<PAGE>
AS FILED WITH THE COMMISSION ON NOVEMBER 29, 1994
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended September 30, 1994
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
COMMISSION FILE NUMBER 1-5964
ALCO STANDARD CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 23-0334400
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
BOX 834, VALLEY FORGE, PENNSYLVANIA 19482
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
Registrant's telephone number, including area code: (610) 296-8000
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH
EXCHANGE ON WHICH
TITLE OF CLASS REGISTERED
-------------- -----------------
Common Stock, no par value New York Stock Exchange
Preferred Share Purchase Rights Philadelphia Stock
Exchange
Chicago Stock Exchange
Series AA Convertible Preferred Stock New York Stock Exchange
(Depositary Shares)
Securities registered pursuant to
Section 12(g) of the Act: None
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO ___
---
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO
THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K. [_]
THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT AS OF NOVEMBER 28, 1994 WAS APPROXIMATELY $2,890,211,891 BASED UPON
THE LAST SALES PRICE OF $55 3/8 PER COMMON SHARE AND $64 PER DEPOSITARY SHARE OF
SERIES AA CONVERTIBLE PREFERRED STOCK AS REPORTED IN THE NEW YORK STOCK EXCHANGE
COMPOSITE TAPE ON SUCH DATE. FOR PURPOSES OF THE FOREGOING SENTENCE ONLY, ALL
DIRECTORS AND OFFICERS OF THE REGISTRANT AND THE TRUSTEES OF THE REGISTRANT'S
PENSION PLAN AND STOCK PURCHASE PLANS WERE ASSUMED TO BE AFFILIATES.
THE NUMBER OF SHARES OF COMMON STOCK, NO PAR VALUE, OF THE REGISTRANT
OUTSTANDING AS OF NOVEMBER 28, 1994 WAS 54,581,560.
DOCUMENTS INCORPORATED BY REFERENCE
PARTS I AND II--REGISTRANT'S ANNUAL REPORT TO SHAREHOLDERS FOR FISCAL YEAR
ENDED SEPTEMBER 30, 1994
PART III--REGISTRANT'S PROXY STATEMENT FOR THE 1995 ANNUAL MEETING OF
SHAREHOLDERS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Alco Standard Corporation
SEC FORM 10-K
SEPTEMBER 30, 1994
<PAGE>
PART I
ITEM 1. BUSINESS.
Alco Standard Corporation ("Alco") was incorporated in Ohio in 1952 and is
the successor to a business incorporated under a similar name in 1928. The term
"Alco" generally includes Alco Standard Corporation and its subsidiaries and
divisions. The address of Alco's principal executive offices is P.O. Box 834,
Valley Forge, Pennsylvania 19482 (telephone number: (610) 296-8000).
Alco markets and distributes office equipment and paper. In fiscal 1994, Alco
had annual revenues of approximately $8 billion. The information concerning
revenues, income before taxes and assets attributable to each of Alco's
business segments for each of the three years in the period ended September 30,
1994 set forth under "Segment Data" in the consolidated financial statements
included on page 42 of Alco's Annual Report to Shareholders for the
fiscal year ended September 30, 1994 ("1994 Annual Report") is incorporated
herein by reference.
Alco was founded and continues to operate as "The Corporate Partnership."
Under this entrepreneurial principle, Alco field executives maintain a high
degree of operating autonomy, which enhances the company's ability to serve and
support its customers. The following describes Alco's two business segments.
ALCO OFFICE PRODUCTS
Alco Office Products ("AOP") sells, rents and leases photocopiers, fax
machines and other automated office equipment. AOP also provides equipment
service, supplies, and equipment leasing, and provides reprographic facilities
management and specialized document copying services.
AOP has locations throughout the United States, Canada and in Europe
(primarily in the United Kingdom). These companies comprise the largest network
of independent copier and office equipment dealers in North America and in the
United Kingdom, and represent the only independent distribution network with
national scope. AOP competes against numerous competitors over a wide range of
markets, competing on the basis of price, quality of service, and product
performance.
AOP distributes the products of numerous manufacturers, including Canon,
Ricoh and Sharp, throughout 47 states, four Canadian provinces and in Europe.
Customers include large and small businesses, professional firms and government
agencies.
During fiscal 1992, 1993 and 1994, AOP accounted for approximately 26%, 25%
and 28%, respectively, of Alco's consolidated revenues, and 47%, 50% and 55%,
respectively, of Alco's operating income (excluding Unisource restructuring
costs in 1993).
During fiscal 1994, AOP acquired 45 office products companies in the United
States and Canada, with an aggregate of over $200 million in annualized
revenues. AOP also expanded Erskine House Ltd., its office equipment
distribution network based in the United Kingdom, through two contiguous
acquisitions. In addition, as part of the IMM divestiture (described on page 3
hereof), AOP acquired operations in Denmark and France.
UNISOURCE
Unisource Worldwide, Inc. ("Unisource") markets and distributes papers for
office and reprographic use, distributes quality printing papers, and
distributes paper and plastic packaging supply items for food retailers and
food processors. Unisource also distributes commercial sanitary and maintenance
products and industrial packaging equipment, closure systems, and supplies. The
Unisource companies were formerly known as "Paper Corporation of America," and
are currently in the process of restructuring and consolidating under the
single name "Unisource." Information concerning the restructuring is contained
on page 2 of this report.
<PAGE>
During fiscal 1992, 1993 and 1994, Unisource accounted for approximately 74%,
75% and 72%, respectively, of Alco's consolidated revenues from continuing
operations, and 53%, 50%, and 45%, respectively, of Alco's operating income
(excluding Unisource restructuring costs in 1993).
Unisource's products are distributed to commercial printers and publishers,
and to all types of manufacturers, offices, government agencies and other
institutions. Paper, printing supplies and industrial and office supply
products are also sold directly to the commercial retail market through
Unisource's Paper Plus (R) retail stores.
Unisource sells the products of substantially all major domestic and Canadian
paper manufacturers and suppliers. There has been no difficulty in obtaining
products from these suppliers. Supplier relationships are good and are expected
to continue.
Unisource's operations constitute the largest independent network of paper
distributors in the United States and Canada. Although substantial in the
aggregate, these operations compete separately in many different markets
against numerous competitors, including both independent distributors and those
owned by major paper manufacturers. Although its business is highly competitive
and its competitors numerous, Unisource believes that its competitive position
is strong. Unisource competes principally on the basis of price, quality
customer service and the range of products maintained in inventory.
Unisource has locations throughout the United States and Canada. In the
aggregate, Unisource occupies over 17 million square feet of space.
In June 1994, Unisource acquired Larsen Packaging Equipment Company, a
distributor of packaging film and equipment located in St. Louis, Missouri, with
approximately $10 million in annual revenues.
INFORMATION CONCERNING ALCO'S BUSINESS IN GENERAL
RESTRUCTURING PLAN
In September 1993, the Board of Directors approved a restructuring plan for
Alco's paper distribution business and changed the name of such business from
"Paper Corporation of America" to "Unisource Worldwide, Inc." As a result of
the restructuring, a pretax charge of $175 million was recorded in the fourth
quarter of fiscal 1993.
The Unisource restructuring plan was adopted as a proactive response to
changes in the business environment in which Unisource operates. In recent
periods, mills have experienced overcapacity, resulting in depressed pricing
and pressure on distributors' margins. The usage and demand for paper has
shifted significantly because of consolidation in the commercial printing
industry, enhancements in imaging technology and the related growth in the
reprographics segment. Customers are increasingly requiring distributors to
provide enhanced services and greater capabilities.
Most facets of the Unisource restructuring plan are proceeding as planned,
with 68 facility consolidations substantially completed by the end of fiscal
1994. By September 30, 1994, Unisource reduced its employee base by
approximately 725. This excludes the data processing personnel who transferred
to Integrated Systems Solutions Corporation ("ISSC"), a subsidiary of IBM, as
part of an information technology system outsourcing agreement with ISSC. This
ten-year agreement for $300 million, which was effective January 1, 1994, will
provide the information technology system to be implemented as part of the
restructuring plan. The agreement was also expanded to automated warehouse and
truck routing systems at an estimated cost of approximately $30 million over the
ten-year period of the agreement. Due to a change in software, initial
implementation of the information technology system was postponed by six months.
This is not anticipated to delay the completion of the restructuring plan by the
end of fiscal 1996.
2
<PAGE>
BOARD AND MANAGEMENT CHANGES
Three new members were elected in 1994 to Alco's Board of Directors: Paul J.
Darling II, Chairman, President and Chief Executive of Corey Steel Company;
James J. Forese, IBM Vice President, Chairman of IBM Credit Corporation and a
member of IBM's Worldwide Management Council; and Dana J. Mead, President and
Chief Executive Officer of Tenneco, Inc., Chairman and Chief Executive Officer
of Case Corporation, a Tenneco subsidiary and former Executive Vice President
and Director of International Paper Company. Retiring from the Board were
Robert H. Potts and William J. Scharffenberger.
Among other executive changes during the 1994 fiscal year, J. Kenneth Croney
was appointed General Counsel of Alco succeeding Hugh G. Moulton, who continues
as Executive Vice President. Kathleen M. Burns, Treasurer, and Michael J.
Dillon, Controller, were named corporate vice presidents of Alco.
In August 1994, William T. Leith was named Executive Vice President of
Unisource with responsibility for all Unisource's U.S. operations. Mr. Leith
was formerly President of Distribix (a Unisource operating company located in
St. Louis, Missouri) and President of the Unisource Central Region. Jack H.
Keeney, formerly Vice President--Finance of Distribix, was appointed
Unisource's Vice President, Finance--U.S. Operations. Raymond A. Peterson was
named Executive Vice President of Unisource's Canadian Operations.
Two former AOP operating company presidents joined AOP group management in
fiscal 1994 in new executive vice president positions. In June 1994, Peter W.
Shoemaker was appointed Executive Vice President of AOP with responsibility for
all North American operations. In July 1994, Michael S. Koether was appointed
Executive Vice President--Marketing of AOP with responsibility for all North
American marketing and acquisition activities.
On October 17, 1994, Ray B. Mundt, who served as Chief Executive Officer from
1980 until August 1993, announced his retirement from his ongoing duties as an
officer of Alco, effective December 31, 1994. Mr. Mundt will continue in his
duties as Chairman of the Board during fiscal 1995 and will remain available to
provide guidance and advice in the future as appropriate.
EQUITY OFFERINGS
In December 1993, Alco completed a public offering of 5,750,000 shares of
common stock, and used the net proceeds of approximately $294 million primarily
to reduce outstanding debt.
DIVESTITURES
In October 1992, Alco made a 49.9% investment in IMM Office Systems
("IMMOS"), a European office equipment distribution joint venture, marking
Alco's entry into the European market. Alco's investment in IMMOS was intended
to serve as a base for further expansion in Europe. The venture agreement
provided Alco with the option of acquiring the remaining shares of IMMOS over a
three-year period beginning in 1996 if IMMOS achieved certain operating goals.
However, the capital structure and organizational complexities of IMMOS,
exacerbated by the distressed European economy and operational differences
among the venture partners, prevented IMMOS from progressing toward those
goals. As a result, in September 1994, Alco sold its 49.9% interest in IMMOS
for cash plus a passive interest in any subsequent sale of IMMOS for five
years. Alco retains no ongoing liability in the joint venture and the parties
exchanged complete mutual releases for past actions. In addition, Alco was
relieved of the covenant not to compete in Europe contained in the joint
venture agreement, although the parties will not compete with each other for a
period expiring on December 31, 1995. As part of the transaction, Alco acquired
profitable operations in Denmark and France and retained limited operations in
Germany. Alco recognized a loss on the sale of its interest in IMMOS in the
quarter ended June 30, 1994, and recorded a pre-tax loss of $115.3 million
($95.1 million, net of tax) equating to a loss per share of $1.75 for the
quarter ($1.77 for fiscal 1994). This charge represents the write-off of Alco's
investment in IMMOS plus certain transactional costs less cash proceeds from
the sale together with related tax benefits.
3
<PAGE>
SUPPLIERS AND CUSTOMERS
Products distributed by Alco are purchased from numerous domestic and
overseas suppliers. There has been no significant difficulty in obtaining
products from these suppliers. No industry segment of Alco is dependent upon a
single customer, or a few customers, the loss of any one or more of which would
have a material adverse effect on Alco's business taken as a whole.
Backlog is not significant because virtually all of Alco's revenues during
the last two fiscal years were derived from its distribution operations which
fill orders shortly after receipt from customers. There is no material seasonal
fluctuation in Alco's business as a whole.
Many of Alco's operations are required to carry significant amounts of
inventory to meet rapid delivery requirements of customers. At September 30,
1994, inventories accounted for approximately 36% of Alco's total current
assets.
PROPRIETARY MATTERS
Alco has a number of patents, licenses and trademarks. Alco does not believe,
however, that any patent, license or trademark is material to its operations as
a whole.
ENVIRONMENTAL REGULATION
Environmental laws and liabilities relating to Alco's current businesses
(which are primarily distribution operations) have not had and are not expected
to have a material adverse effect upon Alco's capital expenditures, earnings or
competitive position. Although Alco has retained certain environmental
liabilities relating to the predivestiture operations of its divested
manufacturing companies, such environmental liabilities have not had and are
not expected to have a material adverse effect on Alco. While it is not
possible to estimate what expenditures may be required in order for Alco to
comply with environmental laws or discharge environmental liabilities in the
future, Alco does not believe that such expenditures will have a material
adverse effect on it or its operations as a whole.
EMPLOYEES
At September 30, 1994, Alco had approximately 30,600 employees.
FOREIGN OPERATIONS
Alco's operations in Canada distribute paper, industrial supplies and
packaging products, and distribute and service office equipment. Alco's
European operations distribute and service office equipment. Alco's 49.9%
equity interest in IMMOS, a German-based office equipment distribution network,
was divested in September 1994 (See "Divestitures", on page 3 hereof).
Information concerning revenues, income before taxes and identifiable assets of
Alco's foreign operations for each of the three years in the period ended
September 30, 1994 set forth in note 9 to the consolidated financial statements
included in Alco's 1994 Annual Report is incorporated herein by reference.
Revenues from exports during the last three fiscal years were not significant.
There are additional risks attendant to foreign operations, such as possible
currency fluctuations and unsettled political conditions.
ITEM 2. PROPERTIES.
At September 30, 1994, Alco owned or leased facilities in 47 states, nine
Canadian provinces and in Europe. These properties occupy a total of
approximately 22.6 million square feet of which approximately 8.1 million
square feet are owned and the balance are leased under lease agreements with
various expiration dates. Alco believes that none of its properties is
materially important to its operations as a whole, and believes that its
facilities are suitable and adequate for the purposes for which they are used.
4
<PAGE>
ITEM 3. LEGAL PROCEEDINGS.
Alco does not believe that the outcome of lawsuits or other legal proceedings
to which it is a party will materially affect Alco or its operations as a
whole. However, Alco is presently in arbitration with a former subsidiary,
which has asserted that Alco is liable to it for certain liabilities arising
under the Coal Industry Health Benefit Act of 1992. Based on consultation with
its counsel, Alco does not believe that it is responsible for such liabilities
and, therefore, no provision for this matter has been recorded in Alco's
financial statements for the fiscal year ended September 30, 1994. In the event
that the arbitrators decide in favor of the claimant, Alco estimates that it
would be obligated to pay approximately $36 million over a twenty-year period
which would result in an after-tax charge of approximately $23 million to
discontinued operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(No response to this item is required.)
----------------
EXECUTIVE OFFICERS OF ALCO
The following is a list of Alco's executive officers, their ages and their
positions with Alco or its subsidiaries for the last five years.
----------------
<TABLE>
<CAPTION>
NAME AGE POSITION (AND YEAR ELECTED OR YEARS SERVED)
---- --- -------------------------------------------
<C> <C> <S>
John E. Stuart................... 50 Chief Executive Officer and President (1993);
Vice President (1989-1993) and Group President
(1985-1993)
Ray B. Mundt..................... 66 Chairman (1986); Chief Executive Officer (1980-
1993)
William F. Drake, Jr. ........... 62 Vice Chairman (1984)
Kurt E. Dinkelacker.............. 41 Executive Vice President and Chief Financial
Officer (1993); Executive Vice President--
Finance, Alco Office Products (1989-1991); Group
Controller, Alco Office Products (1987-1989)
Hugh G. Moulton.................. 61 Executive Vice President (1992); General Counsel
(1979-1994); Senior Vice President--
Administration (1983-1992)
O. Gordon Brewer, Jr. ........... 57 Vice President--Finance (1986)
Kathleen M. Burns................ 42 Vice President (1994) and Treasurer (1989);
Assistant Treasurer (1987-1989)
J. Kenneth Croney................ 52 Vice President (1983), General Counsel (1994)
and Secretary (1983)
Stephen K. Deay.................. 47 Vice President--Tax (1993); Director--Taxes
(1989-1993)
Michael J. Dillon................ 41 Vice President (1994) and Controller (1993);
Group Controller, Alco Office Products (1991-
1993); Associate Audit Director (1991); Senior
Audit Manager (1987-1991)
James E. Head.................... 49 Vice President (1993); President, CopyRite (an
Alco Office Products company) (1979-1993).
William M. Laughlin.............. 52 Vice President--Financial Operation Support
(1993); Vice President--Operational Audit, Alco
Office Products (1992-1993); Director--Audit
(1982-1992)
</TABLE>
5
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The New York Stock Exchange is the principal market on which Alco's common
stock is traded (ticker symbol ASN). Alco's common stock is also traded on the
Philadelphia and Chicago Stock Exchanges. As of November 28, 1994, there were
approximately 14,404 holders of record of Alco's common stock. The information
regarding the quarterly market price ranges of Alco's common stock and dividend
payments under "Quarterly Data" on page 44 of the 1994 Annual Report is
incorporated herein by reference.
Alco currently expects to continue its policy of paying regular cash
dividends, although there can be no assurance as to future dividends because
they are dependent upon future operating results, capital requirements and
financial condition and may be limited by covenants in certain loan agreements.
ITEM 6. SELECTED FINANCIAL DATA.
Information appearing under "Corporate Financial Summary" for fiscal 1990
through 1994 regarding revenues, income from continuing operations, income
from continuing operations per common share, total assets, total debt, serial
preferred stock and cash dividends per common share on pages 40 and 41 of the
1994 Annual Report is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Information appearing under "Financial Review" on pages 36 through 39 of the
1994 Annual Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Report of Independent Auditors and Consolidated Financial Statements of
Alco and its subsidiaries on pages 20 through 35 and the information appearing
under "Quarterly Data" for fiscal 1994 and 1993 on page 44 of the 1994 Annual
Report are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
(No response to this item is required)
----------------
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding directors appearing in Alco's Notice of Annual Meeting
of Shareholders and Proxy Statement for the January 26, 1995 annual meeting of
shareholders (the "1995 Proxy Statement") is incorporated herein by reference.
Information regarding executive officers is set forth in Part I of this report
and is incorporated herein by reference to the 1995 Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION.
Information appearing under "Executive Compensation" in the 1995 Proxy
Statement is incorporated herein by reference.
6
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information regarding security ownership of certain beneficial owners and
management appearing under "Security Ownership" in the 1995 Proxy Statement is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information appearing under "Certain Transactions" in the 1995 Proxy
Statement is incorporated herein by reference.
----------------
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)(1) and (2) List of Financial Statements and Financial Statement
Schedules.
The response to this portion of Item 14 is submitted on page F-1 hereof as a
separate section of this report.
(a) (3) List of Exhibits.*
The following exhibits are filed as a part of this report (listed by numbers
corresponding to the Exhibit Table of Item 601 in Regulation S-K):
<TABLE>
<C> <S>
3.1 Amended and Restated Articles of Incorporation of Alco Standard
Corporation, filed as Exhibit 3.1 to Alco's Form 10-Q for the quarter
ended June 30, 1994 are incorporated herein by reference.
3.2 Code of Regulations of Alco Standard Corporation, as amended February
9, 1982, filed as Exhibit 3(b) to Alco's 1982 Form 10-K, is
incorporated herein by reference.
4.1 1993 Credit Agreement, dated as of September 30, 1993, among Alco
Standard Corporation, Alco Office Products (U.K.) and various
institutional lenders, filed as Exhibit 4.1 to Alco's 1993 Form 10-K,
is incorporated herein by reference.
4.2 Revolving Credit and Acceptance Agreement, dated as of April 21,
1993, among Alco Standard Corporation, Unisource Canada Inc. and The
Toronto Dominion Bank, filed as Exhibit 4.2 to Alco's 1993 Form 10-K,
is incorporated herein by reference. Amendment No. 1 to Revolving
Credit and Acceptance Agreement.
4.3 Credit Agreement dated October 15, 1992 among Alco Standard
Corporation and various lending institutions, filed as Exhibit 4.3 to
Alco's 1992 Form 10-K, is incorporated herein by reference. Amendment
No. 1 to Credit Agreement.
4.4 Receivables Purchase Agreement and Guarantee between PCA Paper
Acquisition Inc., Stars Trust, Alco Standard Corporation and Bank of
Montreal, filed as Exhibit 4.4 to Alco's 1992 10-K, is incorporated
herein by reference. Amendment dated September 30, 1994 to
Receivables Purchase Agreement.
4.5 1991 Credit Agreement, dated as of December 18, 1991, and Amendments
to 1991 Credit Agreement, filed as Exhibit 4.1 to Alco's 1991 Form
10-K and Exhibit 4.1 to Alco's 1992 Form 10-K, respectively, are
incorporated herein by reference. Additional amendments to 1991 Credit
Agreement.
4.6 Rights Agreement dated as of February 10, 1988 between Alco Standard
Corporation and National City Bank, filed on February 11, 1988 as
Exhibit 1 to Alco's Registration Statement on Form 8-A, is
incorporated herein by reference.
4.7 Assumption Agreement and Amended and Restated Note Agreement dated as
of May 13, 1994 between Alco Standard Corporation and the Prudential
Insurance Company of America.
4.8 Pursuant to Regulation S-K item 601(b)(iii), Alco Standard
Corporation agrees to furnish to the Commission, upon request, a copy
of other instruments defining the rights of holders of long-term debt
of Alco Standard Corporation and its subsidiaries.
</TABLE>
7
<PAGE>
<TABLE>
<C> <S>
10.1 Note Purchase Agreement, dated as of June 15, 1986 between Alco
Standard Corporation and certain Institutional Investors, filed as
Exhibit 4.2 to Alco's Current Report, dated July 1, 1988, on Form
8-K, is incorporated herein by reference.
10.2 Alco Standard Corporation Long Term Incentive Compensation Plan, as
amended and restated, filed as Exhibit 99 to Registration Statement
No. 33-56471 on Form S-8, is incorporated herein by reference.**
10.3 Alco Standard Corporation Annual Bonus Plan.**
10.4 Alco Standard Corporation Partners' Stock Purchase Plan, as amended
and restated.**
10.5 Alco Standard Corporation 1981 Stock Option Plan, filed as Exhibit
10.5 to Alco's 1992 Form 10-K, is incorporated herein by reference.
10.6 Alco Standard Corporation 1986 Stock Option Plan, filed as Exhibit
10.6 to Alco's 1993 Form 10-K, is incorporated herein by
reference.**
10.7 Alco Standard Corporation 1989 Directors' Stock Option Plan, filed
as Exhibit 10.3 to Alco's 1992 Form 10-K, is incorporated herein by
reference.**
10.8 Alco Standard Corporation 1993 Directors' Stock Option Plan, filed
as Exhibit 10.7 to Alco's 1993 Form 10-K, is incorporated herein by
reference.**
10.9 Alco Standard Corporation 1995 Stock Option Plan, filed as Exhibit
99 to Alco's Registration Statement No. 33-56469 on Form S-8, is
incorporated herein by reference.**
10.10 Alco Standard Corporation 1980 Deferred Compensation Plan, filed as
Exhibit 10.7 to Alco's 1992 Form 10-K, is incorporated herein by
reference.**
10.11 Alco Standard Corporation 1985 Deferred Compensation Plan, filed as
Exhibit 10.8 to Alco's 1992 Form 10-K, is incorporated herein by
reference.**
10.12 Alco Standard Corporation 1991 Deferred Compensation Plan, filed as
Exhibit 10.9 to Alco's 1992 Form 10-K, is incorporated herein by
reference.**
10.13 Alco Standard Corporation Retirement Plan for Non-Employee
Directors, filed as Exhibit 10.10 to Alco's 1992 Form 10-K, is
incorporated herein by reference.**
10.14 Alco Standard Corporation 1994 Deferred Compensation Plan, as
amended and restated.**
10.15 Indenture, dated as of April 1, 1986 between Alco Standard
Corporation and the Chase Manhattan Bank, N.A., as Trustee, filed
as Exhibit 4.1 to Alco Standard Corporation's Registration
Statement No. 30-4829, is incorporated herein by reference.
10.16 Support Agreement dated as of June 1, 1994 between Alco Standard
Corporation and Alco Capital Resource, Inc. (Alco's leasing
subsidiary), filed as Exhibit 10.4 to Alco Capital Resource's
Amended Registration Statement in Form 10-12G/A dated May 27, 1994,
is incorporated herein by reference.
10.17 Maintenance Agreement, dated as of August 15, 1991 between Alco
Standard Corporation and Alco Capital Resource, Inc. (Alco's
leasing subsidiary), filed as Exhibit 10.2 to Alco Capital
Resource's Registration Statement on Form 10 dated May 4, 1994, is
incorporated herein by reference.
10.18 Operating Agreement, dated as of August 15, 1991 between Alco
Standard Corporation and Alco Capital Resource, Inc. (Alco's
leasing subsidiary), filed as Exhibit 10.3 to Alco Capital
Resource's Registration Statement on Form 10 dated May 4, 1994, is
incorporated herein by reference.
10.19 Share Purchase Agreement dated September 7, 1994 between Alco
Standard Corporation and shareholders of IMM Office Systems Holding
GmbH
</TABLE>
8
<PAGE>
<TABLE>
<C> <S>
10.20 Agreement effective January 1, 1994 between Unisource Worldwide,
Inc. and Integrated Systems Solution Corporation, a subsidiary of
IBM, portions of which contain confidential material.
10.21 Receivables Transfer Agreement dated as of September 23, 1994 Among
Alco Capital Resource, Inc., Twin Towers, Inc. and Deutsche Bank AG,
New York Branch, portions of which contain confidential material.
10.22 Distribution Agreement dated as of July 1, 1994 between Alco
Capital Resource, Inc. and various distribution agents, filed as
Exhibit 1 to Alco Capital Resource's Registration Statement No.
33-53779, is incorporated herein by reference.
10.23 Indenture dated as of July 1, 1994 between Alco Capital Resource,
Inc. and Nations Bank, N.A., as Trustee, filed as Exhibit 4 to Alco
Capital Resource's Registration Statement No. 33-53779, is
incorporated herein by reference.
11 Statement re: Computation of earnings per share.
12.1 Ratio of Earnings to Fixed Charges.
12.2 Ratio of Earnings to Fixed Charges Excluding Captive Finance
Subsidiaries.
12.3 Ratio of Earnings to Fixed Charges and Preferred Stock Dividends.
12.4 Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Excluding Captive Finance Subsidiaries.
13 Financial Section of Alco Standard Corporation's Annual Report to
Shareholders for the fiscal year ended September 30, 1994 (which,
except for those portions thereof expressly incorporated herein by
reference, is furnished for the information of the Commission and is
not "filed" as part of this report).
21 Subsidiaries of Alco Standard Corporation.
23 Auditors' Consent.
24 Powers of Attorney; certified resolution re: Powers of Attorney.
27 Financial Data Schedule.
</TABLE>
- --------
* Copies of the exhibits will be furnished to any security holder of Alco upon
payment of the reasonable cost of reproduction.
**Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K.
On June 30, 1994, Alco filed a Current Report on Form 8-K to report under
Item 5 its decision to divest its 49.9% interest in IMMOS.
(c) The response to this portion of Item 14 is submitted in response to Item
14(a)(3) above.
(d) The response to this portion of Item 14 is contained on pages S-1, S-2
and S-3 of this report.
9
<PAGE>
ALCO STANDARD CORPORATION AND SUBSIDIARIES
ANNUAL REPORT ON FORM 10-K
ITEMS 14(A)(1) AND (2) AND 14(D)
LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
FINANCIAL STATEMENTS: The following consolidated financial statements of Alco
Standard Corporation and its subsidiaries included in the 1994 Annual Report to
Shareholders are incorporated by reference in Item 8 of Part II of this report:
Consolidated Statements of Income
--Fiscal years ended September 30, 1994, September 30, 1993 and
September 30, 1992
Consolidated Balance Sheets
--September 30, 1994 and September 30, 1993
Consolidated Statements of Cash Flows
--Fiscal years ended September 30, 1994, September 30, 1993 and
September 30, 1992
Consolidated Statements of Changes in Shareholders' Equity
--Fiscal years ended September 30, 1994, September 30, 1993 and
September 30, 1992
Notes to Consolidated Financial Statements
FINANCIAL STATEMENT SCHEDULES: The following consolidated financial statement
schedules of Alco Standard Corporation and its subsidiaries are submitted in
response to Item 14(d):
Schedule II--Amounts Receivable From Related Parties and
Underwriters, Promoters and Employees Other Than
Related Parties.
Schedule VIII--Valuation and Qualifying Accounts.
Schedule IX--Short-term Borrowings.
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable and, therefore, have been
omitted.
F-1
<PAGE>
ALCO STANDARD CORPORATION AND SUBSIDIARIES
SCHEDULE II--AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
------ ------ ------ --------------------- --------------------------
DEDUCTIONS BALANCE AT END OF PERIOD
---------- ------------------------
BALANCE
AT
BEGINNING AMOUNTS AMOUNTS
NAME OF DEBTOR(1) OF PERIOD ADDITIONS COLLECTED WRITTEN OFF CURRENT NOT CURRENT
----------------- --------- --------- --------- ----------- ---------- --------------
YEAR ENDED SEPTEMBER 30, 1994
- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Hugh G. Moulton................... $247,000 $247,000
William F. Drake, Jr. ............ 121,000 $121,000
J. Kenneth Croney................. 115,000 $ 15,000 130,000
Peter W. Shoemaker................ 150,000 150,000
James J. Swearingen............... 150,000 150,000
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1993
- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Hugh G. Moulton................... $247,000 $247,000
O. Gordon Brewer, Jr.............. 165,000 $115,000 50,000
Hallie H. Gibbs................... 150,000 150,000
William F. Drake, Jr.............. 121,000 121,000
J. Kenneth Croney................. 115,000 115,000
Raymond A. Peterson............... 111,000 111,000
Peter W. Shoemaker................ $150,000 150,000
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1992
- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Hugh G. Moulton................... $247,000 $247,000
O. Gordon Brewer, Jr.............. 165,000 165,000
Hallie H. Gibbs................... 150,000 150,000
William F. Drake, Jr.............. 121,000 121,000
J. Kenneth Croney................. 115,000 115,000
Raymond A. Peterson............... 111,000 111,000
</TABLE>
- --------
(1) The notes receivable are secured by the debtors' pledge of Alco stock, bear
interest at 6% and are due upon demand.
S-1
<PAGE>
ALCO STANDARD CORPORATION AND SUBSIDIARIES
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
------ ------ ------ -------------- -----------
ADDITIONS
-------------------------
CHARGED TO
BALANCE AT CHARGED TO OTHER BALANCE AT
BEGINNING COSTS AND ACCOUNTS-- DEDUCTIONS-- END OF
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE PERIOD
----------- ----------- ----------- ------------- -------------- -----------
YEAR ENDED SEPTEMBER 30, 1994
- -----------------------------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts........................ $27,528,000 $19,668,000 $836,000(1) $18,604,000(2) $29,428,000
=========== =========== ============= ============== ===========
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1993
- -----------------------------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts........................ $23,947,000 $19,702,000 $4,768,000(1) $20,889,000(2) $27,528,000
=========== =========== ============= ============== ===========
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1992
- -----------------------------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts........................ $20,493,000 $14,636,000 $6,414,000(1) $17,596,000(2) $23,947,000
=========== =========== ============= ============== ===========
</TABLE>
- --------
(1) Represents beginning balances of acquired companies.
(2) Accounts written off during year, net of recoveries.
S-2
<PAGE>
ALCO STANDARD CORPORATION AND SUBSIDIARIES
SCHEDULE IX--SHORT-TERM BORROWINGS
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E(3) COL. F(4)
------ ------ ------ ------ --------- ---------
MAXIMUM AMOUNT WEIGHTED AVERAGE
WEIGHTED OUTSTANDING AVERAGE AMOUNT INTEREST RATE
CATEGORY OF AGGREGATE BALANCE AT AVERAGE DURING THE OUTSTANDING DURING THE
SHORT-TERM BORROWINGS END OF PERIOD INTEREST RATE PERIOD DURING THE PERIOD PERIOD
--------------------- ------------- ------------- -------------- ----------------- ----------------
YEAR ENDED SEPTEMBER 30, 1994
- -----------------------------
<S> <C> <C> <C> <C> <C>
Notes payable to banks--
domestic(1)...................... $43,000,000 5.2% $303,000,000 $160,317,000 3.6%
Notes payable--foreign............ 48,519,000 5.7 52,050,000 47,348,000 5.0
Notes payable--other.............. 480,000 6.9 1,583,000 848,000 8.1
Commercial paper(2)............... 90,000,000 15,769,000 3.3
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1993
- -----------------------------
<S> <C> <C> <C> <C> <C>
Notes payable to banks--
domestic(1)...................... $ 1,166,000 3.3% $164,000,000 $123,999,000 3.3%
Notes payable--foreign............ 72,639,000 5.6 72,639,000 18,056,000 5.3
Notes payable--other.............. 444,000 6.8 1,755,000 968,000 4.5
Commercial paper(2)............... 90,000,000 3.2 100,000,000 33,445,000 3.3
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1992
- -----------------------------
<S> <C> <C> <C> <C> <C>
Notes payable to banks--
domestic(1)...................... $ 39,000,000 $ 23,099,000 3.9%
Notes payable--foreign............ $ 241,000 6.3% 835,000 187,000 9.1
Notes payable--other.............. 1,324,000 4.3 4,752,000 1,377,000 7.5
</TABLE>
- --------
(1) Notes payable to banks represent borrowings under confirmed lines of credit
that are supported by bank credit agreements (See note 5 to the
consolidated financial statements).
(2) Commercial paper matures generally 30 days from date of issue.
(3) The average amount outstanding during the period was computed by dividing
the sum of the daily principal balances by 365.
(4) The weighted average interest rate during the period was computed by
dividing the actual interest expense by the average short-term debt
outstanding.
S-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES ACT OF
1934, THE REGISTRANT HAS DULY CAUSED THIS FORM 10-K FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1994 TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED.
Alco Standard Corporation
Date: November 29, 1994
By /s/ Michael J. Dillon
----------------------------------------
(MICHAEL J. DILLON)
CONTROLLER(PRINCIPAL ACCOUNTING OFFICER)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
FORM 10-K HAS BEEN SIGNED BELOW ON NOVEMBER 29, 1994 BY THE FOLLOWING PERSONS ON
BEHALF OF THE REGISTRANT AND IN THE CAPACITIES INDICATED.
SIGNATURES TITLE
---------- -----
*John E. Stuart Chief Executive Officer and Director
- ------------------------------------- (Principal Executive Officer)
(JOHN E. STUART)
/s/ Kurt E. Dinkelacker Chief Financial Officer (Principal
- ------------------------------------- Financial Officer)
(KURT E. DINKELACKER)
/s/ Michael J. Dillon Controller (Principal Accounting
- ------------------------------------- Officer)
(MICHAEL J. DILLON)
*Ray B. Mundt Chairman of the Board of Directors
- -------------------------------------
(RAY B. MUNDT)
*J. Mahlon Buck, Jr. Director
- -------------------------------------
(J. MAHLON BUCK, JR.)
*Paul J. Darling Director
- -------------------------------------
(PAUL J. DARLING)
*William F. Drake, Jr. Director
- -------------------------------------
(WILLIAM F. DRAKE, JR.)
*James J. Forese Director
- -------------------------------------
(JAMES J. FORESE)
*Frederick S. Hammer Director
- -------------------------------------
(FREDERICK S. HAMMER)
*Barbara Barnes Hauptfuhrer Director
- -------------------------------------
(BARBARA BARNES HAUPTFUHRER)
*Dana G. Mead Director
- -------------------------------------
(DANA G. MEAD)
*Paul C. O'Neill Director
- -------------------------------------
(PAUL C. O'NEILL)
*Rogelio G. Sada Director
- -------------------------------------
(ROGELIO G. SADA)
*James W. Stratton Director
- -------------------------------------
(JAMES W. STRATTON)
*By his signature set forth below, Hugh G. Moulton, pursuant to duly executed
Powers of Attorney duly filed with the Securities and Exchange Commission, has
signed this Form 10-K on behalf of the persons whose signatures are printed
above, in the capacities set forth opposite their respective names.
/s/ Hugh G. Moulton
- ------------------------------------- November 29, 1994
(HUGH G. MOULTON)
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.1 Amended and Restated Articles of Incorporation of Alco Standard
Corporation, filed as Exhibit 3.1 to Alco's Form 10-Q for the quarter
ended June 30, 1994 are incorporated herein by reference.
3.2 Code of Regulations of Alco Standard Corporation, as amended February
9, 1982, filed as Exhibit 3(b) to Alco's 1982 Form 10-K, is
incorporated herein by reference.
4.1 1993 Credit Agreement, dated as of September 30, 1993, among Alco
Standard Corporation, Alco Office Products (U.K.) and various
institutional lenders, filed as Exhibit 4.1 to Alco's 1993 Form 10-K,
is incorporated herein by reference.
4.2 Revolving Credit and Acceptance Agreement, dated as of April 21, 1993,
among Alco Standard Corporation, Unisource Canada Inc. and The Toronto
Dominion Bank, filed as Exhibit 4.2 to Alco's 1993 Form 10-K.
4.3 Credit Agreement dated October 15, 1992 among Alco Standard
Corporation and various lending institutions, filed as Exhibit 4.3 to
Alco's 1992 Form 10-K.
4.4 Receivables Purchase Agreement and Guarantee between PCA Paper
Acquisition Inc., Stars Trust, Alco Standard Corporation and Bank of
Montreal, filed as Exhibit 4.4 to Alco's 1992 10-K. Amendment dated
September 30, 1994 to Receivables Purchase Agreement.
4.5 1991 Credit Agreement, dated as of December 18, 1991, and Amendments
to 1991 Credit Agreement, filed as Exhibit 4.1 to Alco's 1991 Form 10-
K and Exhibit 4.1 to Alco's 1992 10-K, respectively.
4.6 Rights Agreement dated as of February 10, 1988 between Alco Standard
Corporation and National City Bank, filed on February 11, 1988 as
Exhibit 1 to Alco's Registration Statement on Form 8-A, is
incorporated herein by reference.
4.7 Pursuant to Regulation S-K item 601(b)(iii), Alco Standard Corporation
agrees to furnish to the Commission, upon request, a copy of other
instruments defining the rights of holders of long-term debt of Alco
Standard Corporation and its subsidiaries.
10.1 Note Purchase Agreement, dated as of June 15, 1986 between Alco
Standard Corporation and certain Institutional Investors, filed as
Exhibit 4.2 to Alco's Current Report, dated July 1, 1988, on Form 8-K,
is incorporated herein by reference.
10.2 Alco Standard Corporation Amended and Restated Long Term Incentive
Compensation Plan, as amended and restated, filed as Exhibit 33-56471,
is incorporated herein by reference.**
10.3 Alco Standard Corporation Annual Bonus Plan.**
10.4 Alco Standard Corporation Partners' Stock Purchase Plan, as amended
and restated.**
10.5 Alco Standard Corporation 1981 Stock Option Plan, filed as Exhibit
10.5 to Alco's 1992 Form 10-K, is incorporated herein by reference.
10.6 Alco Standard Corporation 1986 Stock Option Plan, filed as Exhibit
10.6 to Alco's 1993 Form 10-K, is incorporated herein by reference.**
10.7 Alco Standard Corporation 1989 Directors' Stock Option Plan, filed as
Exhibit 10.3 to Alco's 1992 Form 10-K, is incorporated herein by
reference.**
10.8 Alco Standard Corporation 1993 Directors' Stock Option Plan, filed as
Exhibit 10.7 to Alco's 1993 Form 10-K, is incorporated herein by
reference.**
10.9 Alco Standard Corporation 1995 Stock Option Plan, filed as Exhibit 94
to Alco's Registration Statement No. 33-56469 on Form S-8, is
incorporated herein by reference.**
10.10 Alco Standard Corporation 1980 Deferred Compensation Plan, filed as
Exhibit 10.7 to Alco's 1992 Form 10-K, is incorporated herein by
reference.**
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.11 Alco Standard Corporation 1985 Deferred Compensation Plan, filed as
Exhibit 10.8 to Alco's 1992 Form 10-K, is incorporated herein by
reference.**
10.12 Alco Standard Corporation 1991 Deferred Compensation Plan, filed as
Exhibit 10.9 to Alco's 1992 Form 10-K, is incorporated herein by
reference.**
10.12 Alco Standard Corporation Retirement Plan for Non-Employee Directors,
filed as Exhibit 10.10 to Alco's 1992 Form 10-K, is incorporated
herein by reference.
10.13 Alco Standard Corporation 1994 Deferred Compensation Plan, as amended
and restated.**
10.14 Indenture, dated as of April 1, 1986 between Alco Standard Corporation
and the Chase Manhattan Bank, N.A., as Trustee, filed as Exhibit 4.1
to Alco Standard Corporation's Registration Statement No. 30-4829, is
incorporated herein by reference.
10.15 Support Agreement dated as of June 1, 1994 between Alco Standard
Corporation and Alco Capital Resource, Inc. (Alco's leasing
subsidiary), filed as Exhibit 10.4 to Alco Capital Resource's Amended
Registration Statement in Form 10-12G/A dated May 27, 1994, is
incorporated herein by reference.
10.16 Maintenance Agreement, dated as of August 15, 1991 between Alco
Standard Corporation and Alco Capital Resource, Inc. (Alco's leasing
subsidiary), filed as Exhibit 10.2 to Alco Capital Resource's
Registration Statement on Form 10 dated May 4, 1994, is incorporated
herein by reference.
10.17 Operating Agreement, dated as of August 15, 1991 between Alco Standard
Corporation and Alco Capital Resource, Inc. (Alco's leasing
subsidiary), filed as Exhibit 10.3 to Alco Capital Resource's
Registration Statement on Form 10 dated May 4, 1994, is incorporated
herein by reference.
10.18 Share Purchase Agreement dated September 7, 1994 between Alco Standard
Corporation and shareholders of IMM Office Systems Holding GmbH
10.19 Agreement effective January 1, 1994 between Unisource Worldwide, Inc.
and Integrated Systems Solution Corporation, a subsidiary of IBM.
10.20 Agreement effective January 1, 1994 between Unisource Worldwide, Inc.
and Integrated Systems Solution Corporation, a subsidiary of IBM,
portions of which contain confidential material.
10.21 Receivables Transfer Agreement dated as of September 23, 1994 Among
Alco Capital Resource, Inc., Twin Towers, Inc. and Deutsche Bank AG,
New York Branch, portions of which contain confidential material.
10.22 Distribution Agreement dated as of July 1, 1994 between Alco Capital
Resource, Inc. and various distribution agents, filed as Exhibit 1 to
Alco Capital Resource's Registration Statement No. 33-53779, is
incorporated herein by reference.
10.23 Indenture dated as of July 1, 1994 between Alco Capital Resource, Inc.
and Nations Bank, N.A., as Trustee, filed as Exhibit 4 to Alco Capital
Resource's Registration Statement No. 33-53779, is incorporated herein
by reference.
11 Statement re: Computation of earnings per share.
12.1 Ratio of Earnings to Fixed Charges.
12.2 Ratio of Earnings to Fixed Charges Excluding Captive Finance
Subsidiaries.
12.3 Ratio of Earnings to Fixed Charges and Preferred Stock Dividends.
12.4 Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Excluding Captive Finance Subsidiaries.
13 Alco Standard Corporation's Annual Report to Shareholders for the
fiscal year ended September 30, 1994 (which, except for those portions
thereof expressly incorporated herein by reference, is furnished for
the information of the Commission and is not "filed" as part of this
report).
21 Subsidiaries of Alco Standard Corporation.
23 Auditors' Consent.
24 Powers of Attorney; certified resolution re: Powers of Attorney.
27 Financial Data Schedule.
</TABLE>
- --------
* Copies of the exhibits will be furnished to any security holder of Alco upon
payment of the reasonable cost of reproduction.
** Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K.
On June 30, 1994, Alco filed a Current Report on Form 8-K to report under
Item 5 its decision to divest its 49.9% interest in IMMOS.
(c) The response to this portion of Item 14 is submitted in response to Item
14(a)(3) above.
(d) The response to this portion of Item 14 is contained on pages S-1, S-2
and S-3 of this report.
<PAGE>
Exhibit 4.2
AMENDMENT NO. 1
dated as of April 20, 1994
to the
$200,000,000
REVOLVING CREDIT AND ACCEPTANCE AGREEMENT
dated as of April 21, 1993
among
ALCO STANDARD CORPORATION
and
UNISOURCE CANADA, INC.,
Borrowers,
THE TORONTO-DOMINION BANK,
CANADIAN IMPERIAL BANK OF COMMERCE,
ROYAL BANK OF CANADA,
DEUTSCHE BANK AG,
NEW YORK BRANCH AND/OR
CAYMAN ISLANDS BRANCH,
and
DEUTSCHE BANK (CANADA)
as the Banks
and
TORONTO DOMINION (TEXAS), INC.,
as Agent for the Banks
<PAGE>
AMENDMENT NO. 1
to the
REVOLVING CREDIT AND ACCEPTANCE AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment"), dated as of April 19, 1994, to the
---------
Revolving Credit and Acceptance Agreement, dated as of April 21, 1993 (as
heretofore amended and modified, the "Existing Credit Agreement") among ALCO
-------------------------
STANDARD CORPORATION, an Ohio Corporation ("Alco"), UNISOURCE CANADA, INC., a
corporation continued under the federal laws of Canada ("Unisource", and
---------
together with Alco, the "Borrowers"), various financial institutions as are or
---------
may become parties hereto (collectively, the "Banks" and individually a "Bank")
and TORONTO DOMINION (TEXAS), INC., as agent for the Banks under this agreement
(in such capacity, the "Agent");
-----
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrowers, the Banks and the Agent are parties to the
Existing Credit Agreement;
WHEREAS, the Borrowers, have requested that (1) certain provisions of the
Existing Credit Agreement be amended and (2) the Scheduled Facility A Commitment
Termination Date be extended pursuant to Section 2.14 of the Existing Credit
------------
Agreement;
WHEREAS, the Banks and the Agent are willing, on the terms and subject to
the conditions hereinafter set forth, to grant the requested amendments and to
so extend the Scheduled Facility A Commitment Termination Date;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Borrowers, the Banks and the Agent hereby agree as
follows:
SECTION 1. Certain Definitions. The following terms (whether or not
-------------------
underscored) when used in this Agreement shall have the following meanings:
"Agent" is defined in the preamble.
----- --------
"Amended Credit Agreement" means the Existing Credit Agreement as amended
------------------------
by this Amendment.
"Amendment is defined in the preamble.
--------- --------
<PAGE>
"Banks" is defined in the preamble.
----- --------
"Borrowers" is defined in the preamble.
--------- --------
"Effective Date" is defined in Section 4.
-------------- ---------
"Existing Credit Agreement" is defined in the preamble.
------------------------- --------
SECTION 2. Other Definitions. Terms for which meanings are provided in the
------------------
Existing Credit Agreement are, unless otherwise defined herein or the context
otherwise requires, used in this Amendment with such meanings.
SECTION 3. Amendments to Existing Credit Agreement. Effective on the
---------------------------------------
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Section 3.
---------
SECTION 3.1. Section 1.1 (Definitions). (a) Both references in the
-------------------------
definition of "Applicable Margin" in Section 1.1 of the Existing Agreement to
-----------
.3125% are hereby amended to be .3250%.
(b) The reference in the definition of "Stamping Fee" in Section 1.1 of
-----------
the Existing Agreement to .4375% is hereby amended to be .4500%.
SECTION 3.2. Section 2.6 (Facility Fees). (a) The reference in clause (1)
--------------------------- ----------
of Section 2.6 of the Existing Credit Agreement to .125% is hereby amended to be
-----------
.100%.
(b) The reference in clause (2) of Section 2.6 of the Existing Credit
---------- -----------
Agreement to .1875% is hereby amended to be .150%.
SECTION 3.3. Section 2.14. (Extension of Scheduled Facility A Commitment
-----------------------------------------------------------
Termination Date). Pursuant to Section 2.14 of the Existing Credit Agreement,
- ----------------- ------------
the Scheduled Facility A Commitment Termination Date is hereby extended to April
19, 1995. Each of the Borrowers, each of the Banks, and the Agent hereby waives
any requirement of notice specified in Section 2.14 of the Existing Credit
------------
Agreement.
SECTION 4. Effective Date. This Amendment shall become effective as of
--------------
April 20, 1994 (the "Effective Date"); provided, however, that all of the
-------------- -------- -------
conditions set forth in this Section 4 have been satisfied, whereupon this
---------
Amendment shall be known, and may be referred to, as "Amendment No. 1 to the
Revolving Credit and Acceptance Agreement".
SECTION 4.1. Execution of Counterparts of this Amendment. The Agent shall
-------------------------------------------
have received executed counterparts of this
- 2 -
<PAGE>
Amendment duly executed on behalf of each of the Borrowers, each of the Banks,
and the Agent.
SECTION 4.2. Compliance with Warranties, No Default, etc. On the
-------------------------------------------
Effective Date, the following statements shall be true and correct:
(a) no Event of Default (or event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default) shall have
then occurred and be continuing; and
(b) the representations and warranties made by the Borrowers in
Section 4 of the Existing Credit Agreement shall be true on and as of such
---------
date with the same force and effect as if made on and as of such date;
and the Agent shall have received certificates from the Borrowers to such
effect.
SECTION 4.3. Legal Details, etc. All documents executed or submitted
------------------
pursuant hereto shall be satisfactory in form and substance to the Agent and its
counsel; the Agent and its counsel shall have received all information, and such
counterpart originals or such certified or other copies of such materials, as
the Agent or its counsel may reasonably request; and all legal matters incident
to the transactions contemplated by this Amendment shall be satisfactory to the
Agent and its counsel.
SECTION 5. References. References in the Existing Credit Agreement and
----------
the Notes to the term "Agreement" shall hereinafter be deemed to be references
to the Amended Credit Agreement.
SECTION 6. Successors and Assigns. This Amendment shall be binding upon
----------------------
and inure to the benefit of the parties hereto and their respective successors
and assigns, subject to Section 10.10 of the Existing Credit Agreement.
-------------
SECTION 7. Full Force and Effect. Except as expressly amended hereby, all
---------------------
of the representations, warranties, terms, covenants, and conditions of the
Existing Credit Agreement shall remain unchanged and shall remain in full force
and effect in accordance with its terms. The amendments set forth herein shall
be limited precisely as provided for herein to the provisions expressly amended
herein and shall not be deemed to be an amendment of consent to or modification
of any other term or provision of the Existing Credit Agreement or of any
transaction or further or future action on the part of the Borrowers which would
require the consent of the Banks or the Agent under the Existing Credit
Agreement.
-3-
<PAGE>
SECTION 8. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT
-------------
MADE UNDER, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 9. Counterparts. This Amendment may be signed in any number of
------------
counterparts with the same effect as if the signatures thereto were upon the
same instrument.
- 4 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
the Credit Agreement to be executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
ALCO STANDARD CORPORATION
By /s/ SIGNATURE APPEARS HERE
------------------------------
UNISOURCE CANADA, INC.
By /s/ SIGNATURE APPEARS HERE
------------------------------
TORONTO DOMINION (TEXAS), INC.,
as the Agent
By /s/ SIGNATURE APPEARS HERE
------------------------------
THE BANKS
---------
THE TORONTO-DOMINION BANK
By /s/ SIGNATURE APPEARS HERE
------------------------------
CANADIAN IMPERIAL BANK OF COMMERCE
By /s/ SIGNATURE APPEARS HERE
------------------------------
-5-
<PAGE>
ROYAL BANK OF CANADA
By /s/ SIGNATURE APPEARS HERE
------------------------------
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By /s/ SIGNATURE APPEARS HERE
------------------------------
By /s/ SIGNATURE APPEARS HERE
------------------------------
DEUTSCHE BANK (CANADA)
By /s/ SIGNATURE APPEARS HERE
------------------------------
By /s/ SIGNATURE APPEARS HERE
------------------------------
- 6 -
<PAGE>
Exhibit 4.3
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT NO. 1 TO CREDIT AGREEMENT (this "Amendment") dated January 14,
1994 among Alco Standard Corporation (the "Borrower") and the financial
institutions listed in Schedule I attached hereto (each a "Bank" and,
collectively, the "Banks").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the parties hereto, together with Deutsche Bank AG, New York
Branch, as Agent, are parties to the Credit Agreement, dated as of October 15,
1992 (as amended, modified or supplemented from time to time, the "Credit
Agreement"); and
WHEREAS, the parties hereto desire to amend the Credit Agreement so as to
extend the Commitment Termination Date; and
WHEREAS, pursuant to Section 9.3 of the Credit Agreement, the Credit
Agreement may be amended as set forth in the immediately preceding recital by
the written agreement of the Borrower and the Banks;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise defined
-------------
herein shall have the meanings assigned to such terms in the Credit Agreement.
2. Amendments. (a) The definition of Commitment Termination Date set
----------
forth in Section 1.1 of the Credit Agreement is hereby amended by deleting the
date "January 15, 1994" where it appears therein and replacing it with the date
"January 11, 1995".
(b) Exhibit A is hereby amended in its entirety and replaced with Schedule
I attached hereto.
3. Representations and Warranties. In order to induce the Banks to enter
------------------------------
into this Amendment, the Borrower hereby (a) makes to each of them each of the
representations, warranties and agreements contained in Section 3 of the
<PAGE>
Credit Agreement, in each case on the date hereof after giving effect to this
Amendment, and (b) represents and warrants that there exists no Event of
Default, in each case on the date hereof and after giving effect to this
Amendment.
4. Counterparts. This Amendment may be executed simultaneously in two or
------------
more counterparts, each of which shall be deemed to be an original, and it shall
not be necessary in making proof of this Amendment to produce or account for
more than one such counterpart.
5. Agreement Not Otherwise Amended. Terms and provisions of the Credit
-------------------------------
Agreement not amended hereby shall continue to remain in full force and effect.
6. Governing Law. This Amendment and the rights and obligations of the
-------------
parties hereunder shall be construed in accordance with and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, each of the parties hereto has executed, or caused to
be executed on its behalf, this Amendment, all on the date first above written.
ALCO STANDARD
By SIGNATURE APPEARS HERE
---------------------------------
Title: Treasurer
DEUTSCHE BANK AG, CAYMAN ISLANDS
BRANCH
By /s/ Bowen T. Depke
---------------------------------
Title: Assistant Vice President
By /s/ Rolf-Peter Mikolayczyk
---------------------------------
Title: Director
-2-
<PAGE>
THE TORONTO-DOMINION BANK
By /s/ David G. Parker
---------------------------------
Title: Mgr. Cr. Admin.
INSTITUTO BANCARIO SAN PAOLO
DI TORINO SPA
By SIGNATURE APPEARS HERE
---------------------------------
Title: Vice President
THE TOYO TRUST & BANKING CO., LTD.
NEW YORK BRANCH
By SIGNATURE APPEARS HERE
---------------------------------
Title: Vice President
-3-
<PAGE>
SCHEDULE I
----------
LIST OF BANKS/COMMITMENTS
-------------------------
Deutsche Bank AG, Cayman Islands Branch DM 122,500,000
The Toronto-Dominion Bank DM 22,500,000
Instituto Bancario San Paolo Di Torino Spa DM 20,000,000
The Toyo Trust & Banking Co., Ltd. New York Branch DM 15,000,000
<PAGE>
Exhibit 4.4
AMENDING AGREEMENT made as of September 30, 1994 by and among UNISOURCE
CANADA, INC., a Canada corporation, as seller and collector (the "Seller"), ALCO
STANDARD CORPORATION, an Ohio corporation, as guarantor (the "Guarantor"), STARS
TRUST, a trust organized and existing under the laws of Alberta, by its trustee,
THE BANKERS' TRUST COMPANY, acting solely in its capacity as trustee and not in
its personal capacity, as purchaser (the "Purchaser"), and BANK OF MONTREAL, a
Canadian chartered bank, solely in its capacity as servicing agent (the "Bank").
WHEREAS PCA Paper Acquisition Inc., the Guarantor, the Bank and the
Purchaser have entered into a receivables purchase agreement and guarantee made
on the 4th day of September, 1992;
AND WHEREAS PCA Paper Acquisition Inc. changed its name to Unisource
Canada, Inc. effective September 14, 1992;
AND WHEREAS Unisource Canada, Inc. amalgamated with Smith Paper Limited on
January 1, 1993 to continue as Unisource Canada, Inc.;
AND WHEREAS the Seller re-organized and renamed its Price Daxion,
Barber-Ellis and Inter City Papers Business Units into four new Business Units
under the names of "Fine Papers East", "Fine Papers West", "Supply Systems
East" and "Supply Systems West", respectively;
AND WHEREAS the Seller, the Guarantor, the Bank and the Purchaser desire to
amend the Agreement;
AND WHEREAS all conditions precedent under the Agreement to the execution
and delivery of this Amending Agreement have been satisfied or fulfilled;
NOW THEREFORE in consideration of the mutual covenants and agreements
herein contained, and other good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged), the parties hereto agree as
follows:
ARTICLE 1 DEFINITIONS
---------------------
Definitions
-----------
1.1 As used in this Amending Agreement and the recitals hereto:
(a) "Agreement" shall mean the Receivables Purchase Agreement and
Guarantee made on September 4, 1992, as amended, modified, supplemented or
restated, by and among the Seller, the Guarantor, the Bank and the Purchaser;
(b) "Amending Agreement" shall mean this Amending Agreement;
(c) unless the context otherwise requires, terms used herein having
initial upper case or capital letters and not otherwise defined herein shall
have the respective meanings assigned thereto in the Agreement.
<PAGE>
ARTICLE 2 AMENDMENTS TO AGREEMENT
---------------------------------
2.1 Amendments to Agreement
-----------------------
The Agreement is hereby amended by:
(a) adding, to the list of Exhibits in the Table of Contents, the
following:
"Exhibit B-1 - Form of Annual Seller's Certificate";
(b) deleting, in the definition of "Business Unit" in Section 1.1, the
words "Price Daxion, Barber-Ellis and Inter City Papers" and replacing them with
the words "Fine Papers East, Fine Papers West, Supply Systems East and Supply
Systems West";
(c) deleting, in the definition of "Seller's Account", the words and
number "account number 0680-0816380" and replacing them with the words and
number "account number 0680-0818766";
(d) deleting, in paragraph (b) of the definition of "Termination Date" in
Section 1.1, the date "December 20, 1993" and replacing it with the date
"December 1, 1995";
(e) deleting, in Section 2.6(a), the amount "70,000,000" and replacing it
with the amount "85,000,000";
(f) adding the following paragraphs to Section 2.12:
"(c) The Seller will deliver to the Purchaser and the Bank on or
before the 120th day following each fiscal year end of the Seller (beginning
January 31, 1995) a certificate of an officer of the Seller addressed to the
Purchaser and the Bank, in substantially the form of Exhibit B-1 hereto.
(d) The Seller will, so long as it is the Collector, on or before
the 10th Business Day of each month from and including October 1994 to and
including September 1995, prepare and deliver to the Purchaser a Portfolio
Report with respect to the total Purchased Assets originated by the Seller's
Supply Systems West Business Unit.
(e) In relation to the Seller's Supply Systems West Business Unit
and for the purposes of (x) each Portfolio Report delivered under this Section
2.12 (y) the definition of Credit Loss Reserve, and (z) the provisions of
sub-sections 7.1(k), (l), (m), (n) and (o), each period of three (3) months, six
(6) months or twelve (12) months referred to therein shall be read as a
reference to the lesser of (i) the number of months from and including October,
1994 to and including the month ended immediately prior to the date of any
Portfolio Report delivered under any of Section 2.12 or the date of
determination under the definition of Credit Loss Reserve or the provisions of
sub-sections 7.1(k), (l), (m), (n) and (o) and (ii) the number of months
otherwise determined under any of Section 2.12, the definition of Credit Loss
Reserve or the provisions of sub-sections 7.1(k), (l), (m), (n) and (o)";
<PAGE>
(g) deleting, in Section 5.1(n), the address "20 Eglinton Avenue West,
Suite 2100, Toronto, Ontario, M4R 2G7" and replacing it with the address "1475
Courtney Park Drive East, Mississauga, Ontario, L5T 2R1";
(h) (i) deleting the word "and" at the end of sub-section 5.1(o);
(ii) deleting the punctuation mark"."at the end of sub-section 5.1(p)
and replacing it with"; and"; and
(iii) adding the following sub-section 5.1(q):
"(q) the Credit and Collection Policies, the collection procedures
and the internal accounting controls, operational controls and information
systems controls of each of the Seller's Business Units are substantially
similar and consistent in all material respects.";
(i) adding Exhibit B-1 in the form of Exhibit B-1 to this Amending
Agreement;
(j) deleting Exhibit C and replacing it with Exhibit C to this Amending
Agreement;
(k) deleting Exhibit D and replacing it with Exhibit D to this Amending
Agreement; and
(l) deleting Exhibit J and replacing it with Exhibit J to this Amending
Agreement.
ARTICLE 3 GENERAL
-----------------
3.1 Correlation to Agreement - This Amending Agreement is supplemental to and
------------------------
shall be read with and be deemed to be part of the Agreement and the Agreement
shall henceforth be read in conjunction with this Amending Agreement and shall
be given effect, so far as is practicable, as if the Agreement and this Amending
Agreement formed one and the same instrument.
3.2 Applicability of Agreement - All the provisions of the Agreement except
--------------------------
insofar as the same may be inconsistent with the express provisions of this
Amending Agreement, shall apply to and have effect in connection with this
Amending Agreement.
3.3 Confirmation of Agreement - The Agreement, as supplemented or amended by
-------------------------
this Amending Agreement, shall and does continue in full force and effect,
otherwise unamended, and the Agreement, as supplemented or amended by this
Amending Agreement, is hereby ratified and confirmed.
3.4 Formal Date - This Amending Agreement shall be deemed to bear the formal
-----------
date and be effective as of and from September 30, 1994 notwithstanding the
actual date of execution hereof.
<PAGE>
3.5 Counterparts - This Amending Agreement may be executed in two or more
------------
counterparts (and by different parties and on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the Seller, the Guarantor, the Bank and the Purchaser
have caused this Agreement to be duly executed by their respective officers as
of the day and year first above written.
UNISOURCE CANADA, INC. ALCO STANDARD CORPORATION
By: /s/Kathleen M. Burns By: /s/Kathleen M. Burns
Name: Kathleen M. Burns Name: Kathleen M. Burns
Title: Treasurer Title: Treasurer
By: /s/Karin M. Kinney By: /s/Karin M. Kinney
Name: Karin M. Kinney Name: Karin M. Kinney
Title: Assistant Secretary Title: Assistant Secretary
BANK OF MONTREAL STARS TRUST,
as Servicing Agent by its Servicing Agent,
Bank of Montreal
By: /s/ SIGNATURE APPEARS HERE By: /s/ SIGNATURE APPEARS HERE
<PAGE>
Exhibit 4.5
[LETTERHEAD OF CORESTATES INVESTMENT BANKING APPEARS HERE]
[LOGO OF CORESTATES
INVESTMENT BANKING
APPEARS HERE]
December 13, 1993
MEMORANDUM TO BANKS PARTY TO THE $200,000,000 ALCO STANDARD CORPORATION CREDIT
- ------------------------------------------------------------------------------
AGREEMENT DATED DECEMBER 18, 1991
- ---------------------------------
Re: 364-Day Facility and Three Year Facility Termination Dates
- ---------------------------------------------------------------
In accordance with Section 2.1 (a) of the Credit Agreement, please be advised
the Banks have unanimously agreed to extend the 364-Day Facility Termination
Date to December 14, 1994.
The new 364-Day Facility Termination Date will be December 14, 1994.
In accordance with Section 2.1 (b) of the Credit Agreement, please be advised
the Banks have unanimously agreed to extend the Three Year Facility Termination
Date to December 18, 1996.
The new Three Year Facility Termination Date will be December 18, 1996.
Please adjust your records accordingly.
If you have any questions, please feel free to call.
Sincerely yours,
/s/ Stacy Shegda
Stacy Shegda
Investment Banking Officer
<PAGE>
[LETTERHEAD OF CORESTATES PHILADELPHIA NATIONAL BANK APPEARS HERE]
[LOGO OF CORESTATES
PHILADELPHIA NATIONAL
BANK APPEARS HERE]
November 17, 1993
Ms. Stacy Shegda
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Stacy:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and 3-Year Facility to
December 14, 1994 and December 18, 1996, respectively.
Sincerely,
/s/ James A. Bennett
<PAGE>
[LOGO OF BANK ONE
APPEARS HERE]
[LETTERHEAD OF BANK ONE APPEARS HERE]
December 3, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, NA
Broad & Chestnut Streets-5th Fl.
Philadelphia, PA 19101
Dear Jim:
Pursuant to Section 2.1 of the Credit agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, NA, the undersigned
hereby agrees to extend the term of the 364 Day Facility and 3 Year Facility to
December 14, 1994 and December 18, 1996 respectively.
Sincerely,
/s/ David A. Hammond
David A. Hammond
Vice President
DAH/sjh
<PAGE>
[LETTERHEAD OF CANADIAN IMPERIAL BANK OF COMMERCE APPEARS HERE]
[LOGO OF CANADIAN IMPERIAL
BANK OF COMMERCE
APPEARS HERE]
November 29, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and 3-Year Facility to
December 14, 1994 and December 18, 1996, respectively.
Sincerely,
/s/ Paul T. LaHiff
Paul T. LaHiff
Vice President
<PAGE>
[LETTERHEAD OF THE CHASE MANHATTAN BANK, N.A. APPEARS HERE]
[LOGO OF CHASE APPEARS HERE]
November 30, 1993
Mr.James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and 3-Year Facility to
December 14, 1994 and December 18, 1996, respectively.
Sincerely,
THE CHASE MANHATTAN BANK, N.A.
/s/ Nancy A. Bridgman
Nancy A. Bridgman
Vice President
<PAGE>
[LETTERHEAD OF CONTINENTAL BANK APPEARS HERE]
[LOGO OF CONTINENTAL
BANK APPEARS HERE]
November 29, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and 3-Year Facility to
December 14, 1994 and December 18, 1996, respectively.
Sincerely,
/s/ Thomas H. Pearson
THP:ic
<PAGE>
[LETTERHEAD OF DEUTSCHE BANK APPEARS HERE]
[LOGO OF DEUTSCHE
BANK APPEARS HERE]
November 18, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Reference is made to the Credit Agreement dated December 18, 1991 among Alco
Standard Corporation, the Banks identified therein and CoreStates Bank, N.A. (as
amended to date, the "Credit Agreement"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings specified in the Credit
Agreement.
Subject to the terms and conditions of the Credit Agreement, the undersigned,
pursuant to Section 2.1(b) of the Credit Agreement, hereby agrees to extend the
term of the Three-Year Facility to December 18, 1996.
Subject to the terms and conditions of the Credit Agreement, the undersigned,
pursuant to Section 2.1(a) of the Credit Agreement, hereby indicates its
willingness to extend a new 364-Day Facility on the present 364-Day Facility
Termination Date; provided, that such new 364-Day Facility matures no later than
December 14, 1994.
Kind regards,
/s/ Bowen T. Depke /s/ Rolf-Peter Mikolayczyk
Bowen T. Depke Rolf-Peter Mikolayczyk
Assistant Vice President Director
<PAGE>
[LOGO OF FIRST FIDELITY
APPEARS HERE]
[LETTERHEAD OF FIRST FIDELITY BANK APPEARS HERE]
December 1, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and 3-Year Facility to
December 14, 1994 and December 18, 1996, respectively.
Sincerely,
[SIGNATURE APPEARS HERE]
CG:mrn
<PAGE>
[LOGO OF FIRST BANK
APPEARS HERE]
[LETTERHEAD OF FIRST BANK PLACE APPEARS HERE]
November 17, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and 3-Year Facility to
December 14, 1994 and December 18, 1996, respectively.
Sincerely,
/s/ Mark R. Olmon
Mark R. Olmon
Vice President
cc: Ms. Kathleen M. Burns
Alco Standard Corporation
<PAGE>
[LOGO OF FIRST INTERSTATE
BANK, LTD. APPEARS HERE]
[LETTERHEAD OF FIRST INTERSTATE BANK, LTD. APPEARS HERE]
November 29, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and 3-Year Facility to
December 14, 1994 and December 18, 1996, respectively.
Sincerely,
/s/ Clark R. Wilcox VP
- -----------------------------------
First Interstate Bank of California
cc: Gordon Brewer, Jr.
Vice President Finance
Alco Standard Corporation
P.O. Box 834
Valley Forge, PA 19482-0834
<PAGE>
[LETTERHEAD OF NATIONSBANK CORPORATE CENTER APPEARS HERE]
[LOGO OF NATIONSBANK
APPEARS HERE]
December 1, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and 3-Year Facility to
December 14, 1994 and December 18, 1996, respectively.
Sincerely,
/s/ Bill Manley
Bill Manley
Senior Vice President
<PAGE>
[LETTERHEAD OF SOCIETY NATIONAL BANK APPEARS HERE]
[LOGO OF SOCIETY NATIONAL
BANK APPEARS HERE]
November 23, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and 3-Year Facility to
December 14, 1994 and December 18, 1996, respectively.
Sincerely,
/s/ Lawrence A. Mack
LAM:amm
CorSTDEL
<PAGE>
[LOGO OF CHEMICAL
BANK APPEARS HERE]
[LETTERHEAD OF CHEMICAL BANK APPEARS HERE]
November 30, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and 3-Year Facility to
December 14, 1994 and December 18, 1996, respectively.
Sincerely,
/s/ SIGNATURE APPEARS HERE
/pd
<PAGE>
[LOGO OF TRUST COMPANY
BANK APPEARS HERE]
[LETTERHEAD OF TRUST COMPANY BANK APPEARS HERE]
November 30, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and the 3-Year Facility
to December 14, 1994 and December 18, 1996, respectively.
Sincerely,
[SIGNATURE APPEARS HERE]
SMT:jt
<PAGE>
[LOGO OF SHAWMUT
BANK APPEARS HERE]
[LETTERHEAD OF SHAWMUT BANK APPEARS HERE]
December 2, 1993
Mr. James A. Bennett
Senior Vice President
CoreStates Bank, N.A.
Broad & Chestnut Streets
Fifth Floor
Philadelphia, PA 19101
Dear Mr. Bennett:
Pursuant to Section 2.1 of the Credit Agreement dated December 18, 1991, among
Alco Standard Corporation, the Banks and CoreStates Bank, N.A., the undersigned
hereby agrees to extend the term of the 364-Day Facility and 3-Year Facility to
December 14, 1994 and December 18, 1996, respectively.
Sincerely,
/s/ Jeffrey C. Lynch
Jeffrey C. Lynch
Vice President
<PAGE>
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "ASSIGNMENT AGREEMENT") between National
Westminster Bank NJ (the "ASSIGNOR") and The Toronto-Dominion Bank (the
"ASSIGNEE") is dated December 15, 1993. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement,
---------------------
dated as of December 18, 1991 (which, as it has been or may be amended,
modified, renewed or extended from time to time, is herein called the "CREDIT
AGREEMENT"), among Alco Standard Corporation (the "BORROWER"), certain banking
institutions party thereto and CoreStates Bank, N.A., as agent for the Banks.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement. The Assignor desires to
assign to the Assignee, and the Assignee desires to assume from the Assignor,
an undivided interest (the "PURCHASED PERCENTAGE") in the Commitment of the
Assignor such that after giving effect to the assignment and assumption
hereinafter provided, the Commitment of the Assignee shall equal $10,000,000 and
its Commitment Percentage shall equal 5.0%.
2. ASSIGNMENT. For and in consideration of the assumption of obligations
----------
by the Assignee set forth in Section 3 hereof and the other consideration set
forth herein, and effective as of the Effective Date (as hereinafter defined),
and the Assignor does hereby sell, assign, transfer and convey all of its right,
title and interest in and to the Purchased Percentage of (i) the Commitment of
the Assignor (as in effect on the Effective Date), (ii) any Loan outstanding on
the Effective Date and (iii) the Credit Agreement and any other document
executed or delivered in connection with the Loans ("LOAN DOCUMENTS"). On and
after the Effective Date the Assignee shall have the same rights, benefits and
obligations as the Assignor had under the Loan Documents with respect to the
Purchased Percentage of the Loan Documents, all determined as if the Assignee
were a "Bank" under the Credit Agreement with a Commitment Percentage equal to
5.0%. The Effective Date shall be December 15, 1993 ("EFFECTIVE DATE").
Notwithstanding the foregoing, the Effective Date shall not be deemed to have
occurred if the payments required to be made by the Assignee to the Assignor on
the Effective Date under Sections 4 and 5 hereof are not made on the Effective
Date.
3. ASSUMPTION. For and in consideration of the assignment of rights by
----------
the Assignor set forth in Section 2 hereof and the other consideration set forth
herein, and effective as of the Effective Date, the Assignee does hereby accept
the assignment, and assume and covenant and agree fully, completely and timely
to perform, comply with and discharge, each and all obligations, duties and
liabilities of the Assignor under the Credit Agreement which are assigned to the
Assignee hereunder, which assumption includes, without limitation, the
obligation to fund the unfunded portion of the Commitment in accordance with the
provisions set forth in the Credit Agreement as if the Assignee were a "Bank"
under the Credit Agreement with Commitment Percentage equal to 5.0%. The
Assignee agrees to be bound by all provisions relating to "Banks" under and as
defined in the Credit Agreement, including, without limitation, provisions
relating to the dissemination of information and the payment of indemnification.
<PAGE>
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee
-------------------
shall be entitled to receive from the Agent all payments of principal, interest
and fees with respect to the Purchased Percentage of the Assignor's Commitment
and Loans. The Assignee shall advance funds directly to the Agent with respect
to all Loans and reimbursement payments made on or after the Effective Date. In
consideration for the transfer of the assigned obligations hereunder, (i) with
respect to all floating interest rate Loans made by the Assignor outstanding on
the Effective Date, the Assignee shall pay the Assignor, concurrently with the
execution of this Assignment Agreement, an amount equal to Purchased Percentage
of all such floating interest rate Loans; and (ii) with respect to each fixed
rate Loan made by the Assignor outstanding on the Effective Date, (a) on the
last day of the Interest Period therefor, or (b) on such earlier date agreed to
by the Assignor and the Assignee, or (c) on the date on which any such fixed
interest rate Loan either becomes due (by acceleration or otherwise) or is
prepaid (the date as described in the foregoing clauses (a), (b) or (c) being
hereinafter referred to as the "PAYMENT DATE"), the Assignee shall pay the
Assignor an amount equal to the Purchased Percentage of such fixed interest rate
Loan. On and after the Effective Date, the Assignee will also remit to the
Assignor any amounts of interest on Loans and fees received from the Agent which
relate to the Purchased Percentage of Loans made by the Assignor which accrued
for periods prior to the Effective Date, in the case of floating interest rate
Loans, or the Payment Date, in the case of fixed interest rate Loans, and not
heretofore paid by the Assignee to the Assignor. In the event interest for the
period from the Effective Date to but not including the Payment Date is not paid
by the Borrower with respect to any fixed interest rate Loan sold by the
Assignor to the Assignee hereunder, the Assignee shall pay to the Assignor
interest for such period on such fixed interest rate Loan at the applicable rate
provided by the Credit Agreement. In the event that either party hereto
receives any payment to which the other party hereto is entitled under this
Assignment Agreement, the party receiving such amount shall promptly remit it to
the other party hereto.
5. FEES PAYABLE BY ASSIGNEE. The Assignee shall not be obligated to
------------------------
account to the Assignor for payment of interest or commitment fees accruing
after the Effective Date.
6. CREDIT DETERMINATION: LIMITATIONS ON ASSIGNOR'S LIABILITY. The Assignee
---------------------------------------------------------
represents and warrants to the Assignor that it is capable of making and has
made and shall continue to make its own credit determinations and analysis based
upon such information as the Assignee deemed sufficient to enter into the
transaction contemplated hereby and not based on any statements or
representations by the Assignor. It is understood and agreed that the assignment
and assumption hereunder are made without recourse to the Assignor and that the
Assignor makes no representation or warranty of any kind to the Assignee and
shall not be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of the Credit
Agreement or any other Loan Document, (ii) any representation, warranty or
statement made in or in connection with any of the Loan Documents, (iii) the
financial condition or creditworthiness of the Borrower, (iv) the performance of
or compliance with any of the terms or provisions of any the Loan Documents, or
(v) inspecting any of the property, books or records of the Borrower. Neither
the Assignor nor any of its
- 2 -
<PAGE>
officers, directors, employees, agents or attorneys shall be liable for any
mistake, error of judgment, or action taken or omitted to be taken in connection
with the Loans or any Loan Document, except for its or their own bad faith or
willful misconduct.
7. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
---------
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's performance or
non-performance of obligations assumed under this Assignment Agreement.
8. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Commitment
----------------------------------
occurs between the date of this Assignment Agreement and the Effective Date, the
Commitment Percentage assigned to the Assignee shall remain the percentage
specified in Section 1 hereof and the dollar amount of the Commitment of the
Assignee shall be recalculated based on reduced Commitment.
9. ENTIRE AGREEMENT. This Assignment Agreement and the attached consent
----------------
embody the entire agreement and understanding between the two parties hereto and
supersede all prior agreements and understandings between the parties hereto
relating to the subject matter hereof.
10. GOVERNING LAW. This Assignment Agreement shall be governed by the
-------------
internal law, and not the law of conflicts, of the Commonwealth of Pennsylvania.
11. NOTICES. Notices shall be given under this Assignment Agreement in the
-------
manner set forth in the Credit Agreement. For the purpose hereof, the addresses
of the parties hereto (until notice of a change is delivered) shall be the
address set forth under each party's name on the signature pages hereof.
12. COUNTERPARTS. This Assignment Agreement may be signed in any number of
------------
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
- --------------------- National Westminster Bank NJ
- ---------------------
22 Route 70 West
Cherry Hill, NJ 08002 By: SIGNATURE APPEARS HERE
--------------------------------
Title: Vice President
-----------------------------
-3-
<PAGE>
E. E. Walker The Toronto-Dominion Bank
Mgr., Credit Admin.
909 Fannisn, Suite 1700 By: [SIGNATURE APPEARS HERE]
Houston, Texas 77010 ------------------------------
Title: Manager-Credit Administration
------------------------------
Accepted and Agreed:
Alco Standard Corporation
By: [SIGNATURE APPEARS HERE]
------------------------------
Title: Treasurer
---------------------------
CoreStates Bank, N.A. as Agent
By: [SIGNATURE APPEARS HERE]
------------------------------
Title: Vice President
---------------------------
4
<PAGE>
Exhibit 4.7
================================================================================
ALCO STANDARD CORPORATION
$35,000,000 10.51% SERIES A SENIOR NOTES DUE APRIL 24, 2001
$25,000,000 8.61% SERIES B SENIOR NOTES DUE APRIL 1, 2005
- --------------------------------------------------------------------------------
ASSUMPTION AGREEMENT
AND
AMENDED AND RESTATED NOTE AGREEMENT
- --------------------------------------------------------------------------------
Dated as of May 13, 1994
================================================================================
<PAGE>
TABLE OF CONTENTS
(Not Part of Agreement)
Page
----
1. BACKGROUND; AUTHORIZATION OF
ASSUMPTION; ASSUMPTION;
AUTHORIZATION OF AMENDMENT AND
RESTATEMENT OF EXISTING AGREEMENTS
AND EXISTING ERSKINE NOTES;
AUTHORIZATION OF ISSUANCE OF NOTES................................. 1
1A. Background.................................................... 1
1B. Authorization of Assumption; Assumption....................... 2
1C. Authorization of Amendment and
Restatement of Existing Agreements
and Existing Erskine Notes;
Authorization of Issuance of Notes............................ 2
2. AMENDMENT AND RESTATEMENT;
PURCHASE AND SALE OF NOTES;
FAILURE TO DELIVER................................................. 3
2A. Amendment and Restatement..................................... 3
2B. Purchase and Sale of Notes.................................... 4
2C. Failure to Deliver............................................ 4
3. CONDITIONS OF CLOSING.............................................. 4
3A. Opinion of Purchaser's Special Counsel........................ 5
3B. Opinion of Company's Counsel.................................. 5
3C. Representations and Warranties; No Default.................... 5
3D. Purchase Permitted By Applicable Laws......................... 5
3E. Proceedings................................................... 5
3F. Certificates of Good Standing/
Qualification to Do Business.................................. 6
3G. No Material Adverse Change.................................... 6
3H. Due Diligence................................................. 6
3I. Yield-Maintenance, Fees and Expenses.......................... 6
<PAGE>
ii
Page
----
4. PREPAYMENTS....................................................... 7
4A. Required Prepayments......................................... 7
4B. Optional Prepayment With Yield-
Maintenance Amount........................................... 7
4C. Notice of Optional Prepayment................................ 7
4D. Partial Payments Pro Rata.................................... 8
4E. Retirement of Notes.......................................... 8
5. AFFIRMATIVE COVENANTS............................................. 8
5A. Reporting Requirements....................................... 8
5A(1). General Information.................................. 8
5A(2). Quarterly Officer's Certificates..................... 11
5A(4). Special Information.................................. 11
5B. Inspection of Property....................................... 12
5C. Covenant to Secure Notes Equally............................. 12
5D. Maintenance of Insurance..................................... 13
5F. Maintenance of Corporate Existence/
Compliance With Law/Preservation of Property................. 13
5G. Compliance with Environmental Laws........................... 13
5H. No Integration............................................... 14
5I. Financial Records............................................ 14
5K. Credit Facilities............................................ 14
6. NEGATIVE COVENANTS................................................ 15
6A. Working Capital and other Limitations........................ 15
6A(1) Working Capital........................................ 15
6A(2) Funded Debt to Net Worth Ratios........................ 16
6A(3) Interest Coverage Ratios............................... 16
6A(4) Contingent Liabilities................................. 16
6A(5) Net Worth.............................................. 17
6B. Restriction on Dividends and
Purchases of Stock........................................... 17
6C. Liens, Debt and Other Restrictions........................... 17
6C(1) Liens.................................................. 17
6C(2) Debt................................................... 18
6C(3) Merger or Consolidation................................ 18
<PAGE>
iii
Page
----
6C(4) Sale or Discount of Receivables........................ 19
6C(6) Transactions with Related Party........................ 19
6C(7) Investments............................................ 19
6D. Sale of Property............................................. 19
6E. Subsidiary Stock and Debt.................................... 20
6F. ERISA........................................................ 21
6G. Environmental Matters........................................ 21
6H. Specified Laws............................................... 21
7. EVENTS OF DEFAULT................................................. 22
7A. Acceleration................................................. 22
7B. Rescission of Acceleration................................... 25
7C. Notice of Acceleration or Rescission......................... 26
7D. Other Remedies............................................... 26
8. REPRESENTATIONS AND WARRANTIES.................................... 26
8A. Organization................................................. 27
8B. Financial Statements......................................... 27
8C. Actions Pending.............................................. 28
8D. Outstanding Debt............................................. 28
8E. Title to Properties.......................................... 28
8F. Taxes........................................................ 28
8G. Conflicting Agreements and Other Matters..................... 29
8H. Offering of Notes............................................ 29
8I. Use of Proceeds.............................................. 30
8J. ERISA........................................................ 30
8K. Governmental Consent......................................... 30
8L. Environmental Compliance..................................... 31
8M. Disclosure................................................... 32
9. REPRESENTATIONS OF THE PURCHASER.................................. 32
9A. Nature of Purchase........................................... 32
9B. Source of Funds.............................................. 33
<PAGE>
iv
Page
----
10. DEFINITIONS....................................................... 33
10A. Yield-Maintenance Terms..................................... 33
10B. Other Terms................................................. 35
10C. Accounting Principles,
Terms and Determinations.................................... 44
11. MISCELLANEOUS..................................................... 44
11A. Note Payments............................................... 44
11B. Expenses.................................................... 45
11C. Consent to Amendments....................................... 46
11D. Form, Registration, Transfer and Exchange
of Notes; Lost Notes........................................ 46
11E. Persons Deemed Owners; Participations....................... 47
11F. Survival of Representations and Warranties;
Entire Agreement............................................ 47
11G. Successors and Assigns; Transfer Provisions................. 48
11H. Disclosure to Other Persons; Confidentiality................ 48
11I. Notices..................................................... 49
11J. Payments Due on Non-Business Days........................... 50
11K. Satisfaction Requirement.................................... 50
11L. Independence of Covenants................................... 50
11M. Governing Law............................................... 50
11N. Severability................................................ 50
11O. Descriptive Headings........................................ 51
11P. Counterparts................................................ 51
11Q. No Novation................................................. 51
PURCHASER SCHEDULE
EXHIBIT A Form of Note
EXHIBIT B Form of Opinion of Company's Counsel
SCHEDULE 8A Subsidiaries
SCHEDULE 8D Outstanding Debt
<PAGE>
ALCO STANDARD CORPORATION
825 Duportail Road
Wayne, Pennsylvania 19087-5589
as of May 13, 1994
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
c/o Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
The undersigned, ALCO STANDARD CORPORATION, an Ohio corporation (the
"Company"), hereby agrees with you as follows:
1. BACKGROUND; AUTHORIZATION OF ASSUMPTION; ASSUMPTION; AUTHORIZATION OF
AMENDMENT AND RESTATEMENT OF EXISTING AGREEMENTS AND EXISTING ERSKINE NOTES;
AUTHORIZATION OF ISSUANCE OF NOTES.
1A. Background. Erskine authorized the issue of and issued to you on
March 30, 1989 its 10.70% Senior Notes due 2001 (as amended up to, but
excluding, the Date of Closing; individually, an "Existing Erskine Note" and
collectively the "Existing Erskine Notes") in the original aggregate principal
amount of $35,000,000 pursuant to, and in accordance with the terms of, that
certain Note and Warrant Purchase Agreement dated as of March 30, 1989 (as
amended up to, but excluding, the Date of Closing, the "Existing Note
Agreement") among Erskine, Erskine House and you. The Existing Erskine Notes
were substantially in the form of Exhibit A attached to the Existing Note
Agreement. On March 29, 1990, Erskine authorized the issue of and issued to you
its $25,000,000 9.21% preferred stock due 2005 (as amended up to, but excluding,
the Date of Closing, individually, the "Erskine Preferred Stock"; the "Existing
Erskine Notes" and the "Erskine Preferred Stock" sometimes collectively referred
to herein as the "Existing Erskine Instruments") pursuant to, and in accordance
with the terms of, that certain
<PAGE>
2
Preferred Stock and Warrant Purchase Agreement dated March 29, 1990 (as amended
up to, but excluding, the Date of Closing, the "Preferred Stock Agreement"; the
Existing Note Agreement and the Preferred Stock Agreement sometimes collectively
referred to herein as the "Existing Agreements") among Erskine, Erskine House
and you. In June 1993, the Company, through a Wholly-Owned Subsidiary,
purchased the outstanding stock of Erskine House.
1B. Authorization of Assumption; Assumption. The Company hereby
authorizes its assumption of, and subject to your consent, hereby agrees that it
is bound by, and assumes and agrees to be fully liable in respect of and to
perform and discharge, all of the liabilities, obligations and undertakings of
Erskine, whether now existing or hereafter arising, provided for in the Existing
Agreements and/or the Existing Erskine Instruments, including, without
limitation, any indemnification provisions and the obligation to duly and
punctually pay the principal of, including any required prepayments of
principal, and interest on, the Existing Erskine Notes in accordance with the
terms and provisions of the Existing Note Agreement and the Existing Erskine
Notes. You, by your execution of this Agreement and subject to the satisfaction
of the conditions set forth in Section 3 of this Agreement, hereby consent to
such assumption, which assumption shall be effective simultaneously with the
transactions contemplated by paragraph 1C below.
1C. Authorization of Amendment and Restatement of Existing Agreements and
Existing Erskine Notes; Authorization of Issuance of Notes. The Company hereby
authorizes, and agrees and consents to, the Assumption and Restatement in their
entirety of the Existing Agreements and the Existing Erskine Notes, as provided
for herein. The Company authorizes the issue of its senior promissory notes in
the aggregate principal amount of $60,000,000, as follows:
(i) as the amendment and restatement of, and substitution for, the
Existing Erskine Notes, the Company will issue its Series A Senior Notes
in the aggregate principal amount of $35,000,000, to mature April 24,
2001, to bear interest on the unpaid balance thereof from the date thereof
until the principal thereof shall have become due and payable at 10.51%
per annum and on overdue payments at the rate specified therein, and to be
substantially in the form of Exhibit A attached hereto (the "Series A
Notes"); and
<PAGE>
3
(ii) in exchange for the retirement of the Erskine Preferred Stock,
the Company will issue its Series B Senior Notes in the aggregate
principal amount of $25,000,000, to mature April 1, 2005, to bear interest
on the unpaid balance thereof from the date thereof until the principal
thereof shall have become due and payable at 8.61% per annum and on
overdue payments at the rate specified therein and to be substantially in
the form of Exhibit A attached hereto (the "Series B Notes").
The term "Notes" as used in this Agreement shall mean the Existing Erskine
Notes, as amended and restated by Exhibit A to this Agreement, and each
promissory note delivered pursuant to any provision of this Agreement (including
the Series A Notes and Series B Notes) and each promissory note delivered in
substitution or exchange for any Note pursuant to any such provision. The term
"Note" shall refer to any of the Notes. Notes which have the same (i) final
maturity, (ii) installment payment dates, (iii) installment payment amounts (as
a percentage of the original principal amount of each Note), (iv) interest rate,
and (v) interest payment periods, are herein called a "Series" of Notes.
2. AMENDMENT AND RESTATEMENT; PURCHASE AND SALE OF NOTES; FAILURE TO
DELIVER.
2A. Amendment and Restatement. Subject to the terms and conditions of
this Agreement, you, by your execution of this Agreement, hereby agree and
consent to the amendment and restatement in its entirety of the Existing
Agreements by this Agreement and, upon the satisfaction of such terms and
conditions, the Existing Agreements shall be deemed so amended and restated.
Subject to the terms and conditions of this Agreement, you, by your execution of
this Agreement, hereby further agree and consent to the amendment and
restatement in their entirety of the Existing Erskine Notes by the substitution
of the Series A Notes therefor. On May 13, 1994, or such other date as may be
acceptable to you and the Company (herein called the "Closing" or the "Date of
Closing"), the Company agrees, subject to the terms and conditions of this
Agreement, to execute and deliver to you, at the offices of King & Spalding, 120
West 45th Street, New York, New York, the aggregate principal amount of the
Series A Notes set forth opposite your name in the Purchaser Schedule attached
to this Agreement as Annex 1 (the "Purchaser Schedule"), in the form of a single
Series A Note (or such greater number of Notes) dated the Date of Closing and
registered in your name (or in the name of your
<PAGE>
4
nominee). Contemporaneously with the receipt by you of such Series A Notes, you
agree to deliver to the Company for cancellation the Existing Erskine Notes held
by you (the foregoing transactions are hereinafter referred to collectively as
the "Assumption and Restatement"). All amounts owing under, and evidenced by,
the Existing Erskine Notes as of the Date of Closing shall continue to be
outstanding under, and shall after the Date of Closing be evidenced by the
Series A Notes, and shall be repayable in accordance with this Agreement and the
Series A Notes.
2B. Purchase and Sale of Notes. The Company will issue and sell to you
and, subject to the terms and conditions of this Agreement, you will purchase
from the Company, the Series B Notes in the principal amount specified opposite
your name for purchase by you in the Purchaser Schedule on the Date of Closing
in exchange for the retirement of the Erskine Preferred Stock. The sale and
exchange shall take place simultaneously with the Assumption and Restatement at
the offices of King & Spalding. At the Closing, the Company will deliver to you
the aggregate principal amount of the Series B Notes set forth opposite your
name in the Purchaser Schedule, in the form of a single Series B Note (or such
greater number of Notes) dated the Date of Closing and registered in your name
(or in the name of your nominee). Contemporaneously with the receipt by you of
such Series B Notes, you agree to deliver to the Company the Erskine Preferred
Stock held by you to be retired by the Company. All amounts owing under, and
evidenced by, the Erskine Preferred Stock as of the Date of Closing shall
continue to be outstanding under, and shall after the Date of Closing be
evidenced by the Series B Notes, and shall be repayable in accordance with this
Agreement and the Series B Notes.
2C. Failure to Deliver. If on the Date of Closing, the Company fails to
tender to you the Notes to be acquired by you on such date or if the terms and
conditions of this Agreement have not been satisfied, you shall be relieved of
all further obligations under this Agreement. Nothing in this paragraph shall
operate to relieve the Company from any obligations under this Agreement, the
Existing Agreements or the Existing Erskine Instruments or to waive any of your
rights against the Company, Erskine or Erskine House.
3. CONDITIONS OF CLOSING. It is the intention of the parties hereto
that the assumption of the Existing Erskine Notes by the Company, the issuance
of the Series A Notes and the Series B Notes and the execution, delivery and
full effectiveness of this Agreement be simultaneously
<PAGE>
5
effected. Your obligation to purchase the Notes at the Closing is subject to
the satisfaction of the following conditions on or before the Date of Closing:
3A. Opinion of Purchaser's Special Counsel. You shall have received from
King & Spalding, who are acting as special counsel for you in connection with
this transaction, a favorable opinion satisfactory to you as to such matters
incident to the matters herein contemplated as you may reasonably request.
3B. Opinion of Company's Counsel. You shall have received from
J. Kenneth Croney, Vice President and General Counsel of the Company, a
favorable opinion reasonably satisfactory to you and substantially in the form
of Exhibit B.
3C. Representations and Warranties; No Default. The representations and
warranties in paragraph 8 shall be true in all material respects on and as of
the date of such Closing, except to the extent of changes caused by the
transactions herein contemplated; no Event of Default or Default shall exist on
the Date of Closing; and the Company shall have delivered to you an Officer's
Certificate, dated the Date of Closing, to both such effects.
3D. Purchase Permitted By Applicable Laws. The purchase of and payment
for the Notes on the terms and conditions herein provided (including the use of
the proceeds of such Notes) shall not violate any applicable law or governmental
regulation (including, without limitation, section 5 of the Securities Act or
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and shall not subject you to any tax (other than any tax on income earned),
penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation, and you shall have received such
evidence as you may reasonably request to establish compliance with this
condition.
3E. Proceedings. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all related
documents shall be reasonably satisfactory in substance and form to you, and you
shall have received such counterpart originals or certified or other copies of
such documents as you may reasonably request. In this connection, the Company
shall deliver to you:
<PAGE>
6
(i) copies of its articles of incorporation (certified as of a recent
date by the Secretary of the State of its incorporation) and its by-laws
(certified by its Secretary) as in effect on the Date of Closing;
(ii) copies (certified by its Secretary) of all corporate action
taken by the Company to authorize the signing, delivery and performance of
this Agreement and the Notes and the issuance of the Notes;
(iii) certificates of incumbency and specimen signatures of the
Company's officers authorized to sign and deliver this Agreement and the
Notes.
3F. Certificates of Good Standing/Qualification to Do Business. You
shall have received a good standing certificate for the Company issued by the
Secretary of State of the State of its incorporation.
3G. No Material Adverse Change. You shall have received a certificate
from the chief financial officer of the Company, dated the Date of Closing,
stating that no material adverse change in the financial condition, business,
operations or prospects of the Company or its Subsidiaries, taken as a whole,
has occurred since September 30, 1993.
3H. Due Diligence. You shall have completed your due diligence review of
the Company and its Subsidiaries, including, without limitation, compliance with
Environmental Requirements, and shall have been satisfied with the results.
3I. Fees and Expenses. (a) The Company shall have paid in immediately
available funds by wire transfer to the account specified in the Purchaser
Schedule with reference to "Alco Standard, Structuring Fee" the structuring fee
in an aggregate amount equal to $125,000 owed to you; and
(b) The Company shall have paid in immediately available funds the fees
and expenses of King & Spalding.
4. PREPAYMENTS. The Notes must be prepaid by the Company as specified
in paragraph 4A and may, at the Company's option, be prepaid as specified in
paragraph 4B.
<PAGE>
7
4A. Required Prepayments. Until the Notes shall be paid in full, the
Company shall make the following prepayment of the Notes, without Yield-
Maintenance Amount.
(i) on the Series A Notes, the Company shall prepay the sum of
$7,000,000 on April 24 in each of the years 1997 to 2000, inclusive, and
such principal amounts of the Series A Notes, together with interest
thereon to the prepayment dates, shall become due on such prepayment
dates. The remaining principal amount of the Series A Notes, together
with interest accrued thereon, shall become due on April 24, 2001, the
maturity date of the Series A Notes.
(ii) on the Series B Notes, the Company shall prepay the sum of
$4,166,600 on April 1 in each of the years 2000 to 2004, inclusive, and
such principal amount of the Series B Notes, together with interest
thereon to the prepayment dates, shall become due on such prepayment
dates. The remaining principal amount of the Series B Notes, together
with interest accrued thereon, shall become due on April 1, 2005, the
maturity date of the Series B Notes.
4B. Optional Prepayment With Yield-Maintenance Amount. The Notes may be
prepaid, in whole at any time or in part from time to time, at the option of the
Company, at 100% of the principal amount so prepaid plus accrued and unpaid
interest thereon to the prepayment date and the Yield-Maintenance Amount, if
any, with respect to each Note. Any partial prepayment of the Notes under this
paragraph 4B shall be in integral multiples of $1,000,000 and applied in
satisfaction of required prepayments of principal under paragraph 4A in inverse
order of their scheduled due dates.
4C. Notice of Optional Prepayment. The Company shall give each holder of
a Note irrevocable written notice of any prepayment under paragraph 4B not less
than 10 Business Days before the prepayment date. The notice shall state the
prepayment date and the principal amount of the Notes, and the Notes held by
such holder, to be prepaid on such date and shall state that the prepayment is
to be made under paragraph 4B. When written notice has been given to each
holder of a Note, the principal amount of the Notes specified in the notice,
together with accrued and unpaid interest thereon to the prepayment date and the
Yield-Maintenance Amount, if any, with respect thereto, shall become due and
payable on the prepayment date. On or before the day on which it gives written
notice under this paragraph
<PAGE>
8
4C, the Company shall inform, by telephone, each holder of Notes which shall
have designated a recipient of such notice in the Purchaser Schedule attached
hereto or in written notice to the Company, of the principal amount of the Notes
to be prepaid and the prepayment date.
4D. Partial Payments Pro Rata. Upon any partial prepayment of the Notes
pursuant to paragraph 4A or 4B, the principal amount so prepaid shall be
allocated to all Notes at the time outstanding (including, for the purpose of
this paragraph 4D only, all Notes prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any Subsidiary or Affiliate other than by
prepayment pursuant to paragraph 4A or 4B) in proportion to the respective
outstanding principal amounts thereof.
4E. Retirement of Notes. The Company shall not, and shall not permit any
Subsidiary or Affiliate to, prepay or otherwise retire in whole or in part prior
to their stated final maturity (other than by prepayment pursuant to paragraph
4A or 4B or upon acceleration of such final maturity pursuant to paragraph 7A),
or purchase or otherwise acquire, directly or indirectly, Notes held by any
holder unless the Company or such Subsidiary or Affiliate shall have offered to
prepay or otherwise retire or purchase or otherwise acquire, as the case may be,
the same proportion of the aggregate principal amount of Notes held by each
other holder of Notes at the time outstanding upon the same terms and
conditions. Any Notes so prepaid or otherwise retired or purchased or otherwise
acquired by the Company or any Subsidiary or Affiliate shall not be deemed to be
outstanding for any purpose under this Agreement, except as provided in
paragraph 4D.
5. AFFIRMATIVE COVENANTS.
5A. Reporting Requirements.
5A(1) General Information. The Company covenants that it will
deliver to each holder of Notes in quadruplicate:
(i) as soon as practicable and in any event within 60 days after the
end of each quarterly period (other than the fourth quarterly period) in
each fiscal year,
(1) Consolidated statements of income, stockholders' equity and
cash flows for the period from the
<PAGE>
9
beginning of the current fiscal year to the end of such quarterly
period, and
(2) a Consolidated balance sheet as at the end of such quarterly
period,
setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, all in reasonable
detail and satisfactory in form to the Required Holder(s) and certified by
an authorized financial officer of the Company as fairly presenting, in
all material respects, the financial condition of the Company and its
Consolidated Subsidiaries as of the end of such period and the results of
their operations for the period then ended in accordance with generally
accepted accounting principles, subject to changes resulting from normal
year-end adjustments and the inclusion of abbreviated footnotes; provided,
however, that delivery pursuant to clause (iii) below of copies of the
Quarterly Report on Form 10-Q of the Company for such quarterly period
filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this clause (i);
(ii) as soon as practicable and in any event within 90 days after the
end of each fiscal year,
(1) Consolidated statements of income, stockholders' equity and
cash flows for such year, and
(2) a Consolidated balance sheet as at the end of such year,
setting forth in each case in comparative form corresponding Consolidated
figures from the preceding annual audit, all in reasonable detail and
satisfactory in scope to the Required Holder(s) and reported on by
independent public accountants of recognized standing selected by the
Company whose report shall be without limitation as to the scope of the
audit and reasonably satisfactory in substance to the Required Holder(s);
provided, however, that delivery pursuant to clause (iii) below of copies
of the Annual Report on Form 10-K of the Company for such year filed with
the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (ii);
<PAGE>
10
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it shall
send to its public stockholders and copies of all registration
statements (without exhibits) and all reports (other than any
registration statement filed on Form S-8) which it files with the
Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other report
submitted to the Company or any Subsidiary by independent accountants in
connection with any annual, interim or special audit made by them of the
books of the Company or any Subsidiary;
(v) promptly upon receipt thereof, a copy of each report, survey,
study, evaluation, assessment or other document prepared by any
consultant, engineer, Environmental Authority or other Person relating to
compliance by the Company or any Subsidiary with any Environmental
Requirements, if the cost of remediation, repair or compliance may be
reasonably expected to exceed $10,000,000 in any one case or in the
aggregate;
(vi) at such times as the Company is no longer subject to the
reporting requirements of section 13 or 15(d) of the Exchange Act, with
reasonable promptness, upon the request of the holder of any Note, provide
such holder, and any qualified institutional buyer designated by such
holder, such financial and other information as such holder may reasonably
determine to be necessary in order to permit compliance with the
information requirements of Rule 144A under the Securities Act in
connection with the resale of Notes. For the purpose of this clause
(vii) the term "qualified institutional buyer" shall have the meaning
specified in Rule 144A under the Securities Act; and
(vii) with reasonable promptness, such other financial data as a
Significant Holder may reasonably request;
5A(2) Quarterly Officer's Certificates. Together with each delivery
of financial statements required by clauses 5A(i) and (ii) above, the Company
will deliver to each Significant Holder an Officer's Certificate demonstrating
(with computations in reasonable detail upon the request of
<PAGE>
11
any holder of a Note) compliance with the provisions of paragraphs 6A, 6B, 6C(1)
and 6C(7) and stating that there exists no Event of Default or Default, or, if
any Event of Default or Default exists, specifying the nature and period of
existence thereof and what action the Company has taken, is taking or proposes
to take with respect thereto;
5A(3) Special Information. The Company also covenants that within 5
Business Days after any Responsible Officer obtains knowledge of:
(a) an Event of Default or Default;
(b) a material adverse change in the financial condition, business or
operations of the Company and its Subsidiaries, taken as a whole;
(c) legal proceedings filed against the Company and/or any
Subsidiary, which reasonably could be expected to have a material adverse
effect on the financial condition, business or operations of the Company
and its Subsidiaries, taken as a whole, or which in any manner draws into
question the validity of or reasonably could be expected to impair the
ability of the Company to perform its obligations under this Agreement or
the Notes;
(d) a default under any agreement or note evidencing Debt for which
the Company or any Subsidiary is liable;
(e) the occurrence of any other event that reasonably could be
expected to impair the ability of the Company to meet its obligations
hereunder;
(f) any (i) Environmental Liabilities, (ii) pending, threatened or
anticipated Environmental Proceedings, (iii) Environmental Notices, (iv)
Environmental Judgments and Orders, or (v) Environmental Releases at, on,
in, under or in any way affecting the Properties which reasonably could be
expected to have a material adverse effect on the business, operations or
financial condition of the Company and its Subsidiaries, taken as a whole;
or
(g) with respect to any Plan that is subject to the funding
requirements of Section 302 of ERISA or Section 412 of the Code,
<PAGE>
12
the Company (i) has given or is required to give notice to the Pension
Benefit Guaranty Corporation that a material reportable event has occurred
with respect to such Plan, (ii) has delivered notice to the Pension
Benefit Guaranty Corporation of any intent to withdraw from or terminate
any such Plan, or (iii) has failed to make timely a contribution to any
such Plan;
the Company will deliver to each Significant Holder an Officer's Certificate
specifying the nature and period of existence thereof and what action the
Company or such Subsidiary has taken, is taking or proposes to take with respect
thereto.
5B. Inspection of Property. The Company covenants that, at such
reasonable times and as often as a Significant Holder may reasonably request, it
will permit any Person designated by a Significant Holder in writing, at the
Company's expense, to:
(i) visit and inspect any of the properties of the Company and any
Subsidiary;
(ii) examine the corporate books and financial records of the
Company and its Subsidiaries and make copies thereof or extracts
therefrom; and
(iii) discuss the affairs, finances and accounts of any of such
corporations with the principal officers of the Company or any Subsidiary
and independent public accountants to the Company.
5C. Covenant to Secure Notes Equally. The Company covenants that if it
or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
paragraph 6C(1) (unless prior written consent shall have been obtained under
paragraph 11C), it will make or cause to be made effective provision whereby the
Notes will be secured by such Lien equally and ratably with any and all other
Debt thereby secured so long as any such other Debt shall be so secured.
5D. Maintenance of Insurance. The Company covenants that it and each
Subsidiary will maintain, with responsible insurers, insurance with respect to
its properties and business against such casualties and contingencies
(including, but not limited to, public liability, larceny, embezzlement or other
<PAGE>
13
criminal misappropriation) and in such amounts as is customary in the case of
similarly situated corporations engaged in the same or similar businesses.
5E. Maintenance of Corporate Existence/Compliance with Law/Preservation
of Property. The Company covenants that, except as permitted under paragraph
6C(3) and 6D, it and each Subsidiary will do or cause to be done all things
necessary to:
(i) preserve, renew and keep in full force and effect the corporate
existence of the Company and its Subsidiaries (other than those
Subsidiaries not material to the financial condition, business or
operations of the Company and its Subsidiaries taken as a whole);
(ii) comply with all laws and regulations (including, without
limitation, laws and regulations relating to equal employment opportunity
and employee safety) applicable to it and any Subsidiary except where the
failure to comply could not reasonably be expected to have a material
adverse effect on the business, operations or financial condition of the
Company and its Subsidiaries, taken as a whole;
(iii) maintain, preserve and protect all material intellectual
property of the Company and its Subsidiaries; and
(iv) preserve all the remainder of its property used or useful in
the conduct of its business and keep the same in good repair, working
order and condition excluding normal wear and tear.
5F. Compliance with Environmental Laws. The Company covenants that it
and each Subsidiary will, comply in a timely fashion with, or operate pursuant
to valid waivers of the provisions of, all applicable Environmental
Requirements, including, without limitation, the emission of wastewater
effluent, solid and hazardous waste and air emissions together with any other
applicable Environmental Requirements for conducting, on a timely basis,
periodic tests and monitoring for contamination of ground water, surface water,
air and land and for biological toxicity of the aforesaid, and all applicable
regulations of the Environmental Protection Agency or other relevant federal,
state or local governmental authority, except where the failure to comply could
not reasonably be expected to have a material adverse effect on the business,
operations or financial condition of the Company and its Subsidiaries, taken as
a whole. The Company agrees to indemnify and
<PAGE>
14
hold you, your officers, agents and employees (each an "Indemnified Person")
harmless from any loss, liability, claim or expense that you may incur or suffer
as a result of a breach by the Company or any Subsidiary, as the case may be, of
this covenant other than as a result of the gross negligence or wilful
misconduct of such Indemnified Person. The Company shall not be deemed to have
breached or violated this paragraph 5G if the Company or any Subsidiary is
challenging in good faith by appropriate proceedings diligently pursued the
application or enforcement of such Environmental Requirements for which adequate
reserves have been established in accordance with generally accepted accounting
principles.
5G. No Integration. The Company covenants that it has taken and will
take all necessary action so that the issuance of the Notes does not and will
not require registration under the Securities Act. The Company covenants that
no future offer and sale of debt securities of the Company of any class will be
made if there is a reasonable possibility that such offer and sale would, under
the doctrine of "integration", subject the issuance of the Notes to you to the
registration requirements of the Securities Act.
5H. Financial Records. The Company covenants that it and each Subsidiary
will, keep proper books of record and account in which full and correct entries
(subject to normal year end adjustments and, as to interim statements, the
absence of footnotes) will be made of the business and affairs of the Company or
such Subsidiary under generally accepted accounting principles consistently
applied (except for changes disclosed in the financial statements furnished to
you pursuant to paragraph 5A and concurred in by the independent public
accountants referred to in paragraph 5A).
5I. Credit Facilities. If (in the opinion of the Required Holders) any
of the covenants, representations and warranties or events of default, or any
other term or provision contained in any Credit Facility, is more favorable to
the banks, financial institutions or other Person who has extended credit
pursuant to such Credit Facility than are the terms of this Agreement to the
holders of Notes, this Agreement shall, coincident with the effectiveness of
such more favorable covenant, representation and warranty, event of default,
term or provision, be deemed to be automatically amended without further action
to contain such more favorable covenant, representation and warranty, event of
default, term or provision, and the Company covenants to provide any
documentation requested by a holder of a Note to evidence such amendment.
<PAGE>
15
6. NEGATIVE COVENANTS. Unless the Required Holders otherwise agree in
writing, the Company shall not, and shall not permit any Consolidated
Subsidiary, to take any of the following actions or permit the occurrence or
existence of any of the following events or conditions:
6A. Working Capital and other Limitations. The Company covenants that it
will not at any time permit:
6A(1) Working Capital. Consolidated current assets at any time to be
less than the greater of either (x) consolidated current liabilities plus U.S.
$250,000,000 or (y) 150% of consolidated current liabilities. For purposes
hereof, consolidated current assets and consolidated current liabilities shall
be determined in accordance with generally accepted accounting principles,
except that:
(a) any loans or advances made by the Company or a Subsidiary shall
not be treated as a current asset;
(b) indebtedness for borrowed money due within one year from the date
of issuance may, at the option of the Company, be treated either as a
current liability or a long term liability, provided, that any such
indebtedness which the Company elects to treat as a long term liability
(x) shall not exceed in the aggregate U.S. $400,000,000 all of which shall
constitute unused availability under existing credit facilities of the
Company having a maturity of more than one year from any date of
determination (availability shall mean that (1) such amount is committed
and unborrowed, (2) no event of default or event which with the passing of
time or giving of notice or both would constitute an event of default
shall have occurred under such credit facility, and (3) all conditions to
a borrowing under the credit facility could be satisfied by the Company),
(y) shall be treated as Funded Debt for the purposes of clauses 6A(2) and
6A(3) of this paragraph, and (z) shall be deemed to be a long term
liability in accordance with such election for the purposes of this
Agreement at the time of receipt by each Significant Holder from the
Company of an appropriate schedule, descriptively identifying such
indebtedness, which schedule shall accompany the financial statements to
be furnished under paragraph 5A(1)(i) and (ii) hereof; and
6A(2) Funded Debt to Net Worth Ratios. Senior Funded Debt of the
Company and its Consolidated Subsidiaries (x) to exceed 45% of
<PAGE>
16
the sum of Senior Funded Debt and Subordinated Funded Debt of the Company and
its Consolidated Subsidiaries plus the consolidated minority interest
obligations shown on the most recently delivered consolidated balance sheet of
the Company and its Consolidated Subsidiaries and the Consolidated Net Worth of
the Company and its Consolidated Subsidiaries, or (y) plus Subordinated Funded
Debt of the Company and its Consolidated Subsidiaries, taken together, to exceed
55% of the sum of Senior Funded Debt and Subordinated Funded Debt of the Company
and its Consolidated Subsidiaries plus the consolidated minority interest
obligations shown on the most recently delivered consolidated balance sheet of
the Company and its Consolidated Subsidiaries and the Consolidated Net Worth of
the Company and its Consolidated Subsidiaries; and
6A(3) Interest Coverage Ratios. The consolidated earnings (before
reduction for taxes and after interest expense has been added back) of the
Company and its Consolidated Subsidiaries for the most recent four quarters to
be less than 3.5 times the consolidated interest expense of the Company and its
Consolidated Subsidiaries for such four quarters. For purposes of calculating
such ratio, (a) the Finance Leasing Subsidiaries shall be treated as if they
were accounted for under the equity accounting method (i.e., the net or deficit
of their income over their expenses shall be taken into account in determining
consolidated earnings of the Company and its Consolidated Subsidiaries but their
aggregate interest expense shall not be added to the consolidated interest
expense of the Company and its Consolidated Subsidiaries) and (b) the amount of
either unusual or special non-operating gains or unusual or special non-
operating losses during such four quarters that, in either the case of losses or
gains, exceed, individually or in the aggregate, U.S. $25,000,000 shall be
excluded. The total of either such gains or such losses up to and including
U.S. $25,000,000 of either or both is to be included in the consolidated
earnings for purposes of calculating compliance with this clause (iii); and
6A(4) Contingent Liabilities. Contingent Liabilities to exceed the
sum of U.S. $20,000,000 plus 10% of Consolidated Net Worth; and
6A(5) Net Worth. Consolidated Net Worth to be less than
$750,000,000.
6B. Restriction on Dividends and Purchases of Stock. The Company will
not declare or pay a dividend on any class of its capital stock or make any
other distribution to its stockholders, or expend an aggregate
<PAGE>
17
amount of funds or other property to purchase, redeem or otherwise acquire for
value any shares of its capital stock in excess of (x) the aggregate amount on a
cumulative basis of (i) U.S. $370,000,000 plus (ii) consolidated net income
after taxes of the Company earned after September 30, 1993 and (iii) the
aggregate amount received after September 30, 1993 as the net cash proceeds of
the sale of any shares of its capital stock less (y) the aggregate amount of all
such dividends, distributions and expenditures made after September 30, 1993.
For purposes of this paragraph 6B, the calculation shall exclude: (x) stock
splits, dividends paid, or distributions made, in stock of the Company; or (y)
exchanges of stock of one or more classes of the Company, except to the extent
cash or other value is involved in such exchange. The term "stock" as used in
this paragraph 6B shall include warrants or options to purchase stock.
6C. Liens, Debt and Other Restrictions. The Company covenants that it
will not and will not permit any Consolidated Subsidiary to:
6C(1) Liens. Create, assume or suffer to exist any Lien upon any of
its property or assets, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Notes pursuant to
paragraph 5C), except:
(i) Liens for taxes (including ad valorem and property taxes) and
assessments or governmental charges or levies not yet due or which are
being actively contested in good faith by appropriate proceedings;
(ii) other Liens incidental to the conduct of its business or the
maintenance, operation, construction or ownership of its property and
assets (including pledges or deposits in connection with workers'
compensation and social security taxes, assessments and charges, and
landlords, mechanics and materialmen Liens and survey exceptions or
encumbrances, easements or reservations, rights-of-way, or zoning
restrictions) provided that (A) such Liens were not incurred in connection
with the borrowing of money, or the obtaining of advances or credit or the
payment of the deferred purchase price of property and (B) the existence
of such Lien does not materially detract from the value of such property
or assets to the Company or any Consolidated Subsidiary or unreasonably
interfere with the ordinary conduct of business;
<PAGE>
18
(iii) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business to secure (or to obtain
letters of credit that secure) the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, performance bonds,
purchase, construction or sales contracts and other similar obligations,
in each case not incurred or made in connection with Debt;
(iv) Liens created after the Date of Closing in connection with the
borrowing or pledge of receivables which Liens when added to all
transactions contemplated by paragraph 6C(4) do not exceed, in the
aggregate, 10% of Consolidated Net Worth; and
(v) any right of set off or banker's lien (whether by common law,
statute, contract or otherwise) in favor of any Person to whom neither the
Company nor Consolidated Subsidiary owes any Debt; or
6C(2) Debt. Create, incur, assume or suffer to exist any Debt,
except:
(i) Debt of any Subsidiary to the Company or any Wholly-Owned
Subsidiary;
(ii) other Debt of Consolidated Subsidiaries permitted under
paragraph 6A; and
(iii) other Debt of the Company (other than Debt owed to a
Subsidiary) permitted under paragraph 6A;
6C(3) Merger or Consolidation. Merge, consolidate or exchange
shares with any other Person, except that:
(i) any Subsidiary may merge or consolidate with the Company or
any Wholly-Owned Subsidiary; provided, in the case of a Wholly-Owned
Subsidiary, it remains a Wholly-Owned Subsidiary after the merger or
consolidation; and
(ii) the Company may merge or consolidate with any other
corporation (including a Subsidiary) if the continuing or surviving
corporation is the Company and immediately after such merger or
<PAGE>
19
consolidation, no Default or Event of Default shall have occurred or
exist; or
6C(4) Sale or Discount of Receivables. Sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable except as permitted by clause (iv) of paragraph
6C(1); or
6C(5) Transactions with Related Party. Effect any transaction with
any Affiliate or Subsidiary by which any asset or services of the Company or a
Subsidiary of the Company is transferred to such Affiliate or Subsidiary, or
from such Affiliate or Subsidiary or enter into any other transaction with an
Affiliate or Subsidiary, on terms more favorable than would be reasonably
expected to be given in a similar transaction with an unrelated entity (a
"Related Transaction") if such Related Transaction individually or taken
together with all other Related Transactions could reasonably be expected to
have a material adverse effect on the Company and its Consolidated Subsidiaries,
taken as a whole; or
6C(6) Investments. Make, or permit to remain, an Investment in a
Finance Leasing Subsidiary which results in the aggregate amount or value at any
time outstanding of such Investments to exceed 20% of the Consolidated Net Worth
of the Company and its Consolidated Subsidiaries.
6D. Sale of Property. The Company will not, and will not permit any
Consolidated Subsidiary to, sell, lease or transfer all or substantially all of
its assets unless after immediately giving effect thereto (i) the Company is in
compliance with the covenants and provisions contained herein and (ii) such
sale, lease or transfer shall not have any materially adverse effect upon the
financial condition of the Company and its ability to perform its obligations
hereunder. Notwithstanding this provision, any Consolidated Subsidiary may
sell, lease or transfer all or substantially all of its assets to any other
Consolidated Subsidiary or to the Company.
6E. Subsidiary Stock and Debt. The Company will not:
(i) permit any Subsidiary directly or indirectly to sell, assign,
pledge or otherwise dispose of any Debt of the Company or any other
Subsidiary, or any shares of stock of (or warrants, rights or options to
acquire stock of) any other Subsidiary, except to the
<PAGE>
20
Company or a Wholly-Owned Subsidiary and except pursuant to paragraph 6D;
(ii) permit any Subsidiary to enter into or otherwise be bound by
or subject to any contract or agreement (including, without limitation,
any provision of its certificate or articles of incorporation or bylaws)
that restricts its ability to pay dividends or other distributions on
account of its stock; or
(iii) permit any of its Subsidiaries directly or indirectly to
create, incur, assume, suffer to exist, Guarantee or otherwise become, be
or remain liable with respect to any Debt in an aggregate amount
outstanding at any time in excess of 10% of Consolidated Net Worth plus
the amount of such Debt outstanding on the Date of Closing except (A) Debt
owing exclusively to the Company or another Subsidiary, (B) Debt of a
Subsidiary outstanding on the date that the Company acquires such
Subsidiary and not created in contemplation of such acquisition, (C) Debt
with respect to property to be used by the Company or its Subsidiaries,
the interest on which Debt is exempt from Federal income tax pursuant to
section 103 of the Code, (D) Debt of any foreign Subsidiary that is not
guaranteed by the Company or any other Subsidiary, (E) Debt of Finance
Leasing Subsidiaries owing to the Company or any of its Consolidated
Subsidiaries to the extent not prohibited under paragraph 6C(7) hereof,
(F) Debt of Finance Leasing Subsidiaries to a Person or Persons other than
the Company and its Consolidated Subsidiaries provided that such Debt is
not guaranteed by the Company or any of its Consolidated Subsidiaries, and
(G) unsecured Debt of Unisource Canada in an amount not to exceed U.S.
$200,000,000 (or the equivalent amount on any day in Canadian currency
calculated after giving effect to a conversion of such amount from U.S.
Dollars to Canadian dollars calculated at the buy spot rate quoted for
wholesale transactions by Corestates Bank, N.A. at approximately 11:00
a.m. Philadelphia time).
6F. ERISA. The Company covenants that it will not nor permit any
Subsidiary to:
(i) terminate or withdraw from any Plan resulting in the incurrence
of any material liability to the Pension Benefit Guaranty Corporation;
<PAGE>
21
(ii) engage in or permit any Person to engage in any prohibited
transaction (as defined in Section 4975 of the Code) involving any Plan
(other than a Multiemployer Plan) which would subject the Company or any
Subsidiary to any material tax, penalty or other liability;
(iii) incur or suffer to exist any material accumulated funding
deficiency (as defined in section 302 of ERISA and section 412 of the
Code), whether or not waived, involving any Plan (other than a
Multiemployer Plan); or
(iv) allow or suffer to exist any risk or condition which
presents a risk of incurring a material liability to the Pension Benefit
Guaranty Corporation.
6G. Environmental Matters. The Company covenants that it will not, and
will not permit any Third Party to, use, produce, manufacture, process,
generate, store, dispose of, manage at, or ship or transport to or from the
Properties any Hazardous Materials except for Hazardous Materials used,
produced, released or managed in the ordinary course of business in compliance
with all applicable Environmental Requirements except where the failure to do so
could not reasonably be expected to have a material adverse effect on the
business, operations or financial condition of the Company and its Subsidiaries
taken as a whole and except for Hazardous Materials released in amounts which do
not require remediation pursuant to applicable Environmental Requirements or if
remediation is required, such remediation could not reasonably be expected to
have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole.
6H. Specified Laws. Neither the Company nor any agent acting on its
behalf will take any action which could reasonably be expected to cause this
Agreement or the Notes to violate Regulation G, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act, in any case as in effect now or as the same may hereafter be
in effect.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
<PAGE>
22
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of or
Yield-Maintenance Amount payable with respect to any Note when the same
shall become due, either by the terms thereof or otherwise as herein
provided; or
(ii) the Company defaults in the payment of any interest on any
Note for more than 5 calendar days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as primary
obligor or as guarantor or other surety) in any payment of principal of or
interest on any other obligation for money borrowed (or any Capitalized
Lease Obligation, any obligation under a conditional sale or other title
retention agreement, any obligation (other than a current trade payable
which does not constitute Debt) issued or assumed as full or partial
payment for property whether or not secured by a purchase money mortgage
or any obligation under notes payable or drafts accepted representing
extensions of credit) beyond any period of grace provided with respect
thereto; or the Company or any Subsidiary fails to perform or observe any
other agreement, term or condition contained in any agreement under which
any such obligation is created (or if any other event thereunder or under
any such agreement shall occur and be continuing) and the effect of such
failure or other event is to cause, or to permit the holder or holders of
such obligation (or a trustee on behalf of such holder or holders) to
cause, such obligation to become due (or to be repurchased by the Company
or any Subsidiary) prior to any stated maturity, provided that the
aggregate amount of all obligations as to which such a payment default
shall occur or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) shall occur and
be continuing exceeds $5,000,000; or
(iv) any representation or warranty made by the Company herein or
by the Company or any of its officers in any writing furnished in
connection with or pursuant to this Agreement shall be false in any
material respect on the date as of which made; or
<PAGE>
23
(v) the Company fails to perform or observe any agreement
contained in paragraph 6; or
(vi) the Company fails to perform or observe any other agreement
contained herein and such failure shall not be remedied within 30 days
after any Responsible Officer obtains actual knowledge thereof or after
receipt by the Company of written notice from a holder of a Note of such
failure; or
(vii) the Company or any Subsidiary makes an assignment for the
benefit of creditors or is generally not paying its debts as such debts
become due; or
(viii) any decree or order for relief in respect of the Company or
any Subsidiary is entered under any bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law, whether now or hereafter in effect (herein
called the "Bankruptcy Law"), of any jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession by,
a trustee, receiver, custodian, liquidator or similar official of the
Company or any Subsidiary, or of any substantial part of the assets of the
Company or any Subsidiary, or commences a voluntary case under the
Bankruptcy Law of the United States or any proceedings (other than
proceedings for the voluntary liquidation and dissolution of a Subsidiary)
relating to the Company or any Subsidiary under the Bankruptcy Law of any
other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary and the
Company or such Subsidiary by any act indicates its approval thereof,
consent thereto or acquiescence therein; or an order, judgment or decree
is entered appointing any such trustee, receiver, custodian, liquidator or
similar official, or approving the petition in any such proceedings, and
such order, judgment or decree remains unstayed and in effect for more
than 60 days; or
(xi) any order, judgment or decree is entered in any proceedings
against the Company decreeing the dissolution of the
<PAGE>
24
Company and such order, judgment or decree remains unstayed and in effect
for more than 60 days; or
(xii) any order, judgment or decree is entered in any proceedings
against the Company or any Subsidiary decreeing a split-up of the Company
or such Subsidiary which requires the divestiture of assets representing a
substantial part (being an amount equal to 10% of consolidated assets), or
the divestiture of the stock of a Subsidiary whose assets represent a
substantial part, of the consolidated assets of the Company and its
Subsidiaries (determined in accordance with generally accepted accounting
principles) or which requires the divestiture of assets, or stock of a
Subsidiary, which shall have contributed at least 10% of consolidated
earnings (as calculated pursuant to paragraph 6A(3)) for any of the three
fiscal years then most recently ended, and such order, judgment or decree
remains unstayed and in effect for more than 60 days; or
(xiii) a final judgment or judgments in an amount in excess of
$10,000,000, individually or in the aggregate, shall be rendered against
the Company or any Subsidiary (for which no insurer has acknowledged, in
writing, responsibility for liability, subject to customary deductible)
and, within 60 days after entry thereof, such judgment is not discharged
or execution thereof stayed pending appeal, or within 60 days after the
expiration of any such stay, such judgment is not discharged; or
(xiv) the Company or any ERISA Affiliate, in its capacity as an
employer under a Multiemployer Plan, makes a complete or partial
withdrawal from such Multiemployer Plan resulting in the incurrence by
such withdrawing employer of a withdrawal liability in an amount exceeding
$10,000,000;
then:
(a) if such event is an Event of Default specified in clause
(i) or (ii) of this paragraph 7A, the holder of any Note (other than the
Company or any Subsidiary or Affiliate) may at its option, by written
notice to the Company, declare such Note to be, and such Note shall
thereupon be and become, immediately due and payable at par together
with interest accrued and unpaid thereon, without presentment, demand,
protest or other notice of any kind (including,
<PAGE>
25
without limitation, notice of intent to accelerate), all of which are
hereby waived by the Company, and
(b) if such event is any Event of Default of this paragraph 7A with
respect to the Company, the Required Holder(s) may, at its or their
option, by written notice to the Company, declare all of the Notes to be,
and all of the Notes shall thereupon be and become, immediately due and
payable, together with interest accrued and unpaid thereon and, to the
extent permitted by applicable law, the Yield-Maintenance Amount, if any,
with respect to each Note, without presentment, demand, protest or other
notice of any kind (including, without limitation, notice of intent to
accelerate), all of which are hereby waived by the Company, provided that,
to the extent permitted by applicable law, the Yield-Maintenance Amount,
if any, with respect to each Note shall be due and payable upon such
declaration only if:
(x) the Required Holder(s) shall have given to the Company, at
least 10 Business Days before such declaration, written notice
stating its or their intention so to declare the Notes to be
immediately due and payable and identifying one or more such Events
of Default whose occurrences on or before the date of such notice
permits such declaration, and
(y) one or more of the Events of Default so identified shall be
continuing at the time of such declaration.
7B. Rescission of Acceleration. At any time after any or all of the
Notes shall have been declared immediately due and payable pursuant to paragraph
7A, the Required Holder(s) may, by notice in writing to the Company, rescind and
annul such declaration and its consequences if:
(i) the Company shall have paid all accrued and unpaid overdue
interest on the Notes, the principal of and Yield-Maintenance Amount, if
any, payable with respect to any Notes which have become due otherwise
than by reason of such declaration, and accrued and unpaid interest on
such overdue interest and overdue principal and Yield-Maintenance Amount
at the rate specified in the Notes,
<PAGE>
26
(ii) the Company shall not have paid any amounts which have become
due solely by reason of such declaration,
(iii) all Events of Default and Defaults, other than non-payment of
amounts which have become due solely by reason of such declaration, shall
have been cured or waived pursuant to paragraph 11C, and
(iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes or this Agreement.
No such rescission or annulment shall extend to or affect any subsequent Event
of Default or Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall occur and
be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
8. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
as follows:
8A. Organization. The Company is a corporation duly organized and
existing in good standing under the laws of the State of Ohio, and each
Subsidiary is duly organized and existing in good standing under the laws of the
jurisdiction in which it is incorporated. Schedule 8A hereto is an accurate and
complete list of all Subsidiaries as of the Date of Closing, including the
<PAGE>
27
jurisdiction of incorporation and ownership of all such Subsidiaries. The
Company and each Subsidiary has the corporate power to own its respective
properties and to carry on its respective businesses as now being conducted and
is duly qualified and authorized to do business in each other jurisdiction in
which the character of its respective properties or the nature of its respective
businesses require such qualification or authorization except where the failure
to be so qualified or authorized could not reasonably be expected to have a
material adverse effect on the business, operations or financial condition of
the Company and its Subsidiaries, taken as a whole.
8B. Financial Statements. The Company has furnished you with the
following financial statements, identified by a principal financial officer of
the Company:
(i) a Consolidated balance sheet as at the last day of the fiscal
year ending September 30, 1993, a Consolidated statement of income for
each such year, and Consolidated statements of stockholder's equity and
cash flows for such year, all reported on by Ernst & Young; and
(ii) a Consolidated balance sheet as at December 31, 1993 and
Consolidated statements of income, stockholders' equity and cash flows for
the three-month period ended on each such date, prepared by the Company.
Those financial statements (including any related schedules and/or notes) are
true and correct in all material respects (subject, as to interim statements, to
the absence of footnotes or to changes resulting from normal year-end
adjustments) and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved and
show all liabilities, direct and contingent, of the Company and its Subsidiaries
required to be shown in accordance with such principles. The balance sheets
fairly present, in all material respects, the Consolidated financial condition
of the Company and its Subsidiaries as at the dates thereof, and the statements
of income, stockholders' equity and cash flows fairly present, in all material
respects, the Consolidated results of the operations of the Company and its
Subsidiaries, the changes in the Company's stockholders' equity and their
Consolidated cash flows for the periods indicated. There has been no material
adverse change in the business, condition (financial or otherwise) or operations
of the Company and its Subsidiaries taken as a whole since September 30, 1993.
<PAGE>
28
8C. Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary, or any properties or rights of the Company or any
Subsidiary, by or before any court, arbitrator or administrative or governmental
body which could reasonably be expected result in any material adverse change in
the business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries taken as a whole.
8D. Outstanding Debt. Neither the Company nor any Subsidiary has any
Debt outstanding except as permitted by paragraphs 6A and 6C(2). There is no
default under the provisions of any instrument evidencing any Debt or of any
agreement relating thereto. Schedule 8D hereto is an accurate and complete list
of Debt of the Company and its Subsidiaries as of December 31, 1993.
8E. Title to Properties. The Company and each Subsidiary have good and
indefeasible title to their respective real properties (other than leased
properties or which individually or in the aggregate are not material to the
Company) and good title to all of their other respective properties and assets,
including the properties and assets reflected in the balance sheet as at
September 30, 1993 referred to in paragraph 8B (other than properties and assets
disposed of in the ordinary course of business or which individually or in the
aggregate are not material to the Company), subject to no Lien of any kind
except Liens permitted by paragraph 6C(1). All leases necessary in any material
respect for the conduct of the respective business of the Company and its
Subsidiaries are valid and subsisting and are in full force and effect.
8F. Taxes. The Company has and each Subsidiary has filed all federal,
state and other income tax returns which, to the best knowledge of the
Responsible Officers of the Company, are required to be filed (giving effect to
any extensions granted), and each has paid all taxes as shown on such returns
and on all assessments received by it to the extent that such taxes have become
due (including any extensions granted), except such taxes as are being contested
in good faith by appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting principles.
8G. Conflicting Agreements and Other Matters. Neither the Company nor
any Subsidiary is a party to any contract or agreement or subject to any charter
or other corporate restriction which materially and adversely affects its
business, property or assets, or financial condition of the
<PAGE>
29
Company and its Subsidiaries taken as a whole. Neither the execution nor
delivery of this Agreement or the Notes, nor the offering, issuance and sale of
the Notes, nor fulfillment of nor compliance with the terms and provisions
hereof and of the Notes will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary pursuant to, the charter or by-laws
of the Company or any Subsidiary, any award of any arbitrator or any agreement
(including any agreement with stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation to which the Company or any Subsidiary
is subject. Neither the Company nor any Subsidiary is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Debt of the
Company or such Subsidiary, any agreement relating thereto or any other contract
or agreement (including its charter) which limits the amount of, or otherwise
imposes restrictions on the incurring of, Debt of the Company of the type to be
evidenced by the Notes.
8H. Offering of Notes. Neither the Company nor any agent acting on its
behalf has, directly or indirectly, offered the Notes or any similar security of
the Company for sale to, or solicited any offers to buy the Notes or any similar
security of the Company from, or otherwise approached or negotiated with respect
thereto with, any Person other than accredited investors, and neither the
Company nor any agent acting on its behalf has taken any action which would
reasonably be expected to subject the issuance or sale of the Notes to the
provisions of section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction. The Company hereby
represents and warrants to you that, within the preceding twelve months, neither
the Company nor any other Person acting on behalf of the Company has offered or
sold to any Person (other than accredited investors) any Notes, or any
securities of the same or a similar class as the Notes, or any other
substantially similar securities of the Company.
8I. Use of Proceeds. Neither the Company nor any Subsidiary owns (other
than margin stock of insignificant amounts received by the Company as payment
for accounts receivable) or has any present intention of acquiring any "margin
stock" as defined in Regulation G (12 CFR Part 207) of the Board of Governors of
the Federal Reserve System (herein called "margin stock"). None of such
proceeds has been or will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any margin
stock or for the purpose of maintaining,
<PAGE>
30
reducing or retiring any Debt which was originally incurred to purchase or carry
any stock that is currently a margin stock or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of such
Regulation G. Neither the Company nor any agent acting on its behalf has taken
any action which might cause this Agreement or the Notes to violate Regulation
G, Regulation T or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act.
8J. ERISA. No accumulated funding deficiency (as defined in section 302
of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the
Pension Benefit Guaranty Corporation has been or is expected by the Company or
any ERISA Affiliate to be incurred with respect to any Plan (other than a
Multiemployer Plan) by the Company, any Subsidiary or any ERISA Affiliate which
is or would be materially adverse to the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole.
Neither the Company, any Subsidiary or any ERISA Affiliate has incurred or
presently expects to incur any withdrawal liability under Title IV of ERISA with
respect to any Multiemployer Plan which is or would be materially adverse to the
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole. The execution and delivery of this Agreement
and the issuance and sale of the Notes will be exempt from, or will not involve
any transaction which is subject to, the prohibitions of section 406 of ERISA
and will not involve any transaction in connection with which a penalty could be
imposed under section 502(i) of ERISA or a tax could be imposed pursuant to
section 4975 of the Code. The representation by the Company in the next
preceding sentence is made in reliance upon and subject to the accuracy of your
representation in paragraph 9B.
8K. Governmental Consent. Assuming the representations made by you in
paragraph 9 are accurate, neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
other action by or notice to or filing with any court or administrative or
governmental body (other than those which are made or obtained prior to Closing
and routine filings after the date of any Closing with the Securities and
Exchange Commission and/or state Blue Sky authorities) in connection with the
execution and delivery of this Agreement, the offering,
<PAGE>
31
issuance, sale or delivery of the Notes or fulfillment of or compliance with the
terms and provisions hereof or of the Notes.
8L. Environmental Compliance.
(i) The Company and its Subsidiaries and all of their respective
Properties have complied at all times and in all respects with all Environmental
Requirements where failure to comply could reasonably be expected to have a
material adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole.
(ii) Neither the Company nor any Subsidiary is subject to any
Environmental Liability or Environmental Requirement which could reasonably be
expected to have a material adverse effect on the business, condition (financial
or otherwise) or operations of the Company and its Subsidiaries, taken as a
whole.
(iii) Neither the Company nor any Subsidiary has been designated as a
potentially responsible party under CERCLA or under any state statute similar to
CERCLA which could reasonably be expected to have a material adverse effect on
the business condition (financial or otherwise) or operations of the Company and
its Subsidiaries, taken as a whole. None of the Properties has been identified
on any current or proposed National Priorities List under 40 C.F.R. (S) 300 or
any list arising from a state statute similar to CERCLA which could reasonably
be expected to have a material adverse effect on the business condition
(financial or otherwise) or operations of the Company and its Subsidiaries,
taken as a whole. None of the Properties has been identified on any CERCLIS
list which could reasonably be expected to have a material adverse effect on the
business condition (financial or otherwise) or operations of the Company and its
Subsidiaries, taken as a whole.
(iv) No Hazardous Materials have been or are being used, produced,
manufactured, processed, generated, stored, disposed of, released, managed at or
shipped or transported to or from the Properties or are otherwise present at,
on, in or under the Properties or, to the actual knowledge of the Company, at or
from any adjacent site or facility, except for Hazardous Materials used,
produced, manufactured, processed, generated, stored, disposed of, released and
managed in the ordinary course of business in compliance with all applicable
Environmental Requirements and except for
<PAGE>
32
Hazardous Materials present in amounts which have not required and do not
require remediation, pursuant to applicable law or regulation, or if remediation
is required, such remediation could not reasonably be expected to have a
material adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries, taken as a whole.
(v) The Company and each Subsidiary have procured all permits necessary
under Environmental Requirements for the conduct of their respective businesses
or is otherwise in compliance with all applicable Environmental Requirements,
except to the extent the failure to do so could not reasonably be expected to
have a material adverse effect on the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries, taken as a whole.
8M. Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to you by or on behalf of the Company in
connection herewith contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein not misleading. There is no fact peculiar to the Company or any
Subsidiary which materially adversely affects or in the future may (so far as
the Company can now reasonably foresee) materially adversely affect the
business, property or assets, or financial condition of the Company and its
Subsidiaries taken as a whole and which has not been set forth in this Agreement
or in the other documents, certificates and statements furnished to you by or on
behalf of the Company prior to the Date of Closing in connection with the
transactions contemplated hereby.
9. REPRESENTATIONS OF THE PURCHASER. You represent as follows:
9A. Nature of Purchase. You represent to the Company, and, by agreeing
to the assumption of the Existing Erskine Notes by the Company, the Amendment
and Restatement thereof and the substitution of the Series A Notes for the
Existing Erskine Notes and the issuance of the Series B Notes for the retirement
of the Erskine Preferred Stock, it is specifically understood and agreed, that
you are acquiring the Notes to be purchased by you hereunder for your own
account and not with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act, provided that the disposition
of your property shall at all times be and remain within your control.
<PAGE>
33
9B. Source of Funds. No part of the funds being used by you to pay the
purchase price of the Notes being purchased by you hereunder constitutes assets
allocated to any separate account maintained by you in which any employee plan.
For the purpose of this paragraph 9B, the term "separate account" shall have the
respective meanings specified in section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the terms defined in
the introductory sentence and in paragraphs 1 and 2 shall have the respective
meanings specified therein, and the following terms shall have the meanings
specified with respect thereto below:
10A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4B or is
declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"Discounted Value" shall mean, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Note is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal
of any Note, the yield to maturity implied by (i) the yields reported, as of
10:00 A.M. (New York City time) on the Y-M Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "Page 678" on the Telerate (or such other display as may replace Page 678 on
the Telerate) for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or (ii) if such yields shall not be reported as of such time or
the yields reported as of such time shall not be ascertainable, the Treasury
Constant Maturity Series yields reported, for the latest day for which such
yields shall have been so reported as of the Y-M Business Day next preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any
<PAGE>
34
comparable successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield shall be determined,
if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent
yields in accordance with accepted financial practice and (b) interpolating
linearly between yields reported for various maturities.
"Remaining-Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest one-
twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) each Remaining Scheduled Payment of
such Called Principal (but not of interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4B or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"Telerate" shall mean Telerate Services, Inc. or such other nationally
recognized service providing comparable services as you may select as a
substitute therefor.
"Yield-Maintenance Amount" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
"Y-M Business Day" shall mean any day other than a Saturday, Sunday or
a day on which commercial banks in New York City are required or authorized to
be closed.
<PAGE>
35
10B. Other Terms.
"Affiliate" shall mean with respect to any Person, any other Person
(a) directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person, (b) which other Person beneficially
owns or holds 5% or more of the shares of any class of Voting Stock of such
Person or (c) 5% or more of any class of the Voting Stock of which is
beneficially owned or held by such designated entity. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
entity, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such entity,
whether through the ownership of Voting Stock or by contract or otherwise.
Affiliate shall not include Subsidiaries.
"Agreement" as used herein and in the Notes, shall mean this Note
Agreement as it may be amended, restated, modified or supplemented from time to
time in accordance with its terms.
"Assumption and Restatement" is defined in paragraph 2A of the
Agreement.
"Bankruptcy Law" is defined in clause (viii) of paragraph 7A.
"Board" shall mean, for any Person, its Board of Directors or
equivalent governing body.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which commercial banks in New York City or are required or authorized
to be closed.
"Capitalized Lease Obligation" shall mean any rental obligation
which, under generally accepted accounting principles, would be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expense) in accordance
with such principles.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act.
<PAGE>
36
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Inventory System established pursuant to CERCLA.
"Closing" is defined in paragraph 2A of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Consolidated" shall mean the consolidated financial information of
the Company and its Subsidiaries under generally accepted accounting principles.
"Consolidated Net Worth" shall be determined in accordance with
generally accepted accounting principles and shall mean the sum (as reflected in
the consolidated balance sheet of the Company and its Consolidated Subsidiaries)
of (i) the stated dollar amount of outstanding capital stock, (ii) the stated
dollar amount of additional paid in capital, if any, plus (iii) the amount of
surplus and retained earnings minus (iv) the cost of treasury shares and the
excess of redemption value over the stated value of preferred stock of the
Company and its Consolidated Subsidiaries.
"Consolidated Subsidiaries" shall mean all Subsidiaries except the
Finance Leasing Subsidiaries.
"Contingent Liabilities" shall mean letters of credit (excluding
commercial documentary letters of credit), any Guarantee to banks or other
lenders of indebtedness of another Person, and liabilities associated with
interest rate hedging agreements, provided, however, that Contingent Liabilities
shall not be deemed to include any recorded liability provided for on the
Company's consolidated balance sheet.
"Credit Facilities" shall mean, collectively, (i) the Amended and
Restated Credit Agreement dated as of September 30, 1993 among the Company, Alco
Office Products (UK) PLC, Corestates Bank, N.A., The Chase Manhattan Bank, N.A.,
Deutsche Bank AG, The Toronto-Dominion Bank and Corestates Bank, N.A., as Agent,
and any agreement, instrument or other document entered into as a replacement or
supplement thereto; (ii) any other agreement or other writing evidencing the
commitment to advance funds to the Company; (iii) any agreement, instrument or
other writing from time to time entered into in connection with any of the
<PAGE>
37
foregoing; and/or (iv) any amendment, modification or supplement to or
restatement or replacement of any of the foregoing.
"Date of Closing" is defined in paragraph 2A of this Agreement.
"Debt" shall mean with respect to any Person, at any date of
determination,
(i) all indebtedness for borrowed money which such Person has
directly or indirectly created, incurred or assumed (including, without
limitation, all Capitalized Lease Obligations); and
(ii) all indebtedness, whether or not for borrowed money, secured
by any Lien on any property or asset owned or held by such Person subject
thereto, whether or not the indebtedness secured thereby shall have been
assumed by such Person; and
(iii) any indebtedness, whether or not for borrowed money, with
respect to which such Person has become directly or indirectly liable and
which represents or has been incurred to finance the purchase price (or a
portion thereof) of any property or services or business acquired by such
Person, whether by purchase, consolidation, merger or otherwise other than
any trade payable in the ordinary course of business that is a current
liability under generally accepted accounting principles; and
(iv) any indebtedness of the character referred to in clauses (i),
(ii) or (iii) of this definition deemed to be extinguished under generally
accepted accounting principles but for which such Person remains legally
liable to the extent the market value of any assets such Person has placed
in trust for the benefit of the holders of that indebtedness is less than
the aggregate amount of that indebtedness; and
(v) any indebtedness of any other Person of the character referred
to in subdivision (i), (ii), (iii) or (iv) of this definition with respect
to which the Person whose Debt is being determined has become liable by
way of a Guarantee;
<PAGE>
38
all as determined in accordance with generally accepted accounting principles,
provided, however, Debt shall not include endorsement of negotiable instruments
for collection in the ordinary course of business.
"Disposition" is defined in paragraph 6D of this Agreement.
"Environmental Authority" shall mean any foreign, federal, state,
local or regional government that exercises any form of jurisdiction or
authority under any Environmental Requirement.
"Environmental Judgments and Orders" shall mean all judgments,
decrees or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
degree or order.
"Environmental Liabilities" shall mean any liabilities, whether
accrued or contingent, arising from or relating in any way to any Environmental
Requirements.
"Environmental Notices" shall mean any written communication from any
Environmental Authority stating possible or alleged noncompliance with or
possible or alleged liability under any Environmental Requirement, including
without limitation any complaints, citations, demands or requests from any
Environmental Authority for correction of any purported violation of any
Environmental Requirements or any investigation concerning any purported
violation of any Environmental Requirements. Environmental Notices also shall
mean (i) any written communication from any other Person threatening litigation
or administrative proceedings against or involving the Company relating to
alleged violation of any Environmental Requirements and (ii) any complaint,
petition or similar documents filed by any other Person commencing litigation or
administrative proceedings against or involving the Company relating to alleged
violation of any Environmental Requirements.
"Environmental Proceedings" shall mean any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
<PAGE>
39
"Environmental Releases" shall mean releases (as defined in CERCLA or
under any applicable state or local environmental law or regulation) of
Hazardous Materials. Environmental Releases does not include releases for which
no remediation or reporting is required by applicable Environmental Requirements
and which do not present a danger to health, safety or the environment.
"Environmental Requirements" shall mean any applicable local, state or
federal law, rule, regulation, permit, order, decision, determination or
requirement relating in any way to Hazardous Materials or to health, safety or
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"Erskine" shall mean Erskine Holdings, Inc., a Delaware corporation
and a Wholly-Owned Subsidiary of Erskine House.
"Erskine House" shall mean Erskine House Group plc, a British
corporation and a Wholly-Owned Subsidiary of the Company.
"Erskine Preferred Stock" is defined in paragraph 1A of the
Agreement.
"Event of Default" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any rules or regulations promulgated thereunder.
<PAGE>
40
"Existing Agreements" is defined in paragraph 1A of the Agreement.
"Existing Erskine Instruments" is defined in paragraph 1A of the
Agreement.
"Existing Erskine Note" is defined in paragraph 1A of the Agreement.
"Existing Note Agreement" is defined in paragraph 1A of the
Agreement.
"Fair Market Value" shall mean at any time, the sale value of
property that would be realized in an arm's-length sale at such time between an
informed and willing buyer, and an informed and willing seller, under no
compulsion to buy or sell, respectively.
"Finance Leasing Subsidiaries" shall mean Alco Capital Resource,
Inc., a Delaware corporation; Alco Capital Resource Canada Limited, a Canadian
corporation; and TNL Financial, Inc., a Texas corporation, and their respective
successor corporations.
"Funded Debt" shall mean any obligation payable more than one year
from the date of the creation thereof which under generally accepted accounting
principles is shown on the consolidated balance sheet as a liability (excluding
reserves for deferred income taxes and other reserves to the extent that such
reserves do not constitute obligations for borrowed money and excluding the
portion of any such obligation properly classified as a current liability) and
including, without limitation, Capitalized Lease Obligations.
"Guarantee" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Debt, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans,
<PAGE>
41
advances, stock purchases, capital contributions or otherwise), or to maintain
the solvency or any balance sheet or other financial condition of the obligor of
such obligation, or to make payment for any products, materials or supplies or
for any transportation or services regardless of the non-delivery or non-
furnishing thereof, in any such case if the purpose or intent of such agreement
is to provide assurance that such obligation will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected against loss in respect thereof. The amount
of any Guarantee shall be equal to the outstanding principal amount of the
obligation guaranteed or such lesser amount to which the maximum exposure of the
guarantor shall have been specifically limited.
