AMENDMENT NUMBER 4
TO THE
MANAGED OPERATIONS SERVICES AGREEMENT
- --------------------------------------------------------------------------------
This Amendment Number 4 to the Managed Operations Services Agreement (this
"Amendment"), is made by and between Franklin Templeton Companies, LLC, a
Delaware Limited Liability Company, having a place of business at One Franklin
Parkway, San Mateo, CA, 94403 ("Franklin") and International Business Machines
Corporation, having place of business at Route 100, Somers, NY, 10589 ("IBM")
(collectively referred to herein as the "Parties"). This Amendment is entered
into on this __1st__day of __July__, 2003 (the "Amendment 4 Effective Date").
This Amendment amends the Managed Operations Services Agreement, dated February
6, 2001, between Franklin and IBM as modified or amended prior to the date
hereof including any schedules, supplements, exhibits and attachments thereto
(the "Agreement"). Capitalized terms used but not defined herein shall have
their respective meanings as defined in the Agreement. In the event of any
inconsistency between the terms of the Agreement and the terms of this
Amendment, the terms of this Amendment shall prevail. All terms and conditions
of the Agreement not specifically amended or supplemented herein, shall remain
unchanged and in full force and effect. The Term of this Amendment will begin as
of the Amendment 4 Effective Date and will run concurrently with the Term, as
modified herein.
The affected and changed sections and Schedules of the Agreement are as
indicated below.
I. THE AGREEMENT:
--------------
A) ADD THE FOLLOWING AS SECTION 1.bbb:
"Amended Commencement Date" means July 1, 2003.
B) SECTION 1.g IS HEREBY AMENDED AS FOLLOWS:
"Original Commencement Date" shall be synonymous with the term
"Commencement Date" as used in the Agreement and means March 1, 2001.
C) SECTIONS 5.a AND 5.b (PAYMENTS) ARE HEREBY DELETED IN THEIR ENTIRETY
AND REPLACED WITH THE FOLLOWING:
a. Franklin shall pay IBM for Services as set forth in Schedule C
(Charges).
b. Upon the first business day of the each month of the Term, IBM
will present Franklin with one invoice in the amount of a monthly
pro rata portion of the Annual Services Charge as set forth in
Exhibit C-1 (the "ASC Invoice"). Upon or before the tenth day of
each month of the Term, IBM will present Franklin with one
invoice covering any variable charges, credits or amounts due and
owing under the Agreement for the preceding month, including ARCs
and RRCs (the "Variable Charge Invoice"). Payment shall be due as
follows (in each case, the "Payable Date"):
1. The ASC Invoice shall be due and payable on or before the
last working day of the calendar month for which such
invoice is applicable. Notwithstanding the forgoing, in the
event that Franklin does not receive the ASC invoice from
IBM in a timely manner consistent with this Section 5(b),
any such invoice shall be due and payable, within 30
calendar days of Franklin's actual receipt of such invoice.
2. The Variable Charge Invoice shall be due and payable within
30 calendar days of Franklin's receipt of such invoice. In
the event that the Variable Charge Invoice reflects a net
credit to Franklin, IBM shall credit such amount to Franklin
within 30 calendar days of the issuance of such invoice.
IBM/FRANKLIN CONFIDENTIAL PAGE 1 OF 9
MOSA AMENDMENT-FINAL.DOC AMENDMENT NUMBER 4
3. In the event that the Parties mutually agree upon any
additional charges to be made pursuant to this Agreement, in
the absence of any contrary agreement between the Parties,
any such additional charge shall be due and payable within
30 calendar days of receipt of invoice by Franklin.
4. Franklin shall have the option to make payments due
hereunder via wire fund transfer or other commercially
similar electronic medium acceptable to IBM. This form of
payment shall be made to an IBM account specified by IBM.
IBM shall provide all necessary account information to
enable Franklin to make such deposit.
5. If any payments or portions thereof are not received by IBM
on the Payable Date, Franklin will also pay IBM a late fee
for each day after the Payable Date and until the date IBM
receives such late payment in full. The amount of the late
fee will be invoiced to Franklin and payable in the next
monthly invoice. The late fee will be the lesser of 1% or
the maximum allowed under the law of any overdue amount per
month.
6. Franklin's payment obligations under this Section 5 shall be
limited to amounts which are properly due and owing pursuant
to the terms of the Agreement. IBM's failure to perform the
Services pursuant to the terms of the Agreement shall be
deemed a proper basis for Franklin's temporary withholding
of payment of such disputed amount.
D) SECTION 8.a (SOFTWARE AND EQUIPMENT) IS DELETED IN ITS ENTIRETY AND
REPLACED WITH THE FOLLOWING:
a. Franklin Provided Software and Equipment. Until Initial Refresh
(with respect to each item of software or equipment), except as
otherwise set forth in this Agreement, Franklin will have
financial responsibility for and will provide all In-Scope
Software and In-Scope Equipment required to provide the Services,
including leases, license fees, upgrade fees and maintenance
fees. Notwithstanding the foregoing, in the event that Initial
Refresh has not occurred within eighteen months following the
Amended Commencement Date, IBM shall be responsible for
maintenance on Sun Microsystems, EMC, and IBM manufactured
In-Scope Equipment (excluding any In Scope Equipment purchased
after the Original Commencement Date) until Initial Refresh does
occur unless such delay is due to Franklin's delay. The foregoing
obligations shall not include (i) the S/390 T16 situated in
Rancho Cordova, described in Section 8.b. below; (ii) the upgrade
to the S/390 T16 to an R56; (iii) all IBM S/390 Systems Software,
and (iv) the IBM Systems Software on the AS/400s. With respect to
the foregoing items described in (i) through (iv), IBM shall
provide and will maintain financial and other responsibility.
Franklin hereby grants to IBM during the Term, its Affiliates,
and their subcontractors, for use solely in connection with IBM's
provision of the Services, the rights to use such Franklin
Provided Software and Franklin Provided Hardware that is
necessary for IBM's provision of the Services, subject to Section
8.d (Required Consents) of this Agreement.
E) SECTION 8.c (IBM PROVIDED SOFTWARE AND IBM PROVIDED EQUIPMENT) IS
DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:
c. IBM Provided Software and IBM Provided Equipment. At the time of
Initial Refresh, with respect to a particular piece of In-Scope
Equipment, IBM shall assume all responsibility for such In-Scope
Equipment and all System Software running on such In-Scope
Equipment (but not including any Third Party OEM Software or
application software and DEC/VAX midrange servers listed on
Schedule G), including leases, license fees, upgrade fees and
maintenance fees. With respect to Third Party OEM Software, IBM
will be responsible for the management and procurement of such
software and will reasonably cooperate with Franklin and Franklin
Affiliates to assess and to maximize efficiencies and volume
benefits that Franklin and Franklin Affiliates
IBM/FRANKLIN CONFIDENTIAL PAGE 2 OF 9
MOSA AMENDMENT-FINAL.DOC AMENDMENT NUMBER 4
may seek from licensors of such software and will, upon mutual
agreement of the Parties, replace Third Party OEM Software with
IBM software during refreshes where IBM replacement software with
similar functionality exists. Franklin will be financially
responsible for all Third Party OEM Software and for IBM
replacement software (excluding IBM Systems Software).
F) SECTION 8.e (REFRESH) IS DELETED IN ITS ENTIRETY AND REPLACED WITH THE
FOLLOWING:
e. Refresh. For each item of In-Scope Hardware and In-Scope Software
as to which IBM has an obligation under subsection (c) above,
Franklin will provide IBM with prior notice of the expiration or
termination of the applicable equipment lease agreement or
pending expiration of depreciation for such item of hardware.
Subject to the terms and conditions of this Agreement, IBM will
negotiate and be financially responsible for the renewal or other
extension of such hardware and associated IBM Systems Software,
or of a similar alternative software or hardware solution
proposed by IBM. It is the intention of the parties that IBM
shall perform all Initial Refresh (excluding any In-Scope
Hardware purchased after the Original Commencement Date) within
eighteen (18) months of the Amended Commencement Date. IBM shall
not implement or otherwise use any hardware or software with
respect to the Services which will unreasonably or adversely
affect Franklin's or a Franklin Affiliate's application
environment.