"Hazardous Materials" shall mean (a) hazardous waste as defined in the
Resource Conservation and Recovery Act of 1976, or in any applicable federal,
state or local law or regulation, (b) hazardous substances, as defined in
CERCLA, or in any applicable state or local law or regulation, (c) gasoline, or
any other petroleum product or by-product, (d) toxic substances, as defined in
the Toxic Substances Control Act of 1976, or in any applicable federal, state or
local law or regulation or (e) insecticides, fungicides, or rodenticides, as
defined in the Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or
in any applicable federal, state or local law or regulation, as each such Act,
statute or regulation may be amended from time to time.
"Investment" shall mean, when used with respect to any Person, any
direct or indirect advance, loan or other extension of credit (other than the
creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any other Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interests, bonds, notes, debentures or other securities issued by
any other Person.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise), or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction) or any other type of preferential arrangement for the purpose,
or having the effect, of protecting a creditor against loss or
<PAGE>
42
securing the payment or performance of an obligation, including any rights of
setoff (whether by statute, common law, contract or otherwise).
"Multiemployer Plan" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Notes" is defined in paragraph 1 of this Agreement.
"Officer's Certificate" shall mean a certificate signed in the name of
the Company by its President, one of its Vice Presidents or its Treasurer.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an estate, an unincorporated organization or a
government or any department, instrumentality or agency thereof.
"Plan" shall mean any "employee pension benefit plan" (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.
"Preferred Stock", as applied to any corporation, shall mean shares of
stock of such corporation which are entitled to preference or priority over any
other shares of such corporation in respect of the payment of dividends or
distribution of assets upon liquidation or both.
"Preferred Stock Agreement" is defined in paragraph 1A of the
Agreement.
"Properties" shall mean all real property owned, leased or otherwise
used or occupied by the Company or any Subsidiary, wherever located.
"Purchaser Schedule" is defined in paragraph 2A of the Agreement.
"Required Holder(s)" shall mean the holder or holders of at least 51%
of the aggregate principal amount of the Notes from time to time outstanding.
<PAGE>
43
"Responsible Officer" shall mean the chief executive officer, chief
operating officer, principal financial officer, principal accounting officer,
treasurer or assistant treasurer of the Company or any other senior executive
officer of the Company involved principally in its financial administration or
its controllership function.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and any rules or regulations promulgated thereunder.
"Senior Funded Debt" shall mean all Funded Debt other than
Subordinated Funded Debt.
"Series A Note" is defined in paragraph 1C of this Agreement.
"Series B Note" is defined in paragraph 1C of this Agreement.
"Significant Holder" shall mean (i) you, so long as you shall hold (or
be committed under this Agreement to purchase) any Note, or (ii) any other
Person which holds at least $5,000,000 of the aggregate principal amount of the
Notes from time to time outstanding.
"Subordinated Funded Debt" shall mean Funded Debt which has been
subordinated to all other Senior Funded Debt pursuant to subordination
provisions acceptable to each Significant Holder.
"Subsidiary" shall mean any corporation of which the Company directly
or indirectly owns or controls at least a majority of the outstanding Voting
Stock.
"Third Party" shall mean all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Company's business (consistent with its practices on the Date of
Closing) and on a temporary basis.
"Transferee" shall mean any direct or indirect transferee of all or
any part of any Note purchased by you under this Agreement.
"Unisource Canada" shall mean Unisource Canada, Inc., a corporation
continued under the federal laws of Canada, and which is a Wholly-Owned
Subsidiary.
<PAGE>
44
"Voting Stock" shall mean, with respect to any corporation, any
shares of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of the Board of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" shall mean any Subsidiary, all of the
Voting Stock of which shall, at the time of determination, be owned by the
Company or another Wholly-Owned Subsidiary.
10C. Accounting Principles, Terms and Determinations. All references in
this Agreement to "generally accepted accounting principles" shall be deemed to
refer to generally accepted accounting principles in effect in the United States
at the time of application thereof. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles, applied on a basis consistent with the
most recent audited consolidated financial statements of the Company and its
Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if no such
statements have been so delivered, the most recent audited financial statements
referred to in clause (i) of paragraph 8B, subject in the case of, interim
statements to normal year end adjustments and to the absence of footnotes.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as you shall hold
any Note, it will make payments of principal of, interest on, and any Yield-
Maintenance Amount payable with respect to such Note, which comply with the
terms of this Agreement, by wire transfer of immediately available funds for
credit (not later than 12:00 noon, New York City time, on the date due) to your
account or accounts as specified in the Purchaser Schedule attached hereto, or
such other account or accounts in the United States as you may designate in
writing, notwithstanding any contrary provision herein or in any Note with
respect to the place of payment. You agree (and any Transferee shall agree as a
condition to the transfer of any Note or part thereof) that, before disposing of
any Note, you (and any such Transferee) will make a notation thereon (or on a
schedule attached thereto) of all
<PAGE>
45
principal payments previously made thereon and of the date to which interest
thereon has been paid. The Company agrees to afford the benefits of this
paragraph 11A to any Transferee which shall have made the same agreement as you
have made in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save you and any
Transferee harmless against liability for the payment of, all reasonable out-of-
pocket expenses actually incurred (including without limitation legal fees)
arising in connection with such transactions, including:
(i) all taxes (together in each case with interest and penalties,
if any), other than state or federal income taxes or franchise taxes,
including without limitation, all stamp, intangibles, recording and other
taxes, which may be payable with respect to the execution and delivery of
this Agreement or the execution, delivery or acquisition of any Note;
(ii) all reasonable document production and duplication charges and
the reasonable fees and expenses of any special counsel engaged by you or
any Transferee after the Date of Closing in connection with this Agreement
or the Notes and any subsequent proposed modification or waiver of, or
proposed consent under, this Agreement or the Notes, whether or not such
proposed modification or waiver shall be effected or proposed consent
granted; and
(iii) the reasonable costs and expenses, including reasonable
attorneys' fees, actually incurred by you or such Transferee in connection
with the restructuring, refinancing or "work out" of this Agreement or the
Notes or the transactions contemplated hereby or thereby or in enforcing
(or determining whether or how to enforce) any rights under this Agreement
or the Notes or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement or
the Notes or the transactions contemplated hereby or by reason of your or
any Transferee's having acquired any Note, including without limitation
costs and expenses incurred in any bankruptcy case.
The obligations of the Company under this paragraph 11B shall survive the
transfer of any Note or portion thereof or interest therein by you or any
Transferee and the payment of any Note.
<PAGE>
46
11C. Consent to Amendments. Except as otherwise provided in paragraph 5I
hereof, this Agreement may be amended, and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, if the Company shall obtain the written consent to such amendment, action or
omission to act, of the Required Holder(s) except that, without the written
consent of the holder or holders of all Notes at the time outstanding, no
amendment to this Agreement shall change:
(i) the maturity of any Note,
(ii) the principal of, or the rate or time of payment of interest
on or any Yield-Maintenance Amount payable on any Note,
(iii) the time, amount or allocation of any prepayments, or
(iv) the proportion of the principal amount of the Notes required
for any consent, amendment, waiver or declaration.
Each holder of any Note at the time or thereafter outstanding shall be bound by
any consent authorized by this paragraph 11C, whether or not such Note shall
have been marked to indicate such consent, but any Notes issued thereafter may
bear a notation referring to any such consent. No course of dealing between the
Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note.
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes. The
Notes are issuable in registered form without coupons in denominations of at
least $1,000,000, except as may be necessary to reflect any principal amount not
evenly divisible by $1,000,000. The Company shall keep at its principal office
a register in which the Company shall provide for the registration of Notes and
a record of transfers of the Notes. Upon surrender for registration of transfer
of any Note at the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Notes of like tenor and of a like
aggregate principal amount, registered in the name of such transferee or
transferees. At the option of the holder of any Note, such Note may be
exchanged for other Notes of like tenor and of any authorized denominations, of
a like aggregate principal amount, upon surrender of the Note to be exchanged at
the principal office of the Company. Whenever any Notes are so surrendered for
exchange, the Company shall, at its expense, execute and deliver the Notes which
the holder making the
<PAGE>
47
exchange is entitled to receive. Every Note surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed, by the holder of such Note or such
holder's attorney duly authorized in writing. Any Note or Notes issued in
exchange for any Note or upon transfer thereof shall carry the rights to unpaid
interest and interest to accrue which were carried by the Note so exchanged or
transferred, so that neither gain nor loss of interest shall result from any
such transfer or exchange. Upon receipt of written notice from the holder of
any Note of the loss, theft, destruction or mutilation of such Note and, in the
case of any such loss, theft or destruction, upon receipt of such holder's
unsecured indemnity agreement, or in the case of any such mutilation upon
surrender and cancellation of such Note, the Company will make and deliver a new
Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to due presentment for
registration of transfer, the Company shall treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of, interest on and any Yield-Maintenance Amount
payable with respect to such Note and for all other purposes whatsoever, whether
or not such Note shall be overdue, and the Company shall not be affected by
notice to the contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in such Note to any Person
(other than any Person not an institutional investor) on such terms and
conditions as may be determined by such holder in its sole and absolute
discretion.
11F. Survival of Representations and Warranties; Entire Agreement. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by you of any Note or
portion thereof or interest therein and the payment of any Note, and may be
relied upon by any Transferee, regardless of any investigation made at any time
by or on behalf of you or any Transferee. Subject to the preceding sentence,
this Agreement and the Notes embody the entire agreement and understanding
between you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
11G. Successors and Assigns; Transfer Provisions. All covenants and other
agreements in this Agreement contained by or on behalf of either
<PAGE>
48
of the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including, without limitation, any
Transferee) whether so expressed or not.
11H. Disclosure to Other Persons; Confidentiality. The Company
acknowledges that the holder of any Note may deliver copies of any financial
statements and other documents or information delivered to such holder, and
disclose any other information disclosed to such holder, by or on behalf of the
Company or any Subsidiary in connection with or pursuant to this Agreement only
to:
(i) such holder's directors, officers, employees, agents and
professional consultants,
(ii) any other holder of any Note,
(iii) any Person to which such holder offers to sell such Note or
any part thereof, provided that each such Person agrees to observe the
confidentiality standards described in this paragraph 11H,
(iv) any Person to which such holder sells or offers to sell a
participation in all or any part of such Note, provided that each such
Person agrees to observe the confidentiality standards described in this
paragraph 11H,
(v) any Person from which such holder offers to purchase any
security of the Company, provided that each such Person agrees to observe
the confidentiality standards described in this paragraph 11H,
(vi) any federal or state regulatory authority having jurisdiction
over such holder,
(vii) the National Association of Insurance Commissioners or any
similar organization, or
(viii) any other Person to which such delivery or disclosure may be
necessary or reasonably appropriate (a) in compliance with any law, rule,
regulation or order applicable to such holder, (b) in response to any
subpoena or other legal process or informal
<PAGE>
49
investigative demand or (c) in connection with any litigation to which
such holder is a party.
Subject to the foregoing, each holder of a Note hereby agrees to use its
best efforts to hold in confidence and not to disclose any Confidential
Information; provided, that such holder will be free, after notice to the
--------
Company, to correct any false or misleading information which may become public
concerning its relationship to the Company. For the purpose of this paragraph
11H, the term "Confidential Information" shall mean information about the
Company or any Subsidiary furnished by the Company or any Subsidiary to such
holder, but does not include any information (i) which as publicly known, or
otherwise known to such holder, at the time of disclosure, (ii) which
subsequently becomes publicly known through no act or omission by such holder,
or (iii) which otherwise becomes known to such holder other than through
disclosure by the Company or any Subsidiary.
11I. Notices. All written communications provided for hereunder shall be
sent by first class mail or nationwide overnight delivery service (with charges
prepaid) and
(i) if to you, addressed to you at the address specified for such
communications in the Purchaser Schedule attached hereto, or at such other
address as you shall have specified to the Company in writing,
(ii) if to any other holder of any Note, addressed to such other
holder at such address as such other holder shall have specified to the
Company in writing or, if any such other holder shall not have so
specified an address to the Company, then addressed to such other holder
in care of the last holder of such Note which shall have so specified an
address to the Company, and
(iii) if to the Company, addressed to it at 825 Duportail Road,
Wayne, Pennsylvania 19087-5589, Telephone: (215) 296-8000, Telecopy: (215)
296-3248, Attention: Vice President-Finance, or at such other address as
the Company shall have specified to the holder of each Note in writing.
11J. Payments Due on Non-Business Days. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or interest
on any Note that is due on a date other than a
<PAGE>
50
Business Day shall be made on the next succeeding Business Day. If the date for
any payment is extended to the next succeeding Business Day by reason of the
preceding sentence, the period of such extension shall be included in the
computation of the interest payable on such Business Day.
11K. Satisfaction Requirement. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to you or to the Required Holder(s), the
determination of such satisfaction shall be made by you or the Required
Holder(s), as the case may be, in the sole and exclusive judgment (exercised in
good faith) of the Person or Persons making such determination.
11L. Independence of Covenants. All covenants of the Company hereunder
shall be of independent effect so that if a particular action or condition is
not permitted by any one of such covenants, the fact that it would be permitted
by an exception to, or otherwise be within the other limitations of, another
covenant, shall not avoid the occurrence of an Event of Default or Default if
such action is taken or condition exists.
11M. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York. THE COMPANY HEREBY SUBMITS TO THE JURISDICTION OF THE
SUPREME COURT OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY, NEW YORK AND
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
IRREVOCABLY AGREES THAT, SUBJECT TO THE SOLE AND ABSOLUTE ELECTION OF THE
REQUIRED HOLDER(S) AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL ACTIONS OR
PROCEEDINGS RELATING TO THIS AGREEMENT OR THE NOTES SHALL BE LITIGATED IN SUCH
COURTS, AND THE COMPANY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER
VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH
COURTS.
11N. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
<PAGE>
51
11O. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11P. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
11Q. No Novation. The Company has entered into this Agreement and the
Notes solely to amend, restate and restructure the terms of, and obligations
owing under and in connection with, the Existing Agreements. The Company does
not intend this Agreement and the Notes nor the transactions contemplated hereby
or thereby to be, and this Agreement and the Notes and the transactions
contemplated hereby or thereby shall not be construed to be, a novation of any
of the obligations owing under or in connection with the Existing Agreement.
[Signatures on Next Page.]
<PAGE>
52
If you agree to the foregoing, please sign the form of acceptance on the
enclosed counterpart of this letter and return the same to the Company,
whereupon this letter shall become a binding agreement between the Company and
you.
Very truly yours,
ALCO STANDARD CORPORATION
By: /s/ Kathleen M. Burns
---------------------
Treasurer
The foregoing Agreement is
hereby accepted as of the date
first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Gail A. McDermott
----------------------
Vice President
<PAGE>
Schedule 8A
SUBSIDIARIES OF REGISTRANT
--------------------------
The registrant is Alco Standard Corporation, an Ohio corporation, which has no
parent. The following sets forth information with respect to Alco's
subsidiaries as of April 30, 1994.
<TABLE>
<CAPTION>
State or other
% Voting jurisdiction of
Securities incorporation
Subsidiary Owned (by whom) or organization
- ---------- --------------- ---------------
<S> <C> <C>
Alco Realty, Inc. (ARI) 100% Alco Delaware
Alco Canada Realty, Inc. 100% ARI Canada
375347 British Columbia Ltd. 100% ARI Canada
The Alco Standard Foundation 100% Alco Pennsylvania
Alco-Texas Realty, Inc. 100% Alco Texas
Chesterbrook Insurance Limited 100% Alco Bermuda
MDR Corporation (MDR) 100% Alco Delaware
AOP Brands, Inc. 100% MDR Delaware
AOP, Inc. (AOP) 100% MDR Delaware
Alco Business Machines, Inc. 100% AOP Delaware
Alco Capital Resource Canada Ltd. 100% AOP Canada
Alco Capital Resource, Inc. 100% AOP Georgia
Alco Office Products (UK) Plc (AOPUK) 100% AOP England
Erskine House Group PLC (EHGPLC) 100% AOPUK England
Erskine Holdings, Inc. (EHI) 100% EHGPLC Delaware
Advanced Image Systems, Inc. 100% EHI Delaware
Ameritech Equipment, Inc. 100% EHI Delaware
Copytex Corporation 100% EHI Delaware
Edgemont Sales Co., Inc. 100% EHI Delaware
Erskine Holding Funding
Corporation 100% EHI Delaware
Erskine Holdings Management Corp. 100% EHI Delaware
Mirex Corporation of Texas 100% EHI Delaware
Omi of California, Inc. 100% EHI Delaware
Sierra Office Concepts, Inc. 100% EHI Delaware
Standard Copier Machines, Inc. 100% EHI Delaware
Systems, Devices & Supplies, Inc. 100% EHI Delaware
University Copy Systems, Inc. 100% EHI Delaware
Zeno Systems of Colorado, Inc. 100% EHI Delaware
Zeno Systems of Georgia, Inc. 100% EHI Delaware
Zeno Systems of Houston, Inc. 100% EHI Delaware
Allegheny Business Machines, Inc. 100% AOP Delaware
Allstate Business Systems, Inc. 100% AOP Georgia
American Business Machines, Inc. 100% AOP Ohio
American Business Machines, Inc. 100% AOP Oregon
Associated Business Products, Inc. 100% AOP Idaho
Badger Business Products 100% AOP Delaware
Benndorf-Verster Limited 100% AOP Canada
Business Systems of Arizona, Inc. 100% AOP Delaware
Business Machines Center, Inc. (NSL) 100% AOP New Mexico
Calgary Copier, Ltd. 100% AOP Canada
Copier Consultants, Inc. 100% AOP North Carolina
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
State or other
% Voting jurisdiction of
Securities incorporation
Subsidiary Owned (by whom) or organization
- ---------- --------------- ---------------
<S> <C> <C>
Copy Corporation 100% AOP Kentucky
Copy Corporation of Canada Limited (CCC) 100% AOP Canada
Lion Business Machines, Ltd. 100% CCC Canada
Copy Data Group, Inc. 100% AOP Delaware
Copyline Corporation (Copy) 100% AOP California
Advanced Image Systems, Inc. 100% Copy California
Copy-Van, Incorporated 100% AOP Delaware
D.C. Hey Company, Inc. 100% AOP Minnesota
Halifax Office Products Limited 100% AOP Canada
Hovinga Business Systems, Inc. 100% AOP Michigan
Innovative Office Systems, Inc. (IOS) 100% AOP Texas
Innovative Office Systems-Louisiana
(IOSL) 100% IOS South Carolina
Copy Products, Inc. 100% IOSL Louisiana
International Office Systems, Inc. 100% AOP Delaware
Ken Parma's Copy Center, Inc. 100% AOP Texas
McDonald-Klein Business Products, Inc. 100% AOP Washington
O'Brien Business Equipment, Inc. 100% AOP Ohio
Office Products, Inc. (OP) 100% AOP Delaware
Office Group, Inc. (OG) 100% AOP Delaware
Office Group Industrie
Beteiligungs GmbH (OGBI) 50% OP, 50% OG Germany
IMM Industrie Beteiligungs
GmbH 49.9956% OGBI Germany
Omni Business Systems, Inc. 100% AOP Florida
S & S Office World, Inc. 100% AOP Texas
Southern Copy Machines, Inc. 100% AOP Delaware
Standard Office Systems of Sacramento, Inc. 100% AOP Delaware
SterCap, Ltd. (SCL) 100% AOP South Carolina
Venture Capital Management, Ltd. (VCM) 100% SCL South Carolina
Business Products, Ltd. (BPL) 100% VCM South Carolina
Modern Office Machines, Inc. (MOM) 100% BPL South Carolina
Modern Office Leasing, Inc. 100% MOM South Carolina
Advanced Office Machines, Inc. 100% MOM South Carolina
Ideal Leasing Company 100% MOM South Carolina
TNL Financial, Inc. 100% AOP Delaware
Taft Locke Companies 100% AOP Delaware
The T. Talbott Bond Company 100% AOP Maryland
Taylor-Made Office Systems, Inc. 100% AOP California
J. L. Teel Company, Inc. 100% AOP Delaware
Texas Copy Systems, Inc. 100% AOP Delaware
Uni-Copy Corporation of North Carolina 100% AOP Delaware
Unitech, Inc., of Mississippi 100% AOP Mississippi
University Copy Systems of Hawaii, Inc. 100% AOP Hawaii
Western Business Resources, Inc. 100% AOP South Dakota
Worcester Business Machines, Inc. 100% AOP Massachusetts
Xtec Office Systems, Inc. 100% AOP Pennsylvania
</TABLE>
- 2 -
<PAGE>
<TABLE>
<CAPTION>
State or other
jurisdiction of
% Voting Securities incorporation or
Subsidiary Owned (by whom) organization
- ---------- ------------------- ----------------
<S> <C> <C>
Alco Standard Acquisition Capital Corporation 100% MDR Delaware
Alco Standard Ltd. 100% MDR Delaware
Alco Standard Petroleum Corporation 100% MDR Delaware
Alco Venture Capital Company 100% MDR Delaware
Office Automation, Inc. (OAI) 100% Alco Kansas
Office Automation Leasing, Inc. 100% OAI Kansas
PCA Holdings, Inc. 100% MDR Delaware
Unisource Worldwide, Inc. (UWI) 100% PCAHold Delaware
Central Products Company-Linden 100% UWI Delaware
Dygert/FCF, Inc. 100% UWI New York
PCA Brands, Inc. 100% UWI Delaware
PCA Sales Corporation 100% UWI Delaware
Paper Corporation of
North America (PCNA) 100% UWI Delaware
3813 Holdings, Ltd. 100% PCNA Canada
Unisource Canada, Inc. 100% PCNA Canada
Unisource International, Inc. 100% UWI Delaware
Partners Securities Company 100% Alco Delaware
TDFC Corporation 100% AFG Delaware
Upshur Coals Corporation 100% Alco West Virginia
</TABLE>
<PAGE>
Schedule 8D
ALCO STANDARD CORPORATION
DEBT
DECEMBER 31, 1993
($ IN THOUSANDS)
<TABLE>
<CAPTION>
SHORT-TERM DEBT - VARIABLE RATE
INTEREST
AMOUNT RATE FACTOR
------ -------- ------
PAPER CORPORATION OF AMERICA
- ----------------------------
<S> <C> <C> <C> <C>
INTER-CITY PRUDENTIAL $ 140 5.00% $ 7
UNISOURCE - CANADA T. DOMINION BANK 2,719 5.50 150
VARIOUS 45,324 4.34 1,967
VARIOUS 3,777 5.50 208
ALCO OFFICE PRODUCTS
- --------------------
AMERITECH - SACRAMENTO JOHN FISHER 21 6.00* 1
RICOH 223 7.00 16
EDGEMONT J&D HEMMINGHAUS 27 6.00* 2
MOVINGA CITICORP 10 7.50 1
LION KELLY 101 7.75 8
CORPORATE
- ---------
NATIONAL WESTMINSTER 95,000 3.46 3,287
SHAWMUT 51,000 3.31 1,688
FIDELITY BANK 15,000 3.31 497
SAN PAOLO 10,000 3.50 350
CONTINENTAL ILLINOIS 20,000 3.50 700
------ -----
243,342 8,882
ACR - RECLASS OF ALCO I/C (4,457) 3.25 506
TOTAL SHORT-TERM DEBT - VARIABLE RATE $ 247,799 3.38% $ 8,376
======= ======
TOTAL SHORT-TERM DEBT - VARIABLE RATE $ 247,799 $ 8,376
TOTAL LONG-TERM DEBT - VARIABLE RATE 8,228 386
------- ------
TOTAL VARIABLE RATE DEBT $ 256,027 3.42% $ 8,762
======= ======
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM DEBT - VARIABLE RATE
PAPER CORPORATION OF AMERICA
- ----------------------------
<S> <C> <C> <C> <C>
GARRETT - BUCHANAN TRUST COMPANY BANK $ 3,565 3.60% $ 128
ROURKE - ENO KEY BANK 299 3.90 12
<CAPTION>
ALCO OFFICE PRODUCTS
- --------------------
CALGARY CANADIAN IMPERIAL BANK 3,777 5.50 208
COPYVAN MITA CORP. 16 6.00* 1
MITA CORP. 12 6.00* 1
MERCHANTS EHFC 41 6.00* 2
MOM CSI 130 7.00 9
C&S 272 6.50 18
VARIOUS 1 6.00*
WESTERN BUSINESS VARIOUS 92 6.00* 6
ZENO - ATLANTA ERSKINE HOLDINGS 23 6.00* 1
------- ------
TOTAL LONG-TERM DEBT - VARIABLE RATE 8,228 4.69 386
======= ======
* RATE INFORMATION IS NOT AVAILABLE, THEREFORE, PRIME IS USED.
</TABLE>
<PAGE>
ALCO STANDARD CORPORATION
DEBT
DECEMBER 31, 1993
($ IN THOUSANDS)
<TABLE>
<CAPTION>
LONG-TERM DEBT-FIXED RATE
INTEREST
AMOUNT RATE FACTOR
------ -------- ------
PAPER CORPORATION OF AMERICA
- ----------------------------
<S> <C> <C> <C> <C>
CARPENTER PAPER OMAHA NAT'L BANK $ 160 7.125% $ 11
COPCO PAPERS FRANKLIN COUNTY 5,700 11.OO 627
INTER-CITY NORTHWESTERN MUTUAL 367 9.875 36
NORTHWESTERN MUTUAL 850 8.375 71
MONARCH PAPER TRINITY RIVER 1,000 8.25 83
ALCO OFFICE PRODUCTS
- --------------------
A-COPY H.CHAMBERS 94 7.50 7
ALLEGHENY TEXAS NAT'L LEASING 8 11.00 1
BUSINESS MACHINES CENTER SUNWEST CREDIT 5 13.50 1
COPYVAN GENERAL MOTORS 10 7.90 1
DANA COMMERCIAL 33 15.10 5
DELTA VISUAL COMMUNICATIONS 130 9.00 12
ROBERT FOGETARY 116 9.00 10
D.C. HEY CARLSON 18 6.70 1
ERSKINE LTD. 873 6.38 56
ERSKINE HOLDINGS PRUDENTIAL 35,000 10.70 3,745
TEXAS COMMERCE 863 4.92 42
HALIFAX TD BANK 83 7.75 6
MERCHANTS 14 15.30 2
MOM ABS 25 12.50 3
IDEAL 93 9.00 8
NIGHTRIDER VARIOUS 7,234 11.00 796
OMI JLA CREDIT 76 6.39 5
KODAK 16 10.47 2
JLA CREDIT 3 12.65
DOWMAR 85 6.39 5
NORTHERN TELECOM 43 7.28 3
OMNI NORTHERN TELECOM 14 11.06 2
UNIV. COPY SYSTEMS - HAWAII AMERICAN NAT'L LEASING 11 14.22 2
AMERICAN NAT'L LEASING 4 17.14 1
AMERICAN NAT'L LEASING 7 12.51 1
GECC HAWAII LEASING 3 5.17
GECC HAWAII LEASING 3 5.57
WESTERN BUSINESS DODGE TOWN 3 14.00
BANK FIRST 8 11.00 1
XTEC UNISYS FINANCE 11 10.10 1
UNISYS FINANCE 1 10.48
UNISYS FINANCE 11 11.35 1
UNISYS FINANCE 1 10.52
YALE PRODUCTS 9 10.60 1
G.E. CAPITAL 63 9.60 6
VARIOUS 57 7.90 5
CORPORATE GROUP
- ---------------
CORPORATE G/L PRIVATE PLACEMENT 100,000 8.112 8,112
BOND ISSUE 150,000 8.875 13,313
TOTAL LONG-TERM DEBT - FIXED RATE $ 303,105 8.90% $ 26,985
======= ======
TOTAL LONG-TERM DEBT (EXCLUDING
UNKNOWNS) $ 311,333 8.79% $ 27,371
======= ======
TOTAL DEBT (EXCLUDING UNKNOWNS
& FINANCE SUB) $ 559,132 6.39% $ 35,747
======= ======
</TABLE>
<PAGE>
ALCO STANDARD CORPORATION
DEBT
DECEMBER 31, 1993
-----------------
($ IN THOUSANDS)
<TABLE>
<CAPTION>
LONG-TERM DEBT -- UNKNOWNS INTEREST
AMOUNT RATE FACTOR
------ ---- ------
<S> <C> <C> <C>
PAPER CORPORATION OF AMERICA
- ----------------------------
PCA CORPORATE $ 2,500
DIVISION LEDGER (2,500)
UNISOURCE 16,976
ALCO OFFICE PRODUCTS
- --------------------
BADGER TEXAS NAT'L. LEASING 34
ABM 3M MINESCO 17
MOM VARIOUS 18
TOTAL LONG-TERM DEBT -- UNKNOWNS $ 17,045
======
--------
TOTAL DEBT (EXCLUDING FINANCE SUB) $ 576,177
=======
LONG-TERM DEBT -- FINANCE SUBSIDIARY
ACR FIDELITY $ 25,000 6.26 % $ 1,565
DEUTSCHE BANK 30,000 5.89 1,767
SANWA BANK 15,000 5.92 888
CREDIT SUISSE 20,000 6.48 1,296
SANWA BANK 15,000 5.99 899
SHAWMUT BANK 20,000 4.01 802
PRUDENTIAL 12,000 8.55 1,026
PRUDENTIAL 25,000 8.62 2,155
TRUST CO. BANK 20,000 8.43 1,686
CREDIT SUISSE 25,000 5.92 1,480
DEUTSCHE BANK 21,000 7.37 1,548
TRUST CO. BANK 15,000 7.38 1,107
TRUST CO. BANK 32,000 5.32 1,702
FUJI BANK 25,000 5.26 1,315
NATIONS BANK 25,000 4.71 1,178
NATIONS BANK 25,000 5.29 1,323
SOCIETY NATIONAL 25,000 4.69 1,173
CREDIT SUISSE 20,000 4.13 826
TORONTO DOMINION 15,000 4.16 624
FIRST FIDELITY 18,000 5.18 932
RECLASS OF ALCO I/C (4,457) 3.25 506
ACR CANADA CANADIAN IMPERIAL BANK 22,964 5.50 1,263
-------- --------
TOTAL LONG-TERM DEBT -- FINANCE SUBSIDIARY $ 446,507 6.06 % $ 27,061
======= ======
</TABLE>
<PAGE>
ALCO STANDARD CORPORATION
AVERAGE COST OF DEBT
DECEMBER 31, 1993
-----------------
($ IN THOUSANDS)
<TABLE>
<CAPTION>
INTEREST
AMOUNT RATE FACTOR
------ -------- ------
<S> <C> <C> <C>
ALCO CORPORATE
- --------------
CORPORATE LEDGER PRIVATE PLACEMENT $ 100,000 8.112 % $ 8,112
BOND ISSUE 150,000 8.875 13,313
--------- -------
TOTAL CORPORATE $ 250,000 8.57 % $ 21,425
======= ======
</TABLE>
<PAGE>
A-1
EXHIBIT A
[FORM OF NOTE]
ALCO STANDARD CORPORATION
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN VIOLATION OF SUCH
LAWS.
____% SERIES [A] [B] SENIOR NOTE DUE APRIL ______
No. R_____ May __, 1994
$____________
FOR VALUE RECEIVED, the undersigned, ALCO STANDARD CORPORATION (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Ohio, hereby promises to pay to _____________________, or
registered assigns, the principal sum of _______ MILLION DOLLARS on May _____,
with interest (computed on the basis of a 360-day year--30-day month) (a) on the
unpaid principal balance thereof at the rate of ____% per annum from the date
hereof, payable [semi-annually] [quarterly] in arrears on the ____ day of
_________[, ________, ________] and _________ in each year, commencing with the
___________ next succeeding the date hereof, until the principal hereof shall
have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of interest and any
overdue payment of any Yield-Maintenance Amount (as defined in the Note
Agreement referred to below), payable semi-annually as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the lesser of (i) the maximum rate permitted by applicable
law or (ii) greater of (a) ____%/*/ or (b) 2.0% over the rate of interest
publicly announced by Morgan Guaranty Trust Company of New York from time to
time in New York City as its Prime Rate.
Payments of principal or interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of Morgan
Guaranty Trust Company of New York in New York City or at
- --------------------------
/*/ 2% above stated rate.
<PAGE>
A-2
such other place as the holder hereof shall designate to the Company in writing,
in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to a Note Agreement, dated as of May 13, 1994 (herein called the
"Agreement"), between the Company and The Prudential Insurance Company of
America and is entitled to the benefits, and subject to the terms, thereof.
This Note is issued in registered form and, as provided in the Agreement,
upon surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company shall not be affected by any notice to the contrary.
The Company agrees to make prepayments of principal on the dates and in
the amounts specified in the Agreement. This Note is also subject to optional
prepayment, in whole or from time to time in part, on the terms specified in the
Agreement.
In case an Event of Default, as defined in the Agreement, shall occur and
be continuing, the principal of this Note may be declared or otherwise become
due and payable in the manner and with the effect provided in the Agreement.
The Company and any and all endorsers, guarantors and sureties severally
waive grace, demand, presentment for payment, notice of dishonor or default,
notice of intent to accelerate, notice of acceleration (to the extent set forth
in the Agreement), protest and diligence in collecting.
Should any debt represented by this Note be collected at law or in equity,
or in bankruptcy or other proceedings, or should this Note be placed in the
hands of attorneys for collection, the Company agrees to pay, in addition to the
principal, Yield-Maintenance Amount, if any, and interest due and payable
hereon, all costs of collecting or attempting to collect this Note,
<PAGE>
A-3
including reasonable attorneys' fees and expenses (including those incurred in
connection with any appeal).
This Note is intended to be performed in the State of New York and shall
be construed and enforced in accordance with the law of such State. As provided
in paragraph 11M of the Agreement, the Company submits to the jurisdiction of
the Supreme Court of the State of New York located in New York County, New York
and the United States District Court for the Southern District of New York in
any action or proceeding relating to this Note.
ALCO STANDARD CORPORATION
By:______________________________
Title:
<PAGE>
B-1
EXHIBIT B
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of General Counsel of the Company]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
We have acted as counsel for Alco Standard Corporation (the "Company") in
connection with the Note Agreement, dated as of May 13, 1994, between the
Company and you (the "Note Agreement"), pursuant to which the Company has issued
to you today 10.51% Series A Senior Notes due April 24, 2001, of the Company in
the aggregate principal amount of $35,000,000 and 8.61% Series B Senior Notes
due April 1, 2005, of the Company in the aggregate principal amount of
$25,000,000. All terms used herein that are defined in the Note Agreement have
the respective meanings specified in the Note Agreement. This letter is being
delivered to you in satisfaction of the condition set forth in paragraph 3B of
the Note Agreement and with the understanding that you are purchasing the Notes
in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and copies certified to our
satisfaction of corporate documents and records of the Company and of other
papers, and have made such other investigations, as we have deemed relevant and
necessary as a basis for our opinion hereinafter set forth. We have relied upon
such certificates of public officials and of officers of the Company with
respect to the accuracy of material factual matters contained therein which were
not independently established. With respect to the opinion expressed
<PAGE>
B-2
in paragraph 4 below, we have also relied upon the representation made by you in
paragraph 9A of the Note Agreement.
Based on the foregoing, it is our opinion that:
1. Each of the Company and each Consolidated Subsidiary is a corporation
duly organized and validly existing in good standing under the laws of the State
of the jurisdiction in which it is incorporated.
2. Each of the Company and each Consolidated Subsidiary has the
requisite corporate power to own its properties and carry on its businesses now
being conducted and is duly qualified and authorized to do business and is in
good standing in each jurisdiction in which the character of its properties or
the nature of its business requires such qualification or authorization and
where the failure to be so qualified or authorized or to be in good standing
could reasonably be expected to have a material adverse effect on its financial
condition, business or operations.
3. The Note Agreement and the Notes have been duly authorized by all
requisite corporate action and duly executed and delivered by authorized
officers of the Company, and are valid obligations of the Company, legally
binding upon and enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). The Notes are entitled to the benefits of the Note
Agreement.
4. It is not necessary in connection with the offering, issuance, sale
and delivery of the Notes under the circumstances contemplated by the Note
Agreement to register the Notes under the Securities Act or to qualify an
indenture in respect of the Notes under the Trust Indenture Act of 1939, as
amended.
5. The extension, arranging and obtaining of the credit represented by
the Notes do not result in any violation of Regulation G, T or X of the Board of
Governors of the Federal Reserve System.
6. The execution and delivery of the Note Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of any
<PAGE>
B-3
compliance with the respective provisions of the Note Agreement and the Notes do
not conflict with, or result in a breach of the terms, conditions or provision
of, or constitute a default under, or result in any violation of, or result in
the creation of any Lien upon any of the properties or assets of the Company
pursuant to, or require any authorization, consent, approval, exemption or other
action by or notice to or filing with any court, administrative or governmental
body or other Person (other than routine filings after the date hereof with the
Securities and Exchange Commission and/or state Blue Sky authorities) pursuant
to, the charter or by-laws of the Company, any applicable law (including any
securities or Blue Sky law), statute, rule or regulation or any agreement,
instrument, order, judgment or decree to which the Company or any Consolidated
Subsidiary is a party or otherwise subject.
This opinion may be relied upon by King & Spalding and any Transferee.
Very truly yours,
<PAGE>
Exhibit 10.3
ALCO STANDARD CORPORATION
ANNUAL BONUS PLAN
Effective October 1, 1994
1. Purpose of the Plan. The Alco Standard Corporation Annual Bonus Plan
-------------------
(the "Plan") is intended to provide a method for attracting and retaining
employees of Alco Standard Corporation ("Alco") and participating subsidiaries
(collectively, the "Company"), to encourage these individuals to remain with the
Company and to devote their best efforts to its affairs and to recognize
employees for their contributions to the overall success of the Company.
2. Administration of the Plan. The Plan shall be administered by a
--------------------------
committee (the "Committee") appointed by the Board of Directors of Alco,
consisting of two or more "outside directors" (as defined in Section 162(m) of
the Internal Revenue Code of 1986, as amended, and regulations thereunder (the
"Code")). The Committee is authorized to interpret the Plan and from time to
time may adopt such rules, regulations and guidelines consistent with the
provisions of the Plan as it may deem advisable to carry out the Plan. The
Committee's interpretations of the Plan, and all actions taken and
determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all parties concerned, including
the Company, its shareholders and any person receiving an award under the Plan.
3. Eligibility. Key employees of the Company are eligible to be granted
-----------
awards under the Plan.
4. Determinations of Bonuses. The Committee shall have full power and
-------------------------
authority to (i) designate those key employees who may be eligible for bonuses
under the Plan for a fiscal year; (ii) determine performance objectives which
must be satisfied as a condition to earning a bonus under the Plan for a fiscal
year (which objectives may differ as among employees or classes of employees);
(iii) determine the types of bonuses to be paid under the Plan for a fiscal
year; (iv) determine the extent to which performance objectives applicable to a
given bonus have been achieved; (v) determine the amounts of bonuses (which may
differ among employees or classes of employees) and (vi) determine the form and
time of payment of bonuses.
5. Section 162(m) Conditions.
-------------------------
(a) Performance Goals. In the case of any employee whose compensation
-----------------
is or, in the opinion of the Committee, is potentially subject to the
compensation deduction
<PAGE>
limits of section 162(m) of the Code ("section 162(m)") for a fiscal year, the
Committee shall establish, in writing, with respect to each fiscal year
beginning with the 1995 fiscal year (i) objective performance goals and the
appropriate weighting of such goals based upon the Company's net income, cash
flow and/or total shareholder return, (ii) performance targets or range of
targets to measure satisfaction in whole or in part of such performance goals or
combination of goals and (iii) a bonus opportunity target percentage of such
employee's annual base compensation which will be used to establish the amount
of bonus to be paid to such employee depending upon the degree of satisfaction
of the performance goals.
(b) Payment of Awards. A cash bonus shall be paid under the Plan for a
-----------------
fiscal year to an employee whose compensation is or, in the opinion of the
Committee, is potentially subject to section 162(m) if and only if the
performance goal or combination of performance goals established by the
Committee with respect to such employee have been attained (based upon the
degree of satisfaction of the performance target or range of targets). Bonuses
paid pursuant to this section shall not exceed 100% of such employee's annual
base compensation for such fiscal year.
(c) Certification. No payment shall be made to an employee until the
-------------
Committee shall certify, in writing, that the applicable performance goals have
been attained.
6. Payments in Event of Termination. In the event an employee terminates
--------------------------------
employment with the Company for any reason, including death, disability and
retirement, prior to the date of payment of a bonus award, the Committee may, in
its sole discretion, pay to such employee or such employee's beneficiary, as the
case may be, a bonus award. The amount of the bonus award, if any, will be at
the sole discretion of the Committee.
7. Prohibition Against Assignment or Encumbrance. The Plan, and the
---------------------------------------------
rights, interests and benefits hereunder, shall not be assigned, transferred,
pledged, sold, conveyed, or encumbered in any way by an employee, and shall not
be subject to execution, attachment or similar process.
8. Nature of the Plan. The Plan shall constitute an unfunded, unsecured
------------------
obligation of the Company to make bonus payments in accordance with the
provisions of the Plan. The establishment of the Plan shall not be deemed to
create a trust and the Company shall not be required to establish any special or
separate fund or to segregate any assets to assure the payment of any award
under the Plan. The rights of a participant to receive benefits under the Plan
shall be only those of a general unsecured creditor.
2
<PAGE>
9. Employment Relationship. No employee or other person shall have any
-----------------------
claim or right to be granted an award under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or affect in any way the right of the
Company to terminate an employee's employment at any time.
10. Withholding. The Company shall have the right to deduct from all
-----------
awards paid hereunder an amount equal to all federal, state and local taxes
required by law to be withheld with respect to such award.
11. Expenses. The costs and expenses of administering the Plan shall be
--------
borne by the Company.
12. Termination and Amendment of Plan. The Committee shall have the
---------------------------------
right, without the necessity of shareholder or employee approval, to alter,
amend or terminate the Plan at any time; provided, however, that no such action
shall adversely affect any rights or obligations under awards previously made
under the Plan.
13. Adjustments to Performance Factors. If any performance goal,
----------------------------------
criterion or target for any year shall have been affected by special factors
(including material changes in accounting policies or practices, material
acquisitions or dispositions of property, or other unusual items) which in the
Committee's judgment should or should not be taken into account, in whole or in
part, in the equitable administration of the Plan, the Committee may, for any
purpose of the Plan, adjust such goal, criterion or target, as the case may be,
for such year (and subsequent years as appropriate), or any combination of them,
and make credits, payments and reductions accordingly under the Plan; provided,
however, that the Committee shall not have the authority to make any such
adjustments with respect to awards paid to any participant who is at such time
an employee whose compensation is or, in the opinion of the Committee, is
potentially subject to the compensation deduction limits of section 162(m).
14. Rights of Company. Nothing contained in the Plan shall prevent the
-----------------
Company or any subsidiary from adopting or continuing in effect other
compensation arrangements, which arrangements may be either generally applicable
or applicable only in specific cases.
15. Applicable Law. The Plan and all rights hereunder shall be governed
--------------
by and construed in accordance with the laws of the Commonwealth of
Pennsylvania.
16. Effective Date. The Plan shall be effective as of October 1, 1994,
--------------
subject to approval by the shareholders of Alco.
ALCO STANDARD CORPORATION
By: /s/ Hugh G. Moulton
-------------------------
Hugh G. Moulton
Executive Vice President
3
<PAGE>
Exhibit 10.4
ALCO STANDARD CORPORATION
PARTNERS' STOCK PURCHASE PLAN
(As Amended and Restated)
1. Purpose. The purpose of this Partners' Stock Purchase Plan (the
-------
"Plan") of Alco Standard Corporation ("Alco"), is to secure for Alco and its
stockholders the benefits of the incentive which an interest in the ownership of
common stock of Alco will provide to directors and those employees and
consultants who will be responsible for Alco's future growth and continued
success.
2. Participation. Only "Eligible Persons" (as hereinafter defined) shall
-------------
be entitled to participate in the Plan. An "Eligible Person" shall be a
director of Alco, or a full-time or part-time employee of Alco, or of a
subsidiary, or a consultant to Alco or a subsidiary, who shall have been
designated as a "Partner of Alco" by the Board of Directors of Alco. A
subsidiary whose employees or consultants may be considered for participation in
the Plan is any present or future corporation of which Alco or a subsidiary of
Alco owns stock representing fifty percent or more of the combined voting power
of all classes of stock of such corporation ("Eligible Subsidiary" or
"Subsidiary"). An Eligible Subsidiary, for this purpose, may be either a
domestic or foreign corporation.
An Eligible Person may become a participant in the Plan ("Participant") by
delivering to Alco or to a Subsidiary the prescribed election form. The first
election shall generally be effective on the first day of the calendar month
next succeeding the month in which the election form is delivered (the "Entry
Date"). Any election thereafter to increase, decrease, or discontinue
contributions to the Plan shall generally become effective as of the next
succeeding Entry Date. A succeeding Entry Date is the first day of the
succeeding month.
<PAGE>
3. Contributions by Participants. All contributions by Participants shall
-----------------------------
be by pay deduction. The amount of such pay deduction shall be fixed in the
election form delivered by the Participant, but shall not be less than 2% and
shall not exceed 15% of the Participant's "Base Compensation," provided,
however, that a Participant shall also be entitled to contribute an amount which
is within the foregoing percentages of the Participant's cash bonus compensation
which may be payable on an annual basis to the Participant after September 30 of
each year as a percentage of Base Compensation. In the event a Participant also
participates in the Alco Standard Corporation Stock Participation Plan or any
other qualified savings plan (other than deferred compensation plans maintained
by Alco or any of its subsidiaries) to which employee pre-tax or after-tax
contributions are currently being made, the foregoing 15% contribution
limitation shall be reduced by the amount which is used as the basis for
calculation of matching company contributions under such other plan. "Base
Compensation" shall mean (a) monthly base salary, including amounts deferred
pursuant to the Alco Standard Corporation Stock Participation Plan, any other
qualified savings plan described or any other non-qualified deferred
compensation plan sponsored by Alco, but excluding any amounts or awards earned
pursuant to the Alco Standard Corporation Long Term Incentive Compensation Plan,
(b) annual director, committee and trustees fees, including fees deferred
pursuant to the 1989 Directors' Stock Option Plan or (c) consulting fees in the
case of consultants.
4. Contributions by Alco or a Subsidiary. Alco or a Subsidiary shall
-------------------------------------
contribute into the Plan with respect to each Participant an amount equal to
66 2/3% of the Participant's contributions. In addition to the foregoing
amount, as
<PAGE>
soon as administratively practicable after September 30 of each year, Alco or
a Subsidiary shall contribute to each Participant's account an amount equal to
33 l/3% of the Participant's contributions during the preceding 12-month period
from October 1 to September 30 (the "Previous Fiscal Year"), provided the
following conditions are met:
a) the Company (as hereinafter defined) employing such Participant
has achieved its Target Performance (as hereinafter defined) for the Previous
Fiscal Year; and
b) except as otherwise authorized by the Plan Committee appointed
pursuant to Paragraph 13, the Participant is an employee of the Company on
September 30 of the Previous Fiscal Year.
"Company" shall mean Alco, or each division, subsidiary or other grouping
within Alco or a Subsidiary, as the case may be. "Target Performance" shall, in
the case of groups and companies, have the meaning set forth in the Alco
Standard Corporation Incentive Bonus Plan, as from time to time in effect for
each group and each company, and in the case of corporate partners, including
non-employee directors, the performance which earns a bonus for corporate
officers equal to 100% of target as established from time to time by the Human
Resources Committee of the Board of Directors. The contribution of each
Participant, together with Alco's or a Subsidiary's contribution, will be
applied to the purchase of shares of Alco common stock as hereinafter described.
5. Trustee. The Board of Directors shall name and designate a Trustee or
-------
Trustees (hereinafter "Trustee"), who shall enter into a Trust Agreement with
Alco in a form approved by the Board of Directors. The Board shall have the
power to approve amendments to the Trust Agreement, remove any Trustee, and
designate a successor Trustee or Trustees. The assets of the Plan shall be
<PAGE>
held in trust by the Trustee for use in accordance with the Plan in providing
for the benefits hereunder. Before the satisfaction of all liabilities under
the Plan in the event of termination of the Plan, none of the assets held by the
Trustee shall be used for or diverted to purposes other than for the exclusive
benefit of Participants and their beneficiaries except as expressly provided in
this Plan and in the Trust Agreement. No persons shall have any interest in, or
right to, any part of the assets or income held by the Trustee, except as and to
the extent expressly provided in this Plan and the Trust Agreement.
6. Purchases of Alco Common Stock. As soon as is practicable after the
------------------------------
end of each month, the Trustee shall allocate to the account of each
Participant, out of shares of Alco common stock acquired by the Trustee for such
purpose, such number of full shares and such fractional interest in a share of
Alco common stock as may be purchased by funds in each Participant's account at
the end of such month representing contributions by the Participant and by Alco
or a Subsidiary. Such allocation of shares shall be at the average cost to the
Trustee of the shares allocated to all Participants' accounts at such time.
Shares purchased with funds contributed by the Participant shall be registered
in the name of the Participant or in such other name or names as the Participant
may have designated in the prescribed election form. Shares purchased with
funds contributed by Alco or a Subsidiary shall be registered in the name of the
Trustee. Any dividends shall be paid on all shares held in the Plan at the
close of business on the record date.
Shares of Alco common stock shall be purchased by the Trustee from time to
time out of funds received by the Trustee under the Plan, either (a) on the open
market, or (b) in private transactions, including, without limitation, from Alco
or a Subsidiary, any individual or any employee benefit plan maintained by Alco
or a Subsidiary; provided, however, that all such purchases shall be at not
<PAGE>
more than the then current fair market value of Alco common stock. The Trustee
shall also hold for the purpose of allocation to the accounts of Participants as
above provided shares of Alco common stock forfeited under the provisions of
Paragraph 11 herein.
7. Stock Rights, Stock Splits and Stock Dividends. The Trustee, in its
----------------------------------------------
discretion, may exercise or sell any rights to purchase any securities
appertaining to shares of Alco common stock held by the Trustee, whether or not
allocated to individual accounts. The accounts of Participants shall be
appropriately credited. Securities received by the Trustee by reason of a stock
split, a stock dividend or other distribution shall also be appropriately
allocated to the accounts of Participants.
8. Voting of Alco Common Stock. The Trustee shall vote all shares of Alco
---------------------------
common stock purchased with the contributions of Alco or a Subsidiary and held
by the Trustee in such manner as the Trustee shall, in the Trustee's discretion,
determine. In the event of a tender offer for Alco stock, the Trustee shall
tender or not tender shares held by the Plan in the Trustee's discretion.
9. Interest of the Participant in Shares. An account will be maintained
-------------------------------------
for each Participant showing the number of shares of Alco common stock purchased
from funds contributed by the Participant and from funds contributed by Alco or
a Subsidiary for the benefit of the Participant. A Participant shall at all
times have a vested interest in the shares of Alco common stock in his account
purchased with his contributions. A Participant's interest in the shares
purchased with the contributions of Alco or a Subsidiary shall not be
immediately vested but shall vest in five equal annual installments, beginning
January 2 of the second full calendar year following the year of purchase of
such shares. The foregoing vesting schedule is subject to the provisions of
Paragraph 11 hereof regarding termination of participation in the Plan.
<PAGE>
10. Share Certificates and Distribution of Dividends. After the end of
------------------------------------------------
each calendar month there shall be distributed to each Participant a stock
certificate registered in the name of the Participant, or in such other name or
names as he may have designated in the prescribed election form, representing
the number of whole shares of Alco common stock purchased during the preceding
calendar month from funds contributed by the Participant.
After the end of each calendar year, there shall be distributed to each
Participant a stock certificate registered in the name of the Participant, or in
such other name or names as he may have designated in the prescribed election
form, representing the number of whole shares of Alco common stock purchased
from funds contributed by Alco or a Subsidiary in which the Participant's
interest shall have vested. Concurrently, there shall be furnished to each
Participant an annual statement which shall reflect the amount of his
contributions to date, the corresponding contributions by Alco or a Subsidiary
to date, the aggregate cost of the shares represented by the certificate
distributed to the Participant, the fractional share, if any, to which the
Participant may be entitled, and the number of shares of Alco common stock in
the Participant's account in which his interest shall not have vested. A
similar statement will be furnished on termination of participation in the Plan.
Dividends on all shares of Alco common stock, whether or not such shares have
vested, will be distributed currently.
11. Termination of Participation. If a Participant ceases to be an
----------------------------
Eligible Person because of death, retirement or termination of his employment by
reason of Alco's or a Subsidiary's termination of its business at a particular
geographic location or by reason of a decrease in Alco's direct or indirect
combined voting power of all classes of stock of a corporation to below 50%, his
participation in the Plan shall automatically terminate as of the end of the
calendar month of his death, retirement or termination of his employment. Upon
such termination, the
<PAGE>
Participant's interest in all shares of Alco common stock in his account
purchased with contributions by Alco or a Subsidiary shall immediately vest and
there shall be delivered to the Participant, or to the estate of a decreased
Participant (a) a stock certificate registered in the name of the Participant,
or such other name or names as he may have designated in the prescribed election
form, representing any whole shares in the Participant's account purchased from
funds contributed by the Participant which have not been previously distributed
to him, (b) a stock certificate registered in the name of the Participant, or
such other name or names as he may have designated, representing the whole
shares in the Participant's account purchased from funds contributed by Alco or
a Subsidiary, and (c) cash representing the value of any fractional share to
which the Participant is entitled as of the effective date of termination of his
participation in the Plan. The term "retirement" as used above shall mean (a)
as to an employee, termination of employment with Alco or a Subsidiary at or
after the earlier of (i) the earliest age on which a Participant may retire
pursuant to the terms of the defined benefit pension plan sponsored by Alco or a
Subsidiary in which the Participant is then participating or (ii) a
Participant's attainment of age sixty (60), or (b) as to a director or
consultant, termination of such status at any time.
If a Participant ceases to be an Eligible Person because of any reason
other than death, retirement, termination of employment under the circumstances
set forth in the preceding paragraph, his participation in the Plan shall
automatically terminate as of the end of the calendar month of his cessation as
an Eligible Person. Upon such termination, the Participant will retain his
interest in all shares of Alco common stock in his account which have vested,
but the Participant's interest will terminate in all shares which have not yet
vested. The Participant shall receive a stock certificate representing any
vested shares,
<PAGE>
together with cash representing the value of any fractional share to which the
Participant is entitled. The shares of Alco common stock in the Participant's
account which have not vested will thereafter be available to reduce the number
of shares otherwise required to be purchased with contributions by Alco or a
Subsidiary under the Plan.
If a Participant ceases to be an Eligible Person because his designation as
a "Partner of Alco" is terminated, the Committee referred to in Paragraph 13
may, in its discretion, determine that so long as such Participant shall
continue to be a director of Alco, or a full-time or part-time employee of Alco
or a Subsidiary, or a consultant to Alco or a subsidiary, he may no longer
contribute to the Plan but his interest in shares of Alco common stock
theretofore purchased with contributions of Alco or a Subsidiary shall continue
to vest in accordance with Paragraph 9 (subject to this Paragraph 11) as though
the Participant remained an Eligible Person.
12. Expenses. In addition to its contributions, Alco or its Subsidiary
--------
will pay all fees and expenses incurred in connection with the Plan, except that
brokerage fees or commissions incurred in the purchase of shares of Alco common
stock shall be considered part of the cost of the shares and shall be paid from
contributions under the Plan. No charge or deduction for any expenses will be
made to a Participant upon the termination of his participation under the Plan
or upon the distribution of certificates representing shares of Alco common
stock purchased with his contributions or the contributions of Alco or a
Subsidiary.
13. Administration. The Board of Directors shall appoint a Plan
--------------
Committee, which Plan Committee shall consist of at least three persons to serve
at the pleasure of the Board. The Plan Committee shall appoint an
Administrator, who shall be responsible for the general administration of the
Plan
<PAGE>
under the policy guidance of the Plan Committee. The Administrator shall be in
the employ of Alco and shall receive no special or additional compensation,
other than reimbursement of expenses, for his service as Administrator.
The Administrator and Plan Committee shall have all powers and duties necessary
to administer the Plan in accordance with its terms and applicable law. Any
construction, interpretation, or application of the Plan by the Administrator or
the Plan Committee shall be final, conclusive and binding on all persons.
14. Powers and Duties of Plan Committee. In addition to any duties and
-----------------------------------
powers described elsewhere herein, the Plan Committee shall have the following
specific duties and powers:
(i) to retain such consultants, accountants and attorneys, as deemed
necessary or advisable, to render statements, reports and advice with
respect to the Plan and to assist the Plan Committee in complying with all
applicable rules and regulations affecting the Plan (such consultants,
accountants or attorneys may be the same as those retained by Alco);
(ii) to decide appeals from adverse determinations of the Administrator
with respect to eligibility for or amounts of benefits under the Plan; and
(iii) to supervise the duties of the Administrator.
15. Powers and Duties of Administrator. In addition to the duties and
----------------------------------
powers described elsewhere herein, the Administrator shall have the following
specific duties and powers:
(i) under the supervision of the Plan Committee, to establish rules,
regulations and procedures to carry out the provisions of the Plan;
(ii) to resolve questions or disputes relating to eligibility for
benefits or the amount of benefits under the Plan;
<PAGE>
(iii) to conduct the day-to-day administration of the Plan subject to the
control and guidance of the Plan Committee;
(iv) to interpret the provisions of the Plan;
(vi) to evaluate administrative procedures;
(vii) to retain such consultants, accountants and attorneys, as deemed
necessary or advisable, to render statements, reports and advice with
respect to the Plan and to assist the Administrator in complying with all
applicable rules and regulations affecting the Plan (such consultants,
accountants or attorneys may be the same as those retained by Alco); and
(viii) to delegate such duties and powers as the Administrator shall
determine from time to time, to any person or persons.
16. Functioning of Administrator and Plan Committee. The Administrator
-----------------------------------------------
and Plan Committee shall keep accurate records and minutes of meetings,
interpretations and decisions. The Plan Committee shall act by majority vote of
the members.
17. Adverse Determinations. If, at any time, the Administrator makes a
----------------------
determination adverse to a Participant or other claimant with respect to a
written claim for benefits or participation under the Plan, the Administrator
shall notify the claimant in writing of such determination.
18. Appeals from Adverse Determinations. A Participant or any other
-----------------------------------
claimant who receives notice of an adverse determination by the Administrator
with respect to his claim may request in writing, within 60 days of receipt of
such notice, a review of the Administrator's determination by the Plan
Committee. The Plan Committee shall render a decision within 90 days of receipt
of a request for review.
<PAGE>
19. Deemed Denials. If for any reason the written notice of denial
--------------
described in Paragraph 17 is not furnished within 90 days of the Administrator's
receipt of a claim for benefits, the claim shall be deemed denied. Likewise, if
for any reason the written decision on review described in Paragraph 18 is not
furnished within the time prescribed, the claim shall be deemed to be denied on
review.
20. Indemnification. The Administrator, each member of the Plan Committee
---------------
and each Trustee shall be indemnified by Alco against expenses (other than
amounts paid in settlement to which Alco does not consent) reasonably incurred
by him in connection with any action to which he may be a party by reason of his
performance of administrative functions and duties under the Plan, except in
relation to matters as to which he shall be adjudged in such action to be
personally guilty of willful misconduct or gross negligence in the performance
of his duties. The foregoing right to indemnification shall be in addition to
such other rights as the Administrator, Plan Committee member or Trustee may
enjoy as a matter of law or by reason of insurance coverage of any kind. Rights
granted hereunder shall also be in addition to and not in lieu of any rights to
indemnification to which the Administrator, the Plan Committee member or Trustee
may be entitled pursuant to the Code of Regulations of Alco.
21. Amendment and Termination. The Board of Directors of Alco may
-------------------------
terminate the Plan at any time and may amend the Plan from time to time in any
respect; provided, however, that upon any termination of the Plan, all unvested
assets in the Participants' accounts shall become fully vested, and shall be
distributed to the Participants as soon as administratively practicable, and
provided further that no amendment to the Plan shall affect the right of a
Participant to receive his interest in the assets in his account, whether vested
or unvested, and no amendment to the Plan shall change the vesting schedule set
<PAGE>
forth in Paragraph 9 hereof so as to increase the vesting period for any assets
in the Participant's account at the time of such amendment.
22. Government and Other Regulations. The obligation of Alco or a
--------------------------------
Subsidiary to make contributions under the Plan, and the obligation of Alco or a
Subsidiary to purchase shares of Alco common stock under the Plan, shall be
subject to all applicable laws, rules and regulations, and to such approvals by
any governmental agencies as may be required.
23. Non-Alienation. No Participant shall be permitted to assign,
--------------
alienate, sell, transfer, pledge, or otherwise encumber his interest under the
Plan prior to the distribution of stock certificates to him. Any attempt to
assign, alienate, sell, transfer, pledge, or otherwise encumber a Participant's
interest under the Plan prior to distribution of stock certificates shall be
void and of no effect.
ALCO STANDARD CORPORATION
By: /s/ Hugh G. Moulton
-----------------------------
Hugh G. Moulton
Executive Vice President &
Chief Administrative Officer
<PAGE>
Exhibit 10.14
ALCO STANDARD CORPORATION
1994 DEFERRED COMPENSATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1995)
1. PURPOSE. The purpose of the Alco Standard Corporation 1994 Deferred
Compensation Plan is to permit certain eligible employees of Alco Standard
Corporation and its affiliated companies to defer a portion of their
compensation and to participate in a program under which they are provided
supplemental income after their retirement. The program is intended to
constitute an unfunded deferred compensation arrangement for a select group of
management or highly compensated employees.
2. DEFINITION. Unless the context otherwise requires, the following
words as used herein shall have the following meanings:
(a) "Administrator" shall mean the person or persons so designated and
acting under Paragraph 16 hereof.
(b) "Affiliated Employer" shall mean any domestic corporation of which
Alco (directly or through any subsidiary) owns 80% or more of the outstanding
voting stock.
(c) "Alco" shall mean Alco Standard Corporation, an Ohio corporation.
(d) "Compensation" shall mean all salaries, commissions and incentive
compensation from an Employer, but shall not include company contributions under
Alco's Partners' Stock Purchase Plan or Stock Participation Plan or any fringe
benefits.
(e) "Effective Date" shall mean January 1, 1995, the effective date of
this amended and restated Plan. The rights of a Participant whose participation
in the Plan commenced prior to the Effective Date and who remains a Participant
on the Effective Date shall be governed by the terms of the amended and restated
Plan as set forth herein.
(f) "Employer" shall mean Alco or an Affiliated Employer.
(g) "Participant" shall mean any person employed by an Employer on the
Effective Date who is eligible, and who has elected, to participate in the Plan.
<PAGE>
(h) "Participation Agreement" shall mean the agreement executed by
each Participant and the Employer setting forth certain information relating to
the Participant's participation in the Plan.
(i) "Plan" shall mean the Alco Standard Corporation 1994 Deferred
Compensation Plan, as amended from time to time.
(j) "Plan Year" shall mean the period beginning on January 1 and
ending on December 31 of each year.
(k) "Total Disability" shall mean a total disability as defined in the
long term disability plan adopted by the Participant's Employer (or, if the
Participant's Employer does not have such a plan, the long term disability plan
of Alco).
3. PARTICIPATION. Any person who (a) is employed by an Employer on a
full-time basis as of the Effective Date, (b) is "highly compensated" (employees
who received Compensation from an Employer in the 1992 or 1993 calendar year in
excess of $100,000 are considered "highly compensated" for purposes of the Plan)
or has been designated by Alco as a "Partner" and (c) is a United States
taxpayer as of the Effective Date, shall be eligible to participate herein. In
addition, other persons who satisfy conditions (a) and (c) of the foregoing
sentence shall be eligible to participate in the Plan if selected by the
President of Alco prior to the Effective Date. A person eligible under this
Paragraph 3 shall become a Participant by executing a Participation Agreement
and such other forms as may be required by the Administrator.
4. DEFERRAL OF COMPENSATION. Prior to the Effective Date, an eligible
employee who is not already a Participant may irrevocably elect to defer or
forgo a portion of his Compensation for each of the next five Plan Years (or, if
less, for each of the Plan Years while he is an active employee of an Employer).
The amount of the deferral for each Plan Year may vary, but may be no less than
$3,000 and no more than $25,000. A Participant shall elect the amount to be
deferred for the first Plan Year on the Participation Agreement. For the next
four Plan Years (or, if less, for each Plan Year while he is an active employee
of an Employer), a Participant will be given the opportunity, prior to the
beginning of each Plan Year, to elect the amount to be deferred (subject to the
minimum and maximum limitations set forth above). In the event that a
Participant fails to specify the amount to be deferred in any Plan Year, he
shall be deemed to have elected to defer $3,000 for such Plan Year. The
Administrator shall have the right to waive the future deferral obligation for a
Participant who has suffered an unforseeable emergency.
2
<PAGE>
The amount to be deferred for a Plan Year will be deducted from the
Participant's Compensation otherwise payable by an Employer, in substantially
equal installments.
5. INVESTMENT ACCOUNTS. Amounts deferred by a Participant pursuant to
Paragraph 4 will be credited to an account established by Alco in the name of
the Participant. A Participant's account will be credited with earnings based
on the performance of various investment options selected by the Participant
from among those made available by Alco from time to time.
A Participant may request a change in his allocation among the various
investment options once during any calendar quarter. Any such changes will
become effective as of the first day of the next calendar quarter.
6. VESTING. A Participant shall vest in the benefits to be provided
hereunder on the fifth anniversary of the date of his initial participation in
the Plan or when he attains age 65, whichever shall first occur, provided the
Participant has been a full-time employee of an Employer for the entire period.
A Participant who incurs a Total Disability while still employed by an
Employer shall become immediately vested in the benefits to be provided
hereunder (as described in Paragraph 8, below).
Each other Participant whose employment terminates prior to vesting (other
than on account of death, as described in Paragraph 7, below) shall be entitled
to receive, in a lump sum payment, an amount equal to the lesser of (i) the
Participant's deferrals to the date of termination, without interest or (ii) the
value of the Participant's account as of the last day of the calendar month
coincident with or next following the date of termination. No other benefits
shall be payable under the Plan to such Participant.
7. DEATH BENEFITS. If a Participant dies while employed by an Employer
(whether or not vested) or if a vested Participant dies while no longer employed
by an Employer but before benefit payments commence, his beneficiary shall be
entitled to receive, in a lump sum payment, the value of the Participant's
account as of the last day of the calendar month coincident with or next
following the Participant's date of death.
8. DISABILITY BENEFITS. If a Participant incurs a Total Disability while
still employed by an Employer, he shall be entitled to receive the benefits
described in Paragraph 9, which shall commence in the January following the year
in which he
3
<PAGE>
attains age 60. A Participant who has incurred a Total Disability may begin to
receive benefits before reaching age 60 if the Committee (as defined in
Paragraph 16) determines, upon application by the Participant, that the
Participant has a financial hardship that cannot reasonably be relieved by use
of other resources available to him.
9. AMOUNT AND TIMING OF BENEFIT PAYMENTS. Except as otherwise provided in
Paragraphs 6, 7 and 8, payment of benefits under the Plan shall commence in the
January following the later of the Participant's attaining age 60 or the
Participant's retirement from the employ of an Employer, unless the Participant
has notified the Administrator, in writing, at least 12 months prior to such
date, of his election to defer receipt of such benefits until a later date. The
Participant's benefits shall be paid to him in ten annual payments, as follows:
(a) 1/10 of the value of his account as of the preceding December 31
in the first year.
(b) 1/9 of the value of his account as of the preceding December 31 in
the second year.
(c) 1/8 of the value of his account as of the preceding December 31 in
the third year.
(d) 1/7 of the value of his account as of the preceding December 31 in
the fourth year.
(e) 1/6 of the value of his account as of the preceding December 31 in
the fifth year.
(f) 1/5 of the value of his account as of the preceding December 31 in
the sixth year.
(g) 1/4 of the value of his account as of the preceding December 31 in
the seventh year.
(h) 1/3 of the value of his account as of the preceding December 31 in
the eighth year.
(i) 1/2 of the value of his account as of the preceding December 31 in
the ninth year.
(j) All amounts remaining in his account in the tenth year.
10. BENEFICIARY DESIGNATION - CONTINUATION OF BENEFITS. Upon the death of
a Participant who is receiving benefits under the Plan, any benefits to which he
would otherwise have been
4
<PAGE>
entitled shall continue to be paid after his death to the beneficiary or
beneficiaries designated by the Participant in his Participation Agreement. This
designation may be amended in writing and filed with the Administrator from time
to time by the Participant. In the event that there is no effective beneficiary
designation when benefits are payable, such benefits shall be paid to the
members of the first surviving class of the Participant in the following
priority:
(a) spouse;
(b) the living children (including adopted children) in equal
amounts;
(c) estate.
11. INCAPACITY OF RECIPIENT. Any payment required to be made under the
Plan to a person who is under a legal disability may be made to or for the
benefit of such person in such of the following ways as the Administrator shall
determine:
(a) to such person;
(b) to the legal representatives of such person;
(c) to a near relative of such person to be used for his benefit; or
(d) to pay the expenses of support, maintenance or education of such
person.
The Administrator shall not be required to see to the application by any
third party of payments made pursuant to this Paragraph 11.
12. RESPONSIBILITY FOR PAYMENT. All benefits under the Plan shall be paid
by Alco. Alco may, in its sole discretion, determine the manner in which it
shall finance its obligation to pay such benefits.
13. NON-ASSIGNMENT. Except as hereinafter provided with respect to
marital or family support disputes, no amount payable under the Plan shall be
subject to assignment, transfer, sale, pledge, encumbrance, alienation or charge
by the Participant or any beneficiary. Any attempt to assign, transfer, sell,
pledge, encumber, alienate or charge any amount hereunder shall be without
effect. In cases of marital or family support disputes, the Administrator will
observe the terms of the Plan unless and until ordered to do otherwise by a
state or federal court. As a condition of participation in the Plan, the
Participant shall
5
<PAGE>
agree to hold the Employer harmless from any claim that arises out of obeying an
order of any state or federal court with respect to marital or family support
disputes, whether such order effects a judgment of such court or is issued to
enforce a judgement or order of another court.
14. NO FUNDING. Alco shall not segregate or physically set aside any
funds or assets as a result of this Plan. Neither a Participant, nor his
beneficiary, nor any other person shall be deemed to have, pursuant to this
Plan, any property interest, legal or equitable, in any specific asset of Alco
or an Employer. To the extent that any person acquires any right to receive
benefits under this Plan or a Participation Agreement, such right shall be no
greater than, nor shall it have any preference or priority over, the rights of
any unsecured general creditor of Alco or an Employer.
15. OWNERSHIP OF LIFE INSURANCE POLICIES. Alco may, but is not obligated
to, purchase life insurance policies to fund benefits under the Plan. Alco will
retain all incidents of ownership in such policies.
As a condition of participation in the Plan, the Participant shall agree
that Alco or an Employer may, at their expense, purchase life insurance on the
life of the Participant.
16. ADMINISTRATION. The Plan shall be administered by a Committee
selected from time to time by the Board of Directors of Alco (the "Committee").
The Committee shall select an Administrator from time to time to administer the
Plan under the general policy guidance of the Committee. The Administrator
shall be one or more persons who shall be responsible for:
(a) maintaining any records necessary in connection with the Plan;
(b) making calculations under the Plan;
(c) interpreting the provisions of the Plan; and
(d) otherwise administering the Plan in accordance with its terms.
17. CLAIMS PROCEDURES. At any time the Administrator makes a
determination adverse to a Participant or beneficiary with respect to a claim
for benefits or participation under the Plan, the Administrator shall notify the
claimant in writing of such determination, setting forth:
(a) the specific reason for such determination;
6
<PAGE>
(b) a reference to the specific provision or provisions of the Plan
on which such determination is based;
(c) a description of any additional material or information necessary
to perfect the claim, and an explanation of the reason that such material is
required; and
(d) an explanation of the rights and procedures set forth in this
Paragraph 17.
A person who receives notice of an adverse determination by the
Administrator with respect to a claim may request, within 60 days of receipt of
such notice, that the Committee review the Administrator's determination. This
request may be made on behalf of a claimant by a duly authorized representative.
The claimant or representative may review pertinent documents and submit issues
and comments with respect to the controversy to the Committee. The Committee
shall render a decision within 60 days of a request for review (or within 120
days under special circumstances), which decision shall be in writing and shall
set forth the specific reasons for the decision reached and the specific
provisions of the Plan on which the decision is based. A copy of the ruling
shall be forwarded to the claimant.
18. EMPLOYEE BENEFIT PLANS. This Plan shall not in any way affect a
Participant's right to participate in any pension, profit-sharing, incentive,
thrift, group health insurance, stock option, termination pay or similar plan of
an Employer, which is now in effect or may hereafter be adopted, to the extent
that the Participant is entitled to participate under the applicable terms and
provisions of such plan, except that the amounts deferred herein shall not be
included in determining a Participant's benefits under any retirement plans
qualified under section 401(a) of the Internal Revenue Code. Deferrals under
this Plan will be included as compensation for purposes of calculating the level
of contributions under Alco's Partners' Stock Purchase Plan.
19. AMENDMENT. This Plan shall remain in effect until termination by the
Board of Directors of Alco. The Board of Directors shall have the power to
amend this Plan at any time; provided, however, that, except as set forth in
Paragraph 20 and/or Paragraph 21, no amendment or termination of the Plan shall
have a material adverse effect upon a Participant unless he consents to such
amendment or termination in writing.
20. TERMINATION. The Board of Directors of Alco shall have the right to
terminate the Plan in its entirety, and not in part, at any time it determines
that proposed or pending tax law changes or other events cause, or are likely in
the future to
7
<PAGE>
cause, the Plan to have an adverse financial impact upon Alco. In such event,
Alco shall have no liability or obligation under the Plan or the Participant's
Participation Agreement (or any other document), provided that Alco distributes
to each Participant, in a lump sum payment, the value of his account, valued as
of the end of the month in which such termination occurs.
21. ACCELERATION. Alco shall have the right at any time to (a) accelerate
the vesting of benefits to be provided under the Plan or (b) cause the payment
of all amounts thereafter due to a Participant to be paid in a single lump sum
or in such other accelerated manner as Alco shall deem appropriate. The amount
of any lump sum payment shall be the value of a Participant's account, valued as
of the end of the month following Alco's determination to accelerate benefits.
If Alco accelerates the payment of benefits to more than 70% of all Participants
pursuant to this provision, it must accelerate the payment of benefits to all
Participants under the Plan in a comparable manner.
22. CHANGE IN CONTROL. In the event that a Flip-in Transaction or Event
or a Flip-over Transaction or Event occurs (as defined in the Alco Standard
Corporation Preferred Share Purchase Rights Plan, as amended from time to time),
the Plan shall terminate, and the Participant shall receive, in a lump sum
payment, the value of his account, valued as of the end of the month in which
such transaction or event occurs.
23. MISCELLANEOUS.
(a) The existence of this Plan and the Participation Agreements
hereunder, and any actions undertaken pursuant hereto, shall not confer upon the
Participant any right to continued employment by any Employer.
(b) This Plan shall be administered under and in accordance with the
laws of the Commonwealth of Pennsylvania, in which Alco's principal place of
business is located.
(c) The terms of this Plan and the Participation Agreements and other
documents executed in accordance herewith shall be binding upon Alco, its
successors and assigns, and each Participant, his heirs and legal
representatives .
(d) Any taxes imposed on a Participant shall be the sole
responsibility of the Participant. Employers shall have the right to deduct
from any benefits payable under the Plan any federal, state or local taxes
required to be deducted or withheld from such benefits.
8
<PAGE>
(e) No expenses of administering the Plan shall be charged against
the Participants or their benefits hereunder.
(f) As used herein, the singular shall include the plural, the
masculine shall include the feminine, and vice versa.
ALCO STANDARD CORPORATION
By: /s/ Hugh G. Moulton
----------------------------
Hugh G. Moulton
Executive Vice President
9
<PAGE>
EXHIBIT 10.19
No. - 562 of the Roll of Deeds for 1994
---------------------------------------
Recorded September 7th -seventh-, 1994
at Munich, Brienner StraBe 25.
Before me, the undersigned Notary
Dr. Hans Wolfsteiner
with offices in Munich
appeared today:
1. Attorney-at-law (Rechtsanwaltin) Dr. Petra Wibbe, having her business
address at Ludwig-Ganghofer-StraBe 6, 82031 Grunwald, personally known to
the notary.
2. Attorney-at-law (Rechtsanwalt) Dr. Markus Fisseler, having his business
address at Taunusanlage 11, 60329 Frankfurt am Main, personally known to
the notary;
The deponents requested to have this deed partly notarized in the English
language. The notary who speaks English fluently ascertained that the
deponents were in command of the English language so as to understand the
transaction contemplated by this deed. Having been advised of their rights by
the notary, the deponents waived their rights to the presence of a sworn
interpreter and a certified translation of this deed.
<PAGE>
- 2 -
The deponent at 1. declared in the following not only to act in his own name
but also as attorney-in-fact without representative authority in the name of
each of the natural and juristic persons set out in Enclosure A to this deed
-----------
(hereinafter collectively being referred to as the "German Shareholders" ) .
The deponent at 2. declared in the following not to act in his own name but as
attorney-in-fact without representative authority in the name of each of the
companies set out in Enclosure B to this deed (hereinafter collectively being
--------- -
referred to as the "Alco Companies").
The deponents declared that they excluded any personal liability as
representatives.
The deponents declared, on behalf of the parties represented by them, that
they wished to finally resolve all arrangements among the parties with respect
to a joint-venture (the "Joint Venture") entered into on October 5, 1992 in
connection with the acquisition of, effectively, approximately 49.9% of the
share capital of IMM Burotechnik Handel GmbH, Grunwald (formerly: IMM
Industrie Beteiligungs GmbH) and its wholly-owned subsidiary, IMM Office
Systems Holding GmbH, Munich, by indirect subsidiaries of Alco Standard
Corporation.
I.
OPOG
Acting as heretofore mentioned, the deponents then entered into the
SHARE PURCHASE AGREEMENT/OPOG
-----------------------------
attached hereto as Exhibit I.
---------
After the conclusion of the aforementioned Share Purchase Agreement/OPOG the
deponent at 1. declared upon the respective
<PAGE>
- 3 -
question of the notary that the assets of the company do not include domestic
real estate. The notary advised the deponents that the acquisition of all shares
in a company whose assets include domestic real estate is subject to German real
estate acquisition tax.
II.
ESKOFOT
Acting as heretofore mentioned, the deponents then entered into the
SHARE PURCHASE AGREEMENT/ESKOFOT
--------------------------------
attached hereto as Exhibit II.
----------
The notary advised the deponents that he was not familiar with the provisions
of Danish law, and that he was unable to accept any liability with regard to
the validity and the enforceability of the Share Purchase Agreement/ESKOFOT.
The deponents accepted this disclaimer.
III.
STR
Acting as heretofore mentioned, the deponents then entered into the
SHARE PURCHASE AGREEMENT/STR
----------------------------
attached hereto as Exhibit III.
-----------
The notary advised the deponents that he was unfamiliar with French law, and
that he could accept no liability with regard to the validity and the
enforceability of the Share Purchase Agreement/STR. The deponents accepted
this disclaimer.
<PAGE>
- 4 -
The persons set out in Enclosure C are the sole shareholders of IMM
-----------
Burotechnik Handel GmbH, Grunwald, registered with the Commercial Register of
the Lower Court of Munich under HRB 86090. The shareholders hereby authorize
the management of IMM Office Systems Holding GmbH Munich ("IMMOS"), a wholly-
owned subsidiary of IMM Burotechnik Handel GmbH, to arrange for the withdrawal
of IMMOS from the Conseil d'Administration of IMM Office Systems France S.A.
IV.
PRESS RELEASE
Acting as hertofore mentioned the deponents then declared:
The parties shall mutually agree on a press release/press releases.
V.
NON-COMPETE; INFORMATION RIGHTS
Acting as hertofore mentioned the deponents then declared:
The parties represented by us will not compete with each other in the
distribution, trading, leasing or servicing of copiers and fax machines, from
the date hereof through December 31, 1995 through a fixed local establishment,
(i) on the part of Alco Standard Corporation: in European countries in
which IMM Burotechnik Handel GmbH, Grunwald, and/or IMM Office
Systems Holding GmbH, Munich, and/or subsidiaries operate
(excluding, however, Denmark and France) except that the Erskine
House operations of Alco Standard Corporation in Germany may
continue and grow provided that they are not increased by
acquisitions;
(ii) on the part of the German Shareholders, acting personally or through
the Company, IMM Burotechnik Handel GmbH or IMM Office Systems
Holding GmbH: in European countries in which Alco Standard
Corporation and/or subsidiaries operate (namely the UK, Denmark and
France).
<PAGE>
- 5 -
Further, the parties will, for the time period set forth above, refrain from
soliciting, and accepting employment, of persons presently employed by the
relevant other parties (unless the prior consent of the other parties is
granted), unless such persons have already been hired on the date hereof.
The parties represented by us will cause their subsidiaries and affiliates to
observe the restrictions and undertakings set forth herein as if such
restrictions were agreed to by them, and hereby guarantee their performance by
way of independent contractual promise.
The parties represented by us will inform each other, and give full account,
on any tax relevant matters relating to their participations sold pursuant
this deed, and the subsidiaries of the companies in which participations are
being sold, in particular, they shall be obliged to each other to provide all
information required by the fiscal authorities on participations and
subsidiaries in any Foreign Corporation Questionnaire (Form 5471) or similar
reporting package.
VI.
RELEASE
Acting as heretofore mentioned the deponents then declared:
The parties represented by us hereby waive, and release each other from, all
rights and obligations pursuant to or in connection with the joint-venture
concluded on October 5, 1992, in particular all Transaction Documents (as
defined in the following deed) set out in notarial deed no. 1-1226/1992 of
notary Dr. Hans Wolfsteiner, Munich (including but not limited to the Share
Purchase and Transfer Agreement, the Agreement among Shareholders, the Funding
Facility and the Put-and-Call Option Agreement) and/or from their conduct as
<PAGE>
- 6 -
shareholders of IMM Burotechnik Handel GmbH, Grunwald or IMM Office Systems
Holding GmbH, Munich or other arrangements in connection therewith including
the services provided by IMM Industrie-Management Munchen GmbH, for whatever
factual or legal reasons or whether or not known or to be known, such waiver
and release to be as broad as possible in order to resolve and prevent any
present and future disputes between the parties, except for disputes, if any,
arising from this Agreement.
Prior to the execution of this deed the former partners to the Joint Venture,
Bankers Trust GmbH of Frankfurt am Main, and Gesellschaft fur
Direktbeteiligungen mbH of Hameln have transferred their shares in IMM
Burotechnik Handel GmbH, Grunwald, and all other rights and obligations in
connection with the Joint Venture, to BUKOR, Hameln; the latter hereby agrees
to indemnify the other partners to the Joint Venture against all claims (and
reasonable costs in connection with claims) Bankers Trust GmbH, and
Gesellschaft fur Direktbeteiligungen mbH may raise against other Joint Venture
partners. Further, prior to the execution of this deed, the former partners to
the Joint Venture, Mr. Arthur Haug of Munich and Deutsche Beteiligungs
Gesellschaft mbH of Frankfurt am Main have transferred their shares in IMM
Burotechnik Handel GmbH, and all other rights and obligations in connection
with the Joint Venture, to TA Triumph-Adler Aktiengesellschaft of Nurnberg and
agreed to waive and release the Alco Companies in accordance with the first
paragraph of this Art. VI.; TA hereby agrees to indemnify the Alco Companies
against all claims (and reasonable costs in connection with claims) Mr. Haug
or Deutsche Beteiligungs Gesellschaft mbH may raise against the Alco
Companies.
Equally, the Alco Companies hereby waive and release the former partners to
the Joint Venture pursuant to the first paragraph of this Art. VI and hereby
declare that they have no claims whatsoever against the former partners to the
Joint Venture, Mr. Haug, Deutsche Beteiligungs Gesellschaft mbH, Gesellschaft
fur Direktbeteiligungen mbH and Bankers Trust
<PAGE>
- 7 -
GmbH, in connection with the Joint Venture (Contract for the benefit of a
third party, Sec. 328 German Civil Code).
-----
VII.
CHANGE OF ARTICLES
Acting on behalf of the natural and the juristic persons set out in
Enclosure C the deponents then declared:
-----------
The persons set out in Enclosure C, acting as the sole shareholders of IMM
-----------
Burotechnik Handel GmbH, Grunwald, registered with the Commercial Register of
the Lower Court of Munich under HRB 86090 hereby resolve the Shareholders'
Resolution in German language set out in Enclosure D .
-----------
Further, the persons set out in Enclosure C have declared or hereby declare
-----------
their general consent to all future share transfers to TA and OPOG pursuant to
Art. 10 (1) and waive their rights pursuant to 10 (2) with respect to such
transfers of the Articles of Association of IMM Burotechnik Handel GmbH,
Grunwald.
The deponents instructed the notary to hand out the first certified copy (1.
Ausfertigung) of the notarial deed relating to the above resolutions for the
change of articles only upon his verification that this Deed has become
effective in accordance with its terms.
VIII.
CLOSING
Acting as hertofore mentioned the deponents then declared:
The closing (hereinafter being referred to as the "Closing") shall take place
on Sept. 19th, 1994 or on any other day mutually agreed in the City of New
York at the offices of the
<PAGE>
- 8 -
law firm Bruckhaus Westrick Stegemann, 767 Fifth Avenue, 43rd Floor, GM
Building, New York, NY 10153, USA. At the Closing,
(i) the deponents, persons designated in notarized declarations by the
deponents, or the persons represented by the deponents shall issue
approval letters substantially in the form set out in Enclosure E
-----------
(German Shareholders) and Enclosure F (Alco Companies) (hereinafter
-----------
being referred to as the "Approval Letters");
(ii) the deponents, persons designated in notarized declarations by the
deponents, or the persons represented by the deponents shall hand
over certified cheques (including also bank cheques) for the
relevant amounts of the purchase prices payable hereunder by TA and
AOP, Inc. respectively;
(iii) the deponents, persons designated in notarized declarations by the
deponents or the persons represented by the deponents shall hand
over to the relevant other side the resignation letters provided
for by Article V 3 of the Share Purchase Agreement/OPOG, Article
V.2 of the Share Purchase Agreement/ESKOFOT and Article V.3 of the
Share Purchase Agreement/STR;
(iv) the deponent at 2, persons designated in notarized declarations by
the deponent at 2, or Office Products, Inc., Office Group, Inc.
shall hand over to the deponent at 1, persons designated in
notarized declarations by the deponent at 1 or TA Triumph Adler
Aktiengesellschaft declarations by Messrs. Fisseler and Rohrer
pursuant to Article 5.4 of the Share Purchase Agreement/ OPOG;
(v) the deponent at 2, persons designated in notarized declarations by
the deponent at 2, or IMM
<PAGE>
- 9 -
Office Systems Holding GmbH shall hand over to the deponent at 1,
persons designated in notarized declarations by the deponent at 1,
or AOP Inc. an ordre de mouvement as well as a declaration by the
board of directors of IMM Office Systems France S.A., all in
accordance with Article 5.2 of the Share Purchase Agreement/STR;
(vi) Office Products, Inc. and Office Group, Inc. shall pass a
resolution by which Mr. Scheiter is being appointed as managing
director with sole signing power of Office Products Office Group
Industrie Beteiligungs GmbH substantially in the form set out in
Enclosure G;
-----------
(vii) the deponents, persons designated in notarized declarations by the
deponents, or the shareholders of IMM Burotechnik Handel GmbH shall
provide resolutions approving the sale of IMM Office Systems
Denmark A/S, and IMM Office Systems France S.A., substantially in
the form set out in Enclosure H;
-----------
(viii) the deponent at 1., persons designated in notarized declarations by
the deponent at 1. or IMM Office Systems Holding GmbH shall hand
over to the deponent at 2, persons designated by the deponent at 2
or AOP, Inc. the share certificate(s) of IMM Office Systems Denmark
A/S.
This Deed shall become valid only upon the notary receiving (first by fax, to
be followed by courier mail) the Approval Letters, properly issued by the
deponents, the persons designated in notarized declarations by the deponents,
or the persons represented by the deponents. The receipt by the notary of the
faxed Approval Letters, duly signed and notarized but not necessarily
legalized shall be decisive. The signatures under the originals of the
Approval Letters shall be notarized. Ms. Petra Wibbe shall be responsible for
the
<PAGE>
- 10 -
mailing of the originals of the Approval Letters to the notary. The authority
of the persons who sign the Approval Letters shall be evidenced,
(i) in the case of principals who are juristic persons resident in Europe,
by certified excerpts from the relevant commercial registers or
certificates of representation or notarized applications to the
relevant commercial registers, and a chain of notarized
powers/declarations of designation and, where necessary, the documents
legalizing the notarisations,
(ii) in the case of principals who are natural persons, by a chain of
notarized powers of attorney/declarations of designation and, where
necessary, the documents legalizing the notarisations, and
(iii) in the case of principals who are juristic persons resident in the US,
by Certificates of Incorporation, Secretary's Certificates of the
relevant company secretaries, and a chain of notarized powers of
attorney/declarations of designations and, where necessary, the
documents legalizing the notarisations.
The deponent at 1. presented or will present for deposit to the notary written
and notarized powers of attorney of the German Shareholders, and excerpts from
the Commercial Registers or certificates of representation or notarized
applications to the relevant commercial registers regarding the juristic
persons represented by him. He asked the notary to verify and certify, upon
receipt, the authority of the person who executed the Approval Letter on
behalf of the German Shareholders by an inspection of the relevant
documentation.
<PAGE>
- 11 -
He asked the notary to attach certified copies of such documentation to this
deed.
The deponent at 2. presented for deposit to the notary written and notarized
powers of attorney of the Alco Companies, which were accompanied, in the case
of the US resident companies represented by him, by Secretary's Certificates
of the relevant company secretaries and an excerpt from the Commercial
Register regarding Office Products-Office Group Industrie Beteiligungs GmbH.
He asked the notary to verify and certify, upon receipt, the authority of the
person who executed the Approval Letter on behalf of the Alco Companies by an
inspection of the relevant documentation. He asked the notary to attach
certified copies of such documentation to this deed.
The deponents asked the notary to attach to this deed certified copies of the
Approval Letters together with his certificate, that the persons who signed
the Approval Letters were duly authorized in accordance with the terms of this
agreement.
The notary advised the deponents that he was unfamiliar with the rules of
representation regarding foreign companies, and that to this extent he could
accept no liability in connection with a possible lack of authority. The
deponents accepted this disclaimer.
<PAGE>
- 12 -
IX.
COSTS
The german notarial fees up to an amount of DM 30,000.-- dreiBigtausend + VAT
shall be borne by Alco Standard Corporation. The other transaction costs and
taxes in connection with the Share Purchase Agreement/ESCFOT and /STR shall be
borne by AOP, Inc.
The banking fees in connection with payments pursuant to this deed shall be
born by Alco Standard Corporation. The travelling expenses for one
representative of the persons set out in Enclosure A to attend the Closing in
New York shall be born by Alco Standard Corporation.
The costs of the Federal Cartel Office, if any, shall be borne by TA Triumph
Adler Aktiengesellschaft.
In all other respects, the costs of the advisers to the parties shall be born
by the relevant parties.
X.
LAW; VENUE; MISCELLANEOUS
This Agreement shall exclusively be governed by the laws of the Federal
Republic of Germany.
In the event of any dispute between the parties arising out of this agreement,
the parties agree, to the extent permitted by law, on Frankfurt am Main as
non-exclusive venue. In any event, the parties hereby exclude, waive and
renounce the jurisdiction of any and all other courts outside of Germany in
respect of any matters deriving from, or relating to, this agreement or its
subject-matter (except that any award of a competent court may be executed or
enforced also with the assistance of a court whose jurisdiction is excluded,
waived or renounced pursuant to this sentence), unless the courts in Germany
should have no jurisdiction over the defendant, in
<PAGE>
- 13 -
which case the relevant defendant may be sued before any court having
jurisdiction.
If any provision of the agreements and other arrangements contained in this
deed should prove void or unenforceable, the remaining provisions shall remain
unaffected. The void or unenforceable provision shall be replaced by a valid
and enforceable provision which best meets the intentions of the parties. The
same principle shall apply to the filling of gaps.
The notary advised the deponents,
- that in case of a divestiture of shares in a GmbH a party is being
considered, as regards its relationship to the company, as the acquiror
only if the acquisition has been notified to the company together with
the submission of evidence of the transfer;
- that the acquiror is bound with respect to the shareholder relationship by
acts taken before such notification by the GmbH vis-a-vis the vendor or
by the vendor vis-a-vis the GmbH;
- that the acquiror is together with the vendor liable for contributions
on the shares in a GmbH which are still outstanding at the time of such
notification;
- that changes to the Articles of Association of a GmbH become valid only
upon the registration of such changes with the appropriate Commercial
Register.
The deponents asked the notary to notify the company of the acquisition of the
shares in Office Products-Office Group Industrie Beteiligungs GmbH by the
Purchaser by submitting a certified copy of this Deed to the company.
<PAGE>
- 14 -
The above protocol including the Enclosures A, B, C, D, E, F, G, H, and
Exhibits I, II and III including the relevant Attachment thereto was read by
the notary to the deponents, approved by them and then signed by them and the
notary in their own hands:
[SIGNATURES APPEAR HERE]
[SIGNATURES APPEAR HERE]
[SIGNATURES APPEAR HERE]
<PAGE>
Enclosure A
-----------
(b) Alcyon S.A. Porrentruy of Porrentruy, Switzerland
(c) Andra von Fuchs of Grunwald
(d) Verena von Fuchs of Leoni/Starnberg
(e) Gerda Klonne of Furth
(f) Alexander von Fuchs of Leoni/Starnberg
(g) Dr. Raimund Konig of Grunwald
(h) IBG Beteiligungsgesellschaft burgerlichen Rechts of Grunwald (Dr. Petra
Wibbe; Dr. Markus Trauttmansdorff-Weinsberg; Dr. Dietmar Scheiter; Dr.
Hans Albrecht; Dr. Thomas Buhler)
(i) Dr. Wolfgang Buhler of Furth
(j) BUKOR Beteiligungs- und Beratungsgesellschaft mbH & Co. KG of Hameln
("BUKOR")
(k) TA Triumph Adler Aktiengesellschaft of Nurnberg
(1) IMM Burotechnik Handel GmbH of Grunwald
(m) IMM Office Systems Holding GmbH of Munich
(n) Deutsche Beteiligungsgesellschaft mbH of Frankfurt am Main (only with
respect to the amendments to the Articles of Association of IMM
Burotechnik Handel) ("DBG")
(o) Arthur Haug of Munich (only with respect to the amendments to the
Articles of Association of IMM Burotechnik Handel)
<PAGE>
Enclosure B
-----------
(a) Alco Standard Corporation, Valley Forge
(b) AOP, Inc., Wilmington
(c) Office Products, Inc., Wilmington
(d) Office Group, Inc., Wilmington
(e) Office Products-Office Group Industrie Beteiligungs GmbH,
Munich
<PAGE>
Enclosure C
-----------
(a) BUKOR GmbH & Co. KG, Hameln,
shares of DM 3.244.700,--
(b) Alcyon S.A. Porrentruy, Porrentruy
shares of DM 1.125.100,--
(c) Dr. Petra Wibbe, Dr. Markus Trauttmans-
dorff-Weinsberg, Dr. Dietmar Scheiter,
Dr. Hans Albrecht und Dr. Thomas Buhler,
unter der Bezeichnung IBG Beteiligungsge-
sellschaft burgerlichen Rechts, Grunwald
shares of DM 1.102.600,--
(d) Dr. Raimund Konig, Grunwald
shares of DM 562.600,--
(e) Dr. Wolfgang Buhler, Furth
shares of DM 490.600,--
(f) Verena von Fuchs, Leoni
shares of DM 434.800,--
(g) Andra von Fuchs, Grunwald
shares of DM 434.800,--
(h) Gerda Klonne, Furth
shares of DM 343.200,--
(i) Alexander von Fuchs, Leoni
shares of DM 227.400,--
<PAGE>
- 2 -
(j) Dr. Petra Wibbe, Munich
shares of DM 22.600,--
(k) Office Products-Office Group Industrie
Beteiligungs GmbH, Munchen
shares of DM 12.498.900,--
(1) Deutsche Beteiligungsgesellschaft mbH
Frankfurt am Main
shares of DM 3.950.100,--
(m) Arthur Haug
Munich
shares of DM 562.600,--
<PAGE>
Enclosure D
-----------
Kapitalerhohunq
---------------
Die Gesellschafter verzichteten auf die Einhaltung aller Formen und Fristen
der Einberufung zu dieser Gesellschafterversammlung und beschlieBen einstimmig
mit allen Stimmen:
a) Das Stammkapital der Gesellschaft wird von DM 25.000.000,-- um
DM 2.500.000,-- - zwei Millionen funfhunderttausend Deutsche Mark - auf
DM 27.500.000,--
- siebenundzwanzig Millionen funfhunderttausend Deutsche Mark - erhoht.
(S) 5 der Satzung der Gesellschaft wird demgemaBgeandert und wie folgt neu
gefaBt:
(S) 5 Stammkapital
Das Stammkapital betragt
DM 27.500.000,--
- siebenundzwanzig Millionen funfhunderttausend Deutsche Mark -."
b) Die Erhohung erfolgt in der Weise, daB ein neuer Geschaftsanteil mit einer
Stammeinlage von DM 2.500.000,-- gebildet wird, die in Geld zu erbringen
ist. Des weiteren ist ein Aufgeld von DM 3.500.000,- zu leisten.
Zur Ubernahme der neuen Stammeinlage wird zugelassen:
Office Products-Office Group
Industrie Beteiligungs GmbH
mit dem Sitz in Munchen.
<PAGE>
Enclosure E
-----------
The undersigned Dr. Petra Wibbe, attorney-at-law in Munich, herewith takes
notice of notarial deed no. __________ , 1994 of notary public Dr. Hans
Wolfsteiner, Munich, and acting on behalf of German Shareholders (as defined
in the notarial deed) pursuant to the powers of attorney which have already
been submitted to the notary, hereby approves all acts made on behalf of the
German Shareholders.
New York, the ________________________, 1994
__________________________________________
Dr. Petra Wibbe
<PAGE>
Enclosure F
-----------
The undersigned Dr. Markus Fisseler, attorney-at-law in Frankfurt am Main,
herewith takes notice of notarial deed no. ________, 1994 of notary public Dr.
Hans Wolfsteiner, Munich, and acting on behalf of Alco Companies (as defined in
the notarial deed) pursuant to the powers of attorney which have already been
submitted to the notary, hereby approves all acts made on behalf of the Alco
Companies.
New York, the __________, 1994
- ----------------------------------
Dr. Markus Fisseler
<PAGE>
Enclosure G
-----------
GESELLSCHAFTERBESCHLUSS
Der unterzeichnete Rechtsanwalt Dr. Markus Fisseler, handelnd aufgrund der ihm
erteilten Vollmachten vom 11.07.1994 fur die Office Products, Inc. und Office
Group, Inc., Wilmington, erklart:
Die von mir vertretenen Gesellschaften sind alleinige Gesellschafter der Office
Products-Office Group Industrie Beteiligungs GmbH, Munchen, welche in Abteilung
B des Handelsregisters des Amtsgerichts Munchen unter Nr. 102712 eingetragen ist
und ihre Geschaftsadresse c/o Arthur Andersen & Co. GmbH, NymphenburgerstraBe 1,
80335 Munchen hat (im folgenden die "Gesellschaft").
Die von mir vertretenen Gesellschaften halten hiermit unter Verzicht auf alle
Formen und Fristen der Einberufung einer Gesellschafterversammlung eine
Gesellschafterversammlung der Gesellschaft ab und beschlieBen was folgt:
Der Unternehmensberater Dr. Dietmar Scheiter, Munchen, wird zum
Geschaftsfuhrer der Gesellschaft bestellt.
Er vertritt stets einzeln.
Frankfurt den,
-----------------
Dr. Markus Fisseler
Rechtsanwalt
<PAGE>
Enclosure H
-----------
SHAREHOLDERS' RESOLUTION
The undersigned shareholders of IMM Burotechnik Handel GmbH, Grunwald, hereby
approve the sale of IMM Office Systems Denmark A/S, and IMM Office Systems
France S.A., at approximately a purchase price of in total DM 18,000,000, to any
affiliate of Alco Standard Corporation, namely AOP Inc. and hereby instruct the
management to do all acts deemed necessary or desirable in connection therewith.
New York, the ___________, 1994
- -----------------------------------
Class-A-Shareholders
- -----------------------------------
Class-B-Shareholders
<PAGE>
Exhibit I to
---------
Deed - 562/ 1994 of
Notary Dr. Hans
Wolfsteiner in Munich
SHARE PURCHASE AGREEMENT/OPOG
-----------------------------
between
1. Office Products, Inc.
501 Silverside Road
Suite 28
Wilmington, DE 19809,
USA
(hereinafter being referred to as the "Seller 1")
2. Office Group, Inc.
501 Silverside Road
Suite 28
Wilmington, DE 19809,
USA
(hereinafter being referred to as the "Seller 2")
(hereinafter collectively being referred to as the Sellers)
and
TA TRIUMPH-ADLER Aktiengesellschaft,
Further StraBe
Nurnberg
(hereinafter being referred to as "TA" or the "Purchaser")
and
<PAGE>
- 2 -
the Persons set out in Attachment 1
------------
(hereinafter collectively being referred to as the "Obligors")
and
Alco Standard Corporation
P.O.Box 834, Valley Forge
PA 19482,
U S A
(hereinafter referred to as "Alco")
WHEREAS
-------
The Seller 1 is a shareholder of Office Products-Office Group Industrie
Beteiligungs GmbH, Munich, which is registered in sec. B of the Commercial
Register of the Lower Court of Munich, folio HRB no. 102 712, and has its main
business establishment at c/o Arthur Andersen & Co. GmbH, Nymphenburger StraBe
1, 80335 Munich (hereinafter being referred to as the "Company" or "OPOG").
The stated capital of the Company (hereinafter being referred to as the "Stated
Capital") is DM 50,000 and is fully paid up. The Stated Capital consists of the
following shares (hereinafter being referred to as the "Shares"):
two shares in the nominal amount of DM 24,500 and two shares in the
nominal amount of DM 500 each.
The Seller 1 is holding two shares of DM 24,500 and DM 500 (hereinafter
collectively being referred to as the "Shares 1"). The Seller 1 is interested in
divesting itself of the Shares 1. The Purchaser is interested in purchasing the
Shares 1 as follows.
<PAGE>
- 3 -
The Seller 2 is holding two shares of DM 24,500 and DM 500 (hereinafter being
referred to as the "Shares 2"). The Seller 2 is interested in divesting itself
of the Shares 2. The Purchaser is interested in purchasing the Shares 2 as
follows.
The Sellers have granted shareholder loans to the Company of DM 80,000,000 and
of DM 80,000,000 resulting from a loan agreement between the Company and Office
Products, Inc. dated October 15, 1992 (the "Loan 1") and a loan agreement
between the Company and Office Group, Inc. dated October 15, 1992 (the "Loan 2")
further each of the Sellers had claims from an intercompany account balance to
-------- -
the Company in the amount of DM 1,422,796_as of October 1, 1993 plus any
additional charges made in the meantime; in an agreement dated May 18, 1994, the
Sellers have waived the Loan 1 and the Loan 2, respectively at an amount of DM
79,000,000 each, subject to an improvement of the performance of the Company
(cf. Art. IV of the agreement of May 18, 1994) further, in an agreement dated
August, 1 1994, the Sellers have waived all their respective rights to the loans
and intercompany account claims, save for a non-interest bearing portion of the
intercompany account balance (liability) to each Seller of DM 406,214 each (such
loans, and intercompany liability plus all other rights connected therewith all
as reduced to two times DM 406,214, hereinafter collectively being referred to
as the "Loans"). The Loans shall not be affected by the transaction contemplated
hereby other than in accordance with Art. 5.1 below. The parties hereto
expressly confirm (bestatigen) the above mentioned waivers.
The Company is an approximately 49.9 % shareholder of IMM Burotechnik Handel
GmbH, Grunwald, which has a book value of approximately DM 180 million in the
books of the Company, while the remaining shares will be held immediately
following this transaction by the Obligors (excluding the Company); the Obligors
have declared their desire, in view of very substantial disagreements among the
shareholders of IMM Burotechnik
<PAGE>
- 4 -
Handel GmbH regarding the business policy of IMM Burotechnik Handel GmbH, to
see the Sellers disassociating themselves from their indirect participation in
IMM Burotechnik Handel GmbH.
The parties therefore agree as follows:
ARTICLE 1
Sale and Assignment of Shares, Right to Profits, Effective Date
---------------------------------------------------------------
1. Upon the terms and conditions of this Agreement the Seller 1 herewith
sells to TA the Shares 1 including all ancillary rights and assigns them
to TA.
2. Upon the terms and conditions of this Agreement the Seller 2 herewith
sells to TA the Shares 2 including all ancillary rights and assigns them
to TA.
3. The Purchaser accepts the relevant sales and assignments.
4. The assignment of the Shares is subject to the occurrence of the following
conditions precedent:
4.1 The receipt by the Sellers of the Cash Purchase Price in accordance
with Article 2. The Sellers shall acknowledge in writing the receipt
of the Purchase Price without undue delay. A copy of this receipt
shall be sent to the notary for attachment to this deed.
5. Irrespective whether the assignment of the Shares herewith agreed becomes
effective ad rem (dinglich) "Effective Date" within the meaning of this
------ --------
Agreement shall be the date of the Closing.
6. The profits of the current fiscal year as well as the profits of previous
fiscal years which have not been distributed to the shareholders (i.e.
profits carried forward
<PAGE>
- 5 -
and profits of previous fiscal years with respect to which no resolution
on the appropriation of results (Erqebnisverwendunq) has been passed)
------------------
shall be exclusively for the account of the Purchaser. The Company has not
made any distributions of dividends in its business year 1993/94. No
resolutions for the distribution of dividends have been passed.
7. The Purchaser hereby consolidates (Zusammenlegung) all shares in the
Company to one share of DM 50,000.
ARTICLE 2
Purchase Price, Further Undertakings of Purchaser
-------------------------------------------------
1. The aggregate cash purchase price for the Shares (hereinafter being
referred to as the "Cash Purchase Price") is DM 30,050,000 (in words:
Deutsche Mark thirty million and fiftythousand). The Cash Purchase Price
shall be paid at the Closing at the full amount of DM 30,050,000 by
certified cheque (including also bank cheques).
2. A contingent payment to provide an incentive for the Sellers to give up
their indirect participation in IMM Burotechnik Handel GmbH (hereinafter
being referred to as the "Contingent Payment" or the "Golden Share") which
shall be payable by the selling Shareholder (as hereinafter defined) shall
amount to 15% of the Net Proceeds (as hereinafter defined) from any
Effective Sale (as hereinafter defined).
2.1 Net Proceeds shall mean the excess, if any, of
2.1.1 the proceeds, in money or money's worth, from an Effective
Sale over
2.1.2 any funds or contributions of any kind (including but not
limited to capital increases, capital injections, shareholder
<PAGE>
- 6 -
loans, payments pursuant to shareholder guarantees or other
security) in money or money's worth, committed or made
available by, or on behalf of, shareholders of the Company,
IMM Burotechnik Handel GmbH or IMM Office Systems Holding GmbH
or subsidiaries or affiliates after the signing hereof and up
to the Effective Sale. The - effective - channelling through
of funds or contributions through several companies by
interrelated action shall count only once.
2.2 Companies shall mean OPOG, IMM Burotechnik Handel GmbH or IMM Office
Systems Holding GmbH.
2.3 Shareholders shall mean the shareholders of the Companies (excluding
DBG/Haug) at the time of conclusion of this Agreement and TA (or any
of its affiliates) and Bankers Trust Company (or any of its
affiliates).
2.4. Effective Sale shall mean a commitment (Bindendes
Verpflichtungsgeschaft) between the date hereof and the fifth
anniversary of the Closing by (i) one of the Shareholders to sell all
or part of their shares in one of the Companies to a third party not
affiliated with one of the Shareholders; or (ii) one of the Companies
to sell all or substantially all of their assets ("Assets") to a
third party not affiliated with one of the Shareholders. A sale of
the shares or Assets of one of the Companies or any part thereof by
one of the Shareholders or Companies to an affiliate of one of the
Shareholders ((S) 15 Aktiengesetz) shall be permissible only if the
transferee assumes all obligations, if any, under this provision
within 30 days after the respective sale.
2.5 The Golden Share shall be assessed on the aggregate value of the
Companies only once. Considering this,
<PAGE>
- 7 -
the Golden Share shall not be assessed on the proceeds for the sale
of the shares or the Assets of one of the Companies as far as the
Golden Share has already been directly or indirectly assessed on the
value of such shares or Assets in connection with a preceeding
Effective Sale.
2.6 The Sellers will be entitled to all reasonable information concerning
(i) the occurrence of an Effective Sale and (ii) the computation of
the Net Proceeds; in particular, the Sellers will be entitled to
obtain a full set of notarial and other documentation relating to an
Effective Sale (including such information which is adequate for the
Sellers in order to establish whether or not an Effective Sale has
occurred).
In the event that the respective seller or transferor shall fail to
advise the Sellers within 60 days of an Effective Sale that such
Effective Sale has occurred, the Sellers shall be entitled to a cash
penalty payment of DM 5,000,000 (Deutsche Mark five million) if the
respective Seller or transferor fails to provide that information. In
the event of a share deal, the relevant amounts of DM 5,000,000 shall
be due pro rata to the shares sold/transferred by the relevant
seller/ transferor in the relevant company. The amount payable
pursuant to the Golden Share shall be deducted from the penalty.
2.7 Any of the persons obliged under the Golden Share may extinguish all
of the Sellers' rights with respect to the Golden Share, at any time
(i) but not later than at the 2nd anniversary of the Closing by
making a cash payment to the Sellers of DM 15,000,000 (in words:
Deutsche Marks fifteen million) and (ii) thereafter by making a cash
payment to the Sellers of DM 20,000,000 (in words: Deutsche Marks
twenty million). Any individual person obliged under the
<PAGE>
- 8 -
Golden Share may exercise its rights hereunder pro rata to the shares
held by it.
2.8 The Purchaser and the Obligors will refrain from actions the sole or
primary purpose of which would be to diminish the value of the Golden
Share.
3. The from time to time outstanding portion of the Purchase Price (including
the Cash Purchase Price and the Contingent Payment) shall, from the due
date until payment, bear interest at a rate which equals FIBOR for
3-months-deposits quoted on the due date plus 25 basis points.
ARTICLE 3
Seller's Warranties
-------------------
The Sellers jointly and severally warrant to the Purchaser by way of an
independent promise of guarantee that the following statements as of the Closing
are true and accurate:
1. The statements in the whereas-clause of this Agreement with respect to the
Sellers and the Company are complete and correct.
2. The Company is a company with limited liability (Gesellschaft mit
----------------
beschrankter Haftunq) duly organized under the laws of the Federal
--------------------
Republic of Germany and validly existing in accordance with the excerpt of
the Commercial Register and the Articles of Association filed with the
Commercial Register. Save for notarial deed 1189/94 J. Kartner, Munich,
there are no shareholder resolutions amending the Articles of Association
which have not yet been registered in the Commercial Register nor are
there any side agreements relating to the constitution and organisation of
the Company.
<PAGE>
3. The Sellers are the legal and beneficial owners of the Shares sold by
them, respectively, which are free of any encumbrances or any other rights
for the benefit of third parties. The Sellers have the right and the power
to freely dispose of the Shares without the consent of any third party and
without violation of the rights of any third party.
4. The Company is the legal and beneficial owner of the Class-B-Shares
("Stamm-B-Geschaftsanteilell", as defined in the Articles of Association
of IMM Burotechnik Handel GmbH), as acquired on October 5, 1992 by
notarial deed 1-1226/92 of notary public Dr. H. Wolfsteiner, Munich. Such
Class-B-Shares are free of any encumbrances or any other rights for the
benefit of third parties. Further, the Company has free and clear title to
DM 50,000 cash on hand, deposited in a fixed account with Deutsche Bank
AG, Frankfurt am Main.
5. Save for the Loans (subject to Art. 5.1) the Company has no liabilities or
obligations to any person (including the Sellers and their affiliates, in
particular Alco Standard Corporation, banks, tax authorities, creditors,
suppliers etc.) of any kind whatsoever whether actual, contingent,
present, future or otherwise, whether or not shown or to be shown on the
balance sheet, which are attributable to or grounded in the time period up
to the date of the Closing. All contractual arrangements with the Sellers
or affiliates of the Sellers have been terminated at no costs to the
Company.
6. There shall be no further warranties or guarantees whatsoever, express or
implied, other than those expressly stipulated herein.
<PAGE>
- 10 -
ARTICLE 4
Legal Consequences
------------------
1. If one or several of the statements which the Sellers have guaranteed
pursuant to Article 3 of this Agreement should turn out not to be
accurate, then the Purchaser shall have the right to demand that the
Sellers create a situation within 60 days after receipt of such demand
which would exist were such statements correct. If the Sellers within such
period of time do not create the situation which is in accordance with
this Agreement the Purchaser and the Company shall be entitled to monetary
damages.
2. Expressly excluded are any rights of the Purchaser to exchange (Wandlung)
--------
or reduction of Purchase Price (Minderung), damages for incorrect
---------
representation (Schadensersatz wegen unrichtiger Zusicherung), culpa in
-------------------------------------------- --------
contrahendo, voidance of this Agreement because of the lack of
-----------
substantial qualities (Anfechtung wegen des Fehlens einer wesentlichen
-------------------- --------------------------
Eigenschaft) or recision or adjustment of this Agreement because of the
-----------
lack of substantial elements (Wegfall der Geschaftsgrundlage), except all
------------------------------
as expressly otherwise provided for in this agreement.
3. Save for legal defects in title all guarantee rights of the Purchaser
pursuant to this Article 4 are subject to a limitation period of three (3)
years beginning with the date hereof, and shall be excluded unless raised
in court prior to the expiration of such period.
4. Any claims because of non-fulfillment of the guarantees regarding taxes
and other public dues (Abgaben) expire three (3) months after the final
-------
assessment (Bestandskraft) of the relevant dues. There will be a netting
of tax benefits and disadvantages arising from the same source of present,
past and future tax periods.
<PAGE>
- 11 -
5. The Purchaser shall cause the Company to permit Sellers and their advisers
who are bound by professional secrecy obligations to get involved in all
tax field audits of the Company for the period before the Effective Date.
The Purchaser shall procure that the Company informs the Sellers about the
announcement or commencement of such field audit without any undue delay,
and to permit the Sellers and their advisers to attend the final tax audit
meeting (SchluBbesprechung). If no agreement can be reached about the
results of any such field audit, then the Purchaser shall upon request of
the Sellers cause the Company to initiate legal proceedings against the
respective tax assessment (Steuerbescheid) and, if necessary, conduct a
--------------
legal action in accordance with Sellers' instructions. The costs of any
such legal action shall be born by the Sellers.
ARTICLE 5
Miscellaneous
-------------
1. Alco hereby commits itself, and guarantees in that respect also the
performance of all its subsidiaries and entities it controls, that (i)
neither Alco or subsidiaries and entities which it controls shall assign
the Loans to any other person than Alco, affiliates of Alco or entities
which Alco controls; (ii) in the event that the owner of the Loans should
leave the group of companies consisting of Alco, affiliates of Alco and
entities which Alco controls (the "Alco Group") Alco shall make adequate
arrangements so that the Loans shall always be owned by a member of the
Alco Group; (iii) the Loans shall be called for payment only at the time
and to the extent the Company realizes in cash or otherwise (for instance
by way of setoff) the accrued potential claims for reimbursement of taxes
against the German Fiscal Authorities which are presently available and
which amount to DM 812,428 each. If it is finally resolved, by
unappealable court ruling, that
<PAGE>
- 12 -
the Company is unable to realize the relevant claims, the Loans shall be
waived. The Purchaser shall observe the interests of the Sellers when
realizing the relevant claims. Art. 4 para 5 shall apply mutatis mutandis.
Alco and the Company will arrange for an express amendment of the loan
documentation in accordance with the above.
2. The Purchaser and each of the Obligors shall be severally liable
(Teilschuld).
3. At the Closing, the Sellers will provide the Purchaser with a resignation
letter of Mr. Bill Brady as the managing director of the Company and of
Mr. John Hearn as a managing director of IMM Burotechnik Handel GmbH, who
shall resign at no costs to the relevant company. The Sellers will, in
turn, appoint Mr. Scheiter as new managing director with sole signing
power of the Company.
4. At the Closing the Sellers will provide the Purchaser with declarations of
Messrs. Fisseler and Rohrer, who shall declare that they return the powers
of attorney to act on behalf of (i) the Sellers and (ii) the Company.
5. This Agreement, including this provision, may only be amended by written
or, if necessary, notarial instrument.
6. Should any provision of this Agreement be held wholly or in part invalid
or unenforceable, the validity or enforceability of the other provisions
shall not be affected thereby. The invalid or unenforceable provision
shall be deemed replaced by such valid and enforceable provision which
serves best the economic interests of the parties originally pursued by
the invalid or unenforceable provision.
7. Any agreements made heretofore between the parties to this Agreement are
superseded by the conclusion of this Agreement.
<PAGE>
Attachment 1
------------
(a) BUKOR Beteiligungs- und Beratungsgesellschaft mbH & Co. KG, Hameln
(b) Alcyon S.A. Porrentruy, Porrentruy
(c) Dr. Petra Wibbe, Dr. Markus Trauttmansdorff-Weinsberg, Dr. Dietmar
Scheiter, Dr. Hans Albrecht und Dr. Thomas Buhler, unter der Bezeichnung
IBG Beteiligungsgesellschaft burgerlichen Rechts, Grunwald
(d) Dr. Raimund Konig, Grunwald
(e) Dr. Wolfgang Buhler, Furth
(f) Verena von Fuchs, Leoni
(g) Andra von Fuchs, Grunwald
(h) Gerda Klonne, Furth
(i) Alexander von Fuchs, Leoni
(j) Dr. Petra Wibbe, Munich
(k) Office Products-Office Group Industrie
Beteiligungs GmbH, Munchen
(l) TA Triumph-Adler Aktiengesellschaft,
Munchen
<PAGE>
Exhibit II to
Deed 1-1562/1994 of
Notary Wolfsteiner
in Munich
SHARE PURCHASE AGREEMENT/ESKOFOT
--------------------------------
between
IMM Office Systems Holding GmbH
ArnulfstraBe 27
80335 Munchen
(hereinafter referred to as the "Seller")
and
AOP, Inc.
Silverside Carr Executive Center
501 Silverside Road
Wilmington DE 19809
(hereinafter referred to as the "Purchaser")
WHEREAS
-------
The Seller is the sole shareholder of IMM Office Systems Denmark A/S, a Danish
stock corporation which is registered with the Danish Commerce & Companies
Agency under registration no. A/S 209171 and has its main business
establishment at Industrieparken 35-37, DK 2750 Ballerup, Kingdom of Denmark,
(hereinafter referred to as the "Company").
<PAGE>
- 2 -
The share capital of the Company (hereinafter referred to as the "Stated
Capital") is DKK 13,000,000.00 and is fully paid up. The Stated Capital
consists of 13,000 shares with a nominal value of DKK 1,000 each (hereinafter
referred to as the "Shares").
The Seller has granted a subordinated loan of DKK 12,000,000 in cash (such
loan and all other shareholder financing including interest as from the
Effective Date, hereinafter referred to as the "Shareholder Loan") in order to
improve the equity position of its subsidiary.
The Company, in turn, is the sole shareholder of ESKOFOT Kontor Systemer A/S,
a Danish stock corporation registered with the Danish Commerce & Companies
Agency under registration no. A/S 61104 who has its main business
establishment at Industriparken 35-37, DK 2750 Ballerup, Kingdom of Denmark
(hereinafter referred to as "ESKOFOT Kontor"). ESKOFOT Kontor has a share
capital of DKK 5,300,000.00 which is fully paid up.
ESKOFOT Kontor, in turn, is the sole shareholder of ESKOFOT Leasing A/S, a
Danish stock corporation registered with the Danish Commerce & Companies
Agency under registration no. A/S 66042 who has its main business
establishment at Industriparken 35-37, DKK 2750 Ballerup, Kingdom of Denmark
(hereinafter referred to as "ESKOFOT Leasing"). ESKOFOT Leasing has a share
capital of DKK 2,000,000.00 which is fully paid up.
The Seller is interested in divesting itself of the Shares and the Shareholder
Loan. The Purchaser is interested in purchasing the Shares and the Shareholder
Loan.
The parties therefore agree as follows:
<PAGE>
- 3 -
ARTICLE 1
Sale and Assignment of Shares, Shareholder Loan, Right to Profits, Effective
----------------------------------------------------------------------------
Date
----
1. Upon the terms and conditions of this Agreement the Seller herewith sells
to the Purchaser the Shares including all ancillary rights and assigns them
to the Purchaser. Further, the Seller hereby sells and assigns to the
Purchaser the Shareholder Loan. The Purchaser accepts such sales and
assignments.
2. The assignment of the Shares and the Shareholder Loan is subject to the
occurrence of the following conditions precedent:
2.1 Receipt of the Purchase Price pursuant to Article 2. The Seller shall
acknowledge in writing the receipt of the Purchase Price without undue
delay. A copy of this receipt shall be sent to the notary for
attachment to this deed.
3. Irrespective whether the assignment of the Shares and of the Shareholder
Loan herewith agreed becomes effective ad rem (dinglich) "Effective Date"
-- --- --------
within the meaning of this Agreement shall be the date of the Closing.
4. The profits of the current fiscal year as well as the profits of previous
fiscal years which have not been distributed to the shareholders (i.e.
profits carried forward and profits of previous fiscal years with respect
to which no resolution on the appropriation of results (Ergebnisverwendung)
------------------
has been passed) shall be exclusively for the account of the Purchaser. The
Sellers have not caused any dividends, whether openly or concealed, for the
business year 1993.
<PAGE>
- 4 -
ARTICLE 2
Purchase Price, Further Undertakings of Purchaser
-------------------------------------------------
1. The aggregate purchase price for the Shares and the Shareholder Loan
(hereinafter referred to as the "Purchase Price") is DM 9.000,000 (in
words: Deutsche Mark nine million).
2. The Purchase Price shall be paid by the Purchaser by certified cheque
(including also bank cheque).
3. The from time to time outstanding portion of the Purchase Price shall, from
the Effective Date until payment, bear interest at a rate which equals
FIBOR for 3-months-deposits quoted on the Effective Date plus 25 basis
points.
ARTICLE 3
Seller's Warranties
-------------------
The Seller warrants to the Purchaser in the form of an independent promise of
guarantee that the following statements are true and accurate as of the Closing:
1. The statements in the whereas-clause of this Agreement with respect to the
Seller and the Company and its subsidiaries are complete and correct.
2. The Company and its subsidiaries are stock corporations with limited
liability duly organized under the laws of the Kingdom of Denmark and
validly existing in accordance with the filings with the Danish Commerce &
Companies Agency register. There are no shareholder resolutions amending
the Articles of Association of the Company which have not yet been
registered with the Danish Commerce & Companies Agency nor are there any
side agreements with the Seller or subsidiaries other than the Company and
its
<PAGE>
- 5 -
subsidiaries relating to the constitution and organisation of the Company or
its subsidiaries.
3. The Seller is the legal and beneficial owner of the Shares which are free of
any encumbrances or any other rights for the benefit of third parties. The
Seller has the right and the power to freely dispose of the Shares without
the consent of any third party. Such disposal would not violate the right of
any third party. Rights of Den Danske Bank A/S, if any, against the disposal
shall not be covered by this Art. 3.3.
4. The Company is the legal and beneficial owner of the shares in ESKOFOT Kontor
which are free of any encumbrances or any other rights of third parties save
for a pledge in favour of Den Danske Bank A/S in connection with the
financing of the operations of the pledgor. ESKOFOT Kontor, in turn, is the
legal and beneficial owner of all the shares in ESKOFOT Leasing, which are
free of any encumbrances or any other rights of third parties save for a
pledge in favour of Den Danske Bank A/S in connection with the financing of
the operations of the pledgor.
5. After December 31, 1993, the Company and its subsidiaries have been operated
in the ordinary course of business; in particular, no distributions of
profits (including hidden distributions) have occurred for the time period
after December 31, 1993, within this framework the Company has complied with
all material provisions of the law.
6. The Seller is not liable for any acts or amissions of Alco Standard
Corporation's employees or nominees.
<PAGE>
- 6 -
ARTICLE 4
Legal Consequences
------------------
l. If one or several of the statements for which Seller has guaranteed pursuant
to Article 3 of this Agreement should turn out not to be accurate, then the
Purchaser shall have the right to demand that the Seller within 60 days
creates a situation which would exist were such statements correct. If Seller
within such period of time does not create the situation which is in
accordance with this Agreement the Purchaser shall be entitled to monetary
damages.
2. With respect to the warranty of Article 3.5 the Seller's liability pursuant
to Article 4.1 hereof is limited to the amount of the Purchase Price.
3. Expressly excluded are any rights of the Purchaser to exchange (Wandlung) or
--------
reduction of Purchase Price (Minderung), damages for incorrect representation
---------
(Schadensersatz wegen unrichtiger Zusicherung), culpa in contrahendo,
-------------------------------- ----------- -------- -----------
voidance of this Agreement because of the lack of substantial qualities
(Anfechtung wegen des Fehlens einer wesentlichen Eigenschaft) or recession or
--------------------- ------------- ------------------------
adjustment of this Agreement because of the lack of substantial elements
(Wegfall der Geschaftsgrundlage).
-------- ----------------------
4. Save for legal defects in title of the Company all warranty rights of
Purchaser pursuant to this Article 4 are subject to a limitation period of
three (3) years beginning with the date hereof, and shall be excluded unless
raised in court prior to the expiration of such period.
5. Any claims because of non-fulfillment of the warranties regarding taxes and
other public dues expire three (3) months after the final assessment of the
relevant dues if a warranty claim in that respect should arise under
<PAGE>
- 7 -
Article 3.5. There will be a netting of tax benefits and disadvantages of
present, past and future tax periods.
6. The Purchaser shall cause the Company to permit Seller or its advisers who
are bound by professional secrecy obligations to get involved in all tax
field audits of the Company for the period before the Effective Date. The
Purchaser shall procure that the Company informs the Seller about the
announcement or commencement of such field audit without any undue delay. If
no agreement can be reached about the results of any such field audit, then
the Purchaser shall upon request of the Seller cause the Company to initiate
legal proceedings against the respective tax assessment (Steuerbescheid) and,
--------------
if necessary, conduct a legal action in accordance with the Seller's
instructions. The cost of any such legal action shall be borne by the Seller.
ARTICLE 5
Miscellaneous
-------------
1. The Purchaser undertakes to change the name of the Company so as to delete
the term "IMM".
2. The Seller shall submit to the Purchaser resignation letters of the following
persons resigning at no costs to the relevant company from the following
positions:
- Dr. Hans Albrecht (Managing Director of the Company; Board of
Directors of the Company; and of ESKOFOT KONTOR)
- Christian Franckenstein (Managing Director of the Company; Board of
Directors of ESKOFOT KONTOR)
<PAGE>
- 8 -
- Dr. Frank Tofflinger (Board of Directors of the Company; of ESKOFOT
Leasing)
- Manfred Gastinger (Board of Directors of ESKOFOT LEASING).
3. [intentionally omitted]
4. This Agreement, including this provision, may only be amended by written or,
if necessary, notarial instrument.
5. Should any provision of this Agreement be held wholly or in part invalid or
unenforceable, the validity or enforceability of the other parts shall not be
affected thereby. The invalid or unenforceable provision shall be deemed
replaced by such valid and enforceable provision which serves best the
economic interest of the contract parties originally pursued by the invalid
or unenforceable provision.
6. Any agreements made heretofore between the parties to this Agreement are
superseded by the conclusion of this Agreement.
7. The Seller shall assist the Purchaser in any possible manner, as the
Purchaser may reasonably request, in the pursuit the Purchaser's or the
Company's rights, if any, against the previous owner of the Shares, Eskofot
A/S, Ballerup in connection with the Stock Purchase Agreement of June 28,
1993.
8. In the event a liability of the Seller should arise pursuant to Art. 4 and,
in the reasonable determination of the Seller there should be a recourse of
the Company against the former seller of the shares in ESCOFOT Contor which
are substantially comparable, then the Purchaser shall procure that the
Company initiates, without pre-
<PAGE>
- 9 -
judice to the rights of the Purchaser, at the Seller's expense and in
accordance with the Seller's instructions, all reasonable legal actions
against the former seller in order to reduce the damages of the Purchaser.
<PAGE>
Exhibit III to
Deed 1-1562/ 1994 of
Notary Wolfsteiner
in Munich.
SHARE PURCHASE AGREEMENT/STR
----------------------------
between
IMM Office Systems Holding GmbH
ArnulfstraBe 27
80335 Munchen
(hereinafter referred to as the "Seller")
and
AOP, Inc.
Silverside Carr Executive Center
501 Silverside Road
Wilmington DE 19809
(hereinafter referred to as the "Purchaser")
WHEREAS
-------
The Seller is a shareholder of IMM Office Systems France S.A., a French stock
corporation which is registered with the commercial register of Paris under
the registration no. B 393 20 3609 and has its main business establishment at
Michel Labrousse, Parc Technologique de BASSO CAMBO, Toulouse, France
(hereinafter referred to as the "Company").
The registered share capital of the Company (hereinafter referred to as the
"Stated Capital") is FF 250,000.00. The
<PAGE>
- 2 -
Stated Capital consists of 2,500 shares with a nominal value of FF 100 each.
2494 shares are being held by the Seller, while the remaining Stated Capital
is being held by the following persons:
- Robert Collongues 1 share of FF 100
- Hans Albrecht 1 share of FF 100
- Hans-Ulrich Bendner 1 share of FF 100
- Christian Franckenstein 1 share of FF 100
- Frank Tofflinger 1 share of FF 100
- Petra Wibbe 1 share of FF 100
The share capital has been increased to FF 8,400,000 by conversion of a
shareholder loan granted by the Seller to the Company of FF 8,150,000 into
81,500 shares with a nominal value of FF 100 each. Such capital increase has
not yet been registered with the local extrait K-bis; however, the new shares
have been validly created in accordance with all applicable provisions of
French corporate law.
The new shares have all been allotted to the Seller. Consequently, the Seller
is the owner of 83,994 shares of FF 100 each (hereinafter being referred to as
the "Shares"). The Shares have been fully paid up.
The Company, in turn, is a shareholder of S.T.R. REPROGRAPHIE S.A., a French
stock corporation registered with the Commercial Register of Toulouse under
registration no. B 303 322 317 who has its main business establishment at 15,
rue Michel Labrousse, Parc Technologique de BASSO CAMBO, Toulouse (hereinafter
referred to as "STR"). STR has a share capital of 6,846 shares with a nominal
value of FF 800 each, i.e. FF 5,476,800 which is fully paid up.
<PAGE>
- 3 -
The Company holds a share capital of 6,810 shares with a nominal value of FF
800 each, i.e. FF 5,448,000 in STR (hereinafter referred to as the "STR
Shares").
The remaining shares are being held either by the Company or as follows on
behalf of the Company:
- Robert Collongues 1 share of FF 800
- Seller 1 share of FF 800
- Frank Tofflinger 1 share of FF 800
- Petra Wibbe 1 share of FF 800
- Christian Franckenstein 1 share of FF 800
- Hans Albrecht 1 share of FF 800,
and, on his own behalf: Joel Guillo 30 shares of FF 800 each.
Mr. Guillo has offered the 30 shares in STR held by him for sale and
assignment to the Company. The Company is committed to buy such shares at FF
90,000.
The Seller is interested in divesting itself of the Shares. The Purchaser is
interested in purchasing the Shares.
The parties therefore agree as follows:
ARTICLE 1
Sale and Assignment of Shares, Right to Profits, Effective
----------------------------------------------------------
Date
----
1. Upon the terms and conditions of this Agreement the Seller herewith sells
to the Purchaser the Shares including all ancillary rights and assigns
them to the Purchaser. The Purchaser accepts such sale and assignment.
2. The assignment of the Shares is subject to the occurrence of the following
conditions precedent:
<PAGE>
- 4 -
2.1 Receipt of the Purchase Price pursuant to Article 2.
The Seller shall acknowledge in writing the receipt of the Purchase
Price without undue delay.
A copy of this receipt shall be sent to the notary for attachment to
this deed.
3. Irrespective whether the assignment of the Shares herewith agreed becomes
effective ad rem (dinglich) "Effective Date" within the meaning of this
------ --------
Agreement shall be the date of the Closing.
4. The profits of the current fiscal year as well as the profits of previous
fiscal years which have not been distributed to the shareholders (i.e.
profits carried forward and profits of previous fiscal years with respect to
which no resolution on the appropriation of results (Erqebnisverwendunq) has
------------------
been passed) shall be exclusively for the account of the Purchaser. The
Seller has not caused any dividends, whether openly or concealed, for the
business years 1993 and 1994 save for a one-time dividend of FF 1.5 million.
ARTICLE 2
Purchase Price, Further Undertakings of Purchaser
-------------------------------------------------
1. The aggregate purchase price for the Shares (hereinafter referred to as the
"Purchase Price") is DM 9,000,000 (in words: Deutsche Mark nine million).
2. The Purchase Price shall be paid by the Purchaser by certified cheque
including also Banque-cheque).
3. The from time to time outstanding portion of the Purchase Price shall, from
the due date until payment, bear in-
<PAGE>
- 5 -
terest at a rate which equals FIBOR for 3-months-deposits quoted on the
Effective Date plus 25 basis points.
ARTICLE 3
Seller's Warranties
-------------------
The Seller warrants to the Purchaser in the form of an independent promise of
guarantee that the following statements are true and accurate as of the
Closing:
1. The statements in the whereas-clause of this Agreement with respect to the
Seller and the Company and its subsidiary are complete and correct.
2. The Company and STR are stock corporations with limited liability duly
organized under the laws of the Republic of France and validly existing in
accordance with the filings with the Commercial Register of Paris and
Toulouse, respectively. Save for the resolution increasing the share capital
of the Company to FF 8,400,000, and a further resolution moving the seat of
the Company to Toulouse there are no shareholder resolutions amending the
Articles of Association of the Company which have not yet been registered
with the commercial register nor are there any with the seller or
subsidiaries other than the Company or STR side agreements with the Seller or
subsidiaries other than the Company or STR relating to the constitution and
organisation of the Company or STR.
3. The Seller is the legal and beneficial owner of the Shares which are free of
any encumbrances or any other rights for the benefit of third parties. The
Seller has the right and the power to freely dispose of the Shares without
the consent of any third party. Such disposal would not violate the right of
any third party. Rights of BNP, if any, against the disposal shall not be
covered by this Art. 3.3.
<PAGE>
- 6 -
4. The Company is the legal and beneficial owner of the STR Shares which are
free and clear of any encumbrances or any other rights of third parties.
Rights of BNP, if any, relating to a pledge over the STR-Shares shall not
be covered by this Art. 3.4.
5. After December 31, 1993, the Company and STR have been operated in the
ordinary course of business; in particular, no distributions of profits
(including hidden distributions) have occurred for the time period after
December 31, 1993 save for a one-time dividend from the Company to the
Seller of FF 1.5 million and a one-time dividend of STR to the Company and
to the minority shareholders of FF 3.1 million; within this framework the
Company and STR have complied with all material provisions of the law.
ARTICLE 4
Legal Consequences
------------------
1. If one or several of the statements for which Seller has guaranteed
pursuant to Article 3 of this Agreement should turn out not to be accurate,
then the Purchaser shall have the right to demand that the Seller creates
within 60 days a situation which would exist were such statements correct.
If Seller within such period of time does not create the situation which is
in accordance with this Agreement the Purchaser shall be entitled to
monetary damages.
2. With respect to the warranty of Art. 3.5 the Seller's liability pursuant to
Sect. 4.1 hereof is limited to the amount of the Purchase Price.
3. Expressly excluded are any rights of the Purchaser to exchange
(Wandlung) or reduction of Purchase Price (Minderung), damages for
-------- ---------
incorrect representation
<PAGE>
- 7 -
(Schadensersatz wegen unrichtiger Zusicherung), culpa in contrahendo,
-------------------------------- ----------- -------- -----------
voidance of this Agreement because of the lack of substantial qualities
(Anfechtung wegen des Fehlens einer wesentlichen Eigenschaft) or recision or
--------------------- ------------- ------------------------
adjustment of this Agreement because of the lack of substantial elements
(Wegfall der Geschaftsgrundlaqe).
------- ----------------------
4. Save for legal defects in title of the Company all warranty rights of
Purchaser pursuant to this Article 4 are subject to a limitation period of
three (3) years beginning with the date hereof, and shall be excluded unless
raised in court prior to the expiration of such period.
5. Any claims because of non-fulfillment of the warranties regarding taxes and
other public dues expire three (3) months after the final assessment of the
relevant dues if a warranty claim in that respect should arise under Article
3.5. There will be a netting of tax benefits and disadvantages of present,
past and future tax periods.
6. The Purchaser shall cause the Company to permit Seller or its advisers who
are bound by professional secrecy obligations to get involved in all tax
field audits of the Company for the period before the Effective Date. The
Purchaser shall procure that the Company informs the Seller about the
announcement or commencement of such field audit without any undue delay. If
no agreement can be reached about the results of any such field audit, then
Purchaser shall upon request of Seller cause the Company to initiate legal
proceedings against the respective tax assessment (Steuerbescheid) and, if
--------------
necessary, conduct a legal action in accordance with Seller's instructions.
The cost of any such legal action shall be borne by Seller.
<PAGE>
- 8 -
ARTICLE 5
Miscellaneous
-------------
1. The Purchaser undertakes to change the name of the Company so as to delete
the term "IMM".
2. The Seller undertakes to provide the appropriate ordre de mouvement to
transfer the Shares; it shall further procure that the remaining shares in
the Company and the shares in STR which are not STR Shares (excluding,
however, the shares held by Mr. Collongues and Mr. Guillo) will be
transferred in due course to designates of the Purchaser at no costs.
Further, the Seller shall provide the Purchaser with a letter of consent by
which the Board of Directors of the Company consents to the Purchaser as a
new shareholder in accordance with the Articles of Association of the
Company.
3. The Seller shall submit to the Purchaser resignation letters of the
following persons/institutions resigning at no costs to the relevant
company from the following positions:
- the Seller (Conseil d'Administration of the Company)
- Dr. Frank Tofflinger (Conseil d'Administration of the Company, and
STR)
- Christian Franckenstein (Conseil d'Administration of the Company,
and of STR, Directeur General of the Company)
- Dr. Hans Albrecht (Conseil d'Administration of STR).
<PAGE>
- 9 -
4. This Agreement, including this provision, may only be amended by written or,
if necessary, notarial instrument.
5. Should any provision of this Agreement be held wholly or in part invalid or
unenforceable, the validity or enforceability of the other parts shall not be
affected thereby. The invalid or unenforceable provision shall be deemed
replaced by such valid and enforceable provision which serves best the
economic interest of the contract parties originally pursued by the invalid
or unenforceable provision.
6. Any agreements made heretofore between the parties to this Agreement are
superseded by the conclusion of this Agreement.
7. The Seller shall assist the Purchaser in any possible manner, as the
Purchaser may reasonably request, in the pursuit of the Purchaser's rights or
the Company's rights, if any, against the former owners of the Shares,
pursuant or in connection with, the Contrat de Cession d'Actions of December
10, 1993.
8. In the event a liability of the Seller should arise pursuant to Art. 4 and,
in the reasonable determination of the Seller there should be recourse of the
Company against the former seller of the shares in STR which are
substantially comparable, then the Purchaser shall procure that the Company
initiates, without prejudice to the rights of the Purchaser, at the Seller's
expense and in accordance with the Seller's instructions, all reasonable
legal actions against the former seller in order to reduce the damages of the
Purchaser.
<PAGE>
APPROVAL LETTER
---------------
To: The German Shareholders (as defined in the following notarial deed)
via
Notary Dr. Wolfsteiner,
Munich
The undersigned Dr. Markus Fisseler, attorney-at-law in Frankfurt am Main,
herewith takes notice of notarial deed no. 1-1562, 1994 dated September 7,
1994, of notary public Dr. Hans Wolfsteiner, Munich, and acting on behalf of
Alco Companies (as defined in the notarial deed) pursuant to the powers of
attorney which have already been submitted to the notary, hereby approves all
acts made on behalf of the Alco Companies.
New York, the 19th September, 1994
/s/ Dr. Markus Fisseler
- ---------------------------
Dr. Markus Fisseler
Lon M. Singer
Notary Public, State of New York
No. 31-4994728
Qualified in New York County
Commission Expires July 29, 1995
Personally subscribed to before me this 19th day
of September, 1994 by Dr. Markus Fisseler who
personally came before me.
/s/ Lon M. Singer
---------------------------------
Lon M. Singer, Notary Public
<PAGE>
APPROVAL LETTER
---------------
To: The Alco Companies (as defined in the following notarial deeds)
via
Notary Dr . Wolfsteiner,
Munich
The undersigned Dr. Petra Wibbe, attorney-at-law in Munich, herewith takes
notice of notarial deed no. 1-1562, 1994 dated September 7, 1994, of notary
public Dr. Hans Wolfsteiner, Munich, and acting on behalf of German
Shareholders (as defined in the notarial deed) pursuant to the powers of
attorney which have already been submitted to the notary, hereby approves all
acts made on behalf of the German Shareholders.
New York, the September 19, 1994
------------
/s/ Dr. Petra Wibbe
- --------------------------------
Dr. Petra Wibbe
Lon M. Singer
Notary Public, State of New York
No. 31-4994728
Qualified in New York County
Commission Expires July 29, 1995
Personally subscribed to before me this 19th day
of September, 1994 by Dr. Petra Wibbe who
personally came before me.
/s/ Lon M. Singer
---------------------------------
Lon M. Singer, Notary Public
<PAGE>
APPROVAL LETTER
---------------
To: The Alco Companies (as defined in the following notarial deeds)
via
Notary Dr. Wolfsteiner,
Munich
The undersigned Dr. Petra Wibbe, attorney-at-law in Munich, herewith takes
notice of notarial deed no. 1-1562, 1994 dated September 7, 1994, of notary
public Dr. Hans Wolfsteiner, Munich, and acting on behalf of German
Shareholders (as defined in the notarial deed) pursuant to the powers of
attorney which have already been submitted to the notary, hereby approves all
acts made on behalf of the German Shareholders.
New York, the September 19, 1994
----------------
/s/ Dr. Petra Wibbe
- ------------------------
Dr. Petra Wibbe
Lon M. Singer
Notary Public, State of New York
No. 31-4994728
Qualified in New York County
Commission Expires July 29, 1995
Personally subscribed to before me this 19th day
of September, 1994 by Dr. Petra Wibbe who
personally came before me.
/s/ Lon M. Singer
---------------------------------
Lon M. Singer, Notary Public
<PAGE>
APPROVAL LETTER
---------------
To: The German Shareholders (as defined in the following notarial deed)
via
Notary Dr. Wolfsteiner,
Munich
The undersigned Dr. Markus Fisseler, attorney-at-law in Frankfurt am Main,
herewith takes notice of notarial deed no. 1-1562, 1994 dated September 7,
1994, of notary public Dr. Hans Wolfsteiner, Munich, and acting on behalf of
Alco Companies (as defined in the notarial deed) pursuant to the powers of
attorney which have already been submitted to the notary, hereby approves all
acts made on behalf of the Alco Companies.
New York, the 19th September, 1994
/s/ Dr. Markus Fisseler
- -------------------------
Dr. Markus Fisseler
Lon M. Singer
Notary Public, State of New York
No. 31-4994728
Qualified in New York County
Commission Expires July 29, 1995
Personally subscribed to before me this 19th day
of September, 1994 by Dr. Markus Fisseler who
personally came before me.
/s/ Lon M. Singer
---------------------------------
Lon M. Singer, Notary Public
<PAGE>
VOLLMACHT
Der/die Unterzelchnele
bevollmachtigl hiermit jeaen der loicenden Vollmachtnehmer
Dr. Petra Wibbe, Munchen.
Reinhard Pollath, Berlin.
den Vollmachtgeber zu vertreten.
1. beim AbschlurB von und anderen Handlungen im Zusammenhang mit allen
Vertragen mit oder Erklarungen gegenuber Alco Standard Corporation und
deren verbundenen Unternehmen und Tochtergesellschaften einschlieBlich
Offlice Products - Office Group Industrie Beteiligungs GmbH. Office
Products. Inc., Office Group, Inc. und AOP, Inc. (alle zusammen und je
einzeln "Alco") im Zusammenhang mit der VerauBerung durch Alco von
einigen oder allen Anteilen an der Office Products - Office Group
Industrie Beteiligungs GmbH sowie der VerautBerung durch die IMM
Office Systems Holding GmbH von einigen oder allen Anteilen an der IMM
Denmark A/S und der IMM Office Systems France S.A. einschlieBlich aller
etwaigen anderen erforderlichen oder zweckmaBigen Vertrage Erklarungen
und MaBnahmen im Zusammenhang damit,
2. bei der Ausubung aller Slimm- und anderer Gesellschafterrechte jeder Art
des Vollmachtgebers an der IMM Burolechnik Handel GmbH und oder der Office
Products-Office Group Industrie Beteiligungs GmbH (einschlieBlich Anderung
von Gesellschattsvertragen. Bestellung und Abberufung von Geschattsfuhrern
und AbschluB. Anderung und Beendigung von Anstellungsvertragen mit diesen).
3. bei allen Anmeldungen zur Registrierung beim Handelsregister,
Anzeigen/Anmeldungen beim Bundeskartellamt, Erklarungen gegenuber sonstigen
staatlichen Stellen und anderen und
4. bei der Entgegennahme von Erklarungen und Unterlagen und beim
treuhanderischen Empfang von Geld im Zusammenhang damit.
Diese Vollmacht ist so umtassend wie rechtlich moglich auszulegen um die
Erreichung der Zwecke der oben genannten Geschafte zu erleichtern oder zu
bewirken.
Jeder Vollmachtnehmer kann den Vollmachtgeber in den vorstehenden Geschaften
vertreten undgleichzeitig in demselben Geschaft im eigenen Namen und auf
eigene Rechnung oder im Namen und auf Rechnung anderer Vollmachtgeber handeln
(Befreiung von (S) 181 BGB). Der Vollmachtnehmer kann seine Befugnisse unter
dieser Vollmacht auf einen oder mehrere andere als Unterbevollmachtigte
ubertragen.
- ---------------, den ------------- 1994
/s/ [SIGNITURE TO COME]^^^^^^^^^^^^
- ------------------------------------
Vollmachtgeber
(notarielle Beglaubigung)
<PAGE>
Exhibit 10.20
[LETTERHEAD OF INTEGRATED SYSTEMS SOLUTIONS CORPORATION APPEARS HERE]
June 29, 1994
Unisource Worldwide Inc.
825 Deportail Road
Chesterbrook
Wayne, Pennsylvania 19087
Attention: Mr. Thomas Simpson
Vice President and CFO Unisource WW Inc.
Subject: Amendment/Revision No. 1 to Information Technology Services Agreement
Reference: Supplement Revision and Amendments to Schedules J, N, and R
Dear Mr. Simpson
The subject Agreement is hereby revised to incorporate the referenced Supplement
and Schedules. Reference is made to the Agreement for Systems Operation
Services, dated December 22, 1993 (the "Agreement") between Integrated Systems
Solutions Corporation, {d/b/a ISSC, Inc.} and Unisource Worldwide, Inc.
Attached to and made a part of this letter is a revised Supplement and Amended
Schedules J, N, and R to the Agreement, which shall replace for all purposes the
existing corresponding documents of the Agreement. This action amends the base
Agreement regarding the XXXX XXXX XXXX and XXXX XXXX System, with appropriate
revisions to the original Schedules, and will be effective upon execution of
this document and for the remainder of the base Agreement unless otherwise
amended by mutual consent of the parties.
Except as herein amended, the Agreement remains in full force and effect.
Offered by: Agreed to and Accepted by:
Integrated Systems Solutions Unisource Worldwide Inc.
Corporation
{d/b/a ISSC, Inc.}
By /s/ S. C. Ryan By /s/ T. L. Simpson
------------------------------ ------------------------------
Authorized Signature Authorized Signature
S. C. Ryan 6/28/94 T. Simpson 6/29/94
------------------------------ ------------------------------
ISSC Director- Date Vice President and CFO Date
Unisource Project Executive Unisource WW Inc.
<PAGE>
ISSC / Unisource [ART APPEARS
HERE]
Agreement for Information Technology Services
- -------------------------------------------------------------------------------
Section N-6
XXXX XXXX System (XXXX)
I. Scope
ISSC will manage the installation and test of the XXXX XXXX XXXX in accordance
with this project section, and integrating the XXXX XXXX XXXX XXXX (XXXX). The
installation plan will be divided into XXXX XXXX. The plan for the phase 1
implementation will have an estimated completion date of XXXX, XXXX, and
will encompass the installation of the XXXX with XXXX/XXXX in XXXX XXXX XXXX
(XXXX Mega; XXXX Large). In addition, ISSC will install XXXX additional XXXX
that will serve as a XXXX for the purpose of XXXX the XXXX of second XXXX that
will encompass the XXXX and XXXX XXXX XXXX. The additional (XXXX) proposed XXXX
will be comprised of XXXX (XXXX w/ XXXX, XXXX w/out XXXX), and XXXX small w/out
XXXX. These XXXX would be planned to be XXXX XXXX in the XXXX thereby allowing
a substantial XXXX of XXXX to XXXX prior to the XXXX to XXXX with the XXXX XXXX
primarily XXXX by the XXXX XXXX derived from the XXXX over the XXXX XXXX
Facilities are further defined as:
. XXXX - greater than XXXX K sq. ft.
. XXXX - XXXX K sq. ft. to XXXX K sq. ft.
. XXXX - XXXX K sq. ft. to XXXX K sq. ft.