G) SECTION 8.g (SOFTWARE CURRENCY) IS DELETED IN ITS ENTIRETY AND
REPLACED WITH THE FOLLOWING:
g. Software Currency. Following Initial Refresh, IBM shall perform
all functions required to maintain all In-Scope Software
currency. Unless otherwise agreed by the parties, IBM shall
maintain In-Scope Software within one generation of current major
release levels.
H) SECTION 8.h (EQUIPMENT CURRENCY) IS DELETED IN ITS ENTIRETY AND
REPLACED WITH THE FOLLOWING:
h. Equipment Currency. Following Initial Refresh, IBM shall perform
all functions required to maintain all In-Scope Equipment
currency (except with respect to the DEC/VAX Servers, Amendment 3
Equipment, and the Canadian Disaster Recovery AS/400 machine in
Rancho Cordova). Unless otherwise agreed to by the Parties, IBM
shall subsequently refresh the In-Scope Equipment according to
Table 8.h.1. below. To avoid all In-Scope Equipment being
refreshed at one time, the Parties shall negotiate in good faith
using commercially acceptable standards, to develop a mutually
agreed upon Annual Technology Refresh Plan which shall be updated
by the Parties annually (by December 31st of the expiring year)
beginning in 2003. The Annual Technology Refresh Plan will
include a schedule to execute the refresh of the In-Scope
Equipment for the following year. Additionally, the Parties agree
to negotiate in good faith to resolve any refresh schedule
mismatches, which may exist due to partial platforms, application
development and testing resource constraints or lack of backward
compatibility. Such resolution may be by acceleration or slowdown
of the refresh cycle.
IBM/FRANKLIN CONFIDENTIAL PAGE 3 OF 9
MOSA AMENDMENT-FINAL.DOC AMENDMENT NUMBER 4
Table 8.h.1
--------------------------------------------- --------------------------------
SYSTEM TYPE REFRESH CYCLE
--------------------------------------------- --------------------------------
Mainframe System Servers (zSeries class) 60 months
--------------------------------------------- --------------------------------
Shared Storage Systems (SAN, NAS) 48 months
--------------------------------------------- --------------------------------
Shared storage such as SAN and NAS 48 months
--------------------------------------------- --------------------------------
Storage internal to a server Same refresh schedule as server
--------------------------------------------- --------------------------------
Standalone storage (not internal to the 48 months
server) included in the other storage
category
--------------------------------------------- --------------------------------
DEC No refresh schedule
--------------------------------------------- --------------------------------
iSeries Systems 60 months
--------------------------------------------- --------------------------------
UNIX Systems (IBM, non-IBM) less than or 48 months
equal to 8 CPU's
--------------------------------------------- --------------------------------
UNIX Systems (IBM, non-IBM greater than or 60 months
equal to 9 CPUs
--------------------------------------------- --------------------------------
Intel Systems (IBM, non-IBM) 36 months
--------------------------------------------- --------------------------------
Any other nonspecified equipment 42 months
--------------------------------------------- --------------------------------
I) SECTION 10.b (REPLACEMENT OF PROTECTED EMPLOYEES) IS HEREBY DELETED IN
ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:
b. Replacement or Reassignment of Protected Employees. During the
eighteen months from the Commencement Date, IBM shall not
reassign or replace any Protected Employee described in (i),
(ii), (iii) or (iv) (with (iv) being limited as described above).
The restrictions described above shall apply, except for the
reasons set forth below: (i) replacement or reassignment of such
Protected Employee pursuant to Franklin's written consent to such
reassignment; (ii) Protected Employee's voluntary resignation
from IBM; (iii) dismissal of a Protected Employee by IBM for
misconduct (e.g., fraud, drug abuse, theft) or unsatisfactory
performance as determined by IBM; or, (iv) inability of a
Protected Employee to work due to sickness or disability, or any
relevant labor or employment legislation or following the
termination or expiration of the Agreement (each, an "Excused
Replacement"). If IBM replaces or reassigns a Protected Employee
in violation of this provision, in addition to whatever rights
and remedies Franklin may otherwise have, IBM shall be
responsible: (i) for replacing such Protected Employee within
thirty (30) days of the last day of such Protected Employee's
employment with IBM; and (ii) for training such Protected
Employee's replacement at IBM's sole expense. The IBM Project
Executive may approach the Franklin Project Executive with a
request to include a specific personnel reassignment in the
category of Excused Replacement based upon IBM's desire to not
limit an IBM Key Employee's career development and advancement.
The Franklin Project Executive will consider such a request in
good faith.
J) THE FIRST TWO SENTENCES OF SECTION 15. (BENCHMARKING) ARE AMENDED AS
FOLLOWS:
Benchmarking. At the end of the 24th, 40th, 56th, 72nd, 88th and 104th
months following the Amended Commencement Date, either party may elect
to conduct a benchmarking process designed to objectively compare the
Services and the rates and charges related thereto to industry
standards for comparable services in accordance the procedures set
forth herein.
K) INTENTIONALLY LEFT BLANK.
IBM/FRANKLIN CONFIDENTIAL PAGE 4 OF 9
MOSA AMENDMENT-FINAL.DOC AMENDMENT NUMBER 4
L) ADD THE FOLLOWING AS SECTION 17.f (USE OF FACILITIES: TORONTO):
f. The Parties hereby agree that a portion of the Services
(specifically remote operations) which are currently provided by
IBM hereunder from the United States, may be transitioned over
and may be provided by IBM from Franklin's facilities in Toronto
Canada. Should IBM decide to make this transition, Franklin shall
provide the following facilities for use by IBM in Toronto:
Franklin will provide IBM with facilities and general office
equipment (including standard office furniture, telephone
handsets, fixtures, use of shared office equipment, such as
photocopiers) for up to forty (40) IBM personnel at Franklin's
facilities in Toronto, Canada that are comparable to which
Franklin provides to its own similarly situated employees and
contractors at such facility. IBM shall be responsible for
providing all personal computers (workstations and laptops) for
use by IBM personnel.
IBM will successfully complete its transition to Toronto in accordance
with its transition plan which shall be commercially reasonable,
unless otherwise mutually agreed.
M) THE FIRST SENTENCE OF SECTION 20.a (TERM) IS DELETED IN ITS ENTIRETY
AND REPLACED WITH THE FOLLOWING:
a. As of the Amended Commencement Date, (Except with respect to
Schedule M, the term of which shall remain unchanged), the Term
of the Agreement is hereby extended as follows: The Term shall
extend until 2400 hours, Pacific time, on the later of (i) the
tenth anniversary of the Amended Commencement Date or (ii) the
last day of the Temporary Extension of Services or the Transition
Period (if any), if not terminated earlier pursuant to Section 18
or 21 (the "Term").
N) SECTION 21.a (TERMINATION) IS HEREBY DELETED IN ITS ENTIRETY AND
REPLACED WITH THE FOLLOWING:
a. Termination for Convenience. At any time after the third
anniversary of the Amended Commencement Date, Franklin may
terminate this Agreement (but not including Schedule M) for
convenience for any reason or no reason upon at least one hundred
twenty (120) days written notice, and Franklin shall have no
further obligations under this Agreement except for (i) payment
for any acceptable Services completed by IBM prior to the
effective date of termination; (ii) payment of the Termination
for Convenience Charge specified in Revision 2 to Schedule C
(iii) payment of the applicable lease buyout charge on all
remaining lease obligations, including lease obligations for
assets used in the IBM data center exclusively to support
Franklin, as set forth in 21 (e) below and (iv) payment of the
reasonable costs incurred by IBM except for those costs which
fall under Section 21 (a) (iii) above, in winding down the
Services to termination that would not have been incurred if the
Agreement had not been terminated for convenience, such amounts
not to exceed $1,500,000 plus the amount of $50,000 multiplied by
every three (3) employees in excess over 100 who are dedicated to
providing Services as of the date on which Franklin gives notice
of termination. For example, if on the date on which Franklin
gives notice of termination, 121 IBM employees are dedicated to
providing Services, the cap on the reasonable costs for which
Franklin is liable under subsection (iv) above, is $1,850,000. If
on the date on which Franklin gives notice of termination, 120
IBM employees are dedicated to providing Services, the cap on the
reasonable costs for which Franklin is liable under subsection
(iv) above, is $1,800,000.