. XXXX - less than XXXX K sq. ft.
In addition, ISSC will establish an end user training facility at Unisource
Headquarters, or other designated Unisource facility, equipped with the XXXX
XXXX XXXX contained in a XXXX XXXX. The XXXX of this center will primarily be
to XXXX XXXX XXXX XXXX to supervisory personnel in a XXXX XXXX, in XXXX of an
XXXX. The equipment XXXX in the training center will be dismantled and XXXX to
XXXX the XXXX XXXX XXXX of XXXX I. This XXXX has been XXXX in the attached XXXX
XXXX for the overall XXXX XXXX.
The Warehouse XXXX XXXX will be XXXX by XXXX, XXXX upon the XXXX of the XXXX
XXXX XXXX XXXX XXXX target, and upon concurrence of XXXX will become an integral
part of this agreement. Recognizing the XXXX XXXX of this XXXX, any necessary
XXXX and XXXX (XXXX XXXX) to this schedule will be XXXX upon XXXX XXXX XXXX to
XXXX, and with XXXX XXXX XXXX. The XXXX for the XXXX is to make the XXXX XXXX
of the XXXX resource XXXX to support an XXXX, and therefore XXXX the XXXX XXXX
XXXX for Unisource.
The system platform for XXXX and XXXX XXXX will be based upon the XXXX
technology and XXXX architecture. The XXXX and XXXX will be based upon an XXXX
model XXXX XXXX. The base XXXX XXXX and related XXXX and XXXX are defined in
(the amendment to) schedule XXXX - Restructured Business Platform.
The XXXX XXXX shall contain a XXXX XXXX either to a XXXX XXXX or a XXXX XXXX
XXXX as needed to XXXX the XXXX XXXX XXXX. If the XXXX system is installed in
a XXXX that is not currently supported by the XXXX system, then the application
development effort to XXXX the XXXX to XXXX will be performed by the XXXX XXXX
personnel providing application development support to that XXXX XXXX XXXX. In
addition, the XXXX will XXXX (via XXXX and XXXX) XXXX, except as required by
law, and XXXX XXXX in the XXXX of XXXX.
ISSC has provided, as part of this effort, an XXXX XXXX XXXX for the XXXX and
XXXX of the XXXX defined in the attached responsibilities matrix, and driven by
the XXXX XXXX XXXX XXXX. In addition, ISSC has provided a XXXX XXXX XXXX XXXX
for the purposes of XXXX XXXX XXXX for XXXX XXXX and XXXX. The entire project
XXXX included project XXXX and one-time XXXX items required for XXXX XXXX of the
system. ISSC and Unisource agree that periodic updates to the XXXX and therefore
XXXX XXXX XXXX may be required and are acceptable for such items as but not
June 29, 1994
ISSC/Unisource Confidential Schedule N Amendment No. 1 Page 1 of 9
<PAGE>
Section N-6
XXXX XXXX System (XXXX)
limited to XXXX in equipment, or XXXX XXXX XXXX XXXX associated with an XXXX
XXXX XXXX and XXXX of equipment deployed, as tracked and determined over
several installations.
II Project Management/Methodology Approach
The XXXX XXXX XXXX project shall utilize the project management methodology
specified in schedule II.
III ISSC Responsibilities
ISSC shall:
Be responsible for XXXX XXXX based upon its XXXX, and will XXXX to XXXX
Unisource in the management of XXXX XXXX, as appropriate, to XXXX XXXX XXXX on
schedule. ISSC will also have XXXX XXXX to manage XXXX XXXX XXXX to the
project; XXXX and XXXX all XXXX hardware and XXXX as XXXX by Unisource (with
XXXX XXXX to Unisource), XXXX and XXXX all XXXX, and provide the necessary XXXX
and on XXXX XXXX as further defined herein.
Perform XXXX to XXXX equipment XXXX and XXXX as well as XXXX XXXX, XXXX XXXX,
low XXXX XXXX, and office XXXX XXXX.
Develop XXXX procedures/plans for XXXX the XXXX of the XXXX functions.
XXXX and specify for Unisource XXXX, the XXXX for the XXXX to be equipped with
XXXX and the XXXX options, at Unisource XXXX location, or other XXXX Unisource
XXXX.
Provide to XXXX the specified Unisource data that is available on the existing
legacy systems in a XXXX that can be XXXX into XXXX.
Provide XXXX as follows:
XXXX & XXXX Facilities:
Conduct a sufficient XXXX of 40 XXXX at the designated Unisource XXXX XXXX to
XXXX all Unisource XXXX XXXX, XXXX size is XXXX XXXX per XXXX. The number of
XXXX will be determined by the number of XXXX XXXX, divided by the ten XXXX
identified.
XXXX with Unisource assistance, as identified below, and XXXX XXXX XXXX XXXX for
the XXXX XXXX at each XXXX receiving XXXX.
Provide Unisource approved XXXX XXXX packages, up to XXXX, and up to XXXX XXXX
administrators XXXX per XXXX.
XXXX & XXXX Facilities:
ISSC responsibilities will be XXXX to XXXX and XXXX Facilities described above,
except on XXXX will be limited to a XXXX.
IV Unisource Responsibilities
Unisource shall:
Perform all tasks identified in the XXXX, within the identified XXXX. In
addition, Unisource will identify common XXXX and common XXXX.
Determine what XXXX and equipment/quantity (primarily XXXX) are to be used in
each facility.
Provide space, power connections, low voltage lines, and office furniture
required for each installation.
Modify the XXXX as necessary to meet the XXXX of the selected XXXX.
Provide a XXXX for the XXXX of up to XXXX at Unisource XXXX or designated
Unisource XXXX, which will be dedicated XXXX over the XXXX of the XXXX.
June 29, 1994
ISSC/Unisource Confidential Schedule N Amendment No. 1 Page 2 of 9
<PAGE>
Section N-6
XXXX XXXX System (XXXX)
Provide XXXX for those XXXX receiving XXXX at the XXXX.
Be responsible for Unisource employee travel and lodging expenses during
training.
Provide data definitions of the files and/or databases in the legacy systems
needed for the initialization of the WMS databases within one week of receiving
the request from ISSC.
Be responsible for all manual data entry required by WMS, but not available on
the existing legacy systems.
Make skilled warehouse logistic experts available to assist in the installation
as required.
Be responsible for FCC license expenses.
Modify the warehouse facility as required to facilitate an FCC RF License.
Perform the operational readiness test, criteria for which will be developed as
identified below.
Make available the Unisource personnel that require the training when scheduled.
V. Project Deliverables
(Note: Dates will be dependent upon Roll-out Schedule)
. XXXX XXXX Plan
. XXXX Plan
. XXXX Plan
. XXXX XXXX XXXX Plan
. XXXX Package
. XXXX Guide
. XXXX Guide
. XXXX Hardware and Software necessary for each XXXX (phase I)
VI. Completion Criteria
Unisource shall accept each XXXX XXXX upon successful completion of the XXXX
XXXX XXXX XXXX to be defined prior to XXXX XXXX, and will include some XXXX of
XXXX XXXX of actual XXXX.
VII. Additional Terms
Unisource will have the XXXX to XXXX this project upon ISSC's XXXX to XXXX the
defined XXXX and XXXX in a XXXX XXXX or should the project XXXX to XXXX be XXXX
XXXX, subject to the XXXX, no other XXXX XXXX shall apply.
In the event Unisource (for XXXX XXXX) does not XXXX the XXXX XXXX of XXXX XXXX
XXXX of XXXX then Unisource XXXX to XXXX ISSC, and it's vendors any XXXX XXXX
XXXX associated with XXXX of the XXXX. Such XXXX would XXXX but not be XXXX to:
additional XXXX XXXX associated with XXXX to meet XXXX XXXX, XXXX XXXX
associated with the XXXX for the XXXX, and placement XXXX of XXXX.
VIII. XXXX XXXX ISSC further agrees to XXXX all XXXX of XXXX herein defined for
the Unisource XXXX XXXX, upon XXXX XXXX of the outstanding XXXX XXXX for XXXX.
Further, ISSC XXXX a XXXX of the XXXX XXXX XXXX XXXX in support of the XXXX to
be provided.
IX. XXXX XXXX
ISSC will maintain XXXX XXXX XXXX facilities for the duration of the project.
XXXX will be provided via XXXX XXXX XXXX support by XXXX ISSC XXXX XXXX.
Initially (through XXXX) XXXX and XXXX will be provided by XXXX XXXX XXXX.
(XXXX) and accessed by XXXX
June 29, 1994
ISSC/Unisource Confidential Schedule N Amendment No. 1 Page 3 of 9
<PAGE>
Section N-6
XXXX XXXX System (XXXX)
through the same XXXX mechanism as XXXX, with XXXX being XXXX as appropriate.
During the XXXX XXXX XXXX and XXXX will be provided by XXXX through XXXX XXXX.
After XXXX of the project, it is estimated that the XXXX of XXXX required for
these XXXX of XXXX will XXXX significantly, and Unisource agrees, that all XXXX
and XXXX support will be XXXX on a XXXX, per the attached XXXX for XXXX shared
XXXX XXXX support will XXXX upon XXXX XXXX of the XXXX XXXX XXXX XXXX of the
facility, and for the XXXX of XXXX, will be XXXX by on XXXX XXXX. XXXX support
will be XXXX XXXX, XXXX. XXXX and XXXX will be XXXX XXXX XXXX, XXXX during the
XXXX of the project. As support will XXXX to XXXX XXXX, all XXXX of XXXX will
be available XXXX XXXX, after complete project XXXX.
Responsibilities Matrix
Organizational Responsibility & Estimated Person Days
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Task Description Unisource ISSC/E&Y XXXX
- -------------------------------------------------------------------------------
PRE-IMPLEMENTATION
- -------------------------------------------------------------------------------
Finalize Technical Architecture
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
XXXX Processor Configuration XXXX XXXX
- -------------------------------------------------------------------------------
Peripheral Configuration XXXX XXXX
- -------------------------------------------------------------------------------
XXXX Vendor Equip XXXX XXXX XXXX
- -------------------------------------------------------------------------------
Develop XXXX XXXX
- -------------------------------------------------------------------------------
Identify & Construct XXXX XXXX XXXX
- -------------------------------------------------------------------------------
Install XXXX Processor XXXX
- -------------------------------------------------------------------------------
Install XXXX Equipment XXXX XXXX
- -------------------------------------------------------------------------------
Install & Test XXXX Software XXXX XXXX
- -------------------------------------------------------------------------------
Develop XXXX XXXX Layout XXXX
- -------------------------------------------------------------------------------
Conduct XXXX XXXX XXXX XXXX XXXX
- -------------------------------------------------------------------------------
Develop XXXX XXXX
- -------------------------------------------------------------------------------
Assemble XXXX XXXX XXXX XXXX XXXX
- -------------------------------------------------------------------------------
Assemble XXXX XXXX XXXX XXXX
- -------------------------------------------------------------------------------
Create XXXX XXXX XXXX XXXX
- -------------------------------------------------------------------------------
Assemble XXXX Material
- -------------------------------------------------------------------------------
Develop XXXX XXXX by XXXX Category XXXX XXXX
- -------------------------------------------------------------------------------
</TABLE>
June 29, 1994
ISSC/Unisource Confidential Schedule N Amendment No. 1 Page 4 of 9
<PAGE>
Section N-6
XXXX XXXX System (XXXX)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Responsibilities Matrix
- --------------------------------------------------------------------------------
Organizational Responsibility & Estimated Person Days
- --------------------------------------------------------------------------------
Task Description Unisource ISSC/E&Y XXXX
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Develop XXXX XXXX Aids XXXX XXXX
- --------------------------------------------------------------------------------
<CAPTION>
Design & Construct System Interface
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Determine XXXX XXXX Requirements XXXX
- --------------------------------------------------------------------------------
Develop & XXXX XXXX XXXX to XXXX XXXX
- --------------------------------------------------------------------------------
Develop & XXXX XXXX XXXX to XXXX XXXX
- --------------------------------------------------------------------------------
Develop & XXXX XXXX XXXX to XXXX XXXX
- --------------------------------------------------------------------------------
<CAPTION>
XXXX & XXXX Installations
- --------------------------------------------------------------------------------
XXXX Configuration
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Analyze/Verify XXXX of XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Conduct XXXX XXXX
- --------------------------------------------------------------------------------
Apply for XXXX XXXX
- --------------------------------------------------------------------------------
Identify XXXX Requirements XXXX
- --------------------------------------------------------------------------------
Determine XXXX/XXXX XXXX
- --------------------------------------------------------------------------------
Determine Locations of XXXX XXXX
- --------------------------------------------------------------------------------
Confirm XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Confirm XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Order IIW & SW XXXX
- --------------------------------------------------------------------------------
Request Network Connections XXXX
- --------------------------------------------------------------------------------
Identify Misc. Materials & Cables XXXX XXXX
- --------------------------------------------------------------------------------
Conduct XXXX of XXXX @ XXXX XXXX XXXX
- --------------------------------------------------------------------------------
<CAPTION>
System XXXX
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Obtain XXXX Check XXXX XXXX
- --------------------------------------------------------------------------------
Scrub XXXX for XXXX XXXX XXXX
- --------------------------------------------------------------------------------
</TABLE>
June 29, 1994
ISSC/Unisource Confidential Schedule N Amendment No. 1 Page 5 of 9
uniskdc
<PAGE>
Section N-6
XXXX XXXX System (XXXX)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Responsibilities Matrix
- --------------------------------------------------------------------------------
Organizational Responsibility & Estimated Person Days
- --------------------------------------------------------------------------------
Task Description Unisource ISSC/E&Y XXXX
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Load XXXX to XXXX XXXX
- --------------------------------------------------------------------------------
Load XXXX Required to XXXX XXXX
- --------------------------------------------------------------------------------
Systems Set-up & Install
- --------------------------------------------------------------------------------
Affect XXXX Changes to XXXX XXXX
- --------------------------------------------------------------------------------
Perform XXXX at XXXX XXXX
- --------------------------------------------------------------------------------
Install XXXX/XXXX at XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Perform XXXX XXXX of XXXX/XXXX XXXX
- --------------------------------------------------------------------------------
Install XXXX & XXXX XXXX
- --------------------------------------------------------------------------------
Perform XXXX XXXX of XXXX XXXX
- --------------------------------------------------------------------------------
Install XXXX XXXX XXXX/XXXX XXXX
- --------------------------------------------------------------------------------
Implement XXXX to XXXX XXXX
- --------------------------------------------------------------------------------
Perform XXXX XXXX to Interface XXXX
- --------------------------------------------------------------------------------
Operations XXXX
- --------------------------------------------------------------------------------
Prepare for XXXX of XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Conduct XXXX XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Systems XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Conduct XXXX XXXX of XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Conduct XXXX of XXXX XXXX to XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Test XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Conduct XXXX XXXX XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Test XXXX of XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Perform XXXX XXXX & XXXX XXXX XXXX
- --------------------------------------------------------------------------------
</TABLE>
June 29, 1994
ISSC/Unisource Confidential Schedule N Amendment No. 1 Page 6 of 9
XXXX
<PAGE>
Section N-6
XXXX XXXX System (XXXX)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Responsibilities Matrix
- --------------------------------------------------------------------------------
Organizational Responsibility & Estimated Person Days
- --------------------------------------------------------------------------------
Task Description Unisource ISSC/E&Y XXXX
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Implementation & Support
- --------------------------------------------------------------------------------
Sign-off by Unisource XXXX
- --------------------------------------------------------------------------------
Live Production XXXX
- --------------------------------------------------------------------------------
Provide XXXX Support @ XXXX XXXX
- --------------------------------------------------------------------------------
Activate XXXX XXXX XXXX
- --------------------------------------------------------------------------------
</TABLE>
Note: Responsibilities Matrix for XXXX and XXXX installations will be completed
upon XXXX of Unisource XXXX to XXXX with XXXX of XXXX.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Warehouse Management System
- --------------------------------------------------------------------------------
Site Roll-out Implementation Schedule
- --------------------------------------------------------------------------------
Site Location Est. Sq. Footage Start Date Est. Completion
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Seattle XXXX XXXX/94 XXXX/94
- --------------------------------------------------------------------------------
San Diego XXXX XXXX/94 XXXX/94
- --------------------------------------------------------------------------------
XXXX XXXX XXXX/94 XXXX/95
- --------------------------------------------------------------------------------
</TABLE>
Remainder of XXXX Installation Schedule will be determined during Joint Planning
session to be completed prior to XXXX, 1994 and based on the following
installation plan.
. 199X:
-- XXXX XXXX Facilities
-- XXXX XXXX Facilities
-- XXXX Facilities (XXXX: XXXX with & XXXX without XXXX)
-- XXXX Facility (Pilot without XXXX)
. 199X
-- XXXX Facilities
Schedule XXXX of XXXX will be defined by XXXX in concert with XXXX and included
this Section.
Note: Schedule for XXXX and XXXX installations will be completed upon XXXX of
Unisource XXXX XXXX to XXXX with XXXX of XXXX.
June 29, 1994
ISSC/Unisource Confidential Schedule N Amendment No. 1 Page 7 of 9
XXXX
<PAGE>
Section N-7
XXXX System
I. Scope
ISSC will manage the installation and test of the XXXX system in accordance with
this project section, and in parallel with the parameters provided by Unisource,
and integrating the XXXX XXXX XXXX System (XXXXS). The plan for Phase I
implementation will have an estimated completion date of XXXX 3XXXX, XXXX, and
shall be performed in parallel with the installation of the XXXX XXXX XXXX
schedule identified in section N-6. The pricing specified in the financial
supplement assumes the installation of XXXX at XXXX identified in the attachment
to section N-7, to be provided by Unisource, and subsequently reviewed, and
approved by ISSC. In addition, a XXXX has been identified for purposes of XXXX
the XXXX, should Unisource XXXX to XXXX in all XXXX facilities. The XXX and it's
related hardware, based upon and XXXX XXXX XXXX, identified in Schedule R, shall
be the basis for the XXXX subsystem. Should Unisource decide at any point during
the roll-out that it desires to XXXX the XXXX of XXXX, Unisource agrees to XXXX
ISSC and its vendors for all XXXX and XXXX associated with successful XXXX of
the XXXX.
XXXX subsytem is required to support XXXX for XXXX based installations and XXXX
and XXXX for installations in the XXXX XXXX of XXXX. The XXXX will have an
interface to the XXXX system or XXXX system which XXXX the XXXX. If XXXX is
installed in a facility that is not currently supported by XXXX, then the
application development effort to build the XXXX to the XXXX subsystem will be
performed by the XXXX at the Unisource XXXX XXXX.
ISSC has provided a XXXX for the XXXX XXXX as well as XXXX for the purpose of
XXXX XXXX should Unisource XXXX to XXXX with the installation in XXXX XXXX.
II Project Management
The TRS project shall utilize the project management methodology specified in
Schedule II.
III ISSC Responsibilities
ISSC shall:
. Design, develop, test, and deliver the XXXX necessary to XXXX between
XXXX and the XXXX System;
. Design, develop, test, and deliver the XXXX necessary to XXXX between
XXXX and either the XXXX subsystems or a XXXX system; prior to XXXX.
Subsequent interface to XXXX will be deployed as part of the XXXX;
. Install the XXXX subsystem at each XXXX as designated by Unisource as
follows:
I. Provide and install XXXX and XXXX necessary for the XXXX subsystem
to meet its detail requirements specification functions. In
exchange for an XXXX XXXX XXXX XXXX, XXXX XXXX XXXX will be granted
for the installation of XXXX and XXXX. Subsequent XXXX will be in
accordance with the XXXX. Site XXXX Implementation Schedule, when
and as defined.
II. Down load and format specific data from the existing XXXX system
and load the data into the XXXX subsystem.
III. Provide XXXX services at all XXXX installed facilities at an assume
XXXX of XXXX customer XXXX per XXXX. Incremental XXXX will be
charged as defined in the Supplement to this Agreement.
IV. Support Unisource during the operational readiness test; and
. Provide XXXX for the XXXX subsystem as follows:
I. Establish, with Unisource, XXXX minimal XXXX criteria.
June 29, 1994
ISSC/Unisource Confidential Schedule N Amendment No. 1 Page 8 of 9
<PAGE>
Section N-7
XXXX System
II. Prepare the Unisource approved XXXX, and provide up to XXXX per XXXX.
III. Prepare the XXXX and provide up to XXXX per XXXX.
IV. Prepare XXXX and provide up to XXXX per XXXX.
V. Provide up to XXXX of XXXX for each XXXX, which will include, providing
and conducting XXXX for the Unisource XXXX XXXX of XXXX in basic XXXX
such as XXXX, copying XXXX, and performing XXXX.
IV Unisource Responsibilities
Unisource shall:
Develop an agreed to roll-out plan in conjunction with the XXXX roll-out plan to
be completed by XXXX 3X, 199X.
Be responsible for manual entry and validation of data required by XXXX but not
available on the existing host system.
Be responsible to provide space and power connections for the XXXX subsystem.
Provide facilities for XXXX.
Have personnel available for XXXX to meet the agreed to schedule.
Perform the operational readiness test.
V Project Deliverables
(Dates will be dependent upon roll-out schedule)
. XXXX XXXX Plan
. XXXX Plan
. XXXX Plan
. XXXX package
. XXXX guide
. XXXX guide
. XXXX plan
. XXXX subsystem XXXX XXXX
. Unique XXXX for XXXX subsystem to XXXX
. XXXX packaged systems
. Multiple XXXX of the XXXX
VI Completion Criteria
Each XXXX shall be accepted by Unisource upon XXXX XXXX of the XXXX XXXX, to be
defined prior to XXXX 3X, 199X, and will include parallel testing of XXXX.
VII Schedule
Schedule roll-out of the above will be defined and completed by Unisource in
concert with ISSC's review and approval and included to this Section by no later
than XXXX 3X, 199X.
<PAGE>
ISSC / Unisource [ART APPEARS HERE]
Agreement for Information Technology Services
- -------------------------------------------------------------------------------
Schedule R
XXXX Business Platform/ISSC Data Center Platform
<TABLE>
<CAPTION>
Base Hardware & Software Configurations Warehouse Management System
- -------------------------------------------------------------------------------
<S> <C>
XXXX XXXX
- -------------------------------------------------------------------------------
IBM LIC XXXX XXXX IBM LIC XXXX
- -------------------------------------------------------------------------------
- - XXXX XXXX Disk Drive - XXXX Disk Drive
- -------------------------------------------------------------------------------
- - XXXX XXXX Diskette Drive - XXXX Diskette Drive
- -------------------------------------------------------------------------------
Service Pub Wrap Plug Kit Service Wrap Plug Kit
- -------------------------------------------------------------------------------
XXXX Memory Select (XXXX XXXX Memory (XXXX
- -------------------------------------------------------------------------------
XXXX Operating System pre-load XXXX Memory Select (XXXX
- -------------------------------------------------------------------------------
Port Adapter Card XXXX Operating systems pre-load
- -------------------------------------------------------------------------------
Port Concentrator Port Adapter Card
- -------------------------------------------------------------------------------
Port Asyne XXXX Port Concentrator
- -------------------------------------------------------------------------------
Linecords Port ASYNC XXXX
- -------------------------------------------------------------------------------
XXXX External Tape Drive XXXX External Tape Drive
- -------------------------------------------------------------------------------
XXXX Controller CBL XXXX Controller CBL
- -------------------------------------------------------------------------------
XXXX, XXXX US / Canada XXXX, XXXX US / Canada
- -------------------------------------------------------------------------------
XXXX disk Drive Linecord
- -------------------------------------------------------------------------------
XXXX to XXXX Cable XXXX User License
- -------------------------------------------------------------------------------
XXXX User License
- -------------------------------------------------------------------------------
XXXX Small
- -------------------------------------------------------------------------------
XXXX XXXX
- -------------------------------------------------------------------------------
XXXX Hard Drive XXXX Hard Drive
- -------------------------------------------------------------------------------
XXXX Ram XXXX Ram
- -------------------------------------------------------------------------------
XXXX Cache F/W SCSI-2 XXXX Cache F/W SCSI-2
- -------------------------------------------------------------------------------
XXXX Ram Upgrade (XXXX XXXX Ram Upgrade
- -------------------------------------------------------------------------------
XXXX Fast SCSI-2 Hard Drive XXXX Serial Adapter
- -------------------------------------------------------------------------------
XXXX Serial Port Adapter
- -------------------------------------------------------------------------------
</TABLE>
June 29, 1994
ISSC/Unisource Confidential Schedule R Amendment No.1 Page 1 of 3
uniskdc
<PAGE>
ISSC / Unisource
Agreement for Information Technology Services [ART APPEARS HERE]
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Base Hardware & Software Configurations XXXX System
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
XXXX Configuration XXXX Qty XXXX Qty XXXX Qty XXXX Qty
- --------------------------------------------------------------------------------
XXXX Network XXXX XXXX XXXX N/A
Controller
- --------------------------------------------------------------------------------
XXXX Unit XXXX XXXX XXXX N/A
w/Ethernet
- --------------------------------------------------------------------------------
XXXX Terminal XXXX XXXX XXXX N/A
- --------------------------------------------------------------------------------
XXXX XXXX Unit XXXX XXXX XXXX N/A
- --------------------------------------------------------------------------------
XXXX XXXX Wand XXXX XXXX XXXX N/A
- --------------------------------------------------------------------------------
60 Miliamp XXXX XXXX XXXX N/A
Battery
- --------------------------------------------------------------------------------
Holsters XXXX XXXX XXXX N/A
- --------------------------------------------------------------------------------
XXXX Charger XXXX XXXX XXXX N/A
- --------------------------------------------------------------------------------
XXXX & XXXX XXXX XXXX XXXX N/A
- --------------------------------------------------------------------------------
XXXX Peripherals XXXX Qty XXXX Qty XXXX Qty XXXX Qty
- --------------------------------------------------------------------------------
IBM XXXX XXXX XXXX XXXX XXXX
XXXX Printer
- --------------------------------------------------------------------------------
IBM XXXX XXXX XXXX XXXX XXXX
XXXX Terminal
- --------------------------------------------------------------------------------
Wedge XXXX XXXX XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------
XXXX Reader XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------
XXXX XXXX Printer XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------
XXXX Diagnostic XXXX XXXX XXXX XXXX
Modem
- --------------------------------------------------------------------------------
XXXX Channel XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------
Misc. Cables XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------
</TABLE>
June 29, 1994
ISSC/Unisource Confidential Schedule R Amendment No. 1 Page 2 of 3
uniskdc
<PAGE>
ISSC / Unisource
Agreement for Information Technology Services
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
Base Hardware & Software Configurations XXXX System
- -----------------------------------------------------------------------
IBM XXXX XXXX XXXX XXXX XXXX XXXX
- -----------------------------------------------------------------------
MATROX XXXX
- -----------------------------------------------------------------------
XXXX Tape Drive
- -----------------------------------------------------------------------
Mouse Systems XXXX Mouse
- -----------------------------------------------------------------------
XXXX Cable
- -----------------------------------------------------------------------
XXXX XXXX AT Adaptor
- -----------------------------------------------------------------------
KB Ext. Cable
- -----------------------------------------------------------------------
Printer Cable
- -----------------------------------------------------------------------
XXXX Cable
- -----------------------------------------------------------------------
Power Strip
- -----------------------------------------------------------------------
XXXX Monitor, XXXX dot pitch
- -----------------------------------------------------------------------
XXXX Monitor, XXXX dot pitch
- -----------------------------------------------------------------------
XXXX Disc Player
- -----------------------------------------------------------------------
XXXX XXXX XXXX Dot Matrix Printer
- -----------------------------------------------------------------------
DOS XXXX
- -----------------------------------------------------------------------
ISSC/Unisource Confidential June 29, 1994 Page 3 of 3
uniskd Supplement R Amendment No.1
<PAGE>
ISSC / Unisource [ART APPEARS HERE]
Agreement for Information Technology Services
- --------------------------------------------------------------------------------
Supplement to
Agreement for Information Technology Services
Name and Address of Customer: Enterprise No.:
Unisource
825 Duportail Road
Wayne,Pennsylvania 19087
ISSC Office Address: ISSC Project Office No.:
ISSC Corporation
44 South Broadway
White Plains, New York 10601
Term Commencement Date: January 1, 1994
Term End Date: December 31, 2003
<TABLE>
<CAPTION>
Contract Year
-------------
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2003
1/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1-
9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30 12/31
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Services Charge
United States XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
($ in Millions - US)
Canada XXXX XXXX
($ in Millions - Canadian)
XXXX Incentive
($ in Millions)
XXXX % but less
than XXXX % XXXX XXXX XXXX XXXX XXXX XXXX
XXXX % but less
than XXXX % XXXX XXXX XXXX XXXX XXXX XXXX
XXXX % but less
than XXXX % XXXX XXXX XXXX XXXX XXXX XXXX
XXXX % and greater
than XXXX XXXX XXXX XXXX XXXX XXXX
Termination Charge/1/
($ in Millions)
XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
<CAPTION>
Calendar Year
-------------
BASE 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
CPI Protection Index XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
(XXXX Compounded)
<CAPTION>
Contract Year
-------------
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2003
1/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1-
9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/39 9/30 12/31
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- -----
Baselines
Consulting and
Management Services XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
(Person Months)
</TABLE>
June 29, 1994
ISSC/Ultrasound Confidential Supplement Revision No. 1 Page 1 of 3
<PAGE>
Supplement to
Agreement for Information Technology Services
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AD/M Services XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
(Person Months)
AD/M Core
Skills Group XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
(Person Months)
New Projects
Development XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
(Person Months)
XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Other/3/ XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Upgrade Allotment XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
($ in Thousands)
Data Network XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
($ in Millions)
XXXX Level 2 & 3 Calls
Calls/Month XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX XXXX
(# of customers
per location) XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Additional Resource Charge Rates
Consulting and
Management Services
Annual ($K) XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Hourly ($) XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
AD/M Services
Annual ($K) XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Hourly ($) XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX Level 2 & 3 Calls
Hourly ($) XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
(3 Hour Minimum)
XXXX XXXX
($ per Customer) XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
</TABLE>
Calendar Year
-------------
<TABLE>
<CAPTION>
Yr 1/6/ Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10
XXXX XXXX/2/
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
XXXX Installation /4/
($K Per XXXX)
XXXX w/XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX w/XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX no/XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX no/XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
Annual Charges - Full Project ($K)
(w/Proj Mgnt, Pre-Implementation Tasks, Ongoing Support & Maintenance, Portland
Ongoing Support & Maintenance)
Total XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX XXXX/2/
XXXX Installation/5/ XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
($K per XXXX)
Annual Charges
Full Project ($K) XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
</TABLE>
ISSC/Unisource Confidential June 29, 1994
uniskd Supplement Revision No. 1 Page 2 of 3
<PAGE>
Supplement to
Agreement for Information Technology Services
(w/ Up Front License Payment)
Notes:
1 In addition to the Termination Charge above, Unisource agrees to pay ISSC's
reasonable and actual expenses associated with early termination for XXXX
XXXX expenses, XXXX XXXX fees and XXXX XXXX penalties.
2 One-time charge plus ongoing support and maintenance.
3 Other = XXXX XXXX System, XXXX XXXX System and XXXX XXXX XXXX .
4 XXXX pricing is based on the implementation schedule for XXXX installations
of XXXX as defined in Schedule N, Section N-6.
5 XXXX pricing is based on the implementation schedule to be defined in
Schedule N, Section N-7 and XXXX installations of XXXX in 1XXXX, XXXX in
1XXXX and XXXX in 1XXXX.
6 Year 1 represents period 7/1/94 thru 12/31/94.
ISSC/Unisource Confidential June 29, 1994
unisup1 Supplement Revision No. 1 Page 3 of 3
<PAGE>
ISSC / Unisource [ART APPEARS HERE]
Agreement for Information Technology Services
- --------------------------------------------------------------------------------
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
I. Introduction
This Schedule J sets forth ISSC's charging methodology for Unisource's
resource usage within the Current Environment, during the Transition Period
and following the migration of the Current Environment to the Restructured
Business Platform.
II. Definitions
For purposes of this Schedule J, the Agreement, Supplement and all other
Schedules, the following terms shall mean:
A. "Additional Resource Charge Rate" ("ARC Rate") means the charge for
additional utilization of a Resource Unit in excess of its Baseline, as
set forth in the Supplement and this Schedule J.
B. "AD/M Core Skills Group" means that level and skill mix of AD/M Services
resources below which ISSC will not be able to provide adequate AD/M
support to Unisource. ISSC and Unisource will agree on the AD/M Core
Skills Group Baseline prior to initial migration to the Restructured
Business Platform and validate such Baseline periodically thereafter and
update the Supplement accordingly.
C. "AD/M Services" means Applications Development and Applications
Maintenance unless a more specific reference is required.
D. "Applications Development" means the programming of any new applications
software, regulatory and statutory mandated changes to Unisource
business, version and release upgrades to operating applications and
changes or enhancements to existing applications programs. Programming
effort shall include the planning, design, coding, testing, installation,
documentation and training necessary to complete the task.
E. "Applications Maintenance" means defect identification and fixes for the
Software specified in Schedule A. Problem identification and fixes shall
include the planning, design, coding, testing, installation,
documentation and training: as applicable, necessary to complete the
task.
F. "Baseline" means the specified quantity of resources for a resource
category included within the Annual Services Charge, as set forth in the
Supplement and this Schedule J.
G. "Benefits Overhead" means XXXX per XXXX plus XXXX of such XXXX base
salary.
H. "Current Environment" means the operations, Unisource Data Centers, Data
Network, warehouses and In-Scope Personnel for which ISSC is assuming
responsibility as of the Commencement Date.
I. "Data Center" means both the ISSC Data Center and the Unisource Data
Center(s).
J. "Data Network" means the individual networks set forth in Schedule I
including all Machines, associated attachments, features and accessories,
Software, lines and cabling used to connect and transmit data between the
Data Center(s) and Unisource locations listed in Schedule I, including,
but not limited to, communication controllers, multiplexors, lines and
modems/DSUs, but does not include End User Machines.
K. "ISSC Data Center" means the Machines and Software to be located at an
ISSC location and at such other locations as ISSC may establish
thereafter.
L. "Reduced Resource Credit Rate" ("RRC Rate") means the credit for reduced
utilization of a Resource Unit below the Baseline, as set forth in the
Supplement and this Schedule J.
M. "Resource Unit" ("RU") means a particular unit of resource utilization,
as described in this Schedule J, which is used to determine "Additional
Resource Charges" ("ARCs") and Reduced Resource Credits" ("RRCs") as
described in this Schedule J.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 1 of 20
<PAGE>
N. "Unisource Data Center(s)" means the Machines and Software located at the
Unisource facilities set forth in Schedule I as of the Commencement Date.
III. Current Environment
A. Unisource Data Centers/Data Network Resources
---------------------------------------------
Resource usage for the existing Unisource Service Locations and Data
Network will be the capabilities and capacity of the Software and
Machines listed in Schedules A, B and C respectively and data lines
connecting the Unisource Service Locations to the Data Network locations
specified in Schedule I.
Unisource shall be entitled to utilize the full capabilities and capacity
of the Unisource Service Locations and Data Network Machines, Software
and data lines for any Unisource internal processes, so long as
Unisource's use of such available capabilities and capacity does not
otherwise hinder ISSC's performance of the Services and sufficient
available capacity exists to enable ISSC to maintain the Performance
Standards, if any, for that location. If ISSC determines additional
capability or capacity is required in order to maintain compliance with
the applicable Performance Standards, ISSC will notify Unisource that
Unisource's use of the Machines, Software and data lines is impacting
ISSC's ability to meet such Performance Standards and Unisource may:
1. elect to reduce Unisource's use of the applicable Machines, Software
and/or data lines sufficiently to enable ISSC to meet the Performance
Standards; or
2. relieve ISSC of the requirement to meet such Performance Standards;
or
3. agree to lower the Performance Standards commensurate with the effect
that Unisource's use of the Machines, Software and/or data lines are
impacting the Performance Standards; or
4. have ISSC add sufficient additional capability and/or capacity to
meet such Performance Standards at Unisource's expense.
B. Additional Unisource Data Center/Data Network Resources
-------------------------------------------------------
While it is the intent of the Parties to stabilize the Current
Environment in its present configuration and maintain that configuration
until it is replaced by the Restructured Business Platform provided under
Schedule N, it is acknowledged by the Parties that some changes will have
to be made to this environment to accommodate Unisource's business
needs during the migration to the Restructured Business Platform.
Unisource has identified the following potential changes to the Current
Environment:
1. upgrading the XXXX located in XXXX to an XXXX;
2. equipment, Software and Data Network changes to support consolidating
and moving the Unisource XXXX in XXXX to the XXXX Data Center located
in XXXX;
3. upgrading the XXXX located in XXXX to XXXX;
4. equipment, Software and Data Network changes to support moving the
XXXX from the XXXX to the XXXX Unisource Data Center;
5. purchasing, upon expiration of the current lease, the XXXX located at
XXXX Unisource Data Center.
ISSC has set aside the amount of money specified in the Supplement under
the Upgrade Allotment Baseline for the purchases and work efforts
specified above. As each change takes place ISSC shall, upon Unisource's
approval, or Unisource may purchase or supply the required equipment,
Software, data lines or other resources and deduct the costs from the
Baseline dollar value set forth in the Supplement, and, if Unisource
purchases such equipment, Software, data lines or other resources,
reimburse Unisource for such purchase. ISSC shall maintain and make
available to Unisource, upon Unisource's reasonable request,
documentation supporting any credits to the Baseline.
While the monies set forth in the Upgrade Allotment Baseline are
initially allocated for the work efforts described above, Unisource may
allocate such monies to other changes or projects as Unisource's
business dictates. In the event that Unisource requires upgrades or
changes to the Current Environment in excess of the Upgrade Allotment
Baseline value whether to accommodate new acquisitions, maintain
acceptable performance, accomplish Unisource's consolidation strategy, or
any other reason attributable to Unisource, then Unisource shall be
responsible for all expenses not covered by such Baseline; conversely, if
any Upgrade Allotment Baseline monies remain after completion of the
migration of all regions to the Restructured Business Platform or if
Unisource determines, after migration of the initial region to the
Restructured Business Platform, that the Upgrade Allotment monies are in
excess of the amount
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 2 of 20
<PAGE>
needed for remaining upgrades in the Current Environment, then ISSC
shall, at Unisource's direction, credit such monies against monies due
ISSC by Unisource.
C. Affected Employees
------------------
1. Replacements
ISSC and IBM Canada shall hire the Affected Employees listed in
Schedule O and use such employees in the provision of the Services for
the Current Environment. In the event that an Affected Employee does
not accept ISSC's or IBM Canada's employment offer or is not offered
employment with ISSC or IBM Canada pursuant to Article 12 of the
Agreement, then ISSC or IBM Canada will promptly replace such Affected
Employee with an individual having similar skills and capable of
performing the tasks of such Affected Employee; provided, however,
that if a significant number of the Affected Employees for a
particular Service Location are not hired by ISSC or IBM Canada for
the reasons stated above, then:
a. ISSC or IBM Canada will promptly exercise commercially reasonable
efforts to expedite the backfills for such Affected Employees;
b. ISSC and Unisource will cooperate to resolve any service delivery
deficiencies that may result for such Service Location due to
inadequate staffing; and
c. Unisource shall excuse ISSC of Performance Standards attainment
and Performance Credit liabilities, if any, resulting therefrom
until replacements for such individuals are hired by ISSC.
All salary expenses, base salary and Benefits Overhead, for
replacements hired by ISSC or IBM Canada for the Affected Employees,
whether for Affected Employees not accepting ISSC's or IBM Canada's
employment offer, or Affected Employees not receiving an employment
offer pursuant to Article 12 of the Agreement or Affected Employees
separated for cause pursuant to Section 12.06 of the Agreement, will
be the responsibility of ISSC and the XXXX and XXXX or the XXXX set
forth in Sections XXXX and XXXX of the Agreement will be administered
pursuant to Section XXXX of the Agreement.
2. XXXX New Hires
It is Unisource's intent to hire XXXX new computer operators for the
XXXX Location which will be in excess of the In-Scope Personnel for
such location. ISSC shall, at Unisource's option, either:
a. hire such individuals, if Unisource effects such hiring before the
Commencement Date, pursuant to Article 12 of the Agreement;
b. hire such individuals selected by Unisource directly into ISSC if
such selection occurs after the Commencement Date; or
c. Select and hire such individuals directly.
The individuals referenced in this Section III.C.2 will be eligible
for ISSC's XXXX XXXX and ISSC's XXXX XXXX XXXX as set forth in Section
XXXX and Unisource will reimburse ISSC for the actual salaries plus
applicable Benefits Overhead plus the Completion Allowance and
Enhanced Completion Allowance paid such individuals. ISSC shall
invoice Unisource for the aforementioned expenses as they are
incurred.
D. Personnel Resources
-------------------
ISSC will provide the Services for the Current Environment using the
In-Scope Personnel.
1. Additional Resource Charges
In the event that Unisource requires changes or additions to the
Current Environment that cannot be provided by the In-Scope Personnel,
ISSC will provide additional resources at an annual ARC Rate which
will XXXX the XXXX for that location, as set forth in Schedule O, XXXX
to reflect ISSC's XXXX and the XXXX priced in the Agreement (XXXX)
plus a XXXX administrative fee. The annual ARC Rate calculated above
will be prorated for the number of months the additional resources are
needed and multiplied by the number of additional FTE months required.
2. Reduced Resource Credits
In the event that Unisource and ISSC agree that an ISSC In-Scope
Personnel individual(s) is not needed and can be released prior to the
migration of that Unisource Service Location to the Restructured
Business Platform and the XXXX for such individual(s) is XXXX than the
XXXX of the Commencement Date and ISSC has had a XXXX of XXXX prior
notification, then ISSC will provide an RRC for such reduction of In-
Scope Personnel resources at an RRC Rate XXXX the XXXX calculated in
Section XXXX above.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 3 of 20
<PAGE>
E. Current Environment Extensions
------------------------------
In the event that the migration of a region is delayed for greater than
30 days and the delay is:
1. at XXXX XXXX, then ISSC shall provide the personnel resources to
effect such extension and Unisource will be financially responsible
for the XXXX of the XXXX being XXXX plus applicable XXXX plus a XXXX
for the XXXX of their XXXX as well as for all XXXX, XXXX, XXXX and
other XXXX resulting from such extension;
2. XXXX by XXXX or XXXX within XXXX or its XXXX XXXX XXXX control, then
XXXX shall be XXXX for XXXX and XXXX directly XXXX to the XXXX of
the Current Environment Services (XXXX, XXXX, and XXXX) until such
XXXX as the XXXX is XXXX; or
3. XXXX by XXXX or XXXX XXXX to XXXX XXXX to XXXX under this XXXX or
the XXXX XXXX XXXX to XXXX the XXXX XXXX, then XXXX will be XXXX for
the XXXX XXXX XXXX XXXX and XXXX will be XXXX for its XXXX XXXX for
such things as, but not limited to, XXXX, XXXX, XXXX and other XXXX
XXXX from such XXXX), until either the XXXX or the XXXX to XXXX is
XXXX.
During the initial XXXX of a XXXX in migrating a region to the XXXX XXXX
Platform, there will be XXXX XXXX and XXXX XXXX will be XXXX for XXXX
Current Environment XXXX. If there is XXXX XXXX XXXX of the same XXXX to
the XXXX XXXX Platform, then the XXXX XXXX set forth above apply from the
XXXX of such XXXX without XXXX to the XXXX no XXXX XXXX XXXX XXXX for
that location.
F. Migration Schedule Swaps
------------------------
In the event that Unisource desires to change the order of the region or
Unisource Service Location(s) migration to the Restructured Business
Platform and such change merely swaps one region or Unisource Service
Location(s) for another without changing the overall migration schedule
and Unisource provides ISSC with sufficient prior notice of Unisource's
desire, then ISSC will swap the region or Unisource Service Location(s)
and the expense or credit to Unisource will be the XXXX plus XXXX XXXX
XXXX between the affected regions or Unisource Service Location(s)
prorated for the length of time such differential is applicable, (the
XXXX). For example, if Unisource wishes to swap XXXX Region, scheduled
for migration completion on XXXX and XXXX Region, scheduled for migration
completion on XXXX and the XXXX and XXXX per XXXX for XXXX for XXXX
Region is XXXX and for XXXX Region is XXXX then ISSC shall provide
Unisource a XXXX in the form of a XXXX in the amount of XXXX (XXXX XXXX
times XXXX) upon completion of the migration of the XXXX Region (XXXX
XXXX and XXXX XXXX are examples only). In the above example, if the XXXX
and XXXX had been XXXX the XXXX provided Unisource would have been an
invoice for the XXXX incurred.
The factors that will determine if Unisource's desire to swap regions
or Unisource Service Location(s) can be accommodated will include, but
not be limited to, ISSC having sufficient notice to provide employment
termination notices pursuant to Section 12.06 of the Agreement, the
availability of hardware and other resources necessary to perform the
migration of the swapped region and the availability of sufficient region
implementation teams.
If ISSC will incur additional expenses because of such swap (e.g.,
accelerating the hardware, Software or Data Network installation
schedules, or bringing in additional region implementation teams early)
then ISSC will notify Unisource of the amount of such additional expenses
and, if Unisource still elects to continue with the swap, ISSC shall
either deduct or add such expenses to the XXXX as applicable.
IV. Restructured Business Platform
A. ISSC Data Center Resources
--------------------------
1. ISSC will provide the Machines and Software set forth in Schedule R
as the ISSC Data Center Platform to support the Restructured
Business Platform. If additional ISSC Data Center resources are
required to support:
a. Unisource's business changes;
b. additional AD/M Services resources above the AD/M Services
Baseline quantity; or
c. ISSC's attainment of the Performance Standards;
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 4 of 20
<PAGE>
due to Unisource growth, changes in Unisource business priorities or
Unisource caused systems or network changes, then ISSC shall add such
resources, upon Unisource's prior written approval, as New Services
pursuant to Section 11.01 of the Agreement.
2. In the event that Unisource's business requirements do not require all
of the Machines and Software specified in Schedule R under the ISSC
Data Center Platform and the migration to the Restructured Business
Platform is complete, ISSC will provide Unisource a credit for the
unused and uninstalled equipment equal to ISSC's XXXX and XXXX
resulting from XXXX such equipment; provided, however, that should
such Machines or Software subsequently be required after credit is
issued the Machines and Software will be provided as New Services
pursuant to Section 11.01 of the Agreement.
3. If the migration to the Restructured Business Platform is delayed:
a. at Unisource's request, then Unisource will reimburse ISSC for all
actual and direct expenses, if any, that ISSC incurs for installing
the Restructured Business Platform and continuing the Projects
Development Group that ISSC would not have otherwise incurred were
it not for the migration delays, or ISSC shall credit Unisource for
any actual and direct savings that ISSC may realize if ISSC can
delay the installation of the Restructured Business Platform or
redeploy and/or otherwise use the Projects Development Group,
whichever occurs;
b. for reasons or factors within ISSC's or its subcontractor's
commercially reasonable control, then ISSC shall be responsible for
Unisource's and ISSC's actual and direct expenses, if any, directly
related to installing the Restructured Business Platform and
continuing the Projects Development Group that either Party would
not have otherwise incurred were it not for the migration delays,
and, in addition, ISSC shall credit Unisource for any actual and
direct savings that ISSC may realize if ISSC can delay the
installation of the Restructured Business Platform or redeploy and
otherwise use the Projects Development Group. ISSC's liability for
the additional expense, if any, ceases when the migration to the
Restructured Business Platform is completed; or
c. for reasons or factors not attributable to either Parties failure
to perform under this Agreement or the Parties mutually agree to
extend the migration period, then ISSC will be responsible for the
ISSC expenses incurred by such delay and Unisource will be
responsible for its continued expenses until either the migration
or the mutually agreed to extension is completed, or ISSC shall
credit Unisource for any actual and direct savings that ISSC may
realize if ISSC can delay the installation of the Restructured
Business Platform or redeploy and/or otherwise use the Projects
Development Group, whichever occurs.
B. Data Network
------------
1. Selection
ISSC will provide Management Services, as described in Schedule E, for
the Data Network in the Restructured Business Platform.
2. Baseline
ISSC has set aside the amount of money specified in the Supplement
under Data Network Baseline for the purchases and payment of Data
Network Services for the Restructured Business Platform. ISSC shall
pay the Data Network vendor invoices and credit such invoices against
the Data Network Baseline. ISSC shall maintain and make available to
Unisource, upon Unisource's reasonable request, documentation
supporting any credits to the Baseline. In the event this Baseline, as
established, requires additional funding to accommodate Unisource's
Data Network expenses in any period, then Unisource shall bear any and
all financial responsibility for any expenses in excess of the
Baseline.
a. Baseline Reconciliation
Beginning on completion of the sixth month following the
Commencement Date and at the completion of each three month period
thereafter, ISSC shall analyze the actual Data Network Vendor
invoice payments as compared to the Data Network Baseline monies
available and determine if the Data Network Baseline monies are in
excess of the Data Network vendor invoices. If it is felt that the
Baseline monies will remain in excess of the vendor invoice amounts
ISSC shall notify Unisource and, upon Unisource's request, provide
a monthly credit against the Unisource's prorated monthly portion
of the Annual Services Charge such that the excess Baseline monies
are returned to Unisource; provided, that if the vendor invoices
exceed the remaining Baseline monies then ISSC will stop the
monthly credit sufficient to cover the vendor invoices.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 5 of 20
<PAGE>
b. Future Option
If at any time during the Term Unisource desires to pay its data
communications invoices directly, ISSC shall:
1) submit such invoices to Unisource for payment within a
reasonable period of time prior to the due date or, if a
discount for early payment is given, the date on which Unisource
may pay such invoice with a discount; and
2) reduce the monthly Services Charges for each month after
Unisource's request by one-twelfth of the Data Network Baseline
for the applicable Contract Year.
C. AD/M Services
-------------
The Parties have agreed that they will use full time equivalent ("FTE")
person-years to measure the quantity of AD/M Services delivered by ISSC
to Unisource. An FTE equals XXXX (exclusive of XXXX, XXXX or other XXXX)
of AD/M Services per year or XXXX hours per month. ISSC will document in
the XXXX the criteria and procedures to be used by ISSC in determining
which personnel can charge hours against the AD/M Services Baseline and
which types of activities will be chargeable against such Baseline.
The quantity of FTEs included in the Annual Services Charge is specified
in the AD/M Services Baseline in the Supplement.
Not less than annually, the Parties will conduct a strategic planning
session during which Unisource's Applications Maintenance and
enhancement/development projects will be reviewed, prioritized and AD/M
Services resources allocated according to the mutually agreed upon AD/M
schedule. In addition, the Parties will review the AD/M Core Skills Group
quantity and skills mix and mutually agree upon the required changes, if
any, to provide support for the upcoming year(s) and adjust the Baseline
accordingly. The Parties have agreed that the initial AD/M Core Skills
Group quantity will be XXXX of the AD/M Services Baseline quantity. The
results of the strategic planning sessions and other Unisource AD/M
forecasts will determine AD/M Services resource deployment and will be
the basis for determining ARCs or RRCs, if any.
1. AD/M Services ARC Rates
The ARC Rate for AD/M Services will reimburse ISSC for the additional
personnel, workstations and AD/M software tools necessary to support
ISSC's delivery of AD/M Services resources in excess of the AD/M
Services Baseline. The AD/M Services ARC Rate is set forth in the
Supplement.
2. Planned AD/M Services Requirements
Unisource shall provide ISSC with its forecasted AD/M Services
resource requirements at least XXXX days prior to the time such
resources are required. In the event that Unisource does not provide
AD/M Services forecast within XXXX days then the AD/M Services that
ISSC will make available to Unisource will be the Baseline quantity
set forth in the Supplement for that period.
a. ARCs
If the forecasted AD/M Services require resources in excess of the
AD/M Services Baselines and Unisource anticipates using such
additional resources for a minimum of one year, ISSC shall provide
such AD/M Services resources at the Annual AD/M Services ARC Rate;
otherwise, ISSC shall provide such additional resources at the
Hourly AD/M Services ARC Rate. The ARC Rates for Annual and Hourly
AD/M Services are specified in the Supplement.
b. RRCs
If the forecasted AD/M Services require resources less than the
AD/M Services Baselines and such reduction does not reduce the
available AD/M Services resources below the AD/M Core Skills Group
then ISSC shall provide Unisource an RRC equal to XXXX of the
applicable AD/M Services ARC Rate times the amount of reduction in
each category, annual or hourly. RRCs are applicable to AD/M
Services reductions less than the AD/M Services Baseline but
greater than the AD/M Core Skills Group. RRCs for any given month
will only be given in whole person-months in order that ISSC may
otherwise use such AD/M Services resources for that period.
3. Unplanned AD/M Services Requirements
If Unisource requires AD/M Services resources in addition to the
planned AD/M Services resources referenced above and requests such
resources with less than XXXX days prior written notification, ISSC
shall provide these AD/M Services resources within five business days
of such request at the Annual and Hourly ARC Rates set forth in the
Supplement plus XXXX.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 6 of 20
<PAGE>
4. Alternate AD/M Services Metric
a. Function Points
During the migration to the Restructured Business Platform, the
Parties will review the feasibility of using a Function Point or
other metric as the methodology for measuring the functional output
of the AD/M Services rather than the labor-hour input. The
following describes how the Parties will implement such a
methodology:
1) Subject to reaching mutual agreement on the details of the
methodology for applying the Function Point metric, the Parties
will use the Function Point metric as the metric to measure the
functional output for the AD/M Services performed by the FTEs
which will be counted using the procedures described in the
International Function Point Users Group ("IFPUG") Function
Point Counting Practices Manual, release 3.2 (and any subsequent
releases). ISSC will also conduct appropriate training seminars
for Unisource personnel on the Function Point metric before
implementation of such methodology.
2) Prior to adopting the Function Point metric, the Parties will
develop a mutually agreed upon methodology for using the
Function Point metric to measure the AD/M Services functional
output provided by ISSC to Unisource each year during the
remainder of the Term and will develop an AD/M Services Baseline
expressed in Function Points to replace the AD/M Services FTE
Baseline. Such Baseline will represent the functional output of
the AD/M Services FTEs provided during the period prior to the
conversion to Function Points, measured using data from mutually
agreed to representative Unisource projects performed during
such period. "Total Net Function Points" delivered by ISSC
during this period will be calculated as follows:
Total Net Function Points for AD/M Services Baseline (Year ?) =
FTE Baseline x Total FPs Delivered x FTE Baseline (Year ?)
------------ ---------------------
FTEs Delivered FTE Baseline
Where:
FTE Baseline = The FTE Baseline for the period
during which the Function Point
conversion is measured.
FTEs Delivered = The actual number of FTEs doing work
during the period measured.
Total FPs Delivered = The number of Functions Points
delivered by the AD/M Services
Personnel during the period measured
normalized to period Function
Points.
FTE Baseline (Year ?) = The number of Baseline FTEs for the
future year being converted to
Function Points.
3) The Function Point ARC Rate will be a rate per Function Point of
work produced and will be based on the actual AD/M Services
costs and productivity of the AD/M Services staff prior to the
migration to the Restructured Business Platform.
b. Other AD/M Services Metric and Methodology
The Parties agree that, if it is mutually determined that an
alternative to the FTE or Function Point metric and methodology
better measures the functional output of AD/M Services, then such
alternative metric and methodology shall be adopted.
The Supplement would be updated to reflect such changes and the revised
Supplement distributed to the Parties.
V. Baseline Adjustments
The Parties understand that Unisource's predicted AD/M Services resources
requirements, while based on the best knowledge available, may be subject to
significant variation as a result of unexpected growth or reduction in its
business and that such resource variations may place Unisource in the
position of incurring ARCs or RRCs. Realizing Unisource's intent and
concern, the Parties have agreed to the following Baseline adjustment
methodology.
In the event that Unisource's use of the resources provided under this
Agreement increases, ("Change"), or, if in Unisource's judgement,
Unisource's use of such resource(s) will Change and such Change is expected
to continue for the foreseeable future, then Unisource may elect to have
ISSC set the AD/M Services Baseline to
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 7 of 20
<PAGE>
the new actual or anticipated resource usage level and adjust the Annual
Services Charge ("ASC") as described below.
A. Increased Resource Usage
------------------------
If Unisource increases its usage of any AD/M Services resource(s)
and/or elects to exercise its option of setting the Baseline to an
increased resource usage level, ISSC shall, with XXXX prior written
notice and a one year minimum commitment to the new Baseline from
Unisource, set the Baseline to the new resource usage level and
increase the Annual Services Charge, prorated to the month the
adjustment is made. The Annual Services Charge will be increased by
XXXX of the annual ARC Rate multiplied by the number of Resource Units
that the Baseline has been increased.
New ASC = ASC + (RUs (greater than) Baseline x ARC Rate x XXXX)
For example, if the monthly prorated portion of the Annual Services
Charge is $3,400,000.00, the AD/M Services Baseline is 20 FTEs, the
annual ARC Rate is $200,000.00 per FTE and the growth is 2 FTEs, then
the new monthly ASC will be:
$3,400,000.00 + {2 FTEs x (($200,000.00 (divided by) 12) x XXXX)}
= New ASC.
$3,400,000.00 + {2 FTEs x ($16,666.67 x XXXX)} = New ASC
$3,400,000.00 + {2 FTEs x $XXXX} = New ASC
$3,400,000.00 + $XXXX = $3,4XXXX
Per the above example, all future monthly prorated ASCs will be
increased by XXXX and all future FTE Baselines will be increased by
XXXX The Supplement would be updated to reflect such changes and the
revised Supplement distributed to the Parties.
B. Reduced Resource Usage
----------------------
If Unisource reduces its usage of any AD/M Services resource(s) and/or
elects to exercise its option of setting the Baseline to a new reduced
resource usage level, ISSC shall, upon XXXX prior written notice and a
one year commitment to the new Baseline from Unisource, set the
Baseline to the new resource usage level and reduce the Annual
Services Charge, prorated to the month the adjustment is made. The
Annual Services Charge will be reduced by XXXX of the ARC Rate
multiplied by the number of Resource Units that the Baseline is being
reduced.
New ASC = ASC - {(Baseline - New Baseline) x ARC Rate x XXXX}
For example, if the monthly prorated portion of the Annual Services
Charge is $3,400,000.00, the monthly AD/M Services Baseline is 20
FTEs, the annual ARC Rate is $200,000.00 per FTE and the resource
reduction is 3 FTEs, then the new monthly ASC will be:
$3,400,000.00 + {((20 FTEs - 17 FTEs) x ($200,000.00 (divided by
12) x XXXX)} = New ASC
$3,400,000.00 + {3 FTEs x ($16,666.67 x XXXX)} = New ASC
$3,400,000.00 + {3 FTEs x $XXXX} = New ASC
$3,400,000.00 + $XXXX = $XXXX
All future monthly prorated ASCs would be decreased by $XXXX and all
future monthly AD/M Services Baselines would be decreased by 3 FTEs.
C. Previously Calculated/Paid ARCs and RRCs
----------------------------------------
Previously calculated or paid ARCs or RRCs shall not be affected by
any Baseline adjustment under this Section.
VI. Transition Projects
A. Consulting and Management Services
----------------------------------
Beginning on the Commencement Date, ISSC will provide personnel
resources with consulting level skills to perform specific tasks such
as Business Process Reengineering. Organizational Change Management
and Transition Management Assistance as well as project management
skills for other Schedule N Projects.
1. Services Contained in the Annual Services Charge
Included in the Annual Services Charge are the level of
consulting skill resources specified in the Supplement under
Consulting and Management Services Baseline. The Baseline
resources are expressed in FTEs as defined in Section IV.C of
this Schedule. The Consulting and Management Services Baseline
resources.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No.1 Page 8 of 20
<PAGE>
a. are dedicated to specific Projects during the migration to the
Restructured Business Platform and can not be reassigned without
approved Change Requests pursuant to Schedule H; and
b. will, after the migration to the Restructured Business Platform, be
assigned to Projects as directed by Unisource during the annual
strategic planning period.
2. Additional Resource Charges
Additional Consulting and Management Services resources over the
Baseline quantity are available upon XXXX prior notification and
payment of Additional Resources Charges at the applicable ARC Rate.
3. Reduced Resource Credits
In the event that ISSC does not use all the resources provided under
the Consulting and Management Services Baseline in performance of the
projects and Unisource does not use or decides not to use the
Consulting and Management Services and provides ISSC XXXX prior
written notice of such intent not to use such resources, then ISSC
will make such unused resources available to Unisource during years
XXXX through XXXX of the Agreement; provided, that Unisource provides
ISSC XXXX prior written notice of its intent to use such resources
prior to using such resources during years XXXX through XXXX.
B. New Projects Development
------------------------
Beginning on the Commencement Date, ISSC will provide personnel resources
with development skills to plan, design, code, test, document, install
the North American Distribution, National Accounts, Executive
Information, Market Intelligence and Electronic Data Interchange Systems.
1. Services Contained in the Annual Services Charge
Included in the Annual Services Charge are the level of development
resources specified in the Supplement under New Projects Development
Baseline. The Baseline resources are expressed in FTEs as defined in
Section IV.C of this Schedule. The New Projects Development Baseline
resources are dedicated to specific Projects during the migration to
the Restructured Business Platform and can not be reassigned without
approved Change Requests pursuant to Schedule H.
The training of Unisource's users on the above projects is not
included in the New Projects Development Baseline but are included in
the Annual Services Charge and the training modules are specified in
each Project description listed in Schedule N. Additionally, the
resources to perform on-going maintenance and enhancements to the
Projects developed hereunder once installed in the production
environment are not included in the New Projects Development Baseline,
but are included under the AD/M Services Baseline described in Section
IV.C of this Schedule.
2. Additional Resource Charges
Additional New Projects Development resources over the Baseline
quantity are available upon XXXX prior notification and payment of
Additional Resources Charges at the applicable AD/M Services ARC Rate.
3. Reduced Resource Charges
If ISSC, after receiving, analyzing and allocating New Projects
Development resources to specific projects, has any uncommitted
resources such resources will be held in reserve by ISSC until the
completion of migration to the New Business Platform for allocation to
new Unisource requirements arising during the performance of the
Projects. If, at the end of the migration to the Restructured Business
Platform, there are unused New Projects Development resources then
ISSC will, at Unisource's direction provide either a Reduced Resource
Credit equal to XXXX of the applicable AD/M Services ARC Rate or defer
the unused resources and allocate to AD/M Services Baselines for
future years.
4. Planned New Projects Baseline Changes
Upon XXXX days notice and commitment to the new Baseline quantity for
the XXXX of the migration to the Restructured Business Platform or
XXXX months, whichever is greater, Unisource may increase or decrease
the New Projects Development Baseline and the Annual Services Charges
at XXXX of the applicable AD/M Services ARC Rate pursuant to Section V
of this Schedule: provided, however, that RRCs for New Projects
Development resources will not be provided for XXXX after the XXXX of
the XXXX to the XXXX XXXX XXXX.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 9 of 20
<PAGE>
5. Resource Shifting
Unisource may, upon XXXX prior written notice, request to divert
future New Projects Development resources to perform work on current
Projects and there will be no additional costs for such diversion
until and unless New Projects Development resources are needed to
complete the future Projects from which the resources were diverted.
The future New Projects Development resources will be provided at XXXX
the then current applicable AD/M Services ARC Rate.
Unisource may, as a result of the Annual Planning Session and upon
XXXX prior notice, request ISSC to delay a Project for a specified
period of time and ISSC will redeploy or otherwise use such resources
during the period of delay and make the appropriate resources
available when the Project restarts at no additional expense to
Unisource.
6. Project Resource Risk Sharing
ISSC has allocated specific levels of New Projects Development
resources to the Applications Development Projects, XXXX (XXXX), XXXX
(XXXX), XXXX (XXXX), XXXX (XXXX), and XXXX (XXXX), all as described in
Schedule N. The total New Projects Development resource for all of the
Projects named above is specified under the New Projects Development
Baseline in the Supplement and this Baseline is further subdivided
into the XXXX Baseline, the XXXX Baseline and the Other Baseline,
which is the resource allocated to XXXX, XXXX and XXXX combined.
ISSC has provided as accurate an estimate of the amount of New
Projects Development resources required to provide the IT functions
required to support Unisource's business processes as is possible with
the limited business requirements provided by Unisource. At such time
as Unisource provides the IT requirements necessary to support its
Restructured Business Platform, ISSC will analyze such requirements
against the basic functions provided by the XXXX program package and
will provide Unisource a commitment as to the New Projects Development
resources and implementation schedule for each Project listed above.
Upon Unisource's acceptance and approval pursuant to Section 4.05 of
the Agreement, ISSC shall commit to the resources and schedule and
such commitment will be fixed unless Unisource requests changes in the
committed deliverables or adds additional business requirements. If
Unisource requests changes in the committed deliverables or adds
additional business requirements for a Project after ISSC has provided
its initial commitment of New Projects Development resources, schedule
and price, then ISSC will provide a separate resource commitment,
schedule and fixed price and, upon Unisource's approval, commit the
additional resources and the price will be in addition to the price(s)
for the previous resource commitment(s).
Both ISSC and Unisource have been diligent in supplying requirements
and estimates and both realize that the resource estimates set forth
in the New Projects Development Baseline will vary by some amount when
Unisource's actual business estimates are known and sized and there is
risk that the amount of variance may be significant. In the event that
there is significant variance between the New Projects Development
resource set forth in the Supplement under the New Projects Baseline
and the actual New Projects Development resources necessary to perform
the Projects as determined by ISSC's reviewing and analyzing of the
actual business requirements, then ISSC and Unisource will share the
affects of such risk as follows:
a. If the actual resources to complete a Project(s) exceeds its
(their) applicable Baseline by XXXX or XXXX, then ISSC shall
provide the additional New Projects Development resources at XXXX
of the applicable AD/M Services ARC Rate.
b. If the actual resources to complete a Project(s) exceeds its
(their) applicable Baseline by more than XXXX but not more
than XXXX, then ISSC shall provide the additional New Projects
Development resources for the initial XXXX variance at XXXX of the
applicable AD/M Services ARC Rate and resources for that portion of
the variance between XXXX and XXXX at XXXX of the applicable AD/M
Services ARC Rate.
c. If the actual resources to complete a Project(s) exceeds its
(their) applicable Baseline by more than XXXX then ISSC shall
provide the additional New Projects Development resources for the
initial XXXX variance XXXX of the applicable AD/M Services ARC
Rate, the resources for that portion of the variance between XXXX
and XXXX at XXXX of the applicable AD/M Services ARC Rate and
Unisource shall pay the AD/M Services ARC Rate it would otherwise
qualify for under Sections VI.B.2 and 3 above for the portion of
the variance above XXXX.
C. XXXX XXXX
---------
Set forth in the Supplement under Warehouse Management ARC Rates are
fixed fees for installing the Warehouse Management System described
in Section N-6 of Schedule N. The Warehouse Management ARC Rate
consists of both a one-time installation charge which provides the
hardware, software, con-
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 10 of 20
<PAGE>
nection and interface to the Restructured Business Platform,
installation and training of XXXX personnel (the "XXXX") and on-going
hardware and Software maintenance, management and support, (the "XXXX").
Unisource is not obligated to exercise its options under the XXXX
Project, however, if Unisource does elect to install XXXX in any of its
XXXX but does not install XXXX in the minimum number specified for Phase
1 installation (XXXX XXXX with XXXX having XXXX capability), then
Unisource shall reimburse ISSC for the unrecovered costs for the New
Projects Development and Project Management expenses ISSC has amortized
over the Phase 1 installations.
Additional New Projects Development resources are available and will be
provided pursuant to Section VI.B of this Schedule J.
D. XXXX System
-----------
Set forth in the Supplement under XXXX ARC Rates are fixed fees for
installing the XXXX System described in Section N-7 of Schedule N. The
XXXX ARC Rate consists of both a one-time installation charge which
provides the hardware, Software, connection and interface to the
Restructured Business Platform, installation and training of XXXX
personnel (the "XXXX Installation") and an ongoing monthly charge for
hardware and Software maintenance, management and support, (the "XXXX
Maintenance").
Unisource is not obligated to exercise its options under the XXXX
Project, however, if Unisource does elect to install XXXX in any of its
XXXX but does not install XXXX in the minimum number specified for Phase
1 installation (XXXX XXXX), then Unisource shall reimburse ISSC for the
unrecovered costs for the New Projects Development and Project
Management expenses ISSC has amortized over the Phase 1 installations.
XXXX for a XXXX must be done in conjunction with the XXXX at the same
XXXX.
Additional New Projects Development resources are available and will be
provided pursuant to Section VI.B of this Schedule J.
FTE resource allocation against the Baseline quantity will be reconciled
against actual hours on a semi-annual bases and adjustments made, as
appropriate, at that time. Use of baseline resources associated with
reruns attributed to failures caused by ISSC or its subcontractor's, will
not be chargeable against the baseline.
VII. Monthly Resource Reporting
Monthly resource utilization will be reported against respective
baselines.
VIII. Cost of Living Adjustment ("COLA") Example
COLA is calculated and applied on a calendar year basis and on a
prospective basis, e.g., the actual inflation for year 1994 will determine
the COLA for 1995. Following is an example for calculating the COLA for
years beginning January 1, 1995:
A. Protection Index
----------------
The inflation sensitive portions of the Annual Services Charges and ARC
Rates have been uplifted by the protection factor, XXXX, compounded
annually for each year of the Term. The base year, December of the year
preceding the Commencement Date (December 1993), CPI-U is also uplifted
by the protection factor, compounded annually for each year of the
Term, and is set forth in the Supplement for use in calculating COLA
for future years. As an example if the CPI-U for December 1993 is XXXX
then the Protection Index appearing in the Supplement would be as
follows:
<TABLE>
<CAPTION>
BASE 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Protection
Index XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
</TABLE>
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 11 of 20
<PAGE>
B. Actual Inflation
----------------
For each year of the Term the actual December CPI-U is compared to the
Protection Index set forth in the Supplement to determine if the actual
inflation is greater than the Protection Index. If the actual CPI-U is
equal to or less than the Protection Index for that year then no COLA is
due for the upcoming year. However, if the actual CPI-U is greater than
the Protection Index for that year then COLA will be applied to the
Annual Services Charges and ARCs less RRCs due ISSC for each month of the
upcoming year. For example purposes we will assume that the actual CPI-Us
for December of each of the first few years are:
<TABLE>
<CAPTION>
BASE 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Actual CPI-U 144.80 149.02 154.33 158.03 163.50
</TABLE>
C. COLA Factor
-----------
COLA for any given year is equal to the Cola Factor times the monies due
ISSC (ASC plus ARCs less RRCs) for each month of the year during which
actual inflation is greater than the Protection Index. The COLA Factor is
calculated as follows:
COLA Factor = {((Actual Inflation - Protection Index) (divided
by) Protection Index) x 0.65}
Where:
Actual Inflation = The CPI-U for December preceding the
calendar year for which COLA is being
calculated.
Protection Index = The Protection Index for the calendar year
preceding the calendar year for which COLA
is being calculated.
XXXX = The portion of the Charges that are
inflation sensitive.
D. COLA Calculation
----------------
As you can see from the examples above there will be no COLA for calendar
years 1995 and 1997 as the actual inflation for their preceding years is
less than the inflation protection factored in the charges, i.e.,
Decembers 1994 and 1996 CPI-Us (149.02 and 158.03) are less than their
respective Protection Indices (149.14 and 158.23). However, there will be
COLA due for calendar years 1996 and 1998 as the actual inflation for
their preceding years is greater than the inflation protection factored
in the charges, i.e., Decembers 1995 and 1997 (154.33 and 163.50) are
greater than their respective Protection Indices (153.62 and 162.97).
To determine the COLA for February of 1996 where the monthly prorated
portion of the ASC for February is $2,900,000 and there are Consulting
and Management Services ARCs of $80,000 due for that month and AD/M
Services RRCs of $36,000 due Unisource for that same month then the COLA
monies due in addition to the charges will be:
COLA = {(ASC + ARCs - RRCs) x COLA Factor}
COLA = {(($2,900,000 + $80,000 - $36,000) x (154.33 - 153.62)
(divided by) 153.62) x XXXX}
COLA = $2,944,000 x {(0.71 (divided by) 153.62) x XXXX}
COLA = $2,944,000 x (0.0046 x XXXX)
COLA = $2,944,000 x XXXX
COLA = XXXX
The COLA for each month of each year in which COLA is due is calculated
as above substituting the appropriate monthly monies and yearly COLA
Factors.
IX. XXXX Incentive
The Parties have agreed that ISSC will be eligible for a XXXX in contract
years XXXX through XXXX if XXXX achieves XXXX XXXX objectives, ("XXXX
Incentive"). The basis for calculating the XXXX Incentive will be the XXXX
of XXXX Business XXXX XXXX XXXX XXXX XXXX determined on a XXXX (exclusive of
XXXX items such as XXXX on XXXX, etc.) to XXXX XXXX annual XXXX.
XXXX Incentive = XXXX XXXX XXXX XXXX (divided by) XXXX
If XXXX for Unisource's XXXX ending XXXX equals or exceed XXXX when
calculated according to the formula above, then ISSC will receive the XXXX
set forth in the XXXX under Performance XXXX. The actual amount of the
incentive payment will depend on the XXXX from the above XXXX and ISSC's
maximum XXXX Incentive will be reached when the XXXX.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 12 of 20
<PAGE>
The XXXX Incentive calculation will be done and the payout made to ISSC
prior to XXXX of the XXXX during which the calculation is made and XXXX. The
XXXX Incentive payments are for XXXX for the XXXX to when the XXXX are XXXX
and XXXX are not affected in any way by the then XXXX. The amount of the
XXXX Incentive will be XXXX as a XXXX during the year for which the XXXX
Incentive is XXXX.
X. Financial Responsibilities Matrices
The attached Financial Responsibilities matrices further define the roles
and responsibilities of the Parties during the Current and the Restructured
Business Platform Environments.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 13 of 20
<PAGE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
FINANCIAL RESPONSIBILITIES MATRICES
CURRENT ENVIRONMENT
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
RESPONSIBILITY
FINANCIAL ------------------
ISSC Unisource
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Annual Services Charge X
- ----------------------------------------------------------------------------------------------------
Additional Resource Charges (subject to Baselines & Rates in Supplement) X
- ----------------------------------------------------------------------------------------------------
Reduced Resource Charges (subject to Baselines & Rates in Supplement) X
- ----------------------------------------------------------------------------------------------------
Cost of Living Adjustment charges (subject to the Protection Index in
Supplement)
- ----------------------------------------------------------------------------------------------------
-- XXXX of amount in excess of Protection Index (XXXX Unisource/ISSC split) X
- ----------------------------------------------------------------------------------------------------
Taxes (pursuant to the Agreement)
- ----------------------------------------------------------------------------------------------------
-- Personal property/use
- ----------------------------------------------------------------------------------------------------
-- ISSC Machines X
- ----------------------------------------------------------------------------------------------------
-- Systems Software X
- ----------------------------------------------------------------------------------------------------
-- Unisource Machines X
- ----------------------------------------------------------------------------------------------------
-- Applications Software X
- ----------------------------------------------------------------------------------------------------
-- End User Machines X
- ----------------------------------------------------------------------------------------------------
-- Excise taxes on Network lines and circuits X
- ----------------------------------------------------------------------------------------------------
-- Real estate taxes
- ----------------------------------------------------------------------------------------------------
-- ISSC owned/leased property X
- ----------------------------------------------------------------------------------------------------
-- Unisource owned/leased property X
- ----------------------------------------------------------------------------------------------------
-- Future taxes on provision of Services/New Services (sales, use, excise or
services) X
- ----------------------------------------------------------------------------------------------------
Termination Charge X
- ----------------------------------------------------------------------------------------------------
Data Center & Data Network Machines
- ----------------------------------------------------------------------------------------------------
-- Leases* X
- ----------------------------------------------------------------------------------------------------
-- Operations X
- ----------------------------------------------------------------------------------------------------
-- Maintenance* X
- ----------------------------------------------------------------------------------------------------
-- Upgrades* X
- ----------------------------------------------------------------------------------------------------
-- Replacements* X
- ----------------------------------------------------------------------------------------------------
-- Depreciation X
- ----------------------------------------------------------------------------------------------------
-- Moves, Adds, & Changes X
- ----------------------------------------------------------------------------------------------------
-- ISSC initiated moves X
- ----------------------------------------------------------------------------------------------------
Unisource owned equipment (depreciation) X
- ----------------------------------------------------------------------------------------------------
</TABLE>
NOTE: ISSC will provide the above services to the extent they are being provided
by In-Scope Personnel at each Data Center as of the Commencement Date.
. For monies in excess of the Unisource Service locations Upgrades
Baseline.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 14 of 20
<PAGE>
FINANCIAL RESPONSIBILITIES MATRICES
CURRENT ENVIRONMENT
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
RESPONSIBILITY
FINANCIAL (cont.) ------------------
ISSC Unisource
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
DEC/VAX/IIP/BULL/DATA GENERAL/IBM/UNISYS/ETC.
- ----------------------------------------------------------------------------------------------------
-- Leases* X
- ----------------------------------------------------------------------------------------------------
-- Operations X
- ----------------------------------------------------------------------------------------------------
-- Maintenance* X
- ----------------------------------------------------------------------------------------------------
-- Upgrades* X
- ----------------------------------------------------------------------------------------------------
-- Replacements* X
- ----------------------------------------------------------------------------------------------------
Systems Software
- ----------------------------------------------------------------------------------------------------
-- License/maintenance fees* X
- ----------------------------------------------------------------------------------------------------
-- Operations X
- ----------------------------------------------------------------------------------------------------
-- Upgrades* X
- ----------------------------------------------------------------------------------------------------
-- Replacements* X
- ----------------------------------------------------------------------------------------------------
Applications Software
- ----------------------------------------------------------------------------------------------------
-- Upgrades installed by ISSC X
- ----------------------------------------------------------------------------------------------------
-- License/maintenance fees* X
- ----------------------------------------------------------------------------------------------------
-- Operations X
- ----------------------------------------------------------------------------------------------------
-- Maintenance/Development (In Scope Personnel) X
- ----------------------------------------------------------------------------------------------------
-- Additional Resource Charges (AD/M Services (greater than) In Scope Personnel) X
- ----------------------------------------------------------------------------------------------------
-- Replacements X
- ----------------------------------------------------------------------------------------------------
Microfiche/microfilm
- ----------------------------------------------------------------------------------------------------
-- Creation X
- ----------------------------------------------------------------------------------------------------
-- Distribution costs X
- ----------------------------------------------------------------------------------------------------
Print
- ----------------------------------------------------------------------------------------------------
-- Creation (Data Center) X
- ----------------------------------------------------------------------------------------------------
-- Creation (outside Data Center) X
- ----------------------------------------------------------------------------------------------------
-- Distribution costs (existing distribution points) X
- ----------------------------------------------------------------------------------------------------
Network locations lines/circuits
- ----------------------------------------------------------------------------------------------------
-- Existing on Commencement Date (as specified in schedule) X
- ----------------------------------------------------------------------------------------------------
-- Upgrades due to capacity X
- ----------------------------------------------------------------------------------------------------
-- Additional Data Network locations X
- ----------------------------------------------------------------------------------------------------
-- Discontinuances - credit applicable on-going monthly charges X
- ----------------------------------------------------------------------------------------------------
-- Carrier charges X
- ----------------------------------------------------------------------------------------------------
</TABLE>
NOTE: ISSC will provide the above services to the extent they are being provided
by In-Scope Personnel at each Data Center as of the Commencement Date.
. ISSC shall operate the Software in accordance with the Licenses granted
pursuant to Section 4.02 and Article 16 of the Agreement.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 15 of 20
<PAGE>
FINANCIAL RESPONSIBILITIES MATRICES
CURRENT ENVIRONMENT
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
RESPONSIBILITY
FINANCIAL (cont.) ------------------
ISSC Unisource
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
LAN server
- ----------------------------------------------------------------------------------------------------
-- Equipment/server software X
- ----------------------------------------------------------------------------------------------------
-- Existing equipment depreciation X
- ----------------------------------------------------------------------------------------------------
LANs/servers equipment and software
- ----------------------------------------------------------------------------------------------------
-- Vendor maintenance contracts X
- ----------------------------------------------------------------------------------------------------
Cabling/wiring (data/LAN)
- ----------------------------------------------------------------------------------------------------
-- Remote sites X
- ----------------------------------------------------------------------------------------------------
All End User Machines
- ----------------------------------------------------------------------------------------------------
-- Additions X
- ----------------------------------------------------------------------------------------------------
-- Maintenance X
- ----------------------------------------------------------------------------------------------------
-- Upgrades X
- ----------------------------------------------------------------------------------------------------
-- Replacements X
- ----------------------------------------------------------------------------------------------------
-- Moves, Adds & Changes X
- ----------------------------------------------------------------------------------------------------
Disaster Recovery X
- ----------------------------------------------------------------------------------------------------
Miscellaneous charges
- ----------------------------------------------------------------------------------------------------
-- Required Consents (see Section 19.02 of the Agreement) X
- ----------------------------------------------------------------------------------------------------
-- Required Consents (see Section 19.01 of the Agreement) X
- ----------------------------------------------------------------------------------------------------
-- Facilities (ISSC space) X
- ----------------------------------------------------------------------------------------------------
-- Facilities (Unisource space) X
- ----------------------------------------------------------------------------------------------------
-- Mailroom, messenger, courier (other than In Scope Personnel performing
such functions) X
- ----------------------------------------------------------------------------------------------------
-- Paper forms, printer paper & microfiche X
- ----------------------------------------------------------------------------------------------------
-- Data Center Machine supplies X
- ----------------------------------------------------------------------------------------------------
-- Unisource office supplies X
- ----------------------------------------------------------------------------------------------------
-- End User office supplies, paper, forms, etc. X
- ----------------------------------------------------------------------------------------------------
-- ISSC office supplies X
- ----------------------------------------------------------------------------------------------------
-- Travel for ISSC employees X
- ----------------------------------------------------------------------------------------------------
</TABLE>
NOTE: ISSC will provide the above services to the extent they are being provided
by In-Scope Personnel at each Data Center as of the Commencement Date.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 16 of 20
<PAGE>
FINANCIAL RESPONSIBILITIES MATRICES
XXXX XXXX XXXX
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
RESPONSIBILITY
FINANCIAL ------------------
ISSC Unisource
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Annual Services Charge X
- ----------------------------------------------------------------------------------------------------
Additional Resource Charges (subject to Baselines & Rates in Supplement) X
- ----------------------------------------------------------------------------------------------------
Reduced Resource Credits (subject to Baselines & Rates in Supplement) X
- ----------------------------------------------------------------------------------------------------
Cost of Living Adjustment charges (subject to the Protection Index in
Supplement)
- ----------------------------------------------------------------------------------------------------
-- XXXX of amount in excess of Protection Index (XXXX Unisource/ISSC split) X
- ----------------------------------------------------------------------------------------------------
Taxes (pursuant to the Agreement)
- ----------------------------------------------------------------------------------------------------
-- Personal property/use
- ----------------------------------------------------------------------------------------------------
-- ISSC Machines X
- ----------------------------------------------------------------------------------------------------
-- Systems Software X
- ----------------------------------------------------------------------------------------------------
-- Unisource Machines X
- ----------------------------------------------------------------------------------------------------
-- Applications Software X
- ----------------------------------------------------------------------------------------------------
-- End User Machines (not part of the Restructured Business Platform) X
- ----------------------------------------------------------------------------------------------------
-- End User Machines (part of the Restructured Business Platform) X
- ----------------------------------------------------------------------------------------------------
-- Excise taxes on Network lines and circuits X
- ----------------------------------------------------------------------------------------------------
-- Real estate taxes
- ----------------------------------------------------------------------------------------------------
-- ISSC owned/leased property X
- ----------------------------------------------------------------------------------------------------
-- Unisource owned/leased property X
- ----------------------------------------------------------------------------------------------------
-- Future taxes on provision of Services/New Services (sales, use, excise or
services) X
- ----------------------------------------------------------------------------------------------------
Termination Charge X
- ----------------------------------------------------------------------------------------------------
Data Center Machines
- ----------------------------------------------------------------------------------------------------
-- Leases (as specified in schedule F) X
- ----------------------------------------------------------------------------------------------------
-- Operations X
- ----------------------------------------------------------------------------------------------------
-- Maintenance X
- ----------------------------------------------------------------------------------------------------
-- Upgrades X
- ----------------------------------------------------------------------------------------------------
-- Replacements X
- ----------------------------------------------------------------------------------------------------
Data Network Machines
- ----------------------------------------------------------------------------------------------------
-- Leases X
- ----------------------------------------------------------------------------------------------------
-- Operations X
- ----------------------------------------------------------------------------------------------------
-- Maintenance X
- ----------------------------------------------------------------------------------------------------
-- Upgrades X
- ----------------------------------------------------------------------------------------------------
-- Replacements X
- ----------------------------------------------------------------------------------------------------
-- Depreciation X
- ----------------------------------------------------------------------------------------------------
-- Moves, Adds, and Changes X
- ----------------------------------------------------------------------------------------------------
</TABLE>
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 17 of 20
<PAGE>
FINANCIAL RESPONSIBILITIES MATRICES
XXXX XXXX XXXX
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
RESPONSIBILITY
FINANCIAL (cont.) ------------------
ISSC Unisource
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Unisource owned equipment (depreciation) X
- ----------------------------------------------------------------------------------------------------
Legacy equipment/software
- ----------------------------------------------------------------------------------------------------
-- Leases X
- ----------------------------------------------------------------------------------------------------
-- Operations X
- ----------------------------------------------------------------------------------------------------
-- Maintenance X
- ----------------------------------------------------------------------------------------------------
-- Upgrades X
- ----------------------------------------------------------------------------------------------------
-- Replacements X
- ----------------------------------------------------------------------------------------------------
-- Systems Software X
- ----------------------------------------------------------------------------------------------------
Systems Software (as specified in Schedule B)
- ----------------------------------------------------------------------------------------------------
-- License/maintenance fees X
- ----------------------------------------------------------------------------------------------------
-- Operations X
- ----------------------------------------------------------------------------------------------------
-- Upgrades and new releases per Schedule B (with mutual agreement) X
- ----------------------------------------------------------------------------------------------------
Applications Software
- ----------------------------------------------------------------------------------------------------
-- License/maintenance fees (for Restructured Business Platform Applications) X
- ----------------------------------------------------------------------------------------------------
-- Operations X
- ----------------------------------------------------------------------------------------------------
-- Upgrades and new releases (not covered under ISSC Maintenance Agreement) X
- ----------------------------------------------------------------------------------------------------
-- Maintenance/Development (up to the Baseline) X
- ----------------------------------------------------------------------------------------------------
-- Additional Resource Charges (Development/Maintenance above Baseline) X
- ----------------------------------------------------------------------------------------------------
-- Reduced Resource Credits (to retained Core Skills Group) X
- ----------------------------------------------------------------------------------------------------
-- Replacements X
- ----------------------------------------------------------------------------------------------------
Microfiche/microfilm
- ----------------------------------------------------------------------------------------------------
-- Creation X
- ----------------------------------------------------------------------------------------------------
-- Distribution costs X
- ----------------------------------------------------------------------------------------------------
Print
- ----------------------------------------------------------------------------------------------------
-- Creation (in ISSC Data Center) X
- ----------------------------------------------------------------------------------------------------
-- Creation (outside ISSC Data Center) X
- ----------------------------------------------------------------------------------------------------
-- Distribution costs (beyond Data Center distribution point) X
- ----------------------------------------------------------------------------------------------------
Network locations lines/circuits
- ----------------------------------------------------------------------------------------------------
-- Existing on Commencement Date (as specified in Schedule I) X
- ----------------------------------------------------------------------------------------------------
-- Upgrades due to capacity X
- ----------------------------------------------------------------------------------------------------
-- Additional Data Network locations X
- ----------------------------------------------------------------------------------------------------
-- Discontinuances - credit applicable on-going monthly charges X
- ----------------------------------------------------------------------------------------------------
</TABLE>
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 18 of 20
<PAGE>
FINANCIAL RESPONSIBILITIES MATRICES
XXXX XXXX XXXX
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
RESPONSIBILITY
FINANCIAL (cont.) ------------------
ISSC Unisource
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
LAN server (non-host connected)
- ----------------------------------------------------------------------------------------------------
-- Additional equipment/server software X
- ----------------------------------------------------------------------------------------------------
-- Existing equipment depreciation X
- ----------------------------------------------------------------------------------------------------
-- Vendor maintenance contracts X
- ----------------------------------------------------------------------------------------------------
Cabling/wiring (data/LAN)
- ----------------------------------------------------------------------------------------------------
-- Remote sites X
- ----------------------------------------------------------------------------------------------------
End User Machines (not part of the Restructured Business Platform)
- ----------------------------------------------------------------------------------------------------
-- Additions X
- ----------------------------------------------------------------------------------------------------
-- Upgrades X
- ----------------------------------------------------------------------------------------------------
-- Maintenance X
- ----------------------------------------------------------------------------------------------------
-- Replacements (exclusive of maintenance) X
- ----------------------------------------------------------------------------------------------------
-- Moves, Adds & Changes X
- ----------------------------------------------------------------------------------------------------
End User Machines (part of Restructured Business Platform)
- ----------------------------------------------------------------------------------------------------
-- Additions (in excess of Schedule R) X
- ----------------------------------------------------------------------------------------------------
-- Upgrades X
- ----------------------------------------------------------------------------------------------------
-- Maintenance X
- ----------------------------------------------------------------------------------------------------
-- Replacements (exclusive of maintenance replacements) X
- ----------------------------------------------------------------------------------------------------
-- Moves, Adds & Changes X
- ----------------------------------------------------------------------------------------------------
-- Leases (excess of Schedule R) X
- ----------------------------------------------------------------------------------------------------
Disaster Recovery
- ----------------------------------------------------------------------------------------------------
-- up to specified Configuration X
- ----------------------------------------------------------------------------------------------------
-- above specified Configuration X
- ----------------------------------------------------------------------------------------------------
</TABLE>
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 19 of 20
<PAGE>
FINANCIAL RESPONSIBILITIES MATRICES
XXXX XXXX XXXX
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
RESPONSIBILITY
FINANCIAL (cont.) ------------------
ISSC Unisource
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Miscellaneous charges
- ----------------------------------------------------------------------------------------------------
-- Required Consents (see Section 19.01 of the Agreement) X
- ----------------------------------------------------------------------------------------------------
-- Required Consents (see Section 19.02 of the Agreement) X
- ----------------------------------------------------------------------------------------------------
-- Facilities (Unisource) X
- ----------------------------------------------------------------------------------------------------
-- Facilities (ISSC) X
- ----------------------------------------------------------------------------------------------------
-- Mailroom, messenger, courier (Unisource internal) X
- ----------------------------------------------------------------------------------------------------
-- Mailroom, messenger, courier (ISSC) X
- ----------------------------------------------------------------------------------------------------
-- Paper forms, printer paper & microfiche (outside ISSC Data Center) X
- ----------------------------------------------------------------------------------------------------
-- Stock forms at ISSC Data Centers X
- ----------------------------------------------------------------------------------------------------
-- Data Center Machine supplies X
- ----------------------------------------------------------------------------------------------------
-- Unisource office supplies X
- ----------------------------------------------------------------------------------------------------
-- End User office supplies, paper, forms, etc. X
- ----------------------------------------------------------------------------------------------------
-- ISSC office supplies X
- ----------------------------------------------------------------------------------------------------
-- Shutdown the displaced centers X
- ----------------------------------------------------------------------------------------------------
-- Travel/expenses - ISSC X
- ----------------------------------------------------------------------------------------------------
-- Travel/expenses - Unisource X
- ----------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Although Particular items which are out-of-scope are identified in the
financial matrix above, there is no intent to imply that items which are
not identified are in scope. Those items (Machines, Software, Leases,
Licenses, Contracts, etc.) which are in scope will be fully defined in the
Schedules to the Agreement.
June 29, 1994
ISSC/Unisource Confidential Schedule J Amendment No. 1 Page 20 of 20
<PAGE>
INFORMATION TECHNOLOGY SERVICES AGREEMENT
between
UNISOURCE WORLDWIDE, INC.
and
INTEGRATED SYSTEMS SOLUTIONS CORPORATION
Dated December 22, 1993
<PAGE>
TABLE OF CONTENTS
-----------------
Section Page
- ------- ----
ARTICLE 1. DEFINITIONS................................................ 2
-----------
ARTICLE 2. TERM....................................................... 8
----
2.01 Initial Term................................................. 8
------------
2.02 Expiration and Renewal....................................... 8
----------------------
ARTICLE 3. CURRENT ENVIRONMENT........................................ 9
-------------------
3.01 Services..................................................... 9
--------
3.02 Machines and Equipment....................................... 9
----------------------
3.03 Machine Maintenance.......................................... 10
-------------------
3.04 Software..................................................... 10
--------
3.05 Systems Software Maintenance................................. 10
----------------------------
3.06 New Releases and Versions.................................... 10
-------------------------
3.07 Replacements, Upgrades and Additions......................... 10
------------------------------------
3.08 Systems and Data Network Management.......................... 11
-----------------------------------
3.09 Help Desk.................................................... 12
---------
3.10 EDI.......................................................... 12
---
3.11 Electronic Mail.............................................. 12
---------------
3.12 Data Services................................................ 12
-------------
3.13 In-Scope Personnel........................................... 13
------------------
3.14 Reductions to the ISSC In-Scope Personnel.................... 13
-----------------------------------------
ARTICLE 4. MIGRATION.................................................. 14
---------
4.01 Migration Services........................................... 14
------------------
4.02 Third Party Software......................................... 15
--------------------
4.03 New Project Development...................................... 15
-----------------------
4.04 Project Requirement Effort................................... 16
--------------------------
4.05 Revised Project Development Estimate......................... 16
------------------------------------
4.06 XXXX Resource................................................ 17
-------------
4.07 Consulting Baseline.......................................... 18
-------------------
4.08 Implementation Schedules and Deliverables.................... 18
-----------------------------------------
4.09 Extensions to the Implementation Schedules................... 18
------------------------------------------
4.10 Project Management........................................... 19
------------------
4.11 Machines and Equipment....................................... 19
----------------------
4.12 Application Conversion....................................... 20
----------------------
4.13 Data Conversion.............................................. 20
---------------
4.14 Testing Environments......................................... 20
--------------------
4.15 Operation Readiness Tests.................................... 21
-------------------------
4.16 Location Completion.......................................... 21
-------------------
4.17 Project Completion........................................... 21
------------------
4.18 Migration Completion......................................... 22
--------------------
4.19 XXXX XXXX.................................................... 22
---------
4.20 Location Closures............................................ 26
-----------------
ARTICLE 5. NEW ENVIRONMENT............................................ 26
---------------
5.01 New Environment Services..................................... 26
------------------------
5.02 Dedicated Environment........................................ 27
---------------------
i
<PAGE>
Page
----
5.03 Machines..................................................... 27
--------
5.04 Replacements................................................. 27
------------
5.05 Machine Maintenance.......................................... 28
-------------------
5.06 Systems Software............................................. 28
----------------
5.07 New Releases and Versions of the Software.................... 28
-----------------------------------------
5.08 Systems Software Maintenance................................. 28
----------------------------
5.09 Systems Management........................................... 29
------------------
5.10 Help Desk.................................................... 29
---------
5.11 EDI.......................................................... 29
---
5.12 Data Network Management...................................... 29
-----------------------
5.13 Data Network Services........................................ 30
---------------------
5.14 Data Services................................................ 31
-------------
5.15 Technology Refresh in a Shared Environment................... 31
------------------------------------------
ARTICLE 6. APPLICATION DEVELOPMENT AND MAINTENANCE.................... 31
---------------------------------------
6.01 Services..................................................... 31
--------
6.02 Current Environment.......................................... 32
-------------------
6.03 New Environment.............................................. 32
---------------
6.04 AD/M Proposals............................................... 32
--------------
6.05 Application Installation Standards........................... 33
----------------------------------
6.06 New Metric................................................... 33
----------
6.07 AD/M Consumption in the New Environment...................... 33
---------------------------------------
6.08 AD/M Commitment.............................................. 34
---------------
6.09 Third Party Maintenance and Support.......................... 34
-----------------------------------
ARTICLE 7. UNISOURCE RESPONSIBILITIES................................. 34
--------------------------
ARTICLE 8. CONTRACT ADMINISTRATION.................................... 37
-----------------------
8.01 ISSC Responsibilities........................................ 37
---------------------
8.02 Performance Under Agreements................................. 38
----------------------------
8.03 Third Party Invoices......................................... 38
--------------------
ARTICLE 9. PERFORMANCE STANDARDS...................................... 39
- --------- ---------------------
9.01 Current Environment.......................................... 39
-------------------
9.02 New Environment.............................................. 39
---------------
9.03 New Services Performance Standards........................... 40
----------------------------------
9.04 Adjustment of Performance Standards.......................... 40
-----------------------------------
9.05 Reports...................................................... 40
-------
ARTICLE 10. SERVICE LOCATIONS.......................................... 41
-----------------
10.01 Service Locations........................................... 41
-----------------
10.02 Safety and Security Procedures.............................. 41
------------------------------
10.03 Facilities for the Central Development Group and
------------------------------------------------
the Project Development Group............................ 42
-----------------------------
ARTICLE 11. NEW SERVICES............................................... 42
------------
11.01 New Services................................................ 42
------------
11.02 Third Party Services........................................ 43
--------------------
ii
<PAGE>
Page
----
ARTICLE 12. HUMAN RESOURCES............................................ 44
---------------
12.01 Affected Employees.......................................... 44
------------------
12.02 Hiring Requirements......................................... 44
-------------------
12.03 Compensation................................................ 45
------------
12.04 Responsibilities............................................ 47
----------------
12.05 Reassignment................................................ 47
------------
12.06 Minimum Employment Period................................... 47
-------------------------
12.07 ISSC Completion Allowance................................... 48
-------------------------
12.08 IBM Canada Separation Allowance............................. 49
-------------------------------
12.09 Financial and Administrative Responsibilities............... 50
---------------------------------------------
12.10 Termination of Responsibility............................... 51
-----------------------------
12.11 Human Resource Representative............................... 51
-----------------------------
12.12 Affected Employee Replacements.............................. 51
------------------------------
ARTICLE 13. PROJECT TEAM............................................... 52
------------
13.01 Joint Advisory Committee.................................... 52
------------------------
13.02 ISSC Project Executive...................................... 53
----------------------
13.03 ISSC Key Employees.......................................... 54
------------------
13.04 Unisource IS Executives..................................... 54
-----------------------
13.05 Unisource XXXX XXXX......................................... 55
-------------------
13.06 Project Staff............................................... 56
-------------
13.07 Subcontractors.............................................. 56
--------------
13.08 XXXX-XXXX................................................... 56
---------
13.09 Confidentiality............................................. 57
---------------
ARTICLE 14. ERNST & YOUNG.............................................. 57
-------------
14.01 Subcontracting Relationship................................. 57
---------------------------
14.02 Termination or Replacement.................................. 57
--------------------------
14.03 Ernst & Young Project Executive............................. 58
-------------------------------
14.04 Non-Compete................................................. 58
-----------
14.05 Terms and Conditions........................................ 58
--------------------
ARTICLE 15. MANAGEMENT AND CONTROL..................................... 59
----------------------
15.01 Procedures Manual........................................... 59
-----------------
15.02 Change Control Procedures................................... 59
-------------------------
15.03 User Procedures Manuals..................................... 60
-----------------------
ARTICLE 16. SOFTWARE AND PROPRIETARY RIGHTS............................ 61
-------------------------------
16.01 Unisource Software.......................................... 61
------------------
16.02 Developed Software.......................................... 62
------------------
16.03 ISSC Software............................................... 63
-------------
16.04 Changes and Upgrades to Software............................ 64
--------------------------------
16.05 Access to Case Tools and Methodologies...................... 64
--------------------------------------
ARTICLE 17. XXXX....................................................... 65
----
17.01 Agent and Subcontractor..................................... 65
-----------------------
17.02 Responsibility.............................................. 65
--------------
17.03 Proprietary Rights.......................................... 65
------------------
17.04 Assignment.................................................. 66
----------
iii
<PAGE>
Page
----
ARTICLE 18. DATA AND REPORTS........................................... 66
----------------
18.01 Ownership of Unisource Data................................. 66
---------------------------
18.02 Correction of Errors........................................ 66
--------------------
18.03 Return of Data.............................................. 67
--------------
18.04 Reports..................................................... 67
-------
ARTICLE 19. CONSENTS................................................... 67
--------
19.01 Unisource Consents.......................................... 67
------------------
19.02 ISSC Consents............................................... 68
-------------
ARTICLE 20. CONTINUED PROVISION OF SERVICES............................ 69
-------------------------------
20.01 Disaster Recovery Plan in the Current Environment........... 69
-------------------------------------------------
20.02 Disaster Recovery Plan in the New Environment............... 69
---------------------------------------------
20.03 Force Majeure............................................... 70
-------------
ARTICLE 21. PAYMENTS TO ISSC........................................... 72
----------------
21.01 Annual Services Charges..................................... 72
-----------------------
21.02 XXXX Charges and XXXX Charges............................... 72
-----------------------------
21.03 Payments in Canada.......................................... 72
------------------
21.04 Additional Resource Charges and Reduced Resource Charges.... 72
--------------------------------------------------------
21.05 New Services Fees........................................... 73
-----------------
21.06 XXXX XXXX in a XXXX Environment............................. 73
-------------------------------
21.07 XXXX XXXXs in a XXXX Environment............................ 74
--------------------------------
21.08 Cost of Living Adjustment................................... 74
-------------------------
21.09 Extraordinary Decrease in Unisource Work.................... 76
----------------------------------------
21.10 Payment Schedule............................................ 76
----------------
21.11 Late Payments............................................... 77
-------------
21.12 Taxes....................................................... 77
-----
21.13 Expenses.................................................... 79
--------
21.14 Rights of Set-Off........................................... 79
-----------------
21.15 Most Favored Customer....................................... 79
---------------------
21.16 Proration................................................... 80
---------
21.17 Refundable Items............................................ 80
----------------
21.18 Unused Credits.............................................. 80
--------------
ARTICLE 22. AUDITS..................................................... 81
------
22.01 Processing.................................................. 81
----------
22.02 Charges..................................................... 81
-------
22.03 ISSC Audit.................................................. 82
----------
ARTICLE 23. CONFIDENTIALITY............................................ 82
---------------
23.01 General Obligations......................................... 82
-------------------
23.02 Unauthorized Acts........................................... 84
-----------------
23.03 Use of Information.......................................... 84
------------------
iv
<PAGE>
Page
----
ARTICLE 24. REPRESENTATIONS AND WARRANTIES............................. 85
------------------------------
24.01 By Unisource................................................ 85
------------
24.02 By ISSC..................................................... 86
-------
24.03 Disclaimer.................................................. 87
----------
ARTICLE 25. DISPUTE RESOLUTION......................................... 87
------------------
25.01 Joint Advisory Committee.................................... 87
------------------------
25.02 Continued Performance....................................... 87
---------------------
ARTICLE 26. TERMINATION................................................ 88
-----------
26.01 Termination for Convenience................................. 88
---------------------------
26.02 Termination for Change of Control of Unisource.............. 88
----------------------------------------------
26.03 Termination for Change of Control/Business of ISSC.......... 89
--------------------------------------------------
26.04 Termination for Cause....................................... 89
---------------------
26.05 Termination for XXXX to XXXX the XXXX XXXX.................. 90
------------------------------------------
26.06 Other Terminations.......................................... 90
------------------
26.07 Effect of Expiration or Termination......................... 90
-----------------------------------
26.08 Machines.................................................... 92
--------
ARTICLE 27. TERMINATION FEE............................................ 93
---------------
27.01 Termination for Convenience or for Unisource's
----------------------------------------------
Change of Control........................................ 93
-----------------
27.02 Termination for ISSC's Change of Control.................... 93
----------------------------------------
27.03 No Additional Fees.......................................... 93
------------------
27.04 Proration................................................... 94
---------
ARTICLE 28. TERMINATION ASSISTANCE..................................... 94
----------------------
ARTICLE 29. INDEMNITIES................................................ 96
-----------
29.01 Indemnity by Unisource...................................... 96
----------------------
29.02 Indemnity by ISSC........................................... 97
-----------------
29.03 Indemnification Procedures.................................. 99
--------------------------
ARTICLE 30. DAMAGES.................................................... 100
-------
30.01 Consequential Damages....................................... 100
---------------------
30.02 Limitation of Damages....................................... 100
---------------------
30.03 Exclusions.................................................. 100
----------
30.04 Credits in the Current Environment.......................... 101
----------------------------------
30.05 Credits in the New Environment.............................. 101
------------------------------
30.06 Remedies.................................................... 102
--------
ARTICLE 31. MISCELLANEOUS.............................................. 103
-------------
31.01 Assignment.................................................. 103
----------
31.02 Notices..................................................... 103
-------
31.03 Counterparts................................................ 104
------------
31.04 Headings.................................................... 104
--------
31.05 Relationship................................................ 104
------------
v
<PAGE>
Page
----
31.06 Consents, Approvals and Requests............................ 105
--------------------------------
31.07 Severability................................................ 105
------------
31.08 Waiver...................................................... 105
------
31.09 Publicity................................................... 105
---------
31.10 Entire Agreement............................................ 106
----------------
31.11 Amendments.................................................. 106
----------
31.12 Survival.................................................... 106
--------
31.13 Third Party Beneficiaries................................... 106
-------------------------
31.14 Governing Law............................................... 106
-------------
31.15 Insurance................................................... 107
---------
31.16 Covenant of Further Assurances.............................. 107
------------------------------
31.17 Hiring of Employees......................................... 108
-------------------
31.18 EDI......................................................... 108
---
31.19 No Interference............................................. 108
---------------
31.20 Marketing................................................... 109
---------
31.21 Construction................................................ 109
------------
31.22 Interpretation of Documents................................. 109
---------------------------
SUPPLEMENT
----------
Annual Services Charge
Termination Charges
Resource Baselines
Addition Resource Charge Rates and Reduced Resource Charge Rates
XXXX Rates
vi
<PAGE>
TABLE OF SCHEDULES
------------------
Schedule A -- Unisource Applications Software
Schedule B -- Unisource Systems Software
Schedule C -- Unisource Machines
Schedule D -- Intentionally Left Blank
Schedule E -- Support Services, Performance Standards and
Operational Responsibilities
Schedule F -- New Services Work Order
Schedule G -- Disaster Recovery Services
Schedule H -- Project Management
Schedule I -- Unisource Service Locations
Schedule J -- ISSC Charges, Measures of Utilization and Financial
Responsibilities
Schedule K -- Application Installation Standards
Schedule L -- Security Procedures
Schedule M -- Help Desk
Schedule N -- Projects
Schedule O -- Affected Employees and Personnel Transition
Schedule P -- Procedures Manual Outline
Schedule Q -- Human Resources Claims
Schedule R -- Restructured Business Platform/ISSC Data Center
Platform
Schedule S -- Key Personnel
Schedule T -- XXXX License Agreement
Schedule U -- XXXX Services Agreement
Schedule V -- XXXX Maintenance Agreement
Schedule W -- Unisource Third Party Agreements
Schedule X -- Release
Schedule Y -- Unisource Reports
Schedule Z -- Confidentiality Agreement
vii
<PAGE>
INFORMATION TECHNOLOGY SERVICES AGREEMENT (this "Agreement"), dated
---------
December 22, 1993, by and between UNISOURCE WORLDWIDE, INC., a Delaware
corporation, with an office at 825 Duportail Road, Wayne, Pennsylvania 19087
("Unisource") and INTEGRATED SYSTEMS SOLUTIONS CORPORATION, doing business as
- -----------
ISSC, Inc., a wholly owned subsidiary of International Business Machines
Corporation ("IBM"), with an office at 44 South Broadway, White Plains, New York
---
10601 ("ISSC").
----
W I T N E S E T H:
- - - - - - - - -
WHEREAS, Unisource desires to obtain from ISSC, and ISSC desires to
provide to Unisource, assistance in the restructuring and consolidation of
Unisource's overall business operations through the provision of the services
detailed in this Agreement and the Schedules; and
WHEREAS, the focus of the services to be provided by ISSC is to
accelerate the consolidation and migration of Unisource's current information
technology environments to a new company-wide distribution and executive
information system by (1) managing and operating Unisource's current
geographically dispersed and diverse information technology environments, (2)
developing and deploying major new applications and (3) managing consolidation
and migration activities.
NOW, THEREFORE, for and in consideration of the agreements of the
parties set forth below, Unisource and ISSC (collectively, the "Parties"; each,
-------
a "Party") agree as follows:
-----
<PAGE>
2
ARTICLE 1. DEFINITIONS.
- --------- -----------
The following defined terms shall have the meanings specified in the
portion of this Agreement indicated below:
TERM DEFINED IN
- ---- ----------
Actual Improvements Section 21.07
AD/M Services Section 6.01
AD/M Commitment Section 6.08
Affected Employees Section 12.01
Affected Employee Replacements Section 12.12
Agreement Heading
Agreement Date Section 4.03
Annual Services Charges Section 21.01
ARCs Section 21.04
Base RBP Projects Section 4.01
Bonus Pool Section 12.03
BPR Section 4.01
CA Section 19.01
Central Development Group Section 10.03
Change(s) Section 15.02
Change Control Procedures Section 15.02
Claim Section 29.03
COLA Section 21.08
Commencement Date Section 2.01
Confidential Information Section 23.01
Consulting Baseline Section 4.07
Consulting/Management Group Section 10.03
Consulting Projects Section 4.01
<PAGE>
3
TERM DEFINED IN
- ---- ----------
Contract Year Section 2.02
CPI-U Section 21.08
Critical Services Section 20.02
Current Environment Section 3.01
Current Environment Credits Section 30.04
Current Environment Upgrade Section 3.07
Current Performance Standards Section 9.01
Current Services Section 3.01
XXXX Section 4.02
XXXX License Section 4.02
XXXX Maintenance Agreement Section 6.09
XXXX Prerequisites Section 17.02
XXXX Services Agreement Section 4.02
XXXX Software Section 4.02
Damages Cap Section 30.02
Data Network Section 3.08
Developed Software Section 16.02
Disaster Section 20.02
Disaster Recovery Plan Section 20.02
E & Y Project Executive Section 14.03
XXXX Section 4.01
XXXX Completion Date Section 4.17
XXXX Section 4.01
XXXX Completion Date Section 4.17
End User Machines Article 7
Extension Period Section 2.02
Fiscal Year Section 2.02
<PAGE>
4
TERM DEFINED IN
- ---- ----------
Force Majeure Event Section 20.03
Hiring Requirements Section 12.02
HR Representative Section 12.11
IBM Heading
IBM Canada Separation Allowance Section 12.08
Implementation Schedule(s) Section 4.08
Incremental Fee Report Section 21.10
Indemnified Party Section 29.03
Indemnifying Party Section 29.03
Initial Project Development Estimate Section 4.03
Initial Term Section 2.01
In-Scope Personnel Section 3.13
Interim Performance Standards Section 9.02
ISSC Heading
ISSC Agents Section 16.01
ISSC Completion Allowance Section 12.07
ISSC Consents Section 19.02
ISSC Data Center Section 10.01
ISSC Enhanced Completion Allowance Section 12.07
ISSC Improvements Section 21.07
ISSC In-Scope Personnel Section 3.13
ISSC Key Employee(s) Section 13.03
ISSC Machines Section 5.03
ISSC Project Executive Section 13.02
ISSC Proprietary Software Section 16.03
ISSC Software Section 16.03
ISSC Third Party Software Section 16.03
<PAGE>
5
TERM DEFINED IN
- ---- ----------
Joint Advisory Committee Section 13.01
Location Completion Date Section 4.16
Machines Section 5.03
Migration Completion Date Section 4.18
Migration Services Section 4.01
Minimum Employment Period Section 12.06
MIS Section 4.01
MIS Completion Date Section 4.17
Monthly Services Charge(s) Section 21.01
XXXX Section 4.01
XXXX Completion Date Section 4.17
XXXX Section 4.01
XXXX Final Completion Date Section 4.17
XXXX Interim Completion Date Section 4.17
New AD/M Baseline Section 6.03
New Application(s) Section 11.01
New Environment Section 5.01
New Environment Credits Section 30.05
New Environment Performance Standards Section 9.02
New Environment Services Section 5.01
New Project Development Section 4.03
New Service(s) Section 11.01
New Services Fees Section 11.01
New Services Performance Standards Section 9.03
New Services Work Order Section 11.01
OA Section 4.01
OCM Section 4.01
<PAGE>
6
TERM DEFINED IN
- ---- ----------
Operation Readiness Test(s) Section 4.15
Party(ies) Recitals
Performance Standards Section 9.03
Procedures Manual Section 15.01
Project Auditor Section 4.04
Project Development Group Section 10.03
Project Plans Section 4.01
Projects Section 4.01
Protection Index Section 21.08
XXXX Machines Section 4.11
XXXX Requirements Section 4.03
XXXX Resource Section 4.04
Reassignment Waiver(s) Section 13.02
Region Section 4.17
Reports Section 18.04
Restructured Business Platform Section 4.01
Retained Resources Section 8.01
Retained Resources Invoice(s) Section 8.03
Revised Project Development Estimate Section 4.04
RRCs Section 21.04
Senior Unisource IS Executive Section 13.04
Separation Allowances Section 12.08
Service Locations Section 10.01
Services Section 11.01
Software Section 16.04
Start Date Section 12.01
Systems Section 5.09
<PAGE>
7
TERM DEFINED IN
- ---- ----------
Systems Operations Services Section 6.01
Term Section 2.02
Termination Assistance Period Article 28
Termination Assistance Services Article 28
Termination Fee Section 27.03
Termination Reasons Section 12.06
TMA Section 4.01
XXXX Section 4.01
XXXX Charges Section 4.01
Unisource Heading
Unisource Competitors Section 13.08
Unisource Consents Section 19.01
Unisource Data Section 18.01
Unisource Key Personnel Section 13.05
Unisource IS Executive Section 13.04
Unisource Machines Section 3.02
Unisource Proprietary Software Section 16.01
Unisource Service Location(s) Section 3.01
Unisource Software Section 16.01
Unisource Third Party Software Section 16.01
Upgrade Allotment Section 3.07
User Procedures Manuals Section 15.03
XXXX Projects Section 4.01
XXXX Section 4.01
XXXX Charges Section 4.01
<PAGE>
8
ARTICLE 2. TERM.
- ---------- ----
2.01 Initial Term. The initial term of this Agreement shall commence
------------
on January 1, 1994 (the "Commencement Date") and shall continue until 12:00
-----------------
midnight on December 31, 2003, unless terminated earlier pursuant to Article 26
----------
(the "Initial Term").
------------
2.02 Expiration and Renewal. ISSC shall notify Unisource pursuant to
----------------------
this Section 2.02 on or before June 30, 2002 as to whether ISSC desires to renew
------------
this Agreement. If ISSC provides Unisource with notice pursuant to this Section
-------
2.02 of its desire not to renew this Agreement, this Agreement shall expire at
- ----
the end of the Initial Term. If ISSC provides Unisource with notice pursuant to
this Section 2.02 of its desire to renew this Agreement, Unisource shall provide
------------
ISSC with notice on or before December 31, 2002 as to whether Unisource desires
to renew this Agreement. If Unisource provides ISSC with notice pursuant to
this Section 2.02 of its desire not to renew this Agreement, this Agreement
------------
shall expire at the end of the Initial Term. If (1) Unisource provides ISSC
with notice pursuant to this Section 2.02 that Unisource desires to renew this
------------
Agreement and (2) Unisource and ISSC have not agreed on the applicable terms and
conditions in respect of the renewal of this Agreement on or before June 30,
2003, this Agreement shall automatically renew for up to one additional year
(the "Extension Period") at the charges, terms and conditions in effect during
----------------
the final 12 months of the Initial Term. If, during the Extension Period,
Unisource and ISSC are unable to reach agreement on the terms and conditions
that will apply during the renewal term, this
<PAGE>
9
Agreement shall expire at the end of the Extension Period. (The Initial Term and
the Extension Period collectively, the "Term".) (Each 12-month period commencing
----
on the Commencement Date or any anniversary of the Commencement Date during the
Term, a "Contract Year". Each 12-month period from the first day of October to
-------------
the last day of September, a "Fiscal Year".)
-----------
ARTICLE 3. CURRENT ENVIRONMENT.
- --------- -------------------
3.01 Services. As of the Commencement Date and continuing for each
--------
of Unisource's locations set forth in Schedule I (each, a "Unisource Service
---------- -----------------
Location"; collectively, the "Unisource Service Locations") until the Location
- -------- ---------------------------
Completion Date for such Unisource Service Location, ISSC shall provide
managerial, administrative, operational, maintenance and other information
technology-related services, including the services described in Schedule E, in
----------
respect of Unisource's current information technology environments at each of
the Unisource Service Locations (the "Current Environment") to the extent the
-------------------
In-Scope Personnel performed such services as of the Commencement Date (the
"Current Services"). Subject to Section 3.07 and Section 21.04, ISSC shall
---------------- ------------ -------------
increase or decrease the amount of the Current Services according to Unisource's
demand for the Current Services.
3.02 Machines and Equipment. ISSC shall provide the Current Services
----------------------
using those machines and equipment which are located at the Unisource Service
Locations or are otherwise part of the Data Network (1) as of the Commencement
Date, including the machines and equipment set forth in Schedule C, or (2) owned
----------
<PAGE>
10
by Unisource, or for which Unisource retains financial responsibility, on or
after the Commencement Date ((1) and (2) collectively, the "Unisource
---------
Machines"). ISSC shall be responsible for the administration and operation of
- --------
the Unisource Machines which are part of the Current Environment.
3.03 Machine Maintenance. As part of the Current Services, ISSC
-------------------
shall provide to Unisource (1) maintenance and support services for the
Unisource Machines and (2) support services for the Data Network to the extent
such maintenance and support services were provided by the In-Scope Personnel as
of the Commencement Date.
3.04 Software. As part of the Current Services, ISSC shall be
--------
responsible for the administration and operation of all of the Unisource
Software and the Developed Software which is part of the Current Environment.
3.05 Systems Software Maintenance. As part of the Current Services,
----------------------------
ISSC shall provide Unisource with systems software maintenance and systems
software production support services to the extent and at the levels provided by
the In-Scope Personnel as of the Commencement Date.
3.06 New Releases and Versions. As part of the Current Services,
-------------------------
ISSC shall, upon Unisource's request, test, install and maintain new releases
and upgrades for the Unisource Software or the Developed Software which is part
of the Current Environment.
3.07 Replacements, Upgrades and Additions. The Supplement identifies
------------------------------------ ----------
the portion of the Annual Services Charges
<PAGE>
11
that has been allocated for replacements, upgrades and additions to the
Unisource Machines and the Unisource Software during ISSC's operation of the
Current Environment (the "Upgrade Allotment"). From time to time during ISSC's
-----------------
operation of the Current Environment, Unisource may procure or request ISSC to
procure on Unisource's behalf replacements, upgrades or additions to the
Unisource Machines and Unisource Software (each, a "Current Environment
-------------------
Upgrade"). If Unisource procures a Current Environment Upgrade and wishes to pay
- -------
for such Current Environment Upgrade out of the Upgrade Allotment, Unisource
shall submit to ISSC, and ISSC shall pay out of the Upgrade Allotment, the
invoice for any such Current Environment Upgrade. If Unisource requests ISSC to
procure a Current Environment Upgrade, ISSC shall submit to Unisource a written
proposal specifying the price and terms for such Current Environment Upgrade.
Upon Unisource's consent after receipt of such proposal, (1) ISSC
shall procure such Current Environment Upgrade and (2) Unisource shall specify
whether such Current Environment Upgrade should be (a) paid for out of the
Upgrade Allotment or (b) considered a New Service. Upon Unisource's request at
any time after the first Region Completion Date, ISSC shall within 10 days after
such request issue to Unisource a credit against future Services in an amount
equal to any unused portion of the Upgrade Allotment.
3.08 Systems and Data Network Management. As part of the Current
-----------------------------------
Services, ISSC shall be responsible for the management services provided by the
Affected Employees as of the Commencement Date in respect of (1) the Unisource
Software and
<PAGE>
12
the Unisource Machines which are part of the Current Environment and (2)
Unisource's data network, including all Unisource Machines, associated
attachments, features and accessories, systems, lines and cabling used to
connect and transmit data, VSAT equipment, satellite dishes, communications
controllers, multiplexors, lines and modems/DSUs (the "Data Network").
------------
3.09 Help Desk. As part of the Current Services, ISSC shall provide
---------
help desk services to the extent and at the levels provided by the In-Scope
Personnel as of the Commencement Date, including (1) initial support to all end-
users for problem identification, tracking, reporting, referring and resolution
and (2) the help desk services described in Schedule M under the Current
----------
Environment.
3.10 EDI. As part of the Current Services, ISSC shall provide
---
electronic data interchange services to the extent and at
the levels provided by the In-Scope Personnel as of the Commencement Date.
3.11 Electronic Mail. As part of the Current Services, ISSC shall
---------------
provide electronic mail services to the extent and at the levels provided by the
In-Scope Personnel as of the Commencement Date.
3.12 Data Services. As part of the Current Services, ISSC shall (1)
-------------
provide printed output or electronic print files to each of the Unisource
Service Locations, (2) store, maintain and provide security for storage media,
including tapes and disk packs, provided by Unisource and (3) provide microfiche
and microfilm services to the extent and at the levels such services
<PAGE>
13
were provided by the In-Scope Personnel as of the Commencement Date.
3.13 In-Scope Personnel. ISSC shall provide the Current Services
------------------
using (1) the Affected Employees hired by ISSC, (2) the Affected Employee
Replacements and (3) the Unisource Key Employees ((1) and (2) collectively, the
"ISSC In-Scope Personnel"; (1) through (3) collectively, the "In-Scope
----------------------- --------
Personnel"). Subject to Section 3.14, ISSC shall be responsible for providing
------------
personnel with adequate experience and skill levels to fill the positions of
each of the ISSC In-Scope Personnel until the Location Completion Date for the
Unisource Service Location of each such ISSC In-Scope Personnel.
3.14 Reductions to the ISSC In-Scope Personnel. After June 30, 1994,
-----------------------------------------
Unisource or ISSC may notify the other Party that it foresees a reduction in the
requirements for the ISSC In-Scope Personnel. Upon Unisource's approval, ISSC
shall in each case effect the reduction to the ISSC In-Scope Personnel within
XXXX XXXX from the date of such approval, but in any event not prior to XXXX
XXXX, XXXX. Upon the implementation of any such reduction to the ISSC In-Scope
Personnel, ISSC shall credit Unisource in ISSC's next invoice for the Monthly
Services Charge an amount equal to the ARC for similar additional resources. For
the purposes of this Section 3.14, a reduction in the ISSC In-Scope Personnel
------------
shall include the reassignment of ISSC In-Scope Personnel to positions within
ISSC pursuant to which such ISSC In-Scope Personnel will provide services other
than the Current
<PAGE>
14
Services, e.g., reassignment to the Project Development Group or the Central
---
Development Group.
ARTICLE 4. MIGRATION.
- --------- ---------
4.01 Migration Services. ISSC shall provide the project management,
------------------
enhancement, development, installation, roll-out, testing, implementation,
documentation and training services (the "Migration Services") described in (1)
------------------
Schedule N and (2) the more detailed project plans to be developed after the
- ----------
definition of the XXXX Requirements (the "Project Plans") in respect of the
-------------
projects set forth in Schedule N, including (a) XXXX XXXX XXXX ("XXXX") and
---------- ----
XXXX XXXX ("XXXX"), (b) XXXX XXXX XXXX ("XXXX"), (c) XXXX XXXX XXXX ("XXXX"),
---- ----- ----
(d) XXXX XXXX XXXX System ("XXXX"), (e) XXXX XXXX XXXX ("XXXX"), (f) XXXX XXXX
---- ----
System ("XXXX"), (g) XXXX XXXX XXXX ("XXXX") and (h) XXXX XXXX XXXX ("XXXX")
---- ---- ----
((a) through (c) collectively, the "Consulting Projects"; (d) through
-------------------
(h) collectively, the "Base XXXX Projects"). Upon Unisource's request, ISSC
------------------
shall implement the (i) XXXX XXXX Systems ("XXXX") described in Schedule N at
---- ----------
the rates set forth in the Supplement (the "XXXX Charges") and (ii) XXXX XXXX
---------- ------------
Systems ("XXXX") as described in Schedule N at the rates set forth in the
---- ----------
Supplement (the "XXXX Charges") (XXXX and XXXX collectively, the
- ---------- ------------
"XXXX Projects"). (Each of the Consulting Projects, the Base XXXX Projects and
-------------
the XXXX Projects, a "Project"; the Consulting Projects, the Base XXXX Projects
--------
and the XXXX Projects collectively, the "Projects"; the
--------
<PAGE>
15
implementation of the Projects collectively, the "Restructured Business
---------------------
Platform".)
- --------
4.02 Third Party Software. As part of the Migration Services, ISSC
--------------------
shall (1) procure a license in Unisource's name substantially in the form set
forth in Schedule T (the "XXXX License") for the XXXX XXXX XXXX, Inc. ("XXXX")
---------- ------------ ----
software described in Schedule N (the "XXXX Software") and (2) enter into a
---------- -------------
services agreement in ISSC's name substantially in the form set forth in
Schedule U for the enhancement and modification of the XXXX Software (the "XXXX
- ---------- ----
Services Agreement"). As part of the XXXX Services, ISSC shall (a) procure a
- ------------------
license in Unisource's name on terms and conditions agreed upon by the Parties
for the XXXX software described in Schedule N and (b) procure a license in
----------
Unisource's name on terms and conditions agreed upon by the Parties for the
XXXX software described in Schedule N.
----------
4.03 New Project Development. Unisource and ISSC acknowledge that
-----------------------
(1) the level of effort set forth in the Supplement and (2) the implementation
----------
schedules set forth in Schedule N in respect of the development of the Projects
----------
("New Project Development") represent ISSC's best estimate (the "Initial Project
----------------------- ---------------
Development Estimate") as of date of the Agreement (the "Agreement Date") of the
- -------------------- --------------
level of effort necessary to complete the development of each of the Base XXXX
Projects in accordance with the applicable implementation schedules. Unisource
and ISSC shall re-evaluate the appropriateness of the Initial Project
Development Estimate in accordance with Section
-------
<PAGE>
16
4.04 after the definition of the functional requirements for each of the Base
- ----
XXXX Projects (the "XXXX Requirements").
-----------------
4.04 Project Requirement Effort. (1) Within XXXX days after the
--------------------------
Commencement Date, Unisource shall define and submit to ISSC the XXXX
Requirements for XXXX. (2) Within XXXX days after the Commencement Date,
Unisource shall define and submit to ISSC the interim solution XXXX Requirements
for XXXX described in Schedule N. (3) On or before XXXX XXXX, XXXX,
----------
Unisource and ISSC shall agree upon the schedule for defining the XXXX
Requirements for XXXX, XXXX and XXXX.
4.05 Revised Project Development Estimate. Within XXXX days after
------------------------------------
ISSC's receipt of the XXXX Requirements for a Base XXXX Project and as part of
the Migration Services, ISSC shall (1) determine the accuracy of the Initial
Project Development Estimate for such Base XXXX Project with respect to the XXXX
Requirements for such Base XXXX Project and (2), if the Initial Project
Development Estimate is inaccurate by more than XXXX percent, submit to
Unisource a revised estimate of (a) the level of effort necessary to complete
the development of the Base RBP Project and (b) the applicable implementation
schedule (such revised estimate, the "Revised Project Development Estimate"). If
------------------------------------
Unisource agrees with the Revised Project Development Estimate for a Base XXXX
Project, the Revised Project Development Estimate shall be deemed the applicable
resource for such Base XXXX Project (the "XXXX Resource"). If Unisource in good
-------------
faith disagrees with a Revised Project Development Estimate, Unisource and ISSC
shall jointly retain a third party knowledgeable in system integration
<PAGE>
17
and development (e.g., XXXX XXXX) (the "Project Auditor") to assess
---- ---------------
the accuracy of such Revised Project Development Estimate. If the Project
Auditor determines that a Revised Project Development Estimate is accurate, the
Revised Project Development Estimate shall be deemed the XXXX Resource for such
Base XXXX Project. If the Project Auditor determines that the level of effort
set forth in a Revised Project Development Estimate exceeds the level of effort
necessary to complete the development of the applicable Base XXXX Project in
accordance with the specified implementation schedule, the Project Auditor shall
calculate and provide a new estimate which shall be deemed the
XXXX Resource for the applicable Base XXXX Project. If the Project Auditor
determines that the level of effort set forth in a Revised Project Development
Estimate is less than the level of effort necessary to complete the development
of the applicable Base XXXX Project in accordance with the specified
implementation schedule, (a) Unisource may upon notice to ISSC either accept (i)
the Revised Project Development Estimate or (ii) the estimate prepared by the
Project Auditor and (b) the estimate accepted by Unisource shall be deemed the
XXXX Resource for the applicable Base XXXX Project. ISSC shall provide the XXXX
Resource on a fixed fee basis. Unisource and ISSC shall each pay one-half of
the fees and expenses charged by the Project Auditor pursuant to this Section
-------
4.05.
- ----
4.06 XXXX Resource. In the event the XXXX Resource for a Base XXXX
-------------
Project exceeds the Initial Project Development Estimate for such Base XXXX
Project, Unisource shall pay for the
<PAGE>
18
resources in excess of the Initial Project Development Estimate by (1)
reallocating resources from another Project to such Base RBP Project pursuant to
Schedule J and/or (2) paying an ARC rate in the amounts set forth in Schedule J.
- ---------- ----------
4.07 Consulting Baseline. As part of the Migration Services, ISSC
-------------------
shall provide the Consulting Projects up to the consulting baseline set forth in
the Supplement (the "Consulting Baseline"). Subject to Section 21.04, ISSC
---------- ------------------- -------------
shall increase or decrease the Consulting Baseline upon Unisource's request.
4.08 Implementation Schedules and Deliverables. As part of the
-----------------------------------------
Migration Services, except as otherwise provided in Section 4.09, ISSC shall (1)
------------
implement each of the Projects and (2) provide the deliverables described in
Schedule N in accordance with the implementation schedules set forth in Schedule
- ---------- --------
N or the Project Plans (collectively, the "Implementation Schedules"; each, an
- - ------------------------
"Implementation Schedule"). Unisource (a) may reallocate the Regions for the
- ------------------------
purposes of the Implementation Schedules in accordance with Schedule J and (b)
----------
shall receive a credit from ISSC for any net savings to ISSC resulting from such
reallocation or pay to ISSC any net increase to ISSC resulting from such
reallocation.
4.09 Extensions to the Implementation Schedules. (1) Upon notice
------------------------------------------
from Unisource that Unisource desires ISSC to extend an Implementation Schedule
for a Unisource Service Location by more than XXXX days, (a) ISSC shall extend
the Implementation Schedule for the requested period of time and (b) Unisource
shall pay (i) the applicable extension fee set
<PAGE>
19
forth in Schedule J and (ii) pursuant to Section XXXX the XXXX XXXX XXXX in
---------- ------------
respect of the XXXX XXXX. (2) In the event an Implementation Schedule for a
Unisource Service Location is extended for more than XXXX days as a result of
XXXX XXXX to XXXX under this Agreement, ISSC shall be XXXX for, in addition to
the XXXX set forth in Section XXXX, all XXXX associated with XXXX the XXXX
------------
XXXX, including XXXX of the XXXX XXXX XXXX. (3) In the event Unisource and
ISSC agree to extend the Implementation Schedule for a Unisource Service
Location, (x) Unisource shall continue to pay pursuant to Section XXXX the XXXX
------------
XXXX XXXX in respect of the XXXX XXXX and (y) ISSC shall be responsible
for all XXXX XXXX XXXX in respect of the XXXX XXXX. (4) In the event the
Current Environment is extended pursuant to this Section 4.09 for a Unisource
------------
Service Location, ISSC shall provide to Unisource a XXXX within XXXX days
after the Location Completion Date for the amount by which ISSC's XXXX
and XXXX XXXX for XXXX the XXXX XXXX are XXXX as a XXXX of such XXXX.
4.10 Project Management. As part of the Migration Services, ISSC
------------------
shall be responsible for overall project management for the consolidation and
migration of Unisource's multiple business units to the XXXX XXXX XXXX,
including the project management services described in Schedule H.
----------
4.11 Machines and Equipment. As part of the Migration Services, ISSC
----------------------
shall provide to Unisource the hardware and
<PAGE>
20
related equipment and utilities software set forth in Schedule R (the "XXXX
---------- ----
Machines"). In the event the ISSC Project Executive and the Senior Unisource IS
- --------
Executive determine that any of the XXXX Machines are not necessary for the
performance of the New Environment Services and are not already installed, ISSC
shall issue Unisource within XXXX days of such determination a credit in an
amount equal to the costs associated with any such XXXX Machine, including
XXXX XXXX, XXXX XXXX and XXXX XXXX. The XXXX Charges and the XXXX Charges
include the hardware and related equipment and utilities software set
forth in Schedule R.
----------
4.12 XXXX Conversion. As part of the Migration Services, ISSC
---------------
shall convert all XXXX set forth in Schedule N so that the XXXX of such XXXX
----------
is re-created on the XXXX XXXX XXXX and provide XXXX to enable the XXXX to XXXX
such converted XXXX.
4.13 XXXX Conversion. As part of the Migration Services, ISSC shall
---------------
convert any XXXX XXXX as may be necessary to implement and support XXXX and
any XXXX XXXX provided to ISSC after the Agreement Date so that such XXXX
is in a XXXX and on a XXXX which can be used on the XXXX XXXX XXXX.
4.14 Testing Environments. As part of the Migration Services, ISSC
--------------------
shall provide (1) parallel operation/testing environments and (2) a training
environment for the Restructured Business Platform using production data
provided by Unisource.
<PAGE>
21
4.15 Operation Readiness Tests. As part of the Migration Services,
-------------------------
ISSC shall perform the operation readiness tests described in Schedule N in
----------
respect of each of the components of the XXXX XXXX XXXX (collectively, the
"Operation Readiness Tests"; each, an "Operation Readiness Test").
------------------------- ------------------------
4.16 Location Completion. Upon the successful completion of the
-------------------
Operation Readiness Tests for the XXXX XXXX XXXX in respect of a Unisource
Service Location, Unisource shall notify ISSC that the migration to the
XXXX XXXX XXXX in respect of such Unisource Service Location is complete (the
"Location Completion Date").
------------------------
4.17 Project Completion. Upon the successful completion of the
------------------
Operation Readiness Tests for XXXX in respect of a Unisource region as described
in Schedule I (each, a "Region"), Unisource shall notify ISSC that the
---------- ------
implementation of XXXX is complete for such Region (for each Region, the "XXXX
----
Completion Date"). Upon the successful completion of the interim solution
- ---------------
described in Schedule N for XXXX, Unisource shall notify ISSC that the interim
----------
solution of XXXX is complete (the "XXXX Interim Completion Date"). Upon
----------------------------
successful completion of the Operation Readiness Tests for (1) XXXX for all of
the Unisource Service Locations, Unisource shall notify ISSC that the
implementation of XXXX is complete (the "XXXX Final Completion Date"), (2) XXXX
--------------------------
for all of the Unisource Service Locations, Unisource shall notify ISSC that the
implementation of EIS is complete (the "XXXX Completion Date"), (3) XXXX for all
--------------------
of the
<PAGE>
22
Unisource Service Locations, Unisource shall notify ISSC that the
implementation of XXXX is complete (the "XXXX Completion Date"), and (4) XXXX
--------------------
for all of the Unisource Service Locations, Unisource shall notify ISSC that the
implementation of XXXX is complete (the "XXXX Completion Date"). Upon
--------------------
Unisource's approval to implement the XXXX Projects, Unisource and ISSC shall
establish the completion dates for each of the XXXX Projects and the applicable
XXXX XXXX in accordance with Section XXXX if such completion dates are
------------
not achieved by ISSC.
4.18 Migration Completion. Upon the successful completion of the
--------------------
final Operation Readiness Tests for the Restructured Business Platform for all
of the Unisource Service Locations, Unisource shall notify ISSC that the XXXX
XXXX XXXX is complete in respect of all of the Unisource Service Locations (the
"Migration Completion Date").
-------------------------
4.19 XXXX XXXX. ISSC XXXX that in the XXXX the XXXX XXXX XXXX for
---------
any of the XXXX, the XXXX XXXX XXXX XXXX, the XXXX XXXX XXXX XXXX, the XXXX
XXXX, the XXXX XXXX XXXX or the XXXX XXXX XXXX is XXXX XXXX in the XXXX XXXX in
XXXX and the XXXX XXXX, Unisource will XXXX XXXX the XXXX of which are XXXX to
- ----
XXXX at XXXX XXXX. Accordingly, in XXXX to any XXXX of XXXX under Section XXXX,
------------
XXXX shall XXXX to XXXX, upon XXXX election, the following XXXX as XXXX XXXX and
XXXX as a XXXX if XXXX XXXX by more than the XXXX of XXXX XXXX in this Section
-------
XXXX to XXXX the XXXX XXXX XXXX for XXXX
- ---- ----
<PAGE>
23
of the XXXX, the XXXX XXXX XXXX XXXX, the XXXX XXXX XXXX, the XXXX XXXX XXXX,
the XXXX XXXX XXXX or the XXXX XXXX XXXX.
(1) In the event the XXXX for a XXXX is not XXXX within XXXX days of the
XXXX XXXX XXXX specified in XXXX as a result of XXXX XXXX to XXXX,
----
XXXX may XXXX, and upon such XXXX ISSC shall XXXX to XXXX, for each
XXXX for which XXXX does XXXX XXXX the XXXX XXXX XXXX the XXXX XXXX in
accordance with the following schedule: for the XXXX from (a) XXXX
through XXXX XXXX; (b) XXXX through XXXX, an XXXX XXXX; and (c) XXXX
through XXXX, an XXXX XXXX.
(2) In the event the XXXX is XXXX XXXX within XXXX of the XXXX XXXX XXXX
specified in XXXX as a result of XXXX XXXX to XXXX, XXXX may XXXX, and
----
upon such XXXX ISSC shall XXXX to XXXX, the XXXX XXXX in accordance
with the following schedule: for the XXXX from (a) XXXX through XXXX;
(b) XXXX through XXXX, an XXXX XXXX; and (c) XXXX through XXXX, an
XXXX XXXX.
(3) In the event the XXXX is XXXX XXXX within XXXX of the XXXX XXXX XXXX
specified in XXXX as a result of XXXX to XXXX, XXXX may XXXX, and upon
----
such XXXX
<PAGE>
24
ISSC shall XXXX to XXXX, the XXXX XXXX in accordance with the
following schedule: for the XXXX from (a) XXXX through XXXX, XXXX; (b)
XXXX through XXXX, an XXXX XXXX; and (c) XXXX through XXXX, an XXXX
XXXX.
(4) In the event the XXXX is XXXX within XXXX of the XXXX for XXXX of the
XXXX as a result of XXXX to XXXX, XXXX may XXXX, and upon such XXXX
ISSC shall XXXX to XXXX, the XXXX XXXX in accordance with the
following schedule: for the XXXX from (a) XXXX through XXXX, XXXX; (b)
XXXX through XXXX, an XXXX XXXX;and (c) XXXX through XXXX, an XXXX
XXXX.
(5) In the event the XXXX is XXXX within XXXX of the XXXX for XXXX of the
XXXX as a result of XXXX to XXXX, XXXX may XXXX, and upon such XXXX
ISSC shall XXXX to XXXX, the XXXX XXXX in accordance with the
following schedule: for the XXXX from (a) XXXX through day XXXX, XXXX;
(b) XXXX through XXXX, an XXXX XXXX; and (c) XXXX XXXX XXXX, an XXXX
XXXX.
(6) In the event the XXXX is XXXX within XXXX of the XXXX for XXXX of the
XXXX as a result of XXXX, XXXX may XXXX, and upon such XXXX ISSC shall
<PAGE>
25
XXXX to XXXX, the XXXX in accordance with the following schedule: for
the XXXX from (a) XXXX through XXXX, XXXX; (b) XXXX through XXXX, an
XXXX XXXX; and (c) XXXX through XXXX, an XXXX.
(7) If the XXXX described in
(a) Section 4.19(1) XXXX XXXX or
---------------
(b) Section 4.19(2), Section 4.19(3), Section 4.19(4),
--------------- --------------- ---------------
Section 4.19(5) and Section 4.19(6) in the XXXX XXXX, Unisource may
--------------- ---------------
(i) XXXX this XXXX, upon XXXX to XXXX within XXXX XXXX after the XXXX
of the XXXX or XXXX of XXXX giving XXXX to the XXXX, without regard to
Section XXXX or Section XXXX and (ii) XXXX an XXXX XXXX to XXXX XXXX
------------ ------------
to the XXXX XXXX. In addition to any XXXX XXXX to XXXX pursuant this
Section 4.19, XXXX shall be XXXX to XXXX for the XXXX between (x) XXXX
------------
XXXX XXXX XXXX of XXXX XXXX to such XXXX XXXX associated with such
XXXX and (y) the XXXX that XXXX XXXX XXXX XXXX to XXXX pursuant to
this Agreement to XXXX the XXXX.
If XXXX XXXX to XXXX the XXXX XXXX, Unisource's XXXX of such XXXX shall XXXX
XXXX by XXXX of XXXX XXXX of XXXX by XXXX (except with respect to the XXXX to
XXXX and XXXX XXXX from an XXXX XXXX pursuant to
<PAGE>
26
Section 4.19(7), Article XXXX, Section XXXX and Section XXXX) that XXXX XXXX
- --------------- ------------ ------------ ------------
its XXXX under this XXXX with respect to such XXXX or XXXX of XXXX
giving XXXX to such XXXX.
4.20 Location Closures. ISSC shall administer and manage the closing
-----------------
of the information technology functions at any of the Unisource Service
Locations as a result of the migration to the XXXX XXXX XXXX ISSC shall, upon
Unisource's request, use commercially reasonable efforts to identify and XXXX,
upon XXXX and XXXX most XXXX to XXXX, purchasers of Unisource's data processing
assets, including by providing XXXX, access to ISSC's used equipment brokers and
XXXX XXXX XXXX XXXX XXXX requirements. Unisource shall pay any costs associated
with such closure not included in the Monthly Services Charges.
ARTICLE 5. NEW ENVIRONMENT.
- --------- ---------------
5.01 New Environment Services. As of the Location Completion Date
------------------------
for each of the Unisource Service Locations and continuing throughout the Term,
ISSC shall provide to Unisource the systems operations and related services in
respect of the new environment at each such Unisource Service Location (the "New
---
Environment") (1) described in Schedule E and (2) otherwise identified in this
- ----------- ----------
Agreement as being part of the New Environment Services ((1) and (2)
collectively, the "New Environment Services"). Subject to Section 21.04, ISSC
------------------------ -------------
shall increase or decrease the amount of the New Environment Services according
to Unisource's demand for the New Environment Services.
<PAGE>
27
5.02 Dedicated Environment. ISSC shall provide the New Environment
---------------------
Services in a hardware and software environment dedicated solely to Unisource.
In the event the Parties agree to migrate Unisource to a shared hardware and
software environment, the Parties shall enter into an amendment to this
Agreement modifying the terms of this Agreement to reflect the migration to such
shared environment.
5.03 Machines. ISSC shall provide the New Environment Services using
--------
those machines and equipment, which are (1) located at the Unisource Service
Locations and (2) either (a) provided by ISSC, or for which ISSC assumes
financial and administrative responsibility, on or after the Commencement Date,
including the RBP Machines and the machines provided as part of the WMS and TRS
Projects (the "ISSC Machines") or (b) owned by Unisource on or after, or for
-------------
which Unisource retains financial and administrative responsibility after, the
Commencement Date ((1) and (2) collectively, the "Machines").
--------
5.04 Replacements. As part of the New Environment Services, ISSC
------------
shall, upon Unisource's approval, replace and provide additional Machines as may
be necessary for ISSC to perform the Services in accordance with the Performance
Standards. Upon request of Unisource no more than once every Contract Year
after the completion of the XXXX Contract Year, ISSC shall XXXX to XXXX
an XXXX of ISSC's XXXX XXXX in XXXX of the ISSC Machines upon the XXXX or XXXX
of this Agreement in such Contract Year according to the XXXX set forth in
Section XXXX.
- ------------
<PAGE>
28
5.05 Machine Maintenance. As part of the New Environment Services,
-------------------
ISSC shall provide to Unisource (1) maintenance and support services, including
upgrades (except for upgrades due to Unisource's growth which shall be provided
by ISSC at Unisource's expense), as necessary for ISSC to perform the Services
in accordance with the Performance Standards for the ISSC Machines and (2)
support services for the Data Network as described in Schedule E.
----------
5.06 Systems Software. As part of the New Environment Services, ISSC
----------------
shall have financial, administrative, operational and maintenance responsibility
for all systems software which is part of the New Environment.
5.07 New Releases and Versions of the Software. As part of the New
-----------------------------------------
Environment Services, ISSC shall, after any such release or version is
commercially available according to a schedule to be agreed upon by Unisource
and ISSC, (1) provide, install on the Machines after sufficient testing and
maintain new releases and versions of the systems software which is part of the
New Environment and (2) provide (to the extent provided as part of third party
maintenance services at no additional charge), install on the Machines after
sufficient testing and maintain new releases and versions of the applications
software which is part of the New Environment.
5.08 Systems Software Maintenance. As part of the New Environment
----------------------------
Services, ISSC shall provide Unisource with systems software maintenance and
systems software production support services, including (1) changes and
enhancements to the systems
<PAGE>
29
software, (2) immediate preventive and corrective maintenance to correct defects
and failures in the systems software and (3) replacements of the systems
software or additional systems software, as ISSC deems necessary, in order to
perform the Services in accordance with the Performance Standards.
5.09 Systems Management. As part of the New Environment Services,
------------------
ISSC shall be responsible for (1) the management services described in Schedule
--------
E in respect of the Software and the Machines (collectively, the "Systems") and
- - -------
(2) within 180 days of the Migration Completion Date, creating and maintaining
an inventory and configuration diagram of the Data Network. ISSC shall provide
to Unisource every 180-day period during the Term a revised copy of such
inventory and configuration diagram.
5.10 Help Desk. As part of the New Environment Services, ISSC shall
---------
provide the help desk services described in Schedule M. ISSC shall provide to
----------
Unisource once every 30 days after the Commencement Date a report of all help
desk services provided during the preceding 30-day period.
5.11 EDI. As part of the New Environment Services, ISSC shall
---
provide (1) the electronic data interchange availability included in the XXXX
Software to Unisource's suppliers and customers and (2) the translation software
described in Schedule N-10.
-------------
5.12 Data Network Management. As part of the New Environment
-----------------------
Services, ISSC shall provide such management and
<PAGE>
30
related services in respect of the Data Network as may be requested by
Unisource.
5.13 Data Network Services. As part of the New Environment Services,
---------------------
ISSC shall receive and review the invoices from Unisource's Data Network service
provider for the Data Network services provided to Unisource for such invoice
period. Unisource shall be the customer of record with such Data Network
provider. ISSC shall pay such invoices up to the Data Network baseline set
forth in the Supplement. Once every 90-day period during the Term, ISSC shall
----------
review Unisource's actual use of Data Network services for the preceding 90-day
period and ISSC's projected use for the following 90-day period. If this review
demonstrates that Unisource's use of the Data Network services for the preceding
90-day period was below the Data Network baseline resource for such 90-day
period, ISSC shall issue to Unisource a credit in an amount equal to the unused
portion of the baseline for such period. If Unisource anticipates that its use
of the Data Network services for the following 90-day period will be less than
the baseline resource allocated for use during such period, ISSC shall reduce
the Data Network baseline by the reduced amount and shall issue to Unisource a
credit equal to the reduced amount. If, at any time during the Term, Unisource
desires to pay its Data Network invoices directly, ISSC shall (1) submit such
invoices to Unisource for payment within a reasonable period of time prior to
the due date or, if a discount for early payment is given, the date on which
Unisource may pay such invoice with a discount, and (2) reduce the Monthly
Services
<PAGE>
31
Charges for each month after Unisource's request by one-twelfth of the Data
Network baseline for the applicable Contract Year.
5.14 Data Services. As part of the New Environment Services, ISSC
-------------
shall provide printed output or electronic print files to the locations
designated by Unisource.
5.15 XXXX XXXX in a Shared Environment. If ISSC migrates
---------------------------------
Unisource to a shared hardware and software environment, ISSC shall (1) review
XXXX every XXXX XXXX during the XXXX, as part of the New Environment Services,
the performance of the New Environment to determine the XXXX for a XXXX to
the XXXX and XXXX currently being used to XXXX the XXXX and (2) XXXX such XXXX
and XXXX, upon Unisource's approval, (a) as may be XXXX to XXXX the XXXX of the
XXXX and (b) at least XXXX every XXXX XXXX after the XXXX on which such XXXX
and XXXX was XXXX and XXXX at the XXXX XXXX XXXX.
ARTICLE 6. APPLICATION DEVELOPMENT AND MAINTENANCE.
- --------- ---------------------------------------
6.01 Services. ISSC shall provide application development and
--------
maintenance services (the "AD/M Services") in (1) the Current Environment to
-------------
the extent and at the levels provided by the In-Scope Personnel as of the
Commencement Date and (2) the New Environment up to the New AD/M Baseline. The
AD/M Services include defect identification and fixes, regulatory and statutory
mandated changes required by Unisource's business operations, enhancements,
version and release upgrades to existing operating applications and the
programming of any new applications. The migration of Unisource's information
<PAGE>
32
technology operations to the Restructured Business Platform shall not be charged
against the New AD/M Baseline. (The Current Services, the Migration Services,
the New Environment Services and the AD/M Services collectively, the "Systems
-------
Operations Services".)
- -------------------
6.02 Current Environment Baseline. As of the Commencement Date and
----------------------------
continuing for each Unisource Service Location until the Location Completion
Date for such Unisource Service Location, ISSC shall provide the AD/M Services
for each Unisource Service Location to the extent provided by the In-Scope
Employees as of the Commencement Date. Subject to Section 21.04, ISSC shall
-------------
increase or decrease the amount of the AD/M Services according to Unisource's
demand for the AD/M Services.
6.03 New Environment Baseline. As of the Commencement Date and
------------------------
continuing throughout the Term, ISSC shall provide the AD/M Services in
connection with the New Environment from a central location in accordance with
Section 10.03 up to the AD/M baselines set forth in the Supplement (the "New
- ------------- ---
AD/M Baseline"). Subject to Section 21.04, ISSC shall increase or decrease the
- ------------- -------------
amount of the AD/M Services according to Unisource's demand for the AD/M
Services.
6.04 AD/M Proposals. As part of the AD/M Services, ISSC shall
--------------
provide Unisource with a proposal in respect of ISSC's development of any
application in connection with the AD/M Services containing a description of the
scope and functionality of such application and an estimate of the computing,
communications and human resources and run-time
<PAGE>
33
requirements necessary to develop and operate such application. Upon receipt of
Unisource's approval of a proposal (which approval shall be in Unisource's sole
discretion), ISSC shall commence the Ernst & Young Navigator Systems
Services(SM) development cycle. If the XXXX XXXX in respect of an XXXX XXXX the
XXXX described in the XXXX, XXXX shall be XXXX for all of the XXXX to XXXX in
respect of the XXXX which XXXX the XXXX included in the XXXX XXXX.
6.05 Application Installation Standards. As part of the Systems
----------------------------------
Operations Services, ISSC shall develop, modify and enhance such existing and
new applications as may be requested by Unisource in accordance with the
application installation standards described in Schedule K.
----------
6.06 New Metric. Each Contract Year during the Term, the Joint
----------
Advisory Committee shall review the manner in which the AD/M Services is
measured. If the Joint Advisory Committee determines that a more appropriate
measurement standard exists than the measurement standard in effect at that
time, the New AD/M Baseline shall be converted to the new measurement method so
that Unisource receives at least the same amount of AD/M Services that it would
have received if the measurement method had not been modified.
6.07 AD/M Consumption in the New Environment. If the metric being
---------------------------------------
used by ISSC and Unisource to measure use of the New AD/M Baseline relates to a
unit of work as opposed to a number of people, Unisource may, upon notice to
ISSC prior to October 1st
<PAGE>
34
of the applicable Contract Year, carryover up to XXXX of the unused portion of
the New AD/M Baseline for such Contract Year to the New AD/M Baseline in the
next Contract Year. Once every XXXX during the period which the metric used to
measure the new AD/M Baseline relates to a unit of work, ISSC shall provide to
Unisource a report specifying the units of work expended during the XXXX XXXX
and the anticipated expenditure during the following XXXX XXXX.
6.08 AD/M Commitment. ISSC shall maintain a core level of person-
---------------
months for each Contract Year in connection with, and as part of, the AD/M
Services in the New Environment (the "AD/M Commitment"). As of the Commencement
---------------
Date, the AD/M Commitment shall equal XXXX of person-months for the New
AD/M Baseline for the applicable Contract Year.
6.09 Third Party Maintenance and Support. As part of the New
-----------------------------------
Environment Services, ISSC shall enter into a maintenance agreement with XXXX in
respect of the XXXX Software substantially in the form set forth in Schedule V
----------
(the "XXXX Maintenance Agreement"). In the event ISSC assumes, upon Unisource's
--------------------------
approval, responsibility for providing any of the maintenance and support
services provided by XXXX or any other third party, ISSC shall provide the same
level of services as were provided by XXXX or such other XXXX XXXX at XXXX
XXXX XXXX to Unisource.
ARTICLE 7. UNISOURCE RESPONSIBILITIES.
- --------- --------------------------
Unisource shall be responsible for:
(1) personal computers, desk top terminals and printers which are not RBP
Machines or otherwise provided by
<PAGE>
35
ISSC as part of the Restructured Business Platform ("End User
--------
Machines"), including leases,depreciation costs, growth and
--------
maintenance;
(2) in the Current Environment, office automation software used by end
users which was not (a) installed, provided or developed by ISSC as
part of the Services or (b) supported by the Affected Employees as of
the Commencement Date;
(3) in the New Environment, office automation software used by end users
which was not installed, provided or developed by ISSC as part of the
Services;
(4) in the Current Environment, end user requirements for application
development to the extent not supported by the Affected Employees as
of the Commencement Date;
(5) in the New Environment, end user requirements for application
development;
(6) in the Current Environment, end user office support, including
clerical and administrative tasks and courier and internal
distribution of computer output to the end user, to the extent not
performed by the Affected Employees as of the Commencement Date;
(7) in the New Environment, end user office support, including clerical
and administrative tasks and courier and internal distribution of
computer output to the end user, unless generated by an ISSC service
location;
(8) password authorization and data security management;
<PAGE>
36
(9) specified responsibilities in connection with projects, including
selection of application software packages;
(10) financial and operational responsibilities for those applications in
the Current Environment that are not replaced by the Restructured
Business Platform;
(11) in the Current Environment, manual data entry functions for data
interface, to the extent not performed by the Affected Employees as of
the Commencement Date;
(12) in the New Environment, manual data entry functions;
(13) payment of reasonable out-of-pocket costs for mail, messenger, postage
and freight;
(14) in the Current Environment, microfilm and microfiche operations and
distribution to the extent not performed by the Affected Employees as
of the Commencement Date;
(15) in the New Environment, microfilm and microfiche operations and
distribution, unless generated by an ISSC service location;
(16) moves, adds and changes for End User Machines and voice equipment;
(17) payment of all usage fees for disaster recovery contracts, if any, for
the Current Environment;
(18) payment of all common carrier charges for voice services and local,
long distance and WATS telecommunications services incurred by
Unisource other than in connection with data transmission;
<PAGE>
37
(19) in the Current Environment, office space, data center facilities and
terminals provided by Unisource to the Affected Employees as of the
Agreement Date;
(20) office space for ISSC's Project Office as described in Schedule H; and
----------
(21) the Unisource responsibilities described in the Schedules.
ARTICLE 8. CONTRACT ADMINISTRATION.
- --------- -----------------------
8.01 ISSC Responsibilities. Throughout the Term, ISSC shall be
---------------------
responsible for managing, administering and maintaining the agreements for the
information technology assets retained by Unisource which are set forth in
Schedule W or which ISSC gains knowledge of after the Agreement Date, except
- ----------
for those agreements relating to Azerty (the "Retained Resources"). ISSC shall
------------------
provide Unisource with reasonable notice of any renewal, termination or
cancellation dates and fees in respect of the Retained Resources. Upon
Unisource's consent, ISSC shall, to the extent permitted by the agreements in
respect of the Retained Resources modify, terminate or cancel any such
agreements. Any modification, termination or cancellation fees or charges
imposed upon Unisource in connection with any such modification, termination or
cancellation shall be XXXX XXXX XXXX, except for any fee or charge which (1) was
XXXX or XXXX an XXXX or XXXX XXXX, including XXXX to XXXX XXXX XXXX of a XXXX,
XXXX or XXXX XXXX or (2) XXXX or its XXXX. The fees and charges
<PAGE>
38
described in Section 8.01(1) and Section 8.01(2) shall be XXXX XXXX.
--------------- ---------------
8.02 Performance Under Agreements. Each of Unisource and ISSC
----------------------------
shall promptly inform the other Party of any breach of, or misuse or fraud in
connection with, any agreement in respect of the Retained Resources and shall
cooperate with the other Party to prevent or stay any such breach, misuse or
fraud. XXXX shall XXXX XXXX for any XXXX or XXXX (including XXXX to a XXXX as a
XXXX XXXX to XXXX XXXX XXXX pursuant to the preceding sentence, associated XXXX
XXXX XXXX and other XXXX XXXX) incurred by XXXX as a result of XXXX or XXXX XXXX
of its XXXX under this XXXX with respect to the XXXX XXXX.
8.03 Third Party Invoices. Provided that ISSC (1) is the addressee
--------------------
on such invoice or (2) receives a copy of such invoice from Unisource in a
timely fashion, ISSC shall (a) receive all invoices submitted by third parties
in connection with the Retained Resources (collectively, the "Retained Resources
------------------
Invoices"; each, "Retained Resource Invoice"), (b) review and correct any
- -------- -------------------------
errors in any such Retained Resources Invoices in a timely manner and (c) submit
such Retained Resources Invoices to Unisource for payment within a reasonable
period of time prior to the due date or, if a discount for each payment is
given, the date on which Unisource may pay such Retained Resource Invoice with a
discount. Unisource shall pay the Retained Resources Invoices received and
approved by ISSC.
<PAGE>
39
Unisource shall only be responsible for payment of the Retained Resources
Invoices and shall not be responsible to ISSC for any management, administration
or maintenance fees of ISSC in connection with the Retained Resources Invoices.
Unisource shall be responsible for XXXX in respect of the Retained Resources
Invoices; provided, however, that XXXX submitted the applicable XXXX to XXXX for
XXXX within a reasonable XXXX prior to the XXXX any such XXXX is XXXX. If XXXX
to XXXX a XXXX to XXXX for XXXX in a XXXX manner, ISSC shall XXXX for the XXXX
or any late XXXX in respect of such XXXX.
ARTICLE 9. PERFORMANCE STANDARDS.
- --------- ---------------------
9.01 Current Environment. As of the Commencement Date and until
-------------------
the migration of all of the Unisource Service Locations in a Region to the
Restructured Business Platform, ISSC shall provide the Current Services at each
of the Unisource Service Locations in such region at least at the performance
standards for such Unisource Service Locations described in Schedule E
----------
(collectively, the "Current Performance Standards").
-----------------------------
9.02 New Environment. Within XXXX of the migration of all of the
---------------
Unisource Service Locations in a Region to the Restructured Business Platform,
Unisource and ISSC shall establish performance standards for all key functions
performed by ISSC in the New Environment for the Unisource Service Locations in
such Region (the "Interim Performance Standards"). Within XXXX of the Migration
-----------------------------
Completion Date, Unisource and
<PAGE>
40
ISSC shall establish system-wide performance standards in the New Environment
(the "New Environment Performance Standards").
-------------------------------------
9.03 New Services Performance Standards. ISSC shall provide the
----------------------------------
New Services at the Performance Standards (1) specified in the New Services Work
Order or (2) otherwise established by Unisource and ISSC ((1) and (2)
collectively, the "New Services Performance Standards"). (The Current
----------------------------------
Performance Standards, the Interim Performance Standards and the New Services
Performance Standards collectively, the "Performance Standards".)
---------------------
9.04 Adjustment of Performance Standards. The Joint Advisory
-----------------------------------
Committee (1) shall review the Performance Standards for the preceding 12 months
during the last calendar quarter of every Contract Year and (2), in respect of
any Performance Standards that require periodic adjustment or are no longer
appropriate because of an increase, decrease or change to the Services, shall
adjust the Performance Standards for the subsequent Contract Year and (3), in
respect of all other Performance Standards, may adjust the Performance Standards
for the subsequent Contract Year. In addition, either Unisource or ISSC may, at
any time upon notice to the other Party, initiate negotiations to review and,
upon agreement by the Joint Advisory Committee, adjust any Performance Standard
which such Party in good faith believes is inappropriate at the time.
9.05 Reports. ISSC shall provide monthly performance reports to
-------
Unisource in a form agreed upon by Unisource and ISSC.
<PAGE>
41
ARTICLE 10. SERVICE LOCATIONS.
- ---------- -----------------
10.01 Service Locations. The Services shall be provided from (1)
-----------------
the Unisource Service Locations, (2) ISSC's Lexington, Kentucky data center
(the "ISSC Data Center") and (3) any other data center or location designated by
----------------
Unisource or ISSC; provided, however, that any such other data center or
location must be approved by Unisource if the migration of any of the Services
to such data center or location would result in incremental costs to Unisource
or have an adverse impact on Unisource's operations ((1), (2) and (3)
collectively, the "Service Locations").
-----------------
10.02 Safety and Security Procedures. (1) As part of the Current
------------------------------
Services, ISSC shall maintain and enforce at the Unisource Service Locations the
safety and security procedures in effect at the Unisource Service Locations as
of the Commencement Date, including the safety and security procedures described
in Schedule L to the extent such procedures were maintained and enforced by the
----------
Affected Employees as of the Commencement Date. (2) As part of the New
Environment Services, ISSC shall maintain and enforce at the ISSC Data Center,
and any other Service Location from which the Services are provided, safety and
security procedures, including the safety and security procedures described in
Schedule L, that are at least (a) equal to industry standards for such
- ----------
Service Locations and (b) as rigorous as those procedures in effect at the
Service Locations as of the Commencement Date.
<PAGE>
42
10.03 Facilities for the Central Development Group and the Project
------------------------------------------------------------
Development Group. During the first three Contract Years, Unisource and ISSC
- -----------------
shall each provide office space for XXXX of (1) the centralized applications
development and maintenance group (the "Central Development Group"), (2) the
-------------------------
New Projects Development group (the "Project Development Group") and (3) the
-------------------------
consulting/management group for the Projects (the "Consulting/Management
---------------------
Group"), but in any event Unisource's XXXX of the office space pursuant to
- -----
this Section 10.03 shall XXXX XXXX XXXX XXXX XXXX. During the fourth through
-------------
tenth Contract Years, ISSC shall XXXX at XXXX XXXX XXXX the office space for
the Central Development Group, the Project Development Group and the
Consulting/Management Group. During the Term and as part of the Systems
Operations Services, XXXX shall provide office equipment, terminals and other
materials necessary for the Central Development Group, the Project Development
Group and the Consulting/Management Group to perform under this Agreement.
ARTICLE 11. NEW SERVICES.
- ---------- ------------
11.01 New Services. Unisource may from time to time request that
------------
ISSC perform services (1) outside the scope of the Services or (2) which require
resources not covered by the Annual Services Charges or require additional
start-up expenses (the "New Service(s)"). Upon receipt of such a request from
--------------
Unisource, ISSC shall inform Unisource as soon as practicable after receipt of
Unisource's request as to whether ISSC desires to perform such New Service and,
if so, ISSC shall provide Unisource with (a) a written description of the work
ISSC
<PAGE>
43
anticipates performing in connection with such New Service, (b) a schedule
for commencing and completing the New Service, (c) ISSC's prospective charges
for such New Service (the "New Services Fees"), (d) when appropriate, a
-----------------
description of any software to be developed or modified by ISSC (the "New
---
Application(s)") or hardware to be provided by ISSC in connection with such
- --------------
New Service, (e) when appropriate, the software and hardware resources and run-
time requirements necessary to develop and operate any New Applications, (f) the
human resources necessary to develop and operate the product or provide the
services, (g) when appropriate, a list of any existing applications or hardware
included in or to be used in connection with such New Service, (h) when
appropriate, acceptance test criteria and procedures in respect of any New
Applications or any products or services and (i) function point estimate, if
applicable. In the event Unisource elects to have ISSC perform the New Service,
Unisource and ISSC shall execute a work order to this Agreement in substantially
the form set forth in Schedule F (each, a "New Services Work Order"). ISSC shall
---------- -----------------------
not begin performing any New Service until a New Services Work Order in respect
of such New Service has been executed on behalf of Unisource. (The Systems
Operations Services and the New Services collectively, the "Services".)
--------
11.02 Third Party Services. Notwithstanding any request made to
--------------------
ISSC by Unisource pursuant to Section 11.01, Unisource shall have the right to
-------------
contract with a third party to perform (1) any New Service, including systems
operations and
<PAGE>
44
related services to augment or supplement the Services or to interface with the
Systems and (2) a XXXX, if the XXXX XXXX determines that the XXXX XXXX XXXX XXXX
for such XXXX is XXXX by XXXX or more. In the event Unisource contracts with a
third party to perform any New Service, ISSC shall cooperate with Unisource and
any such third party to the extent reasonably required by Unisource, including
by providing: (1), in writing to the extent available in writing, requirements,
standards and policies for systems operations so that the enhancements or
developments of such third party may be operated by ISSC, (2) assistance and
support services to such third party at current market prices and (3) third
party access to the Systems in connection with such New Service. Unisource shall
require any such third party to comply with ISSC's reasonable requirements
regarding operations, confidentiality and security in accordance with the
Procedures Manual. Unisource shall receive a XXXX from ISSC for any XXXX XXXX to
ISSC resulting from the XXXX of a XXXX by a XXXX.
ARTICLE 12. HUMAN RESOURCES.
- ---------- ---------------
12.01 Affected Employees. ISSC or IBM Canada shall extend an offer
------------------
of employment to those Unisource employees set forth in Schedule O (the
----------
"Affected Employees") with an employment start date (the "Start Date") of not
------------------ ----------
later than January 17, 1994.
12.02 Hiring Requirements. ISSC or IBM Canada shall hire those
-------------------
Affected Employees receiving offers who:
<PAGE>
45
(1) are employed by Unisource and have not been reassigned to an out-of-
scope position within Unisource as of the date the offer is made;
(2) meet ISSC's customary pre-employment screening procedures for health,
drug and background criteria or IBM Canada's customary pre-employment
screening procedures;
(3) accept the offer of employment from ISSC or IBM Canada within five
business days from the date the offer is made; and
(4) if requested by Unisource, sign a release substantially in the form
set forth in Schedule X ((1) through (4) collectively, the "XXXX
XXXX").
ISSC or IBM Canada shall make hiring decisions regarding the Affected Employees
based on the XXXX XXXX. ISSC or IBM Canada shall be solely responsible for
making such hiring decisions, subject to the provisions of this Section 12.02.
-------------
Those Affected Employees not receiving a final employment offer or who decline a
final employment offer from ISSC or IBM Canada shall remain the responsibility
of Unisource.
12.03 Compensation. Each offer of employment to an Affected Employee
------------
shall include an initial base salary of XXXX XXXX XXXX the XXXX XXXX that XXXX
such XXXX XXXX XXXX from XXXX XXXX of the XXXX XXXX. The Affected Employees'
XXXX XXXX as of the Agreement Date are set forth in XXXX. In addition to XXXX of
such XXXX, ISSC and IBM Canada, as appropriate, shall XXXX up to
<PAGE>
46
XXXX in the XXXX (the "XXXX")to the XXXX XXXX in XXXX as XXXX for XXXX,
according to ISSC or IBM Canada's normal XXXX and XXXX XXXX for services
performed in the Current Environment. ISSC's and IBM Canada's obligation to XXXX
from the XXXX to an XXXX XXXX XXXX shall XXXX upon the XXXX XXXX XXXX for such
XXXX Unisource Service Location. Unisource shall receive a XXXX from ISSC for
the XXXX of XXXX unused XXXX of the XXXX XXXX. ISSC or IBM Canada, as
appropriate, shall offer XXXX to the Affected Employees for positions
comparable, with some exceptions in XXXX and XXXX positions, to the positions in
which such Affected Employees are employed as of the Agreement Date. Each offer
to an Affected Employee shall include the XXXX XXXX XXXX to similarly situated
ISSC or IBM Canada employees; provided, however, that the Affected Employees'
tenure with Unisource as set forth in Schedule O shall be added to such
----------
employees' length-of-service with (1) ISSC when calculating (a) vacation
eligibility and (b) vesting in ISSC's pension plan and (2) IBM Canada when
calculating (i) vacation eligibility, (ii) XXXX and (iii) vesting in IBM Canada
pension plan. While the Affected Employees' tenure with Unisource as set forth
in Schedule O shall be added to such employees' length-of-service with ISSC
----------
or IBM Canada when calculating vesting in ISSC's or IBM Canada's pension plans,
the actual pension benefits earned under ISSC's or IBM Canada's pension plan by
such
<PAGE>
47
employees shall be determined solely by the Affected Employees length-of-service
with ISSC or IBM Canada.
12.04 Responsibilities. Prior to the applicable Start Dates and
----------------
subject to Section 12.05, (1) Unisource shall be responsible for staffing of the
-------------
Unisource Service Locations and (2) all Affected Employees shall perform their
duties under the direction and control of Unisource and shall be treated as
Unisource employees for all purposes throughout such period; provided, however,
that nothing herein shall be interpreted so as to relieve ISSC of its
obligations to provide the Services as of the Commencement Date.
12.05 Reassignment. Prior to the applicable Start Dates, Unisource
------------
shall review with and receive ISSC's or IBM Canada's concurrence before
reassigning any Affected Employees to out-of-scope positions within Unisource.
Replacements for the Affected Employees that are either reassigned within or
resign from Unisource prior to the applicable Start Dates shall be selected by
Unisource and approved by ISSC or IBM Canada, as appropriate.
12.06 XXXX Employment XXXX. Those XXXX XXXX XXXX by (1) ISSC shall
--------------------
be offered a XXXX XXXX XXXX of not XXXX than XXXX and (2) those XXXX XXXX by IBM
Canada shall be offered an XXXX of XXXX ((1) and (2) each, the "XXXX XXXX
---------
XXXX"); provided, however, that nothing herein shall limit ISSC's or IBM
- ----
Canada's XXXX to XXXX an XXXX XXXX for XXXX based on XXXX or XXXX XXXX or
<PAGE>
48
XXXX (the "XXXX"). IBM Canada's standard practices for XXXX of XXXX and XXXX, if
applicable, shall be used to determine if any XXXX are XXXX to IBM Canada XXXX.
Upon the applicable XXXX XXXX, ISSC or IBM Canada shall for XXXX of the XXXX
either:
(a) XXXX the XXXX XXXX without a pre-defined XXXX;
(b) XXXX the XXXX in XXXX or XXXX current XXXX for some defined XXXX of
XXXX; or
(c) XXXX the XXXX XXXX.
If ISSC or IBM Canada intends to XXXX (other than for the XXXX) any XXXX (i)
after the XXXX of the XXXX, or any XXXX thereto as specified in Section XXXX
------------
(b), and (ii) XXXX to or XXXX the XXXX for such XXXX Unisource XXXX, ISSC or IBM
- ---
Canada, as appropriate, shall XXXX such XXXX at least XXXX notice of such
intent.
12.07 ISSC XXXX XXXX. If an XXXX XXXX (1) does not, pursuant to
--------------
Section XXXX (a), XXXX an XXXX of XXXX with ISSC or (2) is XXXX (other
- ----------------
than for the XXXX) by ISSC (a) after the XXXX of the XXXX XXXX XXXX, or any
extension thereto as specified in Section XXXX(b), and (b) XXXX to or on the
---------------
XXXX XXXX XXXX for such XXXX XXXX Unisource
<PAGE>
49
XXXX XXXX, such XXXX shall, upon XXXX from XXXX, XXXX:
(i) a XXXX XXXX XXXX to XXXX of the XXXX XXXX XXXX for XXXX XXXX and
XXXX of XXXX with XXXX as set forth in Schedule X and XXXX;
----------
provided, however, that the XXXX XXXX XXXX pursuant to this Section
-------
12.07(i) shall not XXXX XXXX of such XXXX XXXX XXXX;
--------
(ii) a XXXX XXXX to the XXXX XXXX of the XXXX of XXXX the XXXX XXXX
then-current XXXX XXXX for a XXXX of XXXX equal to the XXXX of XXXX
as XXXX above in Section 12.07(i) ((i) and (ii) collectively, the
----------------
"ISSC XXXX XXXX"); and
---------------
(iii) upon XXXX a XXXX from XXXX XXXX XXXX of the XXXX XXX XXX the "ISSC
----
XXXX XXXX XXXX").
---------------
The ISSC XXXX and ISSC XXXX XXXX shall be considered as XXXX to the
XXXX for XXXX XXXX XXXX.
12.08 IBM Canada XXXX. If an XXXX XXXXX (1) does not, pursuant
---------------
to Section XXXX(a), accept an XXXX of XXXX with XXXX or (2) is XXXX (other
---------------
than for the XXXX) by XXXX (a) after the XXXX of the XXXX, or any XXXX thereto
as specified in Section XXXX(b), and (b) prior to or on
---------------
<PAGE>
50
the XXXX for such XXXX XXXX such XXXX shall, upon XXXX from XXXX XXXX, XXXX:
(i) a XXXX equal to (A) XXXX of the XXXX XXXX XXXX for XXXX XXXX and
XXXX XXXX XXXX of XXXX with XXXX as set forth in Schedule XXXX and
-------------
XXXX; provided, however, that the XXXX XXXX XXXX in this Section
-------
12.08(i)(A) shall XXXX XXXX XXXX of such XXXX, and (B) XXXX of the
-----------
XXXX; and
(ii) a XXXX XXXX XXXX to the XXXX of XXXX the Affected Employee's
current XXXX XXXX for a XXXX of XXXX XXXX to the XXXX of the XXXX
XXXX provided in Section 12.08(i)(A) ((i) and (ii) collectively,
-------------------
the "XXXX").
----
(The ISSC XXXX XXXX, ISSC XXXX XXXX and the XXXX collectively, the "XXXX".) The
----
XXXX XXXX shall be treated as permitted under the XXXX of XXXX at the XXXX of
the XXXX.
12.09 XXXX and XXXX Responsibilities. Unisource shall have XXXX XXXX
-------------------------------
for the Separation Allowances for the period specified in Section 12.07 and
-------------
Section 12.08. ISSC or IBM Canada shall XXXX, XXXX and XXXX to the XXXX XXXX
- -------------
XXXX the XXXX
<PAGE>
51
XXXX and XXXX XXXX for the XXXX XXXX XXXX on a XXXX.
12.10 Termination of Responsibility. Unisource's XXXX XXXX for the
-----------------------------
XXXX XXXX and ISSC's and IBM's Canada's obligation to provide at least XXXX XXXX
notice prior to XXXX of an Affected Employee pursuant to Section 12.06 shall (1)
-------------
be XXXX by ISSC or IBM Canada, as appropriate, on a XXXX XXXX XXXX by XXXX XXXX
XXXX XXXX and (2) XXXX in respect of the XXXX XXXX XXXX as of the XXXX XXXX for
each such XXXX Unisource XXXX XXXX.
12.11 Human Resource Representative. The ISSC representative
-----------------------------
responsible for the transition of the Affected Employees to ISSC and IBM Canada
is Joe Lockaby (the "HR Representative"). Prior to the Start Date, ISSC or IBM
-----------------
Canada shall not replace or reassign the HR Representative without Unisource's
consent except by reason of death, disability or termination.
12.12 Affected Employee Replacements. Except as described in Section
------------------------------ -------
3.14, ISSC shall be responsible for (1) filling the positions of any Affected
- ----
Employees not hired by ISSC pursuant to this Article 12 and (2) replacements for
----------
the Affected Employees ((1) and (2) collectively, the "Affected Employee
-----------------
Replacements"; each, an "Affected Employee Replacement") until the Location
- ------------ -----------------------------
Completion Date of the Unisource Service Location for any such Affected Employee
Replacement. ISSC shall be
<PAGE>
52
XXXX for the XXXX and XXXX for the XXXX XXXX XXXX. The completion and severance
allowances for the Affected Employee Replacements shall be XXXX, and XXXX in the
XXXX as, the ISSC XXXX and the ISSC XXXX or the XXXX XXXX as applicable.
Unisource shall receive a XXXX from XXXX XXXX to the XXXX of any XXXX included
in the XXXX XXXX XXXX for any XXXX of the XXXX XXXX that are not XXXX within
XXXX of the XXXX such XXXX became XXXX until any such XXXX is XXXX.
ARTICLE 13. PROJECT TEAM.
- ---------- ------------
13.01 Joint Advisory Committee. By January 31, 1994, Unisource and
------------------------
ISSC shall each appoint four members of its management staff, including the ISSC
Project Executive, the Senior Unisource IS Executive and the Unisource IS
Executive to serve on a joint advisory committee (the "Joint Advisory
--------------
Committee"). Unisource shall designate one of its four members on the Joint
Advisory Committee to act as the chairman of the Joint Advisory Committee. The
Joint Advisory Committee shall be authorized and responsible for (1) generally
overseeing the performance of this Agreement, (2) conducting quarterly reviews
of the progress of the Projects, (3) conducting annual reviews of (a) the
operating and strategic plans prepared by the ISSC Project Executive and (b)
performance objectives and measurements for the subsequent Contract Year and (4)
resolving disputes between Unisource and ISSC.
<PAGE>
53
13.02 ISSC Project Executive. ISSC shall (1) appoint an individual
----------------------
who from the Commencement Date shall be in charge of implementing the Services
on a full-time basis and (2) replace this individual when required or permitted
pursuant to this Section 13.02 (each such individual, an "ISSC Project
------------- ------------
Executive"). ISSC's appointment of any ISSC Project Executive shall be subject
- ---------
to Unisource's consent. The initial ISSC Project Executive shall be Sean Ryan.
ISSC shall not XXXX or XXXX an ISSC Project Executive during the XXXX XXXX XXXX
of XXXX or XXXX XXXX as the ISSC XXXX XXXX unless (1) XXXX XXXX to such XXXX or
XXXX or (2) the ISSC XXXX (a) XXXX XXXX from ISSC, (b) is XXXX by XXXX for
(i) XXXX (e.g., XXXX, XXXX XXXX, XXXX) or (ii) XXXX XXXX to XXXX XXXX or XXXX
----
XXXX and XXXX pursuant to this Agreement in XXXX XXXX XXXX or (c) is XXXX to
XXXX due to XXXX or XXXX XXXX or XXXX ((1) and (2) in respect of the ISSC XXXX
and any ISSC XXXX collectively, the "XXXX; each, a "XXXX"). In the event that
---- ----
Unisource notifies ISSC that Unisource wishes ISSC to replace the ISSC Project
Executive, Unisource and ISSC shall meet to attempt to resolve Unisource's
concerns. If Unisource and ISSC are not able to resolve Unisource's concerns
within XXXX days (or such other time period as the Parties may agree) after
Unisource's notice to ISSC that Unisource wishes to replace the ISSC Project
Executive, XXXX shall XXXX the XXXX XXXX with an XXXX XXXX to XXXX. Except as
<PAGE>
54
may result from XXXX or XXXX or as may be agreed to by Unisource, no more than
XXXX shall XXXX as the ISSC XXXX during the Term.
13.03 ISSC XXXX XXXX. As of the Commencement Date and from time to
---------------
time as Unisource and ISSC may agree during the Term, Unisource and ISSC shall
designate XXXX XXXX of ISSC or ISSC's XXXX as XXXX XXXX (collectively, the "ISSC
------------------- ----
XXXX"; each, an "ISSC XXXX XXXX" who shall be XXXX to the Unisource XXXX XXXX.
- ---- --------------
The initial ISSC XXXX XXXX are those XXXX listed in Schedule S. Except for a
----------
XXXX or XXXX of the ISSC XXXX due to the occurrence of a XXXX XXXX, ISSC shall
(1) not XXXX or XXXX any ISSC XXXX (a) designated as an ISSC XXXX in respect of
the Current Environment until the XXXX XXXX XXXX or (b) any other ISSC XXXX for
XXXX after XXXX or XXXX XXXX as an ISSC XXXX XXXX (2) not XXXX or XXXX any ISSC
XXXX if such XXXX or XXXX would XXXX XXXX Unisource's XXXX and (3) only XXXX or
XXXX an ISSC XXXX upon such notice to Unisource as may be practicable under the
circumstances. Except as may result from XXXX or XXXX, or as may be XXXX to by
XXXX no more than (i) XXXX XXXX in the XXXX and (ii) XXXX XXXX in the New
Environment shall serve in any XXXX identified in Schedule S during the Term.
----------
13.04 Unisource IS Executives. During the Term, Unisource shall
-----------------------
maintain a designated representative (the "Senior
------
<PAGE>
55
Unisource IS Executive") who will be (1) a senior manager of Unisource and (2)
- ----------------------
authorized to act as the primary point of contact for ISSC in dealing with major
strategic issues and overall management of Unisource's obligations under this
Agreement. The initial Senior Unisource IS Executive shall be John J. McKiernan.
In addition, during the Term, Unisource shall maintain a designated
representative (the "Unisource IS Executive") who will be authorized to act as
----------------------
the primary point of contact for ISSC in dealing with day-to-day decisions and
strategies. The initial Unisource IS Executive shall be Richard J. Hrapczynski.
13.05 Unisource XXXX XXXXX. Certain XXXX of Unisource whom
--------------------
Unisource and ISSC consider important to the operation of the Current
Environment are designated in Schedule S (collectively, the "Unisource XXXX
---------- --------------
XXXX" each, a "XXXX XXXX XXXX"). Unisource shall use reasonable efforts
- ---- --------------
to make the Unisource XXXX XXXX to ISSC until the XXXX XXXX XXXX for such
Unisource XXXX Unisource Service Location. Nothing in this Agreement shall
prevent Unisource from XXXX the XXXX XXXX XXXX pursuant to Unisource's normal
XXXX XXXX. If XXXX XXXX or XXXX a Unisource XXXX prior to the Location XXXX XXXX
for such Unisource XXXX XXXX Unisource Service Location (except for the Senior
Unisource XXXX XXXX and Unisource XXXX), Unisource shall provide an XXXX with
XXXX XXXX to XXXX such Unisource XXXX XXXX until the applicable Location XXXX
XXXX.
<PAGE>
56
13.06 Project Staff. Upon the Migration Completion Date, ISSC shall
-------------
implement the organizational structure in respect of ISSC's project staff agreed
upon by Unisource and ISSC. ISSC shall provide Unisource with notice of any
changes to such project staff. ISSC shall appoint sufficient staff of suitable
training and skills to provide the Services.
13.07 Subcontractors. Except with respect to application
--------------
development, data communications and the Projects, ISSC may subcontract any of
the Services without Unisource's consent. Unisource hereby consents to ISSC's
use of Ernst & Young, DAI, Robocom Systems Inc. and Routing Technology Software,
Inc. as subcontractors under this Agreement to perform the particular services
contemplated by this Agreement as being provided by such subcontractors.
13.08 XXXX Except as approved by Unisource, ISSC shall XXXX the
----
ISSC XXXX XXXX or any ISSC XXXX, and ISSC shall cause XXXX and XXXX as
subcontractors under this Agreement to XXXX any XXXX XXXX of such entity, for
XXXX from the date such ISSC XXXX or such ISSC XXXX was XXXX from the project
staff from XXXX for (1) the XXXX or (2) the XXXX or XXXX by (a) XXXX (including
XXXX XXXX XXXX), (b) XXXX (including XXXX and (c) XXXX (including XXXX) ((1) and
(2) collectively, the "XXXX ). ISSC XXXX
----
<PAGE>
57
into a XXXX XXXX or XXXX XXXX services arrangement with any of the XXXX XXXX.
13.09 Confidentiality. Each of ISSC and IBM Canada, as appropriate,
---------------
shall require all members of the project staff to sign a confidentiality
agreement substantially in the form set forth in Schedule Z. Unisource shall be
----------
a third party beneficiary of any such confidentiality agreement.
ARTICLE 14. ERNST & YOUNG.
- ---------- -------------
14.01 Subcontracting Relationship. ISSC shall enter into a
---------------------------
subcontracting relationship with Ernst & Young which is at least coterminous
with this Agreement.
14.02 XXXX or XXXX. Except as expressly set forth in
------------
this Section 14.02, ISSC may not XXXX or XXXX Ernst & Young XXXX
-------------
XXXX XXXX. If ISSC in good faith determines that XXXX XXXX XXXX is
XXXX to XXXX its XXXX XXXX under its XXXX with XXXX XXXX XXXX XXXX to XXXX
XXXX XXXX XXXX, XXXX shall XXXX to XXXX a XXXX XXXX the XXXX of XXXX XXXX XXXX
XXXX. XXXX shall XXXX the XXXX and if XXXX, in XXXX reasonable XXXX, XXXX
that XXXX XXXX XXXX is not XXXX XXXX XXXX XXXX under XXXX XXXX with XXXX, XXXX
may XXXX and, upon XXXX XXXX, replace XXXX XXXX XXXX as a XXXX under this
XXXX. If XXXX XXXX in its reasonable XXXX that XXXX XXXX XXXX is XXXX its
XXXX XXXX under XXXX XXXX with XXXX and XXXX XXXX this XXXX, XXXX may upon
XXXX to XXXX XXXX the XXXX to the Joint
<PAGE>
58
Advisory Committee pursuant to Section 25.01. If it is determined that XXXX
------------- ----
has XXXX to XXXX XXXX XXXX XXXX under XXXX XXXX with XXXX, XXXX may XXXX XXXX
and XXXX XXXX with a XXXX agreed upon by both Parties. If it is XXXX that XXXX
XXXX has XXXX XXXX XXXX XXXX under XXXX XXXX with XXXX and XXXX its XXXX with
XXXX without XXXX XXXX, XXXX may XXXX this XXXX without XXXX of a XXXX XXXX.
14.03 Ernst & Young Project Executive. An individual from Ernst &
-------------------------------
Young shall be designated who from the Commencement Date shall serve as
Unisource's primary contact (the "E&Y Project Executive"). The initial E&Y
---------------------
Project Executive shall be Tony Madrigale. The E&Y Project Executive shall be
considered an ISSC Key Employee for the purposes of Section 13.03.
-------------
14.04 Non-Compete. ISSC shall cause Ernst & Young as a subcontractor
-----------
under this Agreement XXXX to XXXX into an XXXX with any of the XXXX XXXX
pursuant to which Ernst & Young may XXXX XXXX XXXX and XXXX XXXX, XXXX
organizational XXXX, organizational XXXX or XXXX to XXXX of the XXXX.
14.05 Terms and Conditions. As a requirement of ISSC's contractual
--------------------
relationship with Ernst & Young, ISSC shall expressly cause Ernst & Young to be
bound by the following provisions of this Agreement: this Article XXXX, Article
------------ -------
XXXX and
- ----
<PAGE>
59
Article XXXX; provided, however, that the obligations of Section XXXX shall not
- ------------ ------------
XXXX to XXXX Ernst & Young is XXXX to XXXX by XXXX XXXX in its XXXX as auditor
of Unisource.
ARTICLE 15. MANAGEMENT AND CONTROL.
- ---------- ----------------------
15.01 Procedures Manual. Prior to the commencement of the Operation
-----------------
Readiness Tests in respect of the first Unisource Service Location migrated to
the XXXX XXXX XXXX and as part of the Systems Operations Services, ISSC shall,
in the form and scope agreed upon by Unisource and ISSC, deliver to Unisource,
for Unisource's approval, a management procedures manual substantially in the
form set forth in Schedule P (the "Procedures Manual"). ISSC shall
---------- -----------------
periodically update in accordance with Schedule E, and provide to Unisource,
----------
the Procedures Manual to reflect any changes in the operation or procedures
described therein within a reasonable time after such changes were made.
15.02 Change Control Procedures. Prior to the commencement of the
-------------------------
Operation Readiness Tests in respect of the first Unisource Service Location
migrated to the XXXX XXXX XXXX and as part of the Systems Operations Services,
ISSC shall deliver to Unisource, for Unisource's approval, a written description
of the change control procedures described in Schedule H and set forth in the
----------
Procedures Manual (the "Change Control Procedures"). All changes to the
-------------------------
Systems that would materially alter the functionality or technical environment
of the Systems and all material changes to the Projects (each, a
<PAGE>
60
"Change"; collectively, "Changes"), shall be made pursuant to the Change Control
------ -------
Procedures. No Change shall be implemented without Unisource's approval except
as may be necessary on a temporary basis to maintain the continuity of the
Services. ISSC shall (1) schedule all projects and Changes so as not to
unreasonably interrupt Unisource's business operations, (2) prepare and deliver
to Unisource each month a rolling schedule for ongoing and planned Changes for
the next three-month period, (3) monitor the status of Changes against the
applicable schedule and (4) document and provide to Unisource notification
(which may be given orally provided that such oral notice is confirmed in
writing to Unisource within five business days) of all Changes performed on a
temporary basis to maintain the continuity of the Services no later than the
next business day after the Change is made. The Change Control Procedures shall
be included in the Procedures Manual.
15.03 User Procedures Manuals. Prior to the commencement of the
-----------------------
Operation Readiness Test in respect of the first Unisource Service Location
migrated to the Restructured Business Platform and as part of the Systems
Operations Services, ISSC shall deliver to Unisource, for Unisource's approval,
user procedures manuals and related documentation in respect of the XXXX
XXXX XXXX (the "User Procedures Manuals"). In consideration of the
-----------------------
payments made pursuant to Section 21.01, ISSC hereby assigns, and shall cause
-------------
its subcontractors, employees and agents to assign, to Unisource all rights in
and interests to the User Procedures Manuals.
<PAGE>
61
ARTICLE 16. SOFTWARE AND PROPRIETARY RIGHTS.
- ---------- -------------------------------
16.01 Unisource Software. Subject to Article 18, Unisource hereby
------------------ ----------
grants to ISSC solely to provide the Services a non-exclusive, non-transferable
right to have access to and (1) operate (a) the Unisource proprietary software
operated by the Affected Employees prior to the Commencement Date, including the
proprietary software listed in Schedule A and Schedule B, and (b), to the extent
---------- ----------
agreed upon by the Parties, any Unisource proprietary software acquired by
Unisource or on behalf of Unisource in Unisource's name after the Commencement
Date for use in connection with the Services ((a) and (b) collectively, the
"Unisource Proprietary Software"), (2) operate (i) the software licensed or
------------------------------
leased by Unisource from a third party which was operated by the Affected
Employees prior to the Commencement Date, including the licensed or leased
software listed in Schedule A or Schedule B, and (ii), to the extent agreed upon
---------- ----------
by the Parties, any software licensed or leased by Unisource from a third party
after the Commencement Date ((i) and (ii) collectively, the "Unisource Third
---------------
Party Software") and (3) use any related documentation in Unisource's possession
- --------------
on or after the Commencement Date ((1), (2) and (3) collectively, the "Unisource
---------
Software"). ISSC may sublicense to ISSC's subcontractors and agents (the "ISSC
- -------- ----
Agents") the right to have access to, operate and use the Unisource Software to
- ------
the extent contemplated by this Agreement and as may otherwise be agreed to by
the Parties. Upon expiration of this Agreement or termination of this Agreement
for any reason, (x) the rights granted to ISSC
<PAGE>
62
and the ISSC Agents in this Section 16.01 shall immediately revert to Unisource
-------------
and (y) ISSC shall (A) deliver to Unisource, at no cost to Unisource, a current
copy of all of the Unisource Software in the form in use as of the date of such
expiration or termination and (B) destroy or erase all other copies of the
Unisource Software in ISSC's or the ISSC Agents' possession.
16.02 Developed Software. (1) Any (a) enhancements or modifications
------------------
to the Unisource Software shall be and shall remain the exclusive property of
Unisource or its third party licensor and (b) software, including enhancements
and modifications, developed by ISSC or the ISSC Agents pursuant to this
Agreement, except for the enhancement and modifications described in (i) Section
-------
16.02(2) and (ii) the DAI License Agreement as owned by DAI, shall be and shall
- --------
remain the exclusive property of Unisource ((a) and (b) collectively, the
"Developed Software"). (2) Except in respect of enhancements or modifications
- -------------------
relating to the provision or distribution of printing papers, packaging
equipment and packaging films, industrial papers or janitorial or maintenance
supplies, Unisource shall have no proprietary rights to any enhancements or
modifications to Ernst & Young's pre-existing software tools, methodologies,
models, or related documentation. (3) In consideration of the payments made
pursuant to Section 21.01, ISSC hereby assigns, and shall cause its employees
-------------
and the ISSC Agents to assign, to Unisource all rights in and interests to the
Developed Software. (4) Unisource hereby grants to ISSC a non-exclusive, non-
transferable right to use the Developed Software
<PAGE>
63
solely to provide the Services. (5) Upon expiration of this Agreement or
termination of this Agreement for any reason, the rights granted to ISSC and the
ISSC Agents in this Section 16.02 shall immediately revert to Unisource and ISSC
-------------
shall (x) deliver to Unisource, at no cost to Unisource, a current copy of all
Developed Software (including source code) in the form in use as of the date of
such expiration or termination and (y) destroy or erase all other copies of the
Developed Software in ISSC's or the ISSC Agent's possession.
16.03 ISSC Software. All software and related documentation (1) (a)
-------------
owned by ISSC or its affiliates prior to the Commencement Date or of which ISSC
or its affiliates acquire ownership of after the Commencement Date, which is
used in connection with the Services and (b) developed by ISSC after the
Commencement Date which is not Developed Software ((a) and (b) collectively, the
"ISSC Proprietary Software") and (2) licensed or leased from a third party by
-------------------------
ISSC prior to or after the Commencement Date which will be used in connection
with the Services (the "ISSC Third Party Software") ((1) and (2) collectively,
-------------------------
the "ISSC Software") is, or will be, and shall remain, the exclusive property of
-------------
ISSC or its third-party licensor and Unisource shall have no rights or interests
to the ISSC Software except as described in this Section 16.03 and Section
------------- -------
26.07. ISSC shall make the ISSC Software available to Unisource during the
- -----
Term for use in connection with the Services at no additional cost to Unisource
other than as expressly provided in this Agreement. Subject to Section 26.07
-------------
with
<PAGE>
64
respect to ISSC Third Party Software, ISSC shall deliver to Unisource a copy of,
and hereby grants, or shall cause to be granted, to Unisource a perpetual (or,
if perpetual is not commercially available, a commercially reasonable term),
non-exclusive, non-transferable license to use, sublicense and to permit a third
party to use solely in connection with providing services to Unisource the ISSC
Software upon the expiration or termination of this Agreement.
16.04 Changes and Upgrades to Software. Except as may be approved by
--------------------------------
Unisource, ISSC shall not make any changes or modifications to the Unisource
Software, the Developed Software and the ISSC Software (collectively, the
"Software") that would adversely alter the functionality of the Software,
--------
degrade the performance of the Software or affect the day-to-day operations of
Unisource's business. In addition, ISSC shall pay the cost of any modification
or enhancement to, or substitution for, the Unisource Software, the Developed
Software and any other equipment or software used in connection with the
Services necessitated by (1) unauthorized changes to the Unisource Software or
the Developed Software or (2) changes to the ISSC Software (except as Unisource
may request or as may result from the implementation of a New Service) or the
operating environment of the ISSC Software.
16.05 Access to Case Tools and Methodologies. ISSC shall provide to
--------------------------------------
Unisource and Unisource's agents, upon Unisource's request, access to the
Software; provided, however, that any non-Unisource personnel provided access to
case tools,
<PAGE>
65
methodologies, testing tools, EDI tools, systems management and performance
tools and Ernst and Young's Navigator Systems Services(SM) methodology software
shall execute ISSC's or its subcontractors' standard third-party consultant
confidentiality agreement.
ARTICLE 17. XXXX.
- ----------
17.01 Agent and Subcontractor. Unisource hereby appoints ISSC as
-----------------------
Unisource's agent as of the Agreement Date, and ISSC hereby accepts such agency
as of the Agreement Date, solely for the purpose of managing and administering
the XXXX License Agreement. Unisource hereby consents to ISSC's use of XXXX as a
subcontractor for the purposes of providing maintenance and development services
under the XXXX Maintenance Agreement and the XXXX Services Agreement.
17.02 Responsibility. ISSC shall assume all responsibility for the
--------------
functionality, delivery, implementation and performance of the DAI Software upon
(1) delivery of version 8.0 of the DAI Software, (2) the successful completion
of the stress test described in Schedule N and (3) the comparison of the
----------
Unisource requirements to the functionality of the XXXX Software ((1), (2) and
(3) collectively, the "XXXX Prerequisites"). In the event the XXXX Prerequisites
------------------
are not achieved, the Joint Advisory Committee shall review the direction and
feasibility of the XXXX XXXX XXXX and, as appropriate, amend this Agreement.
17.03 Proprietary Rights. The DAI License Agreement shall provide
------------------
that all enhancements to and modifications of the
<PAGE>
66
DAI Software performed by ISSC, the ISSC Agents, Unisource or its agents or
subcontractors after the expiration or termination of the DAI Maintenance
Agreement for any reason shall be owned by Unisource. ISSC hereby assigns, and
shall cause its employees and the ISSC Agents to assign, to Unisource all rights
or enhancements to and modification of the XXXX Software performed by ISSC, its
employees or the ISSC Agents after the expiration or termination of the XXXX
Maintenance Agreement for any reason.
17.04 Assignment. ISSC shall cause the XXXX Maintenance Agreement
----------
and the XXXX Services Agreement to be assignable to Unisource or its designee
without any assignment or transfer charge. Upon the expiration of this Agreement
or termination of this Agreement for any reason, ISSC shall assign to Unisource
or its designee the XXXX Maintenance Agreement and the XXXX Services Agreement.
ARTICLE 18. DATA AND REPORTS.
- ---------- ----------------
18.01 Ownership of Unisource Data. All data and information
---------------------------
submitted to ISSC by Unisource in connection with the Services (the "Unisource
---------
Data") is and shall remain the property of Unisource. The Unisource Data shall
- ----
not be (1) used by ISSC other than in connection with providing the Services,
(2) disclosed, sold, assigned, leased or otherwise provided to third parties by
ISSC or (3) commercially exploited by or on behalf of ISSC, its employees or
agents.
18.02 Correction of Errors. XXXX XXXX XXXX XXXX, ISSC shall promptly
--------------------
correct any errors or inaccuracies in the Unisource Data caused by ISSC. XXXX
XXXX XXXX, ISSC
<PAGE>
67
shall promptly correct any other errors or inaccuracies in the Unisource Data.
Unisource is responsible for (1) the accuracy and completeness of the Unisource
Data submitted by Unisource to ISSC and (2) any errors in and with respect to
data obtained from ISSC because of any inaccurate or incomplete Unisource Data.
18.03 Return of Data. Upon request by Unisource at any time, ISSC
--------------
shall (1) at Unisource's expense, promptly return to Unisource, in the format
and on the media requested by Unisource, all Unisource Data and (2) erase or
destroy all Unisource Data in ISSC's possession. Any archival tapes containing
Unisource Data shall be used solely for back-up purposes.
18.04 Reports. Commencing as of the Commencement Date, ISSC shall
-------
provide to Unisource those management and production reports (1) prepared by
Unisource as of the Commencement Date and (2) described in Schedule Y ((1) and
----------
(2) collectively, the "Reports"). ISSC shall provide Unisource with such
-------
documentation and information as may be requested by Unisource from time to time
in order to verify the accuracy of the Reports.
ARTICLE 19. CONSENTS.
- ---------- --------
19.01 Unisource Consents. All consents (except for consents relating
------------------
to hardware changes in the Current Environment requested by ISSC which are not
due to capacity changes) necessary to allow ISSC and the ISSC Agents as of the
Commencement Date to have access to and operate in accordance with Section 16.01
-------------
the Unisource Software in the Current
<PAGE>
68
Environment, as such Current Environment is currently configured or as
reconfigured at Unisource's direction, until the Migration Completion Date (the
"Unisource Consents") shall be obtained by Unisource with ISSC providing such
------------------
assistance as may be requested by Unisource. Unisource shall XXXX any XXXX of
obtaining the XXXX XXXX, except as may relate to XXXX XXXX XXXX by XXXX, XXXX
("XXXX") or an XXXX or XXXX of XXXX or XXXX. In addition,
----
Unisource shall be XXXX for any XXXX (1) attributable to XXXX by XXXX arising
XXXX to the XXXX (2) relating to XXXX in the XXXX Environment resulting from the
need for XXXX XXXX requested or otherwise required by Unisource and (3) of
obtaining any XXXX XXXX to XXXX XXXX to XXXX XXXX to provide the Services any
data processing assets leased or owned by Unisource in the New Environment as
may be agreed upon by the Parties.
19.02 ISSC Consents. All consents necessary to allow (1) ISSC to
-------------
provide the Services and to allow the ISSC Agents to perform their obligations
under this Agreement in the New Environment (except for consents to allow ISSC
to use solely to provide the Services any data processing assets leased or owned
by Unisource in the New Environment as may be agreed upon by the Parties), (2)
ISSC and the ISSC Agents to provide the Services in the Current Environment
except as provided for in Section 19.01, (3) ISSC and the ISSC Agents to use (a)
-------------
and assign to Unisource the Developed Software, (b) the ISSC Software, (c) any
data processing assets leased or owned by ISSC and (d) any third-
<PAGE>
69
party services and (4) Unisource, its subcontractors and agents to continue to
use the Developed Software, the ISSC Software, any assets leased or owned by
ISSC and the ISSC Agents that are used by ISSC and the ISSC Agents to provide
the Services and any third-party services retained by ISSC to provide the
Services upon the expiration or termination of this Agreement ((1) through (4)
collectively, the "ISSC Consents") shall be obtained by ISSC with Unisource
-------------
providing such assistance as may be requested by ISSC. ISSC shall XXXX any XXXX
(i) of obtaining the ISSC Consents, (ii) XXXX by XXXX and XXXX (except for XXXX
XXXX to XXXX by XXXX against XXXX arising XXXX to the XXXX) and (iii) relating
to XXXX XXXX in the XXXX requested by XXXX which are not due to XXXX.
ARTICLE 20. CONTINUED PROVISION OF SERVICES.
- ---------- -------------------------------
20.01 Disaster Recovery Plan in the Current Environment. In the
-------------------------------------------------
Current Environment and as part of the Current Services, ISSC shall maintain,
and implement in the event of a disaster, the on-site and off-site disaster
recovery procedures in effect at the Unisource Service Locations as of the
Commencement Date.
20.02 Disaster Recovery Plan in the New Environment. In the New
---------------------------------------------
Environment and as part of the New Environment Services, ISSC shall (1)
implement ISSC's business recovery services (the "Disaster Recovery Plan"), (2)
----------------------
periodically update and test the operability of the Disaster Recovery Plan in
effect at that time, (3) upon Unisource's request, certify to Unisource
<PAGE>
70
that the Disaster Recovery Plan is fully operational at least once every
Contract Year, (4) implement the Disaster Recovery Plan upon the occurrence of a
disaster (a) at the ISSC Data Center, or other ISSC data center or location from
which the Services are provided, or (b) otherwise affecting the provisions or
receipt of the Services (a "Disaster"), (5) consult with Unisource regarding the
--------
priority to be given to the Services during the pendency of a Disaster and (6)
not be excused from implementing the Disaster Recovery Plan as a result of a
Force Majeure Event. ISSC shall restore (i) Customer Service, including order
management, order status, inventory availability and pricing, at all Unisource
Service Locations, (ii) the ability to generate picking tags at all Unisource
Service Locations and (iii) the Data Network in respect of all Unisource Service
Locations ((i) through (iii) collectively, the "Critical Services") within XXXX
-----------------
of the occurrence of a Disaster. For the purposes of this Section 20.02, ISSC
-------------
shall have restored the relevant services when ISSC is able to send, receive
and process data for all of the Unisource Service Locations. ISSC may, upon
notice to Unisource, modify or change the Disaster Recovery Plan at any time;
provided, however, that such change or modification shall not adversely affect
ISSC's ability to restore the Services.
20.03 Force Majeure. Neither Unisource nor ISSC shall be liable for
-------------
any delay in the performance of its obligations pursuant to this Agreement (1)
provided that such delay (a) could not have been prevented by reasonable
precautions and (b) cannot
<PAGE>
71
reasonably be circumvented by the non-performing Party through the use of
alternate sources, work-around plans or other means and (2) if and to the extent
such 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, or any other similar cause beyond the reasonable control of
such Party (each, a "Force Majeure Event"). Upon the occurrence of a Force
-------------------
Majeure Event, the non-performing Party shall be excused from any further
performance of those of its obligations pursuant to this Agreement affected by
the Force Majeure Event for as long as (a) such Force Majeure Event
continues and (b) such Party continues to use best efforts to recommence
performance whenever and to whatever extent possible without delay. The Party
delayed by a Force Majeure Event to such Party shall immediately notify the
other Party of the occurrence of a Force Majeure Event and describe in
reasonable detail the nature of the Force Majeure Event. If any Force Majeure
Event prevents, hinders, or delays performance of the Critical Services for more
than XXXX, Unisource may upon notice to ISSC cease payment of the Annual
Services Charges until the recovery of the Critical Services has been completed
and procure the Services from an alternate source at reasonable charges and ISSC
shall be liable to Unisource for the amount of Unisource's commercially
reasonable payments to such alternate source that are in excess of ISSC's
charges under this Agreement for services substantially similar to the Services
or commercially reasonable terms and conditions. If any Force
<PAGE>
72
Majeure Event prevents, hinders or delays ISSC's performance of the Critical
Services for more than XXXX, Unisource may terminate this Agreement as of
the date specified by Unisource without regard to Section 26.04. The occurrence
-------------
of a Force Majeure Event does not limit or otherwise affect ISSC's obligation to
provide either normal recovery procedures or any other Disaster Recovery
Services as described in Section 20.01 and Section 20.02. The occurrence of a
------------- -------------
Force Majeure Event in respect of another customer of ISSC shall not constitute
a Force Majeure Event under this Agreement.
ARTICLE 21. PAYMENTS TO ISSC.
- ---------- ----------------
21.01 Annual Services Charges. In consideration of ISSC providing
-----------------------
the Systems Operations Services, Unisource shall pay to ISSC the annual services
charges set forth in the Supplement (the "Annual Services Charges"; prorated
---------- -----------------------
monthly each, the "Monthly Services Charges"). The Annual Services Charges
------------------------
include all fees and expenses incurred by ISSC in connection with this Agreement
prior to the Agreement Date.
21.02 XXXX Charges and XXXX Charges. In consideration of ISSC
-----------------------------
providing the XXXX XXXX, Unisource shall pay to ISSC the XXXX Charges
and the XXXX Charges.
21.03 Payments in Canada. All invoices submitted by IBM Canada to
------------------
Unisource shall specify those services provided in Canada by IBM Canada to
Unisource Canada, Inc. and all related charges by IBM Canada shall be in
Canadian dollars.
21.04 Additional Resource Charges and Reduced Resource Charges. At
--------------------------------------------------------
the end of every calendar month during the Term, ISSC shall review the amount of
the Services used by Unisource
<PAGE>
73
during the preceding calendar month in connection with the services described in
Schedule J. In the event Unisource's use of such Services (1) increased above
- ----------
the resource baselines set forth in the Supplement, Unisource shall pay to ISSC,
----------
in addition to the Annual Services Charges, the resource charges in the amounts
specified in Schedule J (the "ARCs") in connection with the services set forth
---------- ----
in Schedule J or (2) decreased below the resource baselines set forth in the
----------
Supplement in connection with the services set forth in Schedule J, ISSC shall
- ---------- ----------
credit Unisource the reduced resource charges specified in Schedule J (the
----------
"RRCs").
----
21.05 New Services Fees. In consideration of ISSC providing the New
-----------------
Services, Unisource shall pay the New Services Fees in the manner agreed upon by
Unisource and ISSC in accordance with Section 11.01.
-------------
21.06 XXXX XXXX in a XXXX Environment. ISSC shall, at least once
-------------------------------
during each Contract Year during which Unisource's information technology
operations are processed in a XXXX and a XXXX environment XXXX XXXX to XXXX,
review with the Joint Advisory Committee XXXX in the XXXX XXXX XXXX during such
Contract Year. If the Joint Advisory Committee determines that the Parties XXXX
XXXX XXXX XXXX as a XXXX of the XXXX of a XXXX XXXX XXXX XXXX, (1) ISSC shall
XXXX such XXXX XXXX XXXX XXXX at XXXX XXXX and (2) Unisource and ISSC shall XXXX
and XXXX an XXXX XXXX to the
<PAGE>
74
Annual Services Charges, ARCs and RRCs to XXXX XXXX XXXX XXXX.
21.07 XXXX XXXX in a XXXX Environment. ISSC shall, at least once
-------------------------------
during each Contract Year during which Unisource's information technology
operations are processed in a XXXX XXXX and XXXX environment, review with the
Joint Advisory Committee (1) the XXXX XXXX XXXX XXXX trends during that
Contract Year as determined by a third party agreed upon by Unisource and
ISSC ("XXXX XXXX") and (2) how XXXX XXXX trends during such Contract
---------
Year ("XXXX XXXX") XXXX with the XXXX XXXX. If the XXXX XXXX are greater
---------
than the XXXX, ISSC shall XXXX to Unisource a XXXX against the XXXX XXXX
XXXX for the XXXX XXXX XXXX or XXXX XXXX by XXXX the XXXX XXXX XXXX by the
XXXX XXXX between XXXX XXXX and XXXX XXXX.
21.08 Cost of Living Adjustment. Except as may relate to services
-------------------------
provided to Unisource Canada, Inc. and charges in addition to the Annual
Services Charges relating to hardware and software purchases (which shall not be
subject to a cost of living adjustment ("COLA")), all charges payable under this
----
Agreement include protection against inflation at a rate of three percent per
year compounded annually (the "Protection Index"). In the event the Actual
----------------
Inflation (as described in the formula set forth below) for any calendar year
exceeds the Protected Inflation (as described in the formula set forth
<PAGE>
75
below), ISSC may, once every calendar year after 1994, increase the Personnel
Charges by COLA as set forth below. In the event ISSC increases any ARC rate
pursuant to this Section 21.08, the RRC rate shall be increased by the same
-------------
percentage. Unisource and ISSC shall use the Consumer Price Index, as published
by the Bureau of Labor Statistics, U.S. Department of Labor, For All Urban
Consumers, U.S. City Average, All Items, 1982-84=100 ("CPI-U") for purposes of
-----
calculating the Actual Inflation. COLA is payable on a prospective basis, i.e.,
----
ISSC may increase the Annual Services Charges, ARCs, RRCs and all other charges
payable by Unisource under this Agreement for the subsequent calendar year by
COLA, if such COLA is in excess of zero. COLA shall be determined as soon as
practicable after the end of each calendar year.
COLA shall be determined using the following formula according to
the example of COLA set forth in Schedule J:
----------
((Actual Inflation - Protection Index) /
Protected Inflation where:
Actual Inflation = CPI-U for the December
preceding calendar year for
which COLA is being
calculated;
Protection Index = the Protection Index for the
year preceding the calendar
year for which COLA is being
calculated; and
Applicable CPI-U = CPI-U for December 1993.
Inflation in excess of the Protected Index shall be
allocated as follows:
Inflation Responsibility
--------- --------------
above XXXX XXXX - Unisource
XXXX - ISSC
<PAGE>
In the event the Bureau of Labor Statistics ceases publishing the CPI-U or
substantially changes its content and format, Unisource and ISSC shall
substitute another comparable index published at least annually. If the Bureau
of Labor Statistics redefines the base year for the CPI-U from 1982-84 to
another year, Unisource and ISSC shall continue to use such CPI-U, but shall
convert the Protection Index to reflect the new base year by using an
appropriate conversion formula.
21.09 Extraordinary Decrease in Unisource Work. If, during the Term,
----------------------------------------
the scope and nature of Unisource's business change significantly and Unisource
expects such changes to result in a decrease of computing resources, ISSC shall
reduce the Annual Services Charges by the amount by which ISSC's actual and
direct expenses for performing the Services are decreased as a result of such
change.
21.10 Payment Schedule. ISSC shall provide Unisource with an invoice
----------------
for the Monthly Services Charge on or after the first day of the month for each
month during which the Systems Operations Services will be provided. Unisource
shall pay the invoice within XXXX days after Unisource's receipt of such
invoice. ISSC shall provide to Unisource by the XXXX XXXX XXXX of each calendar
month a detailed report (but not an invoice) of any ARCs, RRCs and New Service
Fees (the "Incremental Fee Report") incurred by Unisource during the preceding
----------------------
month. Unisource shall notify ISSC within XXXX of Unisource's receipt of the
Incremental Fee Report as to whether Unisource approves or disapproves of the
charges and credits set forth in the
<PAGE>
77
Incremental Fee Report. In the event Unisource disapproves of the charges or
credits set forth in the Incremental Fee Report, Unisource shall provide ISSC
with a list of any charges and credits of which Unisource disapproves within 10
days of Unisource's receipt of the Incremental Fee Report, together with
Unisource's reason for such disapproval, and ISSC shall adjust the Incremental
Fee Report to reflect the changes indicated by Unisource and agreed to by ISSC.
ISSC shall provide Unisource with an invoice in respect of the charges (net of
credits) described in the Incremental Fee Report by the 10th business day of the
month following the month during which the Incremental Fee Report was provided.
Unisource shall pay such invoice within XXXX XXXX of Unisource's receipt of such
invoice or, in the event the credits are in excess of charges, ISSC shall
provide Unisource with such credit (net of charges) as set forth in the invoice
for the Monthly Services Charge for the following month. Unisource shall pay
each invoice by check to ISSC, c/o ISSC Project Executive, 825 Duportail Road,
Chesterbrook, Wayne, Pennsylvania 19087.
21.11 Late Payments. Any fees, payments or credits owing to either
-------------
Party not paid when due shall bear interest at the rate of XXXX XXXX per month,
but in no event to exceed the XXXX XXXX XXXX of XXXX, calculated from the date
such amount was due until the date payment is received by the Party to whom
debts are owed.
21.12 Taxes. (1) ISSC is responsible for paying any applicable
-----
sales, use, personal property or other taxes based
<PAGE>
78
upon or measured by ISSC's cost in acquiring or providing equipment, materials,
supplies or services furnished or used by ISSC in performing or furnishing the
Services, including all personal property, use and sales taxes, if any, due on
ISSC Machines and ISSC Software. (2) Except as provided in this Section 21.12,
-------------
Unisource shall pay the amount of any sales, excise or use tax that is levied or
assessed on the provision of the Services by ISSC to Unisource or on ISSC's
charges to Unisource under this Agreement, however levied or assessed. (3)
Unisource shall pay all personal property or use taxes in respect of the
Unisource Machines, the End-User Machines (not provided by ISSC) and for the
payment of any excise taxes for Data Network lines and circuits. (4) Each Party
shall bear sole responsibility for all taxes, assessments and other real
property-related claims on its owned or leased real property. (5) Unisource and
ISSC shall cooperate with each other to more accurately determine each Party's
tax liability and to minimize such liability to the extent legally permissible.
(6) Unisource and ISSC 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. (7) Unisource and ISSC shall work together
to segregate any fees payable under this Agreement into separate payment streams
for (a) taxable Services, (b) nontaxable Services, (c) which a sales, use or
similar tax has already been paid by ISSC and (d) which ISSC functions merely as
a paying agent for Unisource in
<PAGE>
79
receiving goods, supplies or services (including leasing or licensing
arrangements) that otherwise are nontaxable or have previously been subject to
tax.
21.13 Expenses. Except as expressly set forth in this Agreement, any
--------
expenses related to the Services are included in the Annual Services Charges or
New Services Fees and shall not be reimbursed by Unisource unless agreed to by
Unisource in writing. Except for travel expenses incurred by the Affected
Employees in the Current Environment in connection with the performance of their
duties under this Agreement (provided such expenses are incurred in accordance
with Unisource's then-current policy for such expenses), ISSC shall be
responsible for all travel and travel-related expenses incurred by ISSC in
connection with the performance of its duties under this Agreement.
21.14 Rights of Set-Off. With respect to any amount which Unisource
-----------------
in good faith determines (1) should be reimbursed to Unisource or (2) is
otherwise payable to Unisource by ISSC pursuant to this Agreement, Unisource may
upon notice to ISSC deduct the entire amount owed against the charges otherwise
payable or expenses owed to ISSC under this Agreement until such time as the
entire amount determined to be owed to Unisource has been paid.
21.15 XXXX. ISSC's XXXX to Unisource for the Services shall be XXXX
----
XXXX as XXXX XXXX ISSC's XXXX XXXX for such XXXX to any of ISSC's other XXXX
XXXX XXXX XXXX and XXXX at XXXX volumes and upon XXXX XXXX and XXXX XXXX to
<PAGE>
80
those contained in this Agreement. Upon request, ISSC shall XXXX to Unisource
a XXXX XXXX, signed by an officer of ISSC, XXXX that this Section 21.15 has XXXX
-------------
been XXXX by XXXX XXXX XXXX into by ISSC since the later of (1) the XXXX or
(2) the XXXX of the XXXX XXXX XXXX XXXX by ISSC pursuant to this Section 21.15.
-------------
If ISSC is XXXX to XXXX such XXXX because of a XXXX entered into by ISSC XXXX
this Section 21.15, ISSC shall XXXX to Unisource an XXXX to the XXXX and other
-------------
XXXX of this XXXX, including, if appropriate, the XXXX XXXX included in any such
XXXX.
21.16 Proration. All periodic fees or charges under this Agreement
---------
are to be computed on a calendar month basis and will be prorated for any
partial month.
21.17 Refundable Items. In the event ISSC receives during the Term
----------------
any refund, credit or other rebate in respect of a lease governing a Unisource
leased asset, a Unisource services contract or a Unisource third party software
license (including deposits), ISSC will promptly notify Unisource of such
refund, credit or rebate and shall promptly pay to Unisource the full amount of
such refund, credit or rebate.
21.18 Unused Credits. Any unused credits against future payments
--------------
issued to Unisource by ISSC pursuant to this Agreement shall be paid to
Unisource by ISSC within 30 days of the expiration of this Agreement or
termination of this Agreement for any reason.
<PAGE>
81
ARTICLE 22. AUDITS.
- ---------- ------
22.01 Processing. Upon notice from Unisource, ISSC shall provide
----------
such auditors and inspectors as Unisource or any regulatory authority may, from
time to time, designate with access to the Service Locations for the purpose of
performing, at Unisource's expense, audits or inspections of the business of
Unisource (including ISSC's provision of the Services). ISSC shall provide
such auditors and inspectors any assistance that they may reasonably require.
If any audit by an auditor designated by Unisource or a regulatory authority
having jurisdiction over Unisource or ISSC results in ISSC being notified that
it is not in compliance with any generally accepted accounting principle or
other audit requirement relating to the Services, ISSC shall, within the period
of time specified by such auditor or regulatory authority, comply with such
audit or regulatory authority. If a change is required by a law or regulation
relating to Unisource's business, such change shall be made at Unisource's
expense except to the extent such change is performed as part of the Services.
If a change is required by a law or regulation relating to ISSC's business, such
change shall be made at ISSC's expense.
22.02 Charges. Upon at least 24 hours' notice from Unisource and no
-------
more than twice during any 12-month period during the Term, ISSC shall provide
Unisource with access to all of the financial records and supporting
documentation in respect of its variable charges (including ARCs and RRCs) to
Unisource. If, as a result of such audit, Unisource determines that ISSC has
<PAGE>
82
overcharged Unisource, Unisource shall notify ISSC of the amount of such
overcharge and ISSC shall promptly pay to Unisource the amount of the
overcharge, plus interest at the rate of one percent per month, but in no event
to exceed the highest lawful rate of interest, calculated from the date of
receipt by ISSC of the overcharged amount until the date of payment to
Unisource. In the event any such audit reveals an overcharge to Unisource of
five percent or more of a particular fee category, ISSC shall reimburse
Unisource for the cost of such audit.
22.03 ISSC Audit. If, as a result of an internal audit of its
----------
charges to Unisource, ISSC determines that it has undercharged Unisource, ISSC
may provide Unisource with an invoice in respect of such amount. Any such
invoice shall demonstrate that the amount was not charged to Unisource
previously. ISSC shall provide to Unisource such additional information as
Unisource may request. Upon Unisource's approval of such invoice, Unisource
shall promptly pay the amount of the undercharge calculated from the date of the
invoice which should have included the undercharged amount until the date of
payment by Unisource; provided, however, that Unisource shall not be obligated
to pay any such charges related to the Services provided more than XXXX before
the date of the invoice for such charges.
ARTICLE 23. CONFIDENTIALITY.
- ---------- ---------------
23.01 General Obligations. All confidential or proprietary
-------------------
information and documentation ("Confidential Information") (including the terms
------------------------
of this Agreement, the
<PAGE>
83
Unisource Data and the Software) relating to a Party shall be held in confidence
by the other Party to the same extent and in at least the same manner as such
Party protects its own confidential or proprietary information. Neither Party
shall disclose, publish, release, transfer or otherwise make available
Confidential Information of the other Party in any form to, or for the use or
benefit of, any person or entity without the other Party's consent. Each Party
shall, however, be permitted to disclose relevant aspects of the other Party's
Confidential Information to its officers, agents, subcontractors and employees
and to the officers, agents, subcontractors and employees of its corporate
affiliates or subsidiaries to the extent that such disclosure is reasonably
necessary for the performance of its duties and obligations under this
Agreement; provided, that such Party shall take all reasonable measures to
ensure that Confidential Information of the other Party is not disclosed or
duplicated in contravention of the subcontractors' provisions of this Agreement
by such officers, agents, subcontractors and employees. The obligations in this
Section 23.01 shall not restrict any disclosure by either Party pursuant to any
- -------------
applicable law, or by order of any court or government agency (provided that the
disclosing Party shall give prompt notice to the non-disclosing Party of such
order) and shall not apply with respect to information which (1) is developed by
the other Party without violating the disclosing Party's proprietary rights, (2)
is or becomes publicly known (other than through unauthorized disclosure), (3)
is disclosed by the owner of such information to
<PAGE>
84
a third-party free of any obligation of confidentiality, (4) is already known by
such Party without an obligation of confidentiality other than pursuant to this
Agreement or any confidentiality agreements entered into before the Commencement
Date between Unisource and ISSC or (5) is rightfully received by a Party free of
any obligation of confidentiality.
23.02 Unauthorized Acts. Each Party shall: (1) notify the other
-----------------
Party promptly of any material unauthorized possession, use or knowledge, or
attempt thereof, of the other Party's Confidential Information by any person or
entity which may become known to such Party, (2) promptly furnish to the other
Party full details of the unauthorized possession, use or knowledge, or attempt
thereof, and use reasonable efforts to assist the other Party in investigating
or preventing the recurrence of any unauthorized possession, use or knowledge,
or attempt thereof, of Confidential Information, (3) use reasonable efforts to
cooperate with the other Party in any litigation and investigation against third
parties deemed necessary by the other Party to protect its proprietary rights
and (4) promptly use all reasonable efforts to prevent a recurrence of any such
unauthorized possession, use or knowledge of Confidential Information. Each
Party shall bear the cost it incurs as a result of compliance with this
Section 23.02.
- -------------
23.03 Use of Information. XXXX as may XXXX to XXXX, XXXX,
------------------
XXXX or XXXX related to the XXXX or XXXX of XXXX XXXX, XXXX XXXX and XXXX,
XXXX XXXX or XXXX or XXXX XXXX,
<PAGE>
85
neither Party is restricted pursuant to this Agreement from using any data
processing or network management ideas, concepts, know-how and techniques,
including in the development of products and services. Except as prohibited by
Section 13.08 and Section 14.04, the receipt of Confidential Information by a
- ------------- -------------
Party shall not limit or restrict assignment or reassignment of the employees of
ISSC, Unisource and the ISSC Agents within or between the respective parties and
their affiliates.
ARTICLE 24. REPRESENTATIONS AND WARRANTIES.
- ---------- ------------------------------
24.01 By Unisource. Unisource represents and warrants that: (1) it
------------
is a corporation duly incorporated, validly existing and in good standing under
the laws of Delaware, (2) it has all the requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement, (3) the
execution, delivery and performance of this Agreement has been duly authorized
by Unisource, (4) no approval, authorization or consent of any governmental or
regulatory authority is required to be obtained or made by it in order for it to
enter into and perform its obligations under this Agreement, (5) it shall comply
with all applicable Federal, state and local laws and regulations, and shall
obtain all applicable permits and licenses, in connection with its obligations
under this Agreement, (6) it has not disclosed any Confidential Information of
ISSC and (7) the Unisource Software owned by Unisource does not, as of the
Commencement Date, infringe upon the proprietary rights of any third party.
<PAGE>
86
24.02 By ISSC. ISSC represents and warrants that: (1) it is a
-------
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware, (2) it has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, (3) the
execution, delivery and performance of this Agreement has been duly authorized
by ISSC, (4) no approval, authorization or consent of any governmental or
regulatory authority is required to be obtained or made by it in order for it to
enter into and perform its obligations under this Agreement, (5) it shall comply
with all applicable Federal, state and local laws and regulations and shall
obtain all applicable permits and licenses in connection with its obligations
under this Agreement, (6) it has not disclosed any Confidential Information of
Unisource, (7) all Services performed by ISSC for Unisource will be performed at
least in accordance with industry standards and practices applicable to the
performance of such Services, (8) it will maintain the Machines so as to meet
the Performance Standards, (9) the XXXX XXXX XXXX will perform in XXXX
with the XXXX XXXX, (10) the Services and the Developed Software
(except for any Unisource Data or programs provided by Unisource) will not, and
the ISSC Software does not and will not, infringe upon the proprietary rights of
any third party and (11) it will not breach or violate (a) ISSC's subcontracting
arrangements with Ernst & Young and XXXX or (b) Unisource's third party
agreements.
<PAGE>
87
24.03 Disclaimer. EXCEPT AS SPECIFIED IN SECTION 24.01 AND SECTION
---------- ------------- -------
24.02, NEITHER ISSC NOR UNISOURCE MAKES ANY OTHER WARRANTIES IN RESPECT OF THE
- -----
SERVICES OR THE SYSTEMS AND EACH EXPLICITLY DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A SPECIFIC PURPOSE.
ARTICLE 25. DISPUTE RESOLUTION.
- ---------- ------------------
25.01 Joint Advisory Committee. The Joint Advisory Committee shall
------------------------
meet at least once each 90-day period during the Term (or such other time as the
Joint Advisory Committee may agree upon from time to time) for the purpose of
resolving disputes that may arise under this Agreement. The Joint Advisory
Committee shall consider the disputes in the order such disputes are brought
before it. In the event that the Joint Advisory Committee is unable to resolve
a dispute, the Joint Advisory Committee shall notify the senior management of
each Party. No dispute under this Agreement shall be the subject of litigation
or other formal proceeding between Unisource and ISSC before being considered by
the Joint Advisory Committee; provided, however, that either Party may seek
injunctive relief to prevent or stay a breach of Article 16, Article 18,
---------- ----------
Article 23, Section 13.08 and Section 14.04 without appearing before the Joint
- ---------- ------------- -------------
Advisory Committee.
25.02 Continued Performance. In the event of a good faith dispute
------------------------------
between Unisource and ISSC regarding this Agreent that cannot be resolved by the
Joint Advisory Committee pursuant to which Unisource in good faith believes it
is entitled to
<PAGE>
88
withhold payment, Unisource shall, upon request by ISSC and on the date which
any of the fees payable under this Agreement are required to be made during the
pendency of such dispute, deposit the full amount of the fees payable under this
Agreement in an interest-bearing escrow account in the bank or depository
specified by ISSC and furnish evidence of such deposit to ISSC. For as long as
Unisource makes such escrow deposits during the pendency of such dispute, ISSC
shall continue to provide the Services until the amount in escrow in respect of
such dispute exceeds the amount of money paid by Unisource to ISSC during the
XXXX XXXX preceding the date on which the Joint Advisory Committee
considered the dispute. Upon resolution of the dispute, the parties shall
allocate the money in the escrow account, plus any interest earned on such
money, according to the resolution of the dispute.
ARTICLE 26. TERMINATION.
- ---------- -----------
26.01 Termination for Convenience. Unisource may terminate this
---------------------------
Agreement (1) on December 31, 1996 upon notice to ISSC on or before June 30,
1996 and (2) at any time after December 31, 1996 upon at least 60 days' notice
to ISSC.
26.02 Termination for Change of Control of Unisource. In the event
----------------------------------------------
of a sale or distribution of all or substantially all of the assets of Unisource
or a sale or distribution of more than 51 percent of the stock of Unisource,
Unisource may terminate this Agreement upon 60 days' notice to ISSC given within
270 days after the change in control.
<PAGE>
89
26.03 Termination for Change of Control/Business of ISSC. (1) In
--------------------------------------------------
the event (a) of a sale or distribution of all or substantially all of the
assets of ISSC or a sale or distribution of sufficient stock (other than
pursuant to a public offering) of ISSC to effect a change in control to any of
the Unisource Competitors or (b) that ISSC or its affiliates (including IBM)
enters into the business of providing or distributing printing papers, packaging
equipment and films, industrial papers or janitorial or maintenance supplies,
except for those activities of Lexmark International, Unisource may terminate
this Agreement upon 60 days' notice to ISSC given within 90 days of Unisource's
receipt of notice of such change of control or activity. (2) In the event of a
sale or distribution of all or substantially all of the assets of ISSC or a sale
or distribution of sufficient stock (other than pursuant to a public offering)
of ISSC to effect a change in control to an entity other than any of the
Unisource Competitors, Unisource may terminate this Agreement upon 60 days'
notice to ISSC given within 90 days of Unisource's receipt of notice of such
change of control.
26.04 Termination for Cause. If either Party fails to perform any of
---------------------
its material obligations under this Agreement (except as provided in
Section 26.05), and such failure is not cured within 30 days after notice is
- -------------
given to the defaulting Party specifying the nature of the default, the non-
defaulting Party may, upon further notice to the defaulting Party, terminate
this Agreement as of the date specified in such notice of termination; provided,
however, that the time to cure a
<PAGE>
90
default shall extend for up to 60 days from the date on which a notice of
default is received by the defaulting Party, if the defaulting Party has
promptly commenced to cure the default and continues to use its best efforts to
cure such default during the 60-day period.
26.05 Termination for XXXX to XXXX the XXXX XXXX. If ISSC XXXX to
------------------------------------------
XXXX the XXXX XXXX and does not, within XXXX after receipt of a XXXX from XXXX
signed by the Senior XXXX XXXX XXXX or an individual holding at least a
comparable position with XXXX in respect of such XXXX, cure such XXXX or, if
such XXXX cannot be XXXX within such XXXX, period provide XXXX with a XXXX
around that allows XXXX to XXXX such XXXX XXXX, then XXXX may, upon XXXX to
XXXX, XXXX this Agreement as of the XXXX specified in the XXXX of XXXX. This
XXXX does not apply if such XXXX to XXXX the XXXX XXXX was XXXX by a XXXX XXXX
XXXX. For the purposes of this Section 16.05, XXXX shall have XXXX a XXXX to
XXXX the XXXX XXXX when XXXX is XXXX to XXXX, XXXX and XXXX XXXX in respect of
the XXXX XXXX for all of the XXXX XXXX XXXX.
26.06 Other Terminations. This Agreement may terminate pursuant to
------------------
Section 4.19, Section 14.02, Section 20.03, Section 30.04 and Section 30.05.
- ------------ ------------- ------------- ------------- -------------
26.07 Effect of Expiration or Termination. Upon the expiration of
-----------------------------------
this Agreement or termination of this Agreement for any reason:
<PAGE>
91
(1) ISSC shall provide the Termination Assistance Services in accordance
with Article 28;
----------
(2) Unisource will allow ISSC to use, at no charge, those Unisource
facilities being used to perform the services for up to 60 days
following the effective date of expiration or termination (or from
the last day of any termination assistance period) to enable ISSC to
effect an orderly transition of ISSC's resources;
(3) each Party shall have the rights specified in Article 16 in respect
----------
of the Software;
(4) upon Unisource's request, with respect to generally commercially
available ISSC Third Party Software, which ISSC has licensed or
purchased and is using solely to provide the Services as of the date
of such expiration or termination, ISSC shall transfer, assign or
sublicense such ISSC Third Party Software to Unisource and XXXX any
XXXX or XXXX XXXX XXXX by the applicable vendor;
(5) upon Unisource's request, with respect to generally commercially
available ISSC Third Party Software, which ISSC has licensed or
purchased and is using to provide services to other ISSC customers in
a shared environment as of the date of such expiration or
termination, ISSC shall (a) assist Unisource in obtaining licenses
for such ISSC Third Party Software and (b) XXXX any XXXX or
XXXX XXXX XXXX
<PAGE>
92
or XXXX XXXX XXXX by any applicable vendor; and
(6) upon Unisource's request, with respect to any contracts applicable
solely to services being provided to Unisource for maintenance,
disaster recovery services and other necessary third party services
being used by ISSC to perform the Services as of the expiration or
termination, ISSC (a) shall transfer or assign such agreements to
Unisource or its designee, on terms and conditions acceptable to both
parties and (b) XXXX any XXXX XXXX or XXXX XXXX XXXX by the
applicable vendors.
26.08 Machines. Upon the expiration of this Agreement or a
--------
termination pursuant to Section XXXX, Section XXXX, Section XXXX,
------------ ------------ ------------
Section XXXX, Section XXXX due to XXXX XXXX, Section XXXX, Section XXXX
- ------------ ------------ ------------ ------------
and Section XXXX, ISSC shall XXXX XXXX to XXXX Machines
------------
provided as part of the New Environment, including the RBP Machines, to
Unisource or its designee free and clear of all liens, security interests or
other encumbrances. Upon a termination pursuant to Section XXXX, Section XXXX
------------ ------------
or Section XXXX due to XXXX, ISSC shall, upon Unisource's request, XXXX
-------------
to Unisource or its designee, the Machines provided as part of the New
Environment, including the XXXX Machines, free and clear of all liens, security
interests or other encumbrances at the lesser of (1) the fair market value, as
shall be determined by an agreed-upon appraisal and (2) the book value.
<PAGE>
93
ARTICLE 27. TERMINATION FEE.
- ---------- ---------------
27.01 Termination for Convenience or for Unisource's Change of
--------------------------------------------------------
Control. In the event of a termination of this Agreement pursuant to
- -------
Section 26.01 or Section 26.02, Unisource shall pay to ISSC on the effective
- ------------- -------------
date of such termination an amount equal to the fee specified in the Supplement
----------
for the applicable Contract Year as may be adjusted pursuant to Section 27.04.
-------------
27.02 Termination for ISSC's Change of Control. In the event of a
----------------------------------------
termination of this Agreement pursuant to Section 26.03(2), Unisource shall pay
----------------
to ISSC on the effective date of such termination an amount equal to one-half of
the fee specified in the Supplement for the applicable Contract Year as may be
----------
adjusted pursuant to Section 27.04.
-------------
27.03 No Additional Fees. In the event of a termination pursuant to
------------------
Section 26.01, Section 26.02 or Section 26.03(2), Unisource shall not pay to
- ------------- ------------- ----------------
ISSC any fees or charges other than the applicable termination fee set forth in
the Supplement (each, a "Termination Fee") except charges otherwise payable
---------- ---------------
under this Agreement and any charges payable pursuant to Article 28. ISSC shall
----------
use commercially reasonable efforts to reduce any personnel relocation charges,
subcontractor cancellation fees and lease termination payments. Except for
terminations pursuant to Section 26.01, Section 26.02 and Section 26.03(2),
------------- ------------- ----------------
Unisource shall not be responsible for any termination fees or charges upon the
termination or expiration of this Agreement.
<PAGE>
94
27.04 Proration. Any Termination Fee in Section 27.01 and
--------- -------------
Section 27.02 will be prorated according to the following formula:
- -------------
(A-B) / 12 months} x C + B = Prorated Terminated Fee where:
A = the Termination Fee specified in Section 27.01 or Section 27.02 for
------------- -------------
the Contract Year in which termination is effective;
B = the Termination Fee specified in Section 27.01 or Section 27.02 for
------------- -------------
the Contract Year after the Contract Year in which termination is
effective; and
C = the number of months remaining during the Contract Year in which
termination is effective.
ARTICLE 28. TERMINATION ASSISTANCE.
- ---------- ----------------------
Upon the expiration of this Agreement or the termination of this
Agreement for any reason other than Unisource's failure to pay ISSC pursuant to
Section 21.01 or Section 21.05, ISSC shall, upon Unisource's request, for up to
- ------------- -------------
365 days after the expiration of this Agreement or termination of this
Agreement for any reason (the "Termination Assistance Period") (1) continue to
-----------------------------
provide the Services to the extent requested by Unisource at the baseline rates
for such Services in effect under this Agreement immediately prior to such
expiration or termination and (2) such New Services as Unisource may request
including (a) cooperating with Unisource in effecting the orderly transfer of
the Services to a third party or the resumption of the Services by Unisource,
(b) using such services as may be requested by Unisource in connection with the
transfer of the Services to a third party or the resumption of the Services by
Unisource, (c) freezing all non-critical Systems changes, (d)
<PAGE>
95
notifying all third party vendors of procedures to be followed during the
Termination Assistance Period, (e) review all Systems libraries (tests and
production) with the new service provider and Unisource, (f) assist in
establishing naming conventions for the new production site, (g) analyze space
required for the databases and Systems libraries and (h) generate and deliver to
Unisource a tape and computer listing of the source code for the Developed
Software in a form reasonably requested by Unisource, (i) unload the production
and test databases, (j) deliver tapes or other media requested by Unisource of
production databases (and test content listings) to the new operations staff,
(k) assist with the loading of the databases, (l) assist with the communications
network turnover and (m) assist in the execution of a parallel operation and
user acceptance testing until the effective date of termination or expiration
((a) through (m) collectively, the "Termination Assistance Services"). After
-------------------------------
the expiration of the Termination Assistance Period, ISSC shall (i) answer
questions regarding the Services on an "as needed" basis and (ii) deliver to
Unisource any remaining Unisource-owned reports and documentation still in
ISSC's possession. The Termination Assistance Services shall be provided at no
cost to Unisource except for out-of-pocket expenses not included in the charges
for the Services provided pursuant to Article 28. If, in conjunction with the
----------
Termination Assistance Services, Unisource requests that ISSC perform New
Services, ISSC shall provide and Unisource shall pay ISSC for such New Services
during the Termination Assistance Period the lesser of (x) ISSC's then-
<PAGE>
96
current rate for such New Services and (y) the charges for such New Services set
forth in the applicable New Services Work Order.
ARTICLE 29. INDEMNITIES.
- ---------- -----------
29.01 Indemnity by Unisource. Unisource shall indemnify ISSC from,
----------------------
and defend ISSC against, any liability or expenses (including attorneys' fees)
arising out of or relating to any claim by a third party (1) that the Unisource
Software infringes upon the proprietary rights of any third party (except as may
have been caused by a modification by ISSC or the ISSC Agents or ISSC's or the
ISSC Agents' combination, operation or use with devices, data or programs not
furnished by Unisource), (2) relating to Unisource's failure to obtain the
Unisource Consents, (3) relating to any duties or obligations of Unisource in
respect of a third party accruing after the Commencement Date, (4) relating to
the inaccuracy or untruthfulness of any representation or warranty made by
Unisource under this Agreement, (5) relating to (a) a violation of Federal,
state or other laws in regulations for the protection of persons or members of a
protected class or category of persons by Unisource or its employees,
subcontractors or agents, (b) sexual discrimination or harassment by Unisource
or its employees, subcontractors or agents, (c) work-related injury except as
may be covered by ISSC's workers compensation or death caused by Unisource, (d)
accrued employee benefits not expressly retained by ISSC, (e) any
representations, oral or written, made by Unisource to Unisource's employees and
(f) any other aspect of the employment relationship or the termination of the
employment
<PAGE>
97
relationship (including claims for breach of an expressed or implied contract of
employment) relating to the Affected Employees arising prior to the Start Date,
(6) relating to inadequacies in the physical and data security control systems
at the Unisource Service Locations in the Current Environment to the extent such
inadequacies were not caused by ISSC and (7) relating to any amounts including
taxes, interest and penalties, assessed against ISSC which are obligations of
Unisource pursuant to Section 21.12.
-------------
29.02 Indemnity by ISSC. ISSC shall indemnify Unisource from, and
-----------------
defend Unisource against, any liability or expenses (including attorneys' fees)
arising out of or relating to any claim by a third party (1) that the Services,
the Developed Software, the ISSC Software, the ISSC Machines, any modifications
to Unisource Software performed by ISSC, its employees or the ISSC Agents or any
other equipment, systems, products or other resources or items provided to
Unisource by ISSC, its employees or the ISSC Agents infringe upon the
proprietary rights of any third party (except as may have been caused by a
modification by Unisource or Unisource's combination, operation or use with
devices, data or programs furnished by Unisource), (2) in respect of services or
systems provided by ISSC, its employees or the ISSC Agents to a third party, (3)
relating to any duties or obligations of ISSC, its employees or the ISSC Agents
accruing after the Commencement Date in respect of a third party, (4) relating
to the inaccuracy or untruthfulness of any representation or warranty made by
ISSC,
<PAGE>
98
its employees or the ISSC Agents under this Agreement, (5) relating to ISSC's
failure to obtain the ISSC Consents, (6) arising out of or relating to ISSC's
breach or violation of (i) ISSC's subcontracting arrangements with Ernst & Young
and XXXX or (ii) Unisource's third party agreements, (7) relating to (a) a
violation of Federal, state or other laws in regulations for the protection of
persons or members of a protected class or category of persons by ISSC or its
employees or the ISSC Agents, (b) sexual discrimination or harassment by ISSC,
its employees or the ISSC Agents, (c) work-related injury except as may be
covered by ISSC's workers compensation or death caused by ISSC, its employees or
the ISSC Agents, (d) accrued employee benefits not expressly retained by
Unisource, (e) any representations, oral or written, made by ISSC, IBM Canada or
their employees, subcontractors or agents to Unisource employees or the Affected
Employees hired by ISSC or IBM Canada and (f) any other aspect of the employment
relationship or the termination of the employment relationship (including claims
for breach of an expressed or implied contract of employment) relating to the
Affected Employees arising on or after the Start Date, (8) relating to a failure
by ISSC to renew, terminate or cancel Unisource's agreements in respect of the
Retained Resources in accordance with Article 8, (9) relating to inadequacies
---------
in the physical and data security control systems at (i) the ISSC Data Center or
other ISSC data centers or service locations and (ii) the Unisource Service
Locations to the extent such systems are controlled or provided by ISSC after
the Commencement Date, and
<PAGE>
99
(10) relating to any amounts including taxes, interest and penalties assessed
against Unisource which are obligations of ISSC pursuant to Section 21.12.
-------------
29.03 Indemnification Procedures. If any civil, criminal,
--------------------------
administrative or investigative action or proceeding (each, a "Claim") is
-----
commenced against any Party entitled to indemnifications under Section 29.01 or
-------------
Section 29.02 (an "Indemnified Party") notice thereof shall be given to the
- ------------- -----------------
Party that is obligated to provide indemnification (the "Indemnifying Party")
------------------
as promptly as practicable. 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 notice delivered to the Indemnified Party not less than 10 days
prior to the date on which a response to such Claim is due, 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
<PAGE>
100
of the Indemnified Party. 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 incurred thereafter by such Indemnified Party in
connection with the defense of that Claim. If the Indemnifying Party does not
assume full control over the defense of a Claim subject to such defense as
provided in this Section 29.03, the Indemnifying Party may participate in such
-------------
defense, at its sole cost and expense, and the Indemnified Party shall have the
right to defend the Claim in such manner as it may deem appropriate, at the cost
and expense of the Indemnifying Party.
ARTICLE 30. DAMAGES.
- ---------- -------
30.01 Consequential Damages. Except as may arise pursuant to a
---------------------
XXXX of XXXX, neither Party shall be liable for any indirect, special or
consequential damages or lost profits arising out of or relating to such Party's
performance under this Agreement.
30.02 Limitation of Damages. In the event one Party shall be liable
---------------------
to the other Party for damages arising out of or relating to such Party's
performance under this Agreement, such Party may recover from the other Party
its damages up to an amount not to exceed XXXX in the aggregate (the
"Damages Cap").
-----------
30.03 Exclusions. The limitations set forth in Section 30.02 are not
---------- -------------
applicable to: (1) personal injury and property damages; (2) indemnification
claims as set forth in
<PAGE>
101
Article 29; (3) amounts owed ISSC by Unisource under this Agreement; (4) tax
- ----------
obligations; and (5) damages resulting from XXXX and XXXX.
30.04 Credits in the Current Environment. In the event ISSC fails to
----------------------------------
provide the Current Services in accordance with the Minimum Service Levels (as
defined in Schedule E) for the Current Environment and such failure was the
----------
result of ISSC's failure to manage the in-scope resources in a commercially
reasonable manner, ISSC shall incur charges according to the schedule set forth
in Schedule E (the "Current Environment Credits") against the Monthly Services
---------- ---------------------------
Charge owed to ISSC two months following the month in which the Current
Environment Credit(s) was (were) incurred. If the Current Environment Credits
XXXX (1) XXXX of the Monthly Services Charge (as determined pursuant to
the formula in Schedule E) for any XXXX XXXX or (2) XXXX of the
----------
Monthly Services Charge (as determined pursuant to the formula in Schedule E)
----------
for XXXX XXXX, Unisource may, upon notice to ISSC within XXXX after such XXXX or
XXXX, as applicable, terminate this Agreement without regard to Section 26.04 or
-------------
Section 26.05.
- -------------
30.05 Credits in the New Environment. In the event ISSC fails to
------------------------------
provide the New Environment Services in accordance with the Minimum Service
Levels for the New Environment and such failure was not caused by (1)
Unisource's failure to perform its obligations under this Agreement or (2) a
Force Majeure Event, ISSC shall incur charges according to the schedule set
forth in Schedule E (the "New Environment Credits") against the Monthly
---------- -----------------------
<PAGE>
102
Services Charge owed to ISSC two months following the month in which the New
Environment Credit(s) was (were) incurred. If the New Environment Credits exceed
(1) XXXX of the Monthly Services Charge (as determined pursuant to the
formula in Schedule E) for XXXX or (2) XXXX of the Monthly Services Charge
----------
(as determined pursuant to the formula in Schedule E) for any XXXX, Unisource
----------
may, upon notice to ISSC within XXXX after such XXXX or XXXX, as applicable,
terminate this Agreement without regard to Section 26.04 or Section 26.05.
------------- -------------
30.06 Remedies. ISSC acknowledges that it is obligated to perform
--------
the Services in a manner that meets or exceeds the Minimum Service Levels. In
the event ISSC fails to provide the Services in accordance with the Minimum
Service Levels, Unisource may, at its option, (1) seek all remedies available to
it under the law, subject to the limitations specified in Section 30.01,
-------------
Section 30.02 and Section 30.03 or (2) recover as liquidated damages the
- ------------- -------------
Credit(s) pursuant to Section 30.04 and Section 30.05. If Unisource elects to
------------- -------------
recover Credit(s) pursuant to Section 30.04 and Section 30.05, Unisource's
------------- -------------
recovery of Credit(s) shall constitute acknowledgement by Unisource of full
satisfaction of any claim by Unisource (except with respect to the right to
terminate described in Section 30.04 or Section 30.05, Section 26.07 and
------------- ------------- -------------
Section 26.08) that ISSC breached its obligation under this Agreement with
- -------------
respect to such event or set of events giving rise to the Credit(s).
<PAGE>
103
ARTICLE 31. MISCELLANEOUS.
- ---------- -------------
31.01 Assignment. ISSC shall not assign this Agreement or any
----------
amounts payable pursuant to this Agreement without the consent of Unisource.
Unisource hereby consents to the assignment to IBM Canada of the provision of
the Services to Unisource Canada. The consent of Unisource to any assignment or
subcontracting shall not (1) relieve ISSC of its responsibility for the
performance of any other of its obligations under this Agreement or (2)
constitute Unisource's consent to further assignment or subcontracting. Upon
notice to ISSC, Unisource may assign this Agreement without ISSC's consent to
any affiliate or subsidiary of Unisource with similar creditworthiness of
Unisource or pursuant to a corporate reorganization.
31.02 Notices. All notices, requests, approvals and consents and
-------
other communications required or permitted under this Agreement shall be in
writing and shall be sent by telecopy to the telecopy number specified below. A
copy of any such notice shall also be personally delivered or sent by (1) first
class U.S. Mail, registered or certified, return receipt requested, postage pre-
paid or (2) U.S. Express Mail, Federal Express, or other, similar overnight
bonded mail delivery services.
In the case of Unisource:
Unisource Worldwide, Inc.
825 Duportail Road
Chesterbrook
Wayne, Pennsylvania 19087
Attn: Vice President -
Systems and Administration
Facsimile No. (215) 296-9238
<PAGE>
104
For default or termination, with a copy to:
Unisource Worldwide, Inc.
825 Duportail Road
Chesterbrook
Wayne, Pennsylvania 19087
Attn: Vice President - Law
Facsimile No. (215) 296-9238
In the case of ISSC:
c/o Unisource Worldwide, Inc.
825 Duportail Road
Wayne, Pennsylvania 19087
Attn: ISSC Project Executive
Facsimile No. (215) 296-8535
For termination, with a copy to:
Integrated Systems Solutions Corporation
44 South Broadway
White Plains, New York 10601
Attn: General Counsel
Facsimile No.: (914) 288-1167
Either Party may change its address or telecopy number for notification purposes
by giving the other Party notice of the new address or telecopy number and the
date upon which it will become effective.
31.03 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which taken together shall constitute one single agreement
between the parties.
31.04 Headings. The article and section headings and the table of
--------
contents are for reference and convenience only and shall not be considered in
the interpretation of this Agreement.
31.05 Relationship. Except as otherwise provided in Section 17.01,
------------ -------------
the performance by ISSC of its duties and obligations under this Agreement shall
be that of an independent
<PAGE>
105
contractor and nothing contained in this Agreement shall create or imply an
agency relationship between ISSC and Unisource, nor shall this Agreement be
deemed to constitute a joint venture or partnership between the parties.
31.06 Consents, Approvals and Requests. Except as specifically set
--------------------------------
forth in this Agreement, all consents and approvals to be given by either Party
under this Agreement shall not be unreasonably withheld and each Party shall
make only reasonable requests under this Agreement.
31.07 Severability. If any provision of this Agreement is held by a
------------
court of competent jurisdiction to be contrary to law, then the remaining
provisions of this Agreement shall remain in full force and effect.
31.08 Waiver. No delay or omission by either Party to exercise any
------
right or power it has under this Agreement shall impair or be construed as a
waiver of such right or power. A waiver by any Party of any breach or covenant
shall not be construed to be a waiver of any succeeding breach or any other
covenant. All waivers must be in writing and signed by the Party waiving its
rights.
31.09 Publicity. Each party shall (1) submit to the other all
---------
advertising, written sales promotion, press releases and other publicity matters
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 (2) not publish or use such advertising, sales
<PAGE>
106
promotion, press releases or publicity matters without the other Party's
consent.
31.10 Entire Agreement. This Agreement, the Schedules and the
----------------
Supplement, which are hereby incorporated by reference into this Agreement,
- ----------
represent the entire agreement between the parties with respect to its subject
matter, and there are no other representations, understandings or agreements
between the parties relative to such subject matter. The Letter of Intent, dated
September 28, 1993, is hereby terminated.
31.11 Amendments. No amendment to, or change, waiver or discharge
----------
of, any provision of this Agreement shall be valid unless in writing and signed
by an authorized representative of the Party against which such amendment,
change, waiver or discharge is sought to be enforced.
31.12 Survival. The terms of Article 22, Article 23, Article 24,
-------- ---------- ---------- ----------
Article 28, Article 29, Article 30, Section 13.08, Section 14.04, Section 16.01,
- ---------- ---------- ---------- ------------- ------------- -------------
Section 16.02, Section 16.03, Section 17.03, Section 18.01, Section 18.03,
- ------------- ------------- ------------- ------------- -------------
Section 26.07, Section 26.08, Section 31.09, this Section 31.12, Section 31.14,
- ------------- ------------- ------------- ------------- -------------
Section 31.17 and Section 31.19 shall survive the expiration of this Agreement
- ------------- -------------
or termination of this Agreement for any reason.
31.13 Third Party Beneficiaries. Each Party intends that this
-------------------------
Agreement shall not benefit, or create any right or cause of action in or on
behalf of, any person or entity other than Unisource, ISSC and IBM Canada.
31.14 Governing Law. This Agreement shall be governed by the laws of
-------------
the State of New York. Unisource and ISSC agree
<PAGE>
107
that the Federal courts of the Southern District of New York shall have
exclusive jurisdiction over disputes under this Agreement, the Schedules and the
Supplements and the resolution thereof, and the parties agree that jurisdiction
and venue in such courts is appropriate.
31.15 Insurance. During the Term, ISSC shall maintain insurance of
---------
the following types and in the following amounts: (1) statutory workers'
compensation in accordance with all Federal, state and local requirements and
(2) comprehensive general public liability (including contractual liability
insurance) in an amount not less than $2,000,000. All insurance policies
obtained or maintained by ISSC pursuant to this Agreement shall name Unisource
as an additional insured. ISSC shall not cancel (or permit any lapse) under any
such insurance policy. Each insurance policy shall contain the agreement of the
insurer that the insurer shall not cancel such policy without 30 days' notice to
Unisource. ISSC shall deliver to Unisource a certificate of insurance
evidencing the above insurance coverage prior to the Commencement Date.
31.16 Covenant of Further Assurances. Unisource and ISSC covenant
------------------------------
and agree that, subsequent to the execution and delivery of this Agreement and
without any additional consideration, each of Unisource and ISSC shall execute
and deliver any further legal instruments and perform any acts which are or may
become necessary to effectuate the purposes of this Agreement.
<PAGE>
108
31.17 Hiring of Employees. Unisource may offer employment to and
-------------------
employ any ISSC employees upon the expiration of this Agreement or the
termination of this Agreement for any reason. Either Party may at any time
directly or indirectly solicit and hire any employee of the other Party after
such employee is fired by such Party or terminates his or her employment with
such Party without the intention of accepting employment from the other Party.
In addition, either Party may at any time hire any employee of the other Party
that responds to an indirect solicitation (e.g., through a newspaper, magazine
----
or trade journal advertisement); provided, however, that should ISSC hire any of
the Unisource Key Personnel pursuant to this Section 31.17, Unisource shall be
-------------
released of its obligations pursuant to Section 13.05 with respect to such
-------------
Unisource Key Personnel. Except for the Affected Employees, ISSC shall not
solicit any Unisource employees during the Term and for one year after the
expiration of this Agreement or termination of this Agreement for any reason.
31.18 EDI. ISSC shall not resell any of the EDI services in effect
---
at a Unisource Service Location or use such EDI services to provide services to
a third party.
31.19 No Interference. Upon the expiration of this Agreement or the
---------------
termination of this Agreement for any reason, Unisource may enter into, and ISSC
shall not oppose Unisource's entering into, an arrangement with Ernst & Young or
XXXX pursuant to which Ernst & Young or XXXX may provide services similar to the
Services.
<PAGE>
31.20 Marketing. ISSC shall use reasonable efforts to provide
---------
marketing opportunities to Unisource for Unisource products and services within
ISSC and IBM.
31.21 Construction. The word "including" shall mean "including,
------------
without limitation," throughout this Agreement.
31.22 Interpretation of Documents. In the case of conflicts between
---------------------------
the terms of this Agreement and the terms of Schedules or Supplements to this
Agreement, the terms of this Agreement shall prevail.
<PAGE>
110
IN WITNESS WHEREOF, ISSC and Unisource have each caused this Agreement
to be signed and delivered by its duly authorized representative.
UNISOURCE WORLDWIDE, INC.
By: /s/ John J. McKiernan
--------------------------
John J. McKiernan
Vice President - Systems
and Administration
INTEGRATED SYSTEMS SOLUTIONS
CORPORATION
By: /s/ Michael N. Anderson
--------------------------
Michael N. Anderson
Director - Systems
Solutions
Business Services
<PAGE>
ISSC / Unisource
Agreement for Information Technology Services
- --------------------------------------------------------------------------------
Supplement to
Agreement for Information Technology Services
Name and Address of Customer: Enterprise No.:
Unisource
825 Duportail Road
Wayne, Pennsylvania 19087
ISSC Office Address: ISSC Project Office No.:
ISSC Corporation
44 South Broadway
White Plains, New York 10601
Term Commencement Date: January 1, 1994
Term End Date: December 31, 2003
<TABLE>
<CAPTION>
Contract Year
-------------
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2005
1/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1-
9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Services Charge
United States 34.8 44.6 34.0 34.0 34.0 22.0 19.0 19.0 19.0 19.0 5.0
($ in Millions - US)
Canada 1.5 1.8
($ in Millions - Canadian)
Performance Incentive
($ in Millions)
3.5% but (less than) 4.0% 1.0 1.0 1.0 1.0 1.0 1.0
4.0% but (less than) 4.5% 3.0 3.0 3.0 3.0 3.0 3.0
4.5% but (less than) 5.0% 4.0 4.0 4.0 4.0 4.0 4.0
5.0% and (greater than) 5.0 5.0 5.0 5.0 5.0 5.0
Termination Charge/1/
($ in Millions)
Convenience N/A N/A N/A 18.0 13.0 9.0 6.5 4.5 2.5 1.8 0.3
Change of Control 22.0 22.0 22.0 18.0 13.0 9.0 6.5 4.5 2.5 1.8 0.3
Calendar Year
-------------
BASE 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
CPI Protection Index TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD
(3% Compounded)
</TABLE>
Notes:
1 In addition to the Termination Charge above, Unisource agrees to pay ISSC's
reasonable and actual expenses associated with early termination for
personnel relocation expenses, lease termination fees and subcontractor
cancellation penalties.
2 One-time charge plus ongoing support and maintenance.
3 Other = Executive Information System, Management Information System and
Electronic Data Interchange.
December 22, 1993 Page 1 of 2
ISSC/Unisource Confidential Supplement
<PAGE>
Supplement to
Agreement for Information Technology Services
<TABLE>
<CAPTION>
Contract Year
-------------
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2003
1/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1- 10/1-
9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30 12/31
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Baselines
Consulting and
Management Services 151 201 154 111 102 N/A N/A N/A N/A N/A N/A
(Person Months)
AD/M Services 20 240 249 228 183 168 150 144 144 144 36
(Person Months)
AD/M Core
Skills Group 14 168 174 160 128 118 105 101 101 101 25
(Person Months)
New Projects
Development 304 222 18 N/A N/A N/A N/A N/A N/A N/A N/A
(Person Months)
NADS 228 72 0 N/A N/A N/A N/A N/A N/A N/A N/A
NAS 16 2 0 N/A N/A N/A N/A N/A N/A N/A N/A
Other/3/ 0 148 18 N/A N/A N/A N/A N/A N/A N/A N/A
Upgrade Allotment 2,750 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
($ in Thousands)
Data Network 0.75 2.50 2.76 2.76 2.76 2.76 2.76 2.76 2.76 2.76 0.67
($ in Millions)
Additional Resource Charge Rates
Consulting and
Management Services
Annual ($K) 265 273 281 290 298 307 316 326 336 346 356
Hourly ($) 160 165 170 176 181 186 192 198 203 216 216
AD/M Services
Annual ($K) 200 206 212 218 225 232 239 246 253 261 269
Hourly ($) 120 124 127 131 135 139 143 148 152 157 162
Warehouse Management/2/
WMS Installation
($K Per Warehouse)
Mega w/RF 696.6 696.6 696.6 TBD TBD TBD TBD TBD TBD TBD TBD
Large w/RF 477.0 477.0 477.0 TBD TBD TBD TBD TBD TBD TBD TBD
Medium no/RF 152.8 152.8 152.8 TBD TBD TBD TBD TBD TBD TBD TBD
Small no/RF 83.4 83.4 83.4 TBD TBD TBD TBD TBD TBD TBD TBD
WMS Maintenance
($ Per Warehouse/Month)
Mega w/RF 7,875 8,269 8,682 9,116 9,572 10,051 10,553 11,081 11,635 12,217 12,828
Large w/RF 5,375 5,644 5,926 6,222 6,533 6,860 7,203 7,563 7,941 8,338 8,755
Medium no/RF 3,300 3,465 3,638 3,820 4,011 4,212 4,422 4,643 4,876 5,119 5,375
Small no/RF 2,642 2,774 2,912 3,058 3,211 3,372 3,540 3,717 3,903 4,098 4,303
Truck Routing/2/
TRS Installation 110.3 110.3 110.3 TBD TBD TBD TBD TBD TBD TBD TBD
($K Per Warehouse)
TRS Maintenance 933 980 1,029 1,080 1,135 1,191 1,251 1,313 1,379 1,448 1,520
($ Per Warehouse/Month)
</TABLE>
December 22, 1993 Page 2 of 2
ISSC/Unisource Confidential Supplement
<PAGE>
Schedules to
Agreement for Information Technology Services
SCHEDULE A -- Unisource Applications Software
SCHEDULE B -- Unisource Systems Software
SCHEDULE C -- Unisource Machines
SCHEDULE D -- ISSC Machines
SCHEDULE E -- Support Services, Performance Standards and Operational
Responsibilities
SCHEDULE F -- New Services Work Order
SCHEDULE G -- Disaster Recovery Services
SCHEDULE H -- Project Management
SCHEDULE I -- Unisource Service Locations
SCHEDULE J -- ISSC Charges, Measures of Utilization and Financial
Responsibilities
SCHEDULE K -- Application Installation Standards
SCHEDULE L -- Security Procedures
SCHEDULE M -- Help Desk
SCHEDULE N -- Projects
SCHEDULE O -- Affected Employees and Personnel Transition
SCHEDULE P -- Procedures Manual Outline
SCHEDULE Q -- Human Resources Claims
SCHEDULE R -- Restructured Business Platform/ISSC Data Center Platform
SCHEDULE S -- Key Personnel
SCHEDULE T -- XXXX License Agreement
SCHEDULE U -- XXXX Services Agreement
SCHEDULE V -- XXXX Maintenance Agreement
SCHEDULE W -- Unisource Third Party Agreements
SCHEDULE X -- Release
SCHEDULE Y -- Unisource Reports
SCHEDULE Z -- Confidentiality Agreement
December 22, 1993
ISSC/Unisource Confidential Table of Schedules Page 1 of 1
<PAGE>
ISSC/Unisource
Agreement for Information Technology Services [ART APPEARS HERE]
- --------------------------------------------------------------------------------
Schedule A
Unisource Applications Software
Note:
1. Information contained in this Schedule is meant to represent the data known
as of the Commencement Date of the Contract. Should omitted Licenses be
discovered at a later date, this Schedule will be updated to reflect that
additional data.
2. Personnel costs for operating the Software listed in this Schedule are
included within the Annual Services Charges.
3. ISSC shall operate the Software in accordance with the Licenses granted
pursuant to Article 16 of the Agreement.
Unijax - Jacksonville, FL
<TABLE>
<CAPTION>
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Cambar Business Systems Customer Order Processing I* U I C
Cambar Business Systems Inventory Control/Forecasting I U I I
Cambar Business Systems Purchasing/Receiving I U I I
Cambar Business Systems Sales Analysis I U I I
Cambar Business Systems Customer Remote Order Entry (CAPS) I U I I
Cambar Business Systems EDI Translator I U I I
Cambar Business Systems Accounts Payable I U I I
Cambar Business Systems Partial Accounts Receivable Module I U I I
Computer Associates CA-TAPE HANAGER - 6.0 I U I I
Computer Associates CA-InterTest - 6.0 I U I I
Computer Associates CA-LIBRARIAN - 3.0 I U I I
Computer Associates CA-SPACE HANAGER(DISK) - 6.0 I U I I
Computer Associates CA-UFO I U I I
CAI Data net I U I I
DTA DTA/PRINT I U I I
Enterprise Systems, Inc. ANSI-X12 - vendor interface I U I I
GE Information Services STD DSXHIT I U I I
GE Information Services EDI DSXHIT I U I I
Global Software CARMS I U I I
Global Software FAQS/XP I U I I
Global Software EXPLORE/VM I U I I
Global Software QuickWrite I U I I
Global Software QuickJob I U I I
Global Software EXPLORE VSE I U I I
Global Software EXPLORE VHXA I U I I
GT Software ASSIST/GT-DOS version I U I I
GT Software TUTOR/GT I U I I
GT Software DOCH/GT I U I I
H&W Computer Systems SYSM DOS I U I I
H&W Computer Systems SYSM C/S I U I I
Information Builders FOCUS I U I I
Information Builders CMS to OS/DOS VSAM (XH1) I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule A
uniskda Page 1 of 10
<PAGE>
Schedule A
Unisource Applications Software
Unijax - Jacksonville, FL
<TABLE>
<CAPTION>
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
McCormack & Dodge Fixed Assets I U I I
McCormack & Dodge F/A Plus I U I I
Management Science America HSA Payroll I U I I
On Line Software International VERIFY/DOS I U I I
On Line Software International InterTest/DOS I U I I
<CAPTION>
Butler Paper - Port Edwards, WI
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Blue DUSP ver 1.2.7 I U I I
BHC SUPER OPTIHIZER ver. 2.0 I U I I
BHC DB2ALTER ver. 2.3 I U I I
CANDLE CL/Conference I U I I
Compuware Abend-AID OS w/DB2 ver. 5.2.2 I U I I
Compuware CICS Abend-AID ver. 5.3 I U I I
Compuware Abend-Aid ver. 4.1.0 I U I I
Compuware RADAR ver. 3.2.3 I U I I
Computer Associates CA-SORT ver. 7.3 I U I I
Computer Associates CA/CICS/DADS/ PLUS ver 2.2.0 I U I I
Computer Associates CA/InterTest ver 4.2.2 I U I I
Computer Associates CA/FASTDASD ver. 4.4 I U I I
Computer Associates CA/TOP SECRET I U I I
Computer Associates CA/PANVALET/ISPF I U I I
Computer Associates CA/PANVALET ver 14.2 I U I I
CSK HCI (NETHON) ver. 3.1 I U I I
DTA DTA/JHASTER ver. 1.2 I U I I
Document Science Publishing software I U I I
Document Science Compuset software I U I I
EXECUCOM TSO/IFPS PLUS ver. 4.0.2 I U I I
Goal Int'l GOAL FAQS/FTL ver 5.3.5 I U I I
Goal Int'l GOAL FAQS/CICS ver 5.5.6 I U I I
IBM DF/Sort ver. 11 I U I I
IBM VS FORTRAN ver. 2.5 I U I I
IBM COBOL ver. 2.4 I U I I
IBM COBOL II w/DBUG ver. 3.0.0 I U I I
IBM COBOL II Report Writer ver. 1.2/RW2036 I U I I
IBM OS/VS RPGII ver. 1.1 I U I I
IBM JES3 ver. 4.2.1 I U I I
IBM TSO/E (ESA) ver. 2.3.1 I U I I
IBM TSO/ISPF/PDF ver 3.3.0 I U I I
IBM OS/PL1 ver 5.1 I U I I
IBM AFP-PSF ver. 2.1 I U I I
IBM VTAH/MSNF ver 3.4.1 I U I I
IBM SHF ver. 4.2.2 I U I I
IBM RHF ver. 4.2.2 I U I I
IBM DFP/VSAH/DFEF ver. 3.3.1 I U I I
IBM DFDSS ver. 2.5 I U I I
IBM FTP/NPI ver. 1.0 I U I I
IBM FTP-GSP ver. 2.2 I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule A Page 2 of 10
<PAGE>
Schedule A
Unisource Applications Software
<TABLE>
<CAPTION>
Butler Paper - Port Edwards, WI
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
IBM SHP/E ver. 1.6.0 I U I I
IBM GDDH/PGF ver. 2.2 I U I I
IBM DSF ver. 14 I U I I
IBM HCP ver. 1.2 I U I I
IBM EREP ver. 3.5 I U I I
IBM RSCS ver. 2.3 I U I I
IBM VSE/VSAH ver. 1.4.2 I U I I
IBM VSE/VSAH (Space Hgt) ver. 1.4.2 I U I I
IBM VSE/VSAH (Backup-Restore) ver. 1.4.2 I U I I
IBM VSE FASTCOPY ver. 1.2.1 I U I I
IBM ACF/VTAH ver. 3.2.0 I U I I
IBM BTAH-ES ver. 1.1.10 I U I I
IBM COBOL ver. 1.3.0 I U I I
IBM DSF ver. 1.12.0 I U I I
IBM DOS/VSE/OLTEP ver. 1.1.0 I U I I
IBM DOS/VSE/EREP ver. 3.4.1 I U I I
IBM DITTO VH/VSE ver. 3.1.0 I U I I
IBM FTP/VSE ver. 1.1.0 I U I I
IBM VSE/VSAH ver. 1.3.0/VSE SIPO/E 1.4.2 I U I I
IBM VTAH ver. 2.1.0/VSE SIPO/E 1.4.2 I U I I
IBM BTAH ver. 1.1.0/VSE SIPO/E 1.4.2 I U I I
IBM EREP ver. 2.3.0/VSE SIPO/E 1.4.2 I U I I
IBM COBOL ver. 2.6 I U I I
IBM DITTO ver. 1.1.0/VSE SIPO/E 1.4.2 I U I I
IBM SDF ver. 2.2 I U I I
IBM CICS/DDH I U I I
IBM SSP ver. 3.7 I U I I
IBM CDC HCP 3745 ver. 5.4.0 I U I I
IBM ATL HCP ver. 5.4.0 I U I I
IBM CICS/OS Prod. ver. 2.1.2 I U I I
IBM CICS/OS Demo ver. 2.1.2 I U I I
IBM CICS/OS Test ver. 2.1.2 I U I I
IBM ASH HCP 3745 ver. 5.4.0 I U I I
IBM BHW HCP 3745 ver. 5.4.0 I U I I
IBM NETVIEW ver. 1.3 I U I I
IBM DISOSS ver. 3.4 I U I I
IBM OfficeVision HVS ver. 1.2.0 I U I I
IBM Displaywrite 370 I U I I
IBM DB2 ver. 2.2 I U I I
IBM QHF ver. 3.1.1 I U I I
IBM DBEDIT ver. 1.3 I U I I
IBM AS ver. 2.1 I U I I
IBM HVSEDIT ver. 3.1 I U I I
IBM OV/FAX ver. 2.2 I U I I
Innovation FATS/FATAR ver. 4.3 I U I I
Innovation FDR ver. 5.1 I U I I
Pansophic TSO/Panvalet ver. 12.0 I U I I
SDI UDC ver. 7.0 I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule A Page 3 of 10
<PAGE>
Schedule A
Unisource Applications Software
Butler Paper - Port Edwards, WI
<TABLE>
<CAPTION>
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Sterling DYL-260 ver. 7.1 I U I I
Sterling DYL-260/280 ver. 8.5 I U I I
MacKinney Systems Show and Tell II ver. 1.0 I U I I
MacKinney Systems Spy ver. 1.0 I U I I
Software Technology CICS/CPF ver. 3.4.4 I U I I
SoftSwitch SoftSwitch Central ver. V4L3 I U I I
SoftSwitch Toolkit ver. 1.1 I U I I
Smartech DOCS ver. 6.8 I U I I
Sterling DMS ver. 8.1.6 I U I I
Sterling DMS/ISPF Option ver. 8.1 I U I I
Sterling SHRINK ver. 4.6.3 I U I I
Sterling DYL-260/280 ver. 9.5/6.0 I U I I
Sterling DYL-QUIKJOB ver. 13.0 I U I I
Turnkey Systems TASKMASTER ver. 2.2.3 I U I I
Tone Software Flasher JES3 I U I I
Woven SMFUTIL ver. 5.1 I U I I
<CAPTION>
Butler Paper - Denver, CO
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
No software listing available.
<CAPTION>
Carpenter - Denver, CO
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Intercity QUANTEL I U I I
<CAPTION>
Garrett-Buchanan - Philadelphia, PA
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Allison-Ross TIP(TPS ver 4.0 R3-0102) I U I I
CAI General Ledger I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule A Page 4 of 10
<PAGE>
Schedule A
Unisource Applications Software
<TABLE>
<CAPTION>
Weiss Miquon - Philadelphia, PA
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Baxter ASAP Express Software I U I I
Enterprise Systems Standard Hospital Interface I U I I
EDI Texlon Software I U I I
EDI Enterprise Systems I U I I
Lotus Lotus 123 U U U U
Word Perfect Word Perfect U U U U
Harvard Graphics U U U U
<CAPTION>
Monumental Paper - Baltimore, MD
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Lotus Lotus 123 U U U U
Word Perfect Word Perfect U U U U
Harvard Graphics U U U U
<CAPTION>
Distribix - St. Louis, MO
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Hammermill HAL - Hammermill Access Link I U I I
Weyerhauser WIN - Weyerhaeuser I U I I
Information Network I U I I
Distribix Customer Order Entry I U I I
Distribix Physical Inventory I U I I
Distribix General Ledger I U I I
Distribix Sales Reporting I U I I
Distribix Paper Plus I U I I
Distribix Microfiche Invoice I U I I
Distribix Accounts Receivable & Credit
Mgt. I U I I
Distribix Sales Rep Laptop Order Entry I U I I
Distribix Inventory Control I U I I
Distribix Accounts Payable I U I I
Distribix Sales Forecasting I U I I
Distribix Billing Systems I U I I
Distribix Customer Pricing Management I U I I
Distribix Purchase Order Entry I U I I
Distribix Direct Order Entry I U I I
Distribix National Accounts I U I I
Distribix Fixed Asset System I U I I
Distribix Inter-Company Transfer I U I I
Rhumba Four Session Software I U I I
Sterling EDI Purchase Order System I U I I
Sterling Walmart National Account I U I I
Price Book System I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule A Page 5 of 10
<PAGE>
Schedule A
Unisource Applications Software
<TABLE>
<CAPTION>
Canada East - Cincinnati, OH
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Blueline Software RD/SHARE I U I I
Cincom Systems R-720 HANTIS - Quebec I U I I
Cincom Systems R-721 High Performance Option - Quebec I U I I
Cincom Systems R-720 HANTIS - Ontario I U I I
Cincom Systems R-721 High Performance Option- Ontario I U I I
Cincom Systems R-720 HANTIS - Cincinnati I U I I
Cincom Systems R-721 High Performance Option - Cincinnati I U I I
Computer Associates Tape /Manager I U I I
Computer Associates Tape /Manager ESA Option I U I I
<CAPTION>
Monarch - Houston, TX
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
DISC ONHIDEX KERNEL I U I I
DISC ONHIDEX QUEST I U I I
DISC ONHIDEX INTRINSIC LIBRARY I U I I
DISC ONHIDEX KERNEL I U I I
DRC SFD I U I I
DRC POS I U I I
Powerhouse Powerhouse 4GL I U I I
Robelle QEDIT I U I I
SOTAS SOTAS G/L I U I I
SOTAS SOTAS link I U I I
Tymlabs/Unison BackPack I U I I
Tymlabs/Unison Roadrunner I U I I
Tymlabs/Unison Spoolmate I U I I
Tymlabs/Unison Roadrunner iX PICS TIER T I U I I
Tymlabs/Unison Roadrunner iX UPDATES TIER T I U I I
VESOFT HPEX I U I I
VESOFT VEAUDIT I U I I
Whitman College E - mail I U I I
<CAPTION>
Mack Pac - Dallas, TX
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
No software listing available.
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule A Page 6 of 10
<PAGE>
Schedule A
Unisource Applications Software
Unisource - Oyster Point, CA
<TABLE>
<CAPTION>
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Bradmark DBGENERAL I U I I
DISC OHNIDEX Kernel ESHS I U I I
DISC OHNIDEX Kernel RCS I U I I
DISC OHNIDEX Intrinsic Library EWSHS I U I I
DISC OHNIDEX Intrinsic Library RCS I U I I
DRC SFD I U I I
DRC POS I U I I
DRC CSW I U I I
EDI Solutions EDITRAN I U I I
EDI Solutions EDIHAP I U I I
HP LaserRX/RXForecast I U I I
Honeywell/Bull SVP8064-AOOT Tape Management System I U I I
Honeywell/Bull AVF0041-B1T Fixed Asset I U I I
Honeywell/Bull AV40043-O1T Fixed Asset GL INTF I U I I
Honeywell/Bull AVF0081-81T PR Batch I U I I
Honeywell/Bull Operating System Nipolos I U I I
Honeywell/Bull PPS Utilities I U I I
Honeywell/Bull 4180D Print System I U I I
Honeywell/Bull On-Line Host Connection I U I I
HP DM I U I I
HP DATA ENTRY LIB I U I I
HP BSC LINK I U I I
HP RJE I U I I
HP Cobol I U I I
Intercraft DE300 II I U I I
Robelle QEDIT I U I I
Robelle SUPRTOOL I U I I
Speedware SPEEDWARE/4GL I U I I
Speedware SPEEDWARE/DESIGNER I U I I
Speedware SYSDOC I U I I
Speedware Speedex II I U I I
Sterling Software Doculink/HNP I U I I
Sterling Software Network Interconnect I U I I
Unison Tymlabs Haestro H100UC I U I I
Unison Tymlabs Haestro H150UM I U I I
Unison Tymlabs Haestro H150PX I U I I
Unison Tymlabs Haestro H150UX I U I I
Unison Tymlabs Haestro H150UT I U I I
Unisource Profit - Inventory Replenishment I U I I
Unisource DBS Payroll I U I I
Unisource DBS F/A - Fixed Assets I U I I
Unisource SA - Sales Analysis I U I I
Unisource IA - Inventory Analysis I U I I
Unisource CU - Customer Usage I U I I
Unisource Data Entry front end Pager Plus I U I I
Unisource VIPS - synchronous I U I I
Unisource 3780 - RJE interface to HP I U I I
Unisource 4180 - Page printer driver I U I I
VESOFT (qty. 4) HPEX I U I I
VESOFT (qty. 4) SECURITY I U I I
VESOFT VE Audit I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule A
uniskda page 7 of 10
<PAGE>
Schedule A
Unisource Applications Software
<TABLE>
<CAPTION>
Unisource South - Carson, CA
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Bradmark DBGENERAL I U I I
Bradmark DBGENERAL I U I I
DISC Omnidex I U I I
DRC SFD I U I I
SOTAS SOTAL GL I U I I
SOTAS SOTAL AP I U I I
VESOFT HPEX I U I I
VESOFT SECURITY I U I I
Robelle QEDIT I U I I
Robelle SUPERTOOL I U I I
Speedware SPEEDWARD 4GL I U I I
Unison Hastro I U I I
<CAPTION>
Unisource North - Seattle, WA
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Bradmark DBGENERAL I U I I
Bradmark DBGENERAL I U I I
DISC Omnidex I U I I
DRC SFD I U I I
SOTAS SOTAL GL I U I I
SOTAS SOTAL AP I U I I
VESOFT HPEX I U I I
VESOFT SECURITY I U I I
Robelle QEDIT I U I I
Robelle SUPERTOOL I U I I
Speedware SPEEDWARE 4GL I U I I
Unison Hastro I U I I
<CAPTION>
Unisource Hawaii - Honolulu, HI
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
VESOFT HPEX I U I I
VESOFT SECURITY I U I I
</TABLE>
<PAGE>
Schedule A
Unisource Applications Software
<TABLE>
<CAPTION>
COPCO - Columbus, OH
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Bradmark DBGENERAL I U I I
EDI Solutions EDITRAII I U I I
EDI Solutions EDIHAP I U I I
EDI Solutions TELAHON COHH PKG I U I I
Orbit Software Online - BACKUP +/XL I U I I
<CAPTION>
Inter-City - Minneapolis, MN
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
No software listing available.
<CAPTION>
Rourke Eno - Hartford, CT
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
Adager Corporation Adager Model 2 I U I I
Carolina SYSPAK XL I U I I
EDI Solutions EDITRAN I U I I
EDI Solutions EDIMAP I U I I
HP COBOL II/XL I U I I
HSD Inc. JobRescue I U I I
HSD Inc. JobTime I U I I
SOTAS GL300 General Ledger I U I I
Supply Tech Inc. STX Software I U I I
VESOFT HPEX 3000 I U I I
VESOFT SECURITY 3000 I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule A Page 9 of 10
<PAGE>
Schedule A
Unisource Applications Software
Canada West - Annacis Island, BC, Canada
<TABLE>
<CAPTION>
APPLICATION RESPONSIBILITY
VENDOR APPLICATION NAME OPER FIN MAINT UPGRADES
<S> <C> <C> <C> <C> <C>
DAI Accounts Payable I U I I
DAI Accounts Receivable I U I I
DAI General Ledger I U I I
DAI Sales Analysis I U I I
DAI Sales Order Entry I U I I
DAI Inventory Order Management I U I I
DAI Purchasing I U I I
DAI System Utilities I U I I
DAI Universal Management Information I U I I
DAI Electronic Data Interface I U I I
EDI Telink I U I I
Novell Novell-Lite I U I I
Diskeeper I U I I
PATCHWORKS I U I I
</TABLE>
December 22, 1993
ISSC/Uunsource Confidential Schedule A Page 10 of 10
<PAGE>
ISSC / Unisource
Agreement for Information Technology Services [ART APPEARS HERE]
- --------------------------------------------------------------------------------
Schedule B
Unisource Systems Software
Note:
1. Information contained in this Schedule is meant to represent the data known
as of the Commencement Date of the Contract. Should omitted Licenses be
discovered at a later date, this Schedule will be updated to reflect that
additional data.
2. Personnel costs for operating the Software listed in this Schedule are
included within the Annual Services Charges.
3. ISSC shall operate the Software in accordance with the Licenses granted
pursuant to Article 16 of the Agreement.
Unijax - Jacksonville, FL
<TABLE>
<CAPTION>
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
Altai VH/Analyze2-0106 I U I I
Amdahl ZEKE/VSE - Z410B301C I U I I
BIH BIHPRINT (DTAPRINT) - 3.4F I U I I
Dylakor QUIKJOB - 13.6 I U I I
Dylakor QUIKINDEX - 2.4.1 I U I I
Dylakor QUICKWRITE - 13.6 I U I I
IBM VTAH/VSE - 3.30 I U I I
IBM PL/1 Common Lib - 1.2.0 I U I I
IBM VTAH/VH - 3.4.1 I U I I
IBM DITTO/VH/VSE - 3.2.0 I U I I
IBM EP - 6.1 I U I I
IBM DLF - 1.3.0 I U I I
IBM ASSEMBLER - 2.1.0 I U I I
IBM VH/VSE - 1.2.0 I U I I
IBM MCP - 4.3.1 I U I I
IBM PL/1 OPT LIB - 2.3.0 I U I I
IBM RSCS - 3.1.0 I U I I
IBM POWER/VSE - 5.1.0 I U I I
IBM FASTCOPY/VSE - 2.1.0 I U I I
IBM HIGH LEVEL ASSEMBLER - 1.1.0 I U I I
IBM DOS/COBOL - 1.3.1 I U I I
IBM DL/1 DOS - 1.9.0 I U I I
IBM DCF - 1.4.0 I U I I
IBM CICS/VR - 1.0.0 I U I I
FOCUS - Report writer I U I I
Legent NetSpy/VH I U I I
Legent EXPLORER/VH I U I I
Legent FQS/VSE - 3.54 I U I I
Legent Explorer/VSE - 5.90 I U I I
Landmark MONITOR for CICS/VSE I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule B
Page 1 of 8
<PAGE>
Schedule B
Unisource Systems Software
<TABLE>
<CAPTION>
Unijax - Jacksonville, FL
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
Macro 4 DUHPHASTER - 2.700 I U I I
Macro 4 TUBES/VTAH-VH-Session Mgr I U I I
Macro 4 SSF I U I I
Macro 4 DHOL I U I I
Macro 4 CICS Transaction Dump Supt I U I I
OSI INTERTEST-4.2.1 I U I I
OSI UFO - 3.0 I U I I
SDS IPCP/BASIC - 2.3 I U I I
Sterling Software QUIKDL1 (DOS/VSE) I U I I
Sterling Software TRANSLATOR VSE I U I I
Supply Tech Inc. (Not Identified) I U I I
Snycsort SYNCSORT/DOS - 2.2C I U I I
DOCTORD - 5.88/6.23 I U I I
TUBES - 2.300C I U I I
UMIJAX IPCP/DLI I U I I
<CAPTION>
Butler - Port Edwards, WI
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
IBM HVS/ESA ver 4.2.2 I U I I
IBM VH/SP ver 1.6.0 I U I I
IBM DOS/VSE ver 4.1.3 I U I I
IBM POWER/VSE ver 4.1.2 I U I I
IBM DOS/VSE ver 1.3.5/VSE SIPO/E 1.4.2 I U I I
IBM POWER/VSE ver 2.1.0/VSE SIPO/E 1.4.2 I U I I
DEC VAX/VHS ver. 5.5 I U I I
<CAPTION>
Butler - Denver, CO
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
IBM RPG400 I U I I
IBM OS/400 I U I I
<CAPTION>
Carpenter - Denver, CO
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
IBM RPG400 I U I I
IBM OS/400 I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule B Page 2 of 8
<PAGE>
Schedule B
Unisource Systems Software
<TABLE>
<CAPTION>
Garrett-Buchanan - Philadelphia, PA
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
CAI General ledger I U I I
Unisys OS/3 ver. 13.12.B I U I I
Unisys ICAH I U I I
Unisys EDITOR I U I I
Unisys COBOL I U I I
Unisys PCTRAN I U I I
Unisys MS-DOS I U I I
Unisys IMS-HT I U I I
<CAPTION>
Weiss Miquon - Philadelphia, PA
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
IBM AIX Version 3 I U I I
BSI Maxwell distribution I U I I
<CAPTION>
Monumental Paper - Baltimore, MD
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
IBM AIX Version 3 I U I I
JL Sellers JL Sellers I U I I
<CAPTION>
Distribix - St. Louis, MO
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
IBM OS/400 I U I I
IBM RPG/400 I U I I
IBM CL I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule B Page 3 of 8
<PAGE>
Schedule B
Unisource Systems Software
Canada East - Cincinnati, OH
<TABLE>
<CAPTION>
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
B I MOYLE BIM SPOON for 4361 I U I I
B I MOYLE BIM SPOON for 4381 I U I I
BMC Software 3270 SUPEROPTIMIZER/CICS for DOS/VSE I U I I
GOAL SYSTEM(Legent) FAVER I U I I
IBM VM/ESA I U I I
IBM RSCS 5748-XP1 I U I I
IBM PASSTHUR 5748-RC1 I U I I
IBM IPF 5748-HS1 I U I I
IBM ACF/SSP 5664-289 I U I I
IBM ACF/HCP 5668-754 I U I I
IBM EP 5735-XXB I U I I
IBM VSE/ESA 5799-BMB I U I I
IBM VSE/ESA ADVANCED FUNCTION 5686-032 I U I I
IBM VSE/ESA POWER 5686-03301 I U I I
IBM VSE/ESA FASTCOPY 5686-03401 I U I I
IBM VSE/ESA VSAM 5686-03701 I U I I
IBM VSE/ESA VSAM SPACE MANAGER 5686-03703 I U I I
IBM VSE/ESA VSAM BACKUP RESTORE 5686-03704 I U I I
IBM VSE/ESA CICS/VS 5686-02601 I U I I
IBM VSE/ESA BTAM-ES 5745-SCBTH I U I I
IBM VSE/ESA EREP 5656-26001 I U I I
IBM VSE/ESA ICKDSF 5658-99201 I U I I
IBM VSE/ESA ACF/VTAM 5686-03702 I U I I
IBM VSE/ESA DITTO 5688-05201 I U I I
IBM NCCF 5666-285 I U I I
IBM COBOL 5746-CB1 I U I I
IBM RPG 5746-RG1 I U I I
LANDMARK MONITOR I U I I
MACRO4 CICSPRINT I U I I
MacKINNEY ELECTRO MAIL I U I I
MacKINNEY CICS/SWAP I U I I
RJH SYSTEM SOURCE/BANK I U I I
SDS POWERTOOLS I U I I
SYMCSORT SYMCSORT I U I I
UCCEL (CA) VSAMLIST I U I I
Sterling PCHAINFRAME I U I I
Sterling EDI-GENTRAN PLUS I U I I
Sterling EDI-EDE I U I I
Sterling EDI-SUPERTRACS I U I I
</TABLE>
Canada East - Montreal, Canada
<TABLE>
<CAPTION>
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
Macro 4 Inc. CISPRINT I U I I
Macro 4 Inc. CIS Two Power Spooling I U I I
SDI Cache Magic VM/SP CP4 I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule B Page 4 of 8
<PAGE>
Schedule B
Unisource Systems Software
<TABLE>
<CAPTION>
Monarch Paper - Houston, TX
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
HP HPEiX Ver. 4.0 I U I I
<CAPTION>
Mack Pac - Dallas, TX
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
UNIX I U I I
PICK RDBMS I U I I
PICK BASIC I U I I
Prelude Prelude Distribution I U I I
<CAPTION>
Unisource Central - Oyster Point, CA
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
Honeywell/Bull GCOS8 I U I I
Honeywell/Bull GCOS6 I U I I
Honeywell/Bull DSA300 I U I I
Honeywell/Bull DP58,88,90 Host I U I I
Honeywell/Bull RB Binary Syns I U I I
Honeywell/Bull RCI Terminal I U I I
Honeywell/Bull DNS300 Host Admin I U I I
Honeywell/Bull DNS300 Network Admin I U I I
Honeywell/Bull DN - IV STD IDS/II I U I I
Honeywell/Bull INDEXED Seq Proc I U I I
Honeywell/Bull Cobol 74 I U I I
Honeywell/Bull Cobol 74 Runtime I U I I
Honeywell/Bull Cobol 68 Runtime I U I I
Honeywell/Bull Cobol 85 Comp/RT I U I I
Honeywell/Bull GC858 SAT Full I U I I
Honeywell/Bull TSS Comp Facility I U I I
Honeywell/Bull Comp SYS UTIL I U I I
Honeywell/Bull AVF0041 I U I I
Honeywell/Bull AV40043 I U I I
Honeywell/Bull AVF0081 I U I I
Honeywell/Bull SVP8064 I U I I
HP HPEiX v4.0 I U I I
HP HPEiX vG.2P.00 I U I I
HP HPEV vG.2P.00 I U I I
HP NS3000 I U I I
HP Glance XL I U I I
HP LAser RX/RX Forecast I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule B Page 5 of 8
uniskdb
<PAGE>
Schedule B
Unisource Systems Software
Unisource South - Carson, CA
<TABLE>
<CAPTION>
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
HP HPEiX ver 4.0 I U I I
HP NS3000 I U I I
HP Glance XL I U I I
HP LaserRX/RXForecast I U I I
DRC SFD I U I I
SOTAS SOTAS GL I U I I
SOTAS SOTAS AP I U I I
VESOFT HPEX I U I I
VESOFT SECURITY I U I I
Robelle QEDIT I U I I
Robelle SUPRTOOL I U I I
Speedware SPEEDWARE 4GL I U I I
Unison Maestro I U I I
Bradmark DBGENERAL I U I I
DISC Omnidex I U I I
</TABLE>
Unisource North - Seattle, WA
<TABLE>
<CAPTION>
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
HP HPEiX ver 4.0 I U I I
HP NS3000 I U I I
HP Glance XL I U I I
HP LaserRX/RXForecast I U I I
DRC SFD I U I I
DRC POS I U I I
VESOFT MPEX I U I I
VESOFT SECURITY I U I I
Robelle QEDIT I U I I
Robelle SUPRTOOL I U I I
Speedware SPEEDWARE 4GL I U I I
Unison Maestro I U I I
Bradmark DBGENERAL I U I I
DISC Omnidex I U I I
</TABLE>
Unisource Hawaii - Honolulu, HI
<TABLE>
<CAPTION>
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
HP HPEiX ver 4.0 I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule B
uniskdb Page 6 of 8
<PAGE>
Schedule B
Unisource Systems Software
Copco - Columbus, OH
<TABLE>
<CAPTION>
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
ADAGER Model 2 I U I I
HP HPE/XL Rel B.40.0 I U I I
VSOFT HPEX 3000 I U I I
DISC OMNIDEX Kernal I U I I
DISC OMNIDEX Intrinsic Library I U I I
Robelle SUPRTOOL I U I I
</TABLE>
Inter-City - Minneapolis, MN
<TABLE>
<CAPTION>
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
Quantel-Quantel Quick/Basic I U I I
</TABLE>
Rourke Eno - Hartford, CT
<TABLE>
<CAPTION>
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
Adger 4GL I U I I
IMAGE DBMS I U I I
HP HPEXix ver 4.0 I U I I
HP Glance I U I I
</TABLE>
Canada West - Annacis Island, BC, Canada
<TABLE>
<CAPTION>
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
Digital VAX ver. 5.5-2 I U I I
Digital VAXSIMPLIS I U I I
Digital OpnVHS/V Bas SSS VAX 4100 I U I I
Digital DM/OSI ES V/V LPS I U I I
Digital DEC Rdb Rt V/V LPS I U I I
Digital OpnVHS/V VAX O/S LPS 4 User I U I I
Digital OpnVHS/V FAX O/S LPS 16 User I U I I
Digital VAX WAN Driver LPS I U I I
Digital VAXCLUSTER SW LPS I U I I
Digital OpnVHS/V Base SSS VAX I U I I
Digital DM/OSI EF V/V LPS I U I I
Digital DECRdb Rt V/V LPS I U I I
Digital OPHVMS/V UHL LPS VAX 7610 I U I I
Digital VAXCLUSTER SW LPS I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule B
uniskdb Page 7 of 8
<PAGE>
Schedule B
Unisource Systems Software
<TABLE>
<CAPTION>
Canada West - Annacis Island, BC, Canada
ITEM SOFTWARE RESPONSIBILITY
VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV
<S> <C> <C> <C> <C> <C>
Digital VAX WAN Driver LPS I U I I
Digital INFOSVR 100/500 SVR SSS/06 I U I I
Digital Pathworks Basic Support LPS I U I I
Digital Pathworks/HAC CL HAC RX23 I U I I
Digital Pathworks HAC SVR HDDS TK503 I U I I
Digital VAX WAN Driver LPS I U I I
Dibol Programming environment I U I I
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule B Page 8 of 8
<PAGE>
ISSC / Unisource [ART APPEARS HERE]
Agreement for Information Technology Services
- --------------------------------------------------------------------------------
Schedule C
Unisource Machines
Note:
1. Information contained in this Schedule is meant to represent the data known
as of the Commencement Date of the Contract. Should omitted Leases be discovered
at a later date, this Schedule will be updated to reflect that additional data.
2. Data communication not listed and residing at a Unisource Service Location is
covered by this Schedule.
3. All items listed in this Schedule are quantity one unless otherwise noted.
<TABLE>
<CAPTION>
Unijax - Jacksonville, FL
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
AMDAHL 5890 300E 511192 CPU
EMC 4204-4 Symmetrix
IBM 3990 J03 DASD
IBM 3990 J03 DASD
IBM 3390 A28 DASD
IBM 3390 A28 DASD
IBM 3390 B2C DASD
IBM 3390 B2C DASD
IBM 3390 B2C DASD
IBM 6120 feature for 3390 DASD
IBM 3803 DASD
IBM 3420 DASD
IBM 3725 FEP
Hitachi 7480 A22 Tape
Hitachi 7480 A22 Tape
Hitachi 7480 B22 Tape
Hitachi 7480 B22 Tape
HP Data Wedge 50
HP Laser Printer
Magnavox VGA Monitors 50
Epson F11050 Printer 50
Hitachi 7480 B22 Tape 6
Storage Tek 5000 E21 Printer 2
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 1 of 14
<PAGE>
Schedule C
Unisource Machines
<TABLE>
<CAPTION>
Butler - Port Edwards, WI
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
No hardware listing available.
<CAPTION>
Butler - Denver, CO
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
IBM AS/400 CPU
IBM 2440 A12
IBM 3174 O1R Controller 9
IBM 3174 11R Controller 21
IBM 3174 61R Controller 12
IBM 3174 03R Controller 2
IBM 3174 91R Controller 7
IBM 3174 51R Controller 8
IBM 3174 81R Controller 12
IBM 3178 C40 Display 80
IBM 3178 C20 Display
IBM 3178 C30 Display 6
IBM 3180 220 Display 6
IBM 3180 110 Display 1
IBM 3180 120 Display 8
IBM 3191 A10 Display 361
IBM 3191 B10 Display
IBM 3192 FD0 Display
IBM 3192 G10 Display 2
IBM 3196 A10 Display
IBM 3197 DG0 Display 2
IBM 3268 002 Printer 19
IBM 3278 002 Printer 16
IBM 3299 002 31
IBM 3471 BG1 Display 16
IBM 3745 170 FEP
IBM 3834 001 6
IBM 3979 001
IBM 4201 001 Printer
IBM 4224 101 Printer
IBM 4224 202 Printer 68
IBM 5219 D02 2
IBM 5262 001
IBM 5291 200 3
IBM 5821 010
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 2 of 14
uniskdc
<PAGE>
Schedule C
Unisource Machines
<TABLE>
<CAPTION>
Butler - Denver, CO
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
IBM 5853 003
IBM 5865 001 4
IBM 5866 003 2
IBM 5866 002 32
IBM 6262 T14
IBM 7861 026 Modem 22
IBM 7861 047 Modem 35
IBM 9309 002 2
IBM 9331 001
IBM 9335 A01
IBM 9335 B01
IBM 9406 B40
Xerox 4050 Y87100491 Printer
Xerox 4090 64N021119 Printer
Xerox 3700 E350254399 Printer
Xerox 4045 150D V80431909 Printer
<CAPTION>
Carpenter - Denver, CO
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
AT&T 3600 Comsphere DSU 29
AT&T Modem 9
CRT 140
Dataphone Modem 10
Decision Data 7755 Tape Drive
IBM AS/400 CPU
IBM 9347 Tape Drive
IBM (compatible) PC 20
Perle 394E Wkst. Ctlr 46
Printer 35
Perle 394T 8-Device
Perle 394T 8-Device
Perle 394E 16-Twinax
Perle 394E 16-Twinax
Perle 394E 16-Twinax
Perle 394E 16-Twinax
Perle 394E 32-Twinax
Perle 394E 32-Twinax
Perle 394T
Perle 394T
Perle 394
Perle 394
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 3 of 14
<PAGE>
Schedule C
Unisource Machines
Garrett - Buchanan - Philadelphia, PA
<TABLE>
<CAPTION>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
BA Equip. Leasing F2919 00 Console Table
BA Equip. Leasing C3971 00 Console Key Caps
BA Equip. Leasing F5122 00 WSC Conversion
BA Equip. Leasing F4864 01 Storage EXP-4MB
BA Equip. Leasing F4868 00 Channel EXP 3
BA Equip. Leasing F3964 05 Power Supply
BA Equip. Leasing F2798 00 SLCA-Med Speed 3
BA Equip. Leasing C3823 00 SLCA SEL-RTS 3
BA Equip. Leasing C3824 00 SLCA SEL 3
BA Equip. Leasing F2799 99 SLCA-Low Speed
BA Equip. Leasing 8494 998494 Disk Subsystem
BA Equip. Leasing F4958 998494 Ctlr Expansion
BA Equip. Leasing F4959 99 Drive Expansion 3
BA Equip. Leasing F5152 998494 Dual Access 4
BA Equip. Leasing F5268 01 Terminator
BA Equip. Leasing 3612 87SVT-1122 Workstations 32
BA Equip. Leasing 3612 87SVT-1123 Terminals 35
BA Equip. Leasing AP1329270 Printer 20
BA Equip. Leasing B9961 15 RS232 Interface 20
Norwest 0789 930789 Printer
Norwest F3734 01IDUC
Norwest 8419 008419 Disk
Norwest F2789 02 Peripheral Cont.