O) THE LAST SENTENCE IN SECTION 21.b (TERMINATION FOR CAUSE) WHICH BEGINS
"IN THE EVENT OF A DEFINED DEFAULT SPECIFIED..." IS DELETED IN ITS
ENTIRETY.
P) SECTION 21.d (TERMINATION) IS DELETED IN ITS ENTIRETY.
IBM/FRANKLIN CONFIDENTIAL PAGE 5 OF 9
MOSA AMENDMENT-FINAL.DOC AMENDMENT NUMBER 4
Q) SECTION 21.e (TERMINATION) IS DELETED IN ITS ENTIRETY AND REPLACED
WITH THE FOLLOWING:
e. Leases at Expiration or Termination. In the event that IBM incurs
any actual lease buy out charges due to IBM's termination of
equipment leases because of expiration or termination of the
Agreement for any reason, Franklin shall pay to IBM the
applicable and documentable lease buyout charge on all remaining
In Scope Equipment lease obligations including lease obligations
for assets used in the IBM data center exclusively to support
Franklin. IBM shall provide an itemized accounting of all lease
buy out charges pursuant to this Section 21 (e) and any such
charges shall be commercially reasonable under the circumstances.
The Parties intend that any equipment for which Franklin pays a
lease buyout charge become the property of Franklin.
R) ADD THE FOLLOWING AS SECTION 28:
Mutual Stipulation. IBM and Franklin hereby stipulate that each party
has performed it's obligations under the Agreement for the time period
beginning on the Effective Date and ending on the Amended Commencement
Date. The Parties understand, acknowledge and agree that the
stipulation set forth in this Section 28 is under no circumstances
intended to be, nor should it be interpreted as a being a release of
liability for any actions which may have been taken by either party
under the Agreement during this time.
S) ADD THE FOLLOWING AS SECTION 29 (INCREMENTAL REVENUE COMMITMENT):
Franklin commits to IBM Global Services or its successor an
incremental revenue amount for additional services (including any
products which are included as part of a service) through the IBM
Project Executive under an Amendment or SOW to the Agreement or the
IBM/Franklin Customer Agreement for Services dated July 2, 2001 in the
relevant calendar year as follows ("Incremental Revenue Commitment"):
-------------- --------- --------- --------- --------- --------- -------- ---------
2004 2005 2006 2007 2008 2009 2010
-------------- --------- --------- --------- --------- --------- -------- ---------
Total IBM $1.75 $2.75 $3.25 $3.5 $3.5 $3.5 $3.5
Incremental
Revenue
Commitment
(in millions
USD)
-------------- --------- --------- --------- --------- --------- -------- ---------
The Incremental Revenue Commitment is over and above the Annual
Services Charge set forth in Exhibit C-1. The Incremental Revenue
Commitment will encompass all invoiced amounts paid by Franklin or its
Affiliates globally for additional IT services (including without
limitation, ARCs, One-time Incremental Asset Charges and Monthly
Incremental Asset Charges under the Agreement and any IBM or non-IBM
products which are included as part of a service such as installation,
maintenance or managed operations services, and IBM software to be
installed on the In-scope Equipment, for Franklin's environment) such
as network services, help desk, web hosting services, application
development management services, learning services, maintenance
services, business consulting services and other strategic outsourcing
services performed by IBM Global Services or its successor.
If Franklin fails to meet the Incremental Revenue Commitment in any
calendar year, IBM, at its option, shall either (i) invoice Franklin
in the second month following the applicable calendar year, and
Franklin shall pay an amount equal to 15% of the difference between
the Incremental Revenue Commitment and the amounts invoiced to
Franklin during the applicable calendar
IBM/FRANKLIN CONFIDENTIAL PAGE 6 OF 9
MOSA AMENDMENT-FINAL.DOC AMENDMENT NUMBER 4
year (the "IRC Shortfall Fee"). The IRC Shortfall shall not exceed
$262,500 for 2004, $412,500 for 2005, $487,500 for 2006 and $525,000
per year for years 2007 through 2010 or (ii) provide Franklin a one
year grace period to fulfill its Incremental Revenue Commitment on an
aggregate basis for both the prior and current years. The IRC
Shortfall Fee shall not count towards the next year's Incremental
Revenue Commitment, nor shall any amount paid to IBM during the grace
period if such amount is aggregated with the prior year's revenue in
order to meet such prior year's Incremental Revenue Commitment.
Franklin shall provide reasonable assistance to IBM as required to
calculate the amounts paid to IBM over the previous calendar year.
If the Agreement terminates for any reason prior to its anticipated
expiration date, the Incremental Revenue Commitment will be prorated
for the relevant calendar year in which the Agreement is terminated
and any amounts owing for the IRC Shortfall Fee are due upon the
effective date of Termination.
The additional Services may be subject to a Benchmark (as per the
Benchmark provisions and schedule defined in the Agreement) against
comparable scope and revenue size of similar transactions in the
industry (for example, product installation services will be
benchmarked against comparable scope, complexity, platforms and
volumes).
T) ADD THE FOLLOWING AS SECTION 30:
Geographic Scope of Services. Unless the Parties otherwise agree in
writing, the Services under this Agreement shall be provided only in
the United States of America.
U) ADD THE FOLLOWING AS SECTION 31:
Governance.
a. Introduction
Franklin and IBM agree that the effective implementation and
administration of this Agreement will be facilitated by ongoing
management involvement. This involvement will be enhanced by the
governance structure and process set forth in this Section.
b. Intent
The intent of the governance structure and process is to enhance
and facilitate:
i. the effective implementation of this Agreement including the
establishment of a strategy for communicating and planning
for major organization changes (i.e., people, processes,
functions) associated with this Agreement;
ii. the development of organizational relationships through
formal tools and techniques to support Franklin's and IBM's:
a) IT goals and objectives; and
b) business goals, plans and strategies;
iii. effective operating protocols and an expeditious process for
the resolution of certain disputes; and
iv. periodic senior management review of and recommitment to the
relationship.
c. Objectives
The objectives of the governance structure and process are to
continually validate that:
i. the results and benefits derived from this Agreement are
consistent with Franklin's and IBM's expectations and
objectives;
ii. the goals, objectives, strategies, and plans of Franklin and
IBM are fully understood by the other;
iii. an effective relationship management process exists
including a communication, decision making, and issue
resolution process; and
IBM/FRANKLIN CONFIDENTIAL PAGE 7 OF 9
MOSA AMENDMENT-FINAL.DOC AMENDMENT NUMBER 4
iv. this Agreement continues to provide a living value
proposition to Franklin and IBM throughout the Term.
d. Structure
Franklin and IBM agree to jointly establish the following
governance structure to provide advice and counsel to the
Franklin and IBM Project Executives.
i. Joint Steering Committee
a) Franklin and IBM will jointly create a board consisting
of an equal number of employees from Franklin and IBM
(the Joint Steering Committee) who will focus on
Franklin's and IBM's long-term strategic plans as they
relate to the Services so that such plans remain
consistent with the goals, objectives, strategies and
plans of Franklin and IBM. Within 60 days after the
Amended Commencement Date, Franklin and IBM will
identify the titles of the initial members of the Joint
Steering Committee and will agree upon a process for
replacement of the Joint Steering Committee members.
b) The Joint Steering Committee will:
(1) convene at least semiannually to promote effective
relationship management and validate progress
towards joint strategic initiatives;
(2) conduct annual reviews of the operating and
strategic plans prepared by the Project
Executives;
(3) share global strategies, as appropriate, and
jointly develop new or adjust the existing
Franklin and IBM IT strategy;
(4) consider and recommend amendments to the Agreement
necessary to maintain alignment of Franklin's and
IBM's expectations and shared goals;
(5) upon Franklin's or IBM's request, assist in
resolving any disputes or significant issues
arising from the interpretation or implementation
of this Agreement; and
(6) review the overall operational performance of this
Agreement as well as issues effecting joint mutual
action.
ii. Joint Management Committee
a) Franklin and IBM will jointly create a council
consisting of an equal number of IS managers and
representatives from Franklin and IBM (the Joint
Management Committee). Within 60 days after the Amended
Commencement Date, Franklin and IBM will identify the
titles of the initial members of the Joint Management
Committee and will agree upon a process for replacement
of the Joint Management Committee members.
b) The Joint Management Committee will:
(1) conduct monthly reviews of operational performance,
progress towards project objectives, and
organizational linkages required for efficient,
interdependent performance where required;
(2) prioritize and approve tactical plans;
(3) review the operating and strategic plans prepared
by the Project Executives prior to presenting such
plans to the Joint Steering Committee for review;
(4) provide advice on workload forecasting and demand
management;
(5) provide advice on technology direction and input to
the Joint Steering Committee;
(6) provide sufficient interface to Franklin's line of
business and the IBM organization; and
(7) sponsor appropriate working groups as deemed
necessary to address operational or technical
issues, to address performance concerns of
Franklin's application development groups and
business units for In-
IBM/FRANKLIN CONFIDENTIAL PAGE 8 OF 9
MOSA AMENDMENT-FINAL.DOC AMENDMENT NUMBER 4
Scope Services, whether or not they are
specifically listed as SLA's in Schedule B, and to
enhance Franklin's and IBM's relationship.
V) SECTION 19.a (TEMPORARY EXTENSION OF SERVICES) IS HEREBY AMENDED AS
FOLLOWS: Franklin may elect to extend this Agreement under the terms
set forth in Section 19 (a) for up to and including nine (9) months.
II. THE SCHEDULES:
A) SCHEDULE A (SERVICES) IS HEREBY AMENDED AS FOLLOWS:
---------------------------------------------------
"Schedule A" including Supplement A-1 to Schedule A is deleted in its
entirety and replaced with "Revision 1 to Schedule A" which is
attached hereto.
B) SCHEDULE B (SERVICE LEVELS) IS HEREBY AMENDED AS FOLLOWS:
---------------------------------------------------------
"Revision 1 to Schedule B" including Supplement B-1 to Schedule B is
deleted in its entirety and replaced with "Revision 2 to Schedule B"
which is attached hereto.
C) SCHEDULE C (CHARGES) IS HEREBY AMENDED AS FOLLOWS:
--------------------------------------------------
"Revision 1 to Schedule C" is deleted in its entirety and replaced
with "Revision 2 to Schedule C" which is attached hereto.
D) SCHEDULE E (PROJECTS) IS HEREBY AMENDED AS FOLLOWS:
---------------------------------------------------
"Schedule E" including Supplement E-1 to Schedule E is deleted in its
entirety and replaced with "Revision 1 to Schedule E" which is
attached hereto.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS AMENDMENT, UNDERSTAND IT, AND
AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE PARTIES AGREE THAT
THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES
RELATING TO THIS SUBJECT SHALL CONSIST OF 1) THIS AMENDMENT, 2) THE SCHEDULES
AND SUPPLEMENTS TO THE SCHEDULES, AND 3) THE AGREEMENT, DATED FEBRUARY 6, 2001,
AS PREVIOUSLY AMENDED. Franklin's approval of this Amendment shall be considered
acceptance by Franklin of IBM's provision of the Services for the corresponding
charges specified in THE aGREEMENT, AS AMENDED. THIS STATEMENT OF THE AMENDMENT
SUPERSEDES ALL PROPOSALS OR OTHER PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL
OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER
DESCRIBED IN THIS AMENDMENT.
Accepted by: Accepted by:
International Business Machines Franklin Templeton Companies, LLC
Corporation
By: /s/ Shirley S. Reilich By: /s/ Jennifer J. Bolt
---------------------- ---------------------
Authorized Signature Authorized Signature
SHIRLEY S. REILICH Date July 1, 2003 JENNIFER J. BOLT Date July 1, 2003
- ------------------ ------------ ---------------- ------------
Name (Type or Print) Name (Type or Print)
IBM/FRANKLIN CONFIDENTIAL PAGE 9 OF 9
MOSA AMENDMENT-FINAL.DOC AMENDMENT NUMBER 4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT BETWEEN
FRANKLIN AND IBM
REVISION 1 TO SCHEDULE A
SERVICES AND SUPPORT RESPONSIBILITIES
I. INTRODUCTION.......................................................2
II. DEFINITIONS.......................................................2
III. SERVICE HOURS.....................................................6
IV. DOCUMENTATION.....................................................6
V. DESCRIPTION OF SERVICES AND SUPPORT ACTIVITIES....................8
1.0 General Responsibilities......................................8
1.1 Reporting.....................................................8
1.2 Meetings......................................................8
2.0 Systems Engineering...........................................9
3.0 Systems Management Controls...................................9
3.1 Systems Management Control Project Office....................10
3.2 Configuration Management.....................................10
3.3 Change Management............................................10
3.4 Performance Management.......................................11
3.5 Problem Management...........................................12
3.6 Capacity Planning............................................13
3.7 Availability Management......................................13
4.0 Systems Operations...........................................14
4.1 General Description of Systems Operations....................14
4.2 Processing Operations........................................14
4.3 Midrange and Intel Systems Operations........................15
5.0 Production Control Services..................................15
5.1 General Description..........................................16
5.2 Mainframe Production Control Services........................17
6.0 Systems and Technical Support................................17
7.0 Storage Management Services..................................18
8.0 Data Base Management Services................................19
8.1 Application and Data Modification............................19
8.2 Modifications to the Server/ Database Configuration..........19
8.3 Database Performance Tuning..................................19
8.4 Software Upgrades and Patch installations....................19
8.5 Establish Temporary User ID's for Franklin Database
Administrators:..............................................19
9.0 Tape Management Services.....................................20
9.1 General Description of Tape Management Services..............20
10.0 Output Services..............................................21
11.0 System Testing and Implementation Services...................22
12.0 Maintenance Services.........................................22
13.0 Application Support Services.................................23
13.1 MQ Series Support............................................23
14.0 Security Management..........................................25
14.1 General Responsibilities.....................................25
14.2 Physical Security............................................25
14.3 Logical Access Control.......................................26
14.4 Network Infrastructure Security (in addition to Logical
Access above)................................................28
15.0 Monitoring Services..........................................28
15.1 Design, Development, and Deployment of Monitors..............30
15.2 Steady State Monitoring Operations...........................30
16.0 Business Recovery Services...................................31
17.0 Other Services and Responsibilities..........................31
IBM/FRANKLIN CONFIDENTIAL PAGE 1 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
I. INTRODUCTION
This Schedule describes the duties and responsibilities of International
Business Machines Corporation and Franklin Templeton Companies, LLC (referred to
herein as IBM and Franklin, respectively; or as a Party or the Parties) related
to IBM's provision of steady state Services. A description of the Services IBM
will provide and the responsibilities of the parties with regard to the
transition to steady state are described in Schedule D (Transition).
II. DEFINITIONS
The following terms have the meanings set forth below when used in this Schedule
(and in the base Agreement and other Schedules). Capitalized terms not defined
in this Section 2.0 have the meanings set forth in the Agreement or other
Schedules.
a. ABEND means, with respect to computer processing, an abnormal end of task.
b. APPLICATIONS SOFTWARE means those programs and programming, including all
supporting documentation and media, that perform specific End User related
data processing and telecommunications tasks. For purposes of this
Schedule, Applications Software also includes database management software
in all platforms except the mainframe.
c. ARB means Franklin's Architectural Review Board, which includes the IBM PE
having full membership rights equal to IT directors on the ARB.
d. AVAILABILITY MANAGEMENT means the process for coordinating the appropriate
skills, information, tools and procedures required to manage the
availability of the Mainframe, Midrange, and Intel server devices, and the
supporting hardware and software components that IBM uses to provide
Services.
e. BATCH MANAGEMENT means the process for controlling production batch work
including the scheduling of resources, the processing of data and
transactions and the distribution of data output/information between End
Users.
f. CAPACITY MANAGEMENT means the process for the development and maintenance
of tactical and strategic plans to verify that the operating environments
accommodate Franklin's growing or changing business requirements.
g. CHANGE MANAGEMENT means the process for the planning, testing,
coordinating, implementing and monitoring of changes affecting service
delivery and the operating environments. The process will not adversely
impact Service delivery.
h. CONFIGURATION MANAGEMENT means the process for processing and tracking
hardware and software configuration changes and maintaining lists and
diagrams of system configurations.
i. DASD means direct access storage device.
j. DATA CENTER means either the IBM Data Center(s) or the Franklin Data
Center(s), as identified on Schedule I (Facilities), or both.
k. END USERS means users of Services who are employees, Affiliates, and
contractors or other designees of Franklin.
l. END USER MACHINES means all workstations, terminals, printers, and
associated peripheral equipment located at Franklin Facilities.
m. FACILITIES means those Franklin locations listed in Schedule I
(Facilities).
n. FRANKLIN DATA NETWORK means the portions of the network that Franklin is
responsible for providing as set forth in Schedule H.