Norwest F2788 04 Workstation 4
Norwest F2788 99SLCA 4
Norwest 8609 00T MUX 7
Norwest 8422 02 Diskette Subsystem
Norwest F3427 01 Diskette Control
Unisys 3135-96 Sys 80 Mod 15 CPU
Unisys 8494 DASD 8
Unisys 8419 DASD
Unisys IBM 5160 PC 18
Unisys IBM 5170 PC 5
Unisys SVT 1120 WRKST 111
Unisys SVT 1124 WRKST 3
Unisys HP 2686A 2
Unisys Epson Printers 12
Unisys 136COL Printers 25
Unisys OM37001/AS 6
Unisys OM23000 CT 5
Unisys OM1000/YG
Unisys OM3000/FC 4
Unisys OM105000/BM 4
Unisys 3660/98 2
Unisys 6347/95
Unisys 6211/94
Unisys 6222/96
Unisys 6226/98
Unisys 6231/98
Unisys 7685/98
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 4 of 14
<PAGE>
Schedule C
Unisource Machines
Garrett-Buchanan - Philadelphia, PA
<TABLE>
<CAPTION>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
Unisys BT 3261-81 Tape drive
Unisys BT 3266 Tape drive
Unisys 9246 25B Printer
Unisys 0789 93 Printer
</TABLE>
Weiss Miquon - Philadelphia, PA
<TABLE>
<CAPTION>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
IBM RS/6000 320H Control unit
IBM Server/320 Control unit
IBM 7208 Tape Drive
IBM 800 Ipm Printer 4
IBM (compatible) PC 2
Okidata 321 Printer
Roec Wyse 15V29 DASD
Roec Wyse Keyboard
Roec Wyse 21K100123 Monitor
Roec Wyse 4501VGA Monitor
Roec OKI 81280063284 Printer
MAI Basic Four MAIP4201 Printer
MAI Basic Four MAIP4213 Printer
MAI Basic Four MAIP4220 Printer
MAI Basic Four MAIO4313 Terminal 32
MAI Basic Four MAIO4312 EVDT 6
</TABLE>
Monumental Paper - Baltimore, MD
<TABLE>
<CAPTION>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
IBM RS6000 Power CPU
IBM Server/320 CPU
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 5 of 14
<PAGE>
Schedule C
Unisource Machines
<TABLE>
<CAPTION>
Distribix - St. Louis, MO
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
Decision Data Workstation 14
Decision Data Printer
IBM AS/400 D60 S10A5184 CPU
IBM 3430 Tape Drive
IBM 4234 D02 Printer
IBM 3262 Printer
IBM 4214 36479 Printer
IBM 4214 69528 Printer
IBM 4214 86328 Printer
IBM 5224 15512 Printer
IBM 5224 86888 Printer
IBM 5224 21093 Printer
IBM 5224 55545 Printer
IBM 5224 23400 Printer
IBM 5224 16544 Printer
IBM 5224 15192 Printer
IBM 5224 84687 Printer
IBM 5224 17214 Printer
IBM 5224 79959 Printer
IBM 5256 52898 Printer
IBM 5226 36907 Printer
IBM 5226 55876 Printer
IBM 5226 54480 Printer
IBM 5226 33065 Printer
IBM 5226 55877 Printer
IBM 5226 54479 Printer
IBM 5226 54478 Printer
IBM 3179 Display 2
IBM 5291 9
IBM 5714 3
IBM 5799
IBM 9309 2
IBM 9335 12
IBM 5294 Comm ctlr
Memorex 5441 Tape Drive
Memorex 1476 22
Memorex 1477 12
Memorex 0196 8
Memorex 2296 19
Memorex 1196 4
Memorex 1197 9
Memorex 1224 7
Memorex 8067 15
Memorex 8090
Memorex 8063 10
XL Datacomp 9637 002 DASD
XL Datacomp 9637 002 DASD
XL Datacomp 9637 002 DASD
XL Datacomp 9637 002 DASD
XL Datacomp 9637 121 IPI10 DASD
Perle 5294 Comm ctlr
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 6 of 14
<PAGE>
Schedule C
Unisource Machines
Canada East - Cincinnati, OH
<TABLE>
<CAPTION>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
IBM 9121 210 CPU
IBM 3880-3 CPU 2
IBM 3380E DASD 3
IBM 9345-2 DASD
IBM 3720-1 DASD 2
IBM 3803-2 DASD
IBM 3420-8 Tape dr. 2
IBM 3480 A22 Tape
IBM 3480 B22 Tape 2
IBM 4245 20 Printer
IBM 4341 M02 CPU
IBM 129 003 Card Punch
IBM 3203 005 Printer
IBM 3287 002 Printer
IBM 3370 A01 DASD
IBM 3370 B01 DASD 3
IBM 3274 D01 Control Unit 2
IBM 3274 D41 Control Unit
IBM 3505 B02 Controller - Card
IBM 3525 P03 Card Punch
Paradyne 7610 3 LCU
Paradyne 7229 LCU 4
Paradyne 7620 3 RCU
Paradyne 7212 RCU 2
TELL 4331C 1551872 T-1 Aggregate Link
TELL 4331C 204841 T-1 Aggregate Link
TELL 4335 1506151 CPU Switch
TELL 8440 11368 VAC Power Supply
TELL 8440 11369 VAC Power Supply
TELL 8440 11371 VAC Power Supply
TELL 4340 1555943 TELABS 4 CH SYNC
TELL 4340 1360901 TELABS 4 CH SYNC
TELL 4340 1562436 TELABS 4 CH SYNC
TELL 4340 1562457 TELABS 4 CH SYNC
TELL 4340 1562462 TELABS 4 CH SYNC
TELL 4340 396207 TELABS 4 CH SYNC
TELL 4341A 1557509 QUAD RS232 Interface
TELL 4341A 1557513 QUAD RS232 Interface
TELL 4341A 3850220 QUAD RS232 Interface
TELL 4341A 1850269 QUAD RS232 Interface
TELL 4341A 1850270 QUAD RS232 Interface
TELL 4341A 394331 QUAD RS232 Interface
TELL 350TF 1877 V35-RS INTE CONV
TELL 4300 DP14828 T1 Main Shelf
TELL 4402 48628 110 VAC Power Shelf
TELL 4836 1514172 4836 P/S Monitor
TELL 4332C 1850128 Control Processor
TELL 4332C 396354 Control Processor
TELL 4333A 1551470 Serial I/D Module
TELL 4333A 1551471 Serial I/D Module
TELL 4830 1550253 Datalink Control
TELL 4830 1550278 Datalink Control
Unisys Mod 18
Unisys Mod 24
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 7 of 14
uniskdc
<PAGE>
Schedule C
Unisource Machines
<TABLE>
<CAPTION>
Canada East - East Montreal, Canada
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
ITT 9420 Controller 15
ITT 94300 Device Adaptor 28
ITT 9341 Printer
ITT 9342 Printer 2
ITT 9301 Printer 2
ITT 9303 Printer 22
ITT 92230 Terminal 47
ITT 94320 Terminal 45
<CAPTION>
Monarch Paper - Houston, TX
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
HP HP3000 960 CPU
HP HP150 II CPU 7
HP C2204A DASD 11
HP HP7978 Tape
HP 2566B 900 Ipm Printer
HP 2566B 900 Ipm Printer
HP 700/92 Terminal 29
HP 700/94 Terminal 2
HP 9123D Disk drive 7
HP 2686A Printer
HP 2277A Printer 2
HP D1182A Display 6
HP 4594C Vectra ES/12 Display 6
HP 2934A Printer 3
HP 2933A Printer
HP 33440A Printer 5
HP 33449A Printer
HP 2563B Printer
HP 2563A 300 Ipm Printer 2
HP 2563B 300 Ipm Printer
HP 7470A Plotter
HP 7440A Printer
HP Laserjet 2000 Printer
IEM 4850 5GB Tape
<CAPTION>
Mack Pac - Dallas, TX
<S> <C> <C> <C> <C> <C>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
IBM RS/6000 320 CPU
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 8 of 14
<PAGE>
Schedule C
Unisource Machines
<TABLE>
<CAPTION>
Unisource Central - Oyster Point, CA
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
Cirdata BP1500 X08371 Printer
Delphax 4180D Printer
DTC Comn ctlr 6
Honeywell/Bull DSP8000 81E CPU
Honeywell/Bull DVC8120 Datanet
Honeywell/Bull DSP6000 CPU
Honeywell/Bull DN8 CPU
Honeywell/Bull DPS6 CPU
Honeywell/Bull MSP3880 DASD
Honeywell/Bull MSU3380 DASD
Honeywell/Bull MSU3382 DASD 2
Honeywell/Bull MSU3880 DASD 3
Honeywell/Bull MSU3881 DASD
Honeywell/Bull MTP610 1/2" 9trk Tape drive 4
Honeywell/Bull MTF0634
Honeywell/Bull MTF0635 3
Honeywell/Bull MTF8030
Honeywell/Bull MTK0630
Honeywell/Bull MTK0633 4
Honeywell/Bull MTP8021
Honeywell/Bull MTV0630
Honeywell PRU900 Printer
Honeywell/Bull DN8 FEP
Honeywell/Bull M201 Disk drive
HP HP3000 series 992 CPU
HP HP3000/GX CPU
HP 7937FL DASD 12
HP C2204A DASD
HP C2204A DASD
HP C3023T DASD
HP HP7080 1/2" 9trk Tape drive
HP HP2363 Printer
Printronix Printer
Cipher Black box
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 9 of 14
uniskdc
<PAGE>
Schedule C
Unisource Machines
Unisource South - Carson, CA
<TABLE>
<CAPTION>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
Dataproducts 1200 Printer
HP 3000 980 CPU
HP 3000 S70 CPU
Eagle 1.34FL DASD
Eagle 1.34FL DASD
Eagle 1.34FL DASD
HP 7937XP DASD 7
HP 7937H DASD
HP 7937FL DASD
HP 7936H DASD
HP 670H DASD
HP Bridges 3
Timplex Datacom devices
HP 7980 1/2" 9track Tape
HP 2563 Printer
HP 2563 Printer
HP DTC FEP 7
Printronix Printer
</TABLE>
Unisource North - Seattle, WA
<TABLE>
<CAPTION>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
HP 3000 960 CPU
HP 7937XP DASD 7
HP 7936XP DASD
HP C2204A DASD
HP C2204A DASD
HP XC 7980 1/2" 9track Tape
HP 2563 Printer
HP DTC Comm ctlr 5
Timplex Datacom devices
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 10 of 14
uniskdc
<PAGE>
Schedule C
Unisource Machines
Copco - Columbus, OH
<TABLE>
<CAPTION>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
HP 3000 980-100 CPU
HP 7937 540mb DASD 7
HP 2203 670mb DASD
HP 2204 1.3gb DASD 4
HP 7978B Tape Drive
HP 14850 8mm Tape Drive
HP 2345A 2635F01064 Comm ctlr
HP 2345A 2635F01065 Comm ctlr
HP 2345A 2635F01066 Comm ctlr
HP 2345A 2635F01067 Comm ctlr
HP 2345A 2635F01063 Comm ctlr
HP 2345A 2813A02132 Comm ctlr
HP 2345A 2813A01127 Comm ctlr
HP 2934A 2844A51104 Printer
HP 2562C 2922A00154 Printer
HP 2932A 2434A09628 Printer
HP 2932A 2450A15902 Printer
HP 2932A 2450A15951 Printer
HP 2932A 2450A15953 Printer
HP 2932A 2450A15917 Printer
HP 2932A 2533A23738 Printer
HP 2932A 2535A23746 Printer
HP 2932A 2605A29520 Printer
HP 2932A 2715A39740 Printer
HP 2932A 2533A22237 Printer
HP 2932A 2533A21799 Printer
HP 2932A 2450A15954 Printer
HP 2567B 2819A03862 Printer
HP 2567C 3011A00145 Printer
HP 2563C 3109Y04345 Printer
HP 2563C 3109Y04347 Printer
HP 2934A 2
HP Bridge 3213A06045
HP Bridge 3141A04884
</TABLE>
ISSC/Unisource Confidential December 22, 1993
uniskdc Schedule C Page 11 of 14
<PAGE>
Schedule C
Unisource Machines
Inter-City - Minneapolis, MN
<TABLE>
<CAPTION>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
Monumental Tech W/Q64 64 CPU
Monumental Tech F 3551W/Q64 DASD
Monumental Tech F 5241W/Q64 Tape
Monumental Tech 4121 Printer
Monumental Tech 5067 Printer
Monumental Tech 5082 Printer
Monumental Tech 5131 Printer
Monumental Tech F 4807 Video Ctlr
Decision Data 3278 DASD
Decision Data 4051 Display 3
Decision Data 4052 Display 12
Decision Data 4212 Printer
Decision Data 5067 Printer
Decision Data 5082 Printer
Decision Data 5131 Printer 2
Decision Data 64 297 CPU
Decision Data IOU-48 Disk/Tape
Decision Data IOU-56 Disk/Tape
Decision Data 400MB DASD
Decision Data 8MM Tape drive
Decision Data 16 BPI Tape drive
</TABLE>
ISSC/Unisource Confidential December 22, 1993 Page 12 of 14
uniskdc Schedule C
<PAGE>
Schedule C
Unisource Machines
Rourke Eno - Hartford, CT
<TABLE>
<CAPTION>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
Data Comm Systems Codex 2264 Modem 2
Data Comm Systems Codex 48001 Modem 12
Data Comm Systems Codex 48000 Modem 11
Data Comm Systems DATRICE 40-4102 Modem 4
Data Comm Systems DIG SCOUT Modem 6
Data Comm Systems Digicom 9624E Modem 11
Data Comm Systems Digicom 9624LES Modem 6
Data Comm Systems NBDG 90-0154-01 Modem
Data Comm Systems NBDG 90-0157-05 Modem
Data Comm Systems NBDG 90-0161-01 Modem
Data Comm Systems NBDG 90-0336-01 Modem
Data Comm Systems NBDG 90-0693-02 Modem 5
Data Comm Systems TIX M-QA 4 Port Exp Card 12
Data Comm Systems TIX M2403 Multiplexer 4
Data Comm Systems TIX M348 Expander
Data Comm Systems TIX M32410 MUX 4
Data Comm Systems TIX M34820 MUX
Data Comm Systems TIX M4829
Data Comm Systems TIX QM484 MUX
Data Comm Systems TIX QM484 Expander
HP HP3000 992/100 CPU
HP 7980XC Tape
HP 7980 Tape
HP 2564A 600 LPM Printer
HP 2566 Printer 58
Eagle 7937FL 1.71gb DASD
Eagle 7937FL 1.71gb DASD
Eagle 7937FL 1.71gb DASD
Eagle 7937HPIB 2.85gb DASD 5
Coyte C2201FL 5.36gb DASD 8
Coyte C2204FL 1.34gb DASD
Coyte C2203HPIB 1.34gb DASD
Coyte C2204HPIB 1.34gb DASD
Integrated C2282A 670 mb 3006A01121 Controller
Integrated C2282A 670 mb 3006A01126 Controller
SCSI C2462A 2.60gb DASD
SCSI C2462A 2.60gb DASD
D. Array C2250a 5.20gb DASD
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 13 of 14
<PAGE>
Schedule C
Unisource Machines
Canada West - Annacis Island, BC, Canada
<TABLE>
<CAPTION>
VENDOR MACH MACH MACH MACH QUANTITY
NAME TYPE MODEL S/N DESCRIPTION
<S> <C> <C> <C> <C> <C>
CI CLUSTER RA90 DASD
CI CLUSTER RA82 DASD 2
CI CLUSTER RA81 DASD 5
DEC LP27 Printer
DEC LP26 Printer
Digital DV-41MT1-E1 VAX 4000 CPU
Digital MS44-DC ECM MEM
Digital RF35-EK DSSI DSK 2
Digital QT-005AS-AA
Digital QT-D04AS-L9
Digital QT-MA4AS-L9
Digital QT-XULA9-VD
Digital QT-XULA9-VF
Digital QT-VAWA9-L9
Digital QT-VBRAS-L9
Digital QT-005AD-AD
Digital QT-DO5AD-L9
Digital QT-MA4AD-L9
Digital QT-XULAD-WD
Digital QT-VBRAD-L9
Digital QT-VAWA9-L9
Digital QT-YSHA9-A9
Digital VAX 7610 CPU
Digital VAX 7000 CPU
Digital SF73-JE
Digital SEACD-AA InfoServer
Digital KA-41 InfoServer
Digital TFM86-HE Tape drive
Digital TFM86-TA Tape drive
Digital DSRVE-MA DECSERVER
Digital DSXM-AA MAU
Digital LA120-AA Terminal 14
Digital LA120-DA Terminal 20
Digital LA120-AA Terminal
Digital LA12-A Terminal 3
Digital VT420-CA Terminal 3
Digital VT220-B2 Terminal 4
Digital VT220-C2 Terminal 5
DSSI CLUSTER RF73 DASD 7
DSSI CLUSTER RF35 DASD 12
VAX VAX 7610 UCW CPU
VAX VAX 8550 UCC CPU
VAX VAX 4100 UCHQ CPU
VAX VAX 6410 UCDEV5 CPU
VAX VAX 750 CPSALE CPU
VAX MICROVAX II UCDEV4 CPU
VAX VAX 785 Router CPU
VAX MICROVAX II OPER1 CPU
VAX MICROVAX II OPER2 CPU
VAX MICROVAX II UCDEV6 CPU
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule C Page 14 of 14
uniskdc
<PAGE>
ISSC/Unisource [ART APPEARS HERE]
Agreement for Information Technology Services
- --------------------------------------------------------------------------------
Schedule D
ISSC Machines
Intentionally Blank
This Schedule will be updated as ISSC Machines are added to accommodate the new
operating environment provided in Schedule N.
December 22, 1993
ISSC/Unisource Confidential Schedule D Page 1 of 1
<PAGE>
ISSC/Unisource [Art Appears Here]
Agreement for Information Technology Services
- ------------------------------------------------------------------------------
Schedule E
Support Services, Performance Standards and
Operational Responsibilities
SECTION E
INTRODUCTION
This Schedule E describes:
1. certain duties, obligations and responsibilities of ISSC, including, but not
limited to, Data Center management, telecommunications, software development
and maintenance, equipment management and maintenance, finance and
administration, premises management and general support services;
2. Performance Standards relating to some of the above-described duties; and
3. financial credits which shall apply in the event that ISSC fails to meet
certain Minimum Performance Standards.
Schedule has been organized as follows:
. Section E-1 - Services and Standards - Current Environment
. Section E-2 - Services and Standards - XXXX XXXX XXXX
. Section E-3 - XXXX - XXXX XXXX XXXX
. Exhibit E-1 - Responsibilities Matrix Current Environment
. Exhibit E-2 - Responsibilities Matrix XXXX XXXX XXXX
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 1 of 43
<PAGE>
Schedule E
Support Services, Performance Standards and
Operational Responsibilities
SECTION E-1
CURRENT ENVIRONMENT
I. INTRODUCTION
During the Term and until the migration of a Unisource Service Location to the
XXXX XXXX XXXX ISSC will operate the systems at the Unisource Service Locations
using the equipment, software and related facilities provided by Unisource and
utilized by Unisource prior to the Commencement Date to provide services to
itself, and ISSC will provide at least the same level of information technology
("IT") services being provided at such Unisource Service Locations prior to the
Commencement Date. The descriptions contained in this Schedule E of specific
types of services, and methods and procedures used to perform same are
descriptive of the current types of services, methods and procedures Unisource
used prior to the Commencement Date to perform these services for itself in its
different Unisource Service Locations. ISSC shall provide equivalent or better
services, methods, and procedures. The Parties contemplate that ISSC will
perform the normal and required upgrades or improvements, in accordance Schedule
J, to the Systems in the Current Environment.
During the Term, the Parties may agree on different or additional Services and
Performance Standards, and may amend this Schedule E in writing accordingly.
All capitalized terms not defined in this Schedule E shall have the meanings
given them in the Agreement.
II. SERVICES
A. UNISOURCE SERVICE LOCATIONS MANAGEMENT SERVICES
1. Operation of Unisource Service Locations
----------------------------------------
ISSC shall be responsible for the operation and management of the
Unisource Service Locations. ISSC will retain the selected personnel
currently employed by Unisource pursuant to Section 10 of the Agreement
as well as using the service of the XXXX set forth in Schedule S to
operate the Unisource Service Locations by maintaining at least the
same standards of support and procedures that existed prior to
Commencement Date for each Unisource Service Location. ISSC assumes
that, unless otherwise noted, the Unisource staffing levels, hardware,
software, and processes at the Unisource Service Locations prior to the
Commencement Date are adequate to maintain the Unisource IT services
until replaced by the XXXX XXXX XXXX. No provision has been made to
substantially enhance current systems unless otherwise noted. ISSC
intends to support the Unisource Service Locations with existing
hardware, software and personnel levels until the XXXX XXXX XXXX XXXX
is installed and operational. ISSC will effect any changes requested by
Unisource pursuant to Schedule J.
ISSC shall be responsible for providing the services using the current
facilities and equipment, and for maintaining proper and adequate
supply levels and Unisource will retain financial responsibility for
same. ISSC shall also be responsible for establishing and maintaining a
properly trained Unisource Service Locations' population, including
necessary management and support staff. The hours of operation of the
Unisource Service Locations shall be consistent with the availability
that was normal and accepted practice prior to Commencement Date.
2. Processing Operations
---------------------
ISSC shall monitor and process on-line and batch applications,
including scheduled, unscheduled and on-request services as well as End
User initiated processing. All responsibilities will be performed
consistent with the practices existing at the various Unisource Service
Locations prior to the Commencement Date. To perform such
responsibilities, ISSC shall:
a. provide support for test and production environments;
b. provide computer room operations support and perform all console
monitoring activities;
c. provide support functions including, the support of current systems
and data base access systems and software packages;
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 2 of 43
<PAGE>
d. provide report generation;
e. maintain host networking software, including but not limited to
satellite communication, terrestrial network communication,
LAN interfaces;
g. perform all technical system support operations, including DASD
management, system programming, capacity planning and performance
tuning, and System Software Support consistent with current
Unisource Service Location practices;
h. schedule systems maintenance so as to minimize interference with
the business needs of Unisource;
i. complete all processing schedules on time and in the prescribed
sequence;
j. to the extent reasonably possible, process all special request
activities within the requested time frames;
k. monitor End User job submissions on a regular basis to ensure that
these jobs are successfully completed as time permits in view of
competing production resources;
l. provide access to, and software compatibility with, external
systems necessary for the Services and other systems identified by
Unisource, to the same extent available to Unisource prior to the
Commencement Date;
m. perform regular monitoring of utilization needs and efficiencies
and report on tuning initiatives consistent with current practice;
n. operate, support and maintain, consistent with this Agreement,
third-party products, services and projects; and
o. identify possible product and enhancement opportunities to improve
performance, and notify Unisource of these opportunities.
3. Production Control
------------------
ISSC shall maintain production schedules and cooperate with Unisource
in responding to special processing requests and new processing
requirements. To perform such responsibilities, ISSC shall:
a. schedule batch jobs and report distribution systems in accordance
with Unisource's schedule parameters so that on-line applications
dependent on batch processing and batch process outputs shall be
available as scheduled;
b. obtain Unisource approval changes prior to implementation,
consistent with current practice;
c. coordinate and modify schedules for special requests, follow
Unisource priorities; and promptly notify Unisource if special
requirements shall affect the timely completion of other tasks, so
that Unisource can adjust the priorities if Unisource so desires.
4. File Services
-------------
ISSC shall manage the files for each Unisource Service Location in a
manner consistent with the practices existing for such Unisource
Service Location prior to the Commencement Date to ensure the
availability and integrity of all Unisource data. To perform in such
responsibilities, ISSC shall:
a. ensure that all files under its control are current and available
during requested access times;
b. initiate and complete existing data processing activities to
ensure the data integrity of all files;
c. verify (using current tools and procedures) the successful receipt
of all incoming files and the successful transmission of all
outgoing files;
d. maintain, and, as appropriate, update and execute Unisource's
present file backup and recovery procedures;
e. conduct routine backup and recovery procedures (e.g., data set
restore) so as not to impact scheduled operations;
f. conduct routine monitoring and corrective action according to
current procedures and practices;
g. maintain current documentation of all files, to the extent such
documentation existed prior to Commencement Date;
h. ensure that adequate file space is available for processing;
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 3 of 43
<PAGE>
i. report Unisource disk space utilization and requirements to the
extent necessary for capacity planning purposes and ISSC will
provide on demand reporting to Unisource in a manner consistent with
current practice; and
j. identify possible product and enhancement opportunities for improved
performance, and notify Unisource of these opportunities.
5. Tape Management
---------------
ISSC shall provide tap management services for each Unisource Service
Location consistent with the practices existing for such Unisource
Service Location prior to the Commencement Date. To perform such
responsibilities, ISSC shall:
a. update Unisource's procedures, as appropriate and with Unisource's
consent, governing time periods for retention of tapes;
b. as appropriate at the individual processing sites, store tapes and
paper documentation at secure off-site vault storage, using
processes consistent with current Unisource site practices;
c. provide Unisource with the ability to monitor compliance with
retention and storage requirements;
d. complete tape mounts in sufficient time to meet production
processing requirements;
e. complete tape mounts for nonproduction processing in accordance with
agreed to service levels;
f. ensure tape media is reliable;
g. ensure equipment is properly cleaned and maintained at the required
intervals in accordance with manufacturers' specifications to
minimize problems and outages;
h. ensure adequate supplies for the tape environment are maintained and
that the scratch tape pool is sufficient to service all scheduled
processing needs;
i. store tapes in the storage areas provided currently;
j. retrieve archived tapes and restore required files and data sets
within mutually agreed timeframes;
k. provide Unisource with the prescribed to monitor tape management
operations, mailing and receipt control;
l. report Unisource tape utilization and requirements consistent with
current Unisource site practice; and
m. identify possible product and enhancement opportunities for improved
performance, and notify Unisource of these opportunities.
6. Data Base Administration
------------------------
ISSC shall be responsible for managing the data and the data base
environment for each Unisource Service Location consistent with hardware
and software capabilities existing for such Unisource Service Location
prior to the Commencement Date, and with the practices existing at the
Unisource Service Location prior to the Commencement Date. To perform
such responsibilities, ISSC shall:
a. provide production and test environments with the ability to
increase the number of environments, subject to the limitation of
hardware and software;
b. perform all logical and physical DBMS data base control functions,
consistent with practices available to Unisource prior to the
Commencement Date, including but not limited to:
1) perform SysGens;
2) define tables;
3) define data base program views and associated DBMS records when
required;
4) establish necessary application views of target data bases;
5) allocate physical DBMS data base files;
6) configure DBMS per specifications and apply/test DBMS PTFs on a
timely basis;
7) perform all logical and physical DBMS data base functions to
support current systems and planned Restructured Business
Platform; and
8) perform data base tuning and reorganization as reasonably
required to maintain system performance requirements and in
accordance with a schedule approved by Unisource.
c. plan for changes in the size of data bases due to business growth
and AD/M project implementation, and review plans with Unisource as
required;
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 4 of 43
<PAGE>
d. provide data base environments for applications separate from the
production data base environment, consistent with the current
processes;
e. provide data base support for all current data base environments
and those established by ISSC;
f. maintain existing tools to monitor data base performance;
g. monitor data base performance and data base space utilization, as
well as identify and recommend practical modifications for
improved performance;
h. maintain and implement data base archive processes and procedures
to meet Unisource business requirements, as approved by
Unisource;
i. maintain and implement data base backup procedures to recover from
a data base error within time frames consistent with current
practice;
j. maintain existing user guides for data base products;
k. identify possible product and enhancement opportunities for
improved performance, and notify Unisource of these opportunities;
l. test and implement data base environment changes consistent with
current practices; and
m. maintain the standard data base access routines used by
applications support, and development personnel and Unisource
software, consistent with current practice.
7. Output
------
ISSC shall provide output device processing for each Unisource Service
Location, including print, microfiche, transmission and data files
support in a manner equivalent to the procedures existing for such
Unisource Service Location prior to the Commencement Date. To perform
such responsibilities, ISSC shall:
a. produce output on time;
b. track, manage, communicate and resolve all output problems related
to the Services;
c. separate and package all output and ensure that it is properly
distributed within required timeframe;
d. find, trace or replace lost or missing output;
e. execute reruns of output as reasonably requested by Unisource
and obtain Unisource's approval if rerunning any output shall
impact scheduled on-line or batch production processing; and
f. identify possible enhancement opportunities for improved output
performance and notify Unisource of these opportunities.
8. Information Security
--------------------
ISSC shall provide security access control tools, consistent with the
current implementations, for data, data bases and other information
repositories and for applications, operating systems and libraries as
described in Schedule L.
B. DATA NETWORK MANAGEMENT SERVICES
1. Data Network
------------
ISSC's responsibilities shall include, with Unisource's prior
approval, administering the procurement of, and directing the
engineering, installation, operation, and maintenance of the Network
as needed to support Network operational requirements.
2. Network Connectivity and Operations
-----------------------------------
ISSC shall manage the bandwidth necessary to deliver the services and
shall assume responsibility for management of the Network. ISSC
anticipates using techniques equivalent to conventions prior to
Commencement Date when performing the following functions:
a. maintaining the connectivity required for performance of the
Services;
b. maintaining the Network bandwidth, with Unisource approval,
necessary to deliver the Services;
c. ordering and overseeing installation and maintenance of Network
circuit and Equipment in response to Unisource's operational
requirements and minimizing problems in providing the Services by:
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 5 of 43
<PAGE>
1) performing installation and maintenance activities in accordance
with schedules approved by Unisource.
2) performing changes to the Network on an expedited basis, where
possible, at Unisource's request;
3) scheduling Network outages related to installation and
maintenance during off-peak hours as approved in advance by
Unisource and providing Unisource with reasonable advance notice
of such activity.
d. serving as contact for all Network needs, coordinating with local
exchange and inter-exchange carriers to provide connectivity, and
serving as the interface for providing Services via third party
providers;
e. maintaining current recovery and alternative routing capabilities
consistent with the Current Environment as necessary to meet the
Performance Standards;
f. coordinating network addressing, managing address generation
capacity to avoid interruption or delay of normal Unisource
operations, and providing addressing for the required number of
devices at Unisource Service Locations to meet installation and test
schedules proposed by ISSC and approved by Unisource;
g. preventing, if possible, identify, and resolving problems on the
Network, through the current problem management and escalation
procedures; and
h. identifying possible product and enhancement opportunities for
improved performance, and notifying Unisource of these
opportunities.
C. SOFTWARE DEVELOPMENT AND MAINTENANCE
ISSC will provide Unisource the Systems Software support and maintenance and
AD/M services in the Current Environment, including the Truck Routing
Systems installed prior to the Commencement Date, consistent with practices
and approvals existing for each Unisource Service Location prior to the
Commencement Date. The current level of programming resource will be applied
to respond to requirements as established by Unisource. The development and
maintenance procedures followed will be the same or substantially similar to
those in place prior to Commencement Date. ISSC will establish internal
monitoring and reporting to ensure the effectiveness of the system support
and AD/M activities. Current legacy application support and operations will
terminate upon migration to the Restructured Business Platform.
ISSC shall be responsible for the maintenance and modification of current
Systems Software and Applications using the In-Scope Personnel as required
to meet Unisource's business priorities. Unisource will designate the
allocation and priority of Systems Software Support and AD/M Services
resources. Enhancements and development projects requiring greater than two
person-months must be approved by the Unisource Senior I/S Executive.
1. Quality Assurance
-----------------
ISSC shall maintain the quality assurance processes existing in the
current development environments prior to the Commencement Date and
procedures that are reasonably necessary to ensure that the Software
development and maintenance responsibilities are executed accurately and
in a timely manner.
2. AD/M Project Management
-----------------------
ISSC shall perform development projects for Unisource at Unisource's
request or as required to interact with the XXXX XXXX XXXX described in
Schedule N, in accordance with the AD/M project life cycle described
below. For each AD/M project, both Parties shall designate a single
point-of-contact with decision-making authority to whom Unisource may
communicate requirements, give approvals and obtain information, as
required. ISSC shall update Unisource on the status of each AD/M Project
according to a time schedule mutually agreed to by the Parties,
depending on the critically of the particular AD/M Project, and shall
provide Unisource with such additional information at a level of detail
to be mutually agreed upon that Unisource may reasonably request. ISSC
shall immediately notify Unisource of AD/M Project delays which could
impact any established Schedules.
In addition to executing its responsibilities regarding Software as
needed to provide the Services and meet the Performance Standards, ISSC
shall perform AD/M Projects using the practices established within
Unisource. ISSC will maintain sufficient status reporting to monitor
project progress. Generally AD/M projects adhere to the AD/M Project
Life Cycle listed below:
a. Project Requests
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 6 of 43
<PAGE>
Unisource shall initiate an AD/M Project by submitting a request
in the same manner as it is currently processed to a designated
ISSC individual. This will generally be the same individual
currently receiving requests.
b. AD/M Project Plan
Once Unisource has decided to proceed with the AD/M Project and in
accordance with the assigned priority. ISSC shall develop an AD/M
Project Plan in consultation with Unisource and for Unisource's
approval. ISSC shall obtain such additional detail from
Unisource's representatives as necessary to complete the AD/M
Project Plan. ISSC shall deliver the AD/M Project Plan prior to
commencement of the AD/M Project. The AD/M Project Plan will be
consistent with the current level of planning and be in sufficient
detail for both ISSC and Unisource as to the content, schedule and
effort required by the project. The schedule for completion (as
approved by Unisource and which may require Unisource's
assistance) will be developed so as not to impede the identified
business operations. Impacts the AD/M Project may have on other
on-going or projected work will also be identified by ISSC.
c. Design
ISSC shall design the AD/M Project to meet the User Requirements,
and shall provide Unisource with design documentation if project
size or Unisource representatives determine this to be
appropriate.
d. Coding
ISSC shall conduct coding in accordance with existing Unisource
standards and practices. Unisource may monitor the progress of
coding. ISSC shall promptly report any material delays in or
problems with coding that may impact the schedule.
e. Documentation
ISSC shall provide to Unisource all necessary and appropriate End
User documents.
f. Testing
Testing will be conducted in a manner consistent with current
practices. End Users may review test results as appropriate.
g. Acceptance
If Unisource requires acceptance testing for an AD/M Project, ISSC
will schedule this activity prior to project implementation.
h. Implementation
After Unisource has accepted an AD/M Project, ISSC shall implement
the AD/M Project into then-existing systems in a manner that
minimizes disruption to the services.
i. Support
ISSC shall provide such levels of End User support as are
reasonably required by Unisource's representatives to ensure that
End Users can make use of the AD/M Project in the manner intended.
3. Transition to XXXX
------------------
XXXX prior to a site's migration to the XXXX XXXX XXXX, all AD/M
activity will be stabilized and all AD/M efforts will be directed to
the XXXX XXXX XXXX migrations activities.
4. Dependencies
------------
ISSC is dependent on Unisource to perform the following tasks in
support of the AD/M services for the current systems. Unisource will:
a. provide appropriate business end-user personnel with business
expertise for participation in detail requirements definition,
design, and testing for these enhancements and fixes;
b. be responsible for all administrative and data entry work required
to support conversion to common item numbers and common customers
numbers;
c. maintain the current level of effort and responsibility for the
creation of business requirements from its business personnel as
existed prior to Commencement Date;
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 7 of 43
<PAGE>
d. retain any current hardware and software licenses through migration
of applicable Unisource Service Locations;
e. retain responsibility for record retention and vital records
following the Data Center closings;
f. support warehouse consolidations with the same level of business
expertise and effort as provided prior to the Commencement Date; and
g. implement Electronic Data Interchange outside host applications
within the scope of this Contract.
D. EQUIPMENT MANAGEMENT
ISSC shall manage the equipment utilizing current practices as necessary to
provide the Services and to meet the Performance Standards.
E. TRAINING AND TECHNICAL DOCUMENTATION
ISSC shall:
1. provide analysis for system training and technical documentation, as
appropriate and consistent with Unisource site practice;
2. provide reasonable assistance to Unisource in the design, development
and maintenance of system training and documentation materials for
Unisource End Users; and
3. train End Users on AD/M enhancements to the extent provided by the
In-Scope Personnel prior to the Commencement Date.
F. GENERAL SUPPORT SERVICES
1. Backup, Storage and Disaster Recovery
-------------------------------------
ISSC shall provide backup, storage and disaster recovery capabilities
consistent with current practices. ISSC shall:
a. provide Unisource with access to all stored media;
b. cooperate with Unisource's designated vendor in the provision of
off-site storage in its secure facility for backup data files and
Software, including assisting in daily pickup and delivery to the
off-site storage site; and
c. provide disaster recovery functions and services as described in
Schedule G.
2. Help Desk and Problem Management
--------------------------------
ISSC shall provide help desk and problem management services to the
extent they existed in the various Unisource Service Locations prior to
Commencement Date.
3. Reports
-------
a. ISSC shall provide Unisource with reports in accordance with
Unisource site practices prior to Commencement Date.
b. To the extent available prior to the Commencement Date, ISSC shall
provide Unisource with the capability to down-load data base
information and create its own reports.
4. Change Management
-----------------
ISSC shall:
a. control changes, as mutually agreed upon by the Parties, to the
Unisource environment, implement such changes only in accordance
with established Unisource practices and ensure that changes to the
Unisource environment are implemented so as to ensure continuity
when changes are initiated;
b. review, schedule and communicate all proposed processing environment
changes;
c. obtain Unisource approval, if required, for all changes to
production processing schedules. In the case of an emergency,
however, ISSC may change production processing schedules without
first obtaining Unisource's approval to the extent required to
correct the emergency, provided that ISSC notifies Unisource of the
changes as soon as reasonably possible; and
d. schedule outages, as agreed upon by the Parties, for system
maintenance, expansions and modifications during hours that meet
Unisource's operational needs and minimizes disruption.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 8 of 43
<PAGE>
5. Capacity Planning
-----------------
ISSC shall, consistent with practices existing prior to the
Commencement Date, provide capacity planning and management for all
data processing and Network resources within the scope of its
responsibility, including, without limitation, CPU resources. DASD
and other storage requirements, tapes, input/output devices, data
communications equipment, circuits and Data Network bandwidth.
Without limiting the generality of the foregoing, ISSC shall:
a. ensure that the necessary capacity, pursuant to Schedule J, shall
be available to meet the required Performance Standards;
b. advise Unisource of the requirement for such capacity change based
on Unisource's requirements;
c. incorporate Unisource capacity planning recommendations;
d. review capacity requirements as part of Unisource's normal
business planning cycle; and
e. assist Unisource in forecasting Unisource's capacity requirements
and in monitoring and validating actual utilization to the
capacity forecast.
III. SERVICES RESPONSIBILITIES MATRICES
The services responsibilities for the Current Environment are attached as
Exhibit E-1 of this Schedule E and further define the roles and responsibilities
of the Parties.
IV. PERFORMANCE STANDARDS
A. INTRODUCTION
1. ISSC will meet the duties, obligations and responsibilities
associated with Unisource Service Locations' services including on-
line Application availability, batch completion, essential output
availability, host system availability, transmissions, on-line
response time and other activities comprising the current services.
ISSC will provide these services at a level of performance that meets
or exceeds the performance levels attained by Unisource prior to the
Commencement Date, however, quantitative measures are not
consistently available at the various Unisource processing sites.
a. In those Unisource Service Locations that have documented
historical performance attainment levels, ISSC shall adopt such
performance attainment levels as the Performance Standards for
such Unisource Service Locations.
b. For those Unisource Service Locations not having documented
performance attainment levels, ISSC shall, during the initial XXXX
of the term, measure the actual performance of systems for the
agreed to performance categories (the "Measurement Period"), using
the measurement tools available on such Unisource Service
Location's systems, and the average of such performance
measurements will be set forth as the Performance Standards;
provided, however, that if the Parties determine that such period
is not representative of Unisource's normal operating environment,
then the Parties shall mutually select another XXXX period that is
representative of Unisource's normal operating environment as the
Measurement Period. Thereafter, ISSC performance of the services
shall be measured and compared to the Performance Standards on a
monthly basis.
ISSC shall provide Unisource with a monthly report of the performance
level attainment against the Performance Standards.
2. ISSC will be responsible for promptly investigating and correcting
failures to meet accepted performance standards by:
a. initializing problem investigations to identify root causes of
failures;
b. promptly reporting problems to Unisource that reasonably could be
expected to have a material adverse effect on Unisource
operations; and
c. making written recommendations to Unisource including both ISSC
actions and Unisource actions for improvement in procedures.
3. ISSC shall identify root causes, correct problems and minimize
recurrences of problems for which it is responsible. Unisource will
correct and minimize the recurrence of problems for which Unisource
is responsible and which prevent ISSC from meeting the accepted
performance standards.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 9 of 43
<PAGE>
B. DEFINITIONS
For purposes of this Schedule E, the following terms shall have the
following meanings:
1. "Actual Uptime" means that of the Scheduled Uptime, the aggregate
number of hours in any month during which each defined Application is
actually available at Unisource's point(s)-of-connection to the
Unisource Service Locations.
2. "Application" means individual subsystems or environments comprising
the Applications Software.
3. "Availability" means Actual Uptime plus Excusable Downtime divided by
Scheduled Uptime. For purposes of determining whether ISSC's
performance meets any Availability Performance Standard, ISSC's
Availability performance will be measured based on a monthly average
during each month of the Term, to be calculated and reported once
monthly.
4. "Excusable Downtime" means, that of the Scheduled Uptime, the
aggregate number of hours in any month during which each defined
Application is down due to:
a. action or inaction by Unisource (i.e., failing to provide power
for the equipment at the Unisource data center(s), systems outage
attributable to Application defects and Applications
incompatibility with the Systems Software, existing as of the
Commencement Date; etc.
b. a Force Majeure Event (as defined in Section 20.03 of the
Agreement); or
c. mutually agreed upon time for such things as preventive
maintenance, system upgrades, etc.
5. "Host System" means Unisource Service Locations Data Center equipment
and related Software.
6. "Minimum Service Level" means that level of systems availability below
which Unisource's business functions will be negatively impacted and
for which Unisource shall be entitled to XXXX. The Minimum Service
Level for Systems Availability for each Unisource Service Location is
set forth in Section V.(C) below.
7. "Scheduled Uptime" means the days of the week and hours per day that
each defined Application is scheduled to be available for use by End
Users.
C. PERFORMANCE STANDARDS CATEGORIES
1. Systems Availability and Scheduled Uptime: Application services will
be made available in accordance with the mutually agreed upon schedule
for each Unisource Service Location. ISSC shall perform the Services
as necessary to meet each of the Systems Availability Performance
Standards.
2. New Applications: The Availability Performance Standard for each new
Application material to Unisource's business shall be negotiated
between ISSC and Unisource based on actual performance during the
first 90 day period the implementation of the new Application that is
judged representative by the Parties (new Applications shall meet the
mutually agreed qualification criteria and be compatible with the
Systems environment specified in Schedule K); provided, however, that
such Application Availability Performance Standard shall be consistent
with the standards set forth for other comparable Applications.
3. Host On-line Response Time: Host on-line response time will be a
measure of the response time at the host for a given percentage of
End User initiated transaction(s) for an Application.
4. Scheduled Batch Services: ISSC will perform scheduled batch processing
services. ISSC's commitment to the batch services Performance
Standards is contingent upon ISSC's receipt from Unisource of critical
inputs by the designated time, and successful completion of the
appropriate Application batch job stream. Unisource recognizes that
its deviation from scheduled batch job streams may result in batch
output not being available by the scheduled time. The critical inputs
for each batch processing job shall be mutually agreed upon. If
Unisource fails to deliver any critical input by the deadline for the
applicable batch processing job, or deviates from scheduled batch job
streams, ISSC will use its best efforts, once the input is received,
or corrections are made by Unisource, to complete such batch
processing by the scheduled time.
ISSC is responsible for notifying the Unisource contact person(s) when
batch output will not be available by the scheduled time according to
the practices existing for that Unisource Service Location existing
prior to the Commencement Date. Unisource recognizes that its
deviation from scheduled batch job streams may result in batch output
not being available by the scheduled time resulting in impact to
on-line availability.
5. Unscheduled Batch Services: ISSC will perform on-request or on-demand
batch jobs for Unisource subject to ISSC's ability to meet Scheduled
Batch Services and the Performance Standards for other
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 10 of 43
<PAGE>
areas and a written and properly authorized request from Unisource for
such services and the availability of data or other inputs required to
perform such requests.
6. Help Desk: ISSC will provide Help Desk services in accordance with the
Performance Standards.
V. PERFORMANCE XXXX
A. INTRODUCTION
The Parties agree that ISSC shall be XXXX for Performance XXXX, as
described herein, only under the Current Environment. ISSC's XXXX for
Performance XXXX shall begin for the month following the Measurement
Period for each Unisource Service Location and shall only be XXXX in the
XXXX of an ISSC XXXX to XXXX XXXX Unisource's XXXX. For example, ISSC
XXXX for XXXX XXXX XXXX to machine failure unless XXXX to XXXX in a XXXX
the XXXX and XXXX XXXX established for the affected Unisource Service
Location.
B. CATEGORY
The Unisource/ISSC Agreement and Schedules set forth or refer to numerous
specific Services which ISSC will provide Unisource, a subset of which,
whose performance will be tracked, compared and reported against
Performance Standards. In addition, Minimum Service Levels will be
established for Systems Availability for each Unisource Service Location
which will be used to determine Performance Credits, if any, due to
Unisource.
C. IMPLEMENTATION
Following the Measurement Period for each Unisource Service Location, the
Parties will mutually determine the appropriate Minimum Service Level for
Systems Availability for each Unisource Service Location. After the
Parties reach agreement for the Minimum Service Levels, the following
chart will be revised with such levels.
<TABLE>
<CAPTION>
Unisource Minimum
Service Location Service Level
<S> <C>
1) Unijax XXXX
2) Butler XXXX
3) Carpenter XXXX
4) Garrett-Buchanan XXXX
5) Weiss Miquon XXXX
6) Monumental Paper XXXX
7) Distribix XXXX
8) Cininnati XXXX
9) Canada East XXXX
10) Monarch XXXX
11) Mack Pac XXXX
12) Oyster Point XXXX
13) Carson XXXX
14) Seattle XXXX
15) COPCO XXXX
16) Rourke Eno XXXX
17) Canada West XXXX
</TABLE>
The monthly performance reports provided Unisource by ISSC will be used
to determine whether ISSC has met the Minimum Service Level for each of
the Unisource Service Locations specified above.
Following the Measurement Period for each Unisource Service Location,
ISSC will be XXXX for Performance XXXX in the XXXX of XXXX to XXXX the
XXXX XXXX XXXX for any of the Unisource Service Locations listed above.
Beginning on the tenth day of the month following the completion of the
applicable Measurement Period and of each subsequent month during the
Term (prior to the migration of such
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 11 of 43
<PAGE>
Unisource Service Location to the Restructered Business Platform), ISSC will
determine whether the Services met the Minimum Service Level for each of the
Unisource Service Locations set forth above during the preceding calendar
month. For purposes of determining whether a XXXX is XXXX to XXXX:
1. The actual performance attainment for each of the Unisource Service
Locations specified above will be considered independently of the
others, and
2. The performance measurement will be the month's performance attainment
for Systems Availability as defined in Section IV.B(3) above.
D. CALCULATION
For XXXX to meet the XXXX XXXX XXXX for any of the Unisource Service
Locations specified above, the Performance XXXX will be XXXX as follows:
1. Each of the Unisource Service Locations will be assigned a XXXX XXXX and
the total of the XXXX XXXX must not XXXX XXXX. The XXXX XXXX are:
Unisource XXXX
Service Location XXXX
1) Unijax XXXX
2) Butler XXXX
3) Carpenter XXXX
4) Garrett-Buchanan XXXX
5) Weiss Miquon XXXX
6) Monumental Paper XXXX
7) Distribix XXXX
8) Cincinnati XXXX
9) Canada East XXXX
10) Monarch XXXX
11) Mack Pac XXXX
12) Oyster Point XXXX
13) Carson XXXX
14) Seattle XXXX
15) COPCO XXXX
16) Rourke Eno XXXX
17) Canada West XXXX
----
Total XXXX
2. XXXX to meet the XXXX XXXX XXXX for a specific Unisource Service
Location for each month will result in a Performance XXXX XXXX which
will be determined by XXXX the XXXX by the XXXX XXXX for that Unisource
Service Location. To qualify as a XXXX XXXX or greater, the XXXX to meet
the XXXX must XXXX in XXXX XXXX for the same Unisource Service Location.
Portion of the
Consecutive Months XXXX
XXXX XXXX
XXXX XXXX
XXXX XXXX
XXXX XXXX
For example, if the XXXX XXXX is XXXX and ISSC has XXXX to meet the XXXX
XXXX XXXX for a Unisource Service Location with a XXXX XXXX of XXXX for
XXXX, the applicable Performance XXXX would be:
XXXX x XXXX x XXXX = XXXX
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 12 of 43
<PAGE>
ISSC will return to "Normal Status" with respect to a XXXX attainment when
its monthly performance for such Unisource Service Location meets or exceeds
the Minimum Service Level, provided, that if ISSC has XXXX to XXXX the XXXX
for a particular Unisource Service Location for XXXX or XXXX then ISSC shall
have to XXXX or XXXX the XXXX for XXXX in order to return to Normal Status
for that Unisource Service Location. Any XXXX XXXX to meet the XXXX for that
Unisource Service Location shall be deemed to be a "XXXX."
E. Concurrent Operations
Beginning on the completion of Measurement Period following the migration of
the initial Unisource Service Location to the XXXX after which ISSC is XXXX
for Performance XXXX in both the XXXX and the XXXX the above calculation of
Performance XXXX in the XXXX will be XXXX by XXXX to determine the actual
Performance XXXX Unisource. This XXXX by XXXX or such other XXXX determined
by the XXXX during the Annual Planning Session, provided that the XXXX of
the XXXX for both the Current Environment and XXXX XXXX XXXX Performance
XXXX shall not be greater than XXXX will be in effect for the remainder of
the migration to the XXXX XXXX XXXX or until the Current Environment is
replaced fully by the XXXX or until ISSC's XXXX for Performance XXXX in the
XXXX is terminated, whichever occurs earlier.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 13 of 43
<PAGE>
Schedule E
Support Services, Performance Standards and
Operational Responsibilities
SECTION E-2
XXXX XXXX XXXX
I. INTRODUCTION
This Schedule describes certain duties, obligations and responsibilities of ISSC
in development and support of the Restructured Business Platform, including, but
not limited to, platform transformation, ISSC Data Center management, data
communications, software development and maintenance, help desk, equipment
management and maintenance, finance and administration, premises management for
ISSC locations, and general support services; and performance standards relating
to some of the above-described duties. ISSC shall be ready to provide the
Services described herein prior to the migration of the first Unisource Service
Location to the Restructured Business Platform.
ISSC shall develop a single operational architecture to support Unisource's core
business processes, as set forth in Schedule N.
The Parties agree that appropriate implementation details and procedures for the
Services shall be incorporated into the Procedures Manual.
II. SERVICES
A. SCHEDULE N PROJECTS
ISSC shall implement the transition plan from the current systems to the
XXXX XXXX as described in Schedule N.
B. DATA CENTER MANAGEMENT SERVICES
1. Systems Management Controls
---------------------------
ISSC will provide to Unisource, and ISSC and Unisource will mutually
agree on and use, the Systems Management Control ("SMC") Procedures as
the standard set of disciplines for managing information systems. The
SMC procedures shall be included in the Procedures Manual. ISSC will
administer each SMC discipline. In general, ISSC's SMC
responsibilities shall include the following processes:
a. "Problem Management" - to identify, record, track, and correct issues
impacting service delivery, recognize recurring problems, address
procedural issues and contain or reduce the impact of problems that
occur.
b. "Recovery Management" - for planning, establishing and testing the
recovery procedures required to provide the Services to End Users in
the event of a failure. The intent of this process is to anticipate
and minimize the impact of systems resource failure through the
development of predefined, documented procedures and software/hardware
recovery capabilities. Unisource instructions on what and how to
recover shall be provided to ISSC and included in the Procedures
Manual.
c. "Capacity Management" - for the development and maintenance of
tactical and strategic plans to ensure that the ISSC Data Center and
Data Network environments accommodate Unisource's growing or changing
business requirements.
d. "Performance Management" - to monitor, measure, analyze and report
systems performance as it compares to the Performance Standards.
Where warranted, ISSC may request Unisource to make changes to the
Applications Software to enable system performance improvement.
e. "Change Management" - to assess if the change is necessary, validate
the adequacy of the acceptance test, schedule the promotion into the
test environment, notify the appropriate functions and verify
successful implementation.
f. "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 facilities.
Unisource instructions on what, when and how to schedule and recover
shall be pro-
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 14 of 43
<PAGE>
vided to ISSC and included in the Procedures Manual. Setup and
scheduling shall be performed and controlled by ISSC in accordance
with the Procedures Manual.
g. "On-Line, Management" - for coordinating the appropriate skills,
information, tools and procedures required to manage on-line
networks and their supporting hardware and software systems. This
includes the staffing of a help desk facility for Unisource's End
Users.
h. "Configuration Management" - for processing hardware and Software
configuration changes and maintaining lists and diagrams of systems
configurations in the Procedures Manual. ISSC will provide revised
configurations to Unisource upon Unisource's reasonable request.
i. "Inventory Management" - of the ISSC Machines (including incoming
and outgoing) in the Data Center and Data Network. This activity is
to include, but not be limited to, serial number tracking, vendor
coordination and maintenance.
2. Operation of Data Center
------------------------
ISSC shall be responsible for the transition to and the operation and
management of the ISSC Data Center. ISSC shall be responsible for
establishing and maintaining proper and adequate facilities, equipment
and supplies; with respect to the ISSC Data Center, ISSC shall also be
responsible for establishing and maintaining a properly trained and
adequately staffed data center population, including necessary
management and support staff.
3. Processing Operations
---------------------
ISSC shall make available, monitor and process on-line and batch
applications, including scheduled, unscheduled and on-request services
as well as End User initiated processing. To perform such
responsibilities, ISSC shall:
a. provide support for test and production environments;
b. provide complete computer room operations support and perform all
console monitoring activities;
c. provide support functions including, access and usage of selected
data base query software packages along with the necessary
documentation;
d. install and maintain host networking software, including but not
limited to LAN interfaces;
e. operate and provide End User availability to applications software
to support the operating schedules of Unisource with applicable
systems availability;
f. perform all technical system support operations, including DASD
management, system programming, capacity planning and performance
tuning, including providing support for System Software;
g. with the approval of the Unisource Senior I/S Executive, schedule
systems maintenance so as to minimize interference with the
business needs of Unisource;
h. complete all processing schedules on time and in the prescribed
sequence;
i. to the extent reasonably possible, process all special request
activities within the requested timeframes and in the prescribed
sequence;
j. regularly monitor End User job submissions and ensure that these
jobs are successfully completed as time permits in view of
competing production resources;
k. provide access to, and software compatibility with, external systems
necessary for the Services and other systems identified by
Unisource;
l. provide access to and, where appropriate, copies of a project data
base for the purpose of project tracking and report production;
m. enhance processing capabilities and efficiencies through system
tuning and other run time improvements;
n. perform regular monitoring of utilization needs and efficiencies and
report on tuning initiatives regularly;
o. consistent with this Agreement, operate, support and maintain
third-party products, services and projects;
p. perform all AD/M projects in compliance with the AD/M project
management specifications; and
q. identify possible product and enhancement opportunities for improved
performance and notify Unisource of these opportunities.
4. Production Control
------------------
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 15 of 43
<PAGE>
ISSC shall maintain production schedules and cooperate with Unisource in
responding to special processing requests and new processing
requirements. To perform such responsibilities, ISSC shall:
a. prioritize and schedule batch jobs and report distribution systems in
accordance with Unisource's schedule parameters so that on-line
applications dependent on batch processing and batch process outputs
shall be available as scheduled;
b. distribute and obtain Unisource approval of all schedules prior to
implementation;
c. coordinate and modify schedules for special requests and follow
Unisource priorities. Promptly notify Unisource if special
requirements shall affect the timely completion of other tasks, so
that Unisource can adjust the priorities if Unisource so desires; and
d. respond expeditiously to requests from Unisource for priority job
execution.
5. File Services
-------------
ISSC shall manage files in a manner which shall ensure the availability
and integrity of all Unisource data. To perform such responsibilities,
ISSC shall:
a. ensure that all files under its control are current and available
during requested access times;
b. initiate and complete required data processing activities to ensure
the data integrity of all files;
c. verify (using available tools and procedures) the successful receipt
of all incoming files and the successful transmission of all outgoing
files;
d. document, maintain, and, as appropriate, update and execute Unisource
approved file backup and recovery procedures;
e. provide a recovery procedure for restoring the data image to a
previous level within an agreed amount of time;
f. provide recommendations to Unisource regarding backup and recovery
considerations, such as improved levels of protection, efficiencies
and cost reductions;
g. conduct routine backup and recovery procedures (e.g., data set
restore) so as not to impact scheduled operations;
h. maintain current documentation of all files, including name, content
and purpose/use;
i. ensure that adequate file space is available for processing;
j. report Unisource disk space utilization and requirements to the extent
necessary for capacity planning purposes if Unisource requires
additional equipment. In addition, ISSC will provide on demand
reporting to Unisource.
k. assist Unisource in utilizing disk storage resources in an efficient
and cost effective manner; and
l. identify possible product and enhancement opportunities for improved
performance, and notify Unisource of these opportunities.
6. Central Data Center Tape Management
-----------------------------------
ISSC shall provide tape management services. To perform such
responsibilities, ISSC shall:
a. update Unisource's procedures, as appropriate and with Unisource's
consent, governing time periods for retention of tapes, including
reasonable periods of retention of tapes for auditing purposes. Such
procedures shall be included in the Procedures Manual;
b. provide logging, and tracking of all physical tapes in and out of the
Data Centers, and provide required rotation of tapes for off-site
vault storage;
c. establish procedures to log and track physical tapes that are checked
in and checked out to third party vendors;
d. mark the retention time on each tape to be stored at secure off-site
vault storage;
e. store tapes at secure off-site vault storage;
f. notify the tape storage provider when it is time to destroy a tape in
accordance with retention procedures;
g. provide Unisource with the prescribed procedures to monitor compliance
with retention and storage requirements;
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 16 of 43
<PAGE>
h. complete tape mounts in sufficient time to meet production
processing requirements;
i. complete tape mounts for nonproduction processing in accordance
with agreed to service levels;
j. ensure tape media is reliable and read/write errors are kept to a
minimum;
k. ensure equipment is properly cleaned and maintained at the
required intervals in accordance with manufacturers'
specifications to minimize problems and outages;
l. ensure adequate supplies for the tape environment are maintained
and that the scratch tape pool is sufficient to service all
required processing needs;
m. store tapes in a physically and environmentally protected area.
Authorized Unisource representatives shall be granted access to
inspect storage areas;
n. retrieve archived tapes and restore required files and data sets
within mutually agreed time-frames;
o. provide Unisource with the prescribed reports to monitor tape
management operations, mailing and receipt control;
p. report Unisource tape utilization and requirements; and
q. identify possible product and enhancement opportunities for
improved performance, and notify Unisource and these
opportunities.
7. Data Base Administration
------------------------
ISSC shall be responsible for managing the data and the data base
environment. To perform such responsibilities, ISSC shall:
a. provide multiple production and test environments with the ability
to increase the number of environments;
b. support and control the data dictionary required for Unisource
data management and data base management;
c. perform all logical and physical DBMS data base control functions
including but not limited to:
1) populate the Unisource Data Dictionary;
2) establish necessary application views of target data bases;
3) define and allocate physical DBMS data base files based on
application needs;
4) perform all logical and physical DBMS data base functions to
support the Restructured Business Platform; and
5) perform data base tuning and reorganization as reasonably
required to maintain system performance requirements in
accordance with a schedule approved by Unisource.
d. if possible, plan for changes in the size of data bases due to
business growth and AD/M project implementation, and review plans
with Unisource on a regular basis for Unisource's comment and
approval;
e. provide data base environments for applications development,
maintenance, testing, quality assurance and ad hoc reporting
separate from the production data base environment;
f. maintain the physical data base design, create indices and make
recommendations on practical methods to optimize application
performance;
g. audit, evaluate and approve all data base design changes
associated with applications development/support, subject to
Unisource's review and reasonable approval;
h. maintain and install tools to monitor data base performance;
i. monitor data base performance and data base space utilization, as
well as identify and recommend practical modifications for
improved performance;
j. maintain and implement data base archive processes and procedures
to meet Unisource business requirements, as approved by Unisource;
k. maintain and implement data base backup procedures, as approved by
Unisource, to recover from a data base outage or corrupt data base
within time frames reasonably established by Unisource;
l. maintain data base definitions and make data base definitions
available to Unisource upon request;
m. identify possible product and enhancement opportunities for
improved performance, and notify Unisource of these opportunities;
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 17 of 43
<PAGE>
n. test and implement data base environment changes as approved by
Unisource;
o. determine data base changes and the impact of AD/M work, and
implement necessary changes to relevant data bases after
Unisource's review and approval; which approval shall not be
unreasonably held; and
p. maintain the standard data base access routines used by applications
support, development personnel and document any changes of same.
8. Output
------
ISSC shall provide output device processing including print, microfiche,
transmission and data files support. To perform such responsibilities,
ISSC shall:
a. produce output on time and within established quality standards;
b. effectively track, manage, communicate and resolve all output
problems related to the Services;
c. control and establish spooled output devices as required for remote
site applications; and
d. identify possible enhancement opportunities for improved output
performance and notify Unisource of these opportunities.
9. Information Security
--------------------
ISSC shall provide security access control tools for data, data bases
and other information repositories and for applications, operating
systems and libraries as described in Schedule L.
C. DATA NETWORK MANAGEMENT SERVICES
1. Data Network
------------
ISSC's responsibilities shall include administering the procurement of,
and directing the engineering, installation, operation, maintenance, and
management of the Network as needed to support Network operational
requirements. ISSC shall monitor the inter-networking devices, including
routers, hubs, and terminal servers through its central ISSC Network
Control Center as necessary to determine whether Network problems are
caused by such devices, in which case ISSC shall dispatch appropriate
third party vendors.
2. Network Connectivity and Operations
-----------------------------------
ISSC shall manage the bandwidth necessary to deliver the Services and to
meet the Performance Standards, and shall assume responsibility for the
operation of the Network, including Network management and monitoring,
local access management, equipment, design, circuit ordering,
maintenance, and problem prevention, identification and resolution.
Included in such responsibilities, to perform such responsibilities,
ISSC shall:
a. jointly with Unisource, develop an RFP specification to define the
network requirements of the Schedule N Projects;
b. maintain the Network bandwidth necessary to deliver the Services
and to meet the Performance Standards;
c. maintain Network availability and Network response times in
accordance with the Performance Standards set forth in this
Schedule E;
d. order and oversee installation and maintenance of Network circuits
and Equipment in response to Unisource's operational requirements,
to meet the Performance Standards, and to minimize problems in
providing the Services to;
1) perform provisioning, installation and maintenance activities
in accordance with schedules approved by Unisource;
2) obtain Unisource's approval before implementing Network changes
that materially affect the Services;
3) where possible, perform changes to the Network on an expedited
basis at Unisource's request;
4) schedule Network outages related to installation and maintenance
during off-peak hours as approved in advance by Unisource.
Provide Unisource with reasonable advance notice, and where
possible, notify Unisource three business days prior to a
scheduled outage;
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 18 of 43
<PAGE>
5) provide cost estimates as requested by Unisource for all costs
separately chargeable to Unisource; and
6) request management functions and equipment order preapproval not
less than two business days prior to time required to ensure no
delay to Unisource operations;
e. recommend necessary improvements at the Unisource facilities necessary
to deliver the Services and to meet the Performance Standards;
f. serve as single point-of-contact for all Network needs, coordinate
with local exchange and inter-exchange carriers to provide
connectivity and maintain the Performance Standards, and serve as the
interface for providing Services via third party providers;
g. maintain recovery capabilities and alternative routing for the data
line between the Unisource sites and the ISSC Data Center as necessary
to meet the Performance Standards;
h. coordinate network addressing, manage address generation capacity to
avoid interruption or delay of normal Unisource operations, and
provide addressing for the required number of devices at service
locations to meet installation and test schedules proposed by ISSC and
approved by Unisource;
i. prevent, if possible, identify, and resolve problems on the Network,
through the use of problem management tools available;
j. develop and deliver to Unisource forecasts and Network growth and
other changes in response to the projected business needs of Unisource
and make recommendations to Unisource as to applications or methods to
adopt for Unisource's network to accommodate any such forecasted
Network growth; and
k. identify possible product and enhancement opportunities for improved
performance, and notify Unisource of these opportunities.
3. Network Engineering
-------------------
ISSC shall provide Network design capacity and configuration management,
Network optimization, ordering and installation of circuits and
equipment, conducting site surveys, if required, and recommendations for
upgrading Network Systems and Equipment. To perform such
responsibilities, ISSC shall:
a. manage the capacity and configuration of the Network, and maintain and
deliver to Unisource lists of any additions to Equipment inventories
and changes to circuit diagrams, location lists, and other Network
documentation and information though the change management process,
but not less than once per quarter or otherwise as reasonably
requested by Unisource;
b. perform planning functions related to Network optimization;
c. perform planning functions related to ordering, upgrading, and
installing Network circuits, systems and equipment;
d. evaluate and verify that network, terminal, and interface equipment is
suitable for its intended use;
e. conduct site surveys as appropriate;
f. as part of the Procedures Manual, develop acceptance procedures for
installation and changes to the Network, and for verifying restoration
of services following problems with Network circuits or Equipment;
1) the acceptance procedures shall use objective and demonstrable
criteria for verifying compliance with performance specifications
and applicable criteria; and
2) as will be specified in the Procedures Manual, Services, circuits,
or equipment shall not be deemed accepted until after ISSC has
notified Unisource that the installation, change, or restoration
has successfully passed ISSC's testing process, and Unisource has
notified ISSC of its acceptance.
4. Network Optimization
--------------------
ISSC shall research and evaluate on an ongoing basis during the Term
means for optimizing the efficiency and cost-effectiveness of the Network
as it relates to data line changes and other costs chargeable to
Unisource, including analyzing rates and packages offered by data
communications common carriers, and shall periodically report its
findings to Unisource. ISSC shall promptly advise Unisource of any cost
savings to Unisource that can be realized by making changes to the
Network that do not involve New Services or Replacement Services and ISSC
shall implement such changes as requested by Unisource. ISSC shall
identify possible product and enhancement opportunities for improved per-
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 19 of 43
<PAGE>
formance, and notify Unisource of these opportunities and, as
appropriate, provide a New Services or Replacement Services quotation as
specified in Schedule V of the Agreement. ISSC shall not make changes to
the Network that could adversely impact Unisource without Unisource's
prior written approval. ISSC shall make recommendations to Unisource as
to applications or methods to optimize the efficiency and cost-
effectiveness of Unisource's network.
D. SOFTWARE DEVELOPMENT AND MAINTENANCE
ISSC shall perform development and maintenance on the Software as required
to provide the Services and meet the Performance Standards, in accordance
with this Agreement and the project management control methodology supported
by the XXXX and the XXXX.
1. Systems Software Support
------------------------
The ISSC Systems Software support staff shall provide installation,
maintenance, and tuning services for the Systems Software and system
components. This staff shall also provide support for problem
determination and resolution of Systems Software problems. ISSC shall:
a. install and maintain all Systems Software, both IBM and non-IBM
products;
b. interface with appropriate vendors for System Software fixes;
c. monitor and tune system components to ensure maximum system
availability, stability, and performance;
d. provide required training and procedures for operations and help
desk personnel;
e. provide second and third level problem resolution support for all
System Software problems;
f. perform system capacity planning and management activities;
g. perform storage management activities; and
h. coordinate and execute the implementation of System Software changes
and coordination of changes to hardware or Software components to
ensure the compatibility between all hardware and Software.
2. Applications Software Support
-----------------------------
ISSC shall provide AD/M Services for the Software installed for the
Restructured Business Platform, for other new Applications provided by
Unisource, for the Truck Routing Systems installed prior to the
Commencement Date or for development of new Applications upon
Unisource's request. Not less than annually ISSC and Unisource shall
meet and allocate the available AD/M resources to perform the required
level of maintenance for existing Applications, enhancements of existing
Applications and development of new Applications. ISSC shall provide
Unisource AD/M Services consistent with Unisource business priorities.
The agreed to level of programming resource will be applied to respond
to requirements as established by Unisource using the backlog management
process described in the project management control methodology set
forth in Schedule H. AD/M Services resource requirements in excess of
the AD/M Services Baseline will be provided pursuant to Schedule J. The
AD/M Services processes will be documented and included at part of the
Procedures Manual. The Procedures Manual will include, but not be
limited to the following:
a. Quality Assurance
ISSC shall maintain the quality assurance processes documented in
the project management control methodology set forth in Schedule H,
to ensure that the AD/M Services responsibilities are executed
accurately and in a timely manner.
b. AD/M Project Management
ISSC shall provide AD/M Services resources for Unisource initiated
projects at Unisource's request in accordance with the project
management control methodology supported by the XXXX.
The AD/M project life cycle described below is a high level summary
of and not a replacement for the project control methodology. For
each AD/M development, enhancement and maintenance project, ISSC
shall designate a point-of-contact with decision making authority
to whom Unisource may communicate requirements, give approvals and
obtain information, as required. ISSC shall update Unisource on the
status of each AD/M project according to a time schedule determined
by the criticality of the project and the mutually agreed to
reporting times. ISSC shall immediately notify Unisource of AD/M
project delays which will impact the established delivery schedules.
Generally AD/M projects follow the development phases listed below:
(1) Project Requests
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 20 of 43
<PAGE>
Unisource shall initiate an AD/M project by submitting a request
as specified by the project management control methodology.
(2) AD/M Project Plan
Upon Unisource's decision to proceed with the AD/M Project and in
accordance with the assigned priority, ISSC shall develop an AD/M
project plan in consultation with Unisource and submit for
Unisource's approval. ISSC shall include such additional detail
from Unisource's representatives as necessary to complete the AD/M
project plan. ISSC shall provide the AD/M project plan prior to
beginning any AD/M project and the plan will be consistent with
the agreed to methodology and will include sufficient detail for
both ISSC and Unisource to understand the content, schedule and
effort required by the project. The schedule for completion (which
may require Unisource's assistance) will be developed so as not to
impact the production environment. Impacts, if any, the AD/M
project may have on other ongoing or projected work will also be
identified and documented in the plan.
(3) Design
ISSC shall design the AD/M Project to meet the End User
requirements, in the manner specified by the project management
control methodology.
(4) Coding
ISSC shall perform coding in accordance with the project
management control methodology standards and practices. ISSC shall
promptly report any material delays in or problems with coding
that may impact the schedule.
(5) Documentation
ISSC shall provide to Unisource all necessary and appropriate End
User documents.
(6) Testing
Testing will be conducted in a manner consistent with the project
management control methodology.
(7) Acceptance
Acceptance testing for an AD/M Project will be scheduled prior to
project implementation in accordance with the project management
control methodology.
(8) Implementation
After Unisource has accepted an AD/M project, ISSC shall implement
the AD/M project into the production environment in a manner that
minimizes or prevents disruption to the Services.
(9) Support
Upon installation the development project will become part of the
AD/M Services Baseline of supported Applications Software and ISSC
shall provide such levels of support as are required for End Users
to make use of the AD/M project in the manner intended.
c. Dependencies
------------
ISSC is dependent on Unisource to perform tasks in support of the AD/M
Services. These will be specified in the Procedures Manual and in the
individual project plans for development projects.
3. Problem Classification
----------------------
ISSC will implement the following problem classifications for the
Restructured Business Platform. These classifications specify the impact
of the problem on Unisource's business operations and will determine the
urgency and priority of Applications Maintenance resource assignment.
Following are the definitions of the different problem classifications:
a. "Severity" means a quantitative representation of the actual/potential
impact of a known problem on a business/function.
b. "Severity 1" means the application or program cannot be used resulting
in serious business impacts. (Immediate Resolution Required).
c. "Severity 2" means the application or program can not be used but has
no serious business impact. (Maximum of two days for Resolution).
d. "Severity 3" means the application or program can be used with
restrictions.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 21 of 43
<PAGE>
e. "Severity 4" means the application or program can be used freely
with minor inconvenience.
E. EQUIPMENT MANAGEMENT AND MAINTENANCE
ISSC shall manage and maintain the equipment in the ISSC Data Center and
the host connected terminals and workstations provided as part of the
Restructured Business Platform as necessary to provide the other Services
and to meet the Performance Standards as defined in this Agreement.
F. FINANCE AND ADMINISTRATION
ISSC shall assume responsibility for the finance and administration
functions specified in this Section F of this Schedule E. These
responsibilities include, but are not limited to, the following:
1. Finance and Accounting Functions
--------------------------------
As necessary or required to provide the Services, negotiate leases,
license agreements, and vendor contracts, as necessary and appropriate
to provide the Services.
2. Training and Technical Documentation
------------------------------------
ISSC shall:
a. provide the training to the trainers and technical documentation
described in this Agreement and Schedule N;
b. development of users manuals;
c. provide analysis for system training and technical documentation;
d. provide reasonable assistance to Unisource in the design,
development and maintenance of system training, documentation and
release materials for Unisource End Users;
e. provide, and if not available from software vendors, design,
develop and maintain, Software reference materials;
f. design, develop and maintain in-house procedural materials; and
g. design, develop and maintain internal employee training materials.
G. GENERAL SUPPORT SERVICES
1. System Management Control (SMC) Services
----------------------------------------
ISSC shall provide SMC related services corresponding to SMC
discipline definitions.
2. Help Desk and Problem Management
--------------------------------
ISSC shall provide help desk and problem management services as
described in Schedule M.
3. Security for Facilities
-----------------------
ISSC shall perform all physical security functions at the ISSC Data
Center and Unisource shall perform all physical security functions at
the Unisource Data Centers, as further described in Schedule L.
III. SERVICES RESPONSIBILITIES MATRICES
The Services Responsibilities matrices attached as Exhibit E-2 further defines
the roles and responsibilities of the Parties in the New Environment.
IV. PERFORMANCE STANDARDS
A. INTRODUCTION
ISSC and Unisource will mutually determine the appropriate required
Performance Standards prior to implementation of the XXXX XXXX XXXX
provided under Schedule N. Such levels will be determined by taking into
account the transaction volumes, design objectives and the measurement
criteria established by Unisource.
1. This Section E-2.IV further describes:
a. certain duties, obligations and responsibilities of ISSC including,
but not limited to, on-line Application availability, host on-line
response time, batch delivery timeliness and other activities
comprising the Services;
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 22 of 43
<PAGE>
b. the Performance Standards and Minimum Service Levels for defined
Applications and Services which ISSC is required to meet during
the Term of this Agreement; and
c. certain responsibilities of Unisource.
2. During the 180 days following the completion of the migration of each
Unisource region to the Restructured Business Platform provided under
Schedule N or any new Application for which there will be Performance
Standards or Minimum Service Levels, ISSC will utilize standard
measurement tools to monitor actual performance levels, (the
"Measurement Period"); provided, however, that if the Parties
determine that such period is not representative of Unisource's normal
operating environment, then the Parties shall mutually select another
180 day period that is representative of Unisource's normal operating
environment as the Measurement Period. The Performance Standards under
which ISSC will provide the Services shall be the average performance
levels achieved during the Measurement Period.
3. Following the Measurement Period, if ISSC's performance does not meet
the levels of performance set forth of the Applications and/or
services categories specified in the Procedures Manual, ISSC will be
XXXX for XXXX pursuant to XXXX.
4. By the tenth business day of each month, ISSC will submit to
Unisource a report or set of reports assessing ISSC's performance
against the Performance Standards during the previous calendar month.
ISSC will also be responsible for promptly investigating and
correcting failures to meet Performance Standards by:
a. initiating problem investigations to identify root causes of
failures;
b. promptly reporting problems to Unisource that reasonably could be
expected to have a material adverse effect on Unisource
operations; and
c. making written recommendations to Unisource for improvement in
procedures.
5. ISSC shall identify root causes, correct problems and minimize
recurrences of missed Performance Standards for which it is
responsible. Unisource will correct and minimize the recurrence of
problems for which Unisource is responsible and which prevent ISSC
from meeting the Performance Standards.
B. DEFINITIONS
For purposes of this Schedule E, the following terms shall have the
following meanings:
1. "Actual Uptime" means, that of the Scheduled Uptime, the aggregate
number of hours in any month during which each defined Application is
actually available at Unisource's point(s)-of-connection to the ISSC
Data Center.
2. "Application" means individual subsystems or environments comprising
the Applications Software.
3. "Availability" means Actual Uptime plus Excusable Downtime divided by
Schedule Uptime. For purposes of determining whether ISSC's
performance meets any Availability Performance Standard or Minimum
Service Levels, ISSC's Availability performance will be measured
based on a monthly average during each month of the Term, to be
calculated and reported once monthly.
4. "Excusable Downtime" means, that of the Scheduled Uptime, the
aggregate number of hours in any month during which each defined
Application is down due to:
a. action or inaction by Unisource (i.e., failing to provide power
for the equipment at the Unisource data center(s), systems outage
attributable to Application defects and Applications
incompatibility with the Systems Software for Applications added
by Unisource, etc,;
b. a Force Majeure Event (as defined in Section 20.03 of the
Agreement); or
c. mutually agreed upon time for such things as preventive
maintenance, system upgrades, etc., as defined in the Procedures
Manual.
5. "Host System" means the ISSC Data Center equipment and related
Software.
6. "Minimum Service Level" means that levels of service below which
Unisource's business functions will be negatively impacted and for
which Unisource shall be entitled to Performance Credits. The minimum
service levels for the specified Applications are set forth in the
Procedures Manual.
7. "Scheduled Uptime" means the days of the week and hours per day that
each defined Application is scheduled to be available for use by End
Users.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 23 of 43
<PAGE>
C. PERFORMANCE STANDARDS CATEGORIES
1. On-Line Applications Availability and Scheduled Uptime: On-Line
Application services will be made available in accordance with the
schedule set forth in applicable section of the Procedures Manual.
ISSC shall perform the Services as necessary to meet each of the
Availability Performance Standards.
2. New Applications: Performance Standards for new applications which
are material to Unisource's business shall be included in the
applicable section of the Procedures Manual as they occur. The
Availability Performance Standard for each new Application shall be
negotiated between ISSC and Unisource based on actual performance
during the first 90 day period following the implementation of the
new Application judged to be representative by the Parties (new
Applications shall meet the mutually agreed qualification critical
and be compatible with the Systems environment specified in Schedule
K); provided, however, that such Application Availability Performance
Standard shall be consistent with the standards set forth for other
comparable Applications.
3. Host On-Line Response Time: Host on-line response time will be a
measure of the response time at the host for a given percentage of
End User initiated transaction(s) for an Application as set forth in
the Procedures Manual.
4. Scheduled Batch Services: ISSC will perform scheduled batch
processing services. ISSC's commitment to the batch services
Performance Standards is contingent upon ISSC's receipt from
Unisource of critical inputs by the designated time, and successful
completion of the appropriate Application batch job stream. Unisource
recognizes that its deviation from scheduled batch job streams may
result in batch output not being available by the scheduled time. The
critical inputs for each batch processing job shall be mutually
agreed upon. If Unisource fails to deliver any critical input by the
deadline set for in the Procedures Manual for the applicable batch
processing job, or deviates from scheduled batch job streams, ISSC
will use its best efforts, once the input is received, or corrections
are made by Unisource, to complete such batch processing by the
scheduled time.
ISSC is responsible for notifying the Unisource contact person(s)
when batch output will not be available by the scheduled time as set
forth in the Operations Notification portion of the Procedures
Manual. Unisource recognizes that its deviation from scheduled batch
job streams may result in batch output not being available by the
scheduled time resulting in impact to on-line availability.
5. Unscheduled Batch Services: ISSC will perform on-request or on-demand
batch jobs for Unisource subject to ISSC's ability to meet Scheduled
Batch Services and the Performance Standards for other areas and a
written and properly authorized request from Unisource for such
services and the availability of data or other inputs required to
perform such requests.
6. Help Desk: ISSC will provide Help Desk services in accordance with
the Performance Standards set forth in the Procedures Manual.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 24 of 43
<PAGE>
Schedule E
Support Services, Performance Standards and
Operational Responsibilities
SECTION E-3
PERFORMANCE XXXX
I. INTRODUCTION
The Parties agree that ISSC shall be XXXX for Performance XXXX as described
herein, only under the XXXX XXXX XXXX XXXX provided under Schedule N. ISSC's
XXXX for Performance XXXX shall begin for the month following the Measurement
Period following the migration of a Unisource Region to the XXXX XXXX XXXX XXXX.
II. CATEGORIES
The Unisource/ISSC Agreement and Schedules set forth or refer to numerous
specific Services which ISSC will provide Unisource, a subset of which, whose
performance will be tracked, compared and reported against Performance
Standards. In addition, Minimum Service Levels for the following three
categories of services, which reflect certain Applications critical to the
conduct of Unisource's business functions, will be used to determine Performance
XXXX, if any, due to Unisource (it being acknowledged that there may be other
Applications critical to the conduct of Unisource's business which will not be
used to determine Performance XXXX).
Categories
1) Customer Service Response Time
2) Systems Availability
3) XXXX XXXX XXXX
Not less than annually, ISSC and Unisource will review the Applications and
services categories for which ISSC is liable for Performance XXXX and determine
the continued applicability for the then current categories, the need for adding
new Applications or services and the adequacy of the current and/or proposed
Minimum Service Levels.
III. IMPLEMENTATION
During the Measurement Period the Parties will mutually determine the
appropriate Minimum Service Levels for each of the above categories. After the
Parties reach agreement for the Minimum Service Levels, the following chart will
be revised with such levels.
Minimum
Categories Service Level
1) Customer Service Response Time XXXX
2) Systems Availability XXXX
3) Warehouse Picking Tags XXXX
The monthly performance reports provided Unisource by ISSC will be used to
determine whether ISSC has met the Minimum Service Levels in each of the three
referenced categories.
Following the Measurement Period for the Restructured Business Platform provided
under Schedule N, ISSC will be liable for Performance XXXX in the XXXX of XXXX
XXXX to XXXX the XXXX for any of the categories listed above. Beginning on the
XXXX of the month following the end of the Measurement Period and of each
subsequent month during the Term, ISSC will determine whether the Services met
the Minimum Service Levels for each of the categories set forth above during the
preceding calendar month. For purposes of determining whether a Performance XXXX
is XXXX to XXXX:
A. The actual performance attainment for each of the categories will be
considered independently of the others; and
B. The performance measurement will be the month's performance attainment in
each of the categories, as defined in Section E-3.III above.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 25 of 43
<PAGE>
IV. PERFORMANCE
For XXXX to meet the XXXX in any of the categories specified above, the
Performance XXXX will be determined as follows:
A. Each of the categories will be assigned a XXXX and the total of the XXXX
must not XXXX. The XXXX are:
XXXX
Category XXXX
1) Customer Service Response Time XXXX
2) Systems Availability XXXX
3) XXXX XXXX
----
TOTAL XXXX
B. Failure to meet the Minimum Service Levels in a specific category for each
month will result in a Performance Credit amount which will be determined by
multiplying the corresponding occurrence by the weighting factor for that
category. To qualify as a 2nd Occurrence or greater, the failure to meet the
Minimum Service Levels must occur in consecutive months within the same
category.
XXXX of the
Consecutive Months XXXX XXXX XXXX XXXX
XXXX XXXX XXXX
XXXX XXXX
XXXX XXXX XXXX
XXXX XXXX
For example, if the XXXX is XXXX and ISSC XXXX to XXXX the XXXX XXXX for a
category with a XXXX of XXXX for XXXX, the applicable Performance would be:
XXXX x XXXX x XXXX = XXXX
ISSC will return to "Normal Status" with respect to a XXXX attainment when its
XXXX XXXX for that category meets or exceeds the XXXX, provided, that if XXXX
has XXXX XXXX the XXXX for a particular XXXX for XXXX XXXX then ISSC shall have
to XXXX or XXXX the XXXX for XXXX in order to return to Normal Status for that
category. Any subsequent failure to meet the Minimum Service Level for that
category shall be deemed to be a XXXX.
IV. Concurrent Operations
Beginning on the completion of Measurement Period following the migration of the
initial Unisource Service Location to the XXXX XXXX XXXX after which ISSC is
XXXX for Performance XXXX in both the XXXX XXXX and the XXXX XXXX the above XXXX
of Performance XXXX for the Restructured Business Platform will be XXXX by XXXX
to determine the actual Performance XXXX due Unisource. This XXXX by XXXX or
such other XXXX determined by the Parties during the Annual Planning Session,
provided that the XXXX of the XXXX for both the XXXX and XXXX XXXX XXXX.
Performance XXXX shall not be XXXX than XXXX, will be in effect for the
remainder of the migration to the XXXX XXXX XXXX or until the XXXX XXXX is
replaced fully by the XXXX XXXX XXXX XXXX or until ISSC's XXXX for Performance
XXXX in the XXXX is XXXX, whichever occurs earlier.
<PAGE>
Schedule E
Support Services, Performance Standards and
Operational Responsibilities
EXHIBIT E-1
SERVICES RESPONSIBILITIES-CURRENT ENVIRONMENT
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESPONSIBILITY
COMPUTER OPERATIONS ----------------------
ISSC Unisource
- -------------------------------------------------------------------------------
<S> <C> <C>
Operate console X
- -------------------------------------------------------------------------------
Mount tapes X
- -------------------------------------------------------------------------------
Print forms X
- -------------------------------------------------------------------------------
Help desk (on-line processing management) X
- -------------------------------------------------------------------------------
File backup/recovery (recovery management) X
- -------------------------------------------------------------------------------
Maintain current documentation on operations procedures X
- -------------------------------------------------------------------------------
Job accounting statistics X
- -------------------------------------------------------------------------------
Hardware planning and installation
- -------------------------------------------------------------------------------
- - Technology input X
- -------------------------------------------------------------------------------
- - Technology review and approval X
- -------------------------------------------------------------------------------
- - Hardware facilities requirements X
- -------------------------------------------------------------------------------
- - Hardware configuration maintenance X
- -------------------------------------------------------------------------------
Capacity management
- -------------------------------------------------------------------------------
- - Maintain current business process documents X
- -------------------------------------------------------------------------------
- - Define application plans and requirements X
- -------------------------------------------------------------------------------
- - Capacity monitoring X
- -------------------------------------------------------------------------------
- - Billing data X
- -------------------------------------------------------------------------------
Performance management
- -------------------------------------------------------------------------------
- - Document and maintain current service level
requirements X
- -------------------------------------------------------------------------------
- - Maintain current business process document X
- -------------------------------------------------------------------------------
- - Maintain current service level agreements and
service level objectives X
- -------------------------------------------------------------------------------
- - Measure and analyze performance X
- -------------------------------------------------------------------------------
- - Provide monthly performance reports X
- -------------------------------------------------------------------------------
</TABLE>
NOTE: ISSC will provide the above services to the extent they are being
provided by In-Scope Personnel at each Data Center as of the Commencement
Date.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 27 of 43
<PAGE>
CURRENT ENVIRONMENT
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
---------------------------
COMPUTER OPERATIONS (cont.) ISSC Unisource
- --------------------------------------------------------------------------------
Change management
<S> <C> <C>
- --------------------------------------------------------------------------------
- - Maintain current business process document X
- --------------------------------------------------------------------------------
- - Provide change requirements for application
installs and upgrades X
- --------------------------------------------------------------------------------
- - Provide change requirements for systems software X
- --------------------------------------------------------------------------------
- - Conduct change control meeting X
- --------------------------------------------------------------------------------
- - Promote changes to production X
- --------------------------------------------------------------------------------
- - Report on change success X
- --------------------------------------------------------------------------------
Executive reporting X
- --------------------------------------------------------------------------------
Problem management
- --------------------------------------------------------------------------------
- - Maintain current business process document X
- --------------------------------------------------------------------------------
- - Record problems X
- --------------------------------------------------------------------------------
- - Distribute to support groups for resolution X
- --------------------------------------------------------------------------------
- - Track problem through resolution X
- --------------------------------------------------------------------------------
- - Gain customer concurrence with problem
resolution/closure X
- --------------------------------------------------------------------------------
- - Report on change success X
- --------------------------------------------------------------------------------
Creation of microfiche and microfilm data file X
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
---------------------------
PRODUCTION CONTROL ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Batch test schedule
- --------------------------------------------------------------------------------
- - Define test system requirements X
- --------------------------------------------------------------------------------
- - Schedule available time and confirm with customer X
- --------------------------------------------------------------------------------
- - Execute test X
- --------------------------------------------------------------------------------
Batch production schedule
- --------------------------------------------------------------------------------
- - Scheduler input (determines schedule) X
- --------------------------------------------------------------------------------
- - Scheduler updates X
- --------------------------------------------------------------------------------
- - Execution X
- --------------------------------------------------------------------------------
Microfiche/microfilm distribution X
- --------------------------------------------------------------------------------
Print distribution (site distribution point) X
- --------------------------------------------------------------------------------
Report balancing X
- --------------------------------------------------------------------------------
Special forms inventory
- --------------------------------------------------------------------------------
- - Ordering X
- --------------------------------------------------------------------------------
- - Data center inventory management X
- --------------------------------------------------------------------------------
Initiate and track problem report (balancing error) X
- --------------------------------------------------------------------------------
Track batch problem reports and system crashes
(initiated by operators) X
- --------------------------------------------------------------------------------
Report problem resolution statistics X
- --------------------------------------------------------------------------------
Preparation of run parameter cards X
- --------------------------------------------------------------------------------
</TABLE>
NOTE: ISSC will provide the above services to the extent they are being
provided by In-Scope Personnel at each Data Center as of the Commencement Date.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 28 of 43
<PAGE>
CURRENT ENVIRONMENT
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
---------------------------
OPERATIONS ANALYSIS ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Application system installation
- --------------------------------------------------------------------------------
- - Acceptance test execution X
- --------------------------------------------------------------------------------
- - Acceptance test verification X
- --------------------------------------------------------------------------------
- - Actual installation X
- --------------------------------------------------------------------------------
Automated report distribution
- --------------------------------------------------------------------------------
- - Set-up X
- --------------------------------------------------------------------------------
- - Operation X
- --------------------------------------------------------------------------------
Write standards and procedures
- --------------------------------------------------------------------------------
- - Define Input X
- --------------------------------------------------------------------------------
- - Promote to production X
- --------------------------------------------------------------------------------
- - Approval rights (sign off on procedures) X
- --------------------------------------------------------------------------------
JCL, standards and procedures analysis X
- --------------------------------------------------------------------------------
Automated run documentation
- --------------------------------------------------------------------------------
- - Set-up X
- --------------------------------------------------------------------------------
- - Dependencies X
- --------------------------------------------------------------------------------
- - Initiation X
- --------------------------------------------------------------------------------
- - Recovery X
- --------------------------------------------------------------------------------
Maintenance of tape librarian system X
- --------------------------------------------------------------------------------
Maintenance of automated scheduler system X
- --------------------------------------------------------------------------------
</TABLE>
NOTE: ISSC will provide the above services to the extent they are being
provided by In-Scope Personnel at each Data Center as of the Commencement
Date.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 29 of 43
uniskde
<PAGE>
<TABLE>
CURRENT ENVIRONMENT
<CAPTION>
- --------------------------------------------------------------------------------
TECHNICAL SERVICES RESPONSIBILITY
- --------------------------------------------------------------------------------
<S> <C> <C>
ISSC Unisource
- --------------------------------------------------------------------------------
System software maintenance X
- --------------------------------------------------------------------------------
System software upgrades and replacements installation X
- --------------------------------------------------------------------------------
System monitoring X
- --------------------------------------------------------------------------------
Performance tuning X
- --------------------------------------------------------------------------------
- - Systems X
- --------------------------------------------------------------------------------
- - Applications X
- --------------------------------------------------------------------------------
Troubleshooting/problem resolution X
- --------------------------------------------------------------------------------
Applications programmer technical assistance X
- --------------------------------------------------------------------------------
Backup/recovery procedures X
- --------------------------------------------------------------------------------
Vendor/subcontractor performance and utilization monitoring
- --------------------------------------------------------------------------------
- - Establish performance criteria X
- --------------------------------------------------------------------------------
- - Maintain performance criteria X
- --------------------------------------------------------------------------------
- - Measure and analyze performance X
- --------------------------------------------------------------------------------
- - Performance reporting X
- --------------------------------------------------------------------------------
- - Disaster recovery (Distribix and Cincinnati) X
- --------------------------------------------------------------------------------
- - Disaster recovery (all other sites) X
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
DATA BASE ADMINISTRATION RESPONSIBILITY
- --------------------------------------------------------------------------------
<S> <C> <C>
ISSC Unisource
- --------------------------------------------------------------------------------
Data base requirements X
- --------------------------------------------------------------------------------
Data modeling X
- --------------------------------------------------------------------------------
Logical data base design X
- --------------------------------------------------------------------------------
DBMS (Data Base Management System) maintenance X
- --------------------------------------------------------------------------------
Physical data base design X
- --------------------------------------------------------------------------------
Review logical and physical data base design X
- --------------------------------------------------------------------------------
Physical data base review/support X
- --------------------------------------------------------------------------------
User access (views, copy members) X
- --------------------------------------------------------------------------------
DBMS capacity planning X
- --------------------------------------------------------------------------------
DBMS performance management X
- --------------------------------------------------------------------------------
DBMS performance utilization tracking X
- --------------------------------------------------------------------------------
Training/applications development assistance X
- --------------------------------------------------------------------------------
Backup/recovery procedures X
- --------------------------------------------------------------------------------
Involvement with application installation X
- --------------------------------------------------------------------------------
Data base troubleshooting/resolution X
- --------------------------------------------------------------------------------
Fourth generation language maintenance support X
- --------------------------------------------------------------------------------
</TABLE>
Note: ISSC will provide the above services to the extent they are being
provided by In-Scope Personnel at each Data Center as of the Commencement
Date.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 30 of 43
<PAGE>
CURRENT ENVIRONMENT
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
----------------------------
FAILURE RECOVERY ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Data center/data network machines failure X
- --------------------------------------------------------------------------------
Systems software failure X
- --------------------------------------------------------------------------------
Applications software failure X
- --------------------------------------------------------------------------------
End user machine failure notification X
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
------------------------
DATA NETWORK ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Business requirements X
- --------------------------------------------------------------------------------
Technical requirements X
- --------------------------------------------------------------------------------
Hardware/systems software operations & maintenance X
- --------------------------------------------------------------------------------
Data lines management X
- --------------------------------------------------------------------------------
Product evaluation and procurement (hardware and software)
- --------------------------------------------------------------------------------
- - Define business requirements X
- --------------------------------------------------------------------------------
- - Suggest and review products for requirements satisfaction X
- --------------------------------------------------------------------------------
- - Evaluate and procure products X
- --------------------------------------------------------------------------------
Data network management
- --------------------------------------------------------------------------------
- - Network control center X
- --------------------------------------------------------------------------------
- - Help desk after hours X
- --------------------------------------------------------------------------------
- - Problem determination on circuits/hardware X
- --------------------------------------------------------------------------------
- - Vendor dispatch and coordination X
- --------------------------------------------------------------------------------
- - Provide status on problem resolution progress to user X
- --------------------------------------------------------------------------------
- - Track vendor performance X
- --------------------------------------------------------------------------------
- - Respond to alarms on network management systems X
- --------------------------------------------------------------------------------
Cabling/wiring
- --------------------------------------------------------------------------------
- - Site design/coordination X
- --------------------------------------------------------------------------------
Data network project planning
- --------------------------------------------------------------------------------
- - Develop project plan X
- --------------------------------------------------------------------------------
- - Approve project plan X
- --------------------------------------------------------------------------------
- - Validate assumptions & provide programming & other inputs X
- --------------------------------------------------------------------------------
Hardware/systems software installation
- --------------------------------------------------------------------------------
- - Remote sites
- --------------------------------------------------------------------------------
- Perform or coordinate installs X
- --------------------------------------------------------------------------------
- Provide logistical support X
- --------------------------------------------------------------------------------
Troubleshooting/resolution X
- --------------------------------------------------------------------------------
Communications equipment vendor management X
- --------------------------------------------------------------------------------
Backup/recovery X
- --------------------------------------------------------------------------------
</TABLE>
NOTE: ISSC will provide the above services to the extent they are being
provided by In-Scope Personnel at each Data Center as of the Commencement
Date.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 31 of 43
<PAGE>
RESPONSIBILITIES MATRICES
CURRENT ENVIRONMENT
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
- --------------------------------------------------------------------------------
<S> <C> <C>
DATA NETWORK (cont.) ISSC Unisource
- --------------------------------------------------------------------------------
Capacity planning and management X
- --------------------------------------------------------------------------------
- - Coordinate technical support to monitor utilization &
performance X
- --------------------------------------------------------------------------------
Change control
- --------------------------------------------------------------------------------
- - Manage current change control process X
- --------------------------------------------------------------------------------
Change management
- --------------------------------------------------------------------------------
- - Make requests/define requirements X
- --------------------------------------------------------------------------------
- - Manage change X
- --------------------------------------------------------------------------------
Technical support X
- --------------------------------------------------------------------------------
Training
- --------------------------------------------------------------------------------
- - Technology X
- --------------------------------------------------------------------------------
- - Applications X
- --------------------------------------------------------------------------------
Consult on protocol, interface standards, connectivity
options, etc. X
- --------------------------------------------------------------------------------
Inventory management X
- --------------------------------------------------------------------------------
- - Maintain current standards X
- --------------------------------------------------------------------------------
</TABLE>
NOTE: ISSC will provide the above services to the extent they are being
provided by In-Scope Personnel at each Data Center as of the Commencement
Date.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 32 of 43
<PAGE>
RESPONSIBILITIES MATRICES
CURRENT ENVIRONMENT
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NON-HOST CONNECTED RESPONSIBILITY
---------------------
LAN NETWORK ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Business requirements X
- -------------------------------------------------------------------------------
Technical requirements X
- -------------------------------------------------------------------------------
LANs/servers - equipment and software
- -------------------------------------------------------------------------------
- - Management, operation & maintenance X
- -------------------------------------------------------------------------------
- - Third party vendor maintenance management X
- -------------------------------------------------------------------------------
PCs/workstations
- -------------------------------------------------------------------------------
- - Third party vendor maintenance X
- -------------------------------------------------------------------------------
Future LAN/server equipment and software
- -------------------------------------------------------------------------------
- - Provide requirements X
- -------------------------------------------------------------------------------
- - Procure and install X
- -------------------------------------------------------------------------------
Cabling/wiring
- -------------------------------------------------------------------------------
- - Remote site design/coordination X
- -------------------------------------------------------------------------------
Product evaluation and procurement (hardware and software)
- -------------------------------------------------------------------------------
- - Define business requirements X
- -------------------------------------------------------------------------------
- - Suggest and approve products as appropriate X
- -------------------------------------------------------------------------------
- - Evaluate and procure products X
- -------------------------------------------------------------------------------
LAN network management X
- -------------------------------------------------------------------------------
LAN network design X
- -------------------------------------------------------------------------------
LAN network project planning
- -------------------------------------------------------------------------------
- - Develop project plan X
- -------------------------------------------------------------------------------
- - Validate assumptions and provide input requirements X
- -------------------------------------------------------------------------------
End user help desk X
- -------------------------------------------------------------------------------
Troubleshooting/resolution X
- -------------------------------------------------------------------------------
Backup/recovery X
- -------------------------------------------------------------------------------
Capacity management X
- -------------------------------------------------------------------------------
- - Provide requirements X
- -------------------------------------------------------------------------------
Change control
- -------------------------------------------------------------------------------
- - Provide input to change process development X
- -------------------------------------------------------------------------------
- - Design and own change control process X
- -------------------------------------------------------------------------------
Change management
- -------------------------------------------------------------------------------
- - 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
- -------------------------------------------------------------------------------
</TABLE>
NOTE: ISSC will provide the above services to the extent they are being
provided by In-Scope Personnel at each Data Center as of the Commencement
Date.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 33 of 43
<PAGE>
RESPONSIBILITIES MATRICES
CURRENT ENVIRONMENT
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESPONSIBILITY
APPLICATIONS DEVELOPMENT AND MAINTENANCE ---------------------
ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Application Software
- -------------------------------------------------------------------------------
- - Requirements X
- -------------------------------------------------------------------------------
- - Procurement administration X
- -------------------------------------------------------------------------------
- - Development/enhancement of packages X
- -------------------------------------------------------------------------------
- - Compliance with application installation standards X
- -------------------------------------------------------------------------------
- - Acceptance test execution X
- -------------------------------------------------------------------------------
- - Acceptance test verification X
- -------------------------------------------------------------------------------
- - Maintenance
- -------------------------------------------------------------------------------
- Defect identification fixes X
- -------------------------------------------------------------------------------
- Preventive maintenance X
- -------------------------------------------------------------------------------
- - Development
- -------------------------------------------------------------------------------
- Upgrades X
- -------------------------------------------------------------------------------
- New releases X
- -------------------------------------------------------------------------------
- Enhancements X
- -------------------------------------------------------------------------------
- Government/regulatory changes X
- -------------------------------------------------------------------------------
- - Education/training X
- -------------------------------------------------------------------------------
- - End user support (help desk) X
- -------------------------------------------------------------------------------
- - Promotion into production X
- -------------------------------------------------------------------------------
- - Approval of all changes X
- -------------------------------------------------------------------------------
- - Reporting X
- -------------------------------------------------------------------------------
</TABLE>
NOTE: ISSC will provide the above services to the extent they are being
provided by In-Scope Personnel at each Data Center as of the Commencement
Date.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 34 of 43
<PAGE>
Schedule E
Support Services, Performance Standards and
Operational Responsibilities
EXHIBIT E-2
SERVICES RESPONSIBILITIES - XXXX XXXX XXXX
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
----------------------
COMPUTER OPERATIONS ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Operate console X
- --------------------------------------------------------------------------------
Mount tapes X
- --------------------------------------------------------------------------------
Print forms X
- --------------------------------------------------------------------------------
Help desk (on-line processing management) X
- --------------------------------------------------------------------------------
File backup/recovery management) X
- --------------------------------------------------------------------------------
Document operations procedures X
- --------------------------------------------------------------------------------
Job accounting statistics X
- --------------------------------------------------------------------------------
Hardware planning and installation
- --------------------------------------------------------------------------------
- - Technology input X
- --------------------------------------------------------------------------------
- - Technology review and approval X
- --------------------------------------------------------------------------------
- - Hardware facilities requirements X
- --------------------------------------------------------------------------------
Capacity management
- --------------------------------------------------------------------------------
- - Define and maintain a Procedures Manual X
- --------------------------------------------------------------------------------
- - Define application plans and requirements X
- --------------------------------------------------------------------------------
- - Maintain service levels X
- --------------------------------------------------------------------------------
- - Capacity monitoring X
- --------------------------------------------------------------------------------
- - Capacity planning and adjustment X
- --------------------------------------------------------------------------------
- - Billing data X
- --------------------------------------------------------------------------------
Performance management
- --------------------------------------------------------------------------------
- - Define service level requirements X
- --------------------------------------------------------------------------------
- - Maintain service level X
- --------------------------------------------------------------------------------
- - Define and maintain the Procedures Manual X
- --------------------------------------------------------------------------------
- - Document and maintain service level agreements and X
service level objectives
- --------------------------------------------------------------------------------
- - Measure and analyze performance X
- --------------------------------------------------------------------------------
- - Implement improvement programs X
- --------------------------------------------------------------------------------
- - Provide monthly reports X
- --------------------------------------------------------------------------------
- - Audit ISSC Performance X
- --------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 35 of 43
uniskde
<PAGE>
<TABLE>
XXXX XXXX XXXX
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
- --------------------------------------------------------------------------------
COMPUTER OPERATIONS (cont.) ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Change management
- --------------------------------------------------------------------------------
- - Define and maintain the Procedures Manual X
- --------------------------------------------------------------------------------
- - Provide change requirements for application installs and
upgrades X
- --------------------------------------------------------------------------------
- - Provide change requirements for Systems Software X
- --------------------------------------------------------------------------------
- - Conduct change control meeting X
- --------------------------------------------------------------------------------
- - Promote changes to production X
- --------------------------------------------------------------------------------
- - Report on change success X
- --------------------------------------------------------------------------------
Executive reporting X
- --------------------------------------------------------------------------------
Problem management
- --------------------------------------------------------------------------------
- - Define and maintain the Procedures Manual X
- --------------------------------------------------------------------------------
- - Record problems X
- --------------------------------------------------------------------------------
- - Distribute to support groups for resolution X
- --------------------------------------------------------------------------------
- - Track problem through resolution X
- --------------------------------------------------------------------------------
- - Gain customer concurrence with problem resolution/closure X
- --------------------------------------------------------------------------------
- - Report on change success X
- --------------------------------------------------------------------------------
Creation of microfiche/microfilm data file X
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
- --------------------------------------------------------------------------------
PRODUCTION CONTROL ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Batch test Schedule
- --------------------------------------------------------------------------------
- - Define test system requirements X
- --------------------------------------------------------------------------------
- - Schedule available time and confirm with customer X
- --------------------------------------------------------------------------------
- - Execute test X
- --------------------------------------------------------------------------------
Batch production schedule
- --------------------------------------------------------------------------------
- - Scheduler input (Unisource to determine schedule) X
- --------------------------------------------------------------------------------
- - Scheduler updates X
- --------------------------------------------------------------------------------
- - Execution X
- --------------------------------------------------------------------------------
Microfiche/microfilm distribution X
- --------------------------------------------------------------------------------
Print distribution (to site distribution point) X
- --------------------------------------------------------------------------------
Report balancing X
- --------------------------------------------------------------------------------
Special forms inventory
- --------------------------------------------------------------------------------
- - Ordering (at Data Center) X
- --------------------------------------------------------------------------------
- - Data center inventory management X
- --------------------------------------------------------------------------------
Initiate and track problem report (balancing error) X
- --------------------------------------------------------------------------------
Track batch problem reports and system crashes (initiated by
operators) X
- --------------------------------------------------------------------------------
Report problem resolution statistics X
- --------------------------------------------------------------------------------
Preparation of run parameter cards X
- -------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 36 of 43
<PAGE>
RESPONSIBILITIES MATRICES
XXXX XXXX XXXX
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESPONSIBILITY
OPERATIONS ANALYSIS ---------------------
ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Application system installation
- -------------------------------------------------------------------------------
- - Acceptance test execution X
- -------------------------------------------------------------------------------
- - Acceptance test verification X
- -------------------------------------------------------------------------------
- - Actual installation X
- -------------------------------------------------------------------------------
Automated report distribution
- -------------------------------------------------------------------------------
- - Technology input X
- -------------------------------------------------------------------------------
- - Technology review and approval X
- -------------------------------------------------------------------------------
- - Technology selection X
- -------------------------------------------------------------------------------
- - Analysis of hard copy reports for conversion to
soft copy X
- -------------------------------------------------------------------------------
- - Application changes, if required X
- -------------------------------------------------------------------------------
- - Set-up X
- -------------------------------------------------------------------------------
- - Operation X
- -------------------------------------------------------------------------------
Write standards and procedures
- -------------------------------------------------------------------------------
- - Define input X
- -------------------------------------------------------------------------------
- - Promote to production X
- -------------------------------------------------------------------------------
- - Approval rights (sign off on procedures) X
- -------------------------------------------------------------------------------
JCL, standards and procedures analysis X
- -------------------------------------------------------------------------------
Automated run documentation
- -------------------------------------------------------------------------------
- - Set-up X
- -------------------------------------------------------------------------------
- - Dependencies X
- -------------------------------------------------------------------------------
- - Initiation X
- -------------------------------------------------------------------------------
- - Recovery X
- -------------------------------------------------------------------------------
Maintenance of tape librarian system X
- -------------------------------------------------------------------------------
Maintenance of automated scheduler system X
- -------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 37 of 43
<PAGE>
RESPONSIBILITIES MATRICES
XXXX XXXX XXXX
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
----------------------
TECHNICAL SERVICES ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
System software program installation & maintenance X
- --------------------------------------------------------------------------------
System software upgrades and replacements X
- --------------------------------------------------------------------------------
System monitoring X
- --------------------------------------------------------------------------------
Performance tuning
- --------------------------------------------------------------------------------
- - Systems X
- --------------------------------------------------------------------------------
- - Applications X
- --------------------------------------------------------------------------------
Troubleshooting/problem resolution X
- --------------------------------------------------------------------------------
Application programmer technical assistance X
- --------------------------------------------------------------------------------
Backup/recovery procedures X
- --------------------------------------------------------------------------------
Vendor/subcontractor performance and utilization monitoring
- --------------------------------------------------------------------------------
- - Establish performance criteria X
- --------------------------------------------------------------------------------
- - Implement improvement programs X
- --------------------------------------------------------------------------------
- - Measure and analyze performance X
- --------------------------------------------------------------------------------
- - Performance reporting X
- --------------------------------------------------------------------------------
New technology/product research
- --------------------------------------------------------------------------------
- - Technology input X
- --------------------------------------------------------------------------------
- - Technology review and approval X
- --------------------------------------------------------------------------------
- - Technology selection X
- --------------------------------------------------------------------------------
- - Technology implementation X
- --------------------------------------------------------------------------------
Consulting for product/systems selection X
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
----------------------
DATA BASE ADMINISTRATION ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Data base requirements X
- --------------------------------------------------------------------------------
Data modeling X
- --------------------------------------------------------------------------------
Logical data base design X
- --------------------------------------------------------------------------------
DBMS (Data Base Management System) maintenance X
- --------------------------------------------------------------------------------
Physical data base design X
- --------------------------------------------------------------------------------
Review logical and physical data base design X
- --------------------------------------------------------------------------------
Physical data base review/support X
- --------------------------------------------------------------------------------
User access (views, copy members) X
- --------------------------------------------------------------------------------
DBMS capacity planning X
- --------------------------------------------------------------------------------
DBMS performance management X
- --------------------------------------------------------------------------------
DBMS performance utilization tracking X
- --------------------------------------------------------------------------------
Training/applications development assistance X
- --------------------------------------------------------------------------------
Backup/recovery procedures X
- --------------------------------------------------------------------------------
Involvement with application installation X
- --------------------------------------------------------------------------------
Data base troubleshooting/resolution X
- --------------------------------------------------------------------------------
Fourth generation language maintenance support X
(query, QMF, CSP)
- --------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 38 of 43
<PAGE>
RESPONSIBILITIES MATRICES
XXXX XXXX XXXX
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
----------------------------
FAILURE RECOVERY ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Data center/data network machines failure X
- --------------------------------------------------------------------------------
Systems software failure X
- --------------------------------------------------------------------------------
Applications software failure X
- --------------------------------------------------------------------------------
End user machine failure notification X
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
------------------------
DATA NETWORK ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Vendor selection X
- -------------------------------------------------------------------------------
Define business requirements X
- --------------------------------------------------------------------------------
Define technical requirements X
- --------------------------------------------------------------------------------
Hardware/Systems Software operations & maintenance X
- --------------------------------------------------------------------------------
Data lines management X
- --------------------------------------------------------------------------------
Product evaluation and procurement (hardware and software)
- --------------------------------------------------------------------------------
- - Define business requirements X
- --------------------------------------------------------------------------------
- - Suggest, review and approve products for requirements
satisfaction X
- --------------------------------------------------------------------------------
- - Evaluate products X
- --------------------------------------------------------------------------------
- - Procure products X
- -------------------------------------------------------------------------------
Data network management
- --------------------------------------------------------------------------------
- - Network control center X
- --------------------------------------------------------------------------------
- - Help desk after hours X
- --------------------------------------------------------------------------------
- - Problem determination on circuits/hardware X
- --------------------------------------------------------------------------------
- - Vendor dispatch and coordination X
- --------------------------------------------------------------------------------
- - Provide status on problem resolution progress to user X
- --------------------------------------------------------------------------------
- - Track vendor performance X
- --------------------------------------------------------------------------------
- - Respond to alarms on network management systems X
- --------------------------------------------------------------------------------
Cabling/wiring
- --------------------------------------------------------------------------------
- - Site design consulting X
- -------------------------------------------------------------------------------
- - Site design, coordination and implementation X
- --------------------------------------------------------------------------------
- - Installation and maintenance X
- -------------------------------------------------------------------------------
Data network design X
- -------------------------------------------------------------------------------
Data network project planning
- --------------------------------------------------------------------------------
- - Develop project plan X
- --------------------------------------------------------------------------------
- - Validate assumptions & provide programming & other inputs X
- --------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 39 of 43
<PAGE>
RESPONSIBILITIES MATRICES
XXXX XXXX XXXX
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESPONSIBILITY
DATA NETWORK (cont.) ---------------------
ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Hardware/systems software installation
- -------------------------------------------------------------------------------
- - Remote sites
- -------------------------------------------------------------------------------
- Coordinate installs X
- -------------------------------------------------------------------------------
- Provide logistical support X
- -------------------------------------------------------------------------------
Troubleshooting/resolution X
- -------------------------------------------------------------------------------
Communications equipment vendor management X
- -------------------------------------------------------------------------------
Backup/recovery X
- -------------------------------------------------------------------------------
Capacity planning and management X
- -------------------------------------------------------------------------------
- - Coordinate technical support to monitor utilization
& performance X
- -------------------------------------------------------------------------------
Change control
- -------------------------------------------------------------------------------
- - Provide input to change process development X
- -------------------------------------------------------------------------------
- - Design and be responsible for change control process X
- -------------------------------------------------------------------------------
Change management
- -------------------------------------------------------------------------------
- - Make requests/define requirements X
- -------------------------------------------------------------------------------
- - Manage change X
- -------------------------------------------------------------------------------
System Architecture diagrams documentation and
maintenance X
- -------------------------------------------------------------------------------
Technical support X
- -------------------------------------------------------------------------------
Training
- -------------------------------------------------------------------------------
- - Technology X
- -------------------------------------------------------------------------------
- - Applications X
- -------------------------------------------------------------------------------
Network change requests X
- -------------------------------------------------------------------------------
Consult on protocol, interface standards, connectivity
options, etc. X
- -------------------------------------------------------------------------------
Inventory management X
- -------------------------------------------------------------------------------
Standards
- -------------------------------------------------------------------------------
- - Take lead in defining standards X
- --------------------------------------------------------------------------------
- - Provide input, review and approval X
- -------------------------------------------------------------------------------
- - Implement standards X
- -------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 40 of 43
<PAGE>
RESPONSIBILITIES MATRICES
XXXX XXXX XXXX
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
DATA NETWORK - DATA SERVICES RESPONSIBILITY
- --------------------------------------------------------------------------------
<S> <C> <C>
ISSC Unisource
- --------------------------------------------------------------------------------
Submit project request X
- --------------------------------------------------------------------------------
Complete project tracking & provide status as required X
- --------------------------------------------------------------------------------
Interpret business objectives X
- --------------------------------------------------------------------------------
Consult on data products/technologies/services X
- --------------------------------------------------------------------------------
Consult on protocol/interface standards/connectivity
options/etc. X
- --------------------------------------------------------------------------------
Gather & analyze info for developing/modifying network
systems X
- --------------------------------------------------------------------------------
Complete network traffic studies/capacity planning X
- --------------------------------------------------------------------------------
- - Provide requirements X
- --------------------------------------------------------------------------------
Perform data network technical design and cost analysis X
- --------------------------------------------------------------------------------
- - Provide requirements X
- --------------------------------------------------------------------------------
Cost optimization of data network (excludes Vendor change) X
- --------------------------------------------------------------------------------
Data network project planning
- --------------------------------------------------------------------------------
- - Develop project plan X
- --------------------------------------------------------------------------------
- - Validate assumptions & provide programming & other inputs X
- --------------------------------------------------------------------------------
Prepare business case outlining cost & plan of network
recommendations X
- --------------------------------------------------------------------------------
- - Validate assumptions X
- --------------------------------------------------------------------------------
Manage project implementation X
- --------------------------------------------------------------------------------
Complete site surveys as appropriate X
- --------------------------------------------------------------------------------
Coordinate physical requirements for Unisource sites
(power, floor space, etc.)
- --------------------------------------------------------------------------------
- - Determine requirements X
- --------------------------------------------------------------------------------
- - Provide required power, floor space, etc. X
- --------------------------------------------------------------------------------
Check equipment availability X
- --------------------------------------------------------------------------------
Coordinate order placement of data lines & associated
hardware X
- --------------------------------------------------------------------------------
Coordinate network implementation (tech staff/vendor
support) X
- --------------------------------------------------------------------------------
Minimize network downtime X
- --------------------------------------------------------------------------------
Prepare network implementation plan (notification
of parties) X
- --------------------------------------------------------------------------------
Coordinate shipment/pick-up of equipment X
- --------------------------------------------------------------------------------
- - Receive and send designated equipment X
- --------------------------------------------------------------------------------
Return/relocate displaced equipment X
- --------------------------------------------------------------------------------
- - Receive displace equipment X
- --------------------------------------------------------------------------------
- - Return leased equipment X
- --------------------------------------------------------------------------------
- - Dispose of displaced Unisource owned equipment X
- --------------------------------------------------------------------------------
- - Assist Unisource in disposal of equipment X
- --------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 41 of 43
<PAGE>
RESPONSIBILITIES MATRICES
XXXX XXXX XXXX
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NON-HOST CONNECTED RESPONSIBILITY
----------------------
LAN NETWORK ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Business requirements X
- --------------------------------------------------------------------------------
Technical requirements X
- --------------------------------------------------------------------------------
LANs/servers - equipment and software
- --------------------------------------------------------------------------------
- - Management, operation & maintenance X
- --------------------------------------------------------------------------------
- - Third party vendor maintenance management X
- --------------------------------------------------------------------------------
PCs/workstations
- --------------------------------------------------------------------------------
- - Third party vendor maintenance X
- --------------------------------------------------------------------------------
Future LAN/server equipment and software
- --------------------------------------------------------------------------------
- - Provide requirements X
- --------------------------------------------------------------------------------
- - Procure and install X
- --------------------------------------------------------------------------------
Cabling/wiring
- --------------------------------------------------------------------------------
- - Remote site design/coordination X
- --------------------------------------------------------------------------------
Product evaluation and procurement (hardware and software)
- --------------------------------------------------------------------------------
- - Define business requirements X
- --------------------------------------------------------------------------------
- - Suggest and approve products as appropriate X
- --------------------------------------------------------------------------------
- - Evaluate and procure products X
- --------------------------------------------------------------------------------
LAN network management X
- --------------------------------------------------------------------------------
LAN network design X
- --------------------------------------------------------------------------------
LAN network project planning
- --------------------------------------------------------------------------------
- - Develop project plan X
- --------------------------------------------------------------------------------
- - Validate assumptions and provide input requirements X
- --------------------------------------------------------------------------------
End user help desk X
- --------------------------------------------------------------------------------
Troubleshooting/resolution X
- --------------------------------------------------------------------------------
Backup/recovery X
- --------------------------------------------------------------------------------
Capacity management X
- --------------------------------------------------------------------------------
- - Provide requirements X
- --------------------------------------------------------------------------------
Change control
- --------------------------------------------------------------------------------
- - Provide input to change process development X
- --------------------------------------------------------------------------------
- - Design and own change control process X
- --------------------------------------------------------------------------------
Change management
- --------------------------------------------------------------------------------
- - 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
- --------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 42 of 43
<PAGE>
???????????????????
XXXX XXXX XXXX
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESPONSIBILITY
APPLICATIONS DEVELOPMENT AND MAINTENANCE ---------------------
ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Application Software
- -------------------------------------------------------------------------------
- - Requirements X
- -------------------------------------------------------------------------------
- - Procurement of packages administration X
- -------------------------------------------------------------------------------
- - Development/enhancement of packages (up to baseline) X
- -------------------------------------------------------------------------------
- - Compliance with application installation standards X
- -------------------------------------------------------------------------------
- - Acceptance test execution X
- -------------------------------------------------------------------------------
- - Acceptance test verification X
- -------------------------------------------------------------------------------
- - Maintenance (up to the baseline)
- -------------------------------------------------------------------------------
- Defect identification fixes X
- -------------------------------------------------------------------------------
- Preventive maintenance X
- -------------------------------------------------------------------------------
- - Development (up to the baseline)
- -------------------------------------------------------------------------------
- Upgrades X
- -------------------------------------------------------------------------------
- New releases X
- -------------------------------------------------------------------------------
- Enhancements X
- -------------------------------------------------------------------------------
- Government/regulatory changes X
- -------------------------------------------------------------------------------
- - Education/training of End Users (up to the baseline) X
- -------------------------------------------------------------------------------
Fourth generation language maintenance support
(up to baseline) X
- -------------------------------------------------------------------------------
- - End user support (help desk) X
- -------------------------------------------------------------------------------
- - Promotion into production* X
- -------------------------------------------------------------------------------
- - Approval of all changes X
- -------------------------------------------------------------------------------
- - Reporting X
- -------------------------------------------------------------------------------
</TABLE>
* Promotion of new applications into the ISSC production operating environment
may be considered New Services subject to Section 11.01 of the Agreement.
December 22, 1993
ISSC/Unisource Confidential Schedule E Page 43 of 43
uniskde
<PAGE>
ISSC / Unisource [ART APPEARS HERE]
Agreement for Information Technology Services
- -------------------------------------------------------------------------------
Schedule F
New Services Work Order
Title: Control Number:
-------------------- -------
Requestor(s): Org./Dept.
-------------------- -------
Requestor's Assessment: Major Minor Documentation
---- ---- ----
Data set (name) of Softcopy:
Description of Change:
Reason for Change:
Documentation Affected: Date
Documentation Title: Version DD/MM/YY
- ------------------------- ------- / /
-- -- --
- ------------------------- ------- / /
-- -- --
- ------------------------- ------- / /
-- -- --
- ------------------------- ------- / /
-- -- --
Final Impact
SLOC Labor Sched. Signature
Old New (Days) Delay
System Development:
--- --- ----- ----- ------------------
System Engineering:
--- --- ----- ----- ------------------
Test & Integration:
--- --- ----- ----- ------------------
Other:
--- --- ----- ----- ------------------
Subcontractor:
--- --- ----- ----- ------------------
Status
Classification: (I,II) Rejection Date: / /
------ -- -- --
Deferred Date: / / Reason Code : (A,B,C,D)
-- -- -- ------
Date to Assessment CCB Approval Implement. Closed
Review Complete Date Date Date Date
/ / / / / / / / / / / /
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
Accepted by: Accepted by:
Integrated Systems Solutions Corporation Unisource
d/b/a ISSC, Inc.
By By
---------------------------------------- ----------------------------
Authorized Signature Authorized Signature
- ------------------------------------------- ----------------------------
Name (Type or Print) Date Name (Type or Print) Date
December 22, 1993
ISSC/Unisource Confidential Schedule F Page 1 of 1
<PAGE>
ISSC / Unisource [ART APPEARS HERE]
Agreement for Information Technology Services
- -------------------------------------------------------------------------------
Schedule G
Disaster Recovery Services
Section G-1
Services
I. Current Environment In the event of a Disaster at any site in the Current
Environment, ISSC will exercise and implement the disaster recovery plan in
place for that location or, if there is no disaster recovery plan in place
for that location, use commercially reasonable efforts to reestablish and
provide services either at the original site or at an alternate site, if
feasible and available; provided, however, that Unisource shall reimburse
ISSC for expenses ISSC would not have otherwise incurred had it not been for
ISSC's disaster recovery efforts. For purposes of this Section "commercially
reasonable efforts" shall include, but not be limited to, activities such as
expediting replacement machines, locating alternate operating sites, working
with communications vendors, etc.
II. XXXX XXXX XXXX
ISSC shall provide Disaster Recovery services for Critical Applications at a
level of performance which will allow Unisource to restore and continue
those functions which are vital to the continuation of Unisource's business
operations during a declared Disaster.
Beginning on the completion of the migration of a Unisource Service
Location(s) to the XXXX XXXX as specified in Schedule N, ISSC will be
responsible for the provision of Disaster Recovery capability for the
Services provided to Unisource from the ISSC Data Center. The actual
Disaster Recovery Plan Component will be defined and set forth in the
Procedures Manual during the development phase of the Schedule N systems.
The remainder of Schedule G-1 specifies the general Disaster Recovery
services ISSC will provide Unisource for the XXXX systems installed at the
ISSC site.
ISSC will make commercially reasonable efforts to meet the Performance
Standards during such Disaster.
A. Definitions
1. "Configuration" means the hardware and Software, set forth in Section
G-2, designated for support of the Critical Applications during a
declared Disaster.
2. "Critical Applications" means the applications specified by Unisource
to support Unisource's vital business functions in the event of a
Disaster.
3. "Disaster" means any unplanned interruption of information processing
for Unisource, due to causes beyond the control of Unisource or ISSC,
which significantly impairs the ability of ISSC to operate the
Critical Applications at the Data Center. Examples are:
a. loss of the building to fire;
b. loss of power to the facility due to hurricane damage; and
c. inability to access the facility due to a chemical spill, etc.
4. "Disaster Recovery" means the restoration at a location other than the
Data Center, of Critical Applications following a declared Disaster.
5. "Recovery Center" means the facility from which ISSC provides Disaster
Recovery services.
6. "Disaster Recovery Plan Component" means the Unisource dedicated
portion of the ISSC Lexington Data Center Disaster Recovery Plan
required to recover the Unisource's Critical Applications.
December 22, 1993
ISSC/Unisource Confidential Schedule G Page 1 of 5
<PAGE>
B. Services
1. Disaster Recovery Plan Component
The Disaster Recovery Plan Component for recovering the Critical
Applications, necessary for continuation of the vital business
processes of Unisource, will be developed as scheduled by the project
plan for the XXXX defined in Schedule N and will include, but not be
limited to, the following:
. a brief description of the critical services and functions,
including a prioritized listing of the Critical Applications;
. the hardware and Software comprising the Configuration;
. the hardware and Software necessary for connection to the Data
Network;
. ISSC's and Unisource's recovery responsibilities;
. contact listings of key personnel;
. identification of recovery teams;
. recovery scenarios;
. criteria for Disaster declaration, recovery and testing;
. names of those individuals who are authorized to declare a
Disaster;
. backup process and components;
. notification procedures;
. recovery information, procedures, schedules, etc.;
. testing results and any required corrective action plans; and
. procedures for maintaining the Disaster Recovery Plan.
A listing of the Critical Applications specified by Unisource 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 Component for the
Services covered by this Agreement to serve as a single point of
contact for Unisource's Disaster Recovery related communications and
activities. The ISSC representative will be responsible for the
development and maintenance of the Disaster Recovery Plan Component and
will ensure safe storage and distribution of copies as follows:
a. Off-site vital records storage;
b. Unisource's Disaster Recovery Coordinator;
c. ISSC's Disaster Recovery Coordinator;
d. ISSC Project Office; and
e. ISSC Crisis Management Center.
ISSC, in cooperation with Unisource, will review and update, if
necessary, the Disaster Recovery Plan Component on an annual basis or
as warranted by business and/or technical changes to ensure
compatability with Unisource's and ISSC's overall Disaster Recovery
strategies and related plans. Any additional updates which are
necessary as a result of actions by Unisource will be considered New
Services.
ISSC, in cooperation with Unisource, will XXXX the Disaster Recovery
Plan Component initially XXXX XXXX after the completion of the XXXX of
the XXXX and XXXX of the XXXX of XXXX to the XXXX XXXX XXXX provided
under Schedule N and annually thereafter to ensure the plan remains
practicable and current. Disaster Recovery testing will be coordinated
with Unisource and ISSC will provide Unisource with a report of the
test results following each Disaster Recovery test.
2. Data Center Recovery
The declaration of a Disaster will require consultation with
representatives designated by Unisource and specified in the Disaster
Recovery Plan.
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
December 22, 1993
ISSC/Unisource Confidential Schedule G Page 2 of 5
uniskde
<PAGE>
Unisource's Critical Applications. Restoration of services for the
Critical Applications will be provided within 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 to Unisource, if required.
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.
Unisource will be XXXX.
a. customers who are not Disaster Recovery services customers;
b. customers who have scheduled testing; and
c. customers who subsequently notify the Recovery Center.
If the Recovery Center specified in Section C.2(a) above is not
available when a Disaster is declared. Disaster Recovery services will
be provided at another Recovery Center or at an XXXX XXXX XXXX
facility.
3. Data Network Recovery
ISSC will cooperate with Unisource and the Network Vendor to develop a
Data Network recovery plan to be included in the Disaster Recovery
Plan Component. The Data Network recovery plan will utilize the
strategy for redundancy in place at the time of a declared Disaster
and will include recoverability only to the extent to which the
necessary network connectivity to Unisource's control units is
included in the Configuration. ISSC is not responsible for End User
recovery.
C. Resources and Growth
The resources for Disaster Recovery services are the capacities of the
Configuration listed in Section G-2 of this Schedule and the Data Network
requirements necessary to provide connectivity from the Recovery Center to
the Data Network. Growth in the Configuration will be provided at a rate
necessary to support the percent of growth, if any, for each Resource
Baseline set forth in Schedule J and the Supplement without an increase in
price to Unisource.
D. New Services
Additional services, functions or capacity beyond that specified in Section
G-2 will be added at the request of Unisource, subject the Change Control
Procedures defined in this Agreement.
December 23, 1993
ISSC/Unisource Confidential Schedule G Page 3 of 5
<PAGE>
Schedule G
Disaster Recovery Services
Section G-2
Configuration
The Disaster Recovery backup hardware and Software Configuration for the
Disaster Recovery Center will be agreed to by Unisource and ISSC and listed here
prior to migrating the initial Unisource Service Location to the ISSC Data
Center.
December 22, 1993
ISSC/Unisource Confidential Schedule G Page 4 of 5
<PAGE>
Schedule G
Disaster Recovery Services
Section G-3
Critical Applications
Unisource's Critical Applications supported by the Configuration listed in
Section G-2 will be listed here, when identified, and included as part of the
Disaster Recovery Plan Component.
ISSC/Unisource Confidential December 22, 1993
uniskdg Schedule G Page 5 of 5
<PAGE>
ISSC / Unisource [ART APPEARS HERE]
Agreement for Information Technology Services
- -------------------------------------------------------------------------------
Schedule H
Project Management
I. Introduction
This Schedule describes the overall Scope of the Unisource/ISSC Agreement,
the basic roles/responsibilities of the Parties, and the specific Project
Management processes that ISSC shall implement in order to support delivery
of the Contract deliverables.
II. Scope
ISSC is responsible to provide Unisource with IT and related Services and
Solutions needed to develop, deploy and operate the Unisource XXXX XXXX
XXXX, ("XXXX") as described in the individual Schedules of the Contract.
Additionally, ISSC is responsible for operating the Unisource current
systems until replaced by the XXXX. These items include but are not limited
to Systems Development and Integration, IT System Operations, Application
Enhancements and Application Maintenance. The following subparagraphs
describe the scope of the items to be provided.
A. XXXX XXXX XXXX
ISSC shall provide to Unisource, development, integration and deployment
of subsystems to support Unisource's reengineered business processes,
the ("XXXX XXXX XXXX"). The XXXX XXXX XXXX shall have the functionality
as defined in the individual subsystem Statement of Work project
sections in Schedule N. As part of the project sections for each
subsystem ISSC shall be responsible for transition from the current
Unisource system to the XXXX XXXX XXXX. This shall include appropriate
testing to verify that the system is installed and operating in
accordance with the requirements specification. The defined Subsystems
for the XXXX XXXX XXXX are:
1. XXXX XXXX XXXX System ("XXXX")
2. XXXX XXXX System ("XXXX")
3. XXXX XXXX System ("XXXX")
4. XXXX XXXX System ("XXXX")
5. XXXX XXXX System ("XXXX")
6. XXXX XXXX System ("XXXX")
7. XXXX XXXX XXXX Subsystem ("XXXX")
B. Support to Unisource XXXX XXXX XXXX
As defined in the Unisource/ISSC Agreement, and for specific projects as
defined in Schedule N, ISSC shall provide items and/or Services
specified in this Agreement to support Unisource in its business
Reengineering efforts. The defined Schedule N projects are:
1. XXXX XXXX Management/XXXX XXXX ("XXXX")
2. XXXX XXXX XXXX ("XXXX")
3. XXXX XXXX Assistance ("TMA")
C. Operational Services
ISSC shall provide operational services for Unisource's current system
("Legacy Systems") and operational services for the XXXX XXXX XXXX as it
is installed in the Unisource Organization, as defined in Schedule E.
ISSC shall also provide network support as described in Schedule E.
December 22, 1993
ISSC/Unisource Confidential Schedule H Page 1 of 10
<PAGE>
D. Application Development and Maintenance
ISSC shall provide for Maintenance of the Legacy Systems until
operational cut over to the XXXX XXXX XXXX and maintenance of the XXXX
as defined in Schedule E. ISSC shall include XXXX to and XXXX XXXX that
supply XXXX software for the Legacy and/or the XXXX.
III. Management Process
ISSC shall implement Project Management processes as defined in this
Schedule. These processes shall provide appropriate technical, financial
and project management controls for the major contract elements to assure
effective overall IT management based on Unisource Business priorities and
objectives.
IV. Deliverables
ISSC shall provide Unisource with specific documentation and Services to
enable Unisource to have an understanding of all agreed upon technical and
operational aspects of the Current and the Restructured Business Platform.
These deliverables shall include the services to attain all service
levels. Detail requirements for deliverables are contained in the
appropriate Schedules.
V. Requirements Management
The Parties recognize that the specific business requirements for the XXXX
will change as the XXXX Project is implemented. ISSC will implement a
Change Management Process to permit the emerging requirements to be
incorporated into the XXXX XXXX XXXX in a timely manner, and to update the
Unisource/ISSC Agreement to reflect the new requirements. The Change
management process shall include a Change Request Evaluation Process, and
a Change Control Board that includes Joint participation. Specific
requirements for the Change Management Process are contained in the Change
Management Process section of this Schedule.
The Parties agree that a "Requirements Validation Review" shall be
scheduled at the completion of major portions of the XXXX XXXX XXXX XXXX
Definition and Design tasks for each Subsystem for the purpose of
"revalidating" the requirements baseline and initiating an appropriate
change request to reflect the revised requirements.
VI. Roles/Responsibilities
Unisource shall be responsible to provide certain items and information to
ISSC for the purpose of incorporating these into items that will be
delivered to Unisource as part of the XXXX XXXX XXXX, or for providing
items that facilitate the supplying of services by ISSC. Unisource shall
also be responsible for approving certain deliverable items of
documentation as provided by ISSC. Identification and definition of these
specific responsibilities is contained in the Schedules of the
Unisource/ISSC Agreement.
ISSC shall be responsible for all deliverables defined in the
Unisource/ISSC Agreement. ISSC may utilize subcontractors/Vendors subject
to Section 13.07 of the Agreement to perform various tasks in performance
of its services, however responsibility for providing the deliverables to
Unisource shall remain with ISSC and shall not be transferred to its
subcontractor/vendor under any form of agency.
VII. Measurement Methodology
The Parties recognize that the contract approach for the Schedule N
projects prior to Unisource requirements definition is on a "Level of
Effort" basis. The Parties also recognize and agree that at such time as
Unisource defines their requirements for the respective Projects under
Schedule N, ISSC shall then commit to an allocation of resources, a
completion schedule and a price to provide said services and that price
shall be fixed assuming no further requirement changes. To reflect this in
contract status reporting, ISSC shall report expenditures in Hours Worked
and in Subcontractor Billings for that portion of the project prior to the
"Requirements Validation Review." This reporting shall be at the Work
Product Level and not the detail task level. For the post "Requirements
Validation Review" period, ISSC shall report status against the jointly
agreed implementation resource level.
VIII. Project Management Processes
A. Introduction
The overall project management process that ISSC shall use to manage
the XXXX Project will include the detailed planning, analysis and
project management required to oversee the entire XXXX Project.
The ISSC approach to Project Management is based upon the premise of
the ISSC Project Executive having responsibility and accountability to
meet agreed upon quality, cost, schedule and technical objectives of
the XXXX Project with individual Project Managers assigned to specific
project and operational roles as delineated in Schedules N and E.
December 22, 1993
ISSC/Unisource Confidential Schedule H Page 2 of 10
<PAGE>
Project Management shall be implemented by utilizing structured processes
for defining and organizing all elements of the XXXX XXXX Project and
providing clear and concise delegation of responsibility and accountability
to the supporting organization for execution of specific work products and
tasks.
The ISSC Project Executive shall have overall responsibility for the XXXX
XXXX Project. Reporting to the ISSC Project Executive shall be an
organization structure designed to effectively execute the XXXX Project.
ISSC plans to use both ISSC resources and subcontractors in the performance
of this Contract.
ISSC shall implement the following processes in accordance with the
requirements as defined in this Schedule:
1. Project Management Personnel
2. Project Start-up
3. Project Management Planning
4. Project Orientation
5. Project Control
6. Status Reporting
7. Management Reviews and Meetings
8. Project Financial Control
9. Project Change Management
B. Project Management Personnel Process
1. Task Description
The objective of this process is to establish an organizational
structure to support the effective management of the project. This
organization shall plan, schedule, and control performance of all
functions assigned to the project.
2. ISSC Responsibilities
ISSC shall:
a. Provide an ISSC Project Executive who shall be responsible for
the following:
1) Have overall strategic management responsibility for the
Contract includes planning, directing, and monitoring ISSC
XXXX XXXX XXXX Project activities.
2) Establish the ISSC XXXX XXXX XXXX Project team organization.
3) Be the primary point of contact to Unisource establishing
and maintaining communications through the Unisource Senior
I/S Executive.
4) Provide senior level direction to all assigned ISSC and ISSC
subcontractor project personnel during the period of
performance.
5) Define and monitor the support resources required for the
Restructured Business Platform Project to ensure these
resources are available as scheduled.
6) Conduct Management Reviews and Meetings as described below.
7) Measure and evaluate progress against the plans and
schedules.
8) Resolve deviations from the Project Management Plan with the
Unisource Senior I/S Executive.
9) Be accountable for the Project Change Management as
described in the Change Control Plan.
10) Plan, schedule and participate in periodic ISSC System
Assurance Reviews.
b. Provide a Project Control Office function which shall be
responsible for the following:
1) Assist the ISSC Project Executive in the daily operations
of the Project.
2) Monitor Project task completeness, consistency, and quality.
3) Manage the Project Management Process.
4) Manage the Status Reporting Process.
ISSC/Unisource Confidential December 22, 1993
uniskdh Schedule H Page 3 of 10
<PAGE>
5) Manage the Management Reviews and Meetings Process.
6) Manage the Financial Controls Process.
7) Manage the Project Change Management Process.
8) Work closely with the ISSC Project Executive to coordinate
project meetings, resources, and schedules and resolve
tactical issues.
c. Provide a Systems Architect function which shall be responsible
for the following:
1) Recommend standards/guidelines where none exists.
2) Assure cross application (solution) adherence to Architecture
and Integration and guidelines.
3) Recommend infrastructure to support Unisource's on-going
business and technological needs.
4) Carry out research necessary to support and counsel project
teams.
5) Transform business models into technical implemented projects
consisting of software, hardware, network, and data
dependencies.
6) Define platforms for solution implementation (hardware,
software, network, data).
7) Define architecture (blueprint specifications) based on
requirements.
8) Have ultimate responsibility for meeting solution's
functional and performance specifications and conformance to
client architecture and infrastructure standards and
guidelines.
9) Defines applications (solutions) which are integrated.
10) Maintaining a knowledge base of data and process models
created in the project.
d. Provide Project Managers as required who shall be responsible for
the following:
1) Have "total responsibility and accountability" to the Project
Executive for achieving all quality cost, schedules, and
technical objectives related to their assigned projects.
2) Work jointly with Unisource Project Managers on execution of
project activities.
3) Develop detailed Implementation Plans.
4) Plan and monitor the day-to-day technical activities of the
specific assigned projects.
5) Daily interface to subcontractors involved in the Statement
of Work.
6) Assign responsibilities to project team members.
7) Work with the Project Office to develop work plans. Review
and approve the work plans.
8) Ensure that appropriate project documentation is defined,
completed, and approved.
9) Attend periodic Status Meetings as requested by the ISSC
Project Executive.
10) Assist in making decisions regarding technical alternatives
for the system development and operation in conjunction
with System Architect as required.
3. Unisource Responsibilities
Unisource shall:
a. Assign a Unisource Senior I/S Executive whose responsibilities
shall include:
1) Have the necessary authority to be the single point of
contact for the management of Unisource's obligations under
the Restructured Business Platform Project.
2) Serve as the senior interface between the ISSC Project Team
and all Unisource departments and companies participating in
the Restructured Business Platform Project.
3) Provide operational guidance to the RBP Project.
4) Represents Unisource in the Project Change Management
Process.
5) Attend project status meetings as required by the Management
Reviews and Meetings Process.
6) Obtain and provide information, data, decisions and
approvals, within three days of ISSC's request unless
Unisource and ISSC agree to extended response time.
7) Assign/coordinate Unisource resources on the project.
8) Ensure the attendance of the agreed-to Unisource personnel
in each requirements analysis and planning meeting.
December 22, 1993
ISSC/Unisource Confidential Schedule H Page 4 of 10
<PAGE>
9) Resolve project issues and/or escalate as needed.
10) Ensure that the project requirements meet Unisource's
business and technical objectives.
11) Resolve deviations from project plans which may be caused by
Unisource.
12) Serve as the interface between ISSC and all Unisource
departments participating in this project.
13) Provide executive level review and sign-off that the
deliverables meet Unisource's business and technical
objectives.
14) Provide senior level approval for Pilot Period/Acceptance
Tests and for Installation Group Acceptances.
15) Be accountable for the performance of the Unisource
personnel on the project identified below and for the
completion of Unisource responsibilities as documented in
the Agreement.
b. Form a Unisource Executive Transition Committee which shall have
the following responsibilities:
1) Assure that XXXX Project requirements as designed adheres to
Unisource business goals.
2) Provide functional guidance to the XXXX Project.
3) Organize and direct the Unisource Organization Change and
Business Process Reengineering teams.
4) Participate in Management Reviews and Meetings as required
by the Management Reviews and Meetings Process.
5) Participate in the Project Change Management Process.
6) Provide functional guidance to Unisource Project Managers.
7) Provide oversight on XXXX Project implementation.
8) Provide executive support and commitment to the XXXX
Project.
9) Assist Unisource Senior I/S Executive as required.
c. Commit specific Unisource individual(s) (referred to as Key
Unisource Project Personnel) described in Schedule S.
C. Project Start-up Process
1. Task Description
This process covers those tasks required at the start-up of a
project.
2. ISSC Responsibilities
a. Establish Physical Project Office.
b. Perform facilities start-up activities.
c. Perform organizational start-up activities.
d. Perform financial controls start-up activities.
e. Perform customer start-up activities.
f. Perform education start-up activities.
g. Perform development start-up activities.
3. Unisource Responsibilities
* Provide input and review as requested by ISSC personnel.
D. Project Management Planning Process
1. Task Description
This process encompasses efforts required to produce the overall
project management plan including development of the work breakdown
structure, project schedules and manpower plans.
2. ISSC Responsibilities
a. Conduct project planning for the entire XXXX Project.
b. Create and maintain a Project Management Plan ("PMP") for the
duration of the Agreement. The Project Management Plan shall
contain the following sections:
December 22, 1993
ISSC/Unisource Confidential Schedule H Page 5 of 10
<PAGE>
1) Project Organization
2) Project Description
3) Status Reporting
4) Management Reviews and Meetings
5) System Diagram (as it evolves)
6) Statement of Work Summaries
7) Deliverables List
8) Master Schedule
9) Acceptance Criteria
10) Resources/Services Summary
11) Measurements
12) Unisource Responsibilities
3. Unisource Responsibilities
a. Ensure that appropriate management/staff and associates are made
available for planning sessions and review sessions to define
Unisource goals and objectives.
b. Ensure that appropriate management/staff and associates are made
available for the review sessions prior to release of the Project
Management Plan.
4. ISSC Deliverables
. Project Management Plan
5. ISSC Completion Criteria
. Delivery of the Project Management Plan
E. Project Orientation Process
1. Task Description
This process provides orientation to members of the ISSC Project Team
which shall establish a common understanding of the Project scope, the
goals of the Project, the installation process, and other relevant
topics.
2. ISSC Responsibilities
a. Orient XXXX Project participants to Project goals and the
selected project management methodology.
b. Conduct a review meeting of the Contract and Schedules with the
Unisource Senior I/S Executive within the first thirty days of
the Project.
c. Conduct a XXXX Project Kick-Off Meeting for the ISSC Project
Team to present topics such as:
. Project overview
. Project organization
. Project scope and installation methodology
. Project plan and schedule (overview)
. Project communications and status reporting
. Project standards and procedures
. Project Change Management Process
. Facilities used in the project
. Application environment
. Technical environment
. Administrative procedures
December 22, 1993
ISSC/Unisource Confidential Schedule H Page 6 of 10
<PAGE>
3. Unisource Responsibilities
a. Unisource Senior I/S Executive: Attend a review meeting of the
Contract and Schedules with the ISSC Project Executive. This sub
task shall be performed in the first thirty days of the Project.
b. Key Unisource project personnel: Attend a Project Kick-Off Meeting
for the Project Team.
4. ISSC Deliverables
. None
5. ISSC Completion Criteria
. This task shall be complete when the meetings described have been
held.
F. Project Control Process
1. Process Description
This process encompasses efforts required to control the activities on
the Restructured Business Platform Project on a daily basis.
ISSC intends to use the following product on the XXXX Project when
appropriate: XXXX XXXX for XXXX, and XXXX tool set.
2. ISSC Responsibilities
a. Maintain a Project Control Office ("PCO") that is responsible to
define and implement the overall project management system.
b. Provide the overall project management, project tracking and
reporting for the project to ensure all areas maintain technical
progress according to agreed upon schedules to meet Unisource's
business objectives. This shall include:
1) Measuring, tracking and evaluating progress against the
Project Management Plan.
2) Resolving deviations from the project plan with the Unisource
Senior I/S Executive.
3) Reviewing project tasks, schedules, and resources and making
changes or additions, as appropriate.
c. Develop and maintain procedures relative to the management of the
project.
d. Maintain the Work Breakdown Structure.
e. Create and maintain Resource Plans.
f. Create and maintain the Project Master Schedule.
g. Maintain and issue detailed project schedules.
h. Maintain the Project files.
i. Maintain the Contract files.
j. Oversee the development, use, and maintenance of automated project
schedule tools.
k. Provide copies of XXXX for XXXX, and tool set as required.
l. Assume financial responsibility for XXXX software.
m. Monitor the ongoing status of team activities.
3. Unisource Responsibilities
Unisource shall have the following responsibilities for the Project
Control Process:
a. Provide support and input as requested by ISSC.
b. Provide copies of XXXX as required.
G. Status Reporting Process
1. Task Description
This process encompasses efforts required to provide status against
the Project Management Plan and to provide key indicators that give
trends to validate status assessment and future outlook projections.
December 22, 1993
ISSC/Unisource Confidential Schedule H Page 7 of 10
<PAGE>
2. ISSC Responsibilities
a. Provide written Status Reports to Unisource that provides information
on operation and schedule status, technical progress, issue
identification and action plans for all deliverables in the
Agreement. The reports shall include progress over prior period and
planned work for the coming months. A representative format, for each
project, is as follows:
1) For each Project
a) Activities Performed During Prior period
b) Activities Planned for coming Months
2) High Level Master Schedule
3) Milestone Dates
4) Deliverable Status
5) Project Change Management Summary
6) Measurements
7) Problems, Issues, Concerns
b. Establish a mutually agreed upon format of the Status Report within
60 working days of authorization to proceed.
3. Unisource Responsibilities
Work with ISSC to develop a mutually agreed upon format for the
Status Report.
4. ISSC Deliverables
. Status Report
5. ISSC Completion Criteria
. This task shall be complete when the last status report has been
delivered.
H. Management Reviews and Meeting Process
1. Task Description
This process encompasses efforts required to conduct periodic reviews
and meetings as an essential part of the management process.
2. ISSC Responsibilities
a. Conduct a periodic meeting with the Unisource Senior I/S
Executive and other project personnel as mutually agreed upon.