IBM/FRANKLIN CONFIDENTIAL PAGE 2 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
o. FOCAL POINT means the individual designated by either Party to act as the
single point of contact within a specified set of Services or Facility to
whom the other Party may direct all communications related to such set of
Services or Facility.
p. FRANKLIN MACHINES means machines that are:
1. owned, leased or rented by Franklin Resources, Inc. on or after the
Effective Date; and
2. used by IBM to provide the Services.
q. GSD331 means the IBM GSD331 document, as mutually modified for the Franklin
environment.
r. HOLIDAY means the days specified as holidays by Franklin corporate policy,
which list of holidays Franklin will provide to IBM annually.
s. IBM DATA NETWORK means the network owned, managed and maintained by IBM,
IBM partners or IBM vendors.
t. IBM MANAGEMENT ENVIRONMENT means IBM's tools, processes and programs which
are used by IBM in managing of the System Layer.
u. IMPLEMENTATION means the collaborative planning, preparation, physical
installation, and post installation validation of changes within the test
and production environments in compliance with Change Management procedures
set forth in the Procedures Manual.
v. INFORMATION SECURITY CONTROLS DOCUMENT means the guidelines to establish
security implementation practices and procedures for the protection of
Franklin and IBM.
w. INTEL SERVER means those servers identified as such and listed in Schedule
G (Machines) on the Effective Date and, subsequently, those machines listed
in the IBM database of assets.
x. INVENTORY MANAGEMENT Control Process means the process for maintaining a
record of the IBM and Franklin equipment (including incoming and outgoing)
for those environments for which IBM is providing Services.
y. LEVEL 1 SUPPORT means the initial request is handled by an individual who
takes the incoming request and attempts to fulfill the request. Specific
responsibilities include:
1. responding to the incoming request;
2. gathering the appropriate information for the type of request;
3. assessing the severity and priority of requests;
4. attempting to fulfill the request;
5. reassigning requests as needed;
6. contacting the customer for further information, as required;
7. performing escalation as necessary;
8. performing notification as required; and
9. closing requests that are fulfilled, with customer agreement.
z. LEVEL 2 SUPPORT means the call is referred to a subject matter expert who
handles additional request fulfillment. Specific responsibilities include:
1. fulfilling assigned requests;
2. documenting all actions in the request record;
3. contacting the customer for further information, if required;
4. participating in root cause analysis, when required;
5. requesting escalation;
IBM/FRANKLIN CONFIDENTIAL PAGE 3 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
6. working with vendors as necessary;
7. assisting in the use of supported products;
8. making recommendations for process and tool improvements;
9. contacting other service providers, as required; and
10. interfacing with other systems, networks, and operating system
environments.
aa. LEVEL 3 SUPPORT means the call is referred to a subject matter expert who
handles request fulfillment requiring more in-depth expertise than Level 2.
These subject matter experts may be part of external organizations
(vendors). Specific responsibilities include:
1. fulfilling assigned requests;
2. documenting all actions in the request record;
3. contacting the customer for further information, if required;
4. participating in root cause analysis, when required;
5. requesting escalation;
6. working with vendors as necessary;
7. assisting in the use of supported products;
8. making recommendations for process and tool improvements;
9. contacting other service providers, as required; and
10. interfacing with other systems, networks, and operating system
environments.
bb. LOCAL AREA NETWORK or LAN means the configuration (hardware components,
software, and communications devices) used to transmit and receive data
signals within a Facility.
cc. LOCKED DOWN means In-Scope Equipment for which IBM has completed Production
Lock Down.
dd. MAINFRAME MACHINE means those machines listed as such in Schedule G
(Machines) on the Effective Date and, subsequently, those machines listed
in the IBM database of assets.
ee. MIDRANGE MACHINE means the UNIX, AS/400, DEC Alpha or DEC Vax system
(servers) as listed in Schedule G (Machines) on the Effective Date and,
subsequently, those machines listed in the IBM database of assets.
ff. MQ SERIES APPLICATION OBJECTS means local, remote or other queues, process
definitions, or any other MQ series object required by the application.
gg. MQ SERIES INFRASTRUCTURE OBJECTS includes the following infrastructure
parameters: MQ Series Q_Manager process, Command Server process, Channel
Initiator process, trigger Monitor process, Dead Letter Queue, var mqm Log
file space (thresholds alerts 75/95%), and condition: Channel w/ Retry
Status.
hh. OTHER SITE means a location identified as "other site" and listed in
Schedule I (Facilities).
ii. PERFORMANCE MANAGEMENT means the process for monitoring, measuring,
analyzing and reporting systems performance as compared to the Service
Levels.
jj. POST PRINT OPERATIONS means processes that occur after the printed output
is removed from the printer and placed in the mutually agreed upon
designated area, and includes, but is not limited to, bursting, trimming,
stuffing/insertion, addressing, sorting, mailing and courier services.
kk. PRIME SITE means a location identified as a "prime site" and listed in
Schedule I (Facilities).
ll. PROBLEM MANAGEMENT means the process for identifying, recording, tracking,
and correcting issues impacting service delivery, recognizing recurring
problems, addressing procedural issues and containing or minimizing the
impact of problems that occur for the levels of support (i.e. Level 2 and
Level 3) described in this Schedule A.
IBM/FRANKLIN CONFIDENTIAL PAGE 4 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
mm. PRODUCTION CONTROL means the management of production related processes and
implementations, including batch application scheduling and control,
production promotion, adherence to process and escalation of production
problems according to agreed to problem management process.
nn. PTF is a Program Temporary Fix or repair patch provided by the software
vendor.
oo. PRODUCTION LOCK DOWN means UserID administration including the creation,
modification, deletion and revalidation of UserIDs as described in Section
14.3 of this Schedule. IBM will provide the number of resources specified
in Exhibit C-1 of Schedule C (the "Production Lock Down Baseline") to
perform IBM's Production Lock Down responsibilities.
pp. RECOVERY MANAGEMENT means the process for planning, establishing and
testing the recovery procedures required to reestablish the functionality
of systems included in the Services 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.
qq. REMOTE SITE means a location identified as "remote site" and listed in
Schedule I (Facilities).
rr. SERVICES MACHINES means those machines that are listed as "Services
Machines" in Schedule G (Machines) on the Effective Date and, subsequently,
those machines listed in the IBM database of assets.
ss. STANDARD REPORTS means those reports IBM provides to Franklin, as agreed by
the Parties and listed in the Procedures Manual.
tt. SUPPORT TIER means the level of support provided by IBM to the Image(s) on
a Server as selected by Franklin and certified by IBM as described in the
Procedures Manual. Service Tiers are specified below and the Services
applicable to each Support Tier are described throughout this Schedule:
1. Critical Images;
2. Standard Images;
3. Prime-Time Standard Images;
4. Prime-Time Basic Images;
5. EMEA Prime-Time Standard Images;
6. EMEA Prime-Time Basic Images;
7. Asia Prime-Time Standard Images; and
8. Asia Prime-Time Basic Images.
uu. SYSTEM LAYER is the combination of the Hardware and Systems Software that
provides access to resources required by the Application Software.
vv. SYSTEMS SOFTWARE means those programs and programming, including all
supporting documentation and media, that perform tasks basic to the
functioning of the hardware and which are required to operate the
Applications Software or otherwise support the provision of Services by
IBM.
ww. SYSTEM UTILITIES means utilities (e.g., print queues, backup, storage,
networking and file access utilities), data movement services (e.g., MQ
Series, MQSI, ETL, FTP), job scheduling and monitoring utilities (e.g.,
NDM, Tivoli), high availability services (e.g., mirroring software).
xx. TCP/IP means transmission control protocol/internet protocol.
yy. TESTING means the combined effort of exercising data processing
subsystems/systems (including software and hardware) and production
procedures, in an environment which progressively simulates operational
processes and conditions to allow for verification and validation of system
readiness to support business functions, workflow, data integrity,
operational support and rerun/restart/recovery.
zz. USER IDENTIFICATION or USER ID means a string of characters (i.e., a user
name or a password) that uniquely identifies a user to a system and enables
access to a system or specific data residing on a system.
IBM/FRANKLIN CONFIDENTIAL PAGE 5 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
III. SERVICE HOURS
IBM will provide the Services pursuant to the following table:
- ---------------------------------------------------------------------------
SERVICE HOURS
- ---------------------------------------------------------------------------
Critical Images and Standard Images Twenty-four (24) hours/day, seven
(7) days/week, 365 days/year
- ---------------------------------------------------------------------------
Prime-Time Standard Images Twelve (12) hours/day (6am-6pm US
Mountain Time), Monday-Friday,
including Holidays.
- ---------------------------------------------------------------------------
Prime-Time Basic Images Twelve (12) hours/day (6am-6pm US
Mountain Time), Monday-Friday,
excluding Holidays.
- ---------------------------------------------------------------------------
EMEA Prime-Time Standard Images Twelve (12) hours/day, (one mutually
agreed 12 hour block for all EMEA
regions applicable to EMEA
Prime-Time Standard Images and EMEA
Prime-Time Basic Images),
Monday-Friday, including Holidays
- ---------------------------------------------------------------------------
EMEA Prime-Time Basic Images Twelve (12) hours/day, (one mutually
agreed 12 hour block for all EMEA
regions applicable to EMEA
Prime-Time Standard Images and EMEA
Prime-Time Basic Images),
Monday-Friday, excluding Holidays
- ---------------------------------------------------------------------------
Asia Prime-Time Standard Images Twelve (12) hours/day, (one mutually
agreed 12 hour block for all Asia
regions applicable to Asia
Prime-Time Standard Images and Asia
Prime-Time Basic Images),
Monday-Friday, including Holidays
- ---------------------------------------------------------------------------
Asia Prime-Time Basic Images Twelve (12) hours/day, (one mutually
agreed 12 hour block for all Asia
regions applicable to Asia
Prime-Time Standard Images and Asia
Prime-Time Basic Images),
Monday-Friday, excluding Holidays
- ---------------------------------------------------------------------------
Change Management, and backup Twenty-four (24) hours/day, seven
and recovery services (for all (7) days/week, 365 days/year
tiers)
- ---------------------------------------------------------------------------
all other Services Twelve (12) hours/day (6am-6pm US
Mountain Time), Monday-Friday,
excluding Holidays.
- ---------------------------------------------------------------------------
1.0 CHANGES TO SERVICE TIERS
a. Franklin will use the Change Management procedures to reclassify Images
among the Service Tiers (an Image may only be classified as a single
Service Tier at one time).
b. The promotion of an Image may not be for a period of less than thirty-one
(31) days or for such longer period as mutually agreed and set forth in the
Procedures Manual.
c. If a change to a Service Tier is required outside of the normal Change
Management window, the change will be handled via the Emergency Change
Management process described in the Procedures Manual. If either Party
deems that the Emergency Change Managemetn process is invoked too
frequently or not receiving adequate response, the issue will be addressed
in the monthly joint management committee meeting.
d. Franklin will provide IBM with a Service classification Tier support plan
as part of the standard application development lifecycle.
IV. DOCUMENTATION
Franklin and IBM agree that the Procedures Manual will incorporate appropriate
implementation details and procedures for the Services.
a. IBM is responsible for:
1. creating, updating and maintaining the Procedures Manual in
consultation with Franklin. IBM will obtain Franklin's prior approval
of any Franklin obligations and any proposed changes to any
IBM/FRANKLIN CONFIDENTIAL PAGE 6 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
Franklin obligations before inclusion in the Procedures Manual and IBM
will not reduce its obligations under the Agreement and will not make
changes which would materially alter performance of Services without
Franklin's prior written approval;
2. reviewing operations documentation for adherence to operational
procedures and standards;
3. periodically distributing to appropriate Franklin employees,
information bulletins regarding new or changed operations and
procedures;
4. developing operations documentation for all Systems Software;
5. developing, implementing and maintaining a common electronic,
web-accessible document repository through which Franklin may
authorize IBM to provide Franklin employees with access to read,
download and print documents relating to activities which could
reasonably be expected to affect business operations, including but
not limited to Project Change Requests ("PCR's"), project plans and
schedules and the Procedures Manual; and
6. maintaining procedural documentation necessary to the currency of the
disaster recovery plan.
b. Franklin will:
1. provide IBM with existing documentation for operations procedures and
processes relating to the Applications Software and Franklin Machines
as well as any new documentation for operations procedures and
processes related to new Applications Software and new Franklin
Machines for inclusion in the Procedures Manual to the extent required
for IBM to perform the Services;
2. assist IBM in IBM's development of documentation of Franklin's
operations and procedures existing prior to the Effective Date of this
Agreement, for which documentation is not current and available for
transmittal to IBM on or before the Effective date; and
3. assist IBM in development and implementation of the electronic
document repository.
IBM/FRANKLIN CONFIDENTIAL PAGE 7 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
V. DESCRIPTION OF SERVICES AND SUPPORT ACTIVITIES
The Services described in this Section V will be provided for the
application development and maintenance, testing, and production
environments unless otherwise noted.
1.0 GENERAL RESPONSIBILITIES
IBM will provide the Services in accordance with the descriptions contained in
this Schedule and the Procedures Manual. Franklin will support IBM's provision
of the Services in accordance with the descriptions contained in this Schedule
and the Procedures Manual. During the Term, IBM will continue to investigate new
technologies, look for areas of improvement of Services described herein, and
recommend initiatives required to implement those improvements that would be
beneficial to Franklin's business operations and to make effective use of IT
resources. At a minimum, IBM will work with Franklin during the annual planning
session to prioritize improvement activities.
1.1 REPORTING
IBM will provide Franklin with Standard Reports for which a representative
sample is referred to in Schedule N, which will reflect the statistics related
to IBM's operational responsibilities and performance as defined within this
Schedule A (Services and Support Responsibilities). Specifically, within the
first 90 -days following the Original Commencement Date, IBM will provide
Franklin with the periodic reports that Franklin was generating immediately
prior to the Effective Date. Included within these reports will be the
information necessary to support creation of Franklin's Executive Level Business
Review (ELBR) report, which IBM will continue to provide to Franklin throughout
the Term. Beginning no later than 90 days following the Original Commencement
Date, IBM will also provide Franklin with drafts of the format for the periodic
standard reports that IBM will provide Franklin during the Term. In the event
that Franklin desires additional reporting or modifications to the standard
report formats provided, requests for changes will be considered pursuant to
Change Management procedures set forth in the Procedures Manual.
1.2 MEETINGS
The Parties agree that frequent and ongoing communication is required to support
the working relationship set forth in this Agreement. Within the first 90 days
after the Effective Date, Franklin and IBM will mutually determine a schedule of
periodic operations and contract management meetings between the Parties and
define the participation from each company. IBM will publish an agenda for each
meeting sufficiently in advance to allow meeting participants a reasonable
opportunity to prepare. Additionally, meeting minutes will be recorded and
distributed to appropriate Franklin and IBM management. Actions as appropriate
will be recorded and tracked through closure in the respective meetings.