The purpose of this meeting is to review the status of the XXXX
Project in detail. Agenda items shall include status of
operations, projects, problems, and action plans. Near term plans
shall be discussed to ensure proper priority and resources are
assigned. The ISSC Project Executive shall issue agendas and
shall be responsible for development of minutes and action items.
b. Provide a periodic Project Review of the XXXX Project to
Unisource upper management. The purpose of the review is for the
Unisource Senior I/S Executive and ISSC Project Executive to
present operations and project status and identification of areas
of significant problems and issues. The ISSC Project Executive is
responsible for coordination of agendas, places, and times for
the review. In addition ISSC is responsible for documenting
minutes and action items from the review. The format of the
meeting shall be mutually agreed to.
c. As required by the Agreement, Schedules, and the project
schedules, conduct Technical Reviews of specific technical
activities as they are completed. In general these reviews shall
occur at the beginning of a document acceptance process. Examples
of these reviews are:
1) Requirements Validation Review
2) System/Subsystem Requirements Review
3) System/Subsystem Design Reviews
4) System Acceptance Readiness Reviews
5) Cross Project Reviews among Project Managers
d. Conduct Change Control Board ("CCB") Review meetings at least
once a month to review and approve the initial establishment of
the technical baselines for the project, and to review and
approve Change Requests ("CR") to the established operational and
technical baselines. The
December 22, 1993
ISSC/Unisource Confidential Schedule H Page 8 of 10
<PAGE>
CCB shall be chaired by the ISSC Project Executive and the Unisource
Senior I/S Executive and made up of members from the ISSC Project
Control Office and applicable representatives from Unisource's End
User community. The ISSC Project Control Office shall coordinate
agendas, places, and times for the review and publish the minutes and
actions items from the review.
e. Establish a mutually agreed upon format and schedule for Management
Reviews and Meetings within 60 working days of authorization to
proceed.
3. Unisource Responsibilities
a. Work with ISSC to develop a mutually agreed upon format and schedule
for Management Reviews and Meetings.
b. Unisource Senior I/S Executive shall ensure that appropriate
management/staff and associates are made available for monthly
project reviews and weekly status meetings to monitor the
Restructured Business Platform Project progress.
c. Unisource Senior I/S Executive shall ensure that appropriate
management/staff and End Users are made available for all technical
review sessions prior to release of documentation for approval.
d. In conjunction with the ISSC Project Executive, the Unisource Senior
I/S Executive shall participate in the development of mutually agreed
upon business measurements to track Unisource progress against the
Project Management Plan. These measurements shall be used in Project
Reviews.
4. ISSC Deliverables
. Status Meeting Agenda and Notes
. Project Review Notes and Minutes
. Change Control Board Review Meeting Notes and Minutes
5. ISSC Completion Criteria
. This task shall be complete when the meetings described have been held
and the meeting notes have been distributed.
I. Project Financial Controls Process
1. Task Description
This process encompasses efforts required to establish and maintain the
financial controls necessary for the Restructured Business Platform
Project.
2. ISSC Responsibilities
a. Provide project level financial control for the project.
b. Create and maintain budgets.
c. Maintain asset controls.
d. Cost and price enhancements and Change Requests.
e. Perform procurement activities as required.
f. Create Contract Amendments as required.
g. Supply input into the invoice process.
h. Perform financial activities related to subcontractors.
i. Perform international support requirements.
3. Unisource Responsibilities
a. Provide financial information necessary for the Restructured Business
Platform Project.
b. Approve Contract Amendments as required in a timely manner.
J. Project Change Management Process
1. Task Description
This task encompasses efforts required to establish and maintain the
Project Change Management Process for the Restructured Business Platform
Project.
December 22, 1993
ISSC/Unisource Confidential Schedule H Page 9 of 10
<PAGE>
After requirements are defined and approved by contracting Parties it
is expected that functional changes may be requested. The objective of
the Project Change Management Process is to minimize the risk of
exceeding both time and cost estimates associated with the Project by
identifying, documenting, quantifying, controlling, and communicating
requested changes and their disposition.
The Change Management Plan shall identify the different roles,
responsibilities and actions appropriate to change management that
shall be followed to incorporate changes into the Restructured
Business Platform Project.
The Change Control Board, chaired by the ISSC Project Executive, shall
be the focal point for change management, responsible for the
assessment of change impacts and the source of direction for change
implementation.
2. ISSC Responsibilities
a. Issue a Change Management Plan which shall have the following
sections:
1) Overview
2) Scope
3) Change Control Board Roles and Responsibilities
4) Change Control Review Team Roles and Responsibilities
5) Change Request Form
6) Change Request Log
7) Analysis
8) Impact Assessment
9) Disposition
10) Communications/Distribution
11) Tracking
12) Post Decision Action
b. Maintain baseline measurements.
3. Unisource Responsibilities
Participate in the Change Management Process as described in the
Change Management Plan.
4. ISSC Deliverables
. Change Management Plan
5. ISSC Completion Criteria
. Delivery of the Change Management Plan.
December 22, 1993
ISSC/Unisource Confidential Schedule H Page 10 of 10
<PAGE>
ISSC / UNISOURCE
Agreement for Information Technology Services [ART APPEARS HERE]
- --------------------------------------------------------------------------------
Schedule I
Unisource Service Locations
Section I-1
Data Center Locations
Note: Information contained in this Schedule is meant to represent the data
known as of the Commencement Date of the Contract. Should omitted
Unisource Service Locations be discovered at a later date, this
Schedule will be updated to reflect that additional data.
<TABLE>
<S> <C> <C>
1. Unijax (Mid-Atlantic/Southeast) 8. Distribix, Inc. (Central) 15. Unisource South (West)
Jacksonville, FL St. Louis, MO Carson, CA
2. Butler Paper (Butler) 9. COPCO (Central) 16. Unisource North (West)
Port Edwards, WI Columbus, OH Seattle, WA
3. Butler Paper (Butler) 10. Inter-City (Central) 17. Unisource South (West)
Denver, CO Minneapolis, MN Honolulu, HI
4. Garrett-Buchanan (Northeast) 11. Monarch Paper (West) 18. Canada East (Canada East)
Philadelphia, PA Houston, TX Cincinnati, OH
5. Weiss Miquon (Northeast) 12. Carpenter Paper (West) 19. Canada West (Canada West)
Philadelphia, PA Denver, CO Annacis Island, BC, Canada
6. Monumental Paper (Northeast) 13. Mack Pac (West)
Baltimore, MD Dallas, TX
7. Rourke Eno (Northeast) 14. Unisource Central (West)
Hartford, CT Oyster Point, CA
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule I Page 1 of 9
<PAGE>
Unisource Service Locations
Section I-2
Network Locations
Note: Information contained in this Schedule is meant to represent the data
known as of the Commencement Date of the Contract. Should omitted
Unisource Service Locations be discovered at a later date, this
Schedule will be updated to reflect that additional data.
Mid-Atlantic Southeast
<TABLE>
<CAPTION>
Unijax - Jacksonville, FL
<S> <C> <C> <C> <C> <C>
1. Unijax 12. Unijax 23. Unijax
Nashville, TN Tallahassee, FL Columbia, SC
2. Unijax 13. Unijax 24 Unijax
Memphis, TN Orlando, FL Charleston, SC
3. Unijax 14. Unijax 25. Unijax
Jackson, TN Tampa, FL Charlotte, NC
4. Unijax 15. Unijax 26. Unijax
Knoxville, TN Marimar, FL Garner, NC
5. Unijax 16. Unijax 27. Unijax
Chattanooga, TN Miami, FL Richmond, VA
6. Unijax 17. Unijax 28. Unijax
Huntsville, AL Ft. Meyers, FL Winchester, VA
7. Unijax 18. Unijax 29. Unijax
Montgomery, AL Atlanta, GA Norfolk, VA
8. Unijax 19. Unijax 30. Unijax
Birmingham, AL Valdosta, GA Vinton, VA
9. Unijax 20. Unijax
Dothan, AL Macon, GA
10. Unijax 21. Unijax
Mobile, AL Columbus, GA
11. Unijax 22. Unijax
Jackson, MS Savannah, GA
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule I Page 2 of 9
<PAGE>
Schedule I
Unisource Service Locations
Section I-2
Network Locations
Butler
<TABLE>
<CAPTION>
Butler East - Port Edwards, WI
<S> <C> <C>
1. Butler East 13. Butler East 25. Butler East
Menomonee Falls, WI St. Louis, MO Jacksonville, FL #4
2. Butler East 14. Butler East 26. Butler East
Allentown, PA New Orleans, LA Jacksonville, FL #5
3. Butler East 15. Butler East 27. Butler East
Chicago, IL Tallahassee, FL Miami, FL #1
4. Butler East 16. Butler East 28. Butler East
Cleveland, OH Nashville, TN Tampa, FL #1
5. Butler East 17. Butler East 29. Butler East
Pittsburgh, PA Chattanooga, TN Orlando, FL
6. Butler East 18. Butler East 30. Butler East
Rochester, NY Birmingham, AL Miami, FL #2
7. Butler East 19. Butler East 31. Butler East
Rockford, IL Atlanta, GA Tampa, FL #2
8. Butler East 20. Butler East 32. Butler East
North Haven, CT Columbia, SC Philadelphia, PA
9. Butler East 21. Butler East 33. Butler East
Holyoke, MA Knoxville, TN Fogelsville, PA
10. Butler East 22. Butler East 34. Butler East
Franklin, MA Jacksonville, FL #1 Upper Marlboro, MD #1
11. Butler East 23. Butler East 35. Butler East
Jackson, MS Jacksonville, FL #2 Upper Marlboro, MD #2
12. Butler East 24. Butler East 36. Butler East
Mobile, AL Jacksonville, FL #3 Mechanicsburg, PA
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule I Page 3 of 9
<PAGE>
Schedule I
Unisource Service Locations
Section I-2
Network Locations
Butler
<TABLE>
<CAPTION>
Butler Midwest - Port Edwards, WI
<S> <C> <C>
1. Butler Midwest 12. Butler Midwest 23. Butler Midwest
Des Moines, IA Alexandria, LA Austin, TX #1
2. Butler Midwest 13. Butler Midwest 24. Butler Midwest
Rock Island, IL Fort Smith, AR Austin, TX #2
3. Butler Midwest 14. Butler Midwest 25. Butler Midwest
Madison, WI Shreveport, LA Harlingen, TX
4. Butler Midwest 15. Butler Midwest 26. Butler Midwest
Oklahoma City, OK Little Rock, AR Houston, TX
5. Butler Midwest 16. Butler Midwest 27. Butler Midwest
Omaha, NE Lafayette, LA Louisville, KY
6. Butler Midwest 17. Butler Midwest 28. Butler Midwest
Peoria, IL Lufkin, TX Terre Haute, IN
7. Butler Midwest 18. Butler Midwest 29. Butler Midwest
Des Plaines, IL #1 Tyler, TX Evansville, IN
8. Butler Midwest 19. Butler Midwest 30. Butler Midwest
Des Plaines, IL #2 Corpus Christi, TX Fort Wayne, IN
9. Butler Midwest 20. Butler Midwest 31. Butler Midwest
Tullahoma, IN San Antonio, TX Livonia, MI
10. Butler Midwest 21. Butler Midwest
Chicago, IL Fort Worth, TX
11. Butler Midwest 22. Butler Midwest
Monroe, LA Texarkana, TX
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule I Page 4 of 9
<PAGE>
Schedule I
Unisource Service Locations
Section I-2
Network Locations
Butler
Butler West - Port Edwards, WI
<TABLE>
<CAPTION>
<S> <C> <C>
1. Butler West 12. Butler West 23. Butler West
Sparks, NV Colorado Springs, CO Phoenix, AZ #2
2. Butler West 13. Butler West 24. Butler West
San Diego, CA Phoenix, AZ #1 Wichita, KS
3. Butler West 14. Butler West 25. Butler West
Sacramento, CA Ewa Beach, HI Lenexa, KS
4. Butler West 15. Butler West 26. Butler West
Brisbane, CA Salt Lake City, UT Sioux Falls, SD
5. Butler West 16. Butler West 27. Butler West
Santa Rosa, CA Lubbock, TX Minneapolis, MN
6. Butler West 17. Butler West 28. Butler West
City of Industry, CA El Paso, TX Fargo, ND
7. Butler West 18. Butler West 29. Butler West
Portland, OR Albuquerque, NM Green Bay, WI
8. Butler West 19. Butler West 30. Butler West
Denver, CO #1 Oklahoma City, OK Lansing, MI
9. Butler West 20. Butler West 31. Butler West
Denver, CO #2 Carrollton, TX Rochester, MN
10. Butler West 21. Butler West
Engelwood, CO Tucson, AZ
11. Butler West 22. Butler West
Fort Collins, CO Joplin, MO
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule I Page 5 of 9
<PAGE>
Schedule I
Unisource Service Locations
Section I-2
Network Locations
<TABLE>
<CAPTION>
West
Carpenter Paper - Denver, CO
<S> <C> <C>
1. Unisource 7. Unisource 13. Unisource
Oyster Point, CA Siloam Springs, AR Oklahoma City, OK
2. TBH Brokerage 8. Unisource 14. Unisource
Denver, CO Fort Smith, AR Billings, MT
3. Unisource 9. Unisource 15. Unisource
Omaha, NE Amarillo, TX Great Falls, MT
4. Unisource 10. Unisource 16. Unisource
Lincoln, NE Tulsa, OK Missoula, MT
5. Unisource 11. Unisource
Sioux City, IA Tulsa, OK
6. Unisource 12. Unisource
Wichita, KS Oklahoma City, OK
Central
Distribix - St. Louis, MO
1. Decatur Paper Co. 5. Irwin Paper Co. 9. Tobey Fine Papers
Decatur, IL Quincy, IL North Kansas City, MO
2. Roach Paper/Printer's Supply 6. Crescent Paper Co. 10. LaSalle Whitaker Paper Co.
Little Rock, AR Indianapolis, IN Broadview, IL
3. Tobey Peoria Paper Co. 7. Tobey Fine Papers
Persia, IL Fenton, MO
4. Louisville/Southeastern Paper 8. Roach Paper Co.
Louisville, KY Memphis, TN
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule I Page 6 of 9
<PAGE>
Schedule I
Unisource Service Locations
Section I-2
Network Locations
West
<TABLE>
<CAPTION>
Monarch Paper - Houston, TX
<S> <C> <C>
1. Unisource 3. Unisource 5. Unisource
Oyster Point, CA Austin, TX McAllen, TX
2. Unisource 4. Unisource 6. Unisource
Denver, CO San Antonio, TX Dallas, TX
West
Unisource South - Carson, CA
1. Unisource South 4. Unisource South 7. Unisource South
San Bernadino, CA San Diego, CA Commerce, CO
2. Unisource South 5. Unisource South 8. Unisource South
Las Vegas, NV Honolulu, HI Tucson, AZ
3. Unisource South 6. Unisource South 9. Unisource South
El Centro, CA Phoenix, AZ Oyster Point, CA
West
Unisource Central - Oyster Point, CA
1. Unisource South 5. Unisource Central 8. Unisource Central
Carson, CA Stockton, CA Dublin, CA
2. Unisource Central 6. Unisource Central 9. Carpenter Paper
Fresno, CA Salt Lake City, UT Denver, CO
3. Unisource Central 7. Unisource Central 10. Monarch
Sacramento, CA Reno, NV Houston, TX
4. Unisource Central
San Jose, CA
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule I Page 7 of 9
<PAGE>
Schedule I
Unisource Service Locations
Section I-2
Network Locations
<TABLE>
<CAPTION>
West
Unisource North - Seattle, WA
<S> <C> <C>
1. Unisource North 4. Unisource North 7. Unisource North
Boise, ID Portland, OR Anchorage, AK
2. Unisource North 5. Unisource North 8. Unisource North
Spokane, WA Eugene, OR Fairbanks, AK
3. Unisource North 6. Unisource North
Medford, OR Oyster Point, CA
<CAPTION>
Central
<S> <C> <C>
1. COPCO 4. COPCO 7. COPCO
Cleveland, OH Detroit, MI Charleston, WV
2. COPCO 5. COPCO 8. COPCO
Dayton, OH Lansing, MI Huntington, WV
3. COPCO 6. COPCO
Saginaw, MI Pittsburgh, PA
</TABLE>
<PAGE>
Schedule I
Unisource Service Locations
Section I-2
Network Locations
Northeast
Rourke Eno - Hartford, CT
<TABLE>
<S> <C> <C>
1. Rourke Eno 8. Rourke Eno 15. Rourke Eno
Cincinnati, OH New York, NY Woburn, MA
2. Rourke Eno 9. Rourke Eno 16. Rourke Eno
Henrietta, NY Philadelphia, PA Springfield, MA
3. Rourke Eno 10. Rourke Eno 17. Rourke Eno
Liverpool, NY Atlanta, GA West Haven, CT
4. Rourke Eno 11. Rourke Eno 18. Rourke Eno
Binghamton, NY Providence, RI Portland, ME
5. Rourke Eno 12. Rourke Eno 19. Rourke Eno
Buffalo, NY Worcester, MA Bangor, ME
6. Rourke Eno 13. Rourke Eno
Albany, NY Norwood, MA
7. Rourke Eno 14. Rourke Eno
Rochester, NY Concord, NH
</TABLE>
Central
Universal Paper - Milwaukee, WI
<TABLE>
<S> <C> <C>
1. Unisource 3. Unisource 5. Unisource
New Berlin, WI Schiller Park, IL Madison, WI
2. Unisource 4. Unisource
Bloomington, MN Lacrosse, WI
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule I Page 9 of 9
<PAGE>
ISSC / Unisource [ART APPEARS
Agreement for Information Technology Services HERE]
- --------------------------------------------------------------------------------
Schedule K
Application Installation Standards
Current Environment
ISSC and Unisource agree that the Application installation standards in the
Current Environment will be those standards in place prior to the Commencement
Date and that any new programs promoted into production,
whether provided by ISSC or Unisource, will conform to such standards and will
be subject to the Change Management procedures.
The initial Change Management process will be the current Unisource change
control procedures at the respective operating sites.
XXXX XXXX XXXX
ISSC and Unisource agree that the Application installation standards for the
XXXX XXXX provided under Schedule N will be documented and agreed to prior to
migration and that all subsequent programs promoted to production will be in
accordance with such standards:
ISSC agrees that any Applications Software it provides, develops or enhances
under this Agreement and Unisource agrees that Applications Software provided to
ISSC by Unisource or its authorized third party for execution will conform to
the following standards.
1. programs will be fully tested for compatibility and conformity to the
specifications in place for the install at site prior to transfer to ISSC;
2. that the programs will operate on the Systems Software platform at the
install at site;
3. back-out and recovery procedures will be documented; and
4. programs will, for the specific Unisource Service Location where the
Applications Software is to be installed, 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.
The final Change Management Procedures will be developed as provided in
Schedule H.
December 22, 1993
ISSC/Unisource Confidential Schedule K Page 1 of 1
<PAGE>
ISSC/Unisource [ART APPEARS HERE]
Agreement for Information Technology Services
Schedule L
Security Procedures
Section L-1
Current Environment
ISSC will:
1. use and maintain existing data access control software;
2. use and maintain the functions and features of the existing access control
software;
3. use the system access granted to ISSC employees only to the extent necessary
to perform activities required by this Agreement;
4. comply with existing controls which protect printed output from unauthorized
access while under ISSC's control; and
5. manage storage and security for portable storage media including, but not
limited to, tapes and disk packs under ISSC's control according to existing
controls.
Unisource will:
1. retain responsibility for physical security of the Unisource Service
Locations and the adequacy of the data security controls; and
2. restrict access to the Unisource Service Locations to authorized personnel
only.
December 22, 1993
ISSC/Unisource Confidential Schedule L Page 1 of 4
<PAGE>
Schedule L
Security Procedures
Section L-2
XXXX XXXX XXXX
ISSC will:
1. install, maintain and upgrade new or existing data access control software
for the XXXX XXXX XXXX;
2. implement the functions and features of the access control software which
will satisfy Unisource's security standards and practices as defined in the
Security Procedures Manual to be completed 60 days prior to the
implementation of Schedule N systems;
3. identify the protection requirements for operating system resources and
implement this protection via the access control software for Schedule N
systems installed in the ISSC Data Center and Unisource Service Locations;
4. use the system access granted to ISSC employees only to the extent necessary
to perform activities required by this Agreement;
5. establish, change, deactivate and remove logon IDs and associated access
authorities;
6. review, approve and grant requests for privileged user authorities;
7. periodically review privileged user authorities and remove those for which
management approval no longer exists;
8. restrict access to the ISSC Data Center to authorized personnel only
9. conduct periodic reviews of the ISSC Data Center access logs for unusual
occurrences and perform follow-up activities;
10. implement controls which protect printed output form unauthorized access
while under ISSC's control;
11. provide storage and security for portable storage media including, but not
limited to, tapes and disk packs at the ISSC Data Center;
12. keep abreast of the latest concepts and techniques associated with system
and data security; and
13. review security policies and procedures for effectiveness and recommend
improvements.
Unisource will:
1. provide ISSC with Unisource's most recent data security standards and
practices and updates as they occur;
2. reset logon ID passwords and disclose passwords to authorized personnel;
3. periodically review logon IDs and remove those for which management
authorization no longer exists;
4. identify the protection requirements for application resources and protect
them via the access control methodology.
5. identify the protection requirements for End User data and protect it via
the access control methodology;
6. implement and maintain security controls for those subsystems which are not
supplied by the XXXX XXXX XXXX and do not use the access control software
for their security;
7. implement and maintain physical security controls for system hardware and
media at Unisource Service Locations; and
8. review security policies and procedures for effectiveness and recommend
improvements
December 22, 1993
ISSC/Unisource Confidential Schedule L Page 2 of 4
<PAGE>
Schedule L
Security Procedures
Exhibit L-1
Current Environment
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
RESPONSIBILITY
SECURITY -----------------------------------
ISSC Unisource
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Physical security (Unisource facilities)
- ---------------------------------------------------------------------------------------------------------------------
- Administrative and technical support X
- ---------------------------------------------------------------------------------------------------------------------
- Badge distribution, alarm monitoring and response* X
- ---------------------------------------------------------------------------------------------------------------------
- Emergency response (fire, medical, first aid) X
- ---------------------------------------------------------------------------------------------------------------------
Physical security (ISSC facilities)
- ---------------------------------------------------------------------------------------------------------------------
- Administrative and technical support X
- ---------------------------------------------------------------------------------------------------------------------
- Badge distribution, alarm monitoring and response X
- ---------------------------------------------------------------------------------------------------------------------
- Emergency response (fire, medical, first aid) X
- ---------------------------------------------------------------------------------------------------------------------
Data/Systems security
- ---------------------------------------------------------------------------------------------------------------------
- Systems installation & maintenance X
- ---------------------------------------------------------------------------------------------------------------------
- System access authorization X
- ---------------------------------------------------------------------------------------------------------------------
- Administrative/maintenance support X
- ---------------------------------------------------------------------------------------------------------------------
- Systems profile identification X
- ---------------------------------------------------------------------------------------------------------------------
- Logon ID administration X
- ---------------------------------------------------------------------------------------------------------------------
- Password resets (help desk) X
- ---------------------------------------------------------------------------------------------------------------------
- Sub-systems password administration X
- ---------------------------------------------------------------------------------------------------------------------
LAN systems
- ---------------------------------------------------------------------------------------------------------------------
- Access control system
- ---------------------------------------------------------------------------------------------------------------------
. Systems installation & maintenance X
- ---------------------------------------------------------------------------------------------------------------------
. Administrative support X
- ---------------------------------------------------------------------------------------------------------------------
Data network
- ---------------------------------------------------------------------------------------------------------------------
- Dial networks
- ---------------------------------------------------------------------------------------------------------------------
. Network definitions direct users to Unisource specified applications X
- ---------------------------------------------------------------------------------------------------------------------
- Leased lines
- ---------------------------------------------------------------------------------------------------------------------
. Network definitions direct users to Unisource specified applications X
- ---------------------------------------------------------------------------------------------------------------------
. User lists X
- ---------------------------------------------------------------------------------------------------------------------
. User initialization X
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
* Except to the extent such duties were performed by the In Scope Personnel
prior to the Commencement Date.
December 22, 1993
ISSC/Unisource Confidential Schedule L Page 3 of 4
<PAGE>
Schedule L
Security Procedures
Exhibit L-2
Restructured Business Platform
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
RESPONSIBILITY
SECURITY -----------------------------------
ISSC Unisource
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Physical security (Unisource facilities)
- ---------------------------------------------------------------------------------------------------------------------
- Administrative and technical support X
- ---------------------------------------------------------------------------------------------------------------------
- Badge distribution, alarm monitoring and response X
- ---------------------------------------------------------------------------------------------------------------------
- Emergency response (fire, medical, first aid) X
- ---------------------------------------------------------------------------------------------------------------------
Physical security (ISSC facilities)
- ---------------------------------------------------------------------------------------------------------------------
- Administrative and technical support X
- ---------------------------------------------------------------------------------------------------------------------
- Badge distribution, alarm monitoring and response X
- ---------------------------------------------------------------------------------------------------------------------
- Emergency response (fire, medical, first aid) X
- ---------------------------------------------------------------------------------------------------------------------
Data/Systems security
- ---------------------------------------------------------------------------------------------------------------------
- Systems installation & maintenance X
- ---------------------------------------------------------------------------------------------------------------------
- System access authorization X
- ---------------------------------------------------------------------------------------------------------------------
- Administrative/maintenance support X
- ---------------------------------------------------------------------------------------------------------------------
- Systems profile identification X
- ---------------------------------------------------------------------------------------------------------------------
- Logon ID administration X
- ---------------------------------------------------------------------------------------------------------------------
- Password resets (help desk) X
- ---------------------------------------------------------------------------------------------------------------------
- Sub-systems password administration X
- ---------------------------------------------------------------------------------------------------------------------
LAN systems
- ---------------------------------------------------------------------------------------------------------------------
- Access control system
- ---------------------------------------------------------------------------------------------------------------------
- Systems installation & maintenance X
- ---------------------------------------------------------------------------------------------------------------------
- Administrative support X
- ---------------------------------------------------------------------------------------------------------------------
Data network
- ---------------------------------------------------------------------------------------------------------------------
- Dial networks
- ---------------------------------------------------------------------------------------------------------------------
- Network definitions direct users to Unisource specified applications X
- ---------------------------------------------------------------------------------------------------------------------
- Leased lines
- ---------------------------------------------------------------------------------------------------------------------
- Network definitions direct users to Unisource specified applications X
- ---------------------------------------------------------------------------------------------------------------------
- User lists X
- ---------------------------------------------------------------------------------------------------------------------
- User initialization X
- ---------------------------------------------------------------------------------------------------------------------
Security enhancement
- ---------------------------------------------------------------------------------------------------------------------
- Security consultancy X
- ---------------------------------------------------------------------------------------------------------------------
- Identify areas for improvement X
- ---------------------------------------------------------------------------------------------------------------------
- Recommend solutions X
- ---------------------------------------------------------------------------------------------------------------------
- Solution approval X
- ---------------------------------------------------------------------------------------------------------------------
- Implement solutions (subject to new services) X
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule L Page 4 of 4
<PAGE>
ISSC/Unisource [ART APPEARS HERE]
Agreement for Information Technology Services
Schedule M
Help Desk
I. Current Environment
Existing Unisource site help desk processes prior to Commencement Date will
remain in effect, at a Unisource Service Location, until implementation of
Restructured Business Platform, at such Unisource Service Location, as
described in Schedule N.
II. XXXX XXXX XXXX
ISSC will staff a help desk at the ISSC Data Center, or such other location
as mutually agreed to by the Parties, to provide a single point of contact
for support for End Users related to the services specified in this
contract. ISSC will provide a comprehensive suite of help desk services for
all aspects of hardware, software, network and application services provided
under the XXXX XXXX XXXX defined in Schedule N. The help desk will be manned
and fully operational prior to beginning the migration of a region to the
Restructured Business Platform occurs. ISSC's responsibilities are described
below.
A. ISSC Help Desk
ISSC will provide problem determination, resolution and tracking of
Software, hardware, Network and Application services and functions
within ISSC's scope of responsibility. The Unisource employee calling
the help desk will receive resolution to the identified problem from
the help desk personnel or have it routed to second level problem
determination skills. All actions pertaining to the problem will be
logged and ISSC will provide a proactive analysis of problems
monthly. In addition, ISSC Help Desk will perform the following
functions.
1. receive, log and track all inquires/problems reported;
2. maintain customer communications on all problems through
resolution;
3. ensure that customer satisfaction is confirmed before inquiries
and problems are closed;
4. escalate unresolved problems according to established procedures;
5. support first lebel hardware problems for computed center and data
network equipment;
6. dispatch local carrier for line problems;
7. assist in resolving calls relating to problems or questions
pertaining to Software including the Software specified in
Schedule N and respond back to the End User;
8. provide assistance for problems pertaining to the procedures for
the XXXX XXXX XXXX;
9. update Unisource with complete and accurate systems status;
10. report on the status of batch jobs upon request;
11. notify designated Unisource personnel of systems or equipment
failures, or of an emergency, according to the Procedures Manual;
12. recycle, start and stop devices;
13. maintain and distribute an updated Help Desk telephone number
listing as required;
14. initiate an accurate and complete Problem Management Record
("PMR") to document service outages; and
December 22, 1993
ISSC/Unisource Confidential Schedule M Page 1 of 2
<PAGE>
15 provide a monthly report to Unisource assessing ISSC's performance
with respect to the Help Desk to include, but not be limited to;
. number of calls received,
. number of calls answered at first level,
. response time to problem closure,
. priority of calls received
B. Hours of Operation
Seven days a week, 24 hours a day.
C. Unisource Responsibilities
1. Maintain an updated contact listing for use by the ISSC help desk in
contacting appropriate Unisource personnel for
assistance/notification.
2. Provide resolution for problems outside the contract scope, e.g.,
workstations and workstation software.
3. Report problems to the ISSC Help Desk.
4. Respond to End User training questions until 30 days after the
Unisource Service Location conversion is completed.
III. Help Desk Responsibilities Matrix
Following is the Help Desk Responsibilities Matrix which further defines
the roles and responsibilities of the Parties.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
RESPONSIBILITY
HELP DESK ---------------------------
ISSC Unisource
- --------------------------------------------------------------------------------
<S> <C> <C>
Answer calls from users X
- --------------------------------------------------------------------------------
Problem management X
- --------------------------------------------------------------------------------
-- Record problems X
- --------------------------------------------------------------------------------
-- Track problems through resolution X
- --------------------------------------------------------------------------------
-- Provide feedback to users X
- --------------------------------------------------------------------------------
Initial problem support X
- --------------------------------------------------------------------------------
Level 1 problem resolution X
- --------------------------------------------------------------------------------
Invoke proper problem resolution resources X
- --------------------------------------------------------------------------------
Dispatch service provider (data center/data network) X
- --------------------------------------------------------------------------------
Follow-up for resolution status X
- --------------------------------------------------------------------------------
Escalate to next level of support X
- --------------------------------------------------------------------------------
Standards and procedures (help desk) X
- --------------------------------------------------------------------------------
Notify users of systems availability X
- --------------------------------------------------------------------------------
Level 2 support of Unisource proprietary applications X
- --------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule M Page 2 of 2
<PAGE>
ISSC / Unisource
Agreement for Information Technology Services [ARTWORK APPEARS HERE]
- --------------------------------------------------------------------------------
Schedule N
Projects
Table on Contents
Section N - 0 - XXXX XXXX XXXX - Project Overview
Section N - 1 - XXXX XXXX XXXX/XXXX XXXX (XXXX/XXXX)
Section N - 2 - XXXX XXXX XXXX (XXXX)
Section N - 3 - XXXX XXXX Assistance (XXXX)
Section N - 4 - XXXX XXXX XXXX System (XXXX)
Section N - 5 - XXXX XXXX System (XXXX)
Section N - 6 - XXXX System (XXXX)
Section N - 7 - XXXX XXXX System (XXXX)
Section N - 8 - XXXX XXXX System (XXXX)
Section N - 9 - XXXX XXXX System (XXXX)
Section N - 10 - XXXX XXXX XXXX (XXXX)
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 1 of 39
<PAGE>
Schedule N
Projects
Section N-0
XXXX XXXX XXXX
Projects Overview
I. Scope
This Schedule identifies the technical approach ISSC will use to execute
and fulfill the specific project tasks relating to Unisource's XXXX XXXX
XXXX initiative which will be delivered to Unisource under the terms of the
Agreement. As set forth in the Agreement, pursuant to this Schedule N, ISSC
will provide equipment, Systems Software, Applications Software, Services,
help desk, and Application Development necessary to provide, create and
operate Unisource's XXXX XXXX XXXX.
Under this project structure individual projects have been organized into
specific Sections based on specific work to be performed, "Project
Sections." The Project Sections are:
A. Consulting Services
As defined in the Unisource/ISSC Agreement, and for each specific
Project Section set forth in Schedule N, ISSC shall provide items and/or
services as set forth in this Schedule to support Unisource in its
business reengineering efforts.
1. N-1 XXXX XXXX XXXX/XXXX XXXX (XXXX/XXXX)
2. N-2 XXXX XXXX XXXX (XXXX)
3. N-3 XXXX XXXX Assistance (XXXX)
B. Systems Integration/Application Development
ISSC shall provide Unisource with development, testing, training,
documentation, integration, deployment and operation of subsystems to
support the XXXX XXXX XXXX. The XXXX XXXX XXXX shall have the
functionality as defined in the individual Project Sections in this
Schedule N. As part of the Project Section for each subsystem ISSC
shall be responsible for transition from the current Unisource system
to the XXXX XXXX XXXX. This shall include appropriate testing to verify
that the system is installed and operating in accordance with the
requirements specification.
1. N-4 XXXX XXXX XXXX System (XXXX)
2. N-5 XXXX XXXX Systems (XXXX)
3. N-6 XXXX XXXX System (XXXX)
4. N-7 XXXX XXXX XXXX (XXXX)
5. N-8 XXXX XXXX Systems (XXXX)
6. N-9 XXXX XXXX Systems (EIS)
7. N-10 XXXX XXXX XXXX Subsystems (EDI)
II. Project Prerequisites and Dependencies
Each of the specific Project Sections define respective Project baselines,
functionality, requirements, and dependencies. Project implementation
methodologies, schedules, and cost have been structured based upon these
baselines. At such time as Unisource defines their requirements for the
respective Projects of this Schedule N, ISSC shall then commit to an
allocation of resources, a completion schedule and a price to provide said
services and that price shall be fixed assuming no further requirements
change. Any change requests or Unisource's failure to perform its agreed to
responsibilities under each project will be assessed via the project change
management process for impact, if any, to system performance, project
schedule or cost, and this Agreement adjusted accordingly.
III. Prioritization
Unisource may reorder the priorities of the Projects defined in this
Schedule N, however such change will subject to the Change Management terms
as defined herein.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 2 of 39
<PAGE>
Section N-O
XXXX XXXX XXXX
Project Overview
IV. Project Management
The project management structure and methodology which ISSC will utilize in
performance of these Projects are described in Schedule H.
V. Change Management
At any time during the performance of a project, Unisource or ISSC may
request changes to a project. Such requests shall be submitted in writing,
and shall indicate that the respective Project Executive for the requesting
Party has approved the submission of the request.
For changes requested by Unisource, ISSC shall, within ten working days,
respond with an estimate of the additional cost for evaluating the requested
change (if any), and an estimate of the time required to complete the
evaluation. If Unisource authorizes such evaluation, ISSC shall provide a
proposal for implementation of the change that includes the effects on
schedule, technical performance, price, and other terms of Schedule N.
Within 15 working days of receipt of the implementation proposal Unisource
shall, in writing, authorize ISSC to proceed, or reject the implementation.
For changes requested by ISSC, ISSC will define the impact of said change to
Project schedule, technical performance, price, and other terms of Schedule
N and Unisource, will within 15 working days of receipt of such request,
evaluate the requested change request and shall, in writing, authorize ISSC
to proceed, or reject the requested change.
Pending written authorization to implement a change, ISSC shall proceed in
accordance with agreed terms of Schedule N in effect at such time the
change is requested.
Any changes made to Schedule N Projects shall be in accordance with the
Project Change Management Process as defined Schedule H.
VI. Schedule N Terms and Conditions
In addition to the terms and conditions specifically set forth in the
Agreement the following terms and conditions shall apply to the work scope
defined under the respective Schedule N Projects:
A. Contract Description/Type
Prior to requirements definition, the Parties recognize that the
contract approach for the Schedule N projects is on a "Level of Effort"
basis. The Parties also recognize and agree that at such time as
Unisource defines their requirements for the respective Projects under
Schedule N, ISSC shall then commit to an allocation of resources, a
completion schedule and a price to provide said services and the price
shall be fixed assuming no further requirements change.
For all work performed on a Level of Effort basis, ISSC will exert
commercially reasonable efforts to accomplish the scope of work within
the specified number of hours identified in Supplement. However, the
Parties recognize that due to the developmental nature of work being
performed, it may not be possible to complete this portion of work before
exhausting the specified number of hours.
If ISSC determines it will be necessary to exceed the specified number of
hours to complete that portion of work performed under the Level of
Effort basis, to satisfy the requirements of that specific Project, ISSC
will give prior notification to Unisource as soon as practicable. ISSC's
notification to Unisource will include an estimate of the additional
hours and funding required to complete the scope of work.
Unisource may elect to:
1. authorize ISSC to complete the effected project work scope at
Unisource's expense; or
2. XXXX the XXXX to enable the XXXX of a mutually agreed XXXX XXXX XXXX
within the specified XXXX, via the Change Management Process as
defined herein; or
3. XXXX the Project XXXX of XXXX XXXX only for the services provided to
the XXXX of XXXX plus any XXXX XXXX, if any. If Unisource exercises
the aforementioned XXXX option XXXX XXXX XXXX are defined as, but not
limited to, XXXX XXXX XXXX XXXX associated with determination of XXXX
Project XXXX and XXXX, and XXXX XXXX.
Any XXXX required XXXX to XXXX or XXXX XXXX to XXXX its XXXX will XXXX be
XXXX to XXXX
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 3 of 39
<PAGE>
Section N-0
XXXX XXXX XXXX
Project Overview
B. Project Completion
Each individual Project Section defines completion criteria unique to
that scope of work. The Project scope of work shall be deemed complete
at such time as all specified deliverables have been delivered by ISSC
and accepted by Unisource in accordance with the acceptance criteria
for each Project, or, if performed under a Level of Effort basis at
Unisource's request, once the allocated Level of Effort hours are met,
whichever occurs first. In the event projected person-hours estimates
for a specific project performed under a Level of Effort results in
unused person-hours at end of job, the XXXX XXXX will be XXXX to a
XXXX XXXX XXXX from which other XXXX may XXXX XXXX XXXX XXXX (as they
exist). Level of Effort for individual Projects are set forth in the
Supplement.
C. Project
The Project Sections and their respective scopes of work are
nonseparable and have been developed based on the requirements and
dependencies that all work as defined in Schedule N occurs, and this
assumption has been used as the basis of the cost, performance and
schedule methodology of this Agreement.
D. Documentation
1. For scope of work performed under this Schedule N two general types
of documentation shall be produced:
a. deliverable documents; and
b. nondeliverable documents.
2. Deliverable documents shall be produced in an electronic format
agreed to by the Parties, according to the selected methodologies,
and with the content described in the respective Project Sections.
3. Nondeliverable documents (correspondence, meeting notes, etc.)
shall be produced in formats developed by ISSC.
4. ISSC shall select the software used to develop documentation and
shall provide controlled access to selected Unisource users.
5. ISSC generated documentation shall be deemed XXXX upon meeting the
following criteria:
a. delivered on or before the XXXX XXXX XXXX XXXX;
b. follows the XXXX of the structure and formal guidelines
specified in the Project Sections hereto;
c. has been XXXX through the XXXX XXXX cycle;
d. has been delivered to the Unisource Senior I/S Executive; and
e. XXXX by XXXX.
E. Substitution
ISSC retains the XXXX to make XXXX XXXX, with XXXX Unisource XXXX, for
the life of this Agreement provided such XXXX XXXX satisfies the XXXX
of this XXXX. Should Unisource XXXX its XXXX, Unisource will XXXX any
XXXX XXXX or XXXX to XXXX XXXX levels or XXXX XXXX.
The solutions described in these Project Sections are based on the
selection of XXXX as the provider of the Applications and
functionality for XXXX.
F. Migration to XXXX XXXX XXXX
Data Center environments must be frozen XXXX prior to XXXX XXXX to the
XXXX XXXX XXXX XXXX.
G. XXXX XXXX
ISSC shall be responsible for XXXX and XXXX all appropriate XXXX XXXX
and XXXX XXXX XXXX, in Unisource's name, regarding XXXX XXXX XXXX
authorization under the XXXX Project. In the event ISSC encounters
problems in obtaining the aforementioned XXXX XXXX Unisource agrees to
XXXX with ISSC to XXXX the XXXX and XXXX any XXXX XXXX XXXX XXXX
therewith. XXXX with and XXXX of all other XXXX (XXXX and XXXX) XXXX
and XXXX shall be a XXXX responsibility.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 4 of 39
<PAGE>
Section N-0
Restructured Business Platform
Project Overview
H. Operations Readiness Test/Acceptance Test
The Parties will jointly agree to a set of activities consisting of
functional and operational tests designed to confirm a Project
conformance to Unisource's requirements. The scope and success
criteria will be established and jointly agreed to based on the
applicable requirements prior to beginning the test period.
VII. Project Schedules
The Project Schedules will be a part of the Project Management Plan
developed during the first 90 days of the Agreement. The schedules will
be reviewed and approved by the Change Control Board as part of the Change
Management Process.
The Implementation Schedule included in this Section is provided to
document the basis for pricing in this Agreement at the time of signing.
The following dates are considered Key Dates in this Schedule and as such
are important to achieving the objectives of this Agreement within the
cost and schedule specified in this Agreement.
KEY DATES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Description Completion Date Responsibility
- --------------------------------------------------------------------------------
<S> <C> <C>
XXXX Rollout Strategy XXXX XXXX XXXX Unisource
- --------------------------------------------------------------------------------
Project Mgmt Plan Schedules XXXX ISSC
- --------------------------------------------------------------------------------
XXXX XXXX XXXX Completion XXXX ISSC Unisource
- --------------------------------------------------------------------------------
XXXX XXXX Solution Reqmts XXXX Unisource
- --------------------------------------------------------------------------------
XXXX Business Reqmts XXXX Unisource
- --------------------------------------------------------------------------------
XXXX Deployment ISSC
- --------------------------------------------------------------------------------
- XXXX Solution XXXX
- --------------------------------------------------------------------------------
- XXXX Operations XXXX
- --------------------------------------------------------------------------------
XXXX Operational Deployment ISSC
- --------------------------------------------------------------------------------
- XXXX Region XXXX
- --------------------------------------------------------------------------------
- XXXX Region XXXX
- --------------------------------------------------------------------------------
- XXXX Region XXXX
- --------------------------------------------------------------------------------
- XXXX Region XXXX
- --------------------------------------------------------------------------------
- XXXX XXXX
- --------------------------------------------------------------------------------
- XXXX XXXX
- --------------------------------------------------------------------------------
XXXX XXXX Operational Deployment ISSC
- --------------------------------------------------------------------------------
- Phase I XXXX
- --------------------------------------------------------------------------------
- Phase II XXXX
- --------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 5 of 39
<PAGE>
Section N-0
Restructured Business Platform
Project Overview
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
IMPLEMENTATION XXXX
-----------------------------------------------------------------------
SCHEDULE J F M A M J J A S O N D
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Exec Proj Mgmt XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX Phase I XXXX XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
Phase II
- --------------------------------------------------------------------------------------------
XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX Phase I XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
Phase II
- --------------------------------------------------------------------------------------------
XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
Current System XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX Network XXXX XXXX XXXX XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------
IMPLEMENTATION XXXX
-----------------------------------------------------------------------
SCHEDULE J F M A M J J A S O N D
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Exec Proj Mgmt XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX Phase I XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
Phase II
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX Phase I
- --------------------------------------------------------------------------------------------
Phase II XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
Current System
- --------------------------------------------------------------------------------------------
XXXX Network XXXX XXXX
- --------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------
IMPLEMENTATION XXXX
-----------------------------------------------------------------------
SCHEDULE J F M A M J J A S O N D
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Exec Proj Mgmt XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX Phase I XXXX XXXX
- --------------------------------------------------------------------------------------------
Phase II
- --------------------------------------------------------------------------------------------
XXXX
- --------------------------------------------------------------------------------------------
XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX Phase I
- --------------------------------------------------------------------------------------------
Phase II XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
Current System XXXX XXXX XXXX
- --------------------------------------------------------------------------------------------
XXXX Network
- --------------------------------------------------------------------------------------------
Legend:
XXXX - XXXX Session
XXXX - XXXX Meeting
XXXX - XXXX Plan
XXXX - XXXX
- --------------------------------------------------------------------------------------------
</TABLE>
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 6 of 39
<PAGE>
Schedule N
Projects
Section N-1
XXXX XXXX Management/XXXX XXXX
I. Scope
A. Introduction
ISSC will provide XXXX XXXX and XXXX to assist in XXXX XXXX XXXX XXXX
and XXXX XXXX throughout the duration of the project. The XXXX XXXX
personnel will conduct specific activities to test and evaluate XXXX
to XXXX, in addition, they will XXXX the Unisource Executive
Transition Committee ("ETC") and individual XXXX XXXX XXXX XXXX and
XXXX XXXX XXXX on addressing specific XXXX XXXX as they arise. The
XXXX XXXX XXXX and XXXX XXXX staff will assist Unisource managers in
XXXX the XXXX toward a XXXX which is XXXX of the XXXX XXXX and XXXX.
The XXXX XXXX XXXX and XXXX XXXX activities listed below will be
conducted in coordination with the XXXX XXXX XXXX described in Section
XXXX of this Schedule N and information systems XXXX XXXX defined in
Sections XXXX through XXXX. The XXXX XXXX XXXX XXXX and XXXX XXXX
specialist(s) will form a joint team with Unisource ("XXXX XXXX XXXX
Force") to address issues independently but in consultation with the
XXXX XXXX XXXX and XXXX XXXX teams. Substantially all of the resources
and tasks will involve XXXX.
XXXX activities are highly XXXX on timely feedback from the XXXX XXXX
and XXXX Teams and will work closely with both teams to share the
results of their studies. The XXXX will XXXX the XXXX which may have
to be XXXX to the XXXX XXXX XXXX as XXXX by XXXX:
1. communications - internal and external;
2. XXXX plans;
3. XXXX plans;
4. other XXXX structures;
5. XXXX and XXXX programs;
6. XXXX XXXX functions;
7. XXXX paths;
8. XXXX XXXX - management and XXXX levels;
9. XXXX measurements; and
10. access to XXXX and XXXX.
The project plans for the XXXX XXXX and XXXX XXXX XXXX XXXX will be
based on the appropriate methodologies of XXXX XXXX XXXX Series.SM
B. Objectives
1. The objectives associated with the execution of the XXXX XXXX XXXX
methodology include:
a. XXXX the XXXX XXXX of the requirements placed on itself in XXXX
XXXX;
b. XXXX a detailed XXXX XXXX process and approach;
c. XXXX the XXXX to assimilate XXXX and XXXX to XXXX;
d. identifying XXXX XXXX and XXXX in XXXX the XXXX XXXX; and
e. planning for general and detailed, internal and external XXXX
XXXX at enterprise, group, region, and division, department,
customer and supplier XXXX throughout the XXXX and XXXX XXXX.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 7 of 39
<PAGE>
Section N-1
XXXX XXXX Management
2. The objectives associated with the XXXX XXXX include:
a. XXXX the environmental factors and perceptions and behaviors;
b. XXXX a process for maximizing XXXX and adaptation of the XXXX;
c. formulating a plan for action, in conjunction with Unisource,
to XXXX XXXX XXXX XXXX. XXXX XXXX XXXX XXXX, XXXX. XXXX XXXX
and XXXX XXXX XXXX complete with XXXX and XXXX state
requirements, including:
1) XXXX criteria;
2) detailed XXXX of key future state XXXX;
3) XXXX alternatives; and
4) XXXX barriers.
d. facilitating the XXXX of Unisource XXXX personnel to XXXX
personnel;
e. facilitating Unisource XXXX XXXX and XXXX of the XXXX, XXXX
XXXX, and XXXX; and
f. obtaining XXXX XXXX.
3. XXXX XXXX Management Description
XXXX XXXX XXXX competency provides a foundation to deal with the
XXXX XXXX, XXXX, and XXXX XXXX that often result from XXXX in XXXX
be they XXXX or XXXX, XXXX or XXXX. It facilitates XXXX XXXX
management's XXXX through XXXX develops improved XXXX XXXX and
modifies the XXXX XXXX to better XXXX the available XXXX. The
approach is as follows:
a. Clarification:
Establish informed XXXX to the XXXX with Unisource sponsors so
that they XXXX XXXX XXXX and are ready to do what is required
to XXXX XXXX the XXXX XXXX.
b. Analysis:
XXXX in the XXXX is promoted by gathering Unisource sponsor,
XXXX, and target XXXX of the XXXX and XXXX to determine XXXX
XXXX.
c. Transition Planning
A detailed transition management plan will be built using data
collected in the Analysis phase to XXXX the XXXX of the XXXX in
order to achieve XXXX and to XXXX XXXX.
d. Transition XXXX:
Assist Unisource in XXXX the XXXX of the XXXX and XXXX XXXX of
the XXXX XXXX.
4. XXXX XXXX Description
XXXX XXXX is designed to support Unisource in the XXXX of its XXXX.
It is a XXXX XXXX XXXX for the purpose of improving XXXX XXXX
through the efficient and effective utilization of XXXX. It aligns
the XXXX or XXXX XXXX/XXXX with the XXXX and XXXX XXXX XXXX of the
XXXX and promotes a XXXX and XXXX XXXX to XXXX and XXXX and its
XXXX. It also defines those elements of the XXXX and its XXXX that
are XXXX XXXX to successfully reach the XXXX and XXXX as well as
XXXX in XXXX and its XXXX to support the successful XXXX of the
XXXX XXXX. The approach is as follows:
a. Clarification:
Review Unisource's XXXX and XXXX to XXXX that they are XXXX
with the XXXX XXXX objectives and XXXX.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 8 of 39
<PAGE>
Section N-1
XXXX XXXX XXXX
b. Analysis:
In-depth analysis of XXXX such as XXXX, XXXX, XXXX and XXXX, XXXX
and XXXX, XXXX, XXXX and XXXX management.
c. Design:
Design an XXXX will be designed to XXXX the XXXX state XXXX.
Concepts, strategy, XXXX, policies, transition and implementation
process XXXX will be formulated in XXXX with XXXX.
d. Implementation:
New, individual XXXX will be XXXX by XXXX per the design developed
in the previous phase. XXXX to XXXX state is XXXX XXXX in
implementing XXXX XXXX is measured and XXXX XXXX confirmed.
Evolution XXXX is XXXX to explore XXXX XXXX to improve XXXX.
II. Project Management and Methodology Approach
The XXXX/XXXX Project shall conform to the ISSC Project Management
methodology set forth in Schedule H.
III. ISSC Responsibilities
The specific formal or informal work products to be developed will depend
on the progress of the transition and the guidance received from the ETC.
They will include items such as:
A. XXXX XXXX Management
1. Phase I Task 1: Build XXXX and XXXX Agent XXXX
2. Phase I Task 2: Communicate Unisource XXXX and XXXX Agenda
3. Phase I Task 3: Develop High Level Transition Strategy
4. Phase II Task 1: Prepare and Train XXXX XXXX Teams
5. Phase II Task 2: Conduct XXXX XXXX
6. Phase II Task 3: XXXX Planning
7. Phase II Task 4: Develop XXXX Management Plan
8. Phase III Task 1: Build XXXX XXXX
9. Phase III Task 2: Train XXXX XXXX Personnel
10. Phase III Task 3: Train XXXX XXXX
11. Phase III Task 4: Implement and Evaluate Roll out Activities
B. XXXX XXXX
1. Phase I Task 1: XXXX and XXXX XXXX Formation and Training
2. Phase I Task 2: Current XXXX Review
3. Phase I Task 3: Future XXXX XXXX Modeling
4. Phase I Task 4: XXXX Targeting and Integration
5. Phase II Task 1: XXXX Design
6. Phase II Task 2: Develop XXXX XXXX Transition Plan
7. Phase II Task 3: Assist in XXXX XXXX of XXXX Function
8. Phase II Task 4: Cost/Benefit Risk Assessment
9. Phase II Task 5: Implementation Planning
10. Phase III Task 1: XXXX XXXX Training (combined with XXXX training)
11. Phase III Task 2: Implementation Work-plan Commitment
12. Phase III Task 3: XXXX Implementation and Improvement
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 9 of 39
<PAGE>
Section N-1
XXXX XXXX XXXX
IV. Unisource Responsibilities
A. The most critical assumption underlying the XXXX approach is the
availability of Unisource Executives to participate in the process.
Effectively XXXX to XXXX, XXXX, and XXXX XXXX will demand a XXXX of the
Executive Transition Committee's time over the first XXXX months of the
agreement. Approximately XXXX of their time during XXXX and XXXX will be
devoted to XXXX and XXXX activities. It is estimated this will drop to
XXXX that level in the XXXX years.
B. Introducing XXXX of this XXXX always involves the need for XXXX XXXX
regarding XXXX and other XXXX. The Unisource executive management will be
available to make the decisions which affect the Projects direction,
content, and schedules. Where consensus cannot be achieved, executive
decisions will have to be made within XXXX.
C. Some individuals currently on Unisource XXXX may not be XXXX or XXXX to
XXXX in the XXXX XXXX. The Executive Transition Committee will resolve
Unisource issues that are impeding process to allow overall process
continuation.
D. Experienced Unisource individuals, with expertise in Unisource operations
and customer environments, will be available to implement XXXX XXXX and
XXXX XXXX initiatives for the duration of the project.
E. Unisource will assign XXXX to XXXX, as needed, with an in-depth
understanding of Unisource's overall XXXX and an in-depth XXXX of the
XXXX to serve on the XXXX Task Force to address XXXX XXXX issues. The
Executive Transition Committee will act on the XXXX XXXX XXXX Task
Force's recommendations as they develop frames.
V. Project Deliverables
A. Assessment and Feedback plan and schedule
B. Communications channel and Unisource recommendation
C. Transition Management Plan
D. Refined ETC XXXX and XXXX
E. XXXX XXXX Summary
F. XXXX XXXX Report
G. XXXX Strategies Document
H. XXXX Design Report
I. XXXX XXXX Transition Plan(s)
J. XXXX/XXXX Risk Assessment
K. Implementation Work Plan
VI. Completion Criteria
The XXXX Project will be complete when all the XXXX in the XXXX are XXXX by
the XXXX Teams and XXXX by XXXX or when the Level of Effort resource
commitment has been reached, unless otherwise extended at Unisource's
request and payment of applicable ARCs.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 10 of 39
<PAGE>
Schedule N
Projects
Section N-2
XXXX XXXX XXXX
I. Scope
The scope of the XXXX XXXX XXXX Project includes the XXXX XXXX XXXX, and
their major XXXX and XXXX processes, all as set forth below; such as XXXX
XXXX and XXXX XXXX which are required to support the XXXX, XXXX, XXXX XXXX
XXXX desired by Unisource as will be described in the XXXX XXXX Unisource
XXXX Document. It is expected that one of the first tasks of the Unisource
ETC will be the XXXX, XXXX, and prioritization of the Unisource XXXX XXXX,
and XXXX as to what processes are to be XXXX and what XXXX are to be
standardized. The XXXX XXXX XXXX work effort is divided into two major
components.
XXXX will be an XXXX XXXX with the XXXX XXXX, XXXX and XXXX XXXX XXXX Team
Members acting as the primary XXXX and XXXX points between the XXXX XXXX XXXX
Team(s) and their respective XXXX XXXX and XXXX XXXX XXXX Teams.
A. The XXXX major XXXX includes all of the XXXX which are required to support
the implementation of the common XXXX XXXX XXXX System (XXXX), XXXX XXXX,
and process integration points to the XXXX XXXX System (XXXX), and the
XXXX XXXX system (XXXX). The scope of the work for this component is XXXX
by the XXXX XXXX XXXX desired by Unisource to implement XXXX for the XXXX
XXXX. Therefore the XXXX ETC XXXX of processes to be included during this
component is XXXX to be XXXX as XXXX as reasonably XXXX in order for the
Project to proceed.
The preliminary definitions of the XXXX and other XXXX not falling into
the XXXX XXXX as indentified in the Unisource XXXX Document are as
follows:
1. XXXX and XXXX Management (XXXX XXXX)
This XXXX XXXX includes the XXXX of XXXX and XXXX terms for the XXXX
XXXX determining what XXXX to XXXX in which XXXX, placing XXXX for XXXX
and XXXX what and when to XXXX, arranging for XXXX XXXX, and XXXX with
XXXX to pay for XXXX.
2. XXXX and XXXX Process (XXXX XXXX)
A set of activities related to developing Unisource market channels and
XXXX XXXX. It also includes making XXXX XXXX, establishing XXXX, and
determining XXXX XXXX. A major XXXX is how XXXX will coordinate
activities associated with serving XXXX XXXX.
3. XXXX Service
This XXXX includes all of the activities associated with taking XXXX,
extending XXXX, XXXX and XXXX, and handling XXXX XXXX.
4. XXXX XXXX (XXXX Process)
This XXXX includes all activities in and around XXXX XXXX (XXXX XXXX):
XXXX and XXXX products and XXXX XXXX within XXXX. It also includes XXXX
XXXX such as XXXX, XXXX, and XXXX management.
5. XXXX (XXXX Operations)
XXXX and XXXX, XXXX XXXX management, and XXXX systems management, and
XXXX.
6. XXXX (Measurements)
XXXX planning, XXXX, and performance XXXX.
B. The second major component of the XXXX XXXX XXXX Project encompasses XXXX
XXXX XXXX efforts beginning after the initial implementation site of XXXX
and continuing through the end of the contract. These XXXX XXXX efforts
will further refine the standardized
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 11 of 39
<PAGE>
Section N-2
XXXX XXXX XXXX
and XXXX XXXX included in the first XXXX but will also include
innovation of those XXXX XXXX to the extent possible to XXXX under the
XXXX of the XXXX.
II. XXXX Management and XXXX Approach
The XXXX Project shall conform to the ISSC XXXX XXXX XXXX set forth in
Schedule XXXX.
Additionally this statement of work will utilize the XXXX Process XXXX
Series XXXX(SM) The XXXX XXXX XXXX XXXX XXXX, and the XXXX XXXX XXXX
XXXX(SM) Methodology. Other methodologies may be used during this project as
approved by XXXX ISSC, and XXXX. The XXXX Team shall be made up of personnel
from XXXX, ISSC, and XXXX with XXXX assuming the role of Team Leader.
The business requirements that support the development, integration and
deployment of XXXX XXXX XXXX shall be identified and defined via the
following:
A. Phase 1
1. Stage I: XXXX and XXXX
ISSC will organize the XXXX XXXX XXXX Project and Project Team. Based
upon the Unisource Executive Transition Committee decisions as to
the XXXX XXXX the key XXXX XXXX XXXX and XXXX will be refined. An
initial Process Area Assessment will be conducted to evaluate the
current status, future direction, and to identify Best Practice
locations for each of the prioritized processes. In addition, the
XXXX on which XXXX to XXXX versus standardize will be made by the
Unisource Executive Transition Committee with the guidance and input
from the XXXX XXXX XXXX Project Team. Training in the areas of XXXX
XXXX XXXX XXXX XXXX XXXX and Unisource desired approach will be
provided. A prototype process will be jointly selected by the
Unisource ETC and the XXXX XXXX XXXX Team to accelerate through the
XXXX XXXX XXXX to test the approach to be used by all process teams
in Stage II.
Task 1 - Establish the XXXX XXXX
Task 2 - Conduct process area assessments
2. Stage II: Process XXXX / XXXX
ISSC will conduct a series of XXXX sessions for each XXXX area which
is to be XXXX or XXXX. Not all process areas will require the
complete suite of activities to be performed during this Stage but
all process areas required to support the XXXX of XXXX and other XXXX
XXXX Projects scheduled for implementation coinciding with XXXX will
produce the same set of expected deliverables. The initial process
area prototype will be produced and verified as the major deliverable
of this stage.
Task 1 - Conduct XXXX
Task 2 - Conduct XXXX prototype XXXX
3. Stage III: Process XXXX
ISSC will develop a detailed process XXXX. The deliverables and
process detailed XXXX will be XXXX by forming a single, joint XXXX
XXXX XXXX and XXXX XXXX XXXX for each XXXX XXXX. The project plans at
this point will be XXXX between the XXXX XXXX XXXX and the XXXX XXXX
projects. The XXXX and XXXX XXXX will be identified in XXXX with the
XXXX XXXX XXXX, and a XXXX analysis of the XXXX state including the
XXXX XXXX will be performed. A XXXX XXXX and the XXXX of the XXXX and
XXXX to the process XXXX and XXXX XXXX will be conducted.
Task 1 - Conduct process XXXX and detailed XXXX
Task 2 - Conduct process XXXX
4. Stage IV: Process XXXX
ISSC will XXXX the process XXXX and XXXX XXXX and the XXXX XXXX Plan
and XXXX Plan. The process XXXX XXXX will assist Unisource and the
XXXX XXXX XXXX XXXX in developing XXXX XXXX Criteria. The XXXX XXXX
members will also develop XXXX XXXX performance XXXX. A Regional XXXX
and XXXX XXXX tool and exercise will be XXXX from the process XXXX to
be used as an XXXX and XXXX XXXX
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 12 of 39
<PAGE>
Section N-2
XXXX XXXX XXXX
XXXX XXXX prior to process XXXX. The user XXXX and XXXX XXXX will be
verified with the XXXX XXXX and XXXX XXXX Teams.
Task 1 - Process XXXX XXXX
Task 2 - XXXX planning
5. Stage V: XXXX Process XXXX XXXX
An XXXX will be XXXX jointly by process and technology XXXX XXXX to
XXXX the XXXX and XXXX, to provide an XXXX XXXX, and to XXXX the XXXX
state XXXX and process XXXX. An XXXX will be conducted during the
XXXX XXXX XXXX XXXX and adjustments will be documented.
6. Stage VI: Implementation
Prior to implementation of the XXXX, the XXXX XXXX and XXXX
assessment will be performed on XXXX XXXX XXXX. A process XXXX XXXX
XXXX team will support the XXXX of the XXXX XXXX by providing XXXX to
the XXXX XXXX XXXX, the Unisource XXXX, and to the Unisource XXXX
undergoing the XXXX.
B. Phase 2
1. Stage I: Post Implementation XXXX
After the XXXX implementations of the XXXX and XXXX XXXX have been
XXXX for an XXXX XXXX XXXX of XXXX, a post implementation XXXX of the
XXXX will be conducted. The XXXX may result in XXXX and XXXX to the
XXXX. Any XXXX and XXXX to the process XXXX the XXXX XXXX XXXX will
be managed through the XXXX XXXX Process. A Post Implementation XXXX
XXXX will be generated.
2. Stage II: XXXX Refinement and Innovation
On an ongoing basis the XXXX XXXX will be XXXX by XXXX the XXXX XXXX
in the XXXX XXXX XXXX. It is anticipated that there will be XXXX
process XXXX, XXXX XXXX and XXXX opportunities for Unisource.
Therefore, the XXXX XXXX XXXX XXXX will XXXX in XXXX and will XXXX
those XXXX required for Unisource to achieve XXXX XXXX XXXX and XXXX.
III. ISSC Responsibilities
A. Provide overall project management for the XXXX XXXX XXXX work effort.
B. Assist Unisource in the definition, analysis, design, and
implementation of the XXXX XXXX XXXX XXXX XXXX.
C. Integrate the XXXX XXXX XXXX work effort with all other Projects as
appropriate.
D. Provide XXXX on the XXXX XXXX XXXX principles.
E. Develop task deliverables for each process area, as applicable.
F. The XXXX XXXX XXXX XXXX, the XXXX XXXX and the XXXX XXXX XXXX XXXX
methodologies will be used as the primary methodologies during the XXXX
XXXX XXXX work effort.
G. Assign a XXXX software XXXX XXXX XXXX as a team member of a XXXX where
appropriate.
H. Assign a member of the XXXX XXXX Team to each XXXX XXXX XXXX Team.
IV. Unisource Responsibilities
A. Unisource shall make available to each XXXX XXXX XXXX XXXX those XXXX
XXXX knowledgeable of the XXXX XXXX XXXX and future XXXX XXXX of each
XXXX XXXX for the duration of the XXXX XXXX XXXX effort. Each XXXX XXXX
XXXX shall have one XXXX XXXX assigned as the Unisource XXXX XXXX XXXX
Leader.
B. Unisource shall make available to the XXXX XXXX XXXX XXXX, in a timely
manner, the Unisource, XXXX the XXXX XXXX XXXX XXXX require for the
accurate and timely XXXX of work.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 13 of 39
<PAGE>
Section N-2
XXXX XXXX XXXX
C. Due to the XXXX XXXX XXXX efforts there may be significant change to
the current XXXX XXXX, the XXXX and XXXX, and XXXX in the Unisource
XXXX. In order for the desired time schedules to be met, there is a
XXXX XXXX for XXXX XXXX XXXX. In those instances where a XXXX XXXX of
the XXXX XXXX XXXX Team cannot be achieved it is expected that the
Unisource XXXX (XXXX) will make the XXXX.
D. During the XXXX XXXX and XXXX of the XXXX XXXX XXXX efforts there may
be resistance to change encountered at the individual implementation
site locations. Efforts shall be made by the XXXX XXXX XXXX XXXX to
assist those individuals in migrating to the XXXX. Where XXXX from
Unisource XXXX or XXXX XXXX the schedule, it's anticipated that the
XXXX will XXXX the XXXX at XXXX.
E. There will be at least XXXX XXXX XXXX XXXX/XXXX XXXX XXXX member
associated with each XXXX XXXX XXXX team as an active XXXX XXXX XXXX
XXXX XXXX.
F. Unisource will have completed that portion the XXXX and XXXX projects
necessary for ISSC to continue the Projects and make the XXXX
available to the XXXX XXXX before XXXX 19XX.
G. Unisource will have identified and defined all new job functions, roles
and responsibilities for those areas affecting ISSC Project
implementation by XXXX, 19XX.
V. Work Products Summary
A. Phase 1
1. Stage I XXXX and XXXX
a. Task 1. Establish the Process Team
1) Project management and reporting structure in place and
approved;
2) Training Materials;
3) Process Team Member guidelines and skills; and
4) Process Team Members assigned to Process Teams.
b. Task 2. Conduct Process Area Assessments
1) XXXX preparation materials;
2) Process XXXX Reports; and
3) Prototype XXXX Results.
2. State II Process XXXX/XXXX
a. Task 1. Conduct XXXX
1) Process Area Model;
2) Context Diagram;
3) Event XXXX Results;
4) XXXX XXXX Model;
5) XXXX XXXX Diagrams; and
6) Process Descriptions;
b. Task 2. Conduct XXXX Walk Through
1) Systems supporting the processes updated with the results
of the process Visioning sessions; and
2) XXXX Walk Through Report.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 14 of 39
<PAGE>
Section N-2
XXXX XXXX XXXX
3. Stage III Process Design
a. Task 1. Conduct Process XXXX and Detailed Design
1) Detailed Process Design Document.
b. Task 2. Conduct Process XXXX
1) XXXX Analysis;
2) XXXX Report;
3) XXXX and XXXX Report; and
4) Process Performance Criteria.
4. Stage IV Process Support
a. Task 1. Process Support Activities
1) System and Process User Documentation;
2) Process Acceptance Test Criteria and Plan; and
3) Process Training Curricula.
b. Task 2. Implementation Planning
1) User Acceptance;
2) Implementation Plan;
3) XXXX Plan; and
4) XXXX XXXX Tool.
5. Stage V Execute User Acceptance Test
a. The facilities, technical support and equipment, and systems to
execute the Acceptance Test;
b. Trained Trainers;
c. Modified Documentation; and
d. Acceptance Test Plan Results.
6. Stage VI Implementation
a. Implemented Unisource Sites; and
b. Results of the XXXX.
B. Stage I Post Implementation Review
1. Post Implementation Process Review Report;
2. XXXX identifying system XXXX; and
3. Recommendations for XXXX and XXXX.
C. Stage II Process XXXX and XXXX
Those deliverables previously cited in prior Phases, Stages and Tasks of
this Project Detail as appropriate.
VI. Project Deliverable
A. Detailed Process Design Document
B. XXXX Report
C. System and Process User Documentation
D. Process Acceptance Test Criteria and Plan
E. Process Training Curricula
F. Implementation Plan
G. XXXX Plan
H. Trained Trainers
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 15 of 39
<PAGE>
Section N-2
XXXX XXXX XXXX
I. Modified Documentation
J. XXXX Review Report
VII. Completion Criteria
The XXXX Project will be complete when all the tasks in the Project Plan
are completed by the XXXX and XXXX by XXXX or when the XXXX of XXXX XXXX
has been XXXX unless otherwise XXXX with Unisource approval and XXXX of
applicable XXXX.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 16 of 39
<PAGE>
Schedule N
Projects
Seciton N-3
XXXX XXXX XXXX
I. Scope
The purpose of the XXXX Project effort is to XXXX in managing and
controlling the overall transformation. Project and process XXXX XXXX will
be provided throughout the XXXX. The purpose of this XXXX XXXX XXXX XXXX
Plan will be developed and maintained to track Unisource XXXX XXXX.
Activities of the XXXX will be coordinated with the XXXX Coordination and
assistance will be provided to XXXX to other XXXX, XXXX, and XXXX as
required by the XXXX.
The XXXX project management XXXX which will be provided are the following:
A. facilitation of the XXXX of the project;
B. facilitation of the XXXX of the project;
C. facilitation with XXXX XXXX and XXXX; and
D. reporting and controlling the XXXX XXXX XXXX.
The summation of all of these tasks ("XXXX XXXX") will represent the
services of the XXXX Unisource XXXX XXXX XXXX.
II. Project Management and Methodology Approach
The XXXX Project shall conform to the ISSC Project Management methodology
set forth in Schedule H.
XXXX for XXXX will be the Project XXXX to control and report upon tasks
associated with the XXXX. Project Management Methodology component of the
XXXX XXXX XXXX XXXX will be used for the activities conducted throughout
the duration of this Statement of Work. Other Methodologies such as the
XXXX XXXX XXXX XXXX and the XXXX XXXX XXX XXXX XXXX XXXX may be used where
appropriate in the process. In addition other methodologies, accepted for
use by the XXXX or Unisource may also be used where appropriate upon
approval by XXXX and XXXX.
III. ISSC Responsibilities
A. Structure the Project
The XXXX Project is comprised of many XXXX. Each of these XXXX requires
definition beyond that existing in this Project description. The
development of a XXXX XXXX XXXX is necessary to identify Project XXXX.
The objectives of this phase are to facilitate:
1. the identification and documentation of the XXXX the Project will
support;
2. the establishment of XXXX for the Project;
3. the definition of the XXXX the XXXX, and XXXX of the Project; and
4. the estimation of the Project's XXXX, XXXX, and XXXX
B. Plan the Project
This process creates detailed Project plans of the XXXX activities.
These plans may include task schedules for the XXXX, XXXX commitments,
quality plans, XXXX management plans, a XXXX XXXX plan and a XXXX
budget. This process revises the Master Project Plan for the Unisource
XXXX throughout the life of the XXXX Project.
The objectives of this phase are to facilitate:
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 17 of 39
<PAGE>
Section N-3
XXXX XXXX XXXX
1. the development of the Master Project Plan and other Project
plans XXXX determines are required as a result of identified
XXXX Activities;
2. the planning for management of XXXX quality, XXXX and XXXX; and
3. the production of plans consistent with the XXXX and objectives
of the Unisource XXXX Project.
C. Assess XXXX and XXXX
XXXX is defined as the XXXX to, XXXX from, or XXXX of the Project
XXXX. The Assess XXXX and XXXX process involves the documentation,
evaluation, and disposition of XXXX XXXX and XXXX arising from XXXX
or XXXX to the XXXX. The XXXX will addreess XXXX and XXXX for the
initial phase of implementation of the XXXX XXXX XXXX as well as
XXXX and XXXX which may apply to subsequent phases of the XXXX.
The objectives of this process are to:
1. provide the XXXX a mechanism to process both XXXX and XXXX XXXX
XXXX and XXXX;
2. provide a single point of XXXX for XXXX XXXX and XXXX the XXXX
must consider;
3. facilitate the XXXX in rapid XXXX XXXX and XXXX assessment and
disposition;
4. provide an XXXX of the need to implement a XXXX or XXXX an XXXX
and the XXXX XXXX of that XXXX or XXXX; and
5. provide a formal review and a basis for standard reporting of
XXXX XXXX and XXXX XXXX and XXXX.
D. Reporting and Project Control
The Report Project Status process communicates project progress
versus project plans. XXXX Project status will be communicated to
members of the Unisource XXXX, Unisource XXXX XXXX and XXXX
structure, the XXXX XXXX, and other XXXX parties. This process will
be used XXXX XXXX on an ongoing basis. Assistance will be provided
to the XXXX to monitor and evaluate the progress of the XXXX
Project against plans, and any necessary corrective action will be
initiated by the XXXX.
The objectives of this process are to report:
1. the progress of the XXXX Project toward its objectives, as
measured against the Project plans;
2. XXXX evaluation of that progress;
3. XXXX decisions as to any corrective action, problem resolution
and issue management;
4. facilitate developing communication mechanisms for the XXXX
Project and the XXXX; and
5. interface with other groups as designated by the XXXX where
coordination of activities for the XXXX XXXX Project is
required.
IV. Unisource Responsibilities
A. Unisource will provide timely access to necessary resources which
may be identified during this project as being required to support
the goals and objectives of this Project.
B. The XXXX is charged with responsibility for the total XXXX Project.
V. Deliverables Summary
Project deliverables will be produced throughout the life cycle of the
Transition Project in accordance with a schedule determined by the ETC.
Transition Project Deliverables are as follows:
A. XXXX Project Plan
B. Project Standards and Procedures
C. Project Status
D. Project Communications and Assessments
E. Project Approvals
F. XXXX Log
G. XXXX Log
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 18 of 39
<PAGE>
Section N-3
XXXX XXXX XXXX
VI. Completion Criteria
The XXXX Project will be complete when all the XXXX in the Project Plan
are completed by the XXXX XXXX and XXXX by XXXX or when the XXXX of
XXXX XXXX commitment has been XXXX unless otherwise XXXX with Unisource
approval and XXXX of XXXX as applicable.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 19 of 39
<PAGE>
Schedule N
Projects
Section N-4
XXXX XXXX XXXX XXXX
I. Scope
The XXXX project is XXXX with the XXXX Project. The joint XXXX and XXXX will
develop XXXX. Representatives from the XXXX development team will assist the
XXXX Team in defining these XXXX within the XXXX of the XXXX software XXXX.
During this effort the XXXX will XXXX the XXXX in developing XXXX XXXX, XXXX
process XXXX XXXX, and XXXX materials.
XXXX will support, to the extent XXXX by the XXXX of XXXX, all XXXX XXXX
XXXX currently supported by the XXXX. Any additional XXXX, will be supported
via XXXX as part of the XXXX.
XXXX XXXX include but are not limited to:
A. XXXX XXXX
B. XXXX XXXX
C. XXXX
D. XXXX
E. XXXX Management
F. XXXX Management
G. XXXX XXXX Planning ("XXXX")
H. XXXX
I. XXXX
J. XXXX Management
K. XXXX
L. XXXX
M. XXXX Reporting
N. XXXX
O. XXXX
In addition to the above XXXX, XXXX will provide support for XXXX, XXXX,
XXXX and XXXX, and XXXX until the XXXX XXXX is installed in each XXXX. This
level of support will be limited to the XXXX provided within the XXXX
software XXXX.
The types of XXXX which will be XXXX to XXXX from the XXXX systems to the
XXXX XXXX will fall into XXXX basic XXXX:
A. unload XXXX XXXX from XXXX XXXX to XXXX;
B. reload and validate XXXX to XXXX and XXXX the XXXX XXXX; and
C. migration XXXX between XXXX and XXXX, where the XXXX may not yet have
been XXXX to XXXX and XXXX standards.
II. Project Management/Methodology Approach
The NADS project shall use the Project Management methodology set forth in
Schedule H.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 20 of 39
<PAGE>
Section N-4
XXXX XXXX XXXX XXXX
III. ISSC Responsibilities
ISSC will
A. provide an ISSC XXXX Project Manager
B. document the feasibility of running XXXX of Unisource XXXX on the XXX
XXXX of hardware and software XXXX by XXXX and XXXX
C. define, document and develop the XXXX required for the XXXX between
the XXXX XXXX and the Unisource XXXX,
D. define, document and develop the XXXX required for the XXXX from the
XXXX XXXX environment (i.e., the XXXX XXXX) to the XXXX XXXX
environment;
E. prepare the detailed XXXX XXXX for the XXXX subsystem and have
primary responsibility for XXXX the detailed XXXX for the XXXX within
the XXXX of the XXXX XXXX package and will XXXX XXXX, provided, that
the XXXX shall not XXXX the XXXX of XXXX for XXXX and no
modifications to the XXXX supplied XXXX XXX are included in this
effort;
F. develop the detailed XXXX XXXX models, XXXX models, and XXXX XXXX
required to support the XXXX;
G. provide XXXX modules to XXXX from the XXXX to the XXXX subsystem in
the following XXXX categories;
1. XXXX modules to XXXX from Unisource XXXX to XXXX
2. reload XXXX and XXXX to XXXX and XXXX the XXXX, and
3. XXXX modules between XXXX and XXXX systems, where the XXXX may
not yet have been XXXX to XXXX and XXXX standards.
H. provide XXXX which will coincide with XXXX
I. perform XXXX beginning in a XXXX, at least XXXX prior to XXXX XXXX
roll-out of the XXXX in each XXXX,
J. provide a XXXX which will remain with the XXXX to provide post XXXX
and XXXX for up to XXXX after the XXXX associated with said XXXX is
XXXX to XXXX
K. develop XXXX XXXX,
L. perform XXXX of Unisource XXXX at XXXX XXXX location at XXXX and at
the XXXX,
M. develop XXXX on the XXXX of XXXX XXXX and XXXX and XXXX XXXX XXXX,
N. XXXX up to XXXX frequent XXXX and up to XXXX Unisource XXXX XXXX;
O. XXXX the XXXX for tailoring XXXX and XXXX modules against the XXXX
and XXXX XXXX,
P. perform XXXX to XXXX Unisource XXXX through the XXXX at XXXX XXXX to
XXXX that the product XXXX at an XXXX of XXXX as defined by
Unisource. This XXXX will be XXXX by XXXX the Unisource XXXX to XXXX
and executing these XXXX on the proposed XXXX platform. A performance
XXXX will be used to XXXX and XXXX and XXXX. Performance XXXX will be
XXXX and XXXX to Unisource,
Q. develop XXXX materials for XXXX session; and
R. within the XXXX prior to the XXXX to XXXX, provide XXXX to Unisource
listing all XXXX that will not XXXX, and XXXX associated with the
XXXX XXXX on a XXXX by XXXX basis
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 21 of 39
<PAGE>
Section N - 4
XXXX XXXX XXXX XXXX
IV. Unisource Responsibilities
Unisource will
A. provide a primary contract for XXXX who serves as the Unisource XXXX
Project Manager for that XXXX:
B. complete that part of the XXXX of its basic XXXX necessary for ISSC to
XXXX the XXXX, including XXXX and XXXX projects by XXXX, 19XX;
C. own the XXXX for XXXX and Unisource will authorize XXXX to act as their
XXXX to allow ISSC XXXX of the XXXX for the duration of the contract;
D. provide XXXX XXXX XXXX representing annual XXXX of both XXXX and XXXX
representing XXXX which account for XXXX of the total XXXX XXXX on a
XXXX, XXXX with XXXX requirements and any XXXX activity;
E. provide not less than XXXX for each of the XXXX XXXX that are familiar
with both the XXXX of Unisource and the XXXX of those XXXX within the
XXXX software;
F. following the XXXX and XXXX, prioritize the list of required XXXX to
XXXX;
G. assist in defining XXXX for XXXX, XXXX, XXXX and XXXX used in migrating
its XXXX XXXX to XXXX;
H. provide XXXX or XXXX of the XXXX to the ISSC XXXX Project Manager within
XXXX after XXXX;
I. XXXX and XXXX the XXXX XXXX schedule and provide facilities at each of
the XXXX with at least XXXX for XXXX and XXXX capable of handling up to
XXXX concurrent XXXX to XXXX each and provide a XXXX by XXXX XXXX prior
to the XXXX of XXXX;
J. make its XXXX for XXXX during the XXXX it will be XXXX to the XXXX of a
given XXXX system and appropriately schedule it's XXXX into XXXX of these
XXXX;
K. be responsible for all XXXX and XXXX incurred by it's XXXX participating
in XXXX;
L. XXXX for all XXXX and XXXX for Unisource XXXX attending XXXX;
M. review and XXXX or XXXX interface XXXX documents;
N. review and XXXX or XXXX XXXX XXXX documents for XXXX to XXXX XXXX;
O. be responsible for any XXXX requirements necessary to XXXX to the XXXX
system;
P. develop XXXX plan including XXXX, XXXX, XXXX and XXXX XXXX prior to the
start of XXXX;
Q. review and approve or disapprove the XXXX XXXX;
R. provide an output XXXX for XXXX in XXXX where neither XXXX or XXXX are
XXXX; and
S. provide XXXX facilities at the Unisource XXXX location at XXXX and at the
XXXX XXXX.
V. Project Deliverables
A. Project XXXX Plan
B. Project XXXX Reports
C. Product XXXX Plan
D. XXXX
E. Product XXXX Results
F. XXXX XXXX sign-off
G. XXXX Environment
H. XXXX Environment
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 22 of 39
<PAGE>
Section N-4
XXXX XXXX XXXX XXXX
I. System XXXX
J. Production XXXX
K. Functional XXXX
L. XXXX XXXX and XXXX Plans
M. XXXX
N. XXXX XXXX & XXXX
O. XXXX XXXX Document
P. XXXX XXXX & XXXX
Q. XXXX Document
R. XXXX XXXX
S. XXXX plan
T. XXXX Test
U. XXXX reports
V. Sample XXXX reports
W. XXXX
X. XXXX Plan
Y. XXXX and XXXX Plan
Z. XXXX Plan
AA. XXXX XXXX Test
AB. Operational XXXX
AC. On-going XXXX
AD. XXXX report
VI. Completion Criteria
Unisource shall XXXX the XXXX system upon successful completion of the
XXXX.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 23 of 39
<PAGE>
Schedule N
Projects
Section N-5
XXXX XXXX XXXX
I. SCOPE
ISSC will design, develop, test and install the XXXX XXXX XXXX (XXXX)
subsystem in accordance with the following. The XXXX subsystem shall have
the XXXX as defined in the XXXX generated XXXX entitled "XXXX Requirements"
dated XXXX and the "XXXX XXXX Report" dated XXXX. The XXXX subsystem shall
XXXX with XXXX XXXX of the XXXX Packaged software version XXXX. The
permanent XXXX shall only be installed at those sites that have been
migrated to the XXXX subsystem. The XXXX subsystem shall have sufficient
XXXX to accept the XXXX subsystem XXXX, XXXX and XXXX for normal
operations, and the XXXX XXXX XXXX includes the XXXX, XXXX and XXXX
necessary for XXXX.
II. Project Management
The XXXX project shall utilize the project management methodology as
defined in Schedule H.
III. ISSC RESPONSIBILITIES
ISSC shall:
A. perform a XXXX XXXX study to determine the XXXX XXXX of the XXXX system
that can be supported by the XXXX XXXX;
B. design, develop, test and deliver a XXXX subsystem that contains the
XXXX defined in the XXXX XXXX to the XXXX that the XXXX can be supported
by the XXXX software without XXXX. As required, the XXXX subsystem shall
contain the necessary XXXX to the mutually agreed upon XXXX XXXX, and
shall contain XXXX and XXXX functionality;
C. prepare a detailed XXXX XXXX for the XXXX subsystem. This XXXX shall
reflect the results of the XXXX Project, the XXXX, and shall detail any
XXXX that must be XXXX for the XXXX subsystem. At such time as Unisource
XXXX the XXXX requirements, ISSC shall then XXXX to an XXXX of XXXX, a
completion XXXX and a XXXX to provide said XXXX and the XXXX shall be
XXXX assuming no further XXXX XXXX;
D. XXXX the XXXX subsystem in the Unisource XXXX XXXX which will include
the following:
1. XXXX an XXXX and XXXX Unisource with a XXXX for the XXXX XXXX to
supporting XXXX throughout the XXXX migrations. This XXXX may XXXX
additional XXXX support and XXXX development on each of the affected
XXXX;
2. XXXX from the XXXX Systems to a XXXX needed for XXXX and loading the
XXXX XXXX XXXX; and
3. XXXX the XXXX XXXX on the system and XXXX operation by conducting a
XXXX.
E. provide XXXX for XXXX subsystem XXXX as follows;
1. XXXX a maximum of XXXX, located at Unisource XXXX and XXXX;
2. conducting XXXX separate XXXX of XXXX duration; and
3. XXXX scheduling XXXX prior to the XXXX of a XXXX to XXXX.
F. conducting a XXXX to XXXX that the XXXX subsystem meets the XXXX
specification document; and
G. conducting a XXXX, using XXXX to XXXX that the XXXX subsystem meets the
XXXX specification document.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 24 of 39
<PAGE>
Section N-5
XXXX XXXX XXXX
IV. UNISOURCE RESPONSIBILITIES
Unisource shall
A. provide XXXX to those XXXX that do not have XXXX installed.
B. support ISSC in determining the XXXX to XXXX the XXXX of migration to
XXXX.
C. provide its XXXX with the XXXX for handling regional XXXX that XXXX as
the XXXX are migrated to XXXX.
D. provide a XXXX business XXXX full XXXX to XXXX this project beginning
XXXX. This XXXX shall support ISSC in XXXX the XXXX to the XXXX XXXX
resulting from the XXXX XXXX XXXX Project;
E. provide XXXX business XXXX XXXX to participate with XXXX XXXX;
F. participate in the XXXX of the XXXX subsystem;
G. participate in the XXXX of the XXXX subsystem at the location of the
XXXX being XXXX,
H. provide XXXX facilities to support XXXX. Such facilities shall include
a XXXX and a XXXX capable XXXX for XXXX XXXX except at the XXXX which
shall provide a XXXX for every XXXX XXXX.
I. review and approve the XXXX requirements XXXX; and
J. complete that portion of the XXXX of its XXXX XXXX XXXX necessary for
ISSC to proceed with XXXX, including XXXX and XXXX by XXXX, 19XX.
V. Project Deliverables
A. XXXX Document
B. XXXX Specifications
C. XXXX documentation
D. XXXX Plan
E. XXXX Package
F. XXXX Guide
G. XXXX Guide
H. XXXX Hardware, software necessary for each XXXX
I. XXXX XXXX installations
J. XXXX XXXX Plan and
K. XXXX XXXX Plan
VI. Acceptance Criteria
Unisource shall XXXX each XXXX upon successful completion of the XXXX for
XXXX XXXX.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 25 of 39
<PAGE>
Section N-8
4. provide critical product and market sales trends and forecasts to
aid in supplies management and customer service.
II. Project Management and Methodology Approach
The MIS Project shall conform to the ISSC Project Management
methodology set forth in Schedule H.
III. ISSC Responsibilities
A. Provide overall Project Management to oversee the development and
implementation of this system.
B. XXXX with the following XXXX and XXXX:
1. XXXX XXXX architecture;
2. XXXX architecture;
3. XXXX architecture;
4. XXXX architecture; and
5. XXXX/XXXX over systems usage.
C. Facilitate software XXXX and XXXX of the XXXX XXXX XXXX.
D. Provide software XXXX for the XXXX.
E. Provide XXXX XXXX management system and a high performance XXXX.
F. Manage the XXXX and XXXX of the specific XXXX associated with the XXXX
of this system.
G. Provide the development XXXX including the XXXX XXXX and XXXX
management XXXX.
H. Maintain, support and enhance the XXXX.
I. Develop XXXX to the appropriate XXXX (XXXX), to facilitate XXXX XXXX to
the XXXX XXXX XXXX.
IV. Unisource Responsibilities
A. Populate the XXXX of the XXXX System.
B. Maintain and refresh the XXXX XXXX.
C. Ensure the XXXX System XXXX XXXX and XXXX.
D. Provide a list of personnel authorized to access the XXXX XXXX System.
E. Complete the XXXX XXXX number and XXXX number XXXX.
F. Supply XXXX workstations XXXX as the primary XXXX XXXX XXXX.
G. Provide internally available information (XXXX, XXXX data, XXXX, XXXX
XXXX information, XXXX) to populate the XXXX component of the XXXX XXXX
System.
V. Project Deliverables
A. XXXX Report
B. XXXX Design Report
C. XXXX Plan - XXXX Plan
D. XXXX Report
E. XXXX Procedures
F. XXXX Descriptions
G. XXXX Plan - XXXX Plan
H. XXXX XXXX Design
I. XXXX XXXX Report
J. XXXX Report
December 22 1993
ISSC/Unisource Confidential Schedule N Page 32 of 39
<PAGE>
Section N-8
XXXX XXXX System
K. XXXX Manual
L. XXXX XXXX Report
M. XXXX XXXX
N. XXXX - Refined
O. XXXX Plan - XXXX Plan
P. User XXXX - Refined
Q. XXXX Log
R. XXXX XXXX Test
S. XXXX Plan
VI. Completion Criteria
Unisource shall XXXX the XXXX XXXX Systems upon successful completion of
the XXXX XXXX XXXX XXXX.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 33 of 39
<PAGE>
Schedule N
Projects
Section N-9
XXXX XXXX Systems
I. Scope
The XXXX XXXX System to which this Project Section applies, pertains to the
development, implementation and support of a series of XXXX XXXX systems
entitled;
A. XXXX Management
B. XXXX Reporting
C. XXXX Management (Relations)
Information maintained and controlled by various data files within the XXXX
XXXX System of XXXX will be the primary source from which the
reports/extracts for the XXXX Management, XXXX Reporting and XXXX XXXX
Systems will be developed. The specific subsystems to be accessed of this
soft-ware product will be determined during the respective requirements
analysis phases of each system project initiative. The XXXX XXXX Systems
will be a query and reporting system in its design architecture extracting
appropriate information from the transaction level databases already
available. Some of the requirements for the XXXX XXXX System will be
addressed by the system features and capabilities presently offered by XXXX
XXXX XXXX System. A high XXXX query/XXXX tool is required to facilitate the
XXXX of XXXX XXXX and XXXX and the XXXX presentations and XXXX that will
ensue due to the nature of the information being accessed. XXXX Management
and XXXX XXXX Systems will be resident on those computer processors
supporting the informational demands of the various Unisource regions and
corporate headquarters. XXXX XXXX System and the XXXX Management and XXXX
XXXX Systems for enterprise-wide collection and analysis will be resident on
the processor dedicated to serving corporate and enterprise-wide functions.
The roll out of the XXXX Management and XXXX XXXX Systems to the specific
regions throughout Unisource will occur during or after the roll out of the
XXXX XXXX XXXX System at each specified region. The first region, for
example, to receive the XXXX Management and XXXX XXXX system will be the
XXXX XXXX of Unisource, the region scheduled to receive the XXXX XXXX XXXX
XXXX System initially.
The stream of information between Unisource and its suppliers allies will be
facilitated through XXXX links and will utilize a uniform product XXXX code.
II. Project Description
A. XXXX XXXX System
The XXXX XXXX System will provide Unisource management with the XXXX to
XXXX XXXX the XXXX of XXXX XXXX programs and products. The system will
XXXX all XXXX and XXXX at each XXXX and XXXX the XXXX for XXXX by
Unisource management.
The system will XXXX information within each XXXX and XXXX for XXXX wide
usage and XXXX standard reports describing XXXX and XXXX XXXX XXXX by
XXXX (XXXX and XXXX) and for each XXXX XXXX. For the XXXX XXXX, XXXX,
XXXX and XXXX, XXXX will be available, segmented by XXXX, XXXX, XXXX and
XXXX (XXXX, XXXX, XXXX, XXXX). Similar XXXX XXXX will be generated for
the XXXX XXXX, XXXX by XXXX (quick XXXX, XXXX print, XXXX), XXXX (XXXX),
and XXXX XXXX (XXXX, XXXX). Aside from standard reports, the XXXX XXXX
System will provide Unisource with a XXXX and XXXX technique of gathering
and XXXX XXXX XXXX. The system will include a series of ad hoc and query
reporting capabilities to XXXX XXXX XXXX retrieval and to provide a XXXX
XXXX environment. The key to XXXX specific performance will be the
consistent assignment of each XXXX, XXXX and XXXX to a specific XXXX or
XXXX of XXXX based on uniform standards.
The XXXX can then be used to XXXX XXXX XXXX XXXX, the effectiveness of
new XXXX and XXXX XXXX (XXXX XXXX strategies, XXXX XXXX, etc.) as
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 34 of 39
<PAGE>
Section N-9
XXXX XXXX Systems
well as provide the basis for XXXX XXXX. The same information, when XXXX
appropriately, can be shared with XXXX to XXXX in measuring the
effectiveness of XXXX XXXX/ Unisource XXXX.
B. XXXX XXXX System
While the new XXXX, XXXX and XXXX XXXX systems are to be XXXX throughout
Unisource over the next several XXXX the XXXX XXXX System will be XXXX
XXXX at the effective XXXX and XXXX of day to day XXXX activities. There
will be significant XXXX for XXXX, XXXX and XXXX operational XXXX and
XXXX, to assist Unisource management at corporate and regional levels
for XXXX XXXX.
The XXXX XXXX System will be XXXX for usage at the XXXX level and at the
XXXX level for XXXX XXXX and XXXX. At the XXXX level, this system may
XXXX pertinent XXXX at regular intervals from XXXX XXXX specific XXXX.
The system will provide the XXXX for XXXX Unisource XXXX and XXXX XXXX
progress and expectations. In particular, the system will include but
not be limited to, the following functions:
1. XXXX by XXXX/XXXX/XXXX
2. XXXX XXXX including XXXX turnover, XXXX XXXX XXXX percent XXXX,
average XXXX percent XXXX etc.
3. XXXX XXXX segment XXXX including current XXXX XXXX, historical XXXX
and future XXXX XXXX
4. Financial XXXX XXXX
The XXXX maintained and reported by this XXXX will be XXXX maintained
XXXX to be of XXXX to executive XXXX XXXX. Where current XXXX is XXXX to
decisions, real time XXXX XXXX can be entertained.
C. XXXX XXXX System
The XXXX XXXX System will be responsible for providing all XXXX to
facilitate Unisource's XXXX with its XXXX.
XXXX XXXX currently involves the function of XXXX XXXX. The total XXXX
XXXX System will provide XXXX XXXX by XXXX and XXXX XXXX in order to
define XXXX XXXX and to provide the flexibility required to respond to
XXXX customer XXXX levels the system XXXX.
Increasing emphasis on XXXX XXXX management will require XXXX XXXX
developed by XXXX suppliers. The XXXX XXXX System will support this
effort through the sharing of XXXX XXXX data by XXXX XXXX, XXXX
management XXXX and required XXXX service XXXX.
As relationships to XXXX are XXXX to establishing solid XXXX XXXX
relationships, the XXXX XXXX of XXXX data and related XXXX XXXX data
will be an effective means to serving true XXXX XXXX XXXX.
III. Project Management and Methodology Approach
The XXXX Project shall conform to the ISSC Project Management methodology
set forth in Schedule H.
IV. ISSC Responsibilities
A. Provide the overall project management to oversee development and
implementation of the XXXX XXXX Systems.
B. Provide the integrated architecture and infrastructure necessary to
support these series of executive based systems including:
1. Computer XXXX
2. XXXX architecture,
3. Communications XXXX,
4. Data XXXX, and
5. Documentation/procedures over XXXX XXXX.
C. Critical functions to be included in the XXXX XXXX System
1. XXXX XXXX XXXX by supplier XXXX and product.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 35 of 39
<PAGE>
Section N-9
XXXX XXXX Systems
2. Actual XXXX XXXX by XXXX;
3. Actual XXXX XXXX by XXXX;
4. Actual XXXX XXXX by XXXX XXXX; and
5. Actual XXXX XXXX by XXXX and XXXX within that XXXX.
D. Conduct the XXXX software XXXX XXXX and XXXX of the XXXX XXXX
Systems.
E. Manage the XXXX and XXXX of the specific XXXX associated with the XXXX
of each system comprising the portfolio of the XXXX XXXX Systems.
F. Provide the XXXX XXXX including the XXXX, XXXX development XXXX and
project XXXX XXXX.
G. Maintain and support the XXXX XXXX XXXX.
H. Provide XXXX maintenance and support for the XXXX XXXX System.
I. Provide a high performance XXXX/XXXX.
J. Develop XXXX and XXXX as necessary to support the XXXX XXXX XXXX XXXX
System and those portions of the XXXX System, to XXXX XXXX System.
K. Determine the XXXX required from the XXXX and provide temporary
linkages to the XXXX during XXXX.
V. Unisource Responsibilities
A. Populate the XXXX that make up the XXXX XXXX System.
B. Maintain and refresh the XXXX XXXX System XXXX.
C. Ensure the XXXX System XXXX XXXX and XXXX.
D. Learn basic routines and functions of the XXXX selected to XXXX these
XXXX through XXXX provided by the ISSC team.
E. Provide availability of XXXX linkage between Unisource and XXXX for the
XXXX XXXX XXXX System.
F. Supply XXXX workstations (XXXX) as the primary XXXX XXXX XXXX.
G. Complete that part of the XXXX product XXXX currently underway at
Unisource necessary for ISSC to XXXX this XXXX.
H. Determine the specific XXXX for the process areas listed below:
1. XXXX and XXXX
2. XXXX Service
3. Measurement
4. XXXX Management
5. XXXX and XXXX Management
VI. Project Deliverables
A. XXXX Report
B. XXXX Report
C. XXXX Plan - XXXX Plan
D. XXXX XXXX Report
E. XXXX XXXX Procedures
F. XXXX Descriptions
G. XXXX Plan - XXXX Plan
H. XXXX XXXX Design
I. XXXX XXXX Report
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 36 of 39
<PAGE>
Section N-9
XXXX XXXX Systems
J. Testing Design Report
K. User Procedure Manual
L. Operation Readiness Test
M. Acceptance Test Report
N. Master Plan - Evolution Plan
O. User Infrastructure - Refined
VII. Completion Criteria
Unisource shall accept each of the XXXX upon successful completion of the
XXXX XXXX XXXX.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 37 of 39
<PAGE>
Schedule N
Projects
Section N-10
XXXX XXXX XXXX
I. Scope
Currently Unisource utilizes various XXXX XXXX XXXX XXXX to meet its
business needs. These solutions are XXXX with varying XXXX of XXXX. The
XXXX XXXX represent a reasonable XXXX point but are not XXXX because of a
lack of a XXXX XXXX in addressing the XXXX XXXX from the perspective of
XXXX and XXXX management. The XXXX XXXX have focused on providing XXXX to a
XXXX or a XXXX XXXX. Therefore, this Project Section addresses the XXXX of
the multiple XXXX XXXX XXXX and the XXXX and XXXX of the XXXX of an XXXX
XXXX software XXXX which XXXX Unisource's XXXX. This XXXX will include an
impact XXXX of the current XXXX of XXXX solutions across the Unisource
XXXX. The base transaction set that will be included for day one XXXX will
contain the XXXX XXXX at a XXXX.
Transaction Number Description
810 XXXX
820 XXXX XXXX/XXXX XXXX
823 XXXX
832 XXXX
848 XXXX XXXX XXXX XXXX
850 XXXX XXXX
855 XXXX XXXX XXXX
857 XXXX
859 XXXX XXXX
865 XXXX XXXX XXXX XXXX
Currently within Unisource, an XXXX XXXX has been XXXX to address XXXX
XXXX needs. This will be addressed in the XXXX XXXX XXXX XXXX Section.
II. Project Management and Methodology Approach
The XXXX Project shall XXXX to the XXXX XXXX XXXX methodology set forth in
Schedule H.
III. ISSC Responsibilities
A. Provide overall project management to oversee the successful development
and implementation of the XXXX system.
B. Provide the integrated XXXX and XXXX necessary to support this system in
including:
1. XXXX XXXX architecture;
2. XXXX architecture;
3. Communication architecture;
4. XXXX architecture; and
5. Documentation/procedures over XXXX XXXX.
C. XXXX XXXX will adhere to industry standards.
D. XXXX can accommodate XXXX and XXXX XXXX profiles.
E. The XXXX XXXX will be rolled out along with the XXXX systems.
F. Existing security within XXXX and XXXX translator XXXX is adequate.
G. The XXXX solution will be XXXX and XXXX compatible.
H. The software vendor will provide the base package training.
I. Design, develop and implement the XXXX solutions.
J. Manage the XXXX and XXXX of the specific tasks associated with the XXXX
of this system.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 38 of 39
<PAGE>
Section N-10
XXXX XXXX XXXX
IV. Unisource Responsibilities
A. Provide access to the appropriate personnel within the organization
to facilitate the accelerated Project time frame.
B. Provide access to all XXXX systems and related data to facilitate
the accelerated Project time frame.
C. Prioritize the current XXXX XXXX to be supported.
D. Set-up and communicate customer and/or vendor profiles to process
XXXX transactions.
E. Complete that portion of common product numbers project necessary
for ISSC to proceed with this Project by XXXX.
F. Implement the appropriate business processes prior to implementation
of the XXXX solution.
G. Select and negotiate the XXXX XXXX XXXX (XXXX) XXXX as a part of the
XXXX agreement.
H. Appoint a single project sponsor within Unisource.
V. Project Deliverables
A. Business Area Requirements
B. Business Area Strategy Model
C. Finalist XXXX & XXXX Model
D. Master Plan - Development Plan
E. XXXX XXXX Model
F. Project Charter
G. Short-list Evaluation Model
H. Deliverable Scope - Integration & Testing Phase
I. Application Software Unit and Integration Test Report
J. Master Plan - Implementation Plan
K. Package Application - Unit and Integration Tested
L. Package Integration Environment
M. XXXX XXXX - System Tested
N. XXXX XXXX Design Report
O. XXXX XXXX Environment
P. System Test Report
Q. User Procedure Manual
R. Training Program
S. Package Test Design Report
T. Operation Readiness Test
U. Acceptance Test Report
V. Implementation Plan
VI. Completion Criteria
Unisource shall accept the XXXX XXXX upon successful completion of the
Operation Readiness Test.
December 22, 1993
ISSC/Unisource Confidential Schedule N Page 39 of 39
<PAGE>
ISSC / Unisource
Agreement for Information Technology Services [ART APPEARS HERE]
- --------------------------------------------------------------------------------
Schedule O
Affected Employees and Personnel Transition
Section O-1
Affected Employees - United States
<TABLE>
<CAPTION>
No. LOCATION EMPLOYEE NAME POSITION DESCRIPTION XXXX DOH ANNUAL $
<S> <C> <C> <C> <C> <C> <C>
1. Butler - Denver Arceneaux, Susan Ops Spt Analyst II 06/15/XX $XXXX-US
2. Butler - Denver Baker, Dawn Systems Consultant 05/09/XX $XXXX-US
3. Butler - Denver Bollig, Deborah Project Leader 09/09/XX $XXXX-US
4. Butler - Denver Clay, Laurel Ops Spt Analyst II 09/30/XX $XXXX-US
5. Butler - Denver Cosyns, Kirby Programmer/Analyst 02/25/XX $XXXX-US
6. Butler - Denver Drutar, Ricky Computer Ops Mgr 06/08/XX $XXXX-US
7. Butler - Denver Durbin, Troy Programmer/Analyst 11/07/XX $XXXX-US
8. Butler - Denver Giesler, Louis Technical Analyst 04/11/XX $XXXX-US
9. Butler - Denver Haber, Klee Ray Computer Operator 04/16/XX $XXXX-US
10. Butler - Denver Hendrick, David Sr Computer Operator 07/26/XX $XXXX-US
11. Butler - Denver Jeffries, Jennie Programmer Analyst 12/12/XX $XXXX-US
12. Butler - Denver Kapczynski, Michele Computer Operator II 05/26/XX $XXXX-US
13. Butler - Denver Mattie, David Programmer Analyst 06/01/XX $XXXX-US
14. Butler - Denver McQuaid, Danielle Systems Analyst 12/02/XX $XXXX-US
15. Butler - Denver Melka, Scott Sr Systems Analyst 07/08/XX $XXXX-US
16. Butler - Denver Miller, Lori Info Ctr/BMW Supervisor 09/02/XX $XXXX-US
17. Butler - Denver Naous, Ahlam Programmer I 04/06/XX $XXXX-US
18. Butler - Denver Ray, Diane Programmer II 11/04/XX $XXXX-US
19. Butler - Denver Rothchild, Donna Ops Spt Analyst II 01/13/XX $XXXX-US
20. Butler - Denver Roth, Michael Computer Operator II 11/18/XX $XXXX-US
21. Butler - Denver Sebesta, Shirley Sr Data Entry Operator 10/03/XX $XXXX-US
22. Butler - Denver Siewert, Dianne Op Spt Analyst II 05/03/XX $XXXX-US
23. Butler - Denver Smith, Niki Sys Dev/Proj Mgr 03/14/XX $XXXX-US
24. Butler - Denver Spaulding, Kathleen Sr Systems Analyst 12/12/XX $XXXX-US
25. Butler - Denver Von Feldt, Pattison Programmer/Analyst 12/14/XX $XXXX-US
26. Carson - California Coleman, Margaret Computer Operator 09/22/XX $XXXX-US
27. Carson - California Lucas, Marcia Computer Operator 11/19/XX $XXXX-US
28. Cincinnati Arnold, Ben Operator/Programmer 04/11/XX $XXXX-US
29. Cincinnati Cowdrey, Robert Ops Mgr and Tech Svcs X 08/17/XX $XXXX-US
30. Cincinnati Debord, Eddie Programmer/Analyst 06/03/XX $XXXX-US
31. Cincinnati Gosnell, Michael Computer Operator 04/18/XX $XXXX-US
32. Cincinnati Jones, Jim Batch Systems Mgr X 07/01/XX $XXXX-US
33. Cincinnati Klein, Robert Programmer/Analyst 07/01/XX $XXXX-US
34. Cincinnati O'Donnell, Joe Sys Dev Mgr, US Ops X 03/19/XX $XXXX-US
35. Cincinnati Patten, Charles Programmer/Analyst 05/09/XX $XXXX-US
36. Cincinnati Turner, Bill Manager, On-line Sys X 02/01/XX $XXXX-US
37. COPCO - Columbus Barnhart, Jay Computer Programmer 10/12/XX $XXXX-US
38. COPCO - Columbus Binder Stephen Info Tech Mgr X 02/13/XX $XXXX-US
39. COPCO - Columbus Hedrick, Marilyn Ops/Spt Analyst(Part Time) 07/06/XX $XXXX-US
40. COPCO - Columbus Marquardt, Michael Computer Programmer 06/08/XX $XXXX-US
41. COPCO - Columbus Penn, Saprina Hdw Support & Operations 08/30/XX $XXXX-US
42. COPCO - Columbus Rupert, David Computer Programmer 09/05/XX $XXXX-US
43. COPCO - Columbus Thompson, Tamara Comp Ops Supervisor 06/18/XX $XXXX-US
44. Garrett - Philadelphia Dinardo, Charles Operations Supervisor 05/01/XX $XXXX-US
45. Garrett - Philadelphia MacSaveny, Donald Programmer/Analyst 05/16/XX $XXXX-US
46. Garrett - Philadelphia Morrison, George Sr Programmer/Analyst 08/17/XX $XXXX-US
47. Garrett - Philadelphia Nigro, John Computer Operator II 04/20/XX $XXXX-US
48. Monarch - Houston Mingo, Kathy Computer Operator 04/01/XX $XXXX-US
49. Monarch - Houston O'Neill, Carol Programmer 05/03/XX $XXXX-US
</TABLE>
DRAFT December 21, 1993
ISSC/Unisource Confidential Schedule O Page 1 of 4
<PAGE>
Section O-1
Affected Employees - United States
<TABLE>
<CAPTION>
NO. LOCATION EMPLOYEE NAME POSITION DESCRIPTION XXXX DOH ANNUAL $
<S> <C> <C> <C> <C> <C> <C>
50. Monarch - Houston Warhoe, Brian Info Tech Mgr X 07/01/XX $XXXX - US
51. Northeast Region - Conn Cyr, Loretta Sr Programmer/Analyst 09/28/XX $XXXX - US
52. Northeast Region - Conn Donato, Vito Applications Specialist 04/17/XX $XXXX - US
53. Northeast Region - Conn Gable, Kayellen Ops Spt Analyst 02/16/XX $XXXX - US
54. Northeast Region - Conn Mody, Arvinda Sr Programmer Analyst 05/10/XX $XXXX - US
55. Northeast Region - Conn Pisko, Linda Sr Computer Operator 10/11/XX $XXXX - US
56. Northeast Region - Conn Schleicher, Randy Sr Programmer Analyst 11/23/XX $XXXX - US
57. Northeast Region - Conn Tran, Phuong Van Sr Programmer/Analyst 05/07/XX $XXXX - US
58. Northeast Region - Conn Tyson, Emma Computer Operator 11/20/XX $XXXX - US
59. Northeast Region - Conn Whiting, Kenneth Sr Programmer/Analyst 05/10/XX $XXXX - US
60. Oyster Point - San Fran Alegata, Steve Computer Operator 07/23/XX $XXXX - US
61. Oyster Point - San Fran Barnes, Kenneth Sr Systems Analyst 02/07/XX $XXXX - US
62. Oyster Point - San Fran Berlin, James Programmer/Analyst 08/12/XX $XXXX - US
63. Oyster Point - San Fran Dawson, John Systems Analyst 03/16/XX $XXXX - US
64. Oyster Point - San Fran Descalzo, Vicki Info Support Analyst 04/11/XX $XXXX - US
65. Oyster Point - San Fran Esquibel, Cynthia Info Support Analyst 09/04/XX $XXXX - US
66. Oyster Point - San Fran Gorospe, Arturo Computer Operator 04/02/XX $XXXX - US
67. Oyster Point - San Fran Jensen, Walter MIS Operations Mgr 03/04/XX $XXXX - US
68. Oyster Point - San Fran Kinyauo, Kathee Computer Operator 01/02/XX $XXXX - US
69. Oyster Point - San Fran Palma, Ronald Systems Analyst 12/17/XX $XXXX - US
70. Oyster Point - San Fran Prasadi, Rajesh Computer Operator 01/06/XX $XXXX - US
71. Oyster Point - San Fran Rico, Hipolito Systems Analyst 03/06/XX $XXXX - US
72. Oyster Point - San Fran Sieg, Wallace MIS Dir X 06/24/XX $XXXX - US
73. Oyster Point - San Fran Stewart, J. Michael Sr Systems Analyst 05/06/XX $XXXX - US
74. Oyster Point - San Fran Ulrich, Raymond Sr Systems Analyst 06/13/XX $XXXX - US
75. PCA Central - St. Louis James, Cherie Computer Operator 03/22/XX $XXXX - US
76. PCA Central - St. Louis Lenze, Dale Programmer 08/17/XX $XXXX - US
77. PCA Central - St. Louis Newton, Verlinda Help Desk Coordinator 11/30/XX $XXXX - US
78. PCA Central - St. Louis Ratterman, Ronald Programmer 10/25/XX $XXXX - US
79. PCA Central - St. Louis Weber, Jerry Info Tech Manager X 09/22/XX $XXXX - US
80. Unijax - Jacksonville Bacon, Roosevelt Computer Operator 06/25/XX $XXXX - US
81. Unijax - Jacksonville Barker, Rick Programmer/Analyst 05/26/XX $XXXX - US
82. Unijax - Jacksonville Bell, Edrena Data Entry & Control 05/07/XX $XXXX - US
83. Unijax - Jacksonville Boree, David Systems Programmer 08/17/XX $XXXX - US
84. Unijax - Jacksonville Bussey, Cecil Computer Operator 04/08/XX $XXXX - US
85. Unijax - Jacksonville Denomme, Carol Tape Librarian 11/23/XX $XXXX - US
86. Unijax - Jacksonville Giordano Jr., Frank Computer Ops Mgr 01/12/XX $XXXX - US
87. Unijax - Jacksonville Hays, Michael Data Entry & Control 09/03/XX $XXXX - US
88. Unijax - Jacksonville Head, Barbara Data Control Supervisor 04/01/XX $XXXX - US
89. Unijax - Jacksonville Herrington, Hilda Programmer/Analyst 08/16/XX $XXXX - US
90. Unijax - Jacksonville Hoppe, Elaine Programmer/Analyst 09/15/XX $XXXX - US
91. Unijax - Jacksonville Kuczewski, Tony Project Analyst 06/01/XX $XXXX - US
92. Unijax - Jacksonville Livingston, Bill Systems & Programming Dir X 08/31/XX $XXXX - US
93. Unijax - Jacksonville Neal, Diana Help Desk Mgr 08/17/XX $XXXX - US
94. Unijax - Jacksonville Olsen, Nancy Data Entry & Control 01/28/XX $XXXX - US
95. Unijax - Jacksonville Poole, Steffanie Help Desk 05/17/XX $XXXX - US
96. Unijax - Jacksonville Potfay, Wayne Help Desk 09/14/XX $XXXX - US
97. Unijax - Jacksonville Shepler, Stephen Programmer/Analyst 05/17/XX $XXXX - US
98. Unijax - Jacksonville Shupe, Doug Mgr Tech Support 11/07/XX $XXXX - US
99. Unijax - Jacksonville Thompson, Bill Programmer/Analyst Mgr X 08/25/XX $XXXX - US
100. Unijax - Jacksonville Turner, Jesse Computer Operator 03/05/XX $XXXX - US
101. Unijax - Jacksonville Tye Jr., John Help Desk 10/02/XX $XXXX - US
102. Unijax - Jacksonville Voss, Jeff Project Analyst 11/14/XX $XXXX - US
103. Unijax - Jacksonville Ward, Pamela Help Desk 06/12/XX $XXXX - US
104. Unijax - Jacksonville Wilkerson, James Operations Dir X 09/01/XX $XXXX - US
105. Unijax - Jacksonville Wilson, Deniece Data Entry & Control 10/17/XX $XXXX - US
106. Unijax - Jacksonville Wurth, Karl Programmer/Analyst 03/15/XX $XXXX - US
</TABLE>
DRAFT December 21, 1993
ISSC/Unisource Confidential Schedule O Page 2 of 4
uniskdo
<PAGE>
Schedule O
Affected Employees and Personnel Transition
Section O-2
Affected Employees - Canada
<TABLE>
<CAPTION>
NO. LOCATION EMPLOYEE NAME POSITION DESCRIPTION XXXX DOH ANNUAL $
<S> <C> <C> <C> <C> <C> <C>
1. Canada - Montreal Cordell, Kim Sr Programmer/Analyst 11/13/XX $XXXX-CA
2. Canada - Montreal Filteau, Sylvie Programmer/Analyst 01/06/XX $XXXX-CA
3. Canada - Montreal Finoli, Patricia Systems Analyst 09/24/XX $XXXX-CA
4. Canada - Montreal Glatzfelder, Heinz Sys Dev Mgr, Fine Paper XXXX 11/22/XX $XXXX-CA
5. Canada - Montreal Lovegrove, Linda Programmer/Analyst 09/21/XX $XXXX-CA
6. Canada - Montreal Mouktan, Mohamed Programmer/Analyst 03/05/XX $XXXX-CA
7. Canada - Toronto Chung, Dominic Data Base Administrator 06/20/XX $XXXX-CA
8. Canada - Toronto Fielder, Jim Sr Programmer/Analyst 06/22/XX $XXXX-CA
9. Canada - Toronto Kanandreas, Dean Sr Programmer/Analyst 05/16/XX $XXXX-CA
10. Canada - West Agellon, Roger Head Operator 03/10/XX $XXXX-CA
11. Canada - West Clark, Eric Operator 01/01/XX $XXXX-CA
12. Canada - West Harvey, Cameron Computer Operator 07/04/XX $XXXX-CA
13. Canada - West Hong, Michael Systems Manager 06/13/XX $XXXX-CA
14. Canada - West Roger, Gary Ops Mgr, Info Sys XXXX 07/02/XX $XXXX-CA
15. Canada - West Samson, Emmanuel Computer Operator 11/20/XX $XXXX-CA
16. Canada - West Wu, Richard Data Processing Analyst 03/02/XX $XXXX-CA
</TABLE>
DRAFT December 21, 1993
ISSC/Unisource Confidential Schedule O Page 3 of 4
uniskdo
<PAGE>
Schedule O
Affected Employees and Personnel Transition
Section O-3
Personnel Transition
Major Events
Human Resource and Communications Tasks
<TABLE>
<CAPTION>
EVENT DATES
<S> <C>
Finalize plans - affected employees XXXX
(ISSC hire vs. Unisource retain)
ISSC Information Sessions for affected employees XXXX
. Contingent job offers made
. Employment process overview
. Benefits orientation
Receive employment applications form from employees XXXX
Schedule/conduct medical screening XXXX
Schedule/conduct individual manager/employee meeting XXXX
Deliver Employment Offer Letters XXXX
Acceptance offers due from employees XXXX
Begin employment processing XXXX
. Employees on ISSC compensation/benefits
New employee/manager orientation/education XXXX
. ISSC Corporate overview
. ISSC policies, practices, etc.
. Compensation program
. Performance planning/evaluation process
. Awards program
Managers enrolled in Corporate Management Training XXXX
</TABLE>
DRAFT December 21, 1993
ISSC/Unisource Confidential Schedule O Page 4 of 4
<PAGE>
ISSC / Unisource
Agreement for Information Technology Services [ARTWORK APPEARS HERE]
- --------------------------------------------------------------------------------
Schedule P
Procedures Manual Outline
1. Current Environment
Unisource site procedures for operations and AD/M Services in effect at each
Unisource Service Location prior to the Commencement Date will remain in
effect for that Unisource Service Location until implementation of the
Restructured Business Platform at that Unisource Service Location as
described in Schedule N.
2. Restructured Business Platform
ISSC is responsible for creating, updating and maintaining the ISSC
operations and AD/M Services Procedures Manual for the Restructured Business
Platform described in Schedule N, in consultation with Unisource and with
Unisource's prior approval of any Unisource obligations included therein.
ISSC shall include this documentation in the Procedures Manual:
a. reviewing operations documentation for adherence to operational
procedures and standards;
b. periodically distributing to Unisource employees, information bulletins
regarding new or changed operations and procedures;
c. updating and maintaining help desk documentation and procedures and
distributing to appropriate Unisource personnel; and
d. developing operations documentation for all Systems Software.
An example of a Procedures Manual index is depicted below:
1. Introduction
a. Purpose
b. Audience
2. Enforcement of Standards
3. Requirements Process
a. Introduction
b. What is REQMENT?
c. REQMENT Versus Service Request Documentation
d. When are REQMENTs required?
e. How does the REQMENT process work?
f. REQMENT Subscription List (Current Assignments)
4. Security
a. ISSC Data Center Security Requirements
5. Disaster Recovery
a. Overview
b. Critical Applications
c. Disaster Recovery Plan Outline
d. Operations
6. Production
a. Production Support
7. Customer System Hardware Service Call Procedures
a. Customer System Hardware (In Lexington)
b. Customer System Hardware (Remote)
c. Power-Up/Power-Down Procedures
d. Emergency Power-Down Sequence
e. Power-Up Sequence
8. Application Convention
a. Program IDs
b. Application Code Assignment Procedure
c. Production Data set Names
d. Examples of Production Data set
e. Label Information
f. JCL and PROCS
g. Examples of Naming Conventions
h. Reviewing JCL
i. JOB Class
j. JOB Statement Format
k. Critical Error Handling
l. Date - Compiled
m. Use of Live Test Data
n. Production Turnover Procedures - Operations
o. Production Turnover Procedures - Programming
p. Accessing Production Source Code
q. Reader Queue Dispositions
r. Output Queue Class
s. Output Queue Disposition
t. Report Distribution
December 22, 1993
ISSC/Unisource Confidential Schedule P Page 1 of 3
<PAGE>
Schedule P
Procedures Manual Outline
9. Help Desk
a. Scope
b. Workstation Environment
c. Help Desk Procedures Documentation
d. Escalation Standards
e. Executive Alert Process
f. Alert Notification - Phase I
g. Alert Notification - Phase II
h. Alert Process Overview
i. Alert Process Flowcharts
j. Alert Responsibilities
k. Customer Alert Criteria
l. Notification Guidelines
m. Alert Open/Update/Closed Document Distrib-
ution
10. Technical Support
a. VAX Operating System
b. UNIX Operating System
c. Customer Procedures and Observances
d. Building A New SCP
e. Standalone Procedure for DDR DASD to Tape
f. Miscellaneous Support Procedures
g. Technical Observances
11. Network Configurations
a. Lexington to Customer Connection
b. Network Support
12. Configuration Management
a. Scope
b. Objectives
c. Layouts
13. Storage and Data Management Processes
a. Tape Backup
b. Database Administration
14. XXXX XXXX XXXX
a. Service Level Management
b. Maintenance Service
c. Disaster Recovery Services
d. Security
e. Problem/Change Management
1) Problem Management
a) Introduction
b) Related Publications
c) Mission
d) Scope
e) Objectives
f) Problem Definition
g) Problem Management Process
h) Problem Process Flow
i) Problem Record Flow
j) Process Overview
k) Recognition
l) Reporting
m) Problem Entry
n) Problem Determination
o) Severity Definitions
p) Changing Severity
q) Update and Exception Criteria
r) Update Criteria
s) Exception Criteria
t) Abeyant Problems
u) Target Date - Definition
v) SMC Review (target dates)
w) Outage Reporting
x) Problem Assignment
y) Problem Acceptance
z) Problem Reassignment
aa) Problem Notification
ab) Problem Documentation
ac) Bypass And Recovery
ad) Problem Resolution
ae) Problem Closure
af) Problem Monitoring/Escalation
ag) Escalation
ah) Responsibilities
ai) Department Coordinator Responsibilities
aj) SMC Coordinator Responsibilities
ak) Problem Management Reports
al) Problem Meetings
2) Change Management
a) Introduction
b) Change Definition
c) Change Management Objectives
d) Change Management Process
e) Change Management - Basics
f) Change Entry
g) Change Request Record
h) Required Field
i) Technical Assessment
j) Business Assessment
k) Change Scheduling
l) Change Approval
m) Change Testing
n) Installing Changes
o) Change Outage Recording
p) Reporting
q) Change Management Process Flow
(Graphic)
r) Change Management Procedures
s) Change Management Procedures
t) When Is A Change Request Required?
u) Requesting A Change
v) Maintenance Changes
w) Low Impact, Quick Change
x) Change Checklist
y) Operations Installation
z) Change Implementation Completion
aa) Change Backout Guidelines
ab) Post Change Review
ac) Operations Responsibilities
ad) Determining Failed Changes
ae) Reporting Failed Changes
f. Recovery Management
1) Introduction
2) Recovery Management Process
3) SMC Overview
4) SMC INTERFACES
5) Application Recovery
6) Software Support
December 22, 1993
ISSC/Unisource Confidential Schedule P Page 2 of 3
<PAGE>
Schedule P
Procedures Manual Outline
g. Batch Processing Management
h. Online Processing Management
i. Performance Management
j. Capacity Management
15. Legend of Assignees
16. Hardware Listing As Of / /
a. Hardware in Lexington
b. Hardware at Remote Locations
17. Customer Software Requirements by Application
Versus System
a. Application Requirements
b. System Software
18. Customer Applications
a. List of Customer Applications
19. Application Availability
a. On-line and Batch Time Frames
20. Disaster Recovery Plan Outline
a. Overview of the Disaster Recovery Plan
b. Disaster Definition & Declaration Process
c. Disaster Definition
d. Disaster Declaration
e. Crisis Management Team
f. Management Action Team
g. Company Information & Mission Statement
h. Vital Business Processes
i. Applications
j. Priorities
k. Ownership
l. Timings
m. Team Responsibilities
n. Crisis Management Team
o. Systems Support & Operations Management Action Team
p. Application Owner Recovery Teams
q. Contacts
r. Backup
s. Skills
t. Backup & Recovery Plans for Computing Systems Support Functions
u. Vital Records Storage & Retrieval
v. Hardware & Teleprocessing Environment
w. Operation Systems & Software
x. Data Base Management
y. Operations
z. Application Support
aa. Security
ab. Development Support
ac. PCs, LANs, Voice Communications, etc
ad. Backup & Recovery Plans for Each Vital Business Process & Application
ae. Process Description
af. Key Contacts
ag. Notification Procedures
ah. Critical Suppliers of Services
ai. Service Level Agreements
aj. Critical Dependencies
ak. Critical Requirements Real Time & Batch
al. RIM & Vital Records Requirements
am. Recovery Test Criteria & Results
an. Application Backup Procedures
ao. Application Recovery & Control Procedures
ap. Return to Permanent Site
aq. Business Recovery Testing Procedures
ar. Operational Test
as. Simulation Test
at. Business Recovery Implementation Plan
au. Other Procedures & Agreements
av. Disaster Prevention Information
aw. Recovery Control Center Procedures
ax. Plan Maintenance Procedures
ay. Tracking & Reporting Procedures
az. Agreements With Recovery Site, Suppliers of Services, etc
ba. Transportation
December 22, 1993
ISSC/Unisource Confidential Schedule P Page 3 of 3
<PAGE>
ISSC / Unisource
Agreement for Information Technology Services [ARTWORK APPEARS HERE]
- --------------------------------------------------------------------------------
Schedule Q
Human Resources Claims
There are no claims as of the Commencement Date.
December 22, 1993
ISSC/Unisource Confidential Schedule Q Page 1 of 1
<PAGE>
ISSC / Unisource
Agreement for Information Technology Services [ARTWORK APPEARS HERE]
- --------------------------------------------------------------------------------
Schedule R
XXXX XXXX XXXX/ISSC Data Center Platform
The quantities and/or machine types and models may change as the Restructured
Business Platform requirements change and will be subject to the Change
Management Process.
ISSC Data Center Platform
QTY ITEM NUMBER DESCRIPTION
XXXX XXXX-HA XXXX, Model XXXX AXP Base Server System
XXXX XXXX-MD Open XXXX SHP Upgrade Module for XXXX upgrades
XXXX XXXX-BA XXXX slot Plug-in Unit
XXXX XXXX-DA XXXX Memory (XXXX per system)
XXXX XXXX-6C XXXX XXXX Unlimited User License
XXXX XXXX-AA XXXX E/N Open XXXX License for XXXX
XXXX XXXX-AA XXXX F/F Upgrade for XXXX
XXXX XXXX-H8 XXXX Media & Extended Doc on CD Rom
XXXX XXXX-GZ XXXX Extended Documentation
XXXX XXXX-H8 Layered Product Media/DOC on CD Rom
XXXX XXXX-C8 XXXX Condist/Conold CD Rom Services
XXXX XXXX-AA OpenVHS Cluster License for XXXX
XXXX XXXX-AA XXXX Shadowing License for XXXX
XXXX XXXX-AA XXXX Performance Data Collector License
XXXX XXXX-AA XXXX Software Distribution VHS License
XXXX XXXX-AA XXXX Optimizer License
XXXX XXXX-AA XXXX Manager For Dist. System Driver (AMDS)
XXXX XXXX-AC XXXX 4000 Model 90
XXXX XXXX-HA XXXX Monitor, XXXX x XXXX Resolution
XXXX XXXX-EM XXXX internal SCSI Disk
XXXX XXXX-TA XXXX Cartridge Tabletop Tape System
XXXX XXXX-09 Tape XXXX Cable
XXXX XXXX-H5 XXXX Media and Base Documentation, TK50
XXXX XXXX-EA XXXX XXXX XXXX Async Server
XXXX XXXX-LA XXXX XXXX Bridge
XXXX-3B XXXX Console Licence
XXXX-H5 XXXX Console Media and Documentation
XXXX-GZ XXXX Console Documentation Kit
XXXX-E5 XXXX Console Distribution Service, 1 Year
XXXX-AA XXXX Cluster License
XXXX-AA XXXX Manager For Dist. System Console
XXXX-H5 XXXX Media and Documentation
XXXX-H5 XXXX Documentation Kit
XXXX-H5 XXXX Distribution Services
XXXX-AA XXXX Network Manager 400 License
XXXX-H5 XXXX NH Media and Documentation, TK50
XXXX-GZ XXXX NM Documentation Kit
XXXX-E5 XXXX NM Distribution Services, 1 Year
XXXX-AA XXXX License
XXXX-H5 XXXX Media and Documentation, TK50
XXXX-GZ XXXX Documentation Kit
XXXX-E5 XXXX Distribution Service, 1 Year
XXXX-AA Terminal Server Manager (TSM) License
XXXX-H5 TSH Media and Documentation
XXXX-GZ TSH Documentation Kit
XXXX-E5 TSH Distribution Service, 1 Year
XXXX-AA XXXX Extended Lan Manager
XXXX-H5 XXXX Media and Documentation
XXXX-GZ XXXX Documentation Kit
XXXX-E5 XXXX Distribution Service, 1 Year
XXXX-AA XXXX Performance Advisor License
XXXX-H5 XXXX PA Media and Documentation
XXXX-GZ XXXX PA Documentation Kit
XXXX-E5 XXXX PA Distribution Service, 1 Year
XXXX-AA XXXX Capacity Planner License
XXXX-H5 XXXX CP Media and Documentation
XXXX-GZ XXXX CP Documentation Kit
XXXX-E5 XXXX CP Distribution Service, 1 Year
XXXX-AC XXXX Controller
XXXX-AC XXXX Star Coupler
XXXX-AD XXXX Upgrade for XXXX-AC
XXXX-45 CI Interconnect Cable
XXXX-AA XXXX XXXX Disks
XXXX-AF XXXX XXXX Array Controller, 32HB Read Cache
XXXX-MB Controller Drive Shelf for XXXX
XXXX-JA SCSI Drive Shelf for XXXX
XXXX-VA XXXX XXXX SCSI Drive (XXXX)
XXXX-03 XXXX SCSI Cable
XXXX-VA XXXX Solid State SCSI-2 Disk
XXXX-AE XXXX Unattended Tape System.
XXXX-09 XXXX Cable for Tape System
XXXX-BC XXXX XXXX Concentrator Box
XXXX-TA XXXX Copper Concentrator Module
XXXX-AA XXXX SAS Adapter
XXXX-30 XXXX Fiber Optic Cable
XXXX-LA XXXX, DAS
XXXX-AA XXXX Channel Telnet LAT Support
XXXX-AA XXXX Channel Telnet LAT Support
XXXX-BA Terminal, XXXX (includes 1 console)
XXXX-CA XXXX Printer
XXXX-CA XXXX Laser Printer (XXXX)
XXXX-AA XXXX, 2 Parallel/4 Async ports
XXXX-GZ XXXX Documentation (Hardcopy)
XXXX-KZ XXXX media and documentation service
XXXX-AA XXXX Adapter
XXXX- XXXX Connector
December 22, 1993
ISSC/Unisource Confidential Schedule R Page 1 of 3
<PAGE>
Schedule R
Restructured Business Platform/ISSC Data Center Platform
XXXX XXXX System
Following is a listing of the equipment configuration that will be provided for
the fees specified in the Supplement.
1. Hardware
a. XXXX
1) XXXX XXXX Series XXXX Model XXXX
a) XXXX memory
b) XXXX disk drive
c) XXXX DAT Tape
d) XXXX ports
2) XXXX Terminal Equipment
a) XXXX Network Controller
b) XXXX XXXX Units
c) XXXX LDS/ANSI Vehicle Terminals
d) XXXX Handheld Standard Scanners
e) XXXX Long Range Scanners
f) XXXX batteries
g) XXXX chargers
h) XXXX - antennae
i) - miscellaneous cables
3) XXXX
a) XXXX LJ4 Laser Printers
b) XXXX Color Workstations
c) XXXX Long Range
d) XXXX Label Printers
e) XXXX Printers - type TBD
f) XXXX Diagnostic Modem
g) XXXX 4-channel
b. XXXX
1) XXXX Series XXXX Model XXXX
a) XXXX memory
b) XXXX disk drive
c) XXXX DAT Tape
d) XXXX ports
2) XXXX Terminal Equipment
a) XXXX Network Controller
b) XXXX Radio Frequency Units
c) XXXX LDS/ANSI Vehicle Terminals
d) XXXX Handheld Standard Scanners
e) XXXX Long Range Scanners
f) XXXX batteries
g) XXXX chargers
h) XXXX - antennae
i) - miscellaneous cables
3) Peripherals
a) XXXX Laser Printers
b) XXXX Color Workstations
c) XXXX Long Range
d) XXXX Label Printers
e) XXXX Printers - type TBD
f) XXXX Diagnostic Modem
g) XXXX 4-channel
c. XXXX
1) Compaq XXXX/XXXX
a) XXXX memory
b) XXXX disk drive
c) XXXX serial ports
2) Peripherals
a) XXXX Laser Printers
b) XXXX Color Workstations
c) XXXX Long Range
d) XXXX Label Printers
e) Printers - type TBD
f) XXXX Diagnostic Modem
g) XXXX port async adapter
d. XXXX
1) Compaq XXXX/XXXX
a) XXXX memory
b) XXXX disk drive
c) XXXX serial ports
2) XXXX
a) XXXX Laser Printer
b) XXXX Workstations
c) XXXX Long Range
d) XXXX Label Printers
e) XXXX Printers - type TBD
f) XXXX Diagnostic Modem
g) XXXX port async adapter
NOTE: Hardware configurations pending IBM products safety review
2. Software
a) XXXX:
1) 1 - Hewlett Packard HP-UX 9.0 64 User License
2) 1 - Hewlett Packard ARPA Services/800 (TCP/IP)
3) 1 - LVH Mirroring Software
4) 1 - PROGRESS Query/Report 6.2L
5) 1 - RIMS 3.0
b) XXXX:
1) 1 - Hewlett Packard HP-UX 9.0 32 User License
2) 1 - Hewlett Packard ARPA Services/800 (TCP/IP)
3) 1 - LVH Mirroring Software
4) 1 - PROGRESS Query/Report 6.2L
5) 1 - RIMS 3.0
c) XXXX:
1) XXXX Unix version XXXX
2) XXXX TCP/IP XXXX
3) XXXX - PROGRESS Query/Report XXXX
4) XXXX - RIMS XXXX
d) XXXX
1) XXXX - SCO Unix XXXX
2) XXXX - TCP/IP XXXX
3) XXXX - PROGRESS Query/Report XXXX
4) XXXX - RIMS XXXX
December 22, 1993
ISSC/Unisource Confidential Schedule R Page 2 of 3
<PAGE>
Schedule R
Restructured Business Platform/ISSC Data Center Platform
XXXX System
Following is a listing of the equipment configuration that will be provided for
the fees specified in the Supplement.
1. Hardware
a. PC Tower - XXXX with XXXX BUS, XXXX Motherboard, BIOS
b. XXXX internal RAM
c. XXXX - XXXX Ports
d. XXXX - Key AT - Style Keyboard BTC
e. House (XXXX) - House Systems
f. XXXX Floppy Drive - High Density - XXXX XXXX
g. XXXX Floppy Drive - High Density - XXXX MB XXXX
h. XXXX Hard Drive - XXXX
i. XXXX Board & Text Monitor - XXXX Screen - XXXX
j. Printer (XXXX) - TBD
k. XXXX Disk Drive - XXXX - XXXX
l. Map Monitor - XXXX - XXXX
m. XXXX Board - XXXX - XXXX - XXXX
n. XXXX Tape Backup - XXXX
NOTE: Hardware configuration pending IBM product safety review.
2. Software
a. XXXX System XXXX (XXXX)
b. XXXX XXXX (includes XXXX for XXXX)
c. XXXX Finder XXXX
d. XXXX and XXXX XXXX
e. XXXX (territory & day of wk) XXXX
f. XXXX Maps
g. XXXX MS DOS XXXX
h. XXXX
December 22, 1993
ISSC/Unisource Confidential Schedule R Page 3 of 3
<PAGE>
ISSC / Unisource
Agreement for Information Technology Services [ARTWORK APPEARS HERE]
- --------------------------------------------------------------------------------
Schedule S
Key Personnel
Unisource
1. John McKiernan - VP Systems & Administration and Unisource Senior I/S
Executive
2. Rich Hrapczynski - Director of MIS and Unisource I/S Executive
ISSC
1. Sean Ryan - Project Executive
2. Manager of Operations - Current Environment
3. Manager of Operations - Restructured Business Platform
4. Project Manager - Business Process Reengineering
5. Project Manager(s) - Systems Development
6. Project Manager(s) - Systems Implementation
Ernst & Young (ISSC Subcontractor)
1. Tony Madrigale - E&Y Project Executive
XXXX XXXX XXXX, Inc. (XXXX) (ISSC Subcontractor)
1. (TBD) - XXXX Project Manager
Unisource Operations Personnel (Current Environment)
1. Jerry Bernstein - VP Info Sys
2. Bernie Wildschutte - DBM
3. Dan Moritz - System & Programming Mgr
4. John Nielson - Business Analyst
5. Michele Feist - Ops Mgr
6. Brandi Schermacher - Computer Ops
7. Jody Schell - Computer Ops
8. Ray Gagliardi - MIS Mgr
9. Karl Bruce - VP I/S
10. Steve Olroyd - Project Manager
11. Darrin Tessmer - Technical Writer & Training
12. Bill Weart - I/S Director
13. Dan Chapin - System's Analyst
14. Eric Boshart - Contract Programmer
15. Tina Uyetani - System Admin
16. Rod Bryan - Contract Programmer
17. Allan McDermott - Network PC Admin
18. Velva Nystrom - Training Coordinator
19. Arnie Williamson - Info Center Coordinator
20. Art Philips - CIO
21. Delta Cole - Designated Backup
22. Dave Eckert - Contract Programmer
23. Dale Parker - Contract Programmer
24. Paul Badorf - Contract Programmer
25. Brenda Murray - Contract Programmer
December 22, 1993
ISSC/Unisource Confidential Schedule S Page 1 of 1
<PAGE>
ISSC / Unisource
Agreement for Information Technology Services [ARTWORK APPEARS HERE]
- --------------------------------------------------------------------------------
Schedule T
XXXX License Agreement
License Agreement (this "Agreement") dated as of January 1, 1994, by and between
Unisource Worldwide Inc., with an office at 825 Duportail Road, Wayne,
Pennsylvania, 19087 ("Unisource" or "Customer") and XXXX XXXX Inc., with an
office at XXXX, XXXX, XXXX, XXXX ("XXXX").
Whereas, Unisource is in the business, among others, of selling or distributing
printing papers, industrial papers, packaging equipment and films, janitorial
and maintenance supplies; and
Whereas, XXXX is in the business of developing, licensing, customizing and
maintaining computer application software intended to be used to perform
operations and support functions for distribution businesses such as Unisource;
and
Whereas Unisource desires to restructure and consolidate its overall business
and information technology operations, including the implementation of a new
consolidated, company-wide distribution system incorporating certain XXXX
software; and
Whereas, Unisource wishes to license certain XXXX software for inclusion in its
new business platform; and
Whereas, XXXX is willing to license such XXXX software as more fully described
in this Agreement on the terms and conditions set forth herein;
NOW THEREFORE, the parties agree as follows:
Table of Contents
Section Title Page
1.0 Definitions .................................................... 2
1.1 License Definitions ........................................... 2
2.0 XXXX Product License ........................................... 2
3.0 Ownership and Confidentiality .................................. 2
4.0 Intellectual Property Rights ................................... 2
5.0 Payment ........................................................ 3
6.0 Taxes .......................................................... 3
7.0 Representations and Warranties ................................. 3
8.0 Intellectual Property Indemnity ................................ 3
9.0 Limitations of Liability ....................................... 4
10.0 Termination .................................................... 4
11.0 Noncompetition ................................................. 4
12.0 General Provisions ............................................. 4
12.1 Governing Law ................................................. 4
12.2 Entire Agreement .............................................. 4
12.3 No Waiver ..................................................... 5
12.4 Partial Invalidity ............................................ 5
12.5 Interpretation ................................................ 5
12.6 Notice ........................................................ 5
12.7 Assignment .................................................... 5
12.8 Relationship .................................................. 5
12.9 Publicity ..................................................... 5
12.10 Covenant of Further Assurances ................................ 5
12.11 Hiring of Employees ........................................... 5
13.0 Additional License Provisions .................................. 5
December 22, 1993
ISSC/Unisource Schedule T Page 1 of 6
<PAGE>
1.0 Definitions
1.1 License Definitions
a) "Affiliate" refers to divisions or Customer of business entities of which
Customer owns a controlling interest. Customer includes Affiliates of
Customer.
b) "XXXX Product" refers to a software product, including its object and
source code format, and all documentation related thereto created and
produced by XXXX and its subsidiaries worldwide. Software media is not part
of the XXXX Product.
c) "Licensed Product" refers to a XXXX Product identified in Attachment A.
Licensed Products and described in Exhibit A thereto Licensed Product
Descriptions and any modifications to such product for Customer.
d) "Total XXXX Users" refers to the total of all interactive, on-line,
simultaneous users of a DAI Product at any point in time across all
processors.
2.0 XXXX Product License
2.1 XXXX hereby grants to Unisource a non-exclusive, perpetual, fully paid up,
worldwide right and license to use, execute, perform, display, modify, and
prepare derivative works of the Licensed Products. The rights and licenses
herein granted apply to source and object versions of the Licensed Products
and all product documentation for the Licensed Products. The rights and
licenses herein granted are limited to internal use by Unisource throughout
its worldwide business operations both future and current. No additional
fees shall be due to XXXX for (1) additional users until the Total XXXX
Users exceeds XXXX or (2) based upon any business volumes of Unisource
Operations.
2.2 Customer shall provide XXXX with written notification identifying the
processors on which Customer executes the Licensed Product. Such processors
are referred to as Licensed Processors. The licenses granted herein do not
impose any restriction on the number, type or configuration of the
processors on which Customer executes the Licensed Product; provided that
Customer's use complies with the limitations set forth in Sections 2.1.
2.3 Customer may load, copy, or transmit a Licensed Product only as necessary
for execution on a Licensed Processor, except that Customer may make up to
four archival copies of a Licensed Product as backup.
2.4 The rights and licenses granted to Unisource in this article 2.0 include
the right and license for Unisource to provide access to the Licensed
Products and/or grant sub-licenses of some or all of the rights herein
granted to Unisource to any third party authorized to provide services to
Unisource, subject only to the restrictions contained in this Agreement. In
addition, Unisource may provide such access to the Licensed Products to its
suppliers and customers as may be appropriate to operate its business with
Customer.
3.0 Ownership and Confidentiality
3.1 All Licensed Products shall remain the property of XXXX or its licensors.
Unisource shall receive no ownership interest in and to the Licensed
Products, and shall have only those rights to the Licensed Products
contained in this Agreement.
3.2 Unisource shall protect the source code version of the licensed products in
accordance with the confidentiality agreement between the parties. Any
third party to whom access to source code versions of the Licensed Products
is provided by Unisource shall agree to the same terms for the protection
of such source code as are included in the confidentiality agreement prior
to such third party's access to the source code version of the Licensed
Products. Customer's license to use the source code format of a Licensed
Product is subject to the provisions of Section 2 plus the following
provisions. Customer shall be responsible to secure and audit access to the
source code. Access shall be limited to as few Customer's locations and
employee's as necessary, consistent with the obligation to secure and audit
access. The audit record should include at a minimum, full identification
of persons who have been given access to the source code and when such
access was available. The license to uses the source code includes the
right to modify the source code in accordance with DAI programming
standards.
4.0 Intellectual Property Rights
4.1 Customer agrees that any inventions, ideas or original works of authorship
(referred to herein as "Intellectual Work") in whole or in part conceived,
made, or funded by Customer, and which would constitute derivative works of
XXXX Products or XXXX Information, shall belong exclusively to XXXX and
shall be deemed to be part of the XXXX Products and Information for
purposes of this Agreement.
4.2 When XXXX is not deemed to be the original author or owner of such
Intellectual Work, Customer hereby irrevocably assigns to XXXX any and all
rights, title, and interest which Customer now has or hereafter acquires in
such Intellectual Work, including the right to prepare and distribute
derivative works. Customer waives all copyright rights, including moral
rights.
4.3 During the term of this Agreement and at any subsequent time, Customer
shall, at XXXX expense, assist in the preparation of any documents required
to evidence XXXX ownership or the assignment to XXXX of such Intellectual
Work and assist XXXX to obtain, protect, and enforce intellectual property
rights and other rights relating to such Intellectual Work. If for any
reason XXXX is unable, after reasonable effort, to secure Customer's
signature on any document needed to obtain, protect, or enforce any such
December 22, 1993
ISSC/Unisource Schedule T Page 2 of 6
<PAGE>
rights. Customer hereby irrevocably appoints XXXX to act on Customer's
behalf to execute documents and to do all other lawful acts to obtain,
protect, and enforce any such rights.
4.4 Customer specifically acknowledges that its benefits under this Agreement
are full payment for such Intellectual Work and that such benefits are in
lieu of any royalty payments.
4.5 Customer shall provide XXXX with the same rights to Intellectual Work
contained in this Section 4.0 in relation to Customer's employees as XXXX
has in relation to Customer.
5.0 Payment
Payment of the Licensed Product fees shall be in the amount set forth in
Attachment B in accordance with the schedule set forth therein.
6.0 Taxes
All prices, fees, and other expenses hereunder are exclusive of all sales,
value-added, personal property, and other taxes and are exclusive of all custom
duties and other charges which may result from the transaction herein, including
taxes or charges based upon the sale, license, delivery, installation, use, or
maintenance of hardware or software or upon the provision of services. Such
taxes and charges shall be the responsibility of and paid by Customer, except
for taxes based on XXXX net income.
7.0 Representations and Warranties
7.1 XXXX represents and warrants that:
a) it is the owner of the Licensed Products or, if it is not the owner of
the Licensed Products, it has sufficient right and interest in and to
the Licensed Products to grant the licenses granted herein; and
b) the licenses herein granted will not infringe any valid U.S. or
Canadian intellectual property right.
7.2 Except as stated in this section, XXXX makes no other warranties in respect
of the Licensed Products and explicitly disclaims all other warranties,
express or implied, including the implied warranties of merchantability and
fitness for a specific purpose. XXXX does not represent or warrant that the
Licensed Products will be error free or that operation of the Licensed
Products will be uninterrupted.
8.0 Intellectual Property Indemnity
8.1 XXXX shall indemnify Unisource from, and defend Unisource against, any
liability or expenses (including attorney's fees) arising out of or
relating to any Claim (1) that the Licensed Products or any modifications
to Licensed Products performed by DAI infringe upon the proprietary rights
of any third party (except as may have been caused by a modification by
Unisource or a third party acting for Unisource or Unisource's combination,
operation or use with devices, data or programs furnished by Unisource or
(2) related to XXXX use of any Licensed Product or Intellectual Work (a
Claim).
8.2 If any Claim is commenced against Unisource under Section 8.1 notice
thereof shall be given to XXXX as promptly as practicable. After such
notice, if XXXX shall acknowledge in writing to Unisource that this
Agreement applies with respect to such Claim, then XXXX shall be entitled,
if it so elects, in a notice delivered to Unisource not less than 10 days
prior to the date on which a response to such Claim is due, 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 XXXX sole
cost and expense. Unisource shall cooperate in all reasonable respects with
DAI and its attorneys in the investigation, trial and defense of such Claim
and any appeal arising therefrom; provided, however, that Unisource 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 XXXX shall be entered into without the consent
of Unisource. After notice by XXXX to Unisource of its election to assume
full control of the defense of any such Claim. XXXX shall not be liable to
Unisource for any legal expenses incurred thereafter by Unisource in
connection with the defense of that Claim. If XXXX does not assume full
control over the defense of a Claim subject to defense as provided in this
Section 8.0, XXXX may participate in such defense, at its sole cost and
expense, and Unisource shall have the right to defend the Claim in such
manner as it may deem appropriate, at the cost and expense of XXXX.
8.3 If an injunction is obtained preventing Customer's exercise of the licenses
granted herein, XXXX shall take one of the following actions: obtain for
Customer the right to continue using such Licensed Product in accordance
with the license granted herein; replace or modify such Licensed Product so
it becomes non-infringing, providing that the License Product as so
replaced or modified continues to meet the Customer's Requirements; direct
Customer to cease the infringing use, whereupon Customer may terminate the
license granted herein; or XXXX terminate the license granted herein. Upon
such termination by Customer or XXXX, Customer shall return such Licensed
Product to XXXX in accordance with Section 10.3 and XXXX shall refund the
paid XXXX Product license fee set forth in Attachment B for the respective
XXXX Product.
8.4 XXXX shall have no obligation or liability with respect to such Claims if
the alleged infringement is based upon: Customer's use of a Licensed
Product in breach of this Agreement if such Claim would have been avoided
by use of the product in accordance with this Agreement; Customer's use of
a Licensed Product contrary
December 22, 1993
ISSC/Unisource Schedule T Page 3 of 6
<PAGE>
to the product's documentation if such Claim would have been avoided by use
of the product in accordance with the documentation; combination of a
Licensed Product with products not furnished by XXXX if such Claim would
have been avoided by the exclusive use of the XXXX furnished products;
modification of the XXXX Product by anyone other than XXXX if such Claim
would have been avoided by use of the XXXX Product without such
modifications; or modification of the XXXX Product in accordance with
detailed design instructions provided by Customer.
9.0 Limitation of Liability
9.1 For any cause of action, whether in contract or tort, including intentional
and negligence causes of action, and under any circumstances, including a
remedy herein failing of its essential purpose, the total liability of XXXX
shall be limited as follows:
9.1.1 Shall not be liable for special, indirect, incidental, or
consequential damages, arising out of, or in connection with, or in
reliance on this Agreement or the provision of products or services
by XXXX,
9.1.2 Shall not be liable for any damages whatsoever resulting from loss of
use, loss of data, or loss of profits; and
9.1.3 Shall not be liable in excess of XXXX.
9.2 The foregoing does not apply to (1) personal injury or damage to property
caused by XXXX negligence, (2) the indemnity under Article 8.0, and (3)
Noncompetition under Article 11.0.
9.3 Each provision of this Agreement which is a limitation of liability; a
disclaimer of warranties, representations or conditions; or an exclusion of
damages is intended by the parties to be severable and independent of any
other provision.