The periodic meetings will include, but not be limited to:
a. Operations Management
1. a daily operations review meeting to discuss operations and events,
plan immediate steps required to support operational priorities, and
assign appropriate resources to perform actions;
2. bi-weekly problem management meetings to discuss status of open
problems and problem resolution trends and problematic areas;
3. weekly change management meetings to review and assess production and
test environment recommended changes;
4. a weekly operations meeting to discuss the week's operational trends
and the results of daily performance and planning meetings and
activities; and
5. a monthly operations performance meeting to review monthly service
level attainment reports, recurring issues and actions to solution,
operational trends and recommendations, and other matters, as
appropriate; and
6. participate in service review meetings with vendors and service
providers under contract with Franklin who interact with IBM relative
to the Services, as Franklin reasonably requests.
b. Relationship Management
1. A quarterly senior management meeting to review appropriate
contractual, business, planning or performance issues; and
IBM/FRANKLIN CONFIDENTIAL PAGE 8 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
2. An annual planning session to coincide with Franklin's budgeting
process to outline the next 12-15 month operational view, including
strategic investments, growth and project related work.
2.0 SYSTEMS ENGINEERING
IBM will provide systems engineering support for the Mainframe, Midrange and
Intel server environments, as described below.
a. IBM will:
1. perform infrastructure architecture, engineering and design for
In-Scope Hardware and In-Scope Software and prepare and present
documentation relating to any material changes in the infrastructure
to the Franklin Architectural Review Board and any such material
changes must be approved by the Franklin Architectural Review Board,
provided that an infrastructure change shall not require approval if
the change is made in accordance with Franklin's strategic
infrastructure standards developed under Section 2.0 b. 1. below;
2. perform requirements analysis for hardware and systems software and
provide that information to Franklin in a schedule and format to be
agreed upon by the parties;
3. perform periodic review of software for determination of currency and
necessity to working environment;
4. perform project management of change and upgrade activities to the
infrastructure through design phase;
5. FRI/IBM will mutually define scope, document roles and
responsibilities and will develop an implementation plan for the Test
Engineering Lab within 180 days of the Amended Commencement Date,
provided that Franklin will be responsible for hardware, facilities,
software, tools, network architecture and will provide joint
engineering resource support, and IBM will be responsible for
scheduling, fit up and tear down, and managing of environment with 3
FTEs beginning January 1, 2004.
6. perform review and analysis of major trends in Level 1 and Level 2
support and facilitate transfer of information and knowledge to Level
1 and Level 2 support personnel;
7. provide management and oversight of the design/engineering lab;
8. document and monitor adherence to standards; and
9. coordinate with third party vendors as they relate to the In-Scope
Hardware and In-Scope Software and to IBM's responsibilities
continuously to seek improved technologies and efficiencies.
b. Franklin will:
1. in cooperation with IBM, establish strategic infrastructure standards
and communicate those standards to IBM in a schedule and format to be
agreed to by the parties;
2. retain responsibility for systems engineering for the distributed
Windows/Intel desktop environment;
3. establish the design and engineering lab;
4. coordinate with IBM new and developing technology research; and
5. assist with IBM in review and analysis of trends in Level 1 and Level
2 support.
3.0 SYSTEMS MANAGEMENT CONTROLS
IBM will provide to Franklin, and IBM and Franklin will mutually agree on and
use, the System Management Controls (SMC) procedures as the standard set of
disciplines for managing information systems included within the Services. The
SMC procedures, in some combination, apply to all the Services provided, and
they will be implemented, as described in this Schedule, to each Service being
provided. The Procedures Manual will contain the SMC procedures. IBM's SMC
responsibilities will consist of Configuration Management, Change Management,
Performance Management, Problem Management; Capacity Planning; and Availability
Management, as described herein.
IBM/FRANKLIN CONFIDENTIAL PAGE 9 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
3.1 SYSTEMS MANAGEMENT CONTROL PROJECT OFFICE
IBM will create a dedicated project office to coordinate and provide direction
to the overall development and implementation of Systems Management Controls.
3.2 CONFIGURATION MANAGEMENT
a. IBM will maintain and provide documentation for the following:
1. operating systems configuration;
2. backup and restore processes;
3. IBM will maintain an inventory of the In-Scope Hardware and In-Scope
Software, and will maintain the data elements used for calculating
Resource Units to within 5% accuracy to be validated and reviewed
through a mutually agreed upon process for monthly and quarterly
invoices as described in the Procedures Manual to be agreed up within
60 days of the Amended Commencement Date.
4. hardware configuration reports.
b. Franklin will provide IBM with existing documentation and future
requirements for the following:
1. operating systems configuration;
2. network operating systems configuration;
3. backup and restore processes; and
4. hardware configuration reports.
3.3 CHANGE MANAGEMENT
a. IBM will:
1. work with Franklin to develop procedures for handling all planned and
emergency changes with the potential to impact the Franklin production
environment , including review, approval, communication and
documentation;
2. document, maintain and amend as necessary, the Change Management
process and Emergency Change process as specified in the Procedures
Manual;
3. document and communicate changes made in accordance with the change
management procedures contained in the Procedures Manual;
4. track approved change requests;
5. schedule or manage testing and implementation of approved changes,
including communication to and coordination with Franklin designated
business units' coordinators;
6. evaluate planned changes to the In-Scope Hardware and In-Scope
Software and advise Franklin of any requirements to support such
changes;
7. verify operations of hardware and Systems Software following changes
to the hardware or Systems Software environment, by checking job logs
and system messages;
8. upon completion of the Supported Server Lock Down, automate code
migration as a Project, where possible as requested by Franklin, for
tasks associated with changes;
9. receive and handle notification of related change activity;
10. track change history of managed resources;
11. provide standard change management reports;
12. create and maintain a tactical change calendar;
13. create and maintain a current and accurate database of assets that
contains a list of all equipment and Systems Software that IBM is
using to provide Services. Among other things, the database will
specify which equipment falls into the appropriate Resource Unit
categories. IBM will provide
IBM/FRANKLIN CONFIDENTIAL PAGE 10 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
Franklin with access to such database and will promptly correct any
inaccuracies that Franklin identifies.
b. Franklin will:
1. be responsible for providing the Franklin Change Management process to
IBM, which may be reviewed and modified by IBM as applicable to
provide the Services, as well as promptly notifying IBM of all changes
to the Franklin Change Management process;
2. assist IBM in developing procedures for handling all planned and
emergency changes affecting the In-Scope Hardware, In-Scope Software,
and Services including review, approval, communication and proper
documentation;
3. notify IBM of any planned or emergency changes (including Applications
changes) to Franklin's environment affecting IBM's provision of the
Services and to be provided for the tactical change calendar;
4. verify operation of Application Software following changes to the
hardware or Systems Software environment;
5. provide a test environment for the evaluation of applications and
tools configurations; and
6. test and evaluate applications and tools configurations before
implementing them in the production environment.
7. be responsible for all aspects of Franklin-owned hardware and software
not included within the defined Services. Provide IBM with prior
notification as defined in the Procedures Manual when adding,
deleting, changing or relocating other customer hardware or software
which may, directly or indirectly, affect IBM's provision of the
Services;
3.4 PERFORMANCE MANAGEMENT
a. IBM will:
1. continue to utilize existing Franklin performance indicators, enhance
the existing performance indicators and define new performance
indicators, where appropriate, and monitor in-scope performance
against such indicators;
2. install ARB approved management agents pursuant to Section 15, unless
otherwise agreed by the parties (e.g. Novell);
3. take appropriate resolution action (for example, tuning, notifying the
Franklin Focal Point) when in-scope system(s) performance is impacted;
4. when an In-Scope performance indicator alert is generated, seek
resolution of the problem and, when initial resolution cannot be
immediately achieved, escalate such alerts to the appropriate
personnel according to the Problem Management process.
5. request Franklin to authorize changes to the hardware and software as
needed to enable system performance improvement;
6. work with Franklin to establish a schedule for performing in-scope
system(s) maintenance (for example, virus detection, backup, DASD
cleanup and testing) modifications and enhancements;
7. advise Franklin of any required system configurations and/or
modifications necessary to enable IBM to provide the Services; and
8. provide performance reports as described in the Procedures Manual and
Schedule N; such reports will be published on a centralized database
available to the Parties on a mutually agreed schedule.
b. Franklin will:
1. authorize changes to the hardware and software as reasonably requested
by IBM for the purpose of enabling system performance improvement; and
2. assist IBM in establishing a schedule for performing in-scope
system(s) maintenance (for example, virus detection, backup, DASD
cleanup, and testing) and modifications and enhancements.