9.4 Customer acknowledges and agrees that the fees for the products and
services provided herein reflect the allocation of risks and the
limitations of XXXX liability provided herein.
10.0 Termination
10.1 The licenses granted herein are perpetual, unless terminated as provided
herein, and survive any other termination under this Agreement. XXXX rights
to Intellectual Work acquired prior to any termination as a result of
Section 10.2 are perpetual and survive any termination under this
Agreement.
10.2 Sections 4.1 and 4.2 of this Agreement terminate upon ISSC's termination of
the Maintenance Agreement with respect to the Intellectual Work created by
Unisource or any of its subcontractors after such termination.
10.3 If either party commits a material breach of its obligations under this
Agreement, the complaining party shall provide written notification to the
defaulting party, stating in detail what the breach is and what is required
to cure the breach. The defaulting party shall have 30 days to cure the
breach or otherwise satisfy the complaining party. If the defaulting party
fails to cure the breach or otherwise satisfy the complaining party within
30 days, the complaining party shall have the right to terminate this
Agreement in ten days after written notification, stating in detail the
extent of the failure to cure.
10.4 In the event the licenses granted herein are terminated, Customer agrees to
immediately cease all use of Licensed Products and return or destroy all
copies of all XXXX Products and Information as directed by XXXX and to
provide written certification to XXXX of having complied with XXXX
direction.
10.5 Termination of this Agreement shall be without prejudice to all accrued
rights and remedies, all of which remain subject to all the limitations of
liability; disclaimers of warranties, representations or conditions; and
exclusion of damages of this Agreement.
11.0 Noncompetition
XXXX agrees, in consideration of the license fees paid hereunder, not to license
the Licensed Products to the XXXX or the XXXX XXXX XXXX now or hereafter owned
by XXXX (to include XXXX XXXX), XXXX XXXX (to include XXXX), and XXXX
Corporation (to include XXXX); excluding licenses to XXXX XXXX, an affiliate of
XXXX XXXX, for the products licensed to XXXX, as of the Effective Date of this
Agreement for direct users not including XXXX affiliates or use for ResourceNet
International.
12.0 General Provisions
12.1 Governing Law
Any cause of action (whether in contract or tort, including intentional and
negligence causes of action) arising from or related to the transactions
contemplated by this Agreement shall be governed by the laws of the State of New
York, without regard to its choice of law principles. XXXX and Customer consent
to the personal jurisdiction of the federal courts of the Southern District of
New York.
12.2 Entire Agreement
XXXX and Customer acknowledge that they have not been induced into this
Agreement by any condition, representation, or warranty not set forth in this
Agreement. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior or
contemporaneous proposals, negotiation, and all other communications (oral and
written) between the parties with respect to the subject matter hereof. Any
modifications to this Agreement are invalid unless confirmed in a writing which
is signed by an authorized officer of Customer and XXXX Vice President of
Finance and Administration.
December 22, 1993
ISSC/Unisource Schedule T Page 4 of 6
<PAGE>
12.3 No Waiver
The failure of any party at any time to require performance by another party of
any provision of this Agreement shall in no way affect the right of such party
to require performance of that provision. Nor shall such failure be construed as
a waiver of any continuing or succeeding breach of such provision, a waiver of
the provision itself, or a waiver of any right under this Agreement.
12.4 Partial Invalidity
If any provision of this Agreement is held invalid, such invalidity shall not
affect other provisions of this Agreement which can be given effect without the
invalid provisions. Provisions deemed to be invalid shall be reformed to the
minimum extent necessary to render them valid at such time and, to the extent
possible, in accordance with the original intent of the parties.
12.5 Interpretation
"Include," "includes," and "including" shall be interpreted as introducing a
list of examples which do not limit the generality of the concept they
illustrate. Where reference is made to XXXX Product," a Licensed Product is a
XXXX Product. Where reference is made to "Licensed Product," a Licensed Product
includes the respective XXXX Product. "Modification" to the product includes
corrections to the product, additions to the product, and translations of the
product. "Intellectual property rights" refers to patent right, copyright or
trade secret right. "U.S. intellectual property rights" refers to such rights
under the laws of the United States or any of its States.
12.6 Notice
Any notice given pursuant to this Agreement shall be in writing, shall state
that it is a notice given pursuant to this Agreement, and shall be sent by
certified mail to the address indicated below:
If to Unisource:
825 Duportail Road
Wayne, PA 19087
If to XXXX:
XXXX XXXX
XXXX XXXX
Attention: General Counsel
12.7 Assignment
XXXX shall not assign this Agreement or any amounts payable pursuant to this
Agreement without the consent of Unisource. Unisource shall not assign this
Agreement without XXXX consent, except within the Unisource Enterprise including
parents and Affiliates or part of a business reorganization. The consent of one
party to any assignment shall not (a) relieve the other party of its
responsibility for the performance of any other of its obligations under this
Agreement or (b) constitute the consenting party's consent to further the
assignment.
12.8 Relationship
The relationship between the parties shall be that of independent contractor and
nothing contained in this Agreement shall create or imply an agency relationship
between XXXX and Unisource.
12.9 Publicity
Each party shall (1) submit to the other all advertising, written sales
promotion, press releases and other publicity matters relating to this Agreement
in which the other party's name or mark is mentioned or language from which the
connection is said or mark may be inferred or implied and (2) not publish or use
such advertising, sales, promotion, press releases or publicity matters without
the other party's consent.
12.10 Covenant of Further Assurances
Unisource and XXXX covenant and agree that, subsequent to the execution and
delivery of this Agreement and without any additional consideration, each of
Unisource and XXXX will execute and deliver any further legal instruments and
perform any acts which are or may become necessary to effectuate the purposes of
this Agreement.
12.11 Hiring of Employees
Neither party may at any time directly solicit and hire any employees of the
other party except after such employee is fired by such party or terminates his
or her employment with such party without the intention of accepting
employment from the other party. Provided however, either arty may at any time
hire any employee of the other party that responds to an indirect solicitation
(e.g., through a newspaper, magazine or trade journal advertisement); provided
there has been no direct solicitation of such employee.
13.0 Additional License Provisions
If XXXX is no longer in existence and XXXX has not transferred its right to
license XXXX Products to any other entity in existence then the XXXX on the XXXX
XXXX of XXXX shall no longer be applicable.
December 22, 1993
ISSC/Unisource Schedule T Page 5 of 6
<PAGE>
Accepted by: Accepted by:
Unisource Worldwide, Inc. XXXX, Inc.
By By
---------------------------------- ----------------------------------
Authorized Signature Authorized Signature
- ------------------------------------- -------------------------------------
Name (Type or Print) Date Name (Type or Print) Date
December 22, 1993
ISSC/Unisource Schedule T Page 6 of 6
<PAGE>
ISSC / UNISOURCE [ARTWORK APPEARS HERE]
AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES
- --------------------------------------------------------------------------------
Schedule U
XXXX Services Agreement
Services Agreement dated as of January 1, 1994 (this "Agreement") by and between
Integrated Systems Solutions Corporation, with an office at 44 South Broadway,
White Plains, New York, 10601 ("ISSC" or "Customer") and XXXX Inc. with an
office at XXXX, XXXX, XXXX ("XXXX").
Whereas, ISSC has entered into a certain agreement with Unisource Worldwide,
Inc. ("Unisource"), for, among other things, the integration, customization,
modification, and operation of a new business platform (the "Unisource
Operations Agreement") based in part on certain XXXX software licensed to
Unisource as Licensed Products under a License Agreement between XXXX and
Unisource dated January 1, 1994 (the "Unisource License Agreement"); and
Whereas ISSC wishes to obtain certain services in support of its installation,
customization, modification and enhancement of the Licensed Products for
Unisource from XXXX and XXXX is willing to provide such services to ISSC, all on
the terms and conditions contained herein.
NOW THEREFORE, the parties do agree as follows:
Table of Contents
<TABLE>
<CAPTION>
Section Title Page
<S> <C> <C>
1.0 Definitions....................... 2
2.0 Services Provided................. 2
3.0 Payment........................... 2
4.0 Intellectual Property Rights...... 2
5.0 Representations and Warranties.... 2
6.0 Indemnity......................... 2
7.0 Limitations of Liability.......... 3
8.0 Termination....................... 3
9.0 Non Competition................... 3
10.0 General Provisions................ 3
10.1 Governing Law..................... 3
10.2 Entire Agreement.................. 4
10.3 Assignment........................ 4
10.4 No Waiver......................... 4
10.5 Partial Invalidity................ 4
10.6 Interpretation.................... 4
10.7 Notice............................ 4
10.8 Hiring of Employees............... 4
</TABLE>
December 22, 1993
ISSC/Unisource Schedule U Page 1 of 4
<PAGE>
1.0 Definitions
a) "XXXX Product" refers to a software product, including its source code
format, and all documentation related thereto created and produced by XXXX
and its subsidiaries worldwide. Software media is not part of the XXXX
Product.
b) "Licensed Products" refers to the products licensed under the Unisource
License Agreement and any modifications to such product for Customer.
c) "Statement of Work" refers to the Statement of Work set out in Attachment
B.
d) "Work Products" refers to all software documentation and material prepared
by DAI under this Agreement.
e) "XXXX Key Employees" refers to the DAI project manager for this Agreement.
2.0 Services Provided
2.1 XXXX shall provide the services set forth in the Statement of Work.
3.0 Payment
3.1 Payment Schedule shall be in accordance with the Payment Schedule set forth
in Attachment A.
3.2 Taxes
All prices, fees, and other expenses hereunder are exclusive of all sales,
value added, personal property, and other taxes and are exclusive of all
custom duties and other charges which may result from the transaction
herein, including taxes or charges based upon the sale, license, delivery,
installation, use, or maintenance of hardware or software or upon the
provision of services. Such taxes and charges shall be the responsibility
of and paid by Customer, except for taxes based on XXXX net income.
4.0 Intellectual Property Rights
4.1 ISSC agrees that any inventions, ideas or original works of authorship
(referred to herein as "Intellectual Work") in whole or in part conceived,
made, or funded by ISSC, and which would constitute derivative works of
XXXX Products or XXXX Information, shall belong exclusively to XXXX and
shall be deemed to be part of the XXXX Products and Information for
purposes of this Agreement.
4.2 When XXXX is not deemed to be the original author or owner of such
Intellectual Work, ISSC hereby XXXX XXXX to XXXX any and all XXXX and XXXX
which XXXX now has or hereafter acquires in such Intellectual Work,
including the right to prepare and distribute derivative works. ISSC waives
all XXXX XXXX, including XXXX.
4.3 During the term of this Agreement and at any subsequent time, ISSC shall,
at XXXX expense, assist in the preparation of any documents required to
evidence XXXX ownership or the assignment to XXXX of such Intellectual Work
and assist XXXX to obtain, protect, and enforce intellectual property
rights and other rights relating to such Intellectual Work. If for any
reason XXXX is unable, after reasonable effort, to secure ISSC's signature
on any document needed to obtain, protect, or enforce any such rights, ISSC
hereby irrevocably appoints XXXX to act on ISSC's behalf to execute
documents and to do all other lawful acts to obtain, protect, and enforce
any such rights.
4.4 ISSC specifically acknowledges that its benefits under this Agreement are
full payment for such Intellectual Work and that such benefits are in lieu
of any royalty payments.
4.5 ISSC shall provide XXXX with the same rights to Intellectual Work contained
in this Section 4.0 in relation to ISSC's employees as XXXX has in relation
to ISSC.
5.0 Representations and Warranties
XXXX represents and warrants that;
a) all Work Products will be original works of authorship by XXXX or its
employees;
b) the Work Products will be compatible with and operate in conjunction with
the Licensed Products; and
c) all services provided hereunder shall be performed at least in accordance
with industry standards and practices applicable to such services; and
d) the Work Products will not infringe any valid U.S. or Canadian intellectual
property rights.
6.0 Indemnity
6.1 XXXX shall indemnify ISSC from, and defend ISSC against, any liability or
expenses (including attorneys' fees) arising out of or relating to any
claim
a) that the Licensed Products or any modifications to Licensed Products
performed by XXXX infringe upon the proprietary rights of any third
party (except as may have been caused by a modification by ISSC or a
third party acting for ISSC or ISSC's combination, operation or use
with devices, data or programs furnished by ISSC, or
b) related to XXXX use of any Intellectual Work (a "Claim").
6.2 If any Claim is commenced against ISSC under Section 6.1 notice thereof
shall be given to XXXX as promptly as practicable. After such notice, if
XXXX shall acknowledge in writing to ISSC that this Agreement applies with
respect to such Claim, then XXXX shall be entitled, if it so elects, in a
notice delivered to ISSC not less than 10 days prior to the date on which a
response to such Claim is due, 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 XXXX sole cost and expense. ISSC
shall cooperate in all reasonable respects with XXXX and its attorneys in
the investigation, trial and defense of such
December 22, 1993
ISSC/Unisource Schedule U Page 2 of 4
<PAGE>
Claim and any appeal arising therefrom; provided, however, that ISSC 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 DAI shall be entered into without the
consent of ISSC. After notice by DAI to ISSC of its election to assume full
control of the defense of any such Claim. DAI shall not be liable to ISSC
for any legal expenses incurred thereafter by ISSC in connection with the
defense of that Claim. If DAI does not assume full control over the defense
of a Claim subject to defense as provided in this Section 6.0, DAI may
participate in such defense, at its sole cost and expense, and ISSC shall
have the right to defend the Claim in such manner as it may deem
appropriate, at the cost and expense of DAI.
7.0 Limitation of Liability
7.1 For any cause of action, whether in contact or tort, including intentional
and negligence causes of action, and under any circumstances, including a
remedy herein failing of its essential purpose, the total liability XXXX
shall be limited as follows:
7.1.1 Shall not be liable for special, indirect, incidental, or
consequential damages, arising out of, or in connection with, or in
reliance on this Agreement or the provision of products or services
by XXXX;
7.1.2 Shall not be liable for any damages whatsoever resulting from loss
of use, loss of data, or loss of profits; and
7.1.3 Shall not be liable in excess of the amount of the charges paid
pursuant to this Service Agreement for the three months prior to the
date of such cause of action.
7.2 The foregoing does not apply to personal injury, damage to property and
intellectual property indemnity.
7.3 Each provision of this Agreement which is a limitation of liability; a
disclaimer of warranties, representations or conditions; or an XXXX XXXX is
intended by the parties to be severable and independent of any other
provision.
8.0 Termination
8.1 If either party commits a material breach of its obligations under this
Agreement, the complaining party shall provide written notification to the
defaulting party, stating in detail what the breach is and what is required
to cure the breach. The defaulting party shall have thirty days to cure the
breach or otherwise satisfy the complaining party. If the defaulting party
fails to cure the breach or otherwise satisfy the complaining party within
sixty days, the complaining party shall have the right to terminate this
Agreement in ten days after written notification, stating in detail the
extent of the failure to cure.
8.2 ISSC may terminate for convenience this Agreement or any portions thereof,
by written notice specifying a termination date at least XXXX after receipt
of such notice. XXXX is entitled to continue and be paid for the work for
which it had scheduled prior to receipt of such notice up to the
termination date specified in such notice. XXXX must stop all activities
after the termination date specified in such notice. XXXX will be paid for
work perform through the termination date specified in such notice when
ISSC receives the work product(s) specified in the notice. Such payment
shall constitute ISSC's entire liability.
8.3 At ISSC's sole discretion, XXXX will promptly replace any employee that
does not demonstrate satisfactory performance.
8.4 XXXX rights to Intellectual Work acquired prior to any termination as a
result of Section 8.5 are perpetual and survive any termination under this
Agreement.
8.5 Section 4.1 and 4.2 of this Agreement terminate upon ISSC's termination of
the Maintenance Agreement with respect to the Intellectual Work created by
Unisource or any of its subcontractors after such termination.
9.0 Non Competition
9.1 XXXX Key Employee shall be assigned full time to this Agreement for XXXX or
until completion of all Tasks under this Agreement related to the rollout
of Unisource's new business platform, whichever is earlier.
9.2 In consideration for the fees to be paid hereunder, XXXX will not perform
services for the XXXX or the paper distribution businesses now or hereafter
owned by XXXX XXXX (to include XXXX XXXX), XXXX XXXX to include XXXX) and
the XXXX Corporation (to include XXXX); excluding services to XXXX XXXX,
an affiliate of XXXX, for the products licensed to XXXX as of the Effective
Date of this Agreement for direct users not XXXX affiliates or use for
XXXX.
10.0 General Provisions
10.1 Governing Law
Any cause of action (whether in contract or tort, including intentional and
negligence causes of action) arising from or related to the transactions
contemplated by this Agreement shall be governed by the laws of the State of New
York, without regard to its choice of law principles. XXXX and Customer consent
to the personal jurisdiction of the federal courts located in the Southern
District of New York.
December 22, 1993
ISSC/Unisource Schedule U Page 3 of 4
<PAGE>
10.2 Entire Agreement
XXXX and Customer acknowledge that they have not been induced into this
Agreement by any condition, representation, or warranty not set forth in this
Agreement. This Agreement constitutes the entire Agreement between the parties
with respect to the subject matter hereof and supersedes all prior or
contemporaneous proposals, negotiation, and all other communications (oral and
written) between the parties with respect to the subject matter hereof. Any
modifications to this Agreement are invalid unless confirmed in writing which
states that it amends this Agreement and which is signed by an authorized
officer of Customer and XXXX Vice President of Finance and Administration. Any
subsequent agreements are invalid unless confirmed in a writing which is signed
by an authorized representative of ISSC and XXXX Vice President of Finance and
Administration.
10.3 Assignment
No party may assign or transfer any of the rights, duties, or obligations of
this Agreement without first obtaining the express written consent of the other
parties. ISSC reserves the right to assign this Agreement to Unisource at no
charge upon written notice to XXXX.
10.4 No Waiver
The failure of any party at any time to require performance by another party of
any provision of this Agreement shall in no way affect the right of such party
to require performance of that provision. Nor shall such failure be construed as
a waiver of any continuing or succeeding breach of such provision, a waiver of
the provision itself, or a waiver of any right under this Agreement.
10.5 Partial Invalidity
If any provision of this Agreement is held invalid, such invalidity shall not
affect other provisions of this Agreement which can be given effect without the
invalid provisions. Provisions deemed to be invalid shall be reformed to the
minimum extent necessary to render them valid at such time and, to the extent
possible, in accordance with the original intent of the parties.
10.6 Interpretation
"Include," "includes," and "including" shall be interpreted as introducing a
list of examples which do not limit the generality of the concept they
illustrate. Where reference is made to XXXX Product, a Licensed Product is a
XXXX Product. Where reference is made to `Licensed Product', a Licensed Product
includes the respective XXXX Product. "Modification" to the product includes
corrections to the product, additions to the product, and translations of the
product. "Intellectual property rights" refers to patent right, copyright, or
trade secret right. "U.S. intellectual property rights" refers to such rights
under the laws of the United States or any of its States.
10.7 Notice
Any notice given pursuant to this Agreement shall be in writing, shall state
that it is a notice given pursuant to this Agreement, and shall be sent by
certified mail to the addresses first above written.
10.8 Hiring of Employees
Neither party may at any time directly solicit and hire any employees of the
other party except after such employee is fired by such party or terminates his
or her employment with such party without the intention of accepting employment
from the other party. In addition, either party may at any time hire any
employee of the other party that responds to an indirect solicitation (e.g.,
through a newspaper, magazine or trade journal advertisement); provided there
has been no direct solicitation of such employee.
Accepted by: Accepted by:
Integrated Systems Solutions Corporation XXXX XXXX XXXX, Inc.
By__________________________________________ By______________________________
Authorized Signature Authorized Signature
____________________________________________ _________________________________
Name (Type or Print) Date Name (Type or Print) Date
December 22, 1993
ISSC/Unisource Schedule U Page 4 of 4
<PAGE>
ISSC / UNISOURCE [ARTWORK APPEARS HERE]
AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES
- --------------------------------------------------------------------------------
Schedule V
XXXX Maintenance Agreement
Maintenance Agreement (this "Agreement") by and between Integrated Systems
Solutions Corporation with an office at 44 South Broadway, White Plains, New
York 10601 ("ISSC" or "Customer") an XXXX XXXX, Inc., with an office at
XXXX,XXXX,XXXX ("XXXX") with an effective date of January 1, 1994.
Whereas, ISSC has been selected by Unisource Worldwide Inc. to provide certain
technology services to Unisource pursuant to an agreement between Unisource and
ISSC with an effective date of January 1, 1994 (the "Unisource Operations
Agreement"); and,
Whereas, ISSC will perform certain systems integration, application development,
and systems operations services for Unisource pursuant to the Unisource
Operations Agreement which include integration, customization, and operation of
certain Licensed Products licensed by Unisource from XXXX pursuant to a License
Agreement between Unisource and XXXX with an effective date of January 1, 1994
(the "Unisource License Agreement"); and,
Whereas, ISSC wishes to obtain certain testing, tools, maintenance, and support
services from XXXX in support of the products licensed under the Unisource
License Agreement directly from XXXX; and,
Whereas XXXX is willing to provide such services as more fully described herein;
NOW, THEREFORE, the parties do agree as follows:
Table of Contents
<TABLE>
<CAPTION>
Section Title Page
<S> <C> <C>
1.0 Definitions.......................... 2
2.0 XXXX Responsibilities................ 2
3.0 Customer Responsibilities............ 2
4.0 Payment.............................. 2
4.1 XXXX Product Maintenance Fees........ 2
4.2 Additional Service Fees.............. 2
5.0 Taxes................................ 3
6.0 Representations and Warranties....... 3
7.0 Intellectual Property Indemnity...... 3
8.0 Limitation of Liability.............. 3
9.0 Termination.......................... 4
10.0 General Provisions................... 4
10.1 Governing Law........................ 4
10.2 Entire Agreement..................... 4
10.3 Assignment........................... 4
10.4 No Waiver............................ 4
10.5 Partial Invalidity................... 4
10.6 Interpretation....................... 4
10.7 Notice............................... 4
</TABLE>
December 22, 1993
ISSC/Unisource Schedule V Page 1 of 5
<PAGE>
1.0 Definitions
a) "XXXX" refers to a software product, including its source code format, and
all documentation related thereto created and produced by XXXX and its
subsidiaries worldwide. Software media is not part of the XXXX Product.
b) "Licensed Product" refers to the XXXX Products Licensed to Unisource under
the Unisource License Agreement as set forth in Attachment A, as it is on
the Effective Date and any modifications which are made to such product for
Customer by XXXX and any modifications made to such product by others
provided such modifications are done in accordance with XXXX programming
standards.
c) "XXXX Product Maintenance Services" refers to the services provided in
accordance with Section 2.0 and the Statement of Work.
d) "Statement of Work" shall mean the Statement of Work set out in Attachment
B.
e) "Updates" shall refer to all error corrections, releases, versions, and
federal regulatory or U.S. or Canadian statutory changes provided as part
of the annual Maintenance Fee.
2.0 XXXX Responsibilities
2.1 XXXX shall provide Customer with Updates to DAI Products which are made
generally available to XXXX Customers; provided Customer is licensed for
such XXXX Product and has paid for this service in accordance with Section
4.1. All Updates shall be subject to the provisions to the Unisource
License Agreement.
2.2 No additional license fees are applicable to such Updates. Payment for
services to merge updates are XXXX per hour.
2.3 If a product incorporating new technology or functions replaces an existing
product licensed under this Agreement, the replacement product is an update
to the existing product and shall be provided to Customer in accordance
with Section 2.1. Any product which constitutes an open systems or client
server implementation of a Licensed Product will be considered an Update to
an existing product. If a product incorporating new technology or functions
is offered as an optional, separate product such separate products may be
subject to an additional license fee.
2.4 XXXX shall correct "Errors" in a Licensed Product in accordance with the
Statement of Work; provided Customer provides a description of such
nonconformance, including the circumstances and data to reproduce the
nonconformance in a test environment. "Errors" shall include any
nonconformance of (1) All the functions of Version 7.1 of the Licensed
Products, and (2) Functionality as demonstrated or that would have been
demonstrated, time permitting, as described in the Unisource Distribution
Management Book of Scenarios, during the week of 18 October 1993, and (3)
Functions from Version 8.0 of the XXXX Product Plan from implementation in
XXXX of XXXX. Details to be provided to Unisource. Time spent in
investigating or remedying a claim which is not attributable to such a
nonconformance shall be paid by ISSC to XXXX at the rates defined in
Attachment A of the ISSC XXXX Service Agreement.
3.0 Customer Responsibilities
Customer shall provide a description of the Error in such Licensed Product,
including the circumstances and data to reproduce the Error in a test
environment. Customer shall provide a 9600 baud, full duplex, dedicated, XXXX
communications link between, ISSC data center, and XXXX offices in XXXX.
Customer shall provide access to and software on Customer's computer system as
reasonably required by XXXX to effectively maintain the Licensed Product.
Customer Support Group refers to Customer employees who have been trained, at
Customer's expense, in the use of all the Licensed Products and other applicable
vendor products and who help other Customer employees solve computer system
problems. Customer is responsible for having a Customer Support Group which is
able to identify Licensed Product problems from other product problems and to
resolve application usage and set up problems for the Licensed Product. All
support requests shall be submitted by the Customer Support Group. The Customer
Support Group will attempt to verify that a problem is a Licensed Product Error
and to resolve application usage and set-up problems before requesting support
from XXXX Customer shall notify XXXX of the individuals in the Customer Support
Group authorized to submit support requests, to request services or additional
services. Customer shall notify XXXX of any changes to the list of authorized
individuals.
4.0 Payment
4.1 XXXX Product Maintenance Fees
For the DAI Product Maintenance Services defined in Section 2.0, Customer shall
pay XXXX an annual fee as set forth in the Payment Schedule. For Maintenances
Services outside the normal XXXX coverage period, Customer shall pay the hourly
rates set out in the Payment Schedule.
4.2 Additional Service Fees
For XXXX Product Maintenance Services including Services at Customer or
Unisource's sites in addition to those described in Article 2.0, Customer shall
pay XXXX on a time and expense basis. The rate for the time spent in providing
such services is set forth in the Payment Schedule. Time includes all time spent
in modification, installation, testing, training, demonstration, travel,
research, and project administration. Expense includes all reasonable
transportation, lodging, and communication expense. Customer shall pay XXXX a
per diem for XXXX personnel traveling to Customer's site for food and living
expenses (other than transportation, lodging, and communication). The per diem
rate is as set forth in the Payment Schedule.
December 22, 1993
ISSC/Unisource Schedule V Page 2 of 5
<PAGE>
5.0 Taxes
All prices, fees, and other expenses hereunder are exclusive of all sales, value
added, personal property, and other taxes and are exclusive of all custom duties
and other charges which may result from the transaction herein, including taxes
or charges based upon the sale, license, delivery, installation, use, or
maintenance of hardware or software or upon the provision of services. Such
taxes and charges shall be the responsibility of and paid by Customer, except
for taxes based on XXXX net income.
6.0 Representations and Warranties
6.1 XXXX represents and warrants that;
a) it is and will be the owner of any Updates provided pursuant to this
Agreement, or, if it is not the owner of the Updates, that it has
sufficient right and interest in and to the Updates to grant the
Licenses granted herein;
b) the Updates will be compatible with and operate in conjunction with the
Licensed Products;
c) all services provided hereunder shall be performed at least in
accordance with industry standards and practices applicable to such
services; and
d) the Updates will not infringe any valid U.S. or Canadian intellectual
property rights.
6.2 Except as stated in this Section XXXX makes no other warranties in respect
of the Licensed Products and explicitly disclaims all other warranties,
express or implied, including the implied warranties of merchantability and
fitness for a specific purpose. XXXX does not represent or warrant that the
Licensed Products will be error free or that operation of the Licensed
Products will be uninterrupted.
7.0 Intellectual Property Indemnity
7.1 XXXX shall indemnify ISSC from, and defend ISSC against, any liability or
expenses (including attorneys' fees) arising out of or relating to any
claim that the Licensed Products or any modifications to Licensed Products
performed by DAI infringe upon the proprietary rights of any third party
(except as may have been caused by a modification by Unisource or a third
party acting for ISSC or ISSC's combination, operation or use with devices,
data or programs furnished by ISSC (a "Claim").
7.2 If any Claim is commenced against ISSC under Section 7.1 notice thereof
shall be given to DAI as promptly as practicable. After such notice, if DAI
shall acknowledge in writing to ISSC that this Agreement applies with
respect to such Claim, then XXXX shall be entitled, if it so elects, in a
notice delivered to ISSC not less than 10 days prior to the date on which a
response to such Claim is due, 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, a XXXX sole cost and expense. ISSC
shall cooperate in all reasonable respects with XXXX and its attorneys in
the investigation, trial and defense of such Claim and any appeal arising
therefrom, provided, however, that ISSC 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 XXXX shall be entered into without the consent of ISSC. After
notice by XXXX to ISSC of its election to assume full control of the
defense of any such Claim, XXXX shall not be liable to ISSC for any legal
expenses incurred thereafter by ISSC in connection with the defense of that
Claim. If XXXX does not assume full control over the defense of a Claim
subject to defense as provided in this Section 7.0, XXXX may participate in
such defense, at its sole cost and expense, and ISSC shall have the right
to defend the Claim in such manner as it may deem appropriate, at the cost
and expense of XXXX.
7.3 XXXX shall have no obligation or liability with respect to such Claims if
the alleged infringement is based upon: Customer's use of a Licensed
Product in breach of this Agreement if such Claim would have been avoided
by use of the product in accordance with this Agreement; Customer's use of
a Licensed Product contrary to the product's documentation if such Claim
would have been avoided by use of the product in accordance with the
documentation; combination of a Licensed Product with products not
furnished by XXXX if such Claim would have been avoided by the exclusive
use of the XXXX furnished products; modification of the XXXX Product by
anyone other than XXXX if such Claim would have been avoided by use of the
XXXX Product without such modifications; or modification of the XXXX
Product in accordance with detailed design instructions provided by
Customer.
8.0 Limitation of Liability
8.1 For any cause of action (whether in contract or tort, including intentional
and negligence causes of action) and under any circumstances, including a
remedy herein failing of its essential purpose, the total liability of
either party shall be limited as follows:
8.1.1 Shall not be liable for special, indirect, incidental, or
consequential damages, arising out of, or in connection with, or in
reliance on this Agreement or the provision of products or services
by XXXX; and
8.1.2 Shall not be liable for any damages whatsoever resulting from loss
of use, loss of data, or loss of profits; and
8.1.3 Shall not be liable in excess of the charges paid pursuant to this
Maintenance Agreement for the three (3) months immediately preceding
the occur-
December 22, 1993
ISSC/Unisource Schedule V Page 3 of 5
<PAGE>
rence which gave rise to the cause of action.
8.2 The foregoing does not apply to personal injury or property damage or
intellectual property indemnities.
8.3 Each provision of this Agreement which is a limitation of liability, a
disclaimer of warranties, representations or conditions, or an exclusion of
damages is intended by the parties to be severable and independent of any
other provision.
8.4 Customer acknowledges and agrees that the fees for the products and
services provided herein reflect the allocation of risks and the
limitations of XXXX liability provided herein.
9.0 Termination
9.1 XXXX Product Maintenance Services commence on the Effective Date. The
initial term is 36 months from the Effective Date. Thereafter, this
Agreement may be renewed at ISSC's option for subsequent twelve month
periods upon 90 days notice.
9.2 If either party commits a material breach of its obligations under this
Agreement, the complaining party shall provide written notification to the
defaulting party, stating in detail what the breach is and what is required
to cure the breach. The defaulting party shall have thirty days to cure the
breach or otherwise satisfy the complaining party. If the defaulting party
fails to cure the breach or otherwise satisfy the complaining party within
thirty days, the complaining party shall have the right to terminate this
Agreement in ten days after written notification, stating in detail the
extent of the failure to cure.
10.0 General Provisions
10.1 Governing Law
Any cause of action (whether in contract or tort, including intentional and
negligence causes of action) arising from or related to the transactions
contemplated by this Agreement shall be governed by the laws of the State of New
York, without regard to its choice of law principles. XXXX and Customer consent
to the personal jurisdiction of the federal courts of the Southern District of
New York.
10.2 Entire Agreement
XXXX and Customer acknowledge that neither has been induced into this Agreement
by any condition, representation, or warranty not set forth in this Agreement.
This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior or contemporaneous
proposals, negotiation, and all other communications (oral and written) between
the parties with respect to the subject matter hereof. Any modifications to this
Agreement are invalid unless confirmed in a writing which state that it amends
this Agreement and which is signed by an authorized officer of Customer and XXXX
Vice President of Finance and Administration. Any subsequent agreements are
invalid unless confirmed in a writing which is signed by an authorized officer
of Customer and XXXX Vice President of Finance and Administration.
10.3 Assignment
No party may assign or transfer any of the rights, duties, or obligations of
this Agreement without first obtaining the express written consent of the other
parties. ISSC reserves the right to assign this Agreement to Unisource at no
charge upon written notice to XXXX.
10.4 No Waiver
The failure of either party at any time to require performance by the other
party of any provision of this Agreement shall in no way affect the right of
such party to require performance of that provision. Nor shall such failure be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
10.5 Partial Invalidity
If any provison of this Agreement is held invalid, such invalidity shall not
affect other provisions of this Agreement which can be given effect without the
invalid provisions. Provisions deemed to be invalid shall be reformed to the
minimum extent necessary to render them valid at such time and, to the extent
possible, in accordance with the original intent of the parties.
10.6 Interpretation
"Include," "includes," and "including" shall be interpreted as introducing a
list of examples which do not limit the generality of the concept they
illustrate. Where reference is made to "XXXX Product," a Licensed Product is a
XXXX Product. Where reference is made to "Licensed Product," a Licensed
Product includes the respective XXXX Product. "Modification" to the product
includes corrections to the product, additions to the product, and translations
of the product.
10.7 Notice
Any notice given pursuant to this Agreement shall be in writing, shall state
that it is a notice given pursuant to this Agreement, and shall be sent by
certified mail to the address first above written.
December 22, 1993
ISSC/Unisource Schedule V Page 4 of 5
<PAGE>
Accepted by: Accepted by:
Integrated Systems Solutions Corporation XXXX XXXX XXXX, Inc.
By By
-------------------------------------- ------------------------------------
Authorized Signature Authorized Signature
- ---------------------------------------- --------------------------------------
Name (Type or Print) Date Name (Type or Print) Date
December 22, 1993
ISSC/Unisource Schedule V Page 5 of 5
<PAGE>
RECEIVABLES TRANSFER AGREEMENT
Dated as of September 23, 1994
Among
ALCO CAPITAL RESOURCE, INC.
as Transferor
-------------
and
TWIN TOWERS INC.
as Transferee
-------------
and
DEUTSCHE BANK AG, NEW YORK BRANCH
as Agent
--------
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
THE COMMITMENT................... 2
1.01. Commitment...................................... 2
1.02. Limits on Commitment............................ 2
1.03. Transfer Procedure.............................. 2
1.04. Commitment Termination Date..................... 3
1.05. Voluntary Termination of Commitment or
Reduction of Maximum Investment................. 4
ARTICLE II
TRANSFEREE'S INTEREST................ 4
2.01. Assignment of Transferee's Interest............. 4
2.02. Transferee's Percentage......................... 4
2.03. Rate Tranches; Selection of Yield Periods....... 5
ARTICLE III
SETTLEMENT...................... 6
3.01. Non-Pay Out Settlement Procedures for
Collections..................................... 6
3.02. Pay Out Settlement Procedures for Collections... 8
3.03. Dilutions....................................... 11
3.04. Optional Reduction of Transferee's Investment... 11
3.05. Reporting by Servicer........................... 12
3.06. Delivery of Deemed Collections; Collections
Held in Trust................................... 13
ARTICLE IV
PAYMENT PROCEDURES; FEES AND YIELD PROTECTION... 13
4.01. Payments and Computations....................... 13
4.02. Interest on Overdue Amounts..................... 14
4.03. Fees............................................ 14
4.04. Yield Protection................................ 15
4.05. Interest Rate Hedging Agreements................ 16
ARTICLE V
CONDITIONS PRECEDENT.................. 17
5.01. Conditions Precedent to Initial Transfer........ 17
5.02. Conditions Precedent to All Transfers
and Reinvestments............................... 20
- i -
<PAGE>
ARTICLE VI
REPRESENTATIONS AND WARRANTIES............. 21
6.01. Representations and Warranties of the
Transferor...................................... 21
ARTICLE VII
GENERAL COVENANTS OF TRANSFEROR............. 25
7.01. Affirmative Covenants of the Transferor......... 25
7.02. Reporting Requirements of the Transferor........ 26
7.03. Negative Covenants of the Transferor............ 28
ARTICLE VIII
ADMINISTRATION AND COLLECTION............ 29
8.01. Designation of Servicer......................... 29
8.02. Duties of Servicer.............................. 30
8.03. Rights of the Agent............................. 32
8.04. Responsibilities of Transferor.................. 33
8.05. Further Action Evidencing Transfers............. 33
8.06. Application of Obligors' Payments............... 35
ARTICLE IX
SECURITY INTEREST.................. 35
9.01. Grant of Security Interest...................... 35
9.02. Further Assurances.............................. 35
9.03. Remedies........................................ 36
ARTICLE X
TERMINATION EVENTS................. 36
10.01. Termination Events.............................. 36
10.02. Remedies........................................ 38
ARTICLE XI
THE AGENT...................... 39
11.01. Authorization and Action........................ 39
11.02. Agent's Reliance, Etc........................... 39
11.03. Agent and Affiliates............................ 40
ARTICLE XII
ASSIGNMENTS BY TRANSFEROR OR TRANSFEREE......... 40
12.01. Restrictions on Assignments..................... 40
12.02. Documentation; Notice of Assignment............. 41
12.03. Rights of Assignee.............................. 41
12.04. Allocation of Payments.......................... 41
12.05. Calculation of Earned Discount After Assignment. 41
12.06. Rights of Collateral Agent...................... 42
- ii -
<PAGE>
ARTICLE XIII
INDEMNIFICATION................... 42
13.01. Indemnities by the Transferor................... 42
ARTICLE XIV
MISCELLANEOUS.................... 45
14.01. Amendments, Etc................................. 45
14.02. Notices, Etc.................................... 45
14.03. No Waiver; Remedies............................. 45
14.04. Binding Effect; Survival........................ 46
14.05. Costs, Expenses and Taxes....................... 46
14.06. No Proceedings.................................. 47
14.07. Confidentiality of Transferor Information....... 47
14.08. Confidentiality of Program Information.......... 49
14.09. No Recourse Against Other Parties............... 52
14.10. Definitions; Other Terms........................ 52
14.11. Captions and Cross References................... 52
14.12. Integration..................................... 52
14.13. Governing Law................................... 53
14.14. Waiver Of Jury Trial............................ 53
14.15. Consent To Jurisdiction; Waiver Of Immunities... 53
14.16. Execution in Counterparts....................... 53
14.17. Syndication of Liquidity........................ 54
14.18. Tax Treatment................................... 54
- iii -
<PAGE>
APPENDIX
--------
APPENDIX A Definitions
SCHEDULES
---------
SCHEDULE 5.01(f) Filing Jurisdictions
SCHEDULE 6.01(i) Description of Material Adverse Changes
SCHEDULE 6.01(m) List of Offices of Transferor where Records
Are Kept
SCHEDULE 6.01(n) List of Designated Account Banks and Post Office Boxes
SCHEDULE 6.01(o)-1 Forms of Contracts
SCHEDULE 6.01(o)-2 Description of Credit and Collection Policy
SCHEDULE 14.02 Addresses for Notice
SCHEDULE A-1 Dealers
EXHIBITS
--------
EXHIBIT 1.03 Form of Transfer Request
EXHIBIT 3.05(a) Form of Periodic Report
EXHIBIT 5.01(f) Form of UCC Financing Statement
EXHIBIT 5.01(h) Form of Designated Account Agreement
EXHIBIT 5.01(i) Form of Opinion of Counsel for Transferor
EXHIBIT 5.01(j) Form of Opinion of Counsel for Agent
EXHIBIT 5.01(k) Form of UCC Financing Statement - Dealer
EXHIBIT 5.01(l) Form of Power of Attorney
EXHIBIT 5.01(p) Form of Alco Standard Letter
EXHIBIT A Form of Post Office Box Agreement
- iv -
<PAGE>
RECEIVABLES TRANSFER AGREEMENT
RECEIVABLES TRANSFER AGREEMENT, dated as of September 23, 1994, among ALCO
CAPITAL RESOURCE, INC., a Delaware corporation (the "Transferor"), as
----------
transferor and initial Servicer (as defined herein), TWIN TOWERS INC., a
Delaware corporation (the "Transferee"), as transferee, and DEUTSCHE BANK AG, a
----------
banking corporation organized under the laws of the Federal Republic of Germany
("Deutsche Bank"), acting through its NEW YORK BRANCH ("DBNY"), as agent for the
------------- ----
Transferee (in such capacity, the "Agent"). Unless otherwise indicated,
-----
capitalized terms used in this Agreement are defined in Appendix A.
----------
Background
----------
1. The Transferor has, and expects to have, Pool Receivables in which the
Transferor intends to transfer an undivided interest. The Transferor has
requested the Transferee, and the Transferee has agreed, subject to the terms
and conditions contained in this Agreement, to acquire from the Transferor such
undivided interest, herein referred to as the Transferee's Interest, in one or
more Transfers from time to time during the Reinvestment Period.
2. The Transferor and the Transferee also desire that, subject to the
terms and conditions of this Agreement, certain of the daily Collections in
respect of the Transferee's Interest be reinvested in Pool Receivables so that
the Transferee may maintain its Transferee's Investment fully invested in
uncollected Pool Receivables.
3. The Transferee expects generally to fund its Transfers and
Reinvestments through the issuance of Commercial Paper Notes. The Transferee
has entered into a Liquidity Agreement providing for the making by the Liquidity
Banks of loans secured by the Transferee's Interest in the event the Transferee
is unable to fund its Transfers or Reinvestments pursuant to this Agreement by
the issuance of Commercial Paper Notes or otherwise prefers to fund such
Transfers or Reinvestments under the Liquidity Agreement rather than by the
issuance of Commercial Paper Notes, or is unable to pay such Commercial Paper
Notes at maturity from its share of collections on Pool Receivables. The
Transferee has also entered into an Enhancement Agreement with the Enhancement
Bank providing for the issuance of a letter of credit to a trustee for the
holders of Commercial Paper Notes, and for the making of loans to the
Transferee, to provide funds for the payment of Commercial Paper Notes in the
circumstances described above when funding is not available under the Liquidity
Agreement.
<PAGE>
4. The Transferee has appointed DBNY as its agent to perform certain
administrative duties for the Transferee, including, among other things, the
arrangement of the transactions provided for hereunder, the administration of
the funding of such transactions and the making of certain determinations
hereunder and in connection herewith.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
THE COMMITMENT
SECTION 1.01. Commitment. On the terms and subject to the conditions set
----------
forth in this Agreement (including Article V):
---------
(a) Transfers. Pursuant to Section 1.03, from time to time during the
--------- ------------
Reinvestment Period, upon request by the Transferor, the Transferee shall
acquire from the Transferor, in one or more transactions, an undivided
interest in the Pool Receivables and Related Property. Each of the initial
acquisitions of the Transferee's Interest hereunder and each subsequent
acquisition increasing the Transferee's Interest is herein called a
"Transfer".
--------
(b) Reinvestments. Pursuant to Section 3.01, during the Reinvestment
------------- ------------
Period, the Transferee shall permit the Servicer to cause certain of the
Collections in respect of the Transferee's Interest to be paid to
Transferor for reinvestment in the Pool Receivables and Related Property.
Each such payment is herein called a "Reinvestment".
------------
The Transferee's obligation to make such Transfers and Reinvestments is herein
called the "Commitment".
----------
SECTION 1.02. Limits on Commitment. Under no circumstances shall the
--------------------
Transferee accept any Transfer to the extent that, after giving effect to such
Transfer:
(a) the Transferee's Investment would exceed the Maximum Investment;
or
(b) the Unadjusted Transferee's Percentage would exceed the Maximum
Percentage.
SECTION 1.03. Transfer Procedure. (a) Transfer Request. Each Transfer
------------------ ----------------
from the Transferor by the Transferee shall be made on written request by the
Transferor to the Transferee and the
- 2 -
<PAGE>
Agent, substantially in the form of Exhibit 1.03 (a "Transfer Request"),
------------ ----------------
received by the Agent not later than 11:00 a.m. (New York City time) on the
second Business Day preceding the date of such proposed Transfer. Each such
request shall specify the desired amount and date of such Transfer.
(b) Amount of Transfer Price. The amount of the transfer price paid by the
------------------------
Transferee for each Transfer shall be equal to the lesser of (x) the amount
proposed by the Transferor pursuant to Section 1.03(a) and (y) the maximum
---------------
amount permitted under Section 1.02.
------------
(c) Funding of Transfer. On the date of each Transfer, the Transferee
-------------------
shall, upon satisfaction of the applicable conditions set forth in Article V,
---------
make available to the Agent in immediately available funds, at its office at 31
West 52nd Street, New York, New York 10019, the amount of the transfer price to
be paid for such Transfer (determined pursuant to Section 1.03(b)) and after
---------------
receipt by the Agent of such funds, the Agent will make such funds immediately
available to the Transferor at such office.
SECTION 1.04. Commitment Termination Date. (a) The "Commitment
--------------------------- ----------
Termination Date" shall be the earlier to occur of (i) September 20, 1995
- ----------------
(herein, as the same may be extended, called the "Scheduled Commitment
--------------------
Termination Date"), and (ii) the date of termination of the Commitment pursuant
- ----------------
to Section 1.04(c), 1.05 or 10.02.
--------------- ---- -----
(b) The Scheduled Commitment Termination Date may be extended by six months
on the 20th of each March and September, commencing March 20, 1995; provided
--------
that (i) not less than 60 days prior to such day, the Transferor shall have
delivered a written request for such extension to the Transferee and the Agent,
and (ii) within 15 days prior to such day, the Transferee and the Agent shall
each have given its written consent to such extension (which consent may be
given or withheld by either such party in its sole discretion). As a condition
to any such extension, the Transferor and the Servicer shall deliver such
certificates, opinions of counsel or other documents as the Transferee or the
Agent may require.
(c) The Commitment shall terminate, and the Transferee shall have no
obligation to accept any further Transfers or make any further Reinvestments
hereunder, on the scheduled date of termination of either (A) the Liquidity
Banks' commitments under the Liquidity Agreement or (B) the Enhancement Bank's
commitment under the Enhancement Agreement. The Transferee agrees to give the
Transferor at least 30 days' prior written notice of the termination of the
Commitment pursuant to the foregoing sentence,
- 3 -
<PAGE>
but no failure to give or delay in giving such notice shall prevent or delay
such termination.
SECTION 1.05. Voluntary Termination of Commitment or Reduction of Maximum
-----------------------------------------------------------
Investment. The Transferor may, upon at least ten Business Days' notice to the
- ----------
Agent, terminate the Commitment in whole or reduce in part the unused portion of
the Maximum Investment; provided, however, that (a) each partial reduction shall
-------- -------
be in an amount equal to $5,000,000 or an integral multiple thereof and (b)
after giving effect to such reduction, the remaining Maximum Investment will not
be less than $25,000,000.
ARTICLE II
TRANSFEREE'S INTEREST
SECTION 2.01. Assignment of Transferee's Interest. The Transferor hereby
-----------------------------------
assigns and transfers to the Transferee, effective on and as of the date of the
initial Transfer hereunder and, with respect to any increase in the Transferee's
Interest effected by an additional Transfer hereunder, on the date of such
additional Transfer, an undivided ownership interest, in a percentage equal to
the Transferee's Percentage as determined from time to time in accordance with
Section 2.02, in all Pool Receivables and Related Property, whether now existing
- ------------
or hereafter arising or acquired by the Transferor from time to time. Such
undivided ownership interest as in effect from time to time is herein called the
"Transferee's Interest".
---------------------
SECTION 2.02. Transferee's Percentage. The Transferee's Interest shall be
-----------------------
in a percentage (the "Transferee's Percentage") equal at any time to the
-----------------------
quotient obtained by dividing
(a) the sum of (i) the Transferee's Investment, (ii) the Discount
Factor, (iii) the Default Reserve, (iv) the Servicer's Fee Reserve and (v)
the Dilution Reserve (such sum being herein sometimes called the
"Transferee's Allocation"), by
----------------------- --
(b) the Net Pool Balance,
as most recently computed in accordance with this Section 2.02 (such quotient,
------------
expressed as a percentage, before giving effect to the following proviso, being
-------
the "Unadjusted Transferee's Percentage"); provided, however,
---------------------------------- -------- -------
(1) the Transferee's Percentage shall not be greater than 100%;
- 4 -
<PAGE>
(2) during the Pay Out Period, the Transferee's Percentage shall
be the greater of (x) the Transferee's Percentage in effect
immediately before the commencement of the Pay Out Period and (y) the
Transferee's Percentage as otherwise determined in accordance with
this Section 2.02; and
------------
(3) the Transferee's Percentage shall become zero at such time as
(A) the Transferee shall have received the accrued Earned Discount,
shall have recovered the Transferee's Investment and shall have
received all other amounts payable to the Transferee pursuant to this
Agreement and (B) the Servicer shall have received the accrued
Servicer's Fee.
The Transferee's Percentage shall initially be computed by the Servicer as of
the opening of business of the Servicer on the date of each Transfer, as of the
most recent Month End Date, and shall be recomputed in each Periodic Report and
each Pay Out Statement; provided, however, the Agent may from time to time
-------- -------
request the Servicer to deliver a Periodic Report for the purpose of
recalculating the Transferee's Percentage, and the Servicer shall deliver such
Periodic Report within 10 Business Days after its receipt of such request. The
Transferee's Percentage shall remain constant from the time as of which any such
computation or recomputation is made until the time as of which the next such
recomputation, if any, shall be made.
SECTION 2.03. Rate Tranches; Selection of Yield Periods. (a) From time
-----------------------------------------
to time, for purposes of determining the Yield Periods applicable to different
portions of the Transferee's Interest, and of calculating the Earned Discount
and Servicer's Fee with respect thereto, the Agent shall allocate the
Transferee's Interest to one or more tranches (each a "Rate Tranche"), each
------------
representing a portion of the Transferee's Investment (with respect to each Rate
Tranche, the "Transferee's Tranche Investment"). At any time, each Rate Tranche
-------------------------------
shall have only one Yield Period and one Transferee Rate applicable for purposes
of calculating Earned Discount, and shall be funded by (i) an issue of
Commercial Paper Notes, (ii) a Funding Advance, (iii) a borrowing of Liquidity
Loans funded by the Liquidity Banks ratably and having the same Yield Period, or
(iv) an Enhancement Draw, but not by more than one of the foregoing at the same
time.
(b) The Agent shall select the duration of the initial, and each
subsequent, Yield Period for each Rate Tranche in its discretion; provided that,
--------
so long as no Termination Event shall have occurred and be continuing, the Agent
shall use reasonable efforts, taking into account market conditions, to
accommodate the Transferor's preferences.
- 5 -
<PAGE>
(c) From time to time the Agent shall notify the Servicer of the number of
Rate Tranches, the Transferee's Tranche Investment of each Rate Tranche, the
Transferee Rate for such Rate Tranche and the duration of the current Yield
Period selected by it for each Rate Tranche.
ARTICLE III
SETTLEMENT
SECTION 3.01. Non-Pay Out Settlement Procedures for Collections. (a)
-------------------------------------------------
Daily Procedure. On each day during the Reinvestment Period, the Servicer shall
- ---------------
deem an amount equal to the Transferee's Share of Collections of Pool
Receivables received or deemed received on such day to be received in respect of
the Transferee's Interest, and, out of the Transferee's Share of such
Collections, shall:
(i) hold in trust for the benefit of the Transferee an amount equal to
(A) the aggregate of the aggregate Earned Discount and Servicer's Fee
accrued through such day, less (B) the amount, if any, theretofore set
----
aside and then so held for the benefit of the Transferee in respect of such
Earned Discount and Servicer's Fee;
(ii) set aside and hold in trust for the Transferee an amount equal
to the excess, if any, of
(A) the greatest of
(I) if the Transferor shall have elected to reduce the
Transferee's Investment under Section 3.04, the amount of the
------------
proposed reduction,
(II) if the Transferee's Investment shall exceed the Maximum
Investment, the amount of such excess,
(III) if the Unadjusted Transferee's Percentage shall exceed
the Maximum Percentage, an amount equal to the minimum reduction
of the Transferee's Investment which (based on the Transferee
Rates currently in effect, and assuming that such reduction will
be applied to reduce the Transferee's Tranche Investments of the
Rate Tranches having the shortest remaining Yield Periods first)
would result in the Transferee's Percentage being no greater than
the Maximum Percentage, and
- 6 -
<PAGE>
(IV) if any of the conditions precedent to Reinvestment set
forth in Section 5.02 shall not be met, the Transferee's
------------
Investment, over
----
(B) the aggregate of the amounts theretofore set aside and then
so held for the benefit of the Transferee pursuant to this clause
------
(ii); and
(iii) subject to Section 5.02, pay the remainder, if any, of such
------------
Collections to the Transferor for application to Reinvestment, for the
benefit of the Transferee, in the Transferee's Interest in accordance with
Section 1.01(b).
---------------
The Servicer shall first, apply the Transferor's Share of such Collections to
-----
any other amounts (other than Earned Discount and Transferee's Investment) then
due to Transferee or the Agent and second, pay any remaining portion of the
------
Transferor's Share of such Collections to the Transferor.
(b) Settlement Date Procedure. Prior to the Pay Out Period, on each
-------------------------
Settlement Date, the Servicer shall deposit to the Agent's Account:
(i) out of the amounts set aside pursuant to clause (i) of Section
---------- -------
3.01(a), an amount equal to the Earned Discount and Servicer's Fee accrued
-------
during the related Yield Period with respect to the related Rate Tranche;
and
(ii) out of the amount, if any, set aside pursuant to clause (ii) of
-----------
Section 3.01(a) and not theretofore reinvested in accordance with Section
--------------- -------
3.01(d) or deposited to the Agent's Account pursuant to this Section
------- -------
3.01(b), an amount equal to the lesser of such amount and the Transferee's
-------
Tranche Investment of the related Rate Tranche;
provided, however, that if the Agent gives its consent (which consent may be
- -------- -------
revoked at any time), the Servicer may retain amounts which would otherwise be
deposited in respect of Servicer's Fee, in which case no distribution shall be
made in respect of Servicer's Fee under clause (c) below.
----------
In addition, if, on such Settlement Date, after reducing the Transferee's
Tranche Investment of the related Rate Tranche by the amount deposited pursuant
to clause (ii) above, the Transferee's Investment would be greater than the
-----------
Maximum Investment or the Unadjusted Transferee's Percentage would be greater
than the Maximum Percentage, then the Transferor shall pay to the Servicer, and
the Servicer shall deposit to the Agent's Account, an amount equal to the least
of (x) the minimum reduction of the Transferee's Investment which would result
in the Unadjusted Transferee's Investment not exceeding the Maximum
- 7 -
<PAGE>
Investment and the Unadjusted Transferee's Percentage not exceeding the Maximum
Percentage, (y) the Transferee's Tranche Investment of the related Rate Tranche
and (z) the Transferor's Collection Amount.
(c) Order of Application. Upon receipt by the Agent of funds deposited
--------------------
pursuant to subsection (b) on a Settlement Date for any Rate Tranche, the Agent
--------------
shall distribute them to the Persons, for the purposes and in the order of
priority set forth below:
(i) to the Transferee in payment of the accrued and unpaid Earned
Discount for such Rate Tranche;
(ii) to the Servicer in payment of the accrued and unpaid Servicer's
Fee payable with respect to such Rate Tranche; and
(iii) to the Transferee in reduction of the Transferee's Tranche
Investment of such Rate Tranche.
(d) Unreinvested Collections. During the Reinvestment Period, if on any
------------------------
date the amount of Collections theretofore set aside and then held by the
Servicer for the benefit of the Transferee pursuant to clause (ii) of Section
----------- -------
3.01(a) shall exceed the maximum amount then required to be set aside and so
- -------
held pursuant to such clause (ii), then, subject to the applicable conditions
-----------
precedent set forth in Section 5.02, the Servicer shall pay to the Transferor
------------
the amount of such excess Collections, for application to Reinvestment in
accordance with Section 1.01(b). To the extent and for so long as such
---------------
Collections may not be so reinvested, the Servicer shall hold such Collections
in trust for the benefit of the Transferee in a separate deposit account
containing only such Collections and no other funds. On each Settlement Date
with respect to any Rate Tranche, the Servicer shall pay to the Agent for the
account of the Transferee, in reduction of the Transferee's Investment, the
amount of Collections then held in trust pursuant to the next preceding sentence
or, if less, the Transferee's Tranche Investment of such Rate Tranche; any such
amounts remaining after such application shall continue to be held in trust
pursuant to this paragraph (d) and shall be applied on the next successive
-------------
Settlement Dates until such amount has been reduced to zero. The Transferee's
Investment shall not be deemed reduced by any amount held in trust pursuant to
this subsection (d) unless and until, and then only to the extent that, such
--------------
amount is finally paid to the Agent in accordance with the next preceding
sentence.
SECTION 3.02. Pay Out Settlement Procedures for Collections. (a) Daily
--------------------------------------------- -----
Procedure. During the Pay Out Period, on each day, the Servicer shall (i) set
- ---------
aside and hold in trust
- 8 -
<PAGE>
for the Transferee the Transferee's Share of the Collections of Pool Receivables
received by the Servicer, and (ii) first, apply the Transferor's Share of such
-----
Collections to any other amounts (other than Earned Discount and Transferee's
Investment) then due to Transferee or the Agent and second, pay any remaining
------
portion of the Transferor's Share of such Collections to the Transferor.
(b) Settlement Date Procedure. During the Pay Out Period, on each
-------------------------
Settlement Date for any Rate Tranche, subject to Section 3.02(d), the Servicer
---------------
shall deposit to the Agent's Account the amounts set aside pursuant to Section
-------
3.02(a), but not to exceed the sum of (i) the accrued and unpaid Earned Discount
- -------
with respect to such Rate Tranche, (ii) the Transferee's Tranche Investment of
such Rate Tranche, (iii) the aggregate of other amounts (other than the
Transferee's Investment, Earned Discount and Servicer's Fee) owed hereunder by
the Transferor to the Transferee or the Agent, and (iv) the accrued Servicer's
Fee payable with respect to such Rate Tranche. Any amounts in excess of the
amount required to be deposited in the Agent's Account pursuant to the previous
sentence shall continue to be set aside and held in trust by the Servicer for
application on the next succeeding Settlement Date(s).
(c) Order of Application. Upon receipt of funds deposited to the Agent's
--------------------
account pursuant to Section 3.02(b), subject to Section 3.02(d), the Agent shall
--------------- ---------------
distribute them to the Persons, for the purposes and in the order of priority
set forth below:
(i) to the Transferee in payment of the accrued and unpaid
Earned Discount for such Rate Tranche;
(ii) if the Servicer is a Person other than the Transferor or an
Affiliate of the Transferor, to the Servicer in payment of the accrued
and unpaid Servicer's Fee with respect to such Rate Tranche;
(iii) to the Transferee in reduction of the Transferee's Tranche
Investment with respect to such Rate Tranche;
(iv) to the Transferee or the Agent (as the case may be) in
payment of any other amounts owed by the Transferor hereunder to the
Transferee or the Agent (other than the Transferee's Investment,
Earned Discount and Servicer's Fee); and
(v) to the Servicer in payment of the accrued Servicer's Fee
payable with respect to such Rate Tranche, to the extent not paid
pursuant to clause (ii) above.
-----------
- 9 -
<PAGE>
(d) Priorities in Event of Funding Advances, Liquidity Loans or Enhancement
-----------------------------------------------------------------------
Draw. If on any day during the Pay Out Period any Rate Tranche is funded by a
- ----
Funding Advance, a borrowing of Liquidity Loans or an Enhancement Draw, then:
(i) if the aggregate amount of Collections set aside and held in trust
pursuant to Section 3.02(a) is less than the aggregate accrued and unpaid
---------------
Earned Discount with respect to all Rate Tranches, then such Collections
shall be allocated first to accrued and unpaid Earned Discount on Rate
-----
Tranches funded by Funding Advances, second to accrued and unpaid Earned
------
Discount on Rate Tranches funded by Liquidity Loans, third to accrued and
-----
unpaid Earned Discount on Rate Tranches funded by Commercial Paper Notes,
and fourth to accrued and unpaid Earned Discount on Rate Tranches funded by
------
Enhancement Draws, and, in the case of each of clauses first, second, third
------------- ------ -----
and fourth above, first to the Rate Tranches having the shortest remaining
------
Yield Periods, to the extent that funds have not been set aside or
deposited with the Agent in respect thereof; and
(ii) no Collections shall be deposited in the Agent's Account (unless
requested by the Agent for later distribution in accordance with this
Section 3.02(d)) or distributed by the Agent to the Transferee (A) in
---------------
respect of the Transferee's Tranche Investment of any Rate Tranche funded
by Liquidity Loans unless the Transferee's Tranche Investments of all Rate
Tranches funded by Funding Advances shall have been reduced to zero, or
Collections equal to such Transferee's Tranche Investments shall have been
deposited in the Agent's Account for distribution to the Transferee in
reduction of such Transferee's Tranche Investments, (B) in respect of the
Transferee's Tranche Investment of any Rate Tranche funded by Commercial
Paper Notes unless the Transferee's Tranche Investments of all Rate
Tranches funded by Funding Advances or Liquidity Loans shall have been
reduced to zero, or Collections equal to such Transferee's Tranche
Investments shall have been deposited in the Agent's Account for
distribution to the Transferee in reduction of such Transferee's Tranche
Investments, or (C) in respect of the Transferee's Tranche Investment of
any Rate Tranche funded by any Enhancement Draw unless the Transferee's
Tranche Investments of all Rate Tranches funded by Funding Advances,
Liquidity Loans or Commercial Paper Notes shall have been reduced to zero,
or Collections equal to such Transferee's Tranche Investments shall have
been deposited in the Agent's Account for distribution to the Transferee in
reduction of such Transferee's Tranche Investments.
- 10 -
<PAGE>
SECTION 3.03. Dilutions. (a) If on any day the Unpaid Balance of any
---------
Pool Receivable is
(i) reduced as a result of any defective, rejected or returned
merchandise or services, any cash discount, any allowances or billing
errors, any trade-in or trade-up, or any adjustment by the Transferor, any
Affiliate of the Transferor or by the Servicer or any early termination,
refinancing, consolidation or replacement of the Contract related to such
Pool Receivable,
(ii) reduced or cancelled as a result of a setoff in respect of any
claim or dispute by the Obligor thereof against the Transferor or any
Affiliate of the Transferor (individually or as Servicer) or any other
Person (whether such claim arises out of the same or a related or an
unrelated transaction),
(iii) reduced on account of the obligation of the Transferor or an
Affiliate of the Transferor (individually or as Servicer) to pay to the
related Obligor any rebate or refund, or
(iv) determined by the Agent, the Servicer or the Transferor to have
been less than the Unpaid Balance of such Receivable used in calculating
the Net Pool Balance for purposes of the most recent Periodic Report or
Settlement Statement,
then, on such day, the Transferor shall be deemed to have received a Collection
of such Pool Receivable in the amount of such reduction or cancellation or, in
the case of clause (iv) above, by the amount of the difference between the
-----------
actual Unpaid Balance and the Unpaid Balance as so reported.
(b) If on any day (i) any of the representations or warranties of the
Transferor set forth in Section 6.01(k) or (o) shall not be true with respect to
--------------- ---
a Pool Receivable (other than solely by reason of such Pool Receivable's being a
Defaulted Receivable), or (ii) when the Servicer or the Transferor delivers any
Periodic Report or Settlement Statement, any Pool Receivable the Unpaid Balance
of which is included in the computation of the Net Pool Balance therein shall
not be an Eligible Receivable, then, on such day, the Transferor shall be deemed
to have received a Collection of such Pool Receivable in the amount of the
Unpaid Balance of such Pool Receivable.
SECTION 3.04. Optional Reduction of Transferee's Investment. The
---------------------------------------------
Transferor may at any time elect to cause the reduction of the Transferee's
Investment as follows:
- 11 -
<PAGE>
(a) the Transferor shall give the Agent at least 10 Business Days'
prior written notice of such reduction (including the amount of such
proposed reduction and the proposed date on which such reduction will
commence);
(b) on the proposed date of commencement of such reduction and on each
day thereafter, the Servicer shall set aside Collections and hold them in
trust for the Transferee under clause (ii) of Section 3.01(a) until the
----------- ---------------
amount so set aside shall equal the desired amount of reduction; and
(c) the Servicer shall set aside and hold such Collections for the
benefit of the Transferee and, on each Settlement Date with respect to any
Rate Tranche, shall pay to the Agent for the benefit of the Transferee, in
reduction of the Transferee's Investment, the amount of such Collections so
held or, if less, the Transferee's Tranche Investment of such Rate Tranche
(it being understood that the Transferee's Investment shall not be deemed
reduced by any amount set aside or held pursuant to this Section 3.04
------------
unless and until, and then only to the extent that, such amount is finally
paid to the Agent as aforesaid);
provided that,
- --------
(i) the amount of any such reduction shall be not less than
$5,000,000 and shall be an integral multiple of $1,000,000, and the
Transferee's Investment after giving effect to such reduction shall be not
less than $10,000,000 (unless the Transferee's Investment shall thereby be
reduced to zero),
(ii) the Transferor shall use reasonable efforts to attempt to choose
a reduction amount, and the date of commencement thereof, so that such
reduction shall commence and conclude in a single Yield Period with respect
to a Rate Tranche, and
(iii) such proposed reduction shall be applied, unless the Agent
shall consent otherwise, to the Rate Tranche with the shortest remaining
Yield Period.
SECTION 3.05. Reporting by Servicer. (a) On or prior to the 15th day (or
---------------------
if such day is not a Business Day, on the next Business Day) of each month, the
Servicer shall prepare and forward to the Agent a Periodic Report, executed by
an Authorized Servicing Officer, relating to the Transferee's Interest as of the
close of business of the Servicer on the next preceding Month End Date. In
addition, if at any time the Agent shall so request, then, within 10 Business
Days after the later of (i) the date of such request and (ii) such other date as
the Agent may
- 12 -
<PAGE>
designate in such request as the effective date of the requested report, the
Servicer shall prepare and deliver to the Agent a Periodic Report, executed by
an Authorized Servicing Officer, relating to the Transferee's Interest as of the
close of business on the date of such request or such other effective date, as
applicable.
(b) During the Pay Out Period, on the Settlement Date of each Settlement
Period for each Rate Tranche, the Servicer shall prepare and forward to the
Agent a Pay Out Statement as of the close of business of the Servicer on such
Settlement Date.
SECTION 3.06. Delivery of Deemed Collections; Collections Held in Trust.
---------------------------------------------------------
(a) Whenever the Transferor is deemed to receive Collections pursuant to
Section 3.03, the Transferor shall forthwith deliver to the Servicer the amount
- ------------
of such deemed Collections, and the Servicer shall set aside and hold or
distribute such Collections as and to the same extent as if such Collections had
actually been received on the date of such delivery to Servicer. If Collections
are then being paid to the Agent, or lock boxes or accounts directly or
indirectly owned or controlled by the Agent, the Servicer shall forthwith cause
such deemed Collections to be paid to the Agent or to such lock boxes or
accounts, as applicable.
(b) So long as the Transferor shall hold any Collections or deemed
Collections required to be paid to the Servicer or the Agent, it shall hold such
Collections in trust and separate and apart from its own funds and shall clearly
mark its records to reflect such trust.
ARTICLE IV
PAYMENT PROCEDURES; FEES AND YIELD PROTECTION
SECTION 4.01. Payments and Computations. (a) All amounts to be paid or
-------------------------
deposited by the Transferor or the Servicer to or for the account of the
Transferee or the Agent hereunder shall be paid or deposited in accordance with
the terms hereof no later than 11:00 a.m. (New York City time) on the day when
due in lawful money of the United States of America in immediately available
funds to account #104636460008 or such other account as the Agent may designate
(the "Agent's Account") at DBNY's office at 31 West 52nd Street, New York, New
---------------
York 10019 or at such other place in New York City as the Agent may designate.
(b) All computations of interest, Earned Discount, Negative Spread Fee and
any other fees hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day)
elapsed.
- 13 -
<PAGE>
SECTION 4.02. Interest on Overdue Amounts. The Transferor or Servicer,
---------------------------
as applicable, shall, to the extent permitted by law, pay to the Agent interest
on all amounts not paid or deposited when due hereunder at 1% per annum above
--- -----
the Alternate Base Rate, payable on demand, provided, however, that such
-------- -------
interest rate shall not at any time exceed the maximum rate permitted by
applicable law.
SECTION 4.03. Fees. (a) Certain Fees. The Transferor shall pay to the
---- ------------
Agent and the Transferee the fees in the amounts and at the times set forth in
the letter from the Agent to the Transferor, dated as of the date hereof (as
amended from time to time, the "Fee Letter").
----------
(b) Note Fee. From the date hereof until the Final Pay Out Date, the
--------
Transferor shall pay to the Agent for the account of the Transferee a commercial
paper transaction fee ("Note Fee") in an amount equal to the sum of (i) the
--------
product of (x) the amount of the per-note fee paid or payable by the Transferee
to the issuing agent and depositary for the Commercial Paper Notes in connection
with the completion, authentication and delivery of each Commercial Paper Note,
as notified by the Agent to the Transferor and the Servicer from time to time,
times (y) the number of Commercial Paper Notes issued by the Transferee to fund
- -----
the Transferee's Interest hereunder during the period for which such Note Fee is
payable and to which such per-note fee applies, as notified by the Agent to the
Transferor and the Servicer, plus (ii) the product of (x) the amount of the per-
----
trade fee paid or payable by the Transferee to the Depository Trust Company (or
any other or successor clearing corporation through which the Commercial Paper
Notes may be issued) in connection with the issuance, payment or redemption of
Commercial Paper Notes, as notified by the Agent to the Transferor and the
Servicer from time to time, times (y) the number of transactions in Commercial
-----
Paper Notes issued by the Transferee to fund the Transferee's Interest hereunder
during the period for which such Note Fee is payable and to which such per-trade
fee applies, as notified by the Agent to the Transferor and the Servicer. Such
Note Fee shall be paid in arrears on the last Business Day of each February and
August of each calendar year and on the Final Pay Out Date for the number of
Commercial Paper Notes which were issued, and the number of Commercial Paper
Note trades that were consummated, to fund the Transferee's Interest hereunder
during the six month period ending on the last day of the immediately preceding
December and June, respectively, or in the case of the Final Pay Out Date, other
period then ending and for which no Note Fee shall have theretofore been paid.
The Agent shall notify the Transferor and the Servicer on or prior to the last
day of each January and July of the Note Fee due on the last Business Day of the
following February and August, respectively.
- 14 -
<PAGE>
SECTION 4.04. Yield Protection. (a) If (i) Regulation D or (ii) any
----------------
Regulatory Change occurring after the date hereof
(A) shall subject an Affected Party to any tax, duty or other charge
with respect to the Transferee's Interest or any portion thereof, or any
obligations or right to accept or make Transfers or Reinvestments or to
provide funding therefor, or shall change the basis of taxation of payments
to the Affected Party of any of the Transferee's Investment or Earned
Discount owned by, owed to or funded by it or any other amounts due under
this Agreement in respect of the Transferee's Interest or any portion
thereof or its obligations or rights, if any, to accept or make Transfers
or Reinvestments or to provide funding therefor (except for changes in the
rate of tax on the overall net income of such Affected Party imposed by the
United States of America, by the jurisdiction in which such Affected
Party's principal executive office is located and, if such Affected Party's
principal executive office is not in the United States of America, by the
jurisdiction where such Affected Party's principal office in the United
States is located); or
(B) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Federal Reserve Board, but
excluding any reserve included in the determination of Earned Discount),
special deposit or similar requirement against assets of any Affected
Party, deposits or obligations with or for the account of any Affected
Party or with or for the account of any affiliate (or entity deemed by the
Federal Reserve Board to be an affiliate) of any Affected Party, or credit
extended by any Affected Party; or
(C) shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected Party; or
(D) shall impose any other condition affecting the Transferee's
Interest or any portion thereof owned or funded by any Affected Party, or
its obligations or rights, if any, to accept or make Transfers or
Reinvestments or to provide funding therefor; or
(E) shall change the rate for, or the manner in which the Federal
Deposit Insurance Corporation (or any successor thereto) assesses, deposit
insurance premiums or similar charges, or shall impose on any Affected
Party a requirement to maintain deposit insurance;
and the result of any of the foregoing is or would be
- 15 -
<PAGE>
(x) to increase the cost or to impose a cost on (I) an Affected Party
accepting or funding or making or maintaining any Transfers or
Reinvestments, any loans or other extensions of credit under the Liquidity
Agreement, or any Enhancement Draw, or any commitment of such Affected
Party with respect to any of the foregoing, or (II) the Agent for
continuing its or the Transferor's relationship with the Transferee,
(y) to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement or any other Transaction Document, or
under the Liquidity Agreement or the Enhancement Agreement with respect
thereto, or
(z) in the sole determination of such Affected Party, to reduce the
rate of return on the capital of an Affected Party as a consequence of its
obligations hereunder or arising in connection herewith to a level below
that which such Affected Party could otherwise have achieved (taking into
consideration the policies of such Affected Party with respect to capital
adequacy) by an amount deemed by such Affected Party to be material,
then, within thirty days after demand by such Affected Party (which demand shall
be accompanied by a statement setting forth the basis of such demand), the
Transferor shall pay directly to such Affected Party such additional amount or
amounts as will compensate such Affected Party for such additional or increased
cost or such reduction.
(b) Each Affected Party will promptly notify the Transferor and the Agent
of any event of which it has knowledge which occurs after the date hereof and
will entitle such Affected Party to compensation pursuant to this Section 4.04;
------------
provided, however, no failure to give or delay in giving such notification shall
- -------- -------
adversely affect the rights of any Affected Party to such compensation.
(c) In determining any amount provided for or referred to in this Section
-------
4.04, an Affected Party may use any reasonable averaging and attribution methods
- ----
that it (in its sole discretion) shall deem applicable. Any Affected Party when
making a claim under this Section 4.04 shall submit to the Transferor a
------------
statement as to such increased cost or reduced return (including calculation
thereof in reasonable detail), which statement shall, in the absence of manifest
error, be conclusive and binding upon the Transferor.
SECTION 4.05. Interest Rate Hedging Agreements. Promptly after the
--------------------------------
Commitment Termination Date, the Transferee will enter into, and will maintain
throughout the Pay Out Period, one or
- 16 -
<PAGE>
more interest rate swap agreements, interest rate collars, interest rate caps or
other interest rate hedging arrangements, with one or more financial
institutions, including the Agent, whose long-term unsecured debt obligations
are rated at least Aaa by Moody's or AAA by S&P, with an amortizing notional
amount equal to Transferee's good faith determination of its outstanding
Transferee's Investment from time to time during the Pay Out Period (the
"Hedging Arrangements"). Such Hedging Arrangements shall protect Transferee
- ---------------------
from differences between a fixed interest rate equal to the interpolated yield
to maturity of the Treasury security with a maturity equal to the then Average
Maturity and a floating interest rate equal to the Commercial Paper Rate or
Eurodollar Rate (Reserve Adjusted). The Agent and the Transferee agree to use
their reasonable efforts to obtain such Hedging Arrangements at a commercially
reasonable cost, in light of the circumstances of such transaction. Transferor
hereby agrees to pay, or to reimburse Transferee for, on demand, any and all
costs, expenses and liabilities of Transferee incurred in connection with such
Hedging Arrangements (other than periodic net payments of fixed rate interest
due to the counterparty thereof), including any arrangement fees, legal costs
and early termination payments with respect thereto; provided, that, to the
--------
extent that the notional amount of such Hedging Arrangements exceeds the then
Transferee's Investment, Transferee shall assign to Transferor, and Transferor
shall accept, the portion of such Hedging Arrangement related to such excess, in
which event, Transferor shall be responsible for all obligations, and be
entitled to all benefits, associated with such portion of the Hedging
Arrangements. Notwithstanding the foregoing, if (i) the unsecured short term
obligations of the Transferor are rated at least A-1+ by S&P and P-1 by Moody's,
(ii) the Transferor has requested that the Transferee accept its recourse
obligation for Earned Discount and (iii) the Transferor has executed and
delivered to the Transferee and the Agent an agreement pursuant to which the
Transferor agrees to pay, on a recourse basis, Earned Discount as and when due,
then, for so long as the Transferor maintains the ratings described in the
foregoing clause (i), the Transferee shall accept such agreement in place of
----------
maintaining Hedging Arrangements.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to Initial Transfer. The initial
----------------------------------------
Transfer hereunder is subject to the condition precedent that the Agent shall
have received, on or before the date of such Transfer, the following, each
(unless otherwise indicated) dated (or dated as of) such date and in form and
substance satisfactory to the Agent:
- 17 -
<PAGE>
(a) This Agreement, duly executed by the Transferor (as Transferor and
initial Servicer);
(b) A copy of the resolutions of the Board of Directors of the
Transferor approving this Agreement, and the other Transaction Documents to
be delivered by it hereunder and the transactions contemplated hereby,
certified by its Secretary or Assistant Secretary; a copy of the
resolutions of the Board of Directors of Alco Standard approving the
Support Agreement, certified by its Secretary or Assistant Secretary;
(c) Good standing certificates for Alco Standard issued by the
Secretaries of State of Pennsylvania and Ohio; good standing certificates
for the Transferor issued by the Secretaries of State of Delaware, Georgia,
California, Minnesota and Missouri, in each case dated as of a recent date
acceptable to the Agent;
(d) A certificate of the Secretary or an Assistant Secretary of the
Transferor certifying the names and true signatures of the officers
authorized on its behalf to sign this Agreement and the other Transaction
Documents to be delivered by it hereunder (on which certificate the Agent
and the Transferee may conclusively rely until such time as the Agent shall
receive from the Transferor a revised certificate meeting the requirements
of this subsection (d));
--------------
(e) The Articles of Incorporation of the Transferor and of Alco
Standard, duly certified by the Secretary of State of Delaware and the
Secretary of State of Ohio, respectively, as of a recent date acceptable to
Agent, together with a copy of the By-laws of the Transferor and of Alco
Standard, duly certified by the Secretary or an Assistant Secretary of the
Transferor or Alco Standard, as the case may be;
(f) Acknowledgment copies of proper Financing Statements (Form UCC-1),
substantially in the form attached hereto as Exhibit 5.01(f) (with such
---------------
modifications, if any, as may be necessary or appropriate to conform to the
law, customary practice or standard forms of a particular jurisdiction),
filed on or prior to the date of the initial Transfer, naming the
Transferor as the debtor and transferor of Receivables or an undivided
interest therein and the Transferee as the secured party and transferee, or
other, similar instruments or documents, as may be necessary or, in the
opinion of the Agent, desirable under the UCC or any comparable law of all
appropriate jurisdictions (including those jurisdictions listed on Schedule
--------
5.01(f) hereto) to
-------
- 18 -
<PAGE>
perfect the Transferee's Interest and the security interest granted to the
Transferee under Article IX hereof;
----------
(g) A search report or reports provided in writing to the Agent by
LEXIS Document Services, Inc. as of a recent date (or dates) acceptable to
the Agent, listing all effective financing statements that name the
Transferor as debtor and that are filed in the jurisdictions in which
filings were made pursuant to subsection (f) above and in such other
--------------
jurisdictions that the Agent shall reasonably request, together with copies
of such financing statements (none of which shall cover any Receivables or
Contracts or interests therein or Collections or proceeds of any thereof);
(h) Duly executed copies of Designated Account Agreements with each of
the Designated Account Banks; duly executed copies of Post Office Box
Agreements with respect to each Post Office Box;
(i) A favorable opinion of Karin H. Kinney, counsel to the Transferor
and Alco Standard, in substantially the form of Exhibit 5.01(i);
---------------
(j) A favorable opinion of Mayer, Brown & Platt, counsel for the
Agent, substantially in the form of Exhibit 5.01(j);
---------------
(k) Acknowledgment copies of proper Financing Statements (Form UCC-1),
substantially in the form attached hereto as Exhibit 5.01(k) (with such
---------------
modifications, if any, as may be necessary or appropriate to conform to the
law, customary practice or standard forms of a particular jurisdiction),
filed on or prior to the date of the initial Transfer in the jurisdictions
of the principal places of business of the dealers listed on Schedule A-1,
------------
naming such dealers, respectively, as debtors and transferors of
Receivables, the Transferor as the secured party and transferee and
Transferee as the assignee, or other, similar instruments or documents, as
may be necessary or, in the opinion of the Agent, desirable under the UCC
or any comparable law of all appropriate jurisdictions to perfect
Transferor's interest in the Receivables;
(l) Such powers of attorney as the Agent shall reasonably request to
enable the Agent to collect all amounts due under any and all Pool
Receivables, which powers of attorney shall be substantially in the form of
Exhibit 5.01(l) or in such other form as the Agent may reasonably request;
---------------
- 19 -
<PAGE>
(m) A Periodic Report as of the most recent Month End Date (in which
the Transferee's Interest and the components thereof shall be calculated
after giving effect to the initial Transfer);
(n) A report from independent certified public accountants or other
auditors acceptable to the Agent, with respect to the application of
certain procedures to the Transferor's books and records relating to the
Pool Receivables;
(o) A copy of the Support Agreement, certified as true, correct and
complete by an officer of Alco Standard;
(p) A letter executed by Alco Standard substantially in the form of
Exhibit 5.01(p); and
---------------
(q) An interest rate protection agreement between Transferor and DBNY,
and an assignment agreement related thereto.
SECTION 5.02. Conditions Precedent to All Transfers and Reinvestments.
-------------------------------------------------------
Each Transfer (including the initial Transfer) and each Reinvestment hereunder
shall be subject to the further conditions precedent that on the date of such
Transfer or Reinvestment the following statements shall be true (and the
Transferor by accepting the amount of such Transfer or by receiving the proceeds
of such Reinvestment shall be deemed to have certified that):
(a) The representations and warranties contained in Section 6.01 are
------------
correct on and as of such day as though made on and as of such day and
shall be deemed to have been made on such day,
(b) No event has occurred and is continuing, or would result from such
Transfer or Reinvestment, that constitutes a Termination Event or Unmatured
Termination Event,
(c) In the case of a Reinvestment, the amount of the Reinvestment will
not exceed the amount available therefor under Section 3.01, and in the
------------
case of a Transfer, after giving effect thereto, the Transferee's
Investment will not exceed the Maximum Investment and the Unadjusted
Transferee's Percentage will not exceed the Maximum Percentage, and
(d) The Commitment Termination Date shall not have occurred;
- 20 -
<PAGE>
provided, however, the absence of the occurrence and continuance of an Unmatured
- -------- -------
Termination Event shall not be a condition precedent to any Reinvestment or to
any Transfer on any day which does not cause the Transferee's Investment, after
giving effect to such Transfer, to exceed the Transferee's Investment as of the
opening of business on such day.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Transferor. The
------------------------------------------------
Transferor represents and warrants as follows:
(a) Organization and Good Standing. The Transferor has been duly
------------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are presently
owned and such business is presently conducted, and had at all relevant
times, and now has, all necessary power, authority, and legal right to
acquire and own the Pool Receivables.
(b) Due Qualification. The Transferor is duly qualified to do
-----------------
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business requires such
qualification, licenses or approvals.
(c) Power and Authority; Due Authorization. The Transferor (i) has
--------------------------------------
all necessary power, authority and legal right to execute and deliver this
Agreement and the other Transaction Documents, to carry out the terms of
the Transaction Documents, and to transfer and assign the Transferee's
Interest on the terms and conditions herein provided, and (ii) has duly
authorized by all necessary corporate action the execution, delivery and
performance of this Agreement and the other Transaction Documents and the
transfer and assignment of the Transferee's Interest on the terms and
conditions herein provided.
(d) Valid Transfer; Binding Obligations. This Agreement constitutes a
-----------------------------------
valid transfer and assignment of the Transferee's Interest to the
Transferee, enforceable against creditors of, and purchasers from, the
Transferor; and this Agreement constitutes, and each other Transaction
Document to be signed by the Transferor when duly executed and
- 21 -
<PAGE>
delivered will constitute, a legal, valid and binding obligation of the
Transferor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) No Violation. The execution, delivery and performance by the
------------
Transferor of this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby will not
(i) conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a
default under, the articles of incorporation or by-laws of the Transferor,
or any indenture, loan agreement, receivables purchase agreement, mortgage,
deed of trust, or other agreement or instrument to which the Transferor is
a party or by which it or any of its properties is bound, (ii) result in
the creation or imposition of any Lien upon any of the Transferor's
properties pursuant to the terms of any such indenture, loan agreement,
receivables purchase agreement, mortgage, deed of trust, or other agreement
or instrument, other than this Agreement, or (iii) violate any law or any
order, rule, or regulation applicable to the Transferor of any court or of
any federal or state regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Transferor or any
of its properties.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending, or threatened, before, and there has been no injunction, decree or
other decision issued or made by, any court, regulatory body,
administrative agency, or other tribunal or governmental agency or
instrumentality (i) asserting the invalidity of this Agreement or any other
Transaction Document, (ii) seeking to prevent the transfer and assignment
of the Transferee's Interest or any portion thereof or the consummation of
any of the other transactions contemplated by this Agreement or any other
Transaction Document, (iii) seeking any determination or ruling that might
have a Material Adverse Effect or (iv) seeking to adversely affect the
federal income tax attributes of the Transfers hereunder.
(g) Bulk Sales Act. No transaction contemplated hereby requires
--------------
compliance with any bulk sales act or similar law.
- 22 -
<PAGE>
(h) Government Approvals. No authorization or approval or other
--------------------
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance
by the Transferor of this Agreement or any other Transaction Document,
except for the filing of the UCC Financing Statements referred to in
------
Article V, all of which, at the time required in Article V, shall have been
--------- ---------
duly made and shall be in full force and effect.
(i) Financial Condition. (x) The consolidated balance sheets of the
-------------------
Transferor and its consolidated subsidiaries as at September 30, 1993, and
the related statements of income, cash flows and shareholders' equity of
the Transferor and its consolidated subsidiaries for the fiscal year then
ended, certified by Ernst & Young, independent certified public
accountants, and the consolidated balance sheets of the Transferor and its
consolidated subsidiaries as at December 31, 1993, March 31, 1994 and June
30, 1994, respectively, and the related statements of income, cash flows
and shareholders' equity of the Transferor and its consolidated
subsidiaries for the periods then ended, in each case, copies of which have
been furnished to the Agent, fairly present the consolidated financial
condition, business, business prospects and operations of the Transferor
and its consolidated subsidiaries as at such dates and the consolidated
results of the operations of the Transferor and its consolidated
subsidiaries for the period ended on such dates, all in accordance with
generally accepted accounting principles consistently applied, and (y)
since September 30, 1993 there has been no material adverse change in any
such condition, business, business prospects or operations except as
described in Schedule 6.01(i).
----------------
(j) Margin Regulations. The use of all funds obtained by the
------------------
Transferor under this Agreement will not conflict with or contravene any of
Regulations G, T, U and X promulgated by the Board of Governors of the
Federal Reserve System from time to time.
(k) Quality of Title. (i) Each Pool Receivable, together with the
----------------
Related Property, is owned by the Transferor free and clear of any Lien
(other than any Lien arising solely as the result of any action taken by
the Transferee (or any assignee thereof) or by the Agent) except as created
hereby; (ii) when the Transferee accepts a Transfer, it shall have acquired
and shall at all times thereafter continuously maintain a valid and
perfected first priority undivided percentage ownership interest, in a
percentage equal to the Transferee's Percentage in effect
- 23 -
<PAGE>
from time to time, in each Pool Receivable and in the Related Property,
free and clear of any Lien (other than any Lien arising solely as the
result of any action taken by the Transferee (or any assignee thereof) or
by the Agent); and (iii) no effective financing statement or other
instrument similar in effect covering any Pool Receivable, any interest
therein or any of the Related Property is on file in any recording office
except such as may be filed (A) in favor of the Transferor in accordance
with the Contracts or against the dealers, (B) in favor of the Transferee
or the Agent in accordance with this Agreement or in connection with any
Lien arising solely as the result of any action taken by the Transferee (or
any assignee thereof) or by the Agent, or (C) in favor of DBNY, as
Collateral Agent, or any successor in such capacity, as described in
Section 121.01.
--------------
(l) Accurate Reports. No Periodic Report or Pay Out Statement (if
----------------
prepared by the Transferor, or to the extent that information contained
therein was supplied by the Transferor) or other information, exhibit,
financial statement, document, book, record or report furnished or to be
furnished by the Transferor to the Agent or the Transferee in connection
with this Agreement was or will be inaccurate in any material respect as of
the date it was or will be dated or (except as otherwise disclosed to the
Agent or the Transferee, as the case may be, at such time) as of the date
so furnished, or contained or will contain any material misstatement of
fact or omitted or will omit to state a material fact or any fact necessary
to make the statements contained therein not materially misleading.
(m) Offices. The chief place of business and chief executive office
-------
of the Transferor are located at the address of the Transferor referred to
in Section 14.02, and the offices where the Transferor keeps all its books,
-------------
records and documents evidencing or included in the Pool Receivables and
Related Property are located at the addresses specified in Schedule 6.01(m)
----------------
(or at such other locations, notified to the Agent in accordance with
Section 7.01(f), in jurisdictions where all action required by Section 8.05
--------------- ------------
has been taken and completed).
(n) Designated Accounts; Post Office Boxes. The names and addresses
--------------------------------------
of all the Designated Accounts Banks, together with the account numbers of
the Designated Accounts of the Transferor at such Designated Account Banks,
are specified in Schedule 6.01(n) (or have been notified to the Agent in
----------------
accordance with Section 7.03(d)). The addresses and numbers of all Post
---------------
Office Boxes are specified in Schedule 6.01(n) (as have been notified to
----------------
the Agent in accordance with Section 7.03(d)).
---------------
- 24 -
<PAGE>
(o) Eligible Receivables. Each Receivable included in the Net Pool
--------------------
Balance as an Eligible Receivable on any date shall be an Eligible
Receivable on such date.
(p) Servicing Programs. Any and all programs used by the Transferor
------------------
in the servicing of the Receivables Pool are owned by it and not leased or
licensed, except for all licensed IBM operating system software. No
license or approval is required for the Agent's use of any program used by
the Servicer in the administration of the Receivables, other than those
which have been obtained and are in full force and effect.
ARTICLE VII
GENERAL COVENANTS OF TRANSFEROR
SECTION 7.01. Affirmative Covenants of the Transferor. From the date
---------------------------------------
hereof until the Final Pay Out Date, the Transferor will, unless the Agent shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with
-------------------------
all applicable laws, rules, regulations and orders applicable to the
Transferor, including those with respect to the Pool Receivables and
related Contracts.
(b) Preservation of Corporate Existence. Subject to Section 7.03(e),
----------------------------------- ---------------
preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified in good standing as a foreign corporation in each jurisdiction
where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification would have a Material Adverse
Effect.
(c) Audits. (i) At any time and from time to time during regular
------
business hours, upon reasonable notice, permit the Agent, or its agents or
representatives, (A) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer tapes
and disks) in the possession or under the control of the Transferor
relating to Pool Receivables, including, without limitation, the related
Contracts and purchase orders and other agreements, and (B) to visit the
offices and properties of the Transferor for the purpose of examining such
materials described in clause (i)(A) next above, and to discuss matters
-------------
relating to Pool Receivables or the Transferor's performance hereunder with
any of the officers or employees of the Transferor having knowledge of such
matters; and (ii) without limiting the provisions of
- 25 -
<PAGE>
clause (i) next above, from time to time on request of the Agent given not
----------
more than once in each calendar year so long as no Termination Event or
Unmatured Termination Event shall have occurred and be continuing, permit
certified public accountants or other auditors, selected by the Transferor
and reasonably acceptable to the Agent, to conduct, at the Transferor's
expense, a review of the Transferor's books and records with respect to the
Pool Receivables.
(d) Keeping of Records and Books of Account. Maintain and implement
---------------------------------------
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Pool Receivables in the event of the
destruction of the originals thereof), and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Pool Receivables (including, without
limitation, records adequate to permit the daily identification of each new
Pool Receivable and all Collections of and adjustments to each existing
Pool Receivable).
(e) Performance and Compliance with Receivables and Contracts. At its
---------------------------------------------------------
expense timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the
Contracts related to the Pool Receivables and all purchase orders and other
agreements related to such Pool Receivables.
(f) Location of Records. Keep its chief place of business and chief
-------------------
executive office, and the offices where it keeps its records concerning the
Pool Receivables, all related Contracts and all purchase orders and other
agreements related to such Pool Receivables (and all original documents
relating thereto), at the address(es) of the Transferor referred to in
Section 6.01(m) or, upon 30 days' prior written notice to the Agent, at
---------------
such other locations in jurisdictions where all action required by Section
-------
8.05 shall have been taken and completed.
----
(g) Credit and Collection Policies. Comply in all material respects
------------------------------
with its Credit and Collection Policy in regard to each Pool Receivable and
the related Contract.
(h) Collections. Instruct all Obligors to cause all Collections of
-----------
Pool Receivables to be sent directly to a Post Office Box, and deposit all
Collections received into a Designated Account.
SECTION 7.02. Reporting Requirements of the Transferor. From the date
----------------------------------------
hereof until the Final Pay Out Date, the Transferor
- 26 -
<PAGE>
will, unless the Agent shall otherwise consent in writing, furnish to the Agent:
(a) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within 60 days after the end of each of the first three quarters of
each fiscal year of each of Alco Standard and the Transferor, copies of the
financial statements of the Transferor and its Subsidiaries and Alco
Standard and its Subsidiaries, in each case, prepared on a consolidated
basis, in conformity with generally accepted accounting principles, duly
certified by the chief financial officer, any vice-president, the treasurer
or the controller of the Transferor or Alco Standard, as the case may be;
(b) Annual Financial Statements. As soon as available and in any
---------------------------
event within 90 days after the end of each fiscal year of the Transferor
and Alco Standard, copies of the financial statements of the Transferor and
its Subsidiaries and Alco Standard and its Subsidiaries, in each case
prepared on a consolidated basis, in conformity with generally accepted
accounting principles, duly certified by independent certified public
accountants of recognized standing selected by the Transferor or Alco
Standard, as the case may be;
(c) Reports to Holders and Exchanges. Copies of any reports or
--------------------------------
registration statements that the Transferor or Alco Standard files with the
Securities and Exchange Commission or any national securities exchange
other than registration statements relating to employee benefit plans and
registrations of securities for selling security holders and statements
filed on Form S-1;
(d) ERISA. Promptly after the filing or receiving thereof, copies of
-----
all reports and notices with respect to any Reportable Event defined in
Article IV of ERISA as to which the Pension Benefit Guaranty Corporation
has not waived the 30-day notice requirement which the Transferor or Alco
Standard files under ERISA with the Internal Revenue Service, the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor or which the
Transferor or Alco Standard receives from the Pension Benefit Guaranty
Corporation;
(e) Termination Events. As soon as possible and in any event within
------------------
five days after the occurrence of each Termination Event and each Unmatured
Termination Event, a written statement of the chief financial officer or
chief accounting officer of the Transferor setting forth details of such
event and the action that the Transferor proposes to take with respect
thereto;
- 27 -
<PAGE>
(f) Litigation. As soon as possible and in any event within three Business
----------
Days of the Transferor's knowledge thereof, notice of (i) any litigation,
investigation or proceeding which may exist at any time which could have a
Material Adverse Effect and (ii) any material adverse development in
previously disclosed litigation; and
(g) Other. Promptly, from time to time, such other information,
-----
documents, records or reports respecting the Receivables or the condition
or operations, financial or otherwise, of the Transferor as the Agent may
from time to time reasonably request in order to protect the interests of
the Agent or the Transferee under or as contemplated by this Agreement.
SECTION 7.03. Negative Covenants of the Transferor. From the date hereof
------------------------------------
until the Final Pay Out Date, the Transferor will not, without the prior written
consent of the Agent:
(a) Sales, Liens, Etc. Except as otherwise provided herein, sell,
-----------------
assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Lien upon or with respect to, any Pool
Receivable or Related Property, or any interest therein, or any post office
box or account to which any Collections of any Pool Receivable are sent, or
any right to receive income from or in respect of any of the foregoing.
(b) Extension or Amendment of Receivables. Except as otherwise
-------------------------------------
permitted in Section 8.02, extend, amend, terminate or otherwise modify the
------------
terms of any Pool Receivable, or amend, modify, terminate or waive any term
or condition of any Contract related thereto.
(c) Change in Business or Credit and Collection Policy. Make any
--------------------------------------------------
change in the character of its business or in the Credit and Collection
Policy, which change would, in either case, impair the collectibility of
the Pool Receivables (other than an immaterial portion thereof) or
otherwise adversely affect the interests, rights or remedies of the
Transferee under this Agreement or any other Transaction Document.
(d) Change in Payment Instructions to Obligors. Add or terminate any
------------------------------------------
Post Office Box from those listed in Schedule 6.01(o) or make any change in
----------------
its instructions to Obligors regarding payments to be made to the
Transferor or the Servicer or payments to be made to any Post Office Box
unless the Agent shall have received (i) notice of such addition,
termination or change and (ii) duly executed copies of Post Office Box
Agreements with respect to each
- 28 -
<PAGE>
new Post Office Box. Deposit or transfer any Collections received in any
Post Office Box or otherwise to any account other than a Designated
Account.
(e) Mergers, Acquisitions, Sales, etc. Be a party to any merger or
---------------------------------
consolidation, or purchase or otherwise acquire all or substantially all of
the assets or any stock of any class of, or any partnership or joint
venture interest in, any other Person, or, except in the ordinary course of
its business, sell, transfer, convey or lease all or any substantial part
of its assets, or permit any Subsidiary to do any of the foregoing, except
for any such merger or consolidation, sale, transfer, conveyance, lease or
assignment (i) of or by any wholly-owned Subsidiary into the Transferor or
into, with or to any other wholly-owned Subsidiary, (ii) any such purchase
or other acquisition by the Transferor or any wholly-owned Subsidiary of
the assets or stock of any wholly-owned Subsidiary and (iii) pursuant to
which Transferor is the survivor, provided that no Termination Event or
Unmatured Termination Event has occurred and is continuing or would result
therefrom.
(f) Support Agreement. Amend, modify or terminate the Support
-----------------
Agreement.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer. (a) Transferor as Initial
----------------------- ---------------------
Servicer. The servicing, administering and collection of the Pool Receivables
- --------
shall be conducted by the Person designated as the servicer hereunder (the
"Servicer") from time to time in accordance with this Section 8.01. Until the
-------- ------------
Agent gives to the Transferor a notice designating a new Servicer (as provided
in Section 8.01(b)), the Transferor is hereby designated as, and hereby agrees
---------------
to perform the duties and obligations of, the Servicer pursuant to the terms
hereof.
(b) Designation of New Servicer. Upon the Transferor's receipt of a notice
---------------------------
from the Agent of the Agent's designation of a new Servicer, the Transferor
agrees that it will terminate its activities as the Servicer hereunder in a
manner that the Agent believes will facilitate the transition of the performance
of such activities to the new Servicer, and the Agent (or, its designee) shall
assume each and all of the Transferor's said obligations to service and
administer the Pool Receivables, on the terms and subject to the conditions
herein set forth, and the Transferor shall use its best efforts to assist the
Agent (or its designee) in assuming such obligations. The Agent agrees not to
- 29 -
<PAGE>
give such notice until after the occurrence of (i) any Termination Event, (ii)
any default by the Servicer of the type described in Section 10.01(a) (whether
----------------
or not the Transferor or an Affiliate of the Transferor is the Servicer), or
(iii) any event which, in the reasonable opinion of the Agent, could have a
material adverse effect on the Transferor's ability to perform its obligations
as the Servicer hereunder, in which case such notice may be given at any time in
the Agent's discretion. If the Transferor disputes the occurrence of a
Termination Event or other event described above, the Transferor may take
appropriate action to resolve such dispute; provided that the Transferor must
--------
terminate its activities hereunder as the Servicer and allow the newly
designated Servicer to perform such activities on the date provided by the Agent
as described above, notwithstanding the commencement or continuation of any
proceeding to resolve the aforementioned dispute.
(c) Subcontracts. The Servicer may, with the prior written consent of the
------------
Agent, subcontract with any other person for servicing, administering or
collecting the Pool Receivables; provided that the Servicer shall remain liable
--------
for the performance of the duties and obligations of the Servicer pursuant to
the terms hereof; and provided, further, that any funds received by any
-------- -------
subcontractor pursuant to the subcontract shall be deemed to have been received
by the Servicer.
SECTION 8.02. Duties of Servicer. (a) Appointment; Duties in General.
------------------ ------------------------------
Each of the Transferor, the Transferee and the Agent hereby appoints as its
agent the Servicer, as from time to time designated pursuant to Section 8.01,
------------
(i) to enforce its rights and interests in and under the Pool Receivables, the
Contracts and other Related Property, (ii) to take or cause to be taken all such
actions as may be necessary or advisable to collect each Pool Receivable from
time to time, all in accordance with applicable laws, rules and regulations,
with reasonable care and diligence, and in accordance with the Credit and
Collection Policy, and (iii) to take such other actions and exercise such other
powers on behalf of the Transferee and the Agent under this Agreement as are
delegated to the Servicer by the terms hereof.
(b) Allocation of Collections; Segregation. The Servicer shall set aside
--------------------------------------
and hold in trust for the account of the Transferor and the Transferee their
respective allocable shares of the Collections of Pool Receivables in accordance
with Sections 3.01 and 3.02, but shall not be required (unless otherwise
------------- ----
requested by the Agent) to segregate the funds constituting such portions of
such Collections prior to the remittance thereof in accordance with said
Sections. If instructed by the Agent, the Servicer shall segregate and deposit
with a bank designated by the Agent such allocable shares of Collections of Pool
Receivables, set aside for the Transferee and
- 30 -
<PAGE>
any assignee from the Transferee of the Transferee's Interest (or any portion
thereof), on the first Business Day following receipt by the Servicer of such
Collections in immediately available funds.
(c) Modification of Receivables. So long as no Termination Event or
---------------------------
Unmatured Termination Event shall have occurred and be continuing, the
Transferor, while it is Servicer, may, in accordance with the Credit and
Collection Policy, (i) extend the maturity or adjust the Unpaid Balance of any
Defaulted Receivable as the Transferor may determine to be appropriate to
maximize Collections thereof; provided that, no such extension shall be for more
-------- ----
than 30 days and, after giving effect to such extension of maturity or such
adjustment, the Unadjusted Transferee's Percentage will not exceed the Maximum
Percentage, and (ii) adjust the Unpaid Balance of any Receivable to reflect the
reductions or cancellations described in Section 3.03(a). The Transferee will
---------------
not terminate, nor allow the prepayment of, any Contract related to a Pool
Receivable unless, after giving effect to such termination or prepayment, any
payment of a deemed Collection as a result of such termination or prepayment
pursuant to Section 3.03 and the inclusion of any new Eligible Receivables in
------------
the Receivables Pool, the Unadjusted Transferee's Percentage, as of such date,
does not exceed the Maximum Percentage.
(d) Documents and Records. The Transferor shall deliver to the Servicer,
---------------------
and the Servicer shall hold in trust for the Transferor and the Transferee in
accordance with their respective interests, all documents, instruments and
records (including, without limitation, computer tapes or disks) that evidence
or relate to Pool Receivables.
(e) Power of Attorney. The Transferor hereby grants to the Servicer an
-----------------
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take in the name of the Transferor all steps which are necessary or
advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by the Transferor or transmitted or
received by the Transferee (whether or not from the Transferor) in connection
with any Receivable.
(f) Certain Duties to the Transferor. The Servicer shall, as soon as
--------------------------------
practicable following receipt, turn over to the Transferor (i) that portion of
Collections of Pool Receivables representing its undivided interest therein,
less, the sum of (a) in the event the Transferor is no longer the Servicer, all
reasonable and appropriate out-of-pocket costs and expenses of the Servicer of
servicing, collecting and administering the Pool Receivables to the extent not
covered by the Servicer's Fee received by it and (b) any amounts, other than
Transferee's Investment and Earned Discount, then due to the Transferee or the
- 31 -
<PAGE>
Agent, and (ii) the Collections of any Receivable that is not a Pool Receivable.
The Servicer, if other than the Transferor, shall, at the Transferor's expense,
as soon as practicable upon demand, deliver to the Transferor all documents,
instruments and records in its possession that evidence or relate to Receivables
of the Transferor other than Pool Receivables, and copies of documents,
instruments and records in its possession that evidence or relate to Pool
Receivables.
(g) Termination. The Servicer's authorization under this Agreement shall
-----------
terminate on the Final Pay Out Date.
SECTION 8.03. Rights of the Agent. (a) Notice to Obligors; Segregation.
------------------- -------------------------------
At any time the Agent may notify the Obligors of Pool Receivables, or any of
them, of the ownership of the Transferee's Interest by the Transferee. At any
time the Agent may require the Transferor to establish a new Designated Account
into which no funds are deposited other than Collections, and to deposit, or
cause to be deposited, all Collections into such new Designated Account.
(b) Notice to Post Office Boxes and Designated Banks. At any time when a
------------------------------------------------
Termination Event or an Unmatured Termination Event shall have occurred, (i) the
Agent is hereby authorized to give notice, as provided in the Post Office Box
Agreements, of the transfer to the Agent of dominion and control over the Post
Office Boxes to which the Obligors of Pool Receivables make payments, (ii) the
Agent is hereby authorized to give notice to the Designated Account Banks, as
provided in the Designated Account Agreements, of the transfer to the Agent of
dominion and control over the Designated Accounts and (iii) the Agent may
notify, or may require the Servicer to notify, the Obligors to send their
payments to a lock-box located at DBNY or other bank approved by the Agent,
under the dominion and control of the Agent.
(c) Rights on Designation of New Servicer. At any time following the
-------------------------------------
designation of a Servicer other than the Transferor pursuant to Section 8.01:
------------
(i) The Agent may direct the Obligors of Pool Receivables, or any of
them, to pay all amounts payable under any Pool Receivable directly to the
Agent or its designee.
(ii) The Transferor shall, at the Agent's request and at the
Transferor's expense, give notice of such ownership to each said Obligor
and direct that payments be made directly to the Agent or its designee.
- 32 -
<PAGE>
(iii) The Transferor shall, at the Agent's request, (A) assemble all
of the documents, instruments and other records (including, without
limitation, computer programs, tapes and disks) which evidence the Pool
Receivables and Related Property, or which are otherwise necessary or
desirable to collect such Pool Receivables, and make the same available to
the Agent at a place selected by the Agent or its designee, and (B)
segregate all cash, checks and other instruments received by it from time
to time constituting Collections of Pool Receivables in a manner acceptable
to the Agent and shall, promptly upon receipt, remit all such cash, checks
and instruments, duly endorsed or with duly executed instruments of
transfer, to the Agent or its designee.
(d) Authorization and Power of Attorney. Each of the Transferor and the
-----------------------------------
Transferee hereby authorizes the Agent and hereby appoints the Agent as its
attorney-in-fact (which appointment is coupled with an interest and is
irrevocable), from time to time upon and after the designation of a successor
Servicer in accordance with Section 8.01, to take any and all steps in the
------------
Transferor's name and on behalf of the Transferor and the Transferee which are
necessary or desirable, in the determination of the Agent, to collect all
amounts due under any and all Pool Receivables and Related Property, including,
without limitation, endorsing the Transferor's name on checks and other
instruments representing Collections and enforcing such Pool Receivables and the
related Contracts.
SECTION 8.04. Responsibilities of Transferor. Anything herein to the
------------------------------
contrary notwithstanding:
(a) The Transferor shall perform all of its obligations under the
Contracts related to the Pool Receivables and under the related purchase
orders and other agreements to the same extent as if the Transferee's
Interest had not been transferred hereunder and the exercise by the Agent
of its rights hereunder shall not relieve the Transferor from such
obligations.
(b) Neither the Agent nor the Transferee shall have any obligation or
liability with respect to any Pool Receivables, Contracts related thereto
or any other related purchase orders or other agreements, nor shall any of
them be obligated to perform any of the obligations of the Transferor
thereunder.
SECTION 8.05. Further Action Evidencing Transfers. (a) The Transferor
-----------------------------------
agrees that from time to time, at its expense, it will promptly execute and
deliver all further instruments and documents, and take all further action that
the
- 33 -
<PAGE>
Agent may reasonably request in order to perfect, protect or more fully evidence
the Transfers hereunder and the resulting Transferee's Interest, or to enable
the Transferee or the Agent to exercise or enforce any of their respective
rights hereunder or under the other Transaction Documents. Without limiting the
generality of the foregoing, the Transferor will upon the request of the Agent:
(i) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate;
(ii) mark conspicuously each Contract evidencing each Pool Receivable
with a legend, acceptable to the Agent, evidencing the transfer of the
Transferee's Interest; and
(iii) mark its master data processing records evidencing such Pool
Receivables and related Contracts with such legend.
(b) The Transferor hereby authorizes the Agent to file in the name of the
Transferor, to the extent permitted by applicable law, one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Pool Receivables and Related Property now existing
or hereafter arising. If the Transferor fails to perform any of its agreements
or obligations under this Agreement, the Agent may (but shall not be required
to) itself perform, or cause performance of, such agreement or obligation, and
the expenses of the Agent incurred in connection therewith shall be payable by
the Transferor as provided in Section 13.01.
-------------
(c) Without limiting the generality of subsection (a), the Transferor will,
--------------
not earlier than six (6) months and not later than three (3) months from the
fifth anniversary of the date of filing of the financing statements referred to
in Sections 5.01(f) and 5.01(k) or any other financing statement filed pursuant
---------------- -------
to this Agreement or in connection with any Transfer hereunder, unless the Final
Pay Out Date shall have occurred:
(i) execute and deliver and file or cause to be filed an appropriate
continuation statement with respect to each such financing statement; and
(ii) deliver or cause to be delivered to the Agent an opinion of the
counsel for the Transferor referred to in Section 5.01(i) (or other counsel
---------------
for the Transferor reasonably satisfactory to the Agent), in form and
substance reasonably satisfactory to the Agent, confirming and
- 34 -
<PAGE>
updating the opinion delivered pursuant to Section 5.01(i) with respect to
---------------
the matters set forth in paragraph no. [7] of Exhibit 5.01(i) and otherwise
---------------
to the effect that the Transferee's Interest hereunder continues to be a
valid and perfected interest subject to no Liens of record except as
provided herein or otherwise permitted hereunder.
SECTION 8.06. Application of Obligors' Payments. (a) Any payment by an
---------------------------------
Obligor in respect of any indebtedness owed by it to the Transferor shall,
except as otherwise specified by such Obligor or otherwise required by contract
or law and unless the Agent instructs otherwise, be applied as a Collection of
any Pool Receivable or Receivables of such Obligor to the extent of any amounts
then due and payable thereunder before such payment is applied to any other
indebtedness of such Obligor.
(b) Except or as otherwise required by law or the underlying Contract, all
Collections received from an Obligor of any Receivable shall be applied to Pool
Receivables then outstanding of such Obligor in the order of the age of such
Pool Receivables, starting with the oldest such Pool Receivable; provided,
--------
however, that, if payment is designated by such Obligor for application to
- -------
specific Receivables, it shall be applied to such specified Receivables.
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest. To secure all obligations of
--------------------------
the Transferor arising in connection with this Agreement and each other
Transaction Document, whether now or hereafter existing, due or to become due,
direct or indirect, or absolute or contingent, including, without limitation,
Indemnified Amounts, payments on account of Collections received or deemed to be
received, fees and Earned Discount, in each case pro rata according to the
--- ----
respective amounts thereof, the Transferor hereby assigns and grants to the
Transferee, for its benefit and the benefit of the Agent, the Affected Parties
and the Indemnified Parties, a security interest in all of the Transferor's
right, title and interest (including specifically any undivided interest
retained by the Transferor hereunder) now or hereafter existing in, to and under
all the Pool Receivables and Related Property.
SECTION 9.02. Further Assurances. The provisions of Section 8.05 shall
------------------ ------------
apply to the security interest granted under Section 9.01 as well as to the
------------
Transfers and the Transferee's Interest hereunder.
- 35 -
<PAGE>
SECTION 9.03. Remedies. Upon the occurrence of a Termination Event, the
--------
Transferee, for its own benefit and for the benefit of the Agent, the Affected
Parties and the Indemnified Parties, shall have, with respect to the collateral
granted pursuant to Section 9.01, and in addition to all other rights and
------------
remedies available to the Transferee, the Agent, the Affected Parties or the
Indemnified Parties under this Agreement or other applicable law, all the rights
and remedies of a secured party upon default under the UCC.
ARTICLE X
TERMINATION EVENTS
SECTION 10.01. Termination Events. Each of the following events shall be
------------------
a "Termination Event":
-----------------
(a) (i) The Servicer (if the Transferor or an Affiliate of the
Transferor is the Servicer) shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clause (ii)
-----------
next following) and such failure shall remain unremedied for three Business
Days or (ii) the Servicer (if the Transferor or an Affiliate of the
Transferor is the Servicer) or the Transferor shall fail to make any
payment or deposit to be made by it hereunder when due; or
(b) Any representation or warranty made or deemed to be made by the
Transferor (or any of its officers) under or in connection with this
Agreement or any Periodic Report or Pay Out Statement or other information
or report delivered pursuant hereto shall prove to have been false or
incorrect in any material respect when made; or
(c) The Transferor shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be
performed or observed and any such failure shall remain unremedied for ten
Business Days after written notice thereof shall have been given by the
Agent to the Transferor; or
(d) A default shall have occurred and be continuing under any
instrument or agreement evidencing, securing or providing for the issuance
of indebtedness for borrowed money of, or guaranteed by, the Transferor or
any Affiliate thereof (provided, that in the case of Alco Standard, such
indebtedness is in excess of $5,000,000), which default is a payment
default or if unremedied, uncured, or unwaived (with or without the passage
of time or the giving of notice or both) would permit acceleration of the
maturity of such
- 36 -
<PAGE>
indebtedness and such default shall have continued unremedied, uncured or
unwaived for a period long enough to permit such acceleration and any
notice of default required to permit acceleration shall have been given; or
any default under any agreement or instrument relating to the purchase or
transfer of receivables of the Transferor, or any other event, shall occur
and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such default is to
terminate, or permit the termination of, the commitment of any party to
such agreement or instrument to purchase or acquire receivables or the
right of the Transferor to reinvest in receivables the principal amount
paid by any party to such agreement or instrument for an interest in
receivables; or
(e) An Event of Bankruptcy shall have occurred and remained continuing
with respect to the Transferor or any Affiliate thereof; or
(f) (i) Any litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings not disclosed
in writing by the Transferor to the Agent and the Transferee prior to the
date of execution and delivery of this Agreement is pending against the
Transferor or any Affiliate thereof, or (ii) any material development not
so disclosed has occurred in any litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental proceedings so
disclosed, which, in the case of clause (i) or (ii), in the opinion of the
---------- ----
Agent, is likely to have a Material Adverse Effect; or
(g) The Internal Revenue Service shall file notice of a lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any of the
assets of the Transferor and such lien shall not have been released within
5 days, or the Pension Benefit Guaranty Corporation shall, or shall
indicate its intention to, file notice of a lien pursuant to Section 4068
of the Employee Retirement Income Security Act of 1974 with regard to any
of the assets of the Transferor or Alco Standard; or
(h) There shall have occurred or shall exist any event or condition
which has, or would have a material possibility of causing, a Material
Adverse Effect; or the warranty in Section 6.01(i)(y) shall not be true at
------------------
any time; or
(i) the Unadjusted Transferee's Percentage shall exceed the Maximum
Percentage, and such event shall continue for more than 5 Business Days; or
- 37 -
<PAGE>
(j) The Losses to Liquidations Ratio (1) for any one month period
exceeds 9% or (2) for any six consecutive month period exceeds 7.5%; or
(k) The Delinquency Ratio exceeds 4% or the Default Ratio exceeds 3%;
or
(l) a default shall occur under the Support Agreement, or the Support
Agreement shall terminate or cease to be in effect for any reason; or
(m) There shall have been entered against the Transferor one or more
judgments, awards or decrees which exceed $2,500,000 at any one time
outstanding, excluding judgments, awards or decrees for which there is full
insurance and with respect to which the insurer has assumed a
responsibility in writing; or
(n) Transferor ceases to have a long term unsecured debt rating of at
least BBB- from S&P and Baa3 from Moody's; or
(o) Transferee shall cease to have a valid, perfected first priority
ownership interest in the Receivables and the Related Property for any
reason.
SECTION 10.02. Remedies. (a) Optional Termination. Upon the occurrence
-------- --------------------
of a Termination Event (other than a Termination Event described in subsection
----------
(e) or (i) of Section 10.01), the Agent shall, at the request, or may with the
- --- --- -------------
consent, of the Transferee, by notice to the Transferor declare the Commitment
Termination Date to have occurred.
(b) Automatic Termination. Upon the occurrence of a Termination Event
---------------------
described in subsection (e) or (i) of Section 10.01, the Commitment Termination
-------------- --- -------------
Date shall be deemed to have occurred automatically upon the occurrence of such
event; provided that, if the Commitment Termination Date shall have occurred by
--------
reason of a Termination Event described in subsection (i) and subsequent to such
--------------
date the Unadjusted Transferee's Percentage shall not exceed the Maximum
Percentage, upon written notice by the Agent to the Transferor, the Commitment
shall be reinstated.
(c) Additional Remedies. Upon any termination of the Commitment pursuant
-------------------
to this Section 10.02, the Agent and the Transferee shall have, in addition to
-------------
all other rights and remedies under this Agreement or otherwise, all other
rights and remedies provided under the UCC of each applicable jurisdiction and
other applicable laws, which rights shall be cumulative. Without limiting the
foregoing or the general applicability of
- 38 -
<PAGE>
Article XIII hereof, (i) the occurrence of a Termination Event shall not deny to
- ------------
the Transferee any remedy in addition to termination of the Commitment to which
the Transferee may be otherwise appropriately entitled, whether at law or in
equity, and (ii) following the occurrence of any Termination Event the
Transferee may elect to assign to any Person the Transferee's Interest, or any
portion thereof.
ARTICLE XI
THE AGENT
SECTION 11.01. Authorization and Action. The Transferee has appointed the
------------------------
Agent as its agent pursuant to a Servicing Agreement between the Transferee and
DBNY, and hereby authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the Agent
by the terms hereof and of said Servicing Agreement, together with such powers
as are reasonably incidental thereto.
SECTION 11.02. Agent's Reliance, Etc. Neither the Agent nor any of its
---------------------
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or the Agent under or in connection with this
Agreement (including, without limitation, the servicing, administering or
collecting Pool Receivables as the Servicer pursuant to Section 8.01), except
------------
for its or their own gross negligence or willful misconduct, and except for any
breach by the Servicing Agent of its obligations to the Transferee expressly set
forth in the Servicing Agreement referred to in Section 11.01. Without limiting
-------------
the generality of the foregoing, the Agent: (a) may consult with legal counsel
(including counsel for the Transferor), independent certified public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (b) makes no warranty or representation to the
Transferee or any other holder of any interest in Pool Receivables and shall not
be responsible to the Transferee or any such other holder for any statements,
warranties or representations made by any Person (other than the Servicing
Agent) in or in connection with this Agreement; (c) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of the Transferor or to
inspect the property (including the books and records) of the Transferor, except
for its duties to the Transferee as set forth in the Servicing Agreement
referred to above; (d) shall not be responsible to the Transferee (except for
any breach by the Servicing Agent of its duties set forth in the Servicing
Agreement referred to above) or to any other holder of
- 39 -
<PAGE>
any interest in Pool Receivables for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Transaction Document; and (e) shall incur no liability under or in respect of
this Agreement by acting upon any notice (including notice by telephone),
consent, certificate or other instrument or writing (which may be by facsimile
or telex) believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 11.03. Agent and Affiliates. Deutsche Bank and its Affiliates may
--------------------
generally engage in any kind of business with the Transferor or any Obligor, any
of their respective Affiliates and any Person who may do business with or own
securities of the Transferor or any Obligor or any of their respective
Affiliates, all as if Deutsche Bank were not the Agent and without any duty to
account therefor to the Transferee or any other holder of an interest in Pool
Receivables.
ARTICLE XII
ASSIGNMENTS BY TRANSFEROR OR TRANSFEREE
SECTION 12.01. Restrictions on Assignments. (a) Neither the Transferor
---------------------------
nor the Transferee may assign its rights hereunder or any interest herein
without the prior written consent of the Agent, and the Transferee may not
assign the Transferee's Interest (or any portion thereof) to any Person without
the prior written consent of the Transferor; provided, however, that
-------- -------
(i) the Transferee may assign, or grant a security interest in, the
Transferee's Interest (or any portion thereof) to Deutsche Bank, the
Liquidity Banks (or any successor of any thereof by merger, consolidation
or otherwise), or any Affiliate of Deutsche Bank or any of the Liquidity
Banks (which may then assign the Transferee's Interest (or any portion
thereof so assigned) or any interest therein to such party or parties as it
may choose); and
(ii) the Transferee may assign and grant a security interest in the
Transferee's Interest and the Transferee's rights and interests in, to and
under this Agreement and the other Transaction Documents to DBNY, as
Collateral Agent, and any successor in such capacity, to secure the
Transferee's obligations under or in connection with the Commercial Paper
Notes, the Liquidity Agreement, the Enhancement Agreement and any letter of
credit issued thereunder, and certain other obligations of the Transferee
incurred in connection with the funding of the Transfers and Reinvestments
hereunder, which assignment and grant of a
- 40 -
<PAGE>
security interest shall not be considered an "assignment" for purposes of
Section 12.01(b), Section 12.03 or 12.04 or, prior to the enforcement of
---------------- ------------- -----
such security interest, for purposes of any other provision of this
Agreement.
(b) The Transferor agrees to advise the Agent within five Business Days
after notice to the Transferor of any proposed assignment by the Transferee of
the Transferee's Interest (or any portion thereof), not otherwise permitted
under subsection (a), of the Transferor's consent or non-consent to such
--------------
assignment. If the Transferor does not consent to such assignment, the
Transferee may immediately assign the Transferee's Interest (or such portion) to
Deutsche Bank, any of the Liquidity Banks or any Affiliate of Deutsche Bank or
any of the Liquidity Banks. All of the aforementioned assignments shall be upon
such terms and conditions as the Transferee and the assignee may mutually agree.
SECTION 12.02. Documentation; Notice of Assignment. (a) Any assignment of
-----------------------------------
the Transferee's Interest (or any portion thereof) to any Person may be
evidenced by such instruments or documents as may be satisfactory to the
Transferee, the Agent and the assignee.
(b) The Transferee shall provide notice to the Transferor of any
assignment of the Transferee's Interest (or any portion thereof) by the
Transferee to any assignee (other than the assignment and grant of a security
interest referred to in Section 12.01(a)(ii)).
--------------------
SECTION 12.03. Rights of Assignee. Upon the assignment by the Transferee
------------------
of the Transferee's Interest (or any portion thereof) in accordance with this
Article XII, the assignee receiving such assignment shall have all of the rights
- -----------
of the Transferee hereunder with respect to the Transferee's Interest (or the
portion thereof so assigned); subject, however, to Sections 12.04 and 12.05.
------- ------- -------------- -----
SECTION 12.04. Allocation of Payments. If on any date there are sufficient
----------------------
funds in the Agent's Account to distribute a portion, but not all, of the
amounts payable pursuant to subsection (c)(i) of either Section 3.01 or Section
----------------- ------------ -------
3.02 and, due to any assignment of the Transferee's Interest (or any portion
- ----
thereof), such amounts are payable to more than one Person, then, unless
otherwise agreed between such Persons, and subject to Section 3.02(d), the Agent
---------------
shall distribute funds to such Persons pro rata based upon the amounts so
--- ----
payable to such Persons.
SECTION 12.05. Calculation of Earned Discount After Assignment. Upon
-----------------------------------------------
and after the assignment of the Transferee's Interest (or any portion thereof)
pursuant to this Article XII, the Transferee Rate used to calculate Earned
-----------
Discount from time
- 41 -
<PAGE>
to time with respect to the Transferee's Interest (or the portion thereof so
assigned) for each applicable Yield Period beginning after the effective date of
such assignment shall be the Bank Rate, unless the Transferee, the Transferor
and the assignee may agree in writing upon to use a different Transferee Rate
for calculating such Earned Discount. If (i) the Transferor fails to consent to
any assignment of the Transferee's Interest (or any portion thereof) proposed by
the Transferee, (ii) the Transferee makes an assignment of the Transferee's
Interest (or such portion) to Deutsche Bank or any Affiliate of Deutsche Bank as
permitted under Section 12.01(b), and (iii) in the opinion of the Agent, the
----------------
Transferee was required by applicable law, regulation or directive from any
governmental authority to make such assignment, then the Earned Discount with
respect to the Transferee's Interest (or the portion thereof so assigned) shall
immediately begin to accrue at the Bank Rate for the remainder of any then
applicable Yield Period.
SECTION 12.06. Rights of Collateral Agent. The Transferor hereby agrees
--------------------------
that, upon notice to the Transferor, the Collateral Agent referred to in Section
-------
12.01 may exercise all the rights of the Agent hereunder with respect to the
- -----
Transferee's Interest (or all portions thereof, and Collections with respect
thereto, which are owned by the Transferee), and all other rights and interests
of the Transferee in, to or under this Agreement or any other Transaction
Document. Without limiting the foregoing, upon such notice such Collateral
Agent may request the Servicer to segregate the Transferee's allocable share of
Collections from the Transferor's allocable share in accordance with Section
-------
8.02(a), may give a notice designating a new Servicer pursuant to Section
- ------- -------
8.01(a), may give or require the Agent to give notice to the Post Office Boxes
- -------
and Designated Account Banks as referred to in Section 8.03(a), and may direct
---------------
the Obligors of Pool Receivables to make payments in respect thereof directly to
an account or lockbox designated by it, in each case, to the same extent as the
Transferee or the Agent might have done.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities by the Transferor. (a) General Indemnity.
----------------------------- -----------------
Without limiting any other rights which any such Person may have hereunder or
under applicable law, the Transferor hereby agrees to indemnify each of the
Agent, the Transferee, the Liquidity Banks, the Enhancement Bank, Deutsche Bank,
each of their respective Affiliates, successors, transferees, participants and
assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing (each an "Indemnified Party"),
-----------------
forthwith on demand,
- 42 -
<PAGE>
from and against any and all damages, losses, claims, liabilities and related
costs and expenses, including reasonable attorneys' fees and disbursements (all
of the foregoing being collectively referred to as "Indemnified Amounts")
-------------------
awarded against or incurred by any of them arising out of or relating to this
Agreement or the ownership or funding of the Transferee's Interest (or any
portion thereof) or in respect of any Receivable or any Contract, excluding,
---------
however, (a) Indemnified Amounts to the extent resulting from gross negligence
- -------
or willful misconduct on the part of the Agent, the Transferee or such
Indemnified Party or (b) recourse (except as otherwise specifically provided in
this Agreement) for Defaulted Receivables. Without limiting the foregoing, and
subject to the foregoing exclusions, the Transferor shall indemnify each
Indemnified Party for Indemnified Amounts arising out of or relating to:
(i) the transfer by the Transferor of any interest in any Receivable
other than the transfer of the Transferee's Interest to the Transferee
pursuant to this Agreement and the grant of a security interest to the
Transferee pursuant to Section 9.01;
------------
(ii) the breach of any representation or warranty made by the
Transferor (or any of its officers) or the Servicer (if the Transferor or
an Affiliate of the Transferor is the Servicer) under or in connection with
this Agreement, any Periodic Report or Pay Out Statement or any other
information or report delivered by the Transferor or the Servicer pursuant
hereto, which shall have been false or incorrect in any material respect
when made or deemed made;
(iii) the failure by the Transferor or the Servicer (if the
Transferor or an Affiliate of the Transferor is the Servicer) to comply
with any applicable law, rule or regulation with respect to any Pool
Receivable or the related Contract, or the nonconformity of any Pool
Receivable or the related Contract with any such applicable law, rule or
regulation;
(iv) the failure to vest and maintain vested in the Transferee an
undivided percentage ownership interest, to the extent of the Transferee's
Interest, in the Receivables in, or purporting to be in, the Receivables
Pool, together with all Related Property, free and clear of any Lien, other
than an Lien arising solely as a result of an act of the Transferee or the
Agent, whether existing at the time of any Transfer or Reinvestment or at
any time thereafter;
(v) the failure to file, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any applicable
jurisdiction or
- 43 -
<PAGE>
other applicable laws with respect to any Pool Receivables or Related
Property, whether at the time of any Transfer or Reinvestment or at any
time thereafter;
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool (including, without limitation, a
defense based on such Receivable's or the related Contract's not being a
legal, valid and binding obligation of such Obligor enforceable against it
in accordance with its terms), or any other claim resulting from the sale
of the merchandise or services related to such Receivable or the furnishing
or failure to furnish such merchandise or services;
(vii) any failure of the Transferor, as the Servicer or otherwise, to
perform its duties or obligations in accordance with the provisions of
Article VIII;
------------
(viii) any products liability claim arising out of or in connection
with merchandise or services that are the subject of any Pool Receivable;
or
(ix) any tax or governmental fee or charge (but not including taxes
upon or measured by net income), all interest and penalties thereon or with
respect thereto, and all out-of-pocket costs and expenses, including the
reasonable fees and expenses of counsel in defending against the same,
which may arise by reason of the transfer or ownership of the Transferee's
Interest, any portion thereof or any other interest in the Pool Receivables
or Related Property or in any goods which secure any such Pool Receivables.
(b) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party shall
-------------------------------------
have notice of any attempt to impose or collect any tax or governmental fee or
charge for which indemnification will be sought from the Transferor under
Section 13.01(a)(ix), such Indemnified Party shall give prompt and timely notice
- --------------------
of such attempt to the Transferor and the Transferor shall have the right, at
its expense, to participate in any proceedings resisting or objecting to the
imposition or collection of any such tax, governmental fee or charge.
Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the payment of any of the aforesaid taxes and the receipt
of the indemnity provided hereunder or of any refund of any such tax previously
indemnified hereunder, including the effect of such tax or refund on the amount
of tax measured by net income or profits which is or was payable by the
Indemnified Party.
- 44 -
<PAGE>
(c) Contribution. If for any reason the indemnification provided above in
------------
this Section 13.01 is unavailable to an Indemnified Party or is insufficient to
-------------
hold an Indemnified Party harmless, then the Transferor shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by such Indemnified Party on the one hand
and the Transferor on the other hand but also the relative fault of such
Indemnified Party as well as any other relevant equitable considerations.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement nor consent to any departure by the Transferor therefrom shall in
any event be effective unless the same shall be in writing and signed by (a) the
Transferor, the Agent and the Transferee (with respect to an amendment) or (b)
the Agent and the Transferee (with respect to a waiver or consent by them) or
the Transferor (with respect to a waiver or consent by it), as the case may be,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 14.02. Notices, Etc. All notices and other communications provided
------------
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by express
mail or courier, or by certified mail, postage prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth in
Schedule 14.02 hereto or at such other address or facsimile number as shall be
- --------------
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (a) if personally delivered
or sent by express mail or courier, when received, (b) if sent by certified
mail, three Business Days after having been deposited in the mail, postage
prepaid, and (c) if transmitted by facsimile, when sent, receipt confirmed by
telephone or electronic means, except that notices and communications pursuant
to Article I shall not be effective until received.
---------
SECTION 14.03. No Waiver; Remedies. No failure on the part of the Agent,
-------------------
any Affected Party, any Indemnified Party, the Transferee or any assignee of the
Transferee's Interest or any portion thereof to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other
- 45 -
<PAGE>
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law. Without limiting the foregoing, Deutsche Bank is
hereby authorized by the Transferor at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by Deutsche Bank to or for the credit or
the account of the Transferor, now or hereafter existing under this Agreement,
to the Agent, any Affected Party, any Indemnified Party or the Transferee, or
their respective successors and assigns.
SECTION 14.04. Binding Effect; Survival. This Agreement shall be binding
------------------------
upon and inure to the benefit of the Transferor, the Agent, the Transferee and
their respective successors and assigns, and the provisions of Section 4.04 and
------------
Article XIII shall inure to the benefit of the Affected Parties and the
- ------------
Indemnified Parties, respectively, and their respective successors and assigns;
provided, however, nothing in the foregoing shall be deemed to authorize any
- -------- -------
assignment not permitted by Section 12.01. This Agreement shall create and
-------------
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until such time as the
Final Pay Out Date shall have occurred. The rights and remedies with respect to
any breach of any representation and warranty made by the Transferor pursuant to
Article VI and the provisions of Article XIII, Section 4.04 and Sections 14.05
- ---------- ------------ ------------ --------------
through 14.09 shall be continuing and shall survive any termination of this
-----
Agreement.
SECTION 14.05. Costs, Expenses and Taxes. In addition to its obligations
-------------------------
under Article XIII, the Transferor agrees to pay on demand:
------------
(a) all costs and expenses incurred by the Agent, the Transferee,
Deutsche Bank and their respective Affiliates in connection with the
negotiation, preparation, execution and delivery, the administration
(including periodic auditing) or the enforcement of, or any actual or
claimed breach of, this Agreement and the other Transaction Documents,
including, without limitation (i) the reasonable fees and expenses of
counsel to any of such Persons incurred in connection with any of the
foregoing or in advising such Persons as to their respective rights and
remedies under any of the Transaction Documents, and (ii) all reasonable
out-of-pocket expenses (including reasonable fees and expenses of
independent accountants) incurred in connection with any review of the
Transferor's books and records either prior to the execution and delivery
hereof or pursuant to Section 7.01(c);
---------------
- 46 -
<PAGE>
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of
this Agreement or any or the other Transaction Documents (and the
Transferor agrees to indemnify each Indemnified Party against any
liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees); and
(c) a pro rata share of Transferee's general operating costs and
expenses, including, but not limited to, rating agency fees, management
fees and the fees and expenses of counsel, which pro rata share shall be
determined by dividing the daily average annual Transferee's Investment by
the daily average Commercial Paper Notes issued by Transferee, provided,
--------
however, that in no event shall such pro rata share exceed .01% per annum
-------
of the average annual Transferee's Investment. Such fee shall be payable
on the last day of each February for the calendar year ending on the
immediately preceding December 31.
SECTION 14.06. No Proceedings. The Transferor and Deutsche Bank,
--------------
individually and as Agent, each hereby agrees that it will not institute against
or join any other Person in instituting against, the Transferee, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any Federal or state bankruptcy or similar law, for one year
and a day after the latest maturing Commercial Paper Note is paid. The
foregoing shall not limit the Transferor's right to file any claim in or
otherwise take any action with respect to any insolvency proceeding that was
instituted by any Person other than the Transferor.
SECTION 14.07. Confidentiality of Transferor Information. (a)
-----------------------------------------
Confidential Information. Each of the Transferee and the Agent acknowledges
- -------------------------
that certain of the information provided to such party by or on behalf of the
Transferor in connection with this Agreement and the transactions contemplated
hereby is or may be confidential, and each such party severally agrees that,
unless the Transferor shall otherwise agree in writing, and except as provided
in subsection (b), such party will not disclose to any other person or entity:
--------------
(i) any information regarding, or copies of, any Periodic Reports,
Pay Out Statements, and any non-public financial statements, reports and
other information, furnished by the Transferor to the Transferee or the
Agent pursuant to this Agreement, or
(ii) any other information regarding the Transferor which is
designated by the Transferor to such party in writing or otherwise as
confidential;
- 47 -
<PAGE>
the information referred to in clauses (i) and (ii) above, is collectively
--------------------
referred to as the "Transferor Information"; provided, however, "Transferor
---------------------- -------- ------- ----------
Information" shall not include
- -----------
(A) any information which is or becomes generally available to
the general public or to such party on a nonconfidential basis from a
source other than the Transferor or which was known to such party on a
nonconfidential basis prior to its disclosure by the Transferor, or
(B) general information regarding the nature of this Agreement,
the basic terms hereof (including without limitation the amount and
nature of the Commitment and the Transferee's Investments hereunder
and of the recourse or other credit enhancement provided by
hereunder), the nature, amount and status of the Pool Receivables, and
the current and/or historical ratios of losses to liquidations and/or
outstandings with respect to the Receivables Pool, and the identity of
the Transferor.
(b) Disclosure. Notwithstanding subsection (a), each party may disclose
---------- --------------
any Transferor Information:
(i) to any of such party's attorneys, consultants and auditors, and
to such of the Liquidity Banks, the Enhancement Bank, any dealer or
placement agent for the Transferee's commercial paper, and any actual or
potential assignees of, or participants in, any of the rights or
obligations of the Transferee, the Liquidity Banks, the Enhancement Bank or
Deutsche Bank under or in connection with this Agreement, who (A) are
informed by such party of the confidential nature of the Transferor
Information and the terms of this Section 14.07, and (B) are subject to
-------------
confidentiality restrictions generally consistent with this Section 14.07,
-------------
(ii) to any rating agency that maintains a rating for the
Transferee's commercial paper or is considering the issuance of such a
rating, for the purposes of reviewing the credit of the Transferee in
connection with such rating,
(iii) to any other party to this Agreement, for the purposes
contemplated hereby,
(iv) to any Person whom any dealer or placement agent for the
Transferee shall have identified as an actual or potential investor in
Commercial Paper Notes, and who shall have agreed with Deutsche Bank in
writing to keep such information confidential and use it only in connection
with
- 48 -
<PAGE>
considering or monitoring such investments, subject to applicable legal
requirements (it being understood that such Person may also receive the
information excluded from the definition of "Transferor Information"
pursuant to clause (B) of subsection (a)),
---------- --------------
(v) as may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over such party, in
order to comply with any law, order, regulation, regulatory request or
ruling applicable to such party, or
(vi) subject to subsection (c), in the event such party is legally
--------------
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose such
Transferor Information.
(c) Legal Compulsion. In the event that any party hereto (other than the
----------------
Transferor) or any of its representatives is requested or becomes legally
compelled (by interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any of the Transferor
Information, such party will (or will cause its representatives to)
(i) provide the Transferor with prompt written notice of such request
or legal compulsion; and
(ii) at the Transferor's expense, use its reasonable efforts to
cooperate with the Transferor in making an appropriate objection to
disclosure, seeking a protective order or taking such other actions as may
be lawful and appropriate in order to maintain the confidentiality of such
Transferor Information.
(d) Survival. This Section 14.07 shall survive termination of this
-------- -------------
Agreement.
SECTION 14.08. Confidentiality of Program Information. (a) Program
-------------------------------------- -------
Information. Each party hereto (other than DBNY) acknowledges that DBNY regards
- -----------
the structure of the transactions contemplated by this Agreement, and by the
Liquidity Agreement, the Enhancement Agreement and the other Program Documents
referred to therein, to be proprietary, and each such party severally agrees
that:
(i) unless DBNY shall otherwise agree in writing, and except as
provided in subsection (b), such party will not disclose to any other
--------------
person or entity:
- 49 -
<PAGE>
(A) any information regarding, or copies of, this Agreement or
any transaction contemplated hereby,
(B) any information regarding, or copies of, the Liquidity
Agreement, the Enhancement Agreement, any of the other Program
Documents referred to therein, or any transaction contemplated
thereby,
(C) any information regarding the organization or business of
the Transferee generally, or
(D) any information regarding Deutsche Bank which is designated
by DBNY to such party in writing or otherwise as confidential or not
otherwise available to the general public
(the information referred to in clauses (A), (B), (C) and
----------- --- ---
(D) above, whether furnished by the Transferee, DBNY, any Liquidity Bank, the
- ---
Enhancement Bank, any assignee of or participant in any rights or obligations of
the Transferee, any Liquidity Bank or the Enhancement Bank, or any attorney for
or other representative of any of the foregoing (each a "Program Information
-------------------
Provider"), is collectively referred to as the "Program Information"; provided,
- -------- ------------------- --------
however, "Program Information" shall not include any information which is or
- ------- -------------------
becomes generally available to the general public or to such party on a
nonconfidential basis from a source other than DBNY or any other Program
Information Provider, or which was known to such party on a nonconfidential
basis prior to its disclosure by DBNY or any other Program Information
Provider);
(ii) such party will make the Program Information available to only
such of its officers, directors, employees and agents who (A) in the good
faith belief of such party, have a need to know such Program Information,
(B) are informed by such party of the confidential nature of the Program
Information and the terms of this Section 14.08, and (C) are subject to
-------------
confidentiality restrictions consistent with this Section 14.08;
-------------
(iii) such party will use the Program Information solely for the
purposes of evaluating, administering and enforcing the transactions
contemplated by this Agreement and making any necessary business judgments
with respect thereto; and
(iv) such party will, upon demand, return (and cause each of its
officers, directors, employees, agents, attorneys, consultants or auditors
(collectively, "representatives") to return) to DBNY, or to such other
---------------
Program Information Provider as shall have furnished it with
- 50 -
<PAGE>
any Program Information, all documents or other written material received
from DBNY or such other Program Information Provider which constitute or
contain any Information described in subclause (B), (C), or (D) of clause
------------- --- --- ------
(i) above and all copies of such documents or other material in its
---
possession or in the possession of any of its representatives, and will not
retain any copy, summary or extract thereof on any storage medium
whatsoever.
(b) Disclosure. Notwithstanding clause (i) of subsection (a), each party
---------- ---------- --------------
may disclose any Program Information:
(i) to its attorneys, consultants and auditors who (A) in the good
faith belief of such party, have a need to know such Program Information,
(B) are informed by such party of the confidential nature of the Program
Information and the terms of this Section 14.08, and (C) are subject to
-------------
confidentiality restrictions consistent with this Section 14.08,
-------------
(ii) to any other party to this Agreement, for the purposes
contemplated hereby,
(iii) as may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over such party, in
order to comply with any law, order, regulation, regulatory request or
ruling applicable to such party (provided that prior to making any required
--------
filing of this agreement with the Securities and Exchange Commission,
Transferor shall apply for confidential treatment and shall expurgate those
provisions requested by the Agent), or
(iv) subject to subsection (c), in the event such party is legally
--------------
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose such
Program Information.
(c) Legal Compulsion. In the event that any party hereto (other than
----------------
DBNY) or any one to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Program Information, such party will (or
will cause its representatives to)
(i) provide DBNY with prompt written notice of such request or legal
compulsion;
(ii) unless DBNY agrees that such Program Information may be
disclosed, make a timely objection to the request or
- 51 -
<PAGE>
compulsion to provide such Program Information on the basis that such
Program Information is confidential and subject to the agreements contained
in this Section 14.08; and
-------------
(iii) at the expense of DBNY or any other Program Information
Provider, take any action as DBNY or such other Program Information
Provider may reasonably request to seek a protective order or other
appropriate remedy and otherwise to maintain the confidentiality of such
Program Information.
(d) Survival. This Section 14.08 shall survive termination of this
-------- -------------
Agreement.
SECTION 14.09. No Recourse Against Other Parties. No recourse under any
---------------------------------
obligation, covenant or agreement of the Transferee contained in this Agreement
shall be had against any stockholder, employee, officer, director, or
incorporator of the Transferee, provided, however, that nothing in this Section
-------- ------- -------
14.09 shall relieve any of the foregoing Persons from any liability which such
- -----
Person may otherwise have for such Person's gross negligence or willful
misconduct.
SECTION 14.10. Definitions; Other Terms. Unless otherwise defined herein,
------------------------
all capitalized terms used in this Agreement shall have the meanings set forth
in Appendix A attached to this Agreement and by this reference made a part
----------
hereof. All accounting terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles. All terms used in
Article 9 of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9.
SECTION 14.11. Captions and Cross References. The various captions
-----------------------------
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule or Exhibit are
to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the
case may be, and references in any Section, subsection, or clause to any
subsection, clause or subclause are to such subsection, clause or subclause of
such Section, subsection or clause.
SECTION 14.12. Integration. This Agreement contains a final and complete
-----------
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire Agreement among the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings.
- 52 -
<PAGE>
SECTION 14.13. Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS AND
-------------
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE
PERFECTION (AND THE EFFECT OF PERFECTION OR NONPERFECTION) OF THE INTERESTS OF
THE TRANSFEREE IN THE RECEIVABLES OR THE RELATED PROPERTY IS GOVERNED BY THE
LAWS OF THE JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 14.14. Waiver Of Jury Trial. THE TRANSFEROR HEREBY EXPRESSLY
--------------------
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY
AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY BE IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR OTHER
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT A JURY.
SECTION 14.15. Consent To Jurisdiction; Waiver Of Immunities. EACH OF THE
---------------------------------------------
TRANSFEROR AND TRANSFEREE HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY
UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT
AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK
CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR
FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID
TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
SECTION 14.16. Execution in Counterparts. This Agreement may be executed
-------------------------
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement.
- 53 -
<PAGE>
SECTION 14.17. Syndication of Liquidity. The Transferor agrees to
------------------------
cooperate with DBNY in connection with the syndication of the Liquidity
Agreement.
SECTION 14.18. Tax Treatment. It is the intent of Transferor and
-------------
Transferee that, for federal, state and local income and franchise tax purposes,
the Transferee's Interest will be treated as evidence of indebtedness secured by
the Receivables, Related Security and Collections and other proceeds thereof.
Transferor, by entering into this Agreement, and Transferee agree to treat the
Transferee's Interest for federal, state and local income and franchise tax
purposes as indebtedness. The provisions of this Agreement and all related
Transaction Documents shall be construed to further such intentions of the
parties.
- 54 -
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date first
above written.
TWIN TOWERS INC.,
as Transferee
By
---------------------------------------
Name Printed: Lannhi Tran
Title: Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Agent
By
---------------------------------------
Name Printed: Robert M. Lupoli
Title: Director
By
---------------------------------------
Name Printed:
--------------------------
Title:
---------------------------------
ALCO CAPITAL RESOURCE, INC.
as Transferor and initial Servicer
By
---------------------------------------
Name Printed:
--------------------------
Title:
---------------------------------
<PAGE>
APPENDIX A
DEFINITIONS
This is Appendix A to the Receivables Transfer Agreement, dated as of
----------
September 23, 1994, among Alco Capital Resource, Inc., Twin Towers Inc. and
Deutsche Bank AG, New York Branch, as Agent (as amended, supplemented or
otherwise modified from time to time, this "Agreement"). Each reference in this
---------
Appendix A to any Section, Appendix or Exhibit refers to such Section of or
- ----------
Appendix or Exhibit to this Agreement.
As used in this Agreement, unless the context requires a different meaning,
the following terms have the meanings indicated hereinbelow:
"Adjusted Average Maturity" means, on any day, the sum of (a) 45 days plus
------------------------- --- ----
(b) the Average Maturity for such day.
"Affected Party" means each of the Transferee, the Liquidity Banks, the
--------------
Enhancement Bank, any permitted assignee of the Transferee, any assignee of or
participant in any of the Transferee's obligations to the Liquidity Banks or the
Enhancement Bank, Deutsche Bank (including any branch or agency thereof) and any
successor to Deutsche Bank or DBNY as the Agent.
"Affiliate" when used with respect to a Person means any other Person
---------
controlling, controlled by, or under common control with, such Person.
"Agent" has the meaning set forth in the preamble.
----- --------
"Agent's Account" has the meaning set forth in Section 4.01(a).
--------------- ---------------
"Alco Standard" means Alco Standard Corporation, an Ohio corporation.
-------------
"Alternate Base Rate" means, on any date, a fluctuating rate of interest
-------------------
per annum equal to the higher of
- --- -----
(a) 1.00% above the rate of interest most recently announced by
Deutsche Bank as its prime lending rate for unsecured commercial loans
within the United States; and
(b) 1.00% above the rate per annum at which DBNY, as a branch of a
--- -----
foreign bank, in its sole discretion, can acquire federal funds in the
interbank overnight federal
A-1
<PAGE>
funds market, including through brokers of recognized standing.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by Deutsche Bank or DBNY in connection with extensions of
credit.
"Authorized Servicing Officer" means (i) chief financial officer, chief
----------------------------
accounting officer, controller or president, if the Transferor is the Servicer
and (ii) such other officer as the Agent may agree to, if the Transferor is not
the Servicer.
"Average Maturity" means, on any day, that time period (expressed in days)
----------------
equal to the weighted average maturity of the Pool Receivables as shall be
calculated by the Servicer, as set forth in the most recent Periodic Report in
accordance with the provisions thereof. If the Agent shall disagree with any
such calculation, the Agent may recalculate the Average Maturity for such day,
which calculation shall, absent manifest error, be binding upon the Servicer,
the Transferor and the Transferee.
"Bank Rate" for any Yield Period for any Rate Tranche means a rate per
--------- ---
annum equal to the sum of (a) .30% per annum, plus (b) the Eurodollar Rate
- ----- --- ----- ----
(Reserve Adjusted) for such Yield Period; provided, however, that if (i) it
-------- -------
shall become unlawful for the Agent, any Liquidity Bank or the Enhancement Bank
to obtain funds in the London interbank market in order to fund any Transfer or
to maintain any Rate Tranche, or if such funds shall not be reasonably available
to the Agent, any Liquidity Bank or the Enhancement Bank, or (ii) there shall
not be time prior to the commencement of an applicable Yield Period to determine
a Eurodollar Rate in accordance with its terms, then the "Bank Rate" for any
---------
Yield Period for such Rate Tranche shall be equal to a rate of (x) .425% per
---
annum, plus (y) the Domestic CD Rate (Adjusted) for such Yield Period.
- ----- ----
"Business Day" means a day on which both (a) the Agent at its principal
------------
office in New York City, New York is open for business and (b) commercial banks
in New York City are not authorized or required to be closed for business.
"Collections" means, with respect to any Receivable, all funds which either
-----------
(a) are received by the Transferor or the Servicer from or on behalf of the
related Obligors in payment of any amounts owed (including, without limitation,
purchase prices, finance charges, interest and all other charges) in respect of
such Receivable, or applied to such amounts owed by such Obligors (including,
without limitation, insurance payments that the Transferor or Servicer applies
in the ordinary course of its business to amounts owed in respect of such
Receivable and net proceeds of sale or other disposition of repossessed or
returned
A-2
<PAGE>
Equipment or other collateral or property of the Obligor or any other party
directly or indirectly liable for payment of such Receivable and available to be
applied thereon), (b) are received by the Transferor or the Servicer in payment
of the purchase price of such Receivable or recourse obligations of any Person
related to such Receivable, whether pursuant to arrangements with the dealers or
otherwise, or (c) are deemed to have been received by the Transferor or any
other Person as a Collection pursuant to Section 3.03; provided that, so long
------------ -------- ----
the Transferor or an Affiliate of the Transferor is the Servicer, late payment
charges, collection fees and extension fees shall not be deemed to be
Collections.
"Commercial Paper Notes" means short-term promissory notes issued or to be
----------------------
issued by the Transferee to fund its investments in accounts receivable or other
financial assets.
"Commercial Paper Rate" for any Yield Period for any Rate Tranche means a
---------------------
rate per annum equal to the sum of (i) the rate or, if more than one rate, the
--- -----
weighted average of the rates, determined by converting to an interest-bearing
equivalent rate per annum the discount rate (or rates) at which Commercial Paper
--- -----
Notes having a term equal to such Yield Period and to be issued to fund the
Transfer of or to maintain such Rate Tranche by the Transferee (including,
without limitation, the Transferee's Tranche Investment and accrued and unpaid
Earned Discount) may be sold by any placement agent or commercial paper dealer
selected by the Agent, as agreed between each such agent or dealer and the
Agent, plus (ii) the commissions and charges charged by such placement agent or
----
commercial paper dealer with respect to such Commercial Paper Notes, expressed
as a percentage of the face amount of such Commercial Paper Notes and converted
to an interest-bearing equivalent rate per annum.
--- -----
"Commitment" has the meaning set forth in Section 1.01.
---------- ------------
"Commitment Termination Date" has the meaning set forth in Section 1.04.
--------------------------- ------------
"Concentration Limit" for any Obligor at any time means the greater of (a)
-------------------
the Special Concentration Limit, if any, for such Obligor and (b) 2.0% of the
Transferee's Investment at such time.
"Contract" means a lease, conditional sale agreement or other contract
--------
between the Transferor and any Person pursuant to or under which such Person
shall be obligated to make payments to the Transferor from time to time.
"Credit and Collection Policy" means those credit and collection policies
----------------------------
and practices relating to Contracts and
A-3
<PAGE>
Receivables described in Schedule 6.01(o)-2, as modified without violating
------------------
Section 7.03(c).
- ---------------
"DBNY" has the meaning set forth in the preamble.
---- --------
"Dealer Terminations" means Pool Receivables that have been terminated or
-------------------
prepaid in connection with a trade-in or trade-up or any other reason (other
than a default under such Pool Receivable) in a circumstance where the Obligor
did not make a cash payment to the Transferor in an amount at least equal to the
Unpaid Balance of such Pool Receivable.
"Dealer Termination Ratio" means the ratio (expressed as a percentage)
------------------------
computed as of the last day of each month by dividing (x) the aggregate amount
of the Unpaid Balance of all Dealer Terminations that were terminated or prepaid
during such month by (y) the Collections of Pool Receivables during such month.
"Default Ratio" means the ratio (expressed as a percentage) computed as of
-------------
the last day of each month by dividing (x) the aggregate Unpaid Balance of all
Pool Receivables that are Defaulted Receivables as of such date by (y) the
aggregate Unpaid Balance of all Pool Receivables on such date.
"Default Reserve" on any day means an amount equal to the product of (a)
---------------
the Reserve Percentage at the close of business of the Transferee on such day,
times (b) the sum of (i) the Transferee's Investment at the opening of business
- -----
of the Transferee on such day, plus (ii) the Discount Factor at the close of
----
business of the Transferee on such day, plus (iii) the Discount Amount at the
close of business of the Transferee on such day; provided that from and after
--------
the Commitment Termination Date, the Default Reserve shall be the greater of (1)
the foregoing amount and (2) 6.5% of the sum described in the foregoing clause
------
(b), calculated as of the Month End Date immediately preceding such Commitment
- ---
Termination Date.
"Defaulted Receivable" means a Receivable: (a) as to which any payment, or
--------------------
part thereof, remains unpaid for 90 or more days from the original due date for
such payment, (b) as to which the Obligor thereof is the Obligor on any other
Defaulted Receivable, (c) as to which an Event of Bankruptcy has occurred and
remains continuing with respect to the Obligor thereunder, (d) as to which
payments have been extended, or the terms of payment thereof rewritten, without
the Agent's consent, except as set forth herein or (e) which, consistent with
the Credit and Collection Policy, would be written off the Transferor's books as
uncollectible.
"Delinquency Ratio" means the ratio (expressed as a percentage) computed as
-----------------
of the last day of each month by dividing
A-4
<PAGE>
(x) the aggregate Unpaid Balance of all Pool Receivables that were Delinquent
Receivables at the end of such month by (y) the aggregate Unpaid Balance of all
Pool Receivables on such date.
"Delinquent Receivable" means a Receivable that is not a Defaulted
---------------------
Receivable and: (a) as to which any payment, or part thereof, remains unpaid for
60 days or more from the original due date for such payment; or (b) which,
consistent with the Credit and Collection Policy, would be classified as
delinquent by the Transferor.
"Designated Account" means any bank account into which collections from
------------------
Pool Receivables are deposited.
"Designated Account Agreement" means a letter agreement, in substantially
----------------------------
the form of Exhibit 5.01(h), between the Transferor and any Designated Account
---------------
Bank.
"Designated Account Bank" means any of the banks holding one or more
-----------------------
Designated Accounts.
"Designated Obligor" means, at any time, all Obligors of the Transferor
------------------
except any such Obligor as to which the Agent has, at least three Business Days
prior to the date of determination, given notice to the Transferor that such
Obligor shall not be considered a Designated Obligor.
"Deutsche Bank" has the meaning set forth in the preamble.
------------- --------
"Dilution Percentage" means the higher of (i) 15% times the highest Dealer
------------------- -----
Termination Ratio occurring for the immediately preceding three months and (ii)
10%.
"Dilution Reserve" means on any day an amount equal to the product of (A)
----------------
the Dilution Percentage at the close of business of the Transferee on such day,
times (B) the sum of (i) the Transferee's Investment at the opening of business
- -----
of the Transferee on such day plus (ii) the Discount Factor at the close of
----
business of the Transferee on such day.
"Discount Amount" at any time means an amount equal to (i) the aggregate
---------------
Unpaid Balance of all Eligible Receivables at such time minus (ii) the aggregate
-----
Present Value of all Eligible Receivables at such time.
"Discount Factor" at any time means an amount equal to the sum of the
---------------
aggregate accrued and unpaid Earned Discount with respect to all Rate Tranches
at such time.
"Dollars" means dollars in lawful money of the United States of America.
-------
A-5
<PAGE>
"Domestic CD Rate (Adjusted)" for any Yield Period for any Rate Tranche
---------------------------
means a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
---------
1%) determined pursuant to the following formula:
Domestic CD Rate = Domestic CD Rate + Assessment
----------------
(Adjusted) 1-Reserve Rate
Requirement
where:
- -----
"Domestic CD Rate" means, with respect to any Yield Period for any
----------------
Rate Tranche, a rate of interest equal to the average of the secondary
market morning offering rates in the United States for time
certificates of deposit of major United States money market banks for
a period approximately equal to such Yield Period in an amount
substantially equal to the Transferee's Tranche Investment of such
Rate Tranche, as such offering rate is quoted to the Agent by the
Federal Reserve Bank of New York during the morning of the first day
of such Yield Period; provided, however, that if the Agent shall not
-------- -------
receive any such quote by the Federal Reserve Bank of New York by
11:00 a.m., New York City time, on the morning of the first day of any
Yield Period, then "Domestic CD Rate" shall mean, with respect to
----------------
such Yield Period, the rate of interest determined by the Agent to be
the average (rounded upwards, if necessary, to the nearest 1/100 of
1%) of the bid rates quoted to the Agent in the secondary market at
approximately 11:00 a.m., New York City time (or as soon thereafter as
practicable), on the first day of such Yield Period by two certificate
of deposit dealers in New York or New York City of recognized standing
selected by the Agent in its sole discretion for the purchase from the
Agent at face value of certificates of deposit issued by the Agent in
an amount approximately equal or comparable to such Transferee's
Tranche Investment and having a maturity equal to such Yield Period.
"Assessment Rate" for any Yield Period means the annual assessment
---------------
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) applicable to the Agent on its insured deposits, on the Business
Day immediately preceding the first day of such Yield Period, under
the Federal Deposit Insurance Act, determined by annualizing the most
recent assessment levied on the Agent by the Federal Deposit Insurance
Corporation (together with any successor, the "FDIC") with respect to
----
such deposits after giving effect to the most recent rebate granted to
the Agent by the FDIC
A-6
<PAGE>
with respect to deposit insurance as well as the loss to the Agent
(determined in the good faith judgment of the Agent) of the use of
such rebate prior to the date a credit is taken by the Agent with
respect to such rebate.
"Reserve Requirement" means, with respect to any Yield Period, a
-------------------
percentage (expressed as a decimal) equal to the daily average during
such Yield Period of the aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled changes in
reserve requirements during such period) specified under Regulation D,
as applicable to the class of banks of which the Agent is a member, on
deposits of the types used as a reference in determining the Domestic
CD Rate and having a maturity approximately equal to such Yield
Period.
"Earned Discount" for any Rate Tranche for each day in a Yield Period
---------------
applicable to such Rate Tranche means an amount equal to the sum of (a) the
product of (i) the Transferee's Tranche Investment of such Rate Tranche on such
day, times (ii) the Transferee Rate for such Rate Tranche on such day, times
----- -----
(iii) 1/360, plus (b) the Negative Spread Fee, if any, for such Rate Tranche on
----
such day. No provision of the Agreement shall require the payment or permit the
collection of Earned Discount in excess of the maximum permitted by applicable
law. Earned Discount for any Rate Tranche shall not be considered paid by any
distribution if at any time such distribution is rescinded or must otherwise be
returned for any reason.
"Eligible Contract" means a Contract in one of the forms set forth in
-----------------
Schedule 6.01(o)-1, with such variations as the Transferor shall approve in its
- ------------------
reasonable business judgment and as shall not result in materially lesser rights
for the Transferor as such forms, or otherwise approved by the Agent.
"Eligible Receivable" means, at any time, a Receivable:
-------------------
(a) generated by the Transferor in the ordinary course of its business;
(b) which constitutes an account, chattel paper or general intangible as
defined in the Uniform Commercial Code as in effect in the jurisdiction that
governs the perfection of the Transferee's undivided ownership interest in such
Receivable;
(c) the Obligor of which is a United States resident, is not an Affiliate
of the Transferor, and is not a government or a governmental subdivision or
agency;
A-7
<PAGE>
(d) which is denominated and payable only in Dollars in the United States;
(e) the Obligor of which is a Designated Obligor;
(f) which arises under a Contract (i) in respect of which the related
Equipment has been delivered and unconditionally accepted by the Obligor, (ii)
under which the Obligor has made at least one regularly scheduled payment and
(iii) which is not cancelable by the Obligor before the end of its scheduled
termination date;
(g) which is not a Defaulted Receivable;
(h) with regard to which the warranty of the Transferor in Section 6.01(l)
---------------
is true and correct;
(i) the transfer of an undivided interest in which does not contravene or
conflict with any law or require the consent or approval of, or notice to, any
Person, including the Obligor;
(j) which arises under an Eligible Contract that has been duly authorized
and that, together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with its terms and is
not subject to any dispute, offset, counterclaim or defense whatsoever;
(k) which, together with the Contract related thereto, does not contravene
in any material respect any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to
which no party to the Contract related thereto is in violation of any such law,
rule or regulation in any material respect if such violation would impair the
collectibility of such Receivable;
(l) which (i) satisfies all applicable requirements of the Credit and
Collection Policy and (ii) complies with such other criteria and requirements
(other than those relating to the collectibility of such Receivable) as the
Agent may from time to time specify to the Transferor following thirty days'
notice;
(m) which is an account receivable, chattel paper or general intangible
representing all or part of the sales price of merchandise, insurance and
services within the meaning of section 3(c)(5) of the Investment Company Act of
1940, as amended;
A-8
<PAGE>
(n) which arises out of a current transaction, or the proceeds of which
have been or are to be used for current transactions, within the meaning of
section 3(a)(3) of the Securities Act of 1933, as amended;
(o) which arises under a Contract (i) requiring payment within 30 days of
billing therefor, and (ii) providing for periodic payments in substantially
equal amounts over the scheduled term of the Contract that fully amortize the
initial lease or principal balance;
(p) which is evidenced by a Contract that constitutes either (i) a true
lease pursuant to which the Transferor owns the Equipment free of any Liens
other than such Contract and the Transferee's Interest or (ii) a conditional
sale contract pursuant to which the Transferor has a first priority, perfected
security interest in the related Equipment; and
(q) as to which the Agent has not notified the Transferor that the Agent
has determined, in its sole discretion, that such Receivable (or class of
Receivables) is not acceptable for purchase hereunder.
"Enhancement Agreement" means and includes (a) the Enhancement Agreement
---------------------
dated as of September 14, 1993 among the Transferee, the Agent and DBNY and (b)
any other agreement (other than the Liquidity Agreement or another agreement of
the type described in clause (b) of the definition thereof) hereafter entered
----------
into by the Transferee providing for the issuance of one or more letters of
credit for the account of the Transferee, the making of loans to the Transferee
or any other extensions of credit to or for the account of the Transferee to
support all or any part of the Transferee's payment obligations under its
Commercial Paper Notes or to provide an alternate means of funding the
Transferee's investments in accounts receivable or other financial assets, in
each case, as amended, supplemented or otherwise modified from time to time.
"Enhancement Bank" means and includes DBNY as lender to the Transferee and
----------------
issuer of a letter of credit for the Transferee's account under the Enhancement
Agreement, and any other or additional bank or other financial institution now
or hereafter extending credit or having a commitment to extend credit to or for
the account of the Transferee under the Enhancement Agreement.
"Enhancement Draw" means a drawing under a letter of credit issued pursuant
----------------
to the Enhancement Agreement for the account of the Transferee, a loan to the
Transferee under the Enhancement Agreement or any other advance or disbursement
of funds to the Transferee or for the Transferee's account pursuant to the
A-9
<PAGE>
Enhancement Agreement or any such letter of credit, in each case to the extent
such drawing, loan, advance or disbursement has not been repaid or reimbursed to
the Enhancement Bank in accordance with the Enhancement Agreement.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Equipment" means office equipment.
---------
"Eurodollar Rate (Reserve Adjusted)" means, with respect to any Yield
---------------------------------
Period for any Rate Tranche, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) ---------------
1-Eurodollar
Reserve Percentage
where:
- -----
"Eurodollar Rate" means, with respect to any Yield Period for any Rate
---------------
Tranche, the rate per annum at which Dollar deposits in immediately
available funds are offered to the Eurodollar Office of the Agent two
Eurodollar Business Days prior to the beginning of such period by
prime banks in the interbank eurodollar market at or about 11:00 a.m.,
New York City time for delivery on the first day of such Yield Period,
for the number of days comprised therein and in an amount equal or
comparable to the amount of the Transferee's Tranche Investment of
such Rate Tranche.
"Eurodollar Business Day" means a day of the year on which dealings
-----------------------
are carried on in the eurodollar interbank market of the Agent's
Eurodollar Office and banks are open for business in London and are
not required or authorized to close in New York City.
"Eurodollar Office" shall mean the Cayman Islands office of the Agent
-----------------
or such other office or offices of the Agent (as designated from time
to time by notice from the Agent to the Transferor) or such other
office or offices through which the Agent determines the Eurodollar
Rate. A Eurodollar Office of the Agent may be, at the option of the
Agent, either a domestic or foreign office.
"Eurodollar Reserve Percentage" means, with respect to any Yield
-----------------------------
Period, the then applicable percentage (expressed as a decimal)
prescribed by the Federal
A-10
<PAGE>
Reserve Board for determining reserve requirements applicable to
"Eurocurrency Liabilities" pursuant to Regulation D.
"Event of Bankruptcy" shall be deemed to have occurred with respect to a
-------------------
Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or all or substantially all of its assets, or any
similar action with respect to such Person under any law relating to
bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, and such case or proceeding shall continue
undismissed, or unstayed and in effect, for a period of 30 consecutive
days; or an order for relief in respect of such Person shall be entered in
an involuntary case under the federal bankruptcy laws or other similar laws
now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for, such Person or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall
fail to, or admit in writing its inability to, pay its debts generally as
they become due, or, if a corporation or similar entity, its board of
directors shall vote to implement any of the foregoing.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
---------------------
System, or any successor thereto or to the functions thereof.
"Fee Letter" has the meaning set forth in Schedule 4.03(a).
---------- ----------------
"Final Pay Out Date" means the date, after the Commitment Termination Date,
------------------
when the Transferee's Percentage has been reduced to zero in accordance with
clause (3) of Section 2.02.
- ---------- ------------
"Funding Advance" means an advance (other than a daylight overdraft
---------------
advance) made by the Agent, in its sole discretion, to the Transferee for the
purpose of funding the Transferee's
A-11
<PAGE>
acquisition or maintenance of the Transferee's Interest or a portion thereof.
"Funding Advance Rate" on any day means a rate per annum equal to the
-------------------- ---------
Alternate Base Rate in effect on such day.
"Indemnified Amounts" has the meaning set forth in Section 13.01.
------------------- -------------
"Indemnified Party" has the meaning set forth in Section 13.01.
----------------- -------------
"Lien" means a lien, security interest, charge, or encumbrance, or other
----
right or claim of any Person other than (a) a potential claim or right (that has
not yet been asserted) of a trustee appointed for an Obligor in connection with
any Event of Bankruptcy or (b) an unfiled lien for taxes accrued but not yet
payable.
"Liquidity Agreement" means and includes (a) the Liquidity Loan Agreement
-------------------
dated as of September 23, 1994 among the Transferee, as borrower, the Agent,
DBNY, as lender, and DBNY, as agent for such lender, and (b) any other agreement
hereafter entered into by the Transferee providing for the making of loans or
other extensions of credit to the Transferee secured by a security interest in
the Transferee's Interest (or any portion thereof), to support all or part of
the Transferee's payment obligations under the Commercial Paper Notes or to
provide an alternate means of funding the Transferee's Interest, and under which
the amount available from such loans or other extensions of credit is limited to
an amount calculated by reference to the value or unpaid balance of the Pool
Receivables or any portion or category thereof or the level of credit
enhancement available with respect thereto, in each case as amended,
supplemented or otherwise modified from time to time.
"Liquidity Bank" means and includes DBNY as lender under the Liquidity
--------------
Agreement, and any other or additional bank or other financial institution
hereafter extending credit to or for the account of the Transferee under the
Liquidity Agreement.
"Liquidity Loan" means a loan made by a Liquidity Bank to the Transferee
--------------
pursuant to the Liquidity Agreement.
"Losses" means the aggregate Unpaid Balance of Pool Receivables (a) as to
------
which any payment, or part thereof, remains unpaid for 120 or more days from the
original due date for such payment or (b) as to which the Obligor thereof is
subject to a proceeding under Chapter 7 of the Bankruptcy Reform Act of 1978, 11
U.S.C. 101 et seq., as amended.
-- ---
A-12
<PAGE>
"Losses to Liquidations Ratio" means the percentage that (x) the aggregate
----------------------------
Losses recognized during the one or six, as applicable, month period ending on
the most recent Month End Date was of (y) Collections of Pool Receivables during
such period.
"Material Adverse Effect" means, with respect to any event, condition or
-----------------------
circumstance, a material adverse effect on:
(i) the business, assets, financial condition, operations or
prospects of the Transferor or the Servicer;
(ii) the ability of the Servicer or the Transferor to perform its
obligations under this Agreement or any other Transaction Document;
(iii) the validity, enforceability or collectibility of this
Agreement, any other Transaction Document, the Receivables or the related
Contracts;
(iv) the status, existence, perfection, priority or enforceability of
the Transferee's Interest; or
(v) the collectibility of the Pool Receivables.
"Maximum Investment" means $125,000,000, as such amount may be reduced at
------------------
the option of the Transferor pursuant to Section 1.05.
------------
"Maximum Percentage" means 100%.
------------------
"Month End Date" means the last day of each calendar month.
--------------
"Moody's" means Moody's Investors Service, Inc.
-------
"Negative Spread Fee" means, for any Rate Tranche on any day in a Yield
-------------------
Period applicable to such Rate Tranche (computed without regard to clause (C) of
----------
the proviso to the definition of "Yield Period"), the sum of:
-------
(a) if such day occurs during a period in which a downgraded
Liquidity Bank shall have placed funds in escrow pursuant to the Liquidity
Agreement, an amount designated by the Agent to enable, when taken together
with other amounts similarly designated with respect to other Rate
Tranches, the Transferee to compensate such Liquidity Bank for the excess,
if any, of (x) the Earned Discount which would have accrued on funds in
such escrow account at the Bank Rate if such funds had been designated as a
Liquidity Loan over (y) the income actually earned by investing such funds,
plus
----
A-13
<PAGE>
(b) if all or any part of such Yield Period falls in the Pay Out
Period, the amount, if any, by which:
(i) the additional Earned Discount (calculated without taking
into account any Negative Spread Fee) which would have accrued on the
reductions of the Transferee's Tranche Investment of such Rate Tranche
during such Yield Period if such reductions had remained as the
Transferee's Investment, exceeds
-------
(ii) the income, if any, received by the Transferee from
investing the proceeds of such reductions of the Transferee's
Investment.
"Net Pool Balance" at any time means an amount equal to xxxxxxxxxxx
----------------
xxx xxx xxxxxxxxx xxxxxxx xxxxx xx xxx xxxxxxxx xxxxxxxxxxx xx xxx
xxxxxxxxxxx xxxx xx xxxx xxxx, xxxxx
-----
xxx xxx xxxxxxxxx xxxxxxxxxxxxxxxxxx xx xxx xxxxxxx xx xxxxx xxx xxx
xxxxxx xxxxxxx xx xxx xxxx xxxxxxxxxxx xx xxxx xxxxxxx xxxxxxx xxxx xxx
xxxxxxxxxxxxx xxxxx xxx xxxx xxxxxxx xx xxxx xxxx, xxxxx
-----
xxx xxx xxxxxxxxx xxxxxx xx xxxxxxxx xxxxxxxx xxx xxxxxxx xxxxx
xxxxxxx xx xxx xxxx xxxxxxxxxxx.
"Obligor" means a Person obligated to make payments with respect to a
-------
Receivable. In the case of an Obligor which is an Affiliate of any other
Obligor, the Concentration Limit, the Special Concentration Limit, if any, and
the aggregate Unpaid Balance of Pool Receivables of such Obligors shall be
calculated as if such Obligors were one Obligor.
"Pay Out Period" means the period from and including the Commitment
--------------
Termination Date and to and including the Final Pay Out Date.
"Pay Out Servicer's Fee" at any time means an amount equal to the product
----------------------
of
(a) the Transferee's Investment at such time, times
-----
(b) (i) the percentage per annum set forth in clause (a)(x) of the
--- ----- -------------
definition of the "Servicer's Fee", or (ii) if the Servicer's Fee is
calculated pursuant to clause (b) of such definition, the percentage per
---------- ---
annum determined for each day by dividing the amount of the Servicer's Fee
-----
accrued for such day by the Transferee's Investment at the close of
business on such day, multiplying
A-14
<PAGE>
the quotient by 360 and expressing the product as a percentage, times
-----
(c) a fraction, the numerator of which is the then Adjusted Average
Maturity of the Receivables Pool and the denominator of which is 360.
"Pay Out Statement" means a statement substantially in such form as shall
-----------------
be proposed by the Agent and agreed to by the Transferor, such agreement not to
be unreasonably withheld.
"Periodic Report" means a report in substantially the form of Exhibit
--------------- -------
3.05(a).
- -------
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, joint
venture, government or any agency or political subdivision thereof or any other
entity.
"Pool Receivable" means a Receivable in the Receivables Pool.
---------------
"Post Office Box" means any U.S. post office box to which the Obligors are
---------------
directed to, or do, send payments under the Pool Receivables.
"Post Office Box Agreement" means an executed and undated notice, in
-------------------------
substantially the form of Exhibit A from the Transferor to the applicable U.S.
---------
postal office.
"Present Value" of any Receivable means, at any time, the present value of
-------------
xxx xxxxxx xxxxxxx xxxxxxx, xxxxxxxxxx xx xxx xxxx xx xxxxxxxxxxxxx, xx x xxxx
xxxxx xx xxx xxxxx xxxx xxxx xxx xxxxxxx xx xxx xxx xxx xxxxx xxxxxxxxxx xxxx
----
xxxxxxxx xxxxxxxxx xxx xxx xxx xxxxxxxxxxxx xxxxx xx xxxxxxxx xx xxx xxxxxxxx
xxxxxxxx xxxx x xxxxxxxx xxxxx xx xxx xxxx xxxxxxx xxxxxxxx; xxxxxxxx xxxx xx
--------
xxx xxxxxxxxxx xxx xxxxxxx xxxx xxx xx xxxxxxxx xxxx xxxx xxxxxxxxx, xxx xxxx
xxx xxxxxxxx xx xxxx xxxxxx xxxx xxxx xx xxx xxxxx xxxxxxxx xxxx xxxx xxx
-----------
xxxxxxxxxx xx xxxxxxxxx xx xxx xxxxxxxx xx xxxx xxxxxxxxx xx xxx xx xxxxxxxx
xxxx xxx, xxx xxxx xxx xxxxxxxx xx xxxx xxxxxx xxxx xxxx xx xxx xxxxxx xxxxx xx
-----------
xxxx xxx.
"Program Fee" has the meaning set forth in Fee Letter.
-----------
"Program Fee Rate" has the meaning set forth in the Fee Letter.
----------------
"Program Information" has the meaning set forth in Section 14.08.
------------------- -------------
A-15
<PAGE>
"Program Information Provider" has the meaning set forth in Section 14.08.
---------------------------- -------------
"Rate Tranche" has the meaning set forth in Section 2.03.
------------ ------------
"Receivable" means any right to payment from a Person, whether constituting
----------
an account, chattel paper, instrument or general intangible, arising from the
sale or lease by the Transferor of Equipment, and includes the right to payment
of any interest or finance charges and other obligations of such Person with
respect thereto.
"Receivables Pool" means at any time all then outstanding Receivables which
----------------
(a) were or are generated at any time by the dealers listed on Schedule A-1,
------------
including all divisions and trade names of such dealers (as such list may be
amended from time to time with the written consent of the Transferor and the
Agent) and such other dealers as designated from time to time by Transferor and
approved in writing by the Agent, and (b) as to which the Obligors thereunder
are Designated Obligors.
"Regulation D" means Regulation D of the Federal Reserve Board, or any
------------
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.
"Regulatory Change" means, relative to any Affected Party
-----------------
(a) any change in (or the adoption, implementation, phase-in or
commencement of effectiveness of) any
(i) United States federal or state law or foreign law applicable
to such Affected Party;
(ii) regulation, interpretation, directive, requirement or
request (whether or not having the force of law) applicable to such
Affected Party of (A) any court, government authority charged with the
interpretation or administration of any law referred to in clause
------
(a)(i) or of (B) any fiscal, monetary or other authority having
------
jurisdiction over such Affected Party; or
(iii) generally accepted accounting principles or regulatory
accounting principles applicable to such Affected Party and affecting
the application to such Affected Party of any law, regulation,
interpretation, directive, requirement or request referred to in
clause (a)(i) or (a)(ii) above; or
------------- -------
A-16
<PAGE>
(b) any change in the application to such Affected Party of any
existing law, regulation, interpretation, directive, requirement, request
or accounting principles referred to in clause (a)(i), (a)(ii) or (a)(iii)
------------- ------- --------
above; or
(c) the issuance, publication or release of any regulation,
interpretation, directive, requirement or request of a type described in
clause (a)(ii) above to the effect that the obligations of a Liquidity Bank
--------------
under the Liquidity Agreement are not entitled to be included in the zero
percent category of off-balance sheet assets for purposes of any risk-
weighted capital guidelines applicable to such Liquidity Bank or any
related Affected Party.
"Reinvestment" has the meaning set forth in Section 1.01.
------------ ------------
"Reinvestment Period" means the period from and including the date hereof
-------------------
to but excluding the Commitment Termination Date.
"Related Property" means, with respect to any Pool Receivable: (a) all of
----------------
the Transferor's right, title and interest in and to all Contracts, purchase
orders or other agreements or documents that evidence, secure or otherwise
relate to such Pool Receivable; (b) all of the Transferor's interest in the
Equipment (including returned Equipment), the sale or lease of which gave rise
to such Pool Receivable; (c) all Liens from time to time purporting to secure
payment of such Pool Receivable, whether pursuant to the Contract related to
such Pool Receivable or otherwise, and all property subject to such Liens; (d)
all UCC financing statements covering any collateral securing payment of such
Pool Receivable (to the extent of the interest of the Transferee in the related
Pool Receivable); (e) all guarantees and other agreements or arrangements of
whatever character from time to time supporting or securing payment of such Pool
Receivable whether pursuant to the Contract related to such Pool Receivable or
otherwise; (f) all books and records evidencing or otherwise relating to any
Pool Receivables or any of the foregoing; and (g) all Collections with respect
to, and other proceeds of, such Pool Receivables and any of the property
described above.
"Reserve Percentage" means, on any day the greatest of (i) three times the
------------------
highest sum of the Delinquency Ratio plus the Default Ratio on the last day of
any of the 12 calendar months preceding or ending on such day, (ii) three times
the highest Losses-to-Liquidations Ratio on the last day of any of the 12
calendar months preceding or ending on such day and (iii) 15%.
"Scheduled Commitment Termination Date" has the meaning set forth in
-------------------------------------
Section 1.04.
- ------------
A-17
<PAGE>
"Servicer" has the meaning set forth in Section 8.01.
-------- ------------
"Servicer's Fee" accrued for any day means
--------------
(a) an amount equal to (x) .75% per annum, times (y) the amount of
--- ----- -----
the Transferee's Investment at the close of business on such day, times (z)
-----
1/360; or
(b) on and after the Servicer's reasonable request made at any time
when the Transferor shall no longer be the Servicer, an alternative amount
specified by Servicer not exceeding (x) 115% of the Servicer's cost and
expenses of performing its obligations under the Agreement during the Yield
Period when such day occurs, divided by (y) the number of days in such
Yield Period.
With respect to any Rate Tranche, the Servicer's Fee allocable thereto shall be
equal to the Servicer's Fee determined as set forth above times a fraction, the
-----
numerator of which is the Transferee's Tranche Investment of such Rate Tranche
and the denominator of which is the Transferee's Investment.
"Servicer's Fee Reserve" at any time means an amount equal to the sum of
----------------------
(a) the aggregate accrued and unpaid Servicer's Fee (with respect to all Rate
Tranches), plus (b) the Pay Out Servicer's Fee at such time.
----
"Settlement Date" means the last day of each Settlement Period.
---------------
"Settlement Period" for any Rate Tranche means
-----------------
(a) each period commencing on the first day of each Yield Period for
such Rate Tranche and ending on the last day of such Yield Period; and
(b) on and after the Commitment Termination Date, such period
(including, without limitation, a period of one day) as shall be selected
from time to time by the Agent or, in absence of any such selection, each
period of thirty days from the next preceding Settlement Date;
provided, however, that
- -------- -------
(i) with respect to any Yield Period of one day, the related
Settlement Period shall be the first day following such Yield Period;
(ii) any Settlement Period which would otherwise end on a day which
is not a Business Day shall be extended to the next succeeding Business
Day; and
A-18
<PAGE>
(iii) the last Settlement Period shall end on the Final Pay Out Date.
"S&P" means Standard & Poor's Ratings Group.
---
"Special Concentration Limit" for any Obligor at any time means the amount,
---------------------------
if any, most recently designated by the Agent in a writing delivered to the
Transferor as the Special Concentration Limit for such Obligor.
"Subsidiary" means a corporation of which the Transferor and/or its other
----------
Subsidiaries own, directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the election of directors.
"Support Agreement" means the Support Agreement, dated as of June 1, 1994,
-----------------
between the Transferor and Alco Standard, as it may be amended, supplemented or
otherwise modified from time to time.
"Termination Event" has the meaning set forth in Section 10.01.
----------------- -------------
"Transaction Documents" means this Agreement and the other documents to be
---------------------
executed and delivered in connection herewith.
"Transfer" has the meaning set forth in Section 1.01(a).
-------- ---------------
"Transfer Request" has the meaning set forth in Section 1.03.
---------------- ------------
"Transferee" has the meaning set forth in the preamble.
---------- --------
"Transferee Rate" for any Yield Period for any Rate Tranche means:
---------------
(a) in the case of a Rate Tranche other than one referred to in clause
------
(b) or (c) of this definition, the Commercial Paper Rate for such Rate
--- ---
Tranche for such Yield Period;
(b) in the case of a Rate Tranche funded by a Funding Advance, a rate
per annum equal for each day in such Yield Period to the Funding Advance
---------
Rate in effect on such day; and
(c) in the case of a Rate Tranche funded pursuant to the Liquidity
Agreement or by an Enhancement Draw, the Bank Rate for such Rate Tranche
for such Yield Period;
provided, however, that on any day when any Termination Event shall have
- -------- -------
occurred and be continuing, the Transferee Rate shall
A-19
<PAGE>
mean a rate per annum equal to the sum of the applicable rate pursuant to clause
--- ----- ------
(a), (b) or (c) above on such day plus .70% per annum.
- --- --- --- --- -----
"Transferee's Allocation" has the meaning set forth in Section 2.02.
----------------------- ------------
"Transferee's Interest" has the meaning set forth in Section 2.01.
--------------------- ------------
"Transferee's Investment" at any time means an amount equal to
-----------------------
(a) the aggregate of the amounts theretofore paid to the Transferor
for the acquisition of the Transferee's Interest by Transfer pursuant to
Sections 1.01(a) and 1.03, less
---------------- ---- ----
(b) the aggregate amount of Collections theretofore received by the
Servicer and actually distributed to the Agent for the account of the
Transferee on account of such Transferee's Investment pursuant to Sections
--------
3.01 and 3.02;
---- ----
provided, however, the Transferee's Investment shall not be considered reduced
- -------- -------
by any distribution of any portion of Collections if at any time such
distribution is rescinded or must otherwise be returned for any reason.
"Transferee's Percentage" has the meaning set forth in Section 2.02.
----------------------- ------------
"Transferee's Share" of any Collections means a portion of such Collections
------------------
in an amount equal to the product of (a) the amount of such Collections, times
-----
(b) the Transferee's Percentage as in effect on the date of determination.
"Transferee's Tranche Investment" has the meaning set forth in Section
------------------------------- -------
2.03.
- ----
"Transferor" has the meaning set forth in the preamble.
---------- --------
"Transferor Information" has the meaning set forth in Section 14.07.
---------------------- -------------
"Transferor's Collection Amount" at any time means an amount equal to the
------------------------------
excess, if any, if (a) the aggregate of the amounts theretofore paid by the
Servicer to the Transferor for Reinvestment pursuant to Section 3.01(a)(iii),
--------------------
over (b) the aggregate of the amounts, if any, theretofore paid by the
- ----
Transferor to the Servicer pursuant to the last sentence of Section 3.01(b).
---------------
A-20
<PAGE>
"Transferor's Share" of any Collections means a portion of such Collections
------------------
equal to the amount of such Collections less the Transferee's Share thereof.
----
"UCC" means the Uniform Commercial Code as from time to time in effect in
---
the applicable jurisdiction or jurisdictions.
"Unadjusted Transferee's Percentage" has the meaning set forth in Schedule
---------------------------------- --------
2.02.
- ----
"Unmatured Termination Event" means any event which, with the giving of
---------------------------
notice or lapse of time or both, would, unless cured or waived, become a
Termination Event.
"Unpaid Balance" of any Receivable means at any time the aggregate
--------------
scheduled lease or debt service payments that the Obligor is obligated to make
thereunder during the period from the date such Receivable is included in the
Receivables Pool to the date that is 60 months thereafter, but excluding all
---------
late payment charges, delinquency charges, extension or collection fees and
sales tax payments.
"Yield Period" means with respect to any Rate Tranche, each period
------------
(a) commencing on, and including, the date of creation of such Rate
Tranche pursuant to Section 2.03, or the last day of the immediately
------------
preceding Yield Period for such Rate Tranche (whichever is later); and
(b) ending on, and excluding, the date that falls
(i) in the case of a Rate Tranche funded by the issuance of
Commercial Paper Notes, except as provided in clause (iii) below, such
------------
number of days (not to exceed 180 days or, after the occurrence and
during the continuance of any Termination Event, 60 days) thereafter
as the Agent shall select, after consultation with the Transferor;
(ii) in the case of a Rate Tranche funded by Liquidity Loans or
by an Enhancement Draw, (A) if the Transferee Rate for such Yield
Period is based on the Domestic CD Rate (Adjusted), 1, 7, 14, 30, 60
or 90 days thereafter, and (B) if the Transferee Rate for such Yield
Period is based on the Eurodollar Rate (Reserve Adjusted), one day,
one week, one month, two months or three months thereafter (or, if
such month has no numerically corresponding day, on the last Business
Day of such month), in either case as the Agent may select; and
A-21
<PAGE>
(iii) in the case of (A) any Rate Tranche funded by a Funding
Advance, and (B) any other Rate Tranche, if the Transferee Rate for
such Yield Period is based on the Alternate Base Rate, such number of
days thereafter as the Agent may select in its sole discretion;
provided, however, that
- -------- -------
(A) any Yield Period (other than a Yield Period consisting of one
day) which would otherwise end on a day that is not a Business Day shall be
extended to the next succeeding Business Day (unless the Transferee Rate
for the related Rate Tranche for such Yield Period shall be based on the
Eurodollar Rate (Reserve Adjusted), in which case if such succeeding
Business Day is in a different calendar month, such Yield Period shall
instead be shortened to the next preceding Business Day);
(B) any Yield Period of one day for any Rate Tranche, (I) if such
Yield Period is the initial Yield Period for a new Rate Tranche created in
connection with a Transfer, shall be the day of the Transfer of such Rate
Tranche, and (II) if such Yield Period is not the initial Yield Period for
such Rate Tranche (or, in the case of a Rate Tranche created by division or
combination pursuant to Section 2.03, any predecessor Rate Tranche), (x) if
------------
the immediately preceding Yield Period is more than one day, shall be the
last day of such immediately preceding Yield Period, and (y) if the
immediately preceding Yield Period is one day, shall be the next day
following such immediately preceding Yield Period;
(C) any Yield Period which commences before the Commitment
Termination Date and would otherwise end after the Commitment Termination
Date shall end on the Commitment Termination Date; and
(D) subject to clause (ii) above, each Yield Period which commences on
-----------
or after the Commitment Termination Date shall be of such duration as the
Agent may select in its sole discretion.
The "related" Yield Period for any Rate Tranche at any time means the Yield
-------
Period pursuant to which Earned Discount is then accruing for such Rate Tranche.
A-22
<PAGE>
Exhibit 11
ALCO STANDARD CORPORATION
COMPUTATIONS OF EARNINGS (LOSS) PER SHARE
(in thousands, except earnings (loss) per share)
<TABLE>
<CAPTION>
1994 1993 1992
-------------------- -------------------- --------------------
Fully Fully Fully
Primary Diluted(1) Primary Diluted(1) Primary Diluted(1)
------- ---------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Fiscal Year Ended September 30
- ------------------------------
Average Shares Outstanding
- -------------------------
Common shares 52,691 52,691 46,657 46,657 46,178 46,178
Preferred stock
Considered common equivalents 5 5 48 48 108 108
Options 1,033 1,186 691 751 590 619
------- ------- -------- -------- -------- --------
Total shares 53,729 53,882 47,396 47,456 46,876 46,905
======= ======= ======== ======== ======== ========
Income (Loss)
- -------------
Continuing Operations $70,609 $70,609 $ 7,615 $ 7,615 $104,217 $104,217
Discontinued Operations (7,515) (7,515) (8,455) (8,455)
------- ------- -------- -------- -------- --------
Net Income 70,609 70,609 100 100 95,762 95,762
Less: Preferred dividends 11,572 11,572 9,571 9,571
------- ------- -------- -------- -------- --------
Net income (loss) available to common shareholders $59,037 $59,037 $ (9,471) $ (9,471) $ 95,762 $ 95,762
======= ======= ======== ======== ======== ========
Earnings Per Share
- ------------------
Continuing operations $1.10 $1.10 $(.04) $(.04) $2.22 $2.22
Discontinued operations (.16) (.16) (.18) (.18)
------- ------- -------- -------- -------- --------
$1.10 $1.10 $(.20) $(.20) $2.04 $2.04
======= ======= ======== ======== ======== ========
</TABLE>
(1) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB No. 15
because it results in dilution of less than 3%.
<PAGE>
Exhibit 12.1
ALCO STANDARD CORPORATION AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
(dollars in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended September 30
-------------------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Earnings
Income from continuing operations $ 70,609 $ 7,615 $ 104,217 $ 76,642 $ 64,300
Add:
Loss from unconsolidated affiliate 117,158 2,538
Provision for income taxes 86,203 16,984 68,303 49,160 47,160
Fixed charges 101,779 86,615 70,168 68,748 66,361
--------- --------- --------- --------- ---------
Earnings, as adjusted (A) $ 375,749 $ 113,752 $ 242,688 $ 194,550 $ 177,821
========= ========= ========= ========= =========
Fixed charges
Other interest expense, including
interest on capital leases $ 71,780 $ 63,851 $ 51,203 $ 53,173 $ 52,942
Estimated interest component of
rental expense 29,999 22,764 18,965 15,575 13,419
--------- --------- --------- --------- ---------
Total fixed charges (B) $ 101,779 $ 86,615 $ 70,168 $ 68,748 $ 66,361
========= ========= ========= ========= =========
Ratio of earnings to fixed charges
(A) divided by (B) 3.7 1.3 * 3.5 2.8 2.7
--- --- --- --- ---
</TABLE>
* Excluding the effect of the restructuring costs, the ratio of earnings to
fixed charges for fiscal 1993 is 3.3.
<PAGE>
Exhibit 12.2
ALCO STANDARD CORPORATION AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES (EXCLUDING CAPTIVE FINANCE SUBSIDIARIES)
(dollars in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended September 30
---------------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Earnings
Income from continuing operations $ 57,262 $ 11,025 $ 98,162 $ 73,051 $ 66,283
Add:
Loss from unconsolidated affiliate 117,158 2,538
Provision for income taxes 77,792 11,512 64,592 46,221 46,781
Fixed charges 73,751 62,535 50,595 52,951 55,189
--------- --------- --------- --------- ---------
Earnings, as adjusted (A) $ 325,963 $ 87,610 $ 213,349 $ 172,223 $ 168,253
========= ========= ========= ========= =========
Fixed charges
Other Interest expense, including
interest on capital leases $ 43,802 $ 40,189 $ 31,680 $ 37,426 $ 41,792
Estimated interest component of
rental expense 29,949 22,346 18,915 15,525 13,397
--------- --------- --------- --------- ---------
Total fixed charges (B) $ 73,751 $ 62,535 $ 50,595 $ 52,951 $ 55,189
========= ========= ========= ========= =========
Ratio of earnings to fixed charges
(A) divided by (B) 4.4 1.4* 4.2 3.3 3.0
=== === === === ===
</TABLE>
* Excluding the effect of the restructuring costs, the ratio of earnings to
fixed charges (excluding captive finance subsidiaries) for fiscal 1993 is
4.2.
<PAGE>
Exhibit 12.3
ALCO STANDARD CORPORATION AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(dollars in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended September 30
--------------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Earnings
Income from continuing operations $ 70,609 $ 7,615 $ 104,217 $ 76,642 $ 64,300
Add:
Loss from unconsolidated affiliate 117,158 2,538
Provision for income taxes 86,203 16,984 68,303 49,160 47,160
Fixed charges 101,779 86,615 70,168 68,748 66,361
--------- --------- --------- --------- ---------
Earnings, as adjusted (A) $ 375,749 $ 113,752 $ 242,688 $ 194,550 $ 177,821
========= ========= ========= ========= =========
Fixed charges and preferred stock
dividends
Other interest expense, including
interest on capital leases $ 71,780 $ 63,851 $ 51,203 $ 53,173 $ 52,942
Estimated interest component of
rental expense 29,999 22,764 18,965 15,575 13,419
--------- --------- --------- --------- ---------
Total fixed charges 101,779 86,615 70,168 68,748 66,361
Preferred stock dividends, as adjusted 19,002 15,846 129 228 407
--------- --------- --------- --------- ---------
Total fixed charges and preferred
stock dividends (B) $ 120,781 $ 102,461 $ 70,297 $ 68,976 $ 66,768
========= ========= ========= ========= =========
Ratio of earnings to fixed charges
and preferred stock dividends
(A) divided by (B) 3.1 1.1* 3.5 2.8 2.7
=== === === === ===
</TABLE>
* Excluding the effect of the restructuring costs, the ratio of earnings to
fixed charges and preferred stock dividends for fiscal 1993 is 2.8.
<PAGE>
Exhibit 12.4
ALCO STANDARD CORPORATION AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(EXCLUDING CAPTIVE FINANCE SUBSIDIARIES)
(dollars in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended September 30
--------------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Earnings
Income from continuing operations $ 57,262 $ 11,025 $ 98,162 $ 73,051 $ 66,283
Add:
Loss from unconsolidated affiliate 117,158 2,538
Provision for income taxes 77,792 11,512 64,592 46,221 46,781
Fixed charges 73,751 62,535 50,595 52,951 55,189
--------- --------- --------- --------- ---------
Earnings, as adjusted (A) $ 325,963 $ 87,610 $ 213,349 $ 172,223 $ 168,253
========= ========= ========= ========= =========
Fixed charges and preferred stock
dividends
Other interest expense, including
interest on capital leases $ 43,802 $ 40,189 $ 31,680 $ 37,426 $ 41,792
Estimated interest component of
rental expense 29,949 22,346 18,915 15,525 13,397
--------- --------- --------- --------- ---------
Total fixed charges 73,751 62,535 50,595 52,951 55,189
Preferred stock dividends, as adjusted 19,002 15,613 129 227 401
--------- --------- --------- --------- ---------
Total fixed charges and preferred
stock dividends (B) $ 92,753 $ 78,148 $ 50,724 $ 53,178 $ 55,590
========= ========= ========= ========= =========
Ratio of earnings to fixed charges
and preferred stock dividends
(A) divided by (B) 3.5 1.1* 4.2 3.2 3.0
=== === === === ===
</TABLE>
* Excluding the effect of the restructuring costs, the ratio of earnings to
fixed charges and preferred stock dividends (excluding captive finance
subsidiaries) for fiscal 1993 is 3.4.
<PAGE>
Exhibit 13
FINANCIAL SECTION
OF ALCO STANDARD
CORPORATION
ANNUAL REPORT
20 Management's Responsibility for Financial Reporting
20 Report of Ernst & Young LLP, Independent Auditors
21 Consolidated Financial Statements
36 Financial Review
40 Corporate Financial Summary
42 Segment Data
44 Quarterly Data
19
<PAGE>
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
Alco Standard Corporation and Subsidiaries
The management of Alco Standard Corporation is responsible for the preparation
and presentation of the financial statements and related financial information
included in this annual report. The financial statements include amounts that
are based on management's best estimates and judgements. These statements have
been prepared in conformity with generally accepted accounting principles
consistently applied and have been audited by Ernst & Young LLP, independent
auditors.
Management is also responsible for maintaining systems of internal accounting
controls that are designed to provide reasonable assurance as to the integrity
of the financial records and the protection of corporate assets. Alco Standard
Corporation supports an active program of auditing to monitor the proper
functioning of its systems. The reports issued by the Alco Audit Department, as
well as comment letters from Ernst & Young LLP, are reviewed regularly by the
Audit Committee of the Board of Directors, which is composed of five directors
who are not employees of the Company. The Audit Committee meets periodically
with Ernst & Young LLP, the Alco Audit Department and management to review audit
scope, timing and results.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Board of Directors and Shareholders
Alco Standard Corporation
We have audited the accompanying consolidated balance sheets of Alco Standard
Corporation and subsidiaries as of September 30, 1994 and 1993, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for each of the three years in the period ended September 30, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Alco
Standard Corporation and subsidiaries at September 30, 1994 and 1993, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended September 30, 1994, in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
October 17, 1994
20
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
Alco Standard Corporation and Subsidiaries
<TABLE>
<CAPTION>
Fiscal Year Ended September 30 (in thousands except per share data)
1994 1993 1992
-------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Net sales $7,925,784 $6,387,078 $4,882,908
Dividends, interest and other income 3,537 6,332 3,292
Finance subsidiaries (note 13) 66,731 51,149 38,936
-------------------------------------------------------------------
7,996,052 6,444,559 4,925,136
-------------------------------------------------------------------
COSTS AND EXPENSES
Cost of goods sold 5,884,819 4,799,757 3,638,494
Selling and administrative 1,765,483 1,378,814 1,069,602
Interest 43,802 40,189 31,680
Finance subsidiaries interest (note 13) 27,978 23,662 19,523
Restructuring costs (note 16) 175,000
-------------------------------------------------------------------
7,722,082 6,417,422 4,759,299
-------------------------------------------------------------------
LOSS FROM UNCONSOLIDATED AFFILIATE (note 4) (117,158) (2,538)
INVESTMENT GAIN, net (note 11) 6,683
-------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES 156,812 24,599 172,520
TAXES ON INCOME (note 7) 86,203 16,984 68,303
-------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS 70,609 7,615 104,217
LOSS FROM DISCONTINUED OPERATIONS, net of taxes (note 2) (7,515) (8,455)
-------------------------------------------------------------------
NET INCOME 70,609 100 95,762
PREFERRED DIVIDENDS (note 6) 11,572 9,571
-------------------------------------------------------------------
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ 59,037 $ (9,471) $ 95,762
===================================================================
EARNINGS (LOSS) PER SHARE (note 1)
Continuing operations $ 1.10 $ (.04) $ 2.22
Discontinued operations (.16) (.18)
-------------------------------------------------------------------
$ 1.10 $ (.20) $ 2.04
===================================================================
</TABLE>
See notes to consolidated financial statements.
21
<PAGE>
CONSOLIDATED BALANCE SHEETS
Alco Standard Corporation and Subsidiaries
<TABLE>
<CAPTION>
September 30 (dollars in thousands)
1994 1993
-----------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 53,369 $ 36,495
Accounts receivable, less allowance for doubtful accounts:
1994-$29,428; 1993-$27,528 (note 14) 915,495 855,666
Inventories (note 1) 609,974 591,964
Prepaid expenses and deferred taxes 131,638 92,600
-----------------------------------------
Total current assets 1,710,476 1,576,725
-----------------------------------------
INVESTMENT IN UNCONSOLIDATED AFFILIATE (note 4) 118,060
OTHER INVESTMENTS AND LONG-TERM RECEIVABLES 68,472 46,813
PROPERTY AND EQUIPMENT, at cost (note 5)
Land 29,308 23,959
Buildings and improvements 213,037 226,256
Machinery and equipment 411,377 346,686
-----------------------------------------
653,722 596,901
Less accumulated depreciation 299,775 260,551
-----------------------------------------
353,947 336,350
-----------------------------------------
OTHER ASSETS
Excess of cost of acquired companies over equity (note 1) 747,629 694,757
Miscellaneous 59,331 69,662
Deferred taxes 22,454
-----------------------------------------
806,960 786,873
-----------------------------------------
FINANCE SUBSIDIARIES ASSETS (note 13) 562,403 484,069
-----------------------------------------
$3,502,258 $3,348,890
=========================================
</TABLE>
See notes to consolidated financial statements.
22
<PAGE>
CONSOLIDATED BALANCE SHEETS
Alco Standard Corporation and Subsidiaries
<TABLE>
<CAPTION>
September 30 (dollars in thousands)
1994 1993
-----------------------------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 12,299 $ 39,915
Notes payable (note 5) 91,999 164,249
Trade accounts payable 500,166 426,971
Accrued salaries, wages and commissions 96,987 80,097
Deferred revenues 134,485 116,631
Restructuring costs (note 16) 56,971 27,480
Other accrued expenses 164,023 164,831
-----------------------------------------
Total current liabilities 1,056,930 1,020,174
-----------------------------------------
LONG-TERM DEBT (note 5) 340,771 590,154
DEFERRED TAXES AND OTHER LIABILITIES
Deferred taxes 32,192
Restructuring costs (note 16) 50,000 142,459
Workers' compensation and other 156,511 113,069
-----------------------------------------
238,703 255,528
-----------------------------------------
FINANCE SUBSIDIARIES LIABILITIES (note 13) 498,710 437,418
REDEEMABLE PREFERRED STOCK OF SUBSIDIARY (note 5) 25,000
SHAREHOLDERS' EQUITY (note 6)
Series AA convertible preferred stock, no par value:
4,025,000 depositary shares issued and outstanding 199,912 197,900
Common stock, no par value: authorized 75,000,000 shares;
issued 1994-54,522,000 shares; 1993-48,772,000 shares 551,215 259,031
Retained earnings 642,634 651,373
Foreign currency translation adjustment (22,550) (23,640)
Cost of common shares in treasury: 1994-74,000 shares;
1993-1,808,000 shares (4,067) (64,048)
-----------------------------------------
1,367,144 1,020,616
-----------------------------------------
$3,502,258 $3,348,890
=========================================
</TABLE>
See notes to consolidated financial statements.
23
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Alco Standard Corporation and Subsidiaries
<TABLE>
<CAPTION>
Fiscal Year Ended September 30 (in thousands except per share data)
1994 1993 1992
--------------------------------------------------------------------------
SHARES AMOUNTS Shares Amounts Shares Amounts
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SERIES AA CONVERTIBLE PREFERRED STOCK
Balance, beginning of year 4,025 $197,900
Issued in public offering 4,025 $196,335
Dividend accretion 2,012 1,565
--------------------------------------------------------------------------
Balance, end of year 4,025 $199,912 4,025 $197,900
==========================================================================
COMMON STOCK
Balance, beginning of year 48,772 $259,031 48,772 $257,069 48,772 $ 249,870
Issued in public offering 5,750 293,500
Mergers (4,104) 5,854
Tax benefit relating to stock plans 2,788 1,962 1,345
--------------------------------------------------------------------------
Balance, end of year 54,522 $551,215 48,772 $259,031 48,772 $ 257,069
==========================================================================
RETAINED EARNINGS
Balance, beginning of year $651,373 $699,015 $ 687,892
Net income 70,609 100 95,762
Cash dividends declared:
Preferred stock, per share: 1994-$2.875;
1993-$2.236 (11,572) (9,571)
Common stock, per share: 1994-$1.00;
1993-$.96; 1992-$.92 (52,222) (44,858) (41,520)
Pooled companies, prior to merger (2,408) (3,907)
Credits (charges) from issuance of
treasury shares and other (13,146) 6,687 (39,212)
--------------------------------------------------------------------------
Balance, end of year $642,634 $651,373 $ 699,015
==========================================================================
FOREIGN CURRENCY TRANSLATION ADJUSTMENT
Balance, beginning of year $(23,640) $ (6,622) $ 2,039
Translation adjustment (1,347) (17,018) (8,661)
Sale of investment in unconsolidated affiliate 2,437
--------------------------------------------------------------------------
Balance, end of year $(22,550) $(23,640) $ (6,622)
==========================================================================
COST OF COMMON SHARES IN TREASURY
Balance, beginning of year 1,808 $(64,048) 2,823 $(89,099) 4,134 $(118,606)
Purchases 887 (47,733) 756 (32,389) 1,569 (57,200)
Reissued for
Exercise of options (454) 18,027 (405) 13,063 (297) 8,814
Sales to employee stock plans (1,172) 47,799 (1,250) 40,564 (1,114) 33,127
Mergers, acquisitions and other (995) 41,888 (116) 3,813 (1,469) 44,766
--------------------------------------------------------------------------
Balance, end of year 74 $ (4,067) 1,808 $(64,048) 2,823 $ (89,099)
==========================================================================
</TABLE>
See notes to consolidated financial statements.
24
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Alco Standard Corporation and Subsidiaries
<TABLE>
<CAPTION>
Fiscal Year Ended September 30 (in thousands)
1994 1993 1992
-------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 70,609 $ 100 $ 95,762
Additions (deductions) to reconcile net income to
net cash provided by operating activities
Depreciation 70,037 57,272 47,510
Amortization 26,791 22,137 16,628
Provision for losses on accounts receivable 19,668 19,702 14,636
Provision (benefit) for deferred income taxes 22,487 (55,042) 10,243
Change in deferred liabilities 2,816 15,232 1,198
Restructuring costs (46,588) 169,939
Loss (gain) on sale of
Investment in unconsolidated affiliate 115,265
Alco Diversified Services 9,841 15,294
Alco Food Systems (5,669)
Other investments (6,683)
Changes in operating assets and liabilities
Decrease (increase) in
Accounts receivable (74,369) (72,064) (48,870)
Inventories 3,154 (52,877) (28,954)
Prepaid expenses (17,873) (5,083) (3,225)
Increase (decrease) in accounts payable,
deferred revenues, and accrued expenses 79,855 (52,563) 44,254
Miscellaneous 364 (13,267) (10,880)
-------------------------------------------------------
Net cash provided 272,216 43,327 141,244
-------------------------------------------------------
INVESTING ACTIVITIES
Proceeds from sale (net of cash retained) of
Investment in unconsolidated affiliate 8,226
Alco Diversified Services 69,836
Alco Food Systems 7,756
Other investments 15,881
Cost of companies acquired, net of cash acquired (46,705) (439,447) (330,635)
Proceeds from sale of property and equipment 24,833 21,769 8,123
Expenditures for property and equipment (107,969) (83,789) (58,076)
Payments received on long-term receivables 9,251 5,369 2,740
Purchases of miscellaneous assets (7,973) (10,702) (26,339)
Finance subsidiaries receivables - Additions (408,412) (278,503) (228,951)
Finance subsidiaries receivables - Collections 210,969 166,274 126,493
-------------------------------------------------------
Net cash used (317,780) (549,193) (483,008)
-------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from
Issuance of long-term debt 20,835 319,338 191,898
Issuance of common stock, net 293,500
Issuance of Series AA convertible preferred stock, net 196,335
Option exercises and sale of treasury shares 69,914 62,284 47,096
Sale of finance subsidiaries lease receivables 125,000
Life insurance borrowings 31,055
Issuance (repayment) of short-term borrowings, net (68,278) 163,563
Proceeds (repayments) of accounts receivable sold 14,985 (3,440) 52,124
Long-term debt repayments (369,238) (241,827) (26,148)
Finance subsidiaries debt - Issuance 248,098 228,307 127,843
Finance subsidiaries debt - Repayments (196,308) (124,201) (48,000)
Dividends paid (59,392) (49,995) (41,582)
Purchase of treasury shares (47,733) (32,389) (57,200)
-------------------------------------------------------
Net cash provided 62,438 517,975 246,031
-------------------------------------------------------
NET INCREASE (DECREASE) IN CASH 16,874 12,109 (95,733)
CASH AT BEGINNING OF YEAR 36,495 24,386 120,119
-------------------------------------------------------
CASH AT END OF YEAR $ 53,369 $ 36,495 $ 24,386
=======================================================
</TABLE>
See notes to consolidated financial statements.
25
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Alco Standard Corporation and Subsidiaries
1. SUMMARY OF ACCOUNTING POLICIES
CONSOLIDATION
All wholly-owned subsidiaries are consolidated and intercompany transactions
have been eliminated. The investment in unconsolidated affiliate at September
30, 1993 represented a 49.9% ownership interest in IMM Office Systems GmbH
(IMMOS) which was accounted for by the equity method. The Company sold its
investment in IMMOS in fiscal 1994 (note 4).
REVENUE RECOGNITION
Revenues are recorded at the time of shipment of products or performance of
services. Revenues from service contracts are recognized in earnings over the
term of the contract. The present values of payments due under sales-type
lease contracts are recorded as revenues and cost of goods sold is charged
with the book value of the equipment at the time of shipment. Future interest
income is deferred and recognized over the related lease term.
INVENTORIES
Inventories are stated at the lower of cost or market and consist of finished
goods available for sale. The Company uses the LIFO method of determining
cost for approximately 60% of its inventories and the FIFO method for the
balance. If the FIFO method of accounting had been used for all inventories,
these balances would have been $36,877,000 higher at September 30, 1994 and
$38,630,000 higher at September 30, 1993.
EXCESS OF COST OF ACQUIRED COMPANIES OVER EQUITY
Substantially all of the excess of cost of acquired companies over equity is
amortized over 40 years by the straight-line method. The recoverability of
the asset is evaluated at the operating unit level by an analysis of
operating results and consideration of other significant events or changes in
the business environment. If an operating unit has current operating losses
and based upon projections there is a likelihood that such operating losses
will continue, the Company will measure impairment on the basis of
undiscounted expected future cash flows from operations before interest.
DEPRECIATION
Properties and equipment are depreciated over their useful lives by the
straight-line method.
EARNINGS PER SHARE
Earnings per share are based on 53,729,000 weighted average shares in 1994,
47,396,000 shares in 1993 and 46,876,000 shares in 1992, and include the
dilutive effect of common stock equivalents, principally stock options.
FOREIGN CURRENCY TRANSLATION
All assets and liabilities of foreign subsidiaries are translated into U.S.
dollars at fiscal year-end exchange rates. Income and expense items are
translated at average exchange rates prevailing during the fiscal year. The
resulting translation adjustments are recorded as a component of
shareholders' equity.
ACCOUNTING CHANGES
During fiscal 1994, the Company changed its methods of accounting for income
taxes and retiree healthcare benefits. The cumulative effect of adopting each
of these required new accounting methods was immaterial.
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform with the current
year presentation.
2. DISCONTINUED OPERATIONS
In September 1992, the Company decided to sell Alco Diversified Services
(ADS). Accordingly, ADS results for fiscal years 1993 and 1992 are reported
in the accompanying Statements of Income as discontinued operations. In
fiscal 1992, the Company provided for an anticipated loss on the sale of ADS
of $15,294,000. In July 1993, the Company completed the sale of ADS assets of
approximately $102,000,000 to an investor group for $84,000,000 in cash and
notes. The Company recorded an additional loss of $9,841,000, net of a LIFO
layer liquidation of $3,572,000, in fiscal 1993 in connection with this sale.
The 1993 tax benefit for ADS in the table on page 27 is comprised of
$1,449,000 relating to ADS operations and $4,966,000 relating to the loss on
the sale of ADS. The 1992 tax expense for ADS relates to its operating
income. No tax benefits were recorded for the loss on disposal anticipated at
September 30, 1992, since it consisted principally of the write-off of
nondeductible cost in excess of net assets of acquired businesses.
In fiscal 1990, the Company decided to sell Alco Food Systems (AFS) and began
presenting AFS as discontinued operations at that time. During fiscal 1991,
the Company sold six AFS businesses for $201,000,000 in cash and notes.
Assets of the companies sold were $155,599,000. The remaining two AFS
businesses with assets of $16,764,000 were sold in fiscal 1992 for cash,
notes and preferred stock of $20,714,000.
26
<PAGE>
2. DISCONTINUED OPERATIONS (continued)
The results of discontinued operations are:
<TABLE>
<CAPTION>
Fiscal Year Ended September 30 (in thousands) 1993 1992
----------------------------------
<S> <C> <C>
Revenues
Alco Diversified Services $ 153,063 $ 222,764
Alco Food Systems 18,233
----------------------------------
$ 153,063 $ 240,997
==================================
Income (loss) before taxes
Alco Diversified Services
Operating $ (3,946) $ 10,158
Loss on disposal (9,841) (15,294)
Alco Food Systems
Operating (5,281)
Gain on disposals 5,669
Other (477)
----------------------------------
(13,787) (5,225)
----------------------------------
Tax expense (benefit)
Alco Diversified Services (6,415) 3,239
Alco Food Systems 153
Other 143 (162)
----------------------------------
(6,272) 3,230
----------------------------------
Net income (loss)
Alco Diversified Services (7,372) (8,375)
Alco Food Systems 235
Other (143) (315)
----------------------------------
$ (7,515) $ (8,455)
==================================
</TABLE>
3. ACQUISITIONS
In fiscal 1994, the Company issued 698,675 common shares from treasury for
three acquisitions accounted for as poolings-of-interests and their results
of operations were included from the beginning of the fiscal year. Also
during fiscal 1994, 47 other acquisitions were made for an aggregate purchase
price of $62,009,000 in cash, notes and stock. Total assets related to these
47 acquisitions were $111,099,000 including excess of cost over equity of
$55,165,000. An additional $4,900,000 was paid and capitalized in fiscal 1994
relating to prior years' acquisitions.
In June 1993, the Company acquired over 90% of the outstanding shares of
Erskine House Group PLC (Erskine), a United States and European distributor
of office products, and the remaining outstanding shares were acquired during
the fourth quarter of fiscal 1993. The purchase price was approximately
$103,000,000, plus the assumption of approximately $101,000,000 of debt and
redeemable preferred stock. Total assets acquired were $278,975,000, which
includes excess of cost over acquired equity of $180,408,000.
In July 1993, the Company acquired the paper distribution businesses of
Butler Paper Company for a purchase price of $140,000,000. Total assets
acquired were $277,843,000 and excess of acquired equity over cost of
approximately $37,157,000 was allocated to fixed assets.
During fiscal 1993, 21 other acquisitions were made for an aggregate purchase
price of $50,606,000 in cash and stock. Total assets acquired were
$68,878,000 including excess of cost over equity of $30,645,000. An
additional $30,236,000 was paid and capitalized in 1993 relating to prior
years' acquisitions.
During fiscal 1992, the Company issued 1,416,311 common shares from treasury
for two acquisitions accounted for as poolings-of-interests and their results
of operations were included from the beginning of the fiscal year. In
September 1992, the Company purchased the Paper Distribution Group of
Abitibi-Price (Abitibi) for $309,246,000 in cash. Total assets acquired were
$322,700,000 including excess of cost over acquired equity of $163,246,000.
The Company made eight other acquisitions in fiscal 1992 for $40,839,000 in
cash, and costs relating to prior years' acquisitions of $4,768,000 were paid
and capitalized. Total assets related to fiscal 1992 acquisitions, excluding
Abitibi, were $79,595,000 including excess of cost over acquired equity of
$17,948,000.
All acquisitions, unless otherwise noted, are included from their dates of
acquisition.
27
<PAGE>
3. ACQUISITIONS (continued)
Had the purchase acquisitions been made at the beginning of the year prior to
their acquisition and the poolings been made on October 1, 1991, pro forma
results from continuing operations would have been:
<TABLE>
<CAPTION>
Fiscal Year Ended September 30 (in thousands except per share data) 1994 1993 1992
-------------------------------------------------
<S> <C> <C> <C>
Revenues $8,111,204 $7,735,647 $7,217,085
Income from continuing operations 77,560 24,277 117,054
Earnings per share 1.20 .23 1.98
-------------------------------------------------
</TABLE>
The pro forma results assume that $201,250,000 of the purchase price of 1993 and
1992 acquisitions was funded by the proceeds from issuance of the Series AA
convertible preferred stock, while $293,500,000 of the total purchase price of
1994 and 1993 acquisitions was funded by the proceeds from issuance of common
stock in December 1993.
Pro forma earnings per share for fiscal 1993 are diluted by a $4,647,000
write-off of Advance Corporation Tax related to Erskine.
4. INVESTMENT IN UNCONSOLIDATED AFFILIATE
In October 1992, the Company purchased a 49.9% interest in IMM Office Systems
GmbH, a European distributor of office products, for $122,500,000 in cash, which
included excess of cost over equity of $107,478,000. In September 1994, the
Company completed the sale of this investment for cash plus a passive interest
in any subsequent sale of IMMOS for five years. The Company retains no ongoing
liability in the joint venture and the parties exchanged complete mutual
releases for past actions. In addition, the Company was relieved of the covenant
not to compete in Europe contained in the joint venture agreement, although the
parties will not compete with each other for a period expiring on December 31,
1995. As part of the transaction, the Company acquired profitable operations in
Denmark and France and retained limited operations in Germany. The Company
recognized a loss on the sale of its investment in IMMOS in the quarter ended
June 30, 1994, recording a pretax loss of $115,300,000 ($95,100,000, net of tax)
equating to a loss per share of $1.75 in the quarter ended June 30, 1994 and
$1.77 for the fiscal year ended September 30, 1994. This loss represents the
write-off of the Company's investment in IMMOS, plus certain transactional costs
less the cash proceeds from the sale together with related tax benefits. In
addition, the Company recorded losses totaling $1,900,000 which represent the
Company's share of IMMOS operating losses for the first half of the fiscal year.
5. NOTES PAYABLE AND LONG-TERM DEBT
Notes payable consisted of:
<TABLE>
<CAPTION>
September 30 (in thousands) 1994 1993
------------------------------
<S> <C> <C>
Notes payable to banks at average interest rate:
1994-5.5%; 1993-3.9% $ 91,419 $ 73,563
Commercial paper at interest rate of 3.2% 90,000
Other notes payable at average interest rate:
1994-7.1%; 1993-6.9% 580 686
------------------------------
$ 91,999 $164,249
==============================
</TABLE>
Long-term debt consisted of:
<TABLE>
<CAPTION>
September 30 (in thousands) 1994 1993
------------------------------
<S> <C> <C>
Notes payable at average interest rate of 3.9% $300,000
Bond issue at interest rate of 8 7/8% due 2001 $150,000 150,000
Private placement debt at average interest rate:
1994-8.2%; 1993-8.1%; due 1996-1998 70,000 100,000
Notes payable to insurance company at average interest rate:
1994-9.7%; 1993-10.7%; due 1997-2005 60,000 35,000
Industrial revenue bonds at average interest rate:
1994-8.4%; 1993-8.0%; due 1994-2001 10,537 11,787
Sundry notes, bonds and mortgages at average interest rate:
1994-7.5%; 1993-7.3%; due 1994-2005 38,341 6,850
Present value of capital lease obligations (gross amount:
1994-$40,928; 1993-$45,784) 24,192 26,432
------------------------------
353,070 630,069
Less current maturities 12,299 39,915
------------------------------
Long-term debt $340,771 $590,154
==============================
</TABLE>
28
<PAGE>
5. NOTES PAYABLE AND LONG-TERM DEBT (continued)
Long-term debt matures in fiscal years: 1995-$12,299,000; 1996-$16,599,000;
1997-$26,119,000; 1998-$5,227,000; 1999-$54,481,000; 2000-2005-$238,345,000.
On June 8, 1993, the Company entered into a revolving credit agreement with four
banks allowing the Company to borrow up to $100,000,000 or the Pounds Sterling
equivalent. This credit agreement carries a facility fee of 3/16% per annum and
expires in October 1995. Loans under this agreement may be made under a
selection of rate formulas including prime, Eurodollar or Eurosterling rates.
The Company amended its April 21, 1993 credit agreement with four banks in April
1994, allowing the Company to borrow up to $200,000,000 or the Canadian dollar
equivalent. A facility fee of 1/10% per annum is charged for the $100,000,000
portion of the commitment expiring in April 1995, and 3/20% per annum is charged
for the $100,000,000 portion expiring in April 1996. Loans under the agreement
may be made under a selection of rate formulas including prime, the Eurodollar
rate in the United States or Canada, or the Canadian Bankers Acceptance rate.
On October 15, 1992, the Company entered into a credit agreement with six banks
to borrow up to DM180,000,000, or the U.S. dollar equivalent ($116,000,000). A
facility fee of 1/8% per annum is charged for this commitment, which expires on
January 11, 1995 per an amendment executed in January 1994. Loans under this
agreement may be made under a selection of prime, DM Eurocurrency or Eurodollar
rate formulas.
On December 18, 1991, the Company entered into a credit agreement with 15 banks
to borrow up to $200,000,000. The agreement, which was amended in December 1993,
has two parts: half is subject to termination on December 18, 1996; the other
half is available for 364 days subject to annual renewal for successive 364-day
periods. Annual fees of 3/16% on the three-year portion and 1/8% on the 364-day
portion are charged for these commitments. The agreement provides that loans may
be made under either domestic or Eurodollar notes at rates computed under
various formulas selected by the Company from among the domestic certificates of
deposit rate, prime rate or Eurodollar rate.
At September 30, 1994, $91,419,000 was outstanding under the combined lines of
credit and $524,581,000 was unused and available. In December 1994, the Company
intends to replace three of the above lines of credit with one $500,000,000
multi-currency facility with more favorable terms and to reduce the commitment
under the April 21, 1993 agreement to $100,000,000.
On May 13, 1994, the Company entered into an agreement to amend the terms of
$35,000,000 of 10.7% notes payable to an insurance company and replaced
$25,000,000 of 9.14% redeemable preferred stock of a subsidiary. The notes and
redeemable preferred stock were assumed in connection with the acquisition of
Erskine in fiscal 1993. Under the terms of the new agreement, the Company issued
$35,000,000 of 10.51% senior notes which are due in equal annual installments
beginning on April 24, 1997 through April 24, 2001 and $25,000,000 of 8.61%
senior notes which are due in equal annual installments beginning on April 1,
2000 through April 1, 2005.
The Company is in compliance with all covenants, including financial, for all
loan agreements. The industrial revenue bonds, capital lease obligations and
mortgages are secured by property and equipment that had a net book value of
$53,671,000 at September 30, 1994.
Interest paid approximated the amounts of interest expense in the Consolidated
Statements of Income for fiscal years 1994, 1993 and 1992.
6. SHAREHOLDERS' EQUITY
In December 1993, the Company issued 5,750,000 shares of common stock in a
public offering. The net proceeds from the offering of $293,500,000 were used
for repayment of debt. Income and earnings per share from continuing operations
for fiscal year 1993 would have been $13,288,000 and $.07, respectively, if the
offering had occurred on October 1, 1992. Income from continuing operations for
fiscal 1994 would have been $71,896,000 and earnings per share would have been
unchanged if the offering had occurred on October 1, 1993.
On December 22, 1992, the Company sold 4,025,000 depositary shares, each
representing 1/100th of a share of Series AA convertible preferred stock at
$50.00 per depositary share totaling $201,250,000, and used the net proceeds
to reduce debt. Dividends are cumulative at $2.375 per year per depositary
share through January 2, 1996 and $3.25 per depositary share per year
thereafter. The dividend is accrued on a straight-line basis ($2.875 per
depositary share) and accretion for the difference between the accrued and
cash dividend amounting to $3,577,000 at September 30, 1994 has been credited
to Series AA convertible preferred stock. This series of preferred stock has
one vote per share (equivalent to 1/100 vote per depositary share) and is
convertible at a rate of 1.1201 shares of the Company's common stock per
depositary share at any time. The Series AA convertible preferred stock,
unless previously converted into common stock, is redeemable by issuance of
common stock at the Company's option at the rate of 1.1201 shares of common
stock per depositary share (with certain limitations) on or after January 9,
1996 through January 9, 2000. On or after January 9, 2000, this series of
preferred stock is redeemable at the Company's option at $50.00 per
depositary share. Upon liquidation, the Series AA convertible preferred stock
has preference equivalent to $50.00 per depositary share plus an amount equal
to accrued and unpaid dividends. At September 30, 1994, 4,508,403 shares of
common stock were reserved for conversion of the Series AA convertible
preferred stock.
29
<PAGE>
6. SHAREHOLDERS' EQUITY (continued)
Employee stock options are granted at the market price at dates of grant and
expire in ten years. The proceeds of options exercised are credited to
shareholders' equity. There are no charges or credits to income in connection
with these options. A 1989 plan for the Company's directors enables participants
to receive their annual directors' fees in the form of options to purchase
shares of common stock at a discount. The discount is equivalent to the annual
directors' fees and is charged to expense.
Changes in common shares under option were:
<TABLE>
<CAPTION>
Directors Employees
-------------------------------------------------------------------------
Shares Option Price Range Shares Option Price Range
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
September 30, 1991 70,450 $19.55 to $26.34 2,162,325 $ 9.13 to $35.63
Granted 18,624 28.69 432,250 31.50 to 38.25
Exercised (2,391) 19.55 to 26.34 (294,908) 9.13 to 35.63
Cancelled (44,070) 9.38 to 38.25
---------------------------------- -------------------------------
September 30, 1992 86,683 19.55 to 28.69 2,255,597 16.13 to 38.25
Granted 24,669 30.19 to 40.25 567,817 35.25 to 40.25
Exercised (17,224) 19.55 to 26.34 (387,916) 16.13 to 38.25
Cancelled (211,717) 22.88 to 40.25
---------------------------------- -------------------------------
September 30, 1993 94,128 19.55 to 40.25 2,223,781 16.13 to 40.25
Granted 17,416 42.28 to 56.38 462,335 49.00 to 62.00
Exercised (21,315) 19.55 to 40.25 (432,741) 16.13 to 40.25
Cancelled (760) 30.19 (10,551) 16.13 to 57.63
---------------------------------- -------------------------------
September 30, 1994 89,469 19.55 to 56.38 2,242,824 18.19 to 62.00
================================== ===============================
</TABLE>
At September 30, 1994, options to purchase 1,171,573 shares were exercisable
(1994: employees-1,099,520, directors-72,053; 1993: employees-1,070,710,
directors-69,459) and 648,632 shares were available for grant (1994: employees-
183,767, directors-464,865; 1993: employees-782,051, directors-481,521). At
September 30, 1994, 6,782,962 shares of common stock were reserved for sale to
employee stock plans.
The Company has issued options pursuant to the Company's 1986 Stock Option
Plan to purchase common stock in accordance with the Company's Long-Term
Incentive Compensation Plan. The options become exercisable only to the
extent that credits are issued pursuant to the plan and the award of credits
is conditional upon achieving predetermined performance objectives during
three-year intervals. The value of these awards is charged to expense over
the related plan period. In fiscal 1994, the Company issued options to
purchase 150,575 shares of common stock relating to the three-year
performance period ending September 30, 1996. Options to purchase 107,814
shares of common stock were issued in fiscal 1993, of which 4,575 were
cancelled in fiscal 1994, leaving 103,239 options to cover the performance
period ending September 30, 1995.
One preferred share purchase right (Right) exists for each outstanding share
of common stock (the Shares). The Rights become exercisable ten days after
the earlier of a public announcement by another entity that it has acquired
beneficial ownership of 20% or more of the Shares or a public announcement of
another entity's intention to commence a tender offer to acquire beneficial
ownership of 30% or more of the Shares.
When the Rights become exercisable, each Right will entitle a holder to
purchase 1/100th of a share of Series 12 preferred stock for an exercise
price of $75. If the Company consolidates or merges with another entity, or
sells assets that aggregate 50% of its consolidated assets or generates more
than 50% of its consolidated operating income or cash flow, then each Right
holder will have the right to purchase, for the exercise price, a number of
shares of the other entity having a then-current market value equal to twice
the exercise price.
If another entity owning 20% or more of the Shares (a) engages in certain
transactions with the Company, or (b) causes the Company to forgo or reduce
quarterly dividends or take an action that would result in a more than 2%
increase in the other entity's proportionate share of the outstanding shares;
or if another entity becomes the beneficial owner of 30% or more of the
outstanding shares; then each Right holder (other than the other entity) will
have the right to purchase, for the exercise price, a number of shares of the
Company having a then-current market value equal to twice the exercise price.
The Rights are redeemable by the Company prior to becoming exercisable at
$.05 per Right and expire on February 10, 1998.
7. TAXES ON INCOME - CONTINUING OPERATIONS
Effective October 1, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes". SFAS No.
109 permitted the Company to recognize the benefit of certain deferred tax
assets that could not be recognized under the previous standard, SFAS No. 96,
which the Company adopted in fiscal 1988. The cumulative effect of adopting
SFAS No. 109 as of October 1, 1993 was to increase net income by $1,421,000
or $.03 per share. As permitted under SFAS No. 109, prior years' financial
statements have not been restated.
30
<PAGE>
7. TAXES ON INCOME - CONTINUING OPERATIONS (continued)
Provision for income taxes:
<TABLE>
<CAPTION>
1994 1993 1992
------------------------------------------------------------------------
Fiscal Year Ended September 30 (in thousands) CURRENT DEFERRED Current Deferred Current Deferred
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Federal $46,349 $29,421 $57,200 $(48,149) $45,872 $10,503
Foreign 11,862 (7,855) 6,602 (948) 5,239
State 5,505 921 3,706 (1,427) 6,254 435
------------------------------------------------------------------------
Taxes on income $63,716 $22,487 $67,508 $(50,524) $57,365 $10,938
========================================================================
</TABLE>
Deferred taxes resulting from temporary differences between financial and tax
accounting, which have not been restated for SFAS No. 109:
<TABLE>
<CAPTION>
Fiscal Year Ended September 30 (in thousands) 1993 1992
-----------------------------
<S> <C> <C>
Depreciation $ 4,741 $(1,658)
Lease income recognition 11,993 13,648
Nondeductible reserves (67,115) (5,568)
Other (143) 4,516
-----------------------------
Deferred taxes $(50,524) $10,938
=============================
</TABLE>
The components of deferred income tax assets and liabilities as of September
30, 1994, including finance subsidiaries, were as follows (in thousands):
<TABLE>
<S> <C>
Deferred tax assets:
Nondeductible reserves $143,579
Net operating loss carryforwards 34,932
Other - net 10,454
--------------
Total deferred tax assets 188,965
Valuation allowance (50,592)
--------------
Total deferred tax assets 138,373
--------------
Deferred tax liabilities:
Depreciation 42,778
Lease income recognition 82,837
--------------
Total deferred tax liabilities 125,615
--------------
Net deferred tax assets $ 12,758
==============
</TABLE>
The net operating loss deferred tax asset consists primarily of foreign
carryforwards of $59,371,000 principally expiring in years 1996 through 2000.
The valuation allowance increased by $11,124,000 during fiscal 1994 primarily
due to the effects of the IMMOS sale.
Components of the effective income tax rate:
<TABLE>
<CAPTION>
Fiscal Year Ended September 30 1994 1993 1992
-----------------------------------------------
<S> <C> <C> <C>
Federal 35.0% 34.8% 34.0%
State 2.3 6.1 2.6
Goodwill 3.5 16.1 2.0
Foreign 1.0 8.2 1.2
Effect of sale of IMMOS 12.9
Other .3 3.8 (.2)
-----------------------------------------------
Effective income tax rate 55.0% 69.0% 39.6%
===============================================
</TABLE>
The effective tax rate for the fiscal year ended September 30, 1994, excluding
the effects of the loss on the sale of the investment in IMMOS, is 39.1%. The
effective tax rate for the fiscal year ended September 30, 1993, excluding the
effects of the restructuring costs, is 39.6%.
Net income tax payments for all operations amounted to $62,270,000 in 1994,
$77,487,000 in 1993 and $57,861,000 in 1992.
Undistributed earnings of the Company's foreign subsidiaries were
approximately $28,040,000 at September 30, 1994. Those earnings are
considered to be indefinitely reinvested and, therefore, no provision has
been recorded for U.S. federal and state income taxes.
31
<PAGE>
8. PENSION AND STOCK PURCHASE PLANS
The Company sponsors defined benefit pension plans for the majority of its
employees. The benefits generally are based on years of service and
compensation. The Company funds at least the minimum amount required by
government regulations. The cost of these plans, together with contributions
to multiemployer and defined contribution pension plans ($6,880,000 in 1994,
$5,134,000 in 1993 and $2,642,000 in 1992), charged to continuing operations
amounted to $18,283,000 for 1994, $12,684,000 for 1993 and $7,116,000 for 1992.
The components of net periodic pension cost for the Company-sponsored defined
benefit pension plans are:
<TABLE>
<CAPTION>
Fiscal Year Ended September 30 (in thousands) 1994 1993 1992
------------------------------------------------------
<S> <C> <C> <C>
Service cost $ 16,991 $ 11,123 $ 8,131
Interest cost on projected benefit obligation 18,507 13,416 11,644
Actual return on plan assets (11,020) (34,238) (22,732)
Net amortization and deferral (13,075) 17,249 6,520
------------------------------------------------------
Net pension cost $ 11,403 $ 7,550 $ 3,563
======================================================
</TABLE>
Assumptions used in accounting for the Company-sponsored defined benefit pension
plans were:
<TABLE>
<CAPTION>
1994 1993 1992
-----------------------------------------------------
<S> <C> <C> <C>
Weighted average discount rates 7.75% 7.25% 7.75%
Rates of increase in compensation levels 6.25% 5.75% 6.25%
Expected long-term rate of return on assets 10.00% 10.00% 10.00%
</TABLE>
The funded status and amounts recognized in the Consolidated Balance Sheets
for the Company-sponsored defined benefit pension plans are:
<TABLE>
<CAPTION>
September 30 (in thousands) 1994 1993
--------------------------------
<S> <C> <C>
Actuarial present value of benefit obligations
Vested $237,874 $216,926
================================
Accumulated $241,069 $224,431
================================
Projected $277,500 $258,136
Plan assets at fair value 256,610 254,083
--------------------------------
Plan assets less than projected benefits (20,890) (4,053)
Items not yet recognized
Net gain (3,873) (7,445)
Prior service cost 11,657 7,737
Net asset existing at transition date (16,397) (18,260)
Adjustment required to recognize minimum liability (8,385) (4,902)
--------------------------------
Net pension liability $(37,888) $(26,923)
================================
</TABLE>
Substantially all of the plan assets at September 30, 1994 are invested in
listed stocks, bonds and government securities including common stock of the
Company of $49,700,000.
During fiscal 1994, the Company increased its net pension liability by
$5,949,000 due to early retirement benefits granted to 338 employees in
connection with the Unisource restructuring program (note 16).
The majority of the Company's employees are also eligible to participate in
the Company's Stock Participation Plan. They may invest 2% to 6% of regular
compensation before taxes. The Company contributes an amount equal to
two-thirds of the employees' investments and all amounts are invested in the
Company's common shares. Employees fully vest in the Company's contributions
upon the completion of five years of service. There is a similar plan for
eligible management employees. The cost of these plans charged to continuing
operations amounted to $23,484,000 in 1994, $16,174,000 in 1993 and
$12,797,000 in 1992.
9. SEGMENT REPORTING
A description of each of the Company's industry segments appears elsewhere in
this report. Dollar amounts for revenues, income before taxes, assets,
capital expenditures, and depreciation and amortization for each segment for
1994, 1993 and 1992 are reported on page 42.
32
<PAGE>
9. SEGMENT REPORTING (continued)
Revenues, income before taxes and identifiable assets by geographic area from
continuing operations for the fiscal years ended September 30 are as follows:
<TABLE>
<CAPTION>
(in millions) 1994 1993 1992
------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Domestic $7,153.8 $5,649.8 $4,758.3
Foreign 843.1 799.9 168.8
------------------------------------------------------
Operating 7,996.9 6,449.7 4,927.1
Eliminations and nonallocated (.9) (5.1) (2.0)
------------------------------------------------------
Total $7,996.0 $6,444.6 $4,925.1
======================================================
INCOME BEFORE TAXES
Domestic $ 332.6 $ 73.5 $ 211.9
Foreign 29.1 27.3 13.8
------------------------------------------------------
Operating 361.7 100.8 225.7
Unconsolidated affiliate (117.2) (2.5)
Investment gain, net 6.7
Nonallocated (87.7)* (73.7)* (59.9)*
------------------------------------------------------
Total $ 156.8 $ 24.6 $ 172.5
======================================================
ASSETS
Domestic $2,787.7 $2,547.5 $1,838.3
Foreign 572.5 536.4 413.7
------------------------------------------------------
Operating 3,360.2 3,083.9 2,252.0
Unconsolidated affiliate 118.1
Nonallocated 142.1 146.9 69.2
------------------------------------------------------
Total $3,502.3 $3,348.9 $2,321.2
======================================================
</TABLE>
* Includes interest costs and net corporate expenses.
Included in income before taxes for fiscal 1993 are restructuring costs of
$171,500,000 for domestic operations and $3,500,000 for foreign operations.
10. LEASES - CONTINUING OPERATIONS
Equipment acquired under capital leases is included in property and equipment
in the amount of $37,160,000 in 1994 and $34,583,000 in 1993 and the related
amounts of accumulated amortization are $15,888,000 in 1994 and $15,735,000
in 1993. Related obligations are in long-term debt and related amortization
is included in depreciation.
At September 30, 1994, future minimum payments under noncancelable operating
leases with initial or remaining terms of more than one year were:
1995-$76,023,000; 1996-$63,552,000; 1997-$52,906,000; 1998-$43,444,000;
1999-$51,477,000; thereafter-$84,289,000.
Total rental expense was $89,998,000 in 1994, $68,293,000 in 1993 and
$56,894,000 in 1992.
11. INVESTMENT GAIN
In fiscal 1992, the Company sold debentures received in the 1989 sale of its
equity interest in a former subsidiary, which resulted in a pretax gain of
approximately $8,100,000 and also recorded nonrecurring expenses of
approximately $1,400,000.
12. CONTINGENCIES
There were contingent liabilities for taxes, guarantees, lawsuits, and
environmental and various other matters occurring in the ordinary course of
business. On the basis of information furnished by counsel and others,
management believes that none of these contingencies will materially affect
the Company.
The Company is presently in arbitration with a former subsidiary, which has
asserted that the Company is liable to it for certain liabilities arising
under the "Coal Industry Health Benefit Act of 1992". Based on consultation
with its counsel, the Company does not believe that it is responsible for
such liabilities and, therefore, no provision for this matter has been
recorded in the financial statements. In the event that the arbitrators
decide in favor of the claimant, the Company estimates that it would be
obligated to pay approximately $36,000,000 over a twenty-year period, which
would result in an after-tax charge of approximately $23,000,000 to
discontinued operations.
33
<PAGE>
13. FINANCE SUBSIDIARIES
The Company's wholly-owned finance subsidiaries are engaged in purchasing
office equipment from Company dealers and leasing the equipment to customers
under direct financing leases.
Summarized financial information of the finance subsidiaries is as follows:
<TABLE>
<CAPTION>
September 30 (in thousands) 1994 1993
---------------------------------
<S> <C> <C>
Future minimum lease payments receivable $ 645,083 $555,020
Less: Unearned income (109,416) (82,102)
---------------------------------
Lease receivables 535,667 472,918
Accounts receivable and other assets 26,736 11,151
---------------------------------
Finance subsidiaries assets $ 562,403 $484,069
=================================
Debt at average interest rate:
1994-5.8%; 1993-6% due 1995-1997 $ 464,882 $413,092
Other liabilities 33,828 24,326
---------------------------------
Finance subsidiaries liabilities $ 498,710 $437,418
=================================
</TABLE>
The finance subsidiaries results of operations included in the Company's
consolidated net income were net income of $13,347,000 in 1994, $8,180,000 in
1993, and $6,055,000 in 1992.
At September 30, 1994, future minimum payments to be received under direct
financing leases were: 1995-$255,987,000; 1996-$197,789,000; 1997-$120,699,000;
1998-$52,281,000; 1999-$18,090,000; thereafter-$237,000.
Effective July 1, 1994, Alco Capital Resource, Inc. (Alco Capital), a
wholly-owned finance subsidiary of the Company, may offer to the public from
time to time medium term notes having an aggregate initial offering price not
exceeding $500,000,000 or the equivalent thereof in foreign currency. These
notes will be offered at varying maturities of nine months or more from their
dates of issue and may be subject to redemption at the option of Alco Capital
or repayment at the option of the holder, in whole or in part, prior to the
maturity date in conjunction with meeting specified provisions. Interest
rates are determined based on market conditions at the time of issuance. As
of September 30, 1994, $105,000,000 of medium term notes are outstanding
with a weighted average interest rate of 6.9%.
Alco Capital has followed a policy of matching the maturities of borrowed funds
to the average life of its direct financing leases in order to minimize the
impact of interest rate changes on its operations. Alco Capital has therefore
entered into interest rate swap agreements to eliminate the impact of interest
rate changes on its variable rate notes payable. The interest rate swap
agreements effectively convert the variable rate notes into fixed rate
obligations. At September 30, 1994, there were two variable rate notes
outstanding and two related interest rate swap agreements on a
principal/notional amount of $57,000,000. The weighted average interest rate on
these variable rate notes and related interest rate swap agreements was 5.48%
and 5.04%, respectively, at September 30, 1994. During fiscal 1994, there were
four variable rate notes outstanding and four related interest rate swap
agreements on a weighted average principal/notional amount of $88,000,000. The
weighted average interest rate on these variable rate notes and related interest
rate swap agreements was 4.14% and 5.93%, respectively, during fiscal 1994. The
interest rate swap agreements mature at the time the related notes mature. Alco
Capital is exposed to credit loss in the event of nonperformance by the
counterparties to the interest rate swap agreements. However, Alco Capital does
not anticipate nonperformance by the counterparties.
In September 1994, Alco Capital entered into an agreement to sell, under an
asset securitization program, an undivided ownership interest in $125,000,000
of eligible direct financing lease receivables. The agreement, which expires
in September 1995, contains limited recourse provisions which require Alco
Capital to assign an additional undivided interest in leases to cover any
potential losses to the purchaser due to uncollectible leases. As collections
reduce previously sold interests, new leases can be sold up to $125,000,000.
As of September 30, 1994, $125,000,000 of leases have been sold pursuant to
the agreement.
14. SALE OF ACCOUNTS RECEIVABLE
In September 1992, the Company entered into an agreement to sell, with limited
recourse, up to CN$70,000,000 of certain eligible Canadian accounts receivable.
In December 1993, this agreement was amended to extend the termination date from
December 20, 1993 to December 1, 1995. In September 1994, this agreement was
further amended to increase the maximum amount of receivables sold to
CN$85,000,000. The agreement provides limited recourse to the Company in the
event that any of the previously sold receivables become uncollectible. As
collections reduce previously sold interests, new receivables will be sold up to
CN$85,000,000. The amount of receivables outstanding under the agreement was
CN$81,000,000 (US$60,000,000) and CN$60,000,000 (US$45,000,000) at September 30,
1994 and 1993, respectively.
34
<PAGE>
15. FINANCIAL INSTRUMENTS
The Company uses financial instruments in the normal course of its business.
These financial instruments include debt, commitments to extend credit and
interest rate swap agreements. The notional or contractual amounts of these
commitments and other financial instruments are discussed below.
CONCENTRATION OF CREDIT RISK
The Company is subject to credit risk through trade receivables and
short-term cash investments. Credit risk with respect to trade receivables is
minimized because of a large customer base and its geographic dispersion.
Short-term cash investments are placed with high credit quality financial
institutions and in short duration corporate and government debt securities
funds. By policy, the Company limits the amount of credit exposure in any one
type of investment instrument.
INTEREST RATE SWAP AGREEMENTS
Please refer to note 13 for information on these instruments.
The following methods and assumptions were used by the Company in estimating
fair value disclosures for financial instruments:
CASH, NOTES PAYABLE AND LONG-TERM RECEIVABLES
The carrying amount reported in the balance sheet approximates fair value.
LONG-TERM DEBT
The fair value of long-term debt instruments is estimated using a discounted
cash flow analysis. For more information on these instruments, refer to note 5.
OFF-BALANCE SHEET INSTRUMENTS
Fair values for the Company's off-balance sheet instruments (interest rate
swaps) are based on the termination of the agreements.
The carrying amounts and fair values of the Company's financial instruments
at September 30, 1994 are as follows:
<TABLE>
<CAPTION>
(in thousands) Carrying Amount Fair Value
-------------------------------------------
<S> <C> <C>
Long-term debt:
Bond issue $150,000 $156,833
Private placement debt 70,000 71,837
Notes payable to insurance company 60,000 62,614
Industrial revenue bonds 10,537 11,442
Sundry notes, bonds and mortgages 38,341 36,786
Finance subsidiaries debt 464,882 455,674
Interest rate swaps 1,426
</TABLE>
16. RESTRUCTURING COSTS
On September 29, 1993, the Company adopted a plan to restructure its paper
distribution business including the following: installation of a
customer-focused information system, redesigning of warehouse and
transportation management functions, regionalization of management and
administrative support functions and consolidation of service center
locations. In connection with certain elements of the restructuring plan, the
Company recorded a charge to earnings of $175,000,000 ($112,875,000 net of
taxes or $2.38 per share) in the fourth quarter of fiscal 1993. The charge
provided for facility consolidation ($60,700,000), severance costs
($48,000,000) and related organizational and system redesign ($22,000,000).
At September 30, 1994, the remaining restructuring reserve is $106,971,000,
which management believes is adequate to complete the restructuring plan by
the end of fiscal 1996. As of September 30, 1994, 68 facility consolidations
had been substantially completed. The estimated cost to complete the facility
consolidations is $44,400,000 of which a significant portion relates to costs
to dispose and maintain facilities which have been or will be vacated.
Severance costs have been incurred during 1994 in accordance with the plan
and $23,800,000 is the estimated balance for severance costs. The related
organizational and system redesign is estimated to have a remaining cost of
$16,200,000. The Company estimates cash expenditures for the restructuring
plan will be $53,000,000 in fiscal 1995 and $43,000,000 in fiscal 1996.
17. COMMITMENTS
Effective January 1, 1994, the Company entered into an outsourcing agreement
which will provide the information technology system to be implemented as
part of the Unisource restructuring plan (note 16). This agreement calls for
the payment of $300,000,000 over a ten-year period. This contract has been
expanded to provide automated warehouse and truck routing systems at an
estimated cost of approximately $30,000,000 over the contract period.
35
<PAGE>
F I N A N C I A L R E V I E W
Alco Standard Corporation and Subsidiaries
The discussion of the results of operations for the three years ended
September 30, 1994 reviews the continuing operations of the Company as
contained in the Consolidated Statements of Income.
RESULTS OF OPERATIONS - 1994
Revenues and income before taxes by segment for fiscal years ended September
30, 1994 and September 30, 1993 and the percentage change for 1994 versus
1993 were:
<TABLE>
<CAPTION>
Revenues Income Before Taxes
------------------------------------ ----------------------------------
(in millions) 1994 1993 %CHANGE 1994 1993 %CHANGE
------------------------------------ ----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alco Office Products $2,240 $1,586 41.2% $ 199.4 $ 138.8 43.7%
Unisource
United States 5,108 4,174 22.4 148.8 118.7 25.4
Canada 649 690 (5.9) 13.5 18.3 (26.2)
Restructuring costs (175.0)
------------------------------------ ----------------------------------
Total Unisource 5,757 4,864 18.4 162.3 (38.0)
------------------------------------ ----------------------------------
Operating 7,997 6,450 24.0 361.7 100.8
Unconsolidated affiliate (117.2) (2.5)
Eliminations and nonallocated (1) (5) (87.7) (73.7)*
------------------------------------ ----------------------------------
$7,996 $6,445 24.1 $ 156.8 $ 24.6
==================================== ==================================
</TABLE>
* Includes interest costs and net corporate expenses.
FISCAL 1994 COMPARED TO FISCAL 1993
The Company's revenues for fiscal 1994 were $8 billion, an increase of $1.5
billion over fiscal 1993 revenues of $6.5 billion. Income before taxes from
operations increased to $361.7 million from $100.8 million in fiscal 1993,
which included a restructuring charge of $175 million related to the
Unisource operations. Earnings per share from continuing operations for
fiscal 1994 were $1.10 compared to $(.04) for fiscal 1993 which included a
loss of $2.38 per share resulting from the Unisource restructuring charge.
Earnings per share excluding the loss on the sale of the investment in IMM
Office Systems (IMMOS) in fiscal 1994 and the effect of the restructuring
charge in fiscal 1993 were $2.87 and $2.34, respectively.
Alco Office Products (AOP) generated $654 million in increased revenues of
which $288 million relates to fiscal 1993 acquisitions and $134 million to
fiscal 1994 acquisitions. The remaining $232 million increase reflects
continued internal growth in all revenue areas of AOP's base companies,
particularly in its equipment, service and facilities management businesses.
The $934 million increase in revenues from Unisource's U.S. operations
includes $764 million from acquisitions (primarily Butler Paper) and $170
million of internal growth from its base companies. The $41 million revenue
decrease in the Unisource Canadian paper businesses is primarily attributable
to a 5.9% decrease in the average foreign exchange rate.
AOP's operating income increase of $60.6 million includes $16.4 million from
prior year acquisitions and $10.2 million from current year acquisitions. The
remaining $34 million increase reflects continued internal growth from its
base companies which is primarily the result of higher operating
contributions from the service, supply and facilities management areas of
AOP's businesses, along with increased operating income related to its
leasing activities through Alco Capital Resource, Inc. (Alco Capital).
Operating income from Unisource's U.S. paper operations increased $30.1
million. This increase represents a contribution of $17.6 million from prior
year acquisitions and $12.5 million from its base companies. The internal
growth is attributable to improved gross margins and expense reductions
realized in the last half of the fiscal year offset primarily by lower
comparable margins experienced in the first half of the year. The Canadian
paper distribution business decrease in operating income of $4.8 million is
the result of the carryover of certain incremental merger costs related to
the Canadian merger plan implemented in fiscal 1993, gross margin erosion in
the first half of the fiscal year, and the effects of the declining foreign
exchange rates.
36
<PAGE>
Geographically, revenues from the Company's paper and office products
operations outside the U.S. were $843 million for fiscal 1994 compared to
$800 million for the prior fiscal year. The increase reflects $77 million
from the European operations of Erskine acquired in fiscal 1993 along with $7
million from AOP internal growth offset by a decrease of $41 million from the
Canadian paper distribution business. Operating income from foreign
operations was $29.1 million for fiscal 1994, an increase of $1.8 million
from the prior year, the result of increased AOP foreign operations, offset
by the decrease in operating income of the Canadian paper distribution
business.
The 49.9% investment in IMMOS in October 1992, marked the entry of the
Company into the European market, and it was to serve as a base for further
expansion in Europe. The venture agreement provided the Company with the
option of acquiring the remaining shares of IMMOS over a three-year period
beginning in 1996 if IMMOS achieved certain operating goals. However, the
capital structure and organizational complexities of IMMOS, exacerbated by
the distressed European economy and operational differences among the venture
partners, had prevented IMMOS from progressing toward those goals. As a
result, in September 1994, the Company sold its 49.9% interest in IMMOS for
cash plus a passive interest in any subsequent sale of IMMOS for five years.
The Company retains no ongoing liability in the joint venture and the parties
exchanged complete mutual releases for past actions. In addition, the Company
was relieved of the covenant not to compete in Europe contained in the joint
venture agreement, although the parties will not compete with each other for
a period expiring on December 31, 1995. As part of the transaction, the
Company acquired profitable operations in Denmark and France and retained
limited operations in Germany. The Company recognized a loss on the sale of
its interest in IMMOS in the quarter ended June 30, 1994, and recorded a
pretax loss of $115.3 million ($95.1 million, net of tax) equating to a loss
per share of $1.75 for the quarter ($1.77 for fiscal 1994). This charge
represents the write-off of the Company's investment in IMMOS plus certain
transactional costs less cash proceeds from the sale together with related
tax benefits. For the fiscal year ended September 30, 1994, the Company
recorded a total pretax loss of $117.2 million from its investment in an
unconsolidated affiliate. This includes the pretax loss of $115.3 million
relating to the sale previously discussed and a $1.9 million operating loss
on its investment through March 31, 1994.
Interest expense increased by $3.6 million from fiscal 1993, a result of
higher interest rates along with higher borrowing levels during the year to
fund acquisitions and working capital requirements. Income before taxes from
continuing operations increased by $132.2 million, which reflects the net
effect of the $115.3 million loss on the sale of IMMOS in fiscal 1994 and the
$175 million charge for restructuring costs in fiscal 1993. Income before
taxes from continuing operations also includes improved operating results
from base companies and earnings contributed by current and prior year
acquisitions net of increased interest costs and other corporate items. The
effective income tax rate for fiscal 1994 is 55% compared to 69% in fiscal
1993. The effective income tax rate for fiscal 1994, excluding the effect of
the sale of IMMOS, is 39.1% compared with 39.6% in fiscal 1993, excluding the
effect of the restructuring costs. Fiscal 1994 weighted average shares were
6.3 million shares greater than the 47.4 million shares for fiscal 1993,
primarily the result of a public offering of common stock in December 1993.
Most facets of the Unisource restructuring plan announced in September 1993
are proceeding as planned. As of September 30, 1994, Unisource had
substantially completed 68 facility consolidations and reduced its employee
base by approximately 725. This excludes the data processing personnel that
transferred to Integrated Systems Solutions Corporation (ISSC), a subsidiary
of IBM, as part of the information technology system outsourcing agreement
with ISSC. However, due to a change in software, initial implementation of
the information technology system was postponed by six months. This is not
anticipated to delay the completion of the restructuring plan by the end of
fiscal 1996.
At September 30, 1994, the remaining restructuring reserve is $107 million,
which management believes is adequate to complete the restructuring plan by
the end of fiscal 1996 and also obtain the goal of increasing Unisource's
operating return on sales to a run rate of 4% by the end of fiscal 1996. The
estimated cost to complete the facility consolidations is $44.4 million of
which a significant portion relates to costs to dispose and maintain
facilities which have been or will be vacated. Severance costs have
been incurred during 1994 in accordance with the plan and $23.8 million is
the estimated balance for severance costs. The related organizational and
system redesign is estimated to have a remaining cost of $16.2 million.
The Company is presently in arbitration with a former subsidiary, which has
asserted that the Company is liable to it for certain liabilities arising
under the Coal Industry Health Benefit Act of 1992. Based on consultation
with its counsel, the Company does not believe that it is responsible for
such liabilities and, therefore, no provision for this matter has been
recorded in the financial statements. In the event that the arbitrators
decide in favor of the claimant, the Company estimates that it would be
obligated to pay approximately $36 million over a twenty-year period, which
would result in an after-tax charge of approximately $23 million to
discontinued operations.
During the first quarter of fiscal 1994, the Company adopted Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" and Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes"; the individual
and combined effect on earnings of these accounting changes was immaterial.
37
<PAGE>
RESULTS OF OPERATIONS - 1993
Revenues and income before taxes by segment for fiscal years ended September
30, 1993 and September 30, 1992 and the percentage change for 1993 versus
1992 were:
<TABLE>
<CAPTION>
Revenues Income Before Taxes
-------------------------------------- -------------------------------------
(in millions) 1993 1992 %Change 1993 1992 %Change
-------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alco Office Products $1,586 $1,259 26.0% $ 138.8 $105.2 31.9%
Unisource
United States 4,174 3,585 16.4 118.7 118.2 .4
Canada 690 83 18.3 2.3
Restructuring costs (175.0)
-------------------------------------- -------------------------------------
Total Unisource 4,864 3,668 32.6 (38.0) 120.5
-------------------------------------- -------------------------------------
Operating 6,450 4,927 30.9 100.8 225.7 (55.3)
Unconsolidated affiliate (2.5)
Investment gain, net 6.7
Eliminations and nonallocated (5) (2) (73.7)* (59.9)*
-------------------------------------- -------------------------------------
$6,445 $4,925 30.9 $ 24.6 $172.5 (85.7)
====================================== =====================================
</TABLE>
* Includes interest costs and net corporate expenses.
FISCAL 1993 COMPARED WITH FISCAL 1992
The Company increased revenues $1.6 billion to $6.5 billion in fiscal 1993
from $4.9 billion in fiscal 1992. Income before taxes from operations, which
includes a restructuring charge of $175 million relating to Unisource
operations, decreased from $226 million in fiscal 1992 to $101 million in
fiscal 1993. Earnings per share from continuing operations decreased from
$2.22 to $(.04), including the Unisource restructuring charge of $2.38.
Earnings per share from continuing operations excluding the effect of the
restructuring charge were $2.34.
AOP generated $327 million in increased revenues of which $17 million relates
to fiscal 1992 acquisitions and $100 million to current year acquisitions.
The remaining $210 million increase reflects continued growth in all revenue
areas of AOP's base companies, including its equipment, service
and facilities management businesses. The $589 million increase in
revenues from Unisource's U.S. operations represents $161 million from its
base companies and $428 million from current and prior year acquisitions. The
$607 million revenue increase in the Unisource Canadian paper businesses is
primarily attributable to the prior year acquisitions and includes a decrease
of $32 million relating to changes in foreign currency rates.
The Company's total foreign operations including the foreign operations of
AOP and Unisource Canada generated $800 million in revenues for the fiscal
year 1993 compared with $169 million for the same period of the prior fiscal
year. The increase is primarily the result of the Canadian paper distribution
acquisitions made in September 1992 and reflects a $48 million negative
impact because of foreign currency rate changes.
AOP's operating income increase of $33.6 million includes $1.7 million from
fiscal 1992 acquisitions and $2.7 million from current year acquisitions. The
remaining $29.2 million increase from its base companies is primarily the
result of higher operating contributions from the service and supply areas of
AOP's businesses. Unisource's U.S. paper operations include an increase in
operating income of $.5 million, reflecting $10.2 million contributed by
current and prior year acquisitions, offset by a decrease in earnings of $9.7
million from base paper distribution companies caused by competitive business
conditions in the paper industry. Unisource's Canadian paper operations
include a $16 million increase in operating income primarily relating to
fiscal 1992 acquisitions. The overall decrease in operating income for
Unisource is primarily attributed to the $175 million of restructuring costs,
$171.5 million relating to U.S. operations and $3.5 million relating to
Canadian operations.
In September 1993, the Company adopted the Unisource restructuring plan as a
proactive response to changes in the business environment in which Unisource
operates. In recent periods, mills have experienced overcapacity, resulting
in depressed pricing and pressure on distributor's margins. The usage and
demand for paper has shifted significantly because of consolidation in the
commercial printing industry, enhancements in imaging technology and the
related growth in reprographics segment.
The restructuring plan encompasses the following: adoption of the "Unisource"
identity, installation of a customer-focused information system,
re-engineering of warehouse and transportation management functions,
regionalization of management and administrative support functions and
consolidation of service center locations. In connection with certain
elements of the restructuring plan, the Company recorded a charge to earnings
of $175 million ($112.9 million net of taxes or $2.38 per share) in the fourth
quarter of fiscal 1993. The major components of the restructuring costs
are location consolidation ($60.7 million), severance costs ($48 million)
and related information system redesign ($22 million). Included in
the charge are noncash asset
38
<PAGE>
writedowns relating to inventory and equipment that approximate $22.5 million
and are directly attributable to the Unisource restructuring. The
restructuring charge will be funded from Unisource's cash flow. The Company's
objective in adopting the restructuring plan is to increase Unisource's
operating return on sales from 2.6% in the fourth quarter of fiscal 1993 to
4% by the end of fiscal 1996.
Income from foreign operations was $27.3 million for the year ended September
30, 1993. This represents an increase of $13.5 million over the prior year
results of $13.8 million and is primarily attributable to the Canadian paper
distribution acquisitions in September 1992. Fluctuations in the foreign
currency rates reduced the increase by $1.9 million. The Company recorded a
$2.5 million loss from an unconsolidated affiliate, IMM Office Systems GmbH,
due to recessionary conditions and costs associated with an increase in sales
force.
Interest expense increased $8.5 million from the comparable period in fiscal
1992, a result of higher borrowing levels to fund acquisitions. Income before
taxes from continuing operations decreased by $147.9 million, which reflects
the $175 million restructuring charge in fiscal 1993. Income before taxes
from continuing operations also includes the combined result of improved
operations from base companies along with earnings contributed by key
acquisitions made in the prior year, which were achieved despite the increase
in interest cost and the $6.7 million net investment gain from the prior
year. The effective income tax rate for the current period is 69%. The
effective tax rate, excluding the restructuring costs, is 39.6%, the same as
the effective rate for the year ended September 30, 1992.
FINANCIAL CONDITION AND LIQUIDITY
Debt, excluding finance subsidiaries, was $445 million at September 30, 1994, a
decrease of $349 million from the Company's debt balance at September 30, 1993
of $794 million. The Company had a total of $616 million in bank credit
commitments as of September 30, 1994, of which $525 million were unused and
available. In December 1994, the Company intends to replace three of these
credit agreements with one $500 million multi-currency facility with more
favorable terms and to reduce the commitment under the remaining credit
agreement to $100 million, resulting in total bank credit commitments of $600
million. Debt as a percentage of capitalization was 24.6% and the current ratio
was 1.6 to 1 at September 30, 1994. At the end of fiscal 1994, the Company's
commitments for capital expenditures were approximately $22 million, all of
which is expected to be expended during fiscal 1995.
In December 1993, the Company issued 5,750,000 shares of common stock in a
public offering, and the net proceeds of approximately $294 million were used
to reduce outstanding debt. The Company entered into an agreement in May 1994
retiring $25 million of redeemable preferred stock of a subsidiary and issued
senior notes in an equivalent amount.
The Company estimates that total cash expenditures in connection with the
Unisource restructuring plan will amount to $148 million, of which approximately
$52 million has been spent to date, with $53 million anticipated to be paid in
fiscal 1995 and $43 million in fiscal 1996. Effective January 1, 1994, Unisource
entered into a ten-year agreement with ISSC for $300 million, to provide the
information technology system to be implemented as part of the restructuring
plan. Such contract has been expanded to provide automated warehouse and truck
routing systems at an estimated cost of approximately $30 million over the same
contract period. The forgoing commitments are anticipated to be funded from
Unisource's operating cash flow.
Finance subsidiaries debt grew by $52 million from September 30, 1993, a
result of increased leasing activity. Effective July 1, 1994, Alco Capital
entered into a Medium Term Note Program, whereby Alco Capital may offer to
the public from time to time medium term notes having an aggregate initial
offering price not exceeding $500 million or the equivalent thereof in
foreign currency. These notes are offered at varying maturities of nine
months or more from their dates of issue and may be subject to redemption at
the option of Alco Capital or repayment at the option of the holder, in whole
or in part, prior to the maturity date in conjunction with meeting specified
provisions. Interest rates are determined based on market conditions at the
time of issuance. As of September 30, 1994, Alco Capital had issued $105
million of medium term notes bearing a weighted average interest rate of 6.9%.
In addition, Alco Capital entered into an agreement in September 1994 to sell
under an asset securitization program, an undivided ownership interest in
$125 million of eligible direct financing lease receivables. The agreement,
which expires in September 1995, contains limited recourse provisions that
require Alco Capital to assign an additional undivided interest in leases to
cover any potential losses to the purchaser due to uncollectible leases. As
collections reduce previously sold interests, new lease receivables can be
sold up to $125 million. As of September 30, 1994, $125 million of lease
receivables have been sold pursuant to the agreement.
The Company believes that its operating cash flow together with unused lines
of credit and other financing arrangements will be sufficient to finance
current operating requirements including capital expenditure, acquisition and
restructuring programs.
39
<PAGE>
CORPORATE FINANCIAL SUMMARY
Alco Standard Corporation and Subsidiaries
<TABLE>
<CAPTION>
(in millions except per share data, shareholders of record, employees)
SEVEN-YEAR
COMPOUND GROWTH 1994 1993
----------------------------------------------------------------
<S> <C> <C> <C>
CONTINUING OPERATIONS
Revenues 14.1% $7,996.0 $6,444.6
Gross profit 18.2 2,083.3 1,621.1
% of revenues 26.1 25.2
Selling and administrative 18.1 1,765.5 1,378.8
% of gross profit 84.7 85.1
Operating income 21.0 361.7 100.8
% of revenues 4.5 1.6
Income before taxes 18.1/(a)/ 156.8 24.6
% of revenues 2.0 .4
Effective income tax rate (%) 55.0 69.0
Income 18.8/(a)/ 70.6 7.6
% of revenues .9 .1
Earnings (loss) per share
Primary 1.10 (.04)
Fully diluted /(d)/ /(d)/
Capital expenditures 17.0 108.0 78.8
Depreciation and amortization 15.0 96.8 76.1
----------------------------------------------------------------
DISCONTINUED OPERATIONS
Income (loss) $ (7.5)
Earnings (loss) per share
Primary (.16)
Fully diluted /(d)/
----------------------------------------------------------------
TOTAL OPERATIONS
Net income 10.9%/(a)/ $ 70.6 $ .1
Earnings (loss) per share
Primary 1.10 (.20)
Fully diluted /(d)/ /(d)/
----------------------------------------------------------------
SHARE ACTIVITY
Dividends per share 6.6% $ 1.00 $ .96
Per share book value 8.1 21.44 17.52
Return on shareholders' equity 14.8/(a)/ 11.5/(a)/
Average common and common equivalent shares 53.7 47.4
Shareholders of record 14,348 13,999
----------------------------------------------------------------
SUPPLEMENTARY INFORMATION
Days sales outstanding 37.8 38.9
Inventory turns (FIFO basis) 6.3 6.3
Current ratio 1.6 1.5
Pretax return on capital employed 17.1/(a)/ 14.7/(a)/
Pretax return on capital employed with
finance subsidiaries on equity method 18.4/(a)/ 15.7/(a)/
Working capital 5.1% $ 653.5 $ 556.6
Total assets 14.1 3,502.3 3,348.9
Total debt 21.8 910.0 1,207.4
% of capitalization 40.0 53.6
Total debt excluding finance subsidiaries 11.7 445.1 794.3
% of capitalization 24.6 43.2
Serial preferred stock .3
Employees 30,600 28,500
</TABLE>
(a) Excludes the effect of the sale of IMMOS (note 4) in fiscal 1994 and
restructuring costs (note 16) in fiscal 1993.
(b) Includes the sale of an automobile leasing subsidiary which resulted in
a pretax gain of $17,637,000.
(c) Includes unusual pretax charges relating to the Hillman Companies of
$10,323,000.
(d) Dilution is immaterial after 1987, therefore no disclosure.
(e) Excludes gain on sale of Alco Health Services Corporation of pretax -
$96,800,000; net income - $61,900,000.
Note: Unless otherwise noted, ratios and operating results include the effect
of: fiscal 1994 - loss on sale of investment in IMMOS (note 4), pretax
income ($115,265,000), net income ($95,086,000), earnings per share ($1.77);
fiscal 1993 - restructuring costs (note 16), operating income ($175,000,000),
net income ($112,875,000), earnings per share ($2.38).
40
<PAGE>
<TABLE>
<CAPTION>
1992 1991 1990 1989 1988 1987
- ----------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
$4,925.1 $4,516.0 $4,293.4 $3,783.6 $3,379.4 $3,173.7
1,267.1 1,110.0 1,022.4 841.9 690.3 646.8
25.7 24.6 23.8 22.3 20.4 20.4
1,069.6 946.8 864.4 711.1 584.7 552.1
84.4 85.3 84.5 84.5 84.7 85.4
225.7 195.3 190.0 153.0 128.4 95.2
4.6 4.3 4.4 4.0 3.8 3.0
172.5 125.8 111.5/(c)/ 97.8 90.2 84.7/(b)/
3.5 2.8 2.6 2.6 2.7 2.7
39.6 39.1 42.3 17.1 18.2 38.3
104.2 76.7 64.3/(c)/ 81.1 72.5 49.7/(b)/
2.1 1.7 1.5 2.1 2.1 1.6
2.22 1.70 1.44/(c)/ 1.80 1.49 1.10/(b)/
/(d)/ /(d)/ /(d)/ /(d)/ /(d)/ 1.05/(b)/
54.8 47.4 57.9 57.1 38.3 35.9
59.3 58.2 49.5 43.8 37.3 36.4
- ----------------------------------------------------------------------------------------------------------------------------
$ (8.4) $ 40.9 $ 29.2 $ 85.5 $ 37.0 $ 30.5
(.18) .91 .66 1.89 .76 .68
/(d)/ /(d)/ /(d)/ /(d)/ /(d)/ .62
- ----------------------------------------------------------------------------------------------------------------------------
$ 95.8 $ 117.6 $ 93.5/(c)/ $ 166.6 $ 109.5 $ 80.2/(b)/
2.04 2.61 2.10/(c)/ 3.69 2.25 1.78/(b)/
/(d)/ /(d)/ /(d)/ /(d)/ /(d)/ 1.67/(b)/
- ----------------------------------------------------------------------------------------------------------------------------
$ .92 $ .88 $ .84 $ .76 $ .68 $ .64
18.72 18.40 16.93 14.96 14.08 12.43
11.4 15.0 13.5 16.9/(e)/ 16.9 15.8
46.9 45.1 44.6 45.2 48.7 45.2
13,726 14,096 14,152 13,410 14,103 12,875
- ----------------------------------------------------------------------------------------------------------------------------
37.8 38.6 39.7 39.3 38.5 38.9
5.9 5.7 5.7 5.7 5.6 5.3
1.7 1.9 1.7 1.6 1.9 2.1
15.3 20.8 20.1 20.8/(e)/ 19.9 21.3
16.2 22.5 21.6 21.7/(e)/ 20.3 21.3
$ 496.0 $ 516.0 $ 404.3 $ 342.8 $ 412.3 $ 462.5
2,444.8 2,020.6 1,916.5 1,623.9 1,512.4 1,389.3
782.2 524.9 450.6 378.0 253.6 229.4
47.6 38.9 37.4 36.9 26.6 26.3
481.7 304.2 291.0 283.5 201.4 205.8
35.8 27.0 27.8 30.5 22.4 24.2
1.6 2.9 4.9 7.4 9.9 11.4
23,500 18,800 20,900 19,800 17,300 17,300
</TABLE>
41
<PAGE>
SEGMENT DATA
Alco Standard Corporation and Subsidiaries
<TABLE>
<CAPTION>
(continuing operations, in millions)
Depreciation
Income Capital and
Revenues Before Taxes Assets Expenditures Amortization
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SEVEN-YEAR COMPOUND GROWTH
1987-1994
Alco Office Products 33.0% 41.4% 38.5% 23.0% 22.4%
Unisource 14.1 11.1 18.0 19.7 17.2
==================================================================================
1994
Alco Office Products $2,240.4 $199.4 $1,672.2 $ 72.5 $62.7
Unisource
United States 5,107.6 148.8 1,391.5 30.5 26.1
Canada 648.9 13.5 296.5 3.4 6.4
----------------------------------------------------------------------------------
Total Unisource 5,756.5 162.3 1,688.0 33.9 32.5
----------------------------------------------------------------------------------
Operating 7,996.9 361.7 3,360.2 106.4 95.2
Unconsolidated affiliate (117.2)
Eliminations and nonallocated (.9) (87.7)* 142.1 1.6 1.6
----------------------------------------------------------------------------------
$7,996.0 $156.8 $3,502.3 $108.0 $96.8
==================================================================================
1993
Alco Office Products $1,585.6 $138.8 $1,450.0 $ 55.9 $45.4
Unisource
United States 4,173.7 118.7 1,319.6 18.8 22.3
Canada 690.4 18.3 314.3 2.9 6.9
Restructuring costs (175.0)
----------------------------------------------------------------------------------
Total Unisource 4,864.1 (38.0) 1,633.9 21.7 29.2
----------------------------------------------------------------------------------
Operating 6,449.7 100.8 3,083.9 77.6 74.6
Unconsolidated affiliate (2.5) 118.1
Eliminations and nonallocated (5.1) (73.7)* 146.9 1.2 1.5
----------------------------------------------------------------------------------
$6,444.6 $ 24.6 $3,348.9 $ 78.8 $76.1
==================================================================================
1992
Alco Office Products $1,259.2 $105.2 $ 967.5 $ 33.8 $37.0
Unisource
United States 3,585.1 118.2 988.7 19.1 20.0
Canada 82.8 2.3 295.8 1.1 .6
----------------------------------------------------------------------------------
Total Unisource 3,667.9 120.5 1,284.5 20.2 20.6
----------------------------------------------------------------------------------
Operating 4,927.1 225.7 2,252.0 54.0 57.6
Investment gain, net 6.7
Eliminations and nonallocated (2.0) (59.9)* 69.2 .8 1.7
----------------------------------------------------------------------------------
$4,925.1 $172.5 $2,321.2 $ 54.8 $59.3
==================================================================================
</TABLE>
* Includes interest costs and net corporate expenses.
42
<PAGE>
<TABLE>
<CAPTION>
Depreciation
Income Capital and
Revenues Before Taxes Assets Expenditures Amortization
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1991
Alco Office Products $1,047.1 $ 79.6 $ 781.3 $28.6 $36.3
Unisource
United States 3,441.1 113.8 897.3 16.1 18.4
Canada 35.8 1.9 8.2 .2 .4
----------------------------------------------------------------------------------
Total Unisource 3,476.9 115.7 905.5 16.3 18.8
----------------------------------------------------------------------------------
Operating 4,524.0 195.3 1,686.8 44.9 55.1
Eliminations and nonallocated (8.0) (69.5)* 177.8 2.5 3.1
----------------------------------------------------------------------------------
$4,516.0 $125.8 $1,864.6 $47.4 $58.2
==================================================================================
1990
Alco Office Products $ 951.7 $ 58.9 $ 680.5 $32.3 $33.2
Unisource
United States 3,316.3 129.4 843.9 24.6 14.9
Canada 22.2 1.7 8.5 .1 .2
----------------------------------------------------------------------------------
Total Unisource 3,338.5 131.1 852.4 24.7 15.1
----------------------------------------------------------------------------------
Operating 4,290.2 190.0 1,532.9 57.0 48.3
Investment Gain 5.6
Unusual charges (AOP) (10.3)
Eliminations and nonallocated 3.2 (73.8)* 88.8 .9 1.2
----------------------------------------------------------------------------------
$4,293.4 $111.5 $1,621.7 $57.9 $49.5
==================================================================================
1989
Alco Office Products $ 729.5 $ 41.3 $ 540.4 $26.5 $26.7
Unisource - United States 3,047.3 111.7 692.7 27.5 14.5
----------------------------------------------------------------------------------
Operating 3,776.8 153.0 1,233.1 54.0 41.2
Eliminations and nonallocated 6.8 (55.2)* 108.3 3.1 2.6
----------------------------------------------------------------------------------
$3,783.6 $ 97.8 $1,341.4 $57.1 $43.8
==================================================================================
1988
Alco Office Products $ 484.8 $ 28.9 $ 328.7 $19.6 $19.4
Unisource - United States 2,755.5 99.5 670.9 15.9 13.9
----------------------------------------------------------------------------------
Operating 3,240.3 128.4 999.6 35.5 33.3
Gains, net of losses, from divestitures 7.9
Eliminations and nonallocated 139.1 (46.1)* 140.0 2.8 4.0
----------------------------------------------------------------------------------
$3,379.4 $ 90.2 $1,139.6 $38.3 $37.3
==================================================================================
1987
Alco Office Products $ 303.7 $ 17.6 $ 171.0 $17.0 $15.2
Unisource - United States 2,281.7 77.6 528.8 9.6 10.7
----------------------------------------------------------------------------------
Operating 2,585.4 95.2 699.8 26.6 25.9
Gains, net of losses, from divestitures 17.6
Eliminations and nonallocated 588.3 (28.1)* 348.5 9.3 10.5
----------------------------------------------------------------------------------
$3,173.7 $ 84.7 $1,048.3 $35.9 $36.4
==================================================================================
</TABLE>
* Includes interest costs and net corporate expenses.
43
<PAGE>
QUARTERLY DATA
Alco Standard Corporation and Subsidiaries
<TABLE>
<CAPTION>
(unaudited, in millions except per share data)
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1994
Revenues $1,921.8 $1,969.4 $2,001.3 $2,103.5 $7,996.0
Gross profit 485.4 511.7 535.4 550.8 2,083.3
Income (loss) before taxes 53.4 63.0 (38.9)/(b)/ 79.3 156.8/(b)/
Net income (loss) 31.9 38.0 (48.3)/(b)/ 49.0 70.6/(b)/
Earnings (loss) per share .60 .64 (.95)/(b)/ .83 1.10/(b)/
Dividends $ .25 $ .25 $ .25 $ .25 $ 1.00
Common stock price
High/Low 54 3/4-43 1/2 58 7/8-51 1/2 60 3/8-49 1/2 65 1/2-57 65 1/2-43 1/2
- -----------------------------------------------------------------------------------------------------------------------------
1993
Revenues $1,444.5 $1,490.6 $1,547.1 $1,962.4 $6,444.6
Gross profit 364.2 382.1 389.2 485.6 1,621.1
Income (loss) before taxes 40.9 48.5 50.8 (115.6)/(c)/ 24.6/(c)/
Income (loss)
Continuing operations $ 24.8 $ 29.5 $ 30.7 $ (77.4)/(c)/ $ 7.6/(c)/
Discontinued operations /(a)/ 1.2 2.0 (10.7) (7.5)
---------------------------------------------------------------------------------------
Net income (loss) $ 26.0 $ 31.5 $ 30.7 $ (88.1)/(c)/ $ .1/(c)/
=======================================================================================
Earnings (loss) per share
Continuing operations $ .52 $ .57 $ .58 $ (1.71)/(c)/ $ (.04)/(c)/
Discontinued operations /(a)/ .03 .04 (.23) (.16)
---------------------------------------------------------------------------------------
$ .55 $ .61 $ .58 $ (1.94)/(c)/ $ (.20)/(c)/
=======================================================================================
Dividends $ .24 $ .24 $ .24 $ .24 $ .96
Common stock price
High/Low 38 1/2-33 1/4 45 3/4-35 3/4 50 5/8-44 3/4 49 3/8-42 1/4 50 5/8-33 1/4
</TABLE>
(a) The Company recorded an additional pretax charge of $9,800,000 or $.10
per share, in 1993 for the loss on the disposal of ADS.
(b) Includes a pretax charge of $115,265,000 ($95,086,000 net of taxes or $1.75
per share for the third quarter and $1.77 for the fiscal year) for the sale
of the investment in IMMOS.
(c) Includes a pretax charge of $175,000,000 ($112,875,000 net of taxes or
$2.38 per share) for restructuring costs.
44
<PAGE>
Exhibit 21
----------
SUBSIDIARIES OF REGISTRANT
--------------------------
The registrant is Alco Standard Corporation, an Ohio corporation, which has no
parent. The following sets forth information with respect to Alco's
subsidiaries as of November 15, 1994.
<TABLE>
<CAPTION>
State or other
% Voting jurisdiction of
Securities incorporation
Subsidiary Owned (by whom) or organization
- ---------- --------------- ---------------
<S> <C> <C>
Alco Realty, Inc. (ARI) 100% Alco Delaware
Alco Canada Realty, Inc. 100% ARI Canada
375347 British Columbia Ltd. 100% ARI Canada
The Alco Standard Foundation 100% Alco Pennsylvania
Alco-Texas Realty, Inc. 100% Alco Texas
Chesterbrook Insurance Limited 100% Alco Bermuda
MDR Corporation (MDR) 100% Alco Delaware
AOP Brands, Inc. 100% MDR Delaware
AOP, Inc. (AOP) 100% MDR Delaware
Alco Business Machines, Inc. 100% AOP Delaware
Alco Capital Resource Canada Ltd. 100% AOP Canada
Alco Capital Resource, Inc. 100% AOP Georgia
Alco Office Products (UK) Plc (AOPUK) 100% AOP England
Erskine House Group PLC (EHGPLC) 100% AOPUK England
Erskine Holdings, Inc. (EHI) 100% AOP Delaware
Advanced Image Systems, Inc. 100% EHI Delaware
Ameritech Equipment, Inc. 100% EHI Delaware
Copytex Corporation 100% EHI Delaware
Edgemont Sales Co., Inc. 100% EHI Delaware
Mirex Corporation of Texas 100% EHI Delaware
Omi of California, Inc. 100% EHI Delaware
University Copy Systems, Inc. 100% EHI Delaware
Zeno Systems of Colorado, Inc. 100% EHI Delaware
Zeno Systems of Georgia, Inc. 100% EHI Delaware
Zeno Systems of Houston, Inc. 100% EHI Delaware
Allegheny Business Machines, Inc. 100% AOP Delaware
American Business Machines, Inc. 100% AOP Ohio
American Business Machines, Inc. 100% AOP Oregon
Associated Business Products, Inc. 80% AOP, 20% EHI Idaho
Badger Business Products 100% AOP Delaware
Benndorf-Verster Limited 100% AOP Canada
Business Systems of Arizona, Inc. 100% AOP Delaware
Business Machines Center, Inc. (NSL) 100% AOP New Mexico
Calgary Copier, Ltd. 100% AOP Canada
Copier Consultants, Inc. 100% AOP North Carolina
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
State or other
% Voting jurisdiction of
Securities incorporation
Subsidiary Owned (by Whom) or organization
- ---------- --------------- ---------------
<S> <C> <C>
Copy Corporation 100% AOP Kentucky
Copy Corporation of Canada Limited (CCC) 100% AOP Canada
Lion Business Machines, Ltd. 100% CCC Canada
Copy Data Group, Inc. 100% AOP Delaware
Copyline Corporation (Copy) 100% AOP California
Advanced Image Systems, Inc. 100% Copy California
Copy-Van, Incorporated 100% AOP Delaware
D.C. Hey Company, Inc. 100% AOP Minnesota
Halifax Office Products Limited 100% AOP Canada
Hovinga Business Systems, Inc. 100% AOP Michigan
Innovative Office Systems, Inc. (IOS) 100% AOP Texas
Innovative Office Systems-Louisiana
(IOSL) 100% IOS South Carolina
O'Brien Business Equipment, Inc. 100% AOP Ohio
Office Products, Inc. (OP) 100% AOP Delaware
Office Group, Inc. (OG) 100% AOP Delaware
Omni Business Systems, Inc. 80% AOP, 20% EHI Florida
Southern Copy Machines, Inc. 100% AOP Delaware
Standard Office Systems of Sacramento, Inc. 100% AOP Delaware
Modern Office Machines, Inc. (MOM) 100% BPL South Carolina
TNL Financial, Inc. 100% AOP Delaware
Taft Locke Companies 100% AOP Delaware
The T. Talbott Bond Company 100% AOP Maryland
Taylor-Made Office Systems, Inc. 100% AOP California
J. L. Teel Company, Inc. 100% AOP Delaware
Texas Copy Systems, Inc. 100% AOP Delaware
Uni-Copy Corporation of North Carolina 100% AOP Delaware
Unitech, Inc., of Mississippi 100% AOP Mississippi
University Copy Systems of Hawaii, Inc. 100% AOP Hawaii
Western Business Resources, Inc. 100% AOP South Dakota
Worcester Business Machines, Inc. 100% AOP Massachusetts
Xtec Office Systems, Inc. 80% AOP, 20% EHI Pennsylvania
</TABLE>
- 2 -
<PAGE>
<TABLE>
<CAPTION>
State or other
jurisdiction of
% Voting Securities incorporation or
Subsidiary Owned (by whom) organization
- ---------- ------------------- ----------------
<S> <C> <C>
Alco Standard Acquisition Capital Corporation 100% MDR Delaware
Alco Standard Ltd. 100% MDR Delaware
Alco Standard Petroleum Corporation 100% MDR Delaware
Alco Venture Capital Company 100% MDR Delaware
Office Automation, Inc. (OAI) 100% Alco Kansas
Unisource Holdings, Inc. (Unisource Hold) 100% MDR Delaware
Unisource Worldwide, Inc. (UWI) 100% Unisource Hold Delaware
Central Products Company-Linden 100% UWI Delaware
Dygert/FCF, Inc. 100% UWI New York
Paper Corporation of
North America (PCNA) 100% UWI Delaware
3813 Holdings, Ltd. 100% PCNA Canada
Unisource Canada, Inc. 100% PCNA Canada
Unisource Brands, Inc. 100% UWI Delaware
Unisource International, Inc. 100% UWI Delaware
Unisource Sales Corporation 100% UWI Delaware
Partners Securities Company 100% Alco Delaware
TDFC Corporation 100% AFG Delaware
Upshur Coals Corporation 100% Alco West Virginia
</TABLE>
<PAGE>
Alco Standard Corporation
Form 10-K -- Fiscal Year Ended
September 30, 1994
Exhibit 23
----------
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
--------------------------------------------------
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Alco Standard Corporation of our report dated October 17, 1994, included in
the 1994 Annual Report to the Shareholders of Alco Standard Corporation.
Our audits also included the financial statement schedules of Alco Standard
Corporation listed in item 14(a). These schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedules referred to above,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
We consent to the incorporation by reference in the following registration
statements on Form S-8 and Form S-3 of Alco Standard Corporation and in the
related Prospectuses of our report dated October 17, 1994, with respect to the
consolidated financial statements of Alco Standard Corporation incorporated by
reference in its Annual Report (Form 10-K) for the fiscal year ended September
30, 1994 and the related financial statement schedules included therein, filed
with the Securities and Exchange Commission.
<TABLE>
<CAPTION>
Registration
Number Filing Date Description
------ ----------- -----------
<S> <C>
2-66880 March 10, 1980 Alco Standard Corporation
1980 Deferred Compensation Plan
2-75296 December 11, 1982 Alco Standard Corporation
1982 Deferred Compensation Plan
2-70630 December 30, 1982 Alco Standard Corporation
1981 Stock Option Plan
33-00120 September 6, 1985 Alco Standard Corporation
1985 Deferred Compensation Plan
33-4829 April 15, 1986 Alco Standard Corporation
$150,000,000 Debt Securities
33-3046 February 10, 1987 Alco Standard Corporation
1986 Stock Option Plan
33-20479 March 4, 1988 Alco Standard Corporation
Stock Participation Plan
33-22948 July 7, 1988 Alco Standard Corporation
Partner's Stock Purchase Plan
33-26732 January 27, 1989 Alco Standard Corporation
1989 Directors' Stock Option Plan
33-28763 May 17, 1989 Alco Standard Corporation
Unijax Inc. Capital Accumulation Plan
33-30497 August 14, 1989 Alco Standard Corporation
Canadian Group Registered
Retirement Savings Plan
33-35057 May 23, 1990 Alco Standard Corporation
Defined Contribution Plan
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Registration
Number Filing Date Description
------ ----------- -----------
<S> <C>
33-36745 September 10, 1990 Alco Standard Corporation
1991 Deferred Compensation Plan
33-38192 December 10, 1990 Alco Standard Corporation
Partner's Stock Purchase Plan
33-38193 December 10, 1990 Alco Standard Corporation
1986 Stock Option Plan
33-38519 January 14, 1991 Alco Standard Corporation
$150,000,000 Debt Securities
Preferred Stock or Common Stock
33-41689 July 12, 1991 Alco Standard Corporation
292,864 Shares of Common Stock
33-41690 July 12, 1991 Alco Standard Corporation
3,300,001 Shares of Common Stock
33-84376 June 4, 1992 Alco Standard Corporation
Stock Award Plan
33-50974 August 17, 1992 Alco Standard Corporation
1,034,061 Shares of Common Stock
33-50976 August 17, 1992 Alco Standard Corporation
382,250 Shares of Common Stock
33-55004 November 24, 1992 Alco Standard Corporation
Stock Participation Plan
33-55096 November 24, 1992 Alco Standard Corporation
Stock Option Plan for Non-Employee
Directors
33-54742 December 15, 1992 Alco Standard Corporation
3,500,000 Depositary Shares
Convertible Preferred Stock
33-62460 June 1, 1993 Alco Standard Corporation
$400,000,000 Debt Securities, Preferred
Stock or Common Stock ($150,000,000 of
which was previously registered under
Registration Statement No. 33-38519)
33-49863 July 30, 1993 Alco Standard Corporation
42,200 Shares of Common Stock
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Registration
Number Filing Date Description
------ ----------- -----------
<S> <C>
33-51183 November 24, 1993 Alco Standard Corporation
Partners' Stock Purchase Plan
33-30497 February 7, 1994 Alco Standard Corporation
Canadian Group Registered
Retirement Savings Plan
33-53711 May 19, 1994 Alco Standard Corporation
496,090 Shares of Common Stock
33-54779 July 28, 1994 Alco Standard Corporation
365,871 Shares of Common Stock
33-54781 July 28, 1994 Alco Standard Corporation
Stock Award Plan
33-55435 September 12, 1994 Alco Standard Corporation
Defined Contribution Plan
33-55947 October 7, 1994 Alco Standard Corporation
122,409 Shares of Common Stock
33-56455 November 14, 1994 Alco Standard Corporation
25,655 Shares of Common Stock
33-56457 November 14, 1994 Alco Standard Corporation
46,774 Shares of Common Stock
33-56469 November 15, 1994 Alco Standard Corporation
1995 Stock Option Plan
33-56471 November 15, 1994 Alco Standard Corporation
Long Term Incentive Compensation Plan
</TABLE>
/s/ Ernst & Young, LLP
Philadelphia, Pennsylvania
November 29, 1994
<PAGE>
Exhibit 24
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Kurt E. Dinkelacker, Michael J.
Dillon and J. Kenneth Croney as his attorneys-in-fact, each with the power of
substitution, to execute, on his behalf the foregoing Report on Form 10-K and
any and all amendments thereto for filing with the Securities and Exchange
Commission ("SEC"), and to do all such other acts and execute all such other
documents which said attorney may deem necessary or desirable.
Dated this 29th day of November,1994.
SIGNED: /s/ J. MAHLON BUCK, JR.
----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Kurt E. Dinkelacker, Michael J.
Dillon and J. Kenneth Croney as his attorneys-in-fact, each with the power of
substitution, to execute, on his behalf the foregoing Report on Form 10-K and
any and all amendments thereto for filing with the Securities and Exchange
Commission ("SEC"), and to do all such other acts and execute all such other
documents which said attorney may deem necessary or desirable.
Dated this 29th day of November, 1994.
SIGNED: /S/ PAUL J. DARLING, II
----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is Chief Financial Officer of Alco
Standard Corporation ("Alco").
The undersigned hereby appoints each of Michael J. Dillon and J. Kenneth
Croney as his attorneys-in-fact, each with the power of substitution, to
execute, on his behalf the foregoing Report on Form 10-K and any and all
amendments thereto for filing with the Securities and Exchange Commission
("SEC"), and to do all such other acts and execute all such other documents
which said attorney may deem necessary or desirable.
Dated this 29th day of November, 1994.
SIGNED: /s/ KURT E. DINKELACKER
----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Kurt E. Dinkelacker, Michael J.
Dillon and J. Kenneth Croney as his attorneys-in-fact, each with the power of
substitution, to execute, on his behalf the foregoing Report on Form 10-K and
any and all amendments thereto for filing with the Securities and Exchange
Commission ("SEC"), and to do all such other acts and execute all such other
documents which said attorney may deem necessary or desirable.
Dated this 29th day of November,1994.
SIGNED: /s/ WILLIAM F. DRAKE, JR.
---------------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Kurt E. Dinkelacker, Michael J.
Dillon and J. Kenneth Croney as his attorneys-in-fact, each with the power of
substitution, to execute, on his behalf the foregoing Report on Form 10-K and
any and all amendments thereto for filing with the Securities and Exchange
Commission ("SEC"), and to do all such other acts and execute all such other
documents which said attorney may deem necessary or desirable.
Dated this 29th day of November,1994.
SIGNED: /s/ JAMES J. FORESE
------------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Kurt E. Dinkelacker, Michael J.
Dillon and J. Kenneth Croney as his attorneys-in-fact, each with the power of
substitution, to execute, on his behalf the foregoing Report on Form 10-K and
any and all amendments thereto for filing with the Securities and Exchange
Commission ("SEC"), and to do all such other acts and execute all such other
documents which said attorney may deem necessary or desirable.
Dated this 29th day of November,1994.
SIGNED: /s/ FREDERICK S. HAMMER
---------------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that she is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Kurt E. Dinkelacker, Michael J.
Dillon and J. Kenneth Croney as her attorneys-in-fact, each with the power of
substitution, to execute, on her behalf the foregoing Report on Form 10-K and
any and all amendments thereto for filing with the Securities and Exchange
Commission ("SEC"), and to do all such other acts and execute all such other
documents which said attorney may deem necessary or desirable.
Dated this 29th day of November,1994.
SIGNED: /s/ BARBARA BARNES HAUPTFUHRER
---------------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Kurt E. Dinkelacker, Michael J.
Dillon and J. Kenneth Croney as his attorneys-in-fact, each with the power of
substitution, to execute, on his behalf the foregoing Report on Form 10-K and
any and all amendments thereto for filing with the Securities and Exchange
Commission ("SEC"), and to do all such other acts and execute all such other
documents which said attorney may deem necessary or desirable.
Dated this 29th day of November,1994.
SIGNED: /s/ DANA G. MEAD
-----------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Michael J. Dillon and J. Kenneth
Croney as his attorneys-in-fact, each with the power of substitution, to
execute, on his behalf the foregoing Report on Form 10-K and any and all
amendments thereto for filing with the Securities and Exchange Commission
("SEC"), and to do all such other acts and execute all such other documents
which said attorney may deem necessary or desirable.
Dated this 29th day of November,1994.
SIGNED: /s/ RAY B. MUNDT
-----------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Kurt E. Dinkelacker, Michael J.
Dillon and J. Kenneth Croney as his attorneys-in-fact, each with the power of
substitution, to execute, on his behalf the foregoing Report on Form 10-K and
any and all amendments thereto for filing with the Securities and Exchange
Commission ("SEC"), and to do all such other acts and execute all such other
documents which said attorney may deem necessary or desirable.
Dated this 29th day of November,1994.
SIGNED: /s/ PAUL C. O'NEILL
----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Kurt E. Dinkelacker, Michael J.
Dillon and J. Kenneth Croney as his attorneys-in-fact, each with the power of
substitution, to execute, on his behalf the foregoing Report on Form 10-K and
any and all amendments thereto for filing with the Securities and Exchange
Commission ("SEC"), and to do all such other acts and execute all such other
documents which said attorney may deem necessary or desirable.
Dated this 29th day of November,1994.
SIGNED: /s/ ROGELIO G. SADA
----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Kurt E. Dinkelacker, Michael J.
Dillon and J. Kenneth Croney as his attorneys-in-fact, each with the power of
substitution, to execute, on his behalf the foregoing Report on Form 10-K and
any and all amendments thereto for filing with the Securities and Exchange
Commission ("SEC"), and to do all such other acts and execute all such other
documents which said attorney may deem necessary or desirable.
Dated this 29th day of November,1994.
SIGNED: /s/ JAMES W. STRATTON
----------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned certifies that he is a Director of Alco Standard
Corporation ("Alco").
The undersigned hereby appoints each of Kurt E. Dinkelacker, Michael J.
Dillon and J. Kenneth Croney as his attorneys-in-fact, each with the power of
substitution, to execute, on his behalf the foregoing Report on Form 10-K and
any and all amendments thereto for filing with the Securities and Exchange
Commission ("SEC"), and to do all such other acts and execute all such other
documents which said attorney may deem necessary or desirable.
Dated this 29th day of November,1994.
SIGNED: /s/ JOHN E. STUART
----------------------------
<PAGE>
CERTIFICATION
I, J. Kenneth Croney, Secretary of Alco Standard Corporation do hereby
certify that the following resolutions were duly passed by the Board of
Directors of the Corporation on November 11, 1994, and that such resolutions
are, as of the date hereof, in full force and effect:
FURTHER RESOLVED, that each of the officers and directors of the
corporation is hereby authorized to appoint Kurt E. Dinkelacker, Michael
J. Dillon and J. Kenneth Croney as his or her attorneys-in-fact on behalf
of each of them each attorney-in-fact with the power of substitution, to
execute on such officer's or director's behalf, one or more registration
statements and annual reports of the corporation for filing with the
Securities and Exchange Commission ("SEC"), and any and all amendments to
said documents which said attorney may deem necessary or desirable to
enable the corporation to register the offering of (i) serial preferred
stock; (ii) common stock; (iii) debt securities; and/or (iv)
participation interests in employee benefit plans under the Federal
securities law, and to further enable the corporation to file such
reports as are necessary under Section 13 or 15(d) of the Securities
Exchange Act of 1934 and such other documents as are necessary to comply
with all rules, regulations or requirements of the SEC in respect
thereto; and
FURTHER RESOLVED, that any officer of the corporation is hereby
authorized to do and perform, or cause to be done or performed, any and
all things and to execute and deliver any and all agreements,
certificates, undertakings, documents or instruments necessary or
appropriate in order to carry out the purpose and intent of the foregoing
resolutions.
IN WITNESS WHEREOF, the undersigned has set his hand this 29th day of
November,1994.
/s/ J. KENNETH CRONEY
----------------------------------------
J. Kenneth Croney
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements of Alco Standard Corporation and subsidiaries
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Sep-30-1994
<PERIOD-END> Sep-30-1994
<CASH> 53,369
<SECURITIES> 0
<RECEIVABLES> 944,923
<ALLOWANCES> 29,428
<INVENTORY> 609,974
<CURRENT-ASSETS> 1,710,476
<PP&E> 653,722
<DEPRECIATION> 299,775
<TOTAL-ASSETS> 3,502,258 <F2>
<CURRENT-LIABILITIES> 1,056,930
<BONDS> 340,771
<COMMON> 551,215
0
199,912 <F1>
<OTHER-SE> 616,017
<TOTAL-LIABILITY-AND-EQUITY> 3,502,258 <F3>
<SALES> 7,925,784
<TOTAL-REVENUES> 7,996,052
<CGS> 5,884,819
<TOTAL-COSTS> 5,912,797 <F4>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 19,668
<INTEREST-EXPENSE> 43,802
<INCOME-PRETAX> 156,812
<INCOME-TAX> 86,203
<INCOME-CONTINUING> 70,609
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,609
<EPS-PRIMARY> 1.10
<EPS-DILUTED> 1.10
<FN>
<F1> Redeemable solely at the Company's option.
<F2> Includes Finance Subsidiaries assets (primarily lease receivables) of
$562,403.
<F3> Includes Finance Subsidiaries liabilities (primarily debt) of $498,710.
<F4> Includes Finance Subsidiaries interest of $27,978.
</FN>
</TABLE>