IBM/FRANKLIN CONFIDENTIAL PAGE 11 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
3.5 PROBLEM MANAGEMENT
A party shall open a problem ticket immediately upon learning of a problem,
including automated threshold alerts. Promptly upon opening a ticket, the party
opening the ticket will assign the problem ticket to the appropriate queue. The
time in which IBM is required to generate notifications and escalations and take
other actions is determined by the electronic time stamp indicating when the
problem ticket entered IBM's queue.
a. IBM will:
1. take calls escalated from Franklin's Level 1 Help Desk for all
in-scope environments;
2. for each problem record forwarded to IBM by Franklin and for each
problem record originated by IBM, make initial assignments regarding
ownership and priority for each problem;
3. for problem records with Severity 1 and 2 codes, generate automatic
notification to IBM and Franklin management personnel
(a) within fifteen (15) minutes after identification of the problem;
(b) within one hour after identification of the problem;
(c) hourly thereafter until resolved or until the parties agree on a
different notification schedule; and
(d) and perform Situation Management through to service restored as
defined in the Procedure Manual.
4. take steps identified in the Procedures Manual to notify Franklin
within five minutes of Severity 1 problems originally identified by
IBM;
5. work with Franklin to:
(a) define indicators to monitor,
(b) define alert and paging processes and procedures, including
escalation procedures for Levels 2 and 3 support;
6. following the Problem Management process documented in the Procedures
Manual, manage all Severity 1 and 2 problem records through to service
restored status. Manage all in scope problem tickets (all severities)
through to resolved status and report on timeframes in which problem
records are closed; and
7. perform reporting, logging, tracking, resolution, communication and
escalation for problems as defined in the Procedures Manual for Level
2 and Level 3 Support.
b. Franklin will:
1. make changes to any assignments regarding priority and ownership of
problem records;
2. perform problem management tasks for Level 1 Support;
3. define problem priority levels and associated escalation procedures
for Level 1 Support;
4. perform reporting logging, tracking, resolution, communication and
escalation for problems as defined in the Procedures Manual for Level
1 Support;
5. provide to IBM the Franklin escalation chain, including any updates as
they occur; and
6. use diligent efforts to make available the appropriate Franklin
personnel to interface with IBM personnel, as required to isolate or
resolve complex network, operational or software problems affecting
IBM's ability to provide the Services.
7. assist IBM in:
(a) defining problem priority levels and associated escalation
procedures;
(b) defining indicators to monitor, and
(c) defining alert and paging processes and procedures, including
escalation procedures.
IBM/FRANKLIN CONFIDENTIAL PAGE 12 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
8. assist IBM and provide necessary Franklin resources for the resolution
of technical problems affecting the Services.
3.6 CAPACITY PLANNING
a. IBM will:
1. monitor and document Franklin's current workloads on the In-Scope
Equipment, unless otherwise agreed by the Parties, and provide the
information to Franklin for IBM's and Franklin's use in determining
future capacity requirements;
2. report to Franklin on usage of system capacity in a format and content
to be agreed upon by the Parties for Franklin's use in budgeting and
planning (e.g., preventing outages due to hardware and software
resource capacity deficiencies and determining impacts on software
licensing requirements);
3. provide capacity planning reports as described in the Procedures
Manual and Schedule N; such reports will be published on a centralized
database available to the Parties on a mutually agreed schedule.
4. procure adequate capacity for growth and expansion needs communicated
to IBM by Franklin in accordance with the Agreement; and
5. conduct periodic capacity planning meetings.
b. Franklin will:
1. work with IBM in developing growth planning as it relates to
Franklin's capacity needs;
2. project future trends and capacity requirements for new projects and
provide such information to IBM not less frequently than annually or
when there is a change in Franklin's operations or business planning
which would affect IBM's provision of the Services; and
3. participate in periodic capacity planning meetings.
3.7 AVAILABILITY MANAGEMENT
a. IBM will:
1. assist Franklin in defining Franklin's availability requirements;
2. establish backup and recovery processes and procedures;
3. develop an availability plan during the Transition Period, to include
hours of operation, maintenance windows and related pertinent
information;
4. track, analyze and report on availability;
5. provide hardware maintenance in accordance with the equipment
manufacturer's specifications or as otherwise mutually agreed;
6. develop and maintain a plan that enables the recovery of data due to
unplanned operational types of failures such as equipment malfunction,
temporary power disturbances and abnormal termination;
7. provide the Franklin Focal Point with procedures for measuring system
availability;
8. review system availability and utilization requirements at status
meetings on a mutually agreed schedule;
9. provide the Franklin Focal Point a system availability and utilization
report on a mutually agreed schedule including measurements on
processor and disk resources; and
10. recommend availability improvements.
b. Franklin will:
1. with IBM's assistance, define Franklin's availability requirements;
and
IBM/FRANKLIN CONFIDENTIAL PAGE 13 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
2. participate in planning processes for purpose of determining
availability needs, as set forth in the Procedures Manual.
4.0 SYSTEMS OPERATIONS
4.1 GENERAL DESCRIPTION OF SYSTEMS OPERATIONS
Using the IBM Management Environment, IBM will provide remote operational
services for the Machines specified in Schedule G which are located at the
Franklin Data Center(s) and at the Franklin dedicated DR site designated in
Disaster Recovery Plan.
a. IBM will:
1. monitor the hardware;
2. monitor system messages in system operator message queue;
3. perform backups as described in the Procedures Manual;
4. perform file or system restores from incremental or full backups as
described in the Procedures Manual;
5. perform reboots, recycles, stops and restarts for in-scope machines;
6. notify Franklin of unsuccessful backups according to problem
management procedures;
7. provide system start-up services including shipping, unpacking of
hardware, preparation and installation, power-on and related
diagnostics and testing;
8. load operating Systems Software on all systems added to the in-scope
environment;
9. load Applications software on production systems;
10. provide maintenance services on the IBM In-Scope Hardware listed in
Schedule G and the IBM Systems Software listed in Schedule F and
manage the maintenance services provided under Franklin's contracts
for the OEM server hardware listed in Schedule G and the OEM Systems
Software listed in Schedule F until refresh;
11. provide maintenance services on the refreshed OEM In-Scope Hardware
listed in Schedule G and the refreshed OEM Midrange and Distributed
Systems Software listed in Schedule F after refresh; and
12. set up system logs, allocate disk space, provide user ID admin at the
system level and provide file system protection and security.
b. Franklin will:
1. provide the existing In-Scope Hardware and In-Scope Software, Franklin
Data Network, and associated documentation, if any exists, which is
required for the provision of Services;
2. provide the tape library,;
3. provide IBM with required information on file restores and verify
integrity of restored files when restored; and
4. provide offsite storage and transportation of backups to offsite
facilities as well as retrieving storage media from offsite facilities
as required for restores of backed up user/system data;
5. provide the information required to enable IBM to load Applications
software on production systems.
4.2 PROCESSING OPERATIONS
IBM will make available, monitor and process on-line and batch applications,
including scheduled, unscheduled and on-request services and End User initiated
processing.
a. IBM will:
1. support the environments consistent with the obligations set forth in
this Schedule A;
2. provide operations support and perform console monitoring activities;
IBM/FRANKLIN CONFIDENTIAL PAGE 14 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
3. operate and provide system availability for present and future
Applications Software and Systems Software to support Franklin's
operating schedules;
4. in accordance with the change management process schedule systems
maintenance so as to minimize interference with Franklin's business
operations; and
5. monitor IBM-scheduled job submissions to verify scheduled completion.
b. Franklin will:
1. be responsible for selecting or defining requirements for business
Applications Software; and
2. assist in scheduling required system maintenance windows.
4.3 MIDRANGE AND INTEL SYSTEMS OPERATIONS
The following services are unique to Midrange Servers and Intel Servers.
a. IBM will:
1. support -images based on the applicable Support Tier selected by
Franklin for certified images as described in the Procedures Manual;
2. manage production job scheduling, job monitoring and job restarts for
Midrange;
3. provide on-site Midrange and Intel server support for the Prime and
Remote Sites;
4. operate the Franklin mail application in accordance with the
Procedures Manual; and
5. perform the installation of tools for use by IBM pursuant to Section
15 for job scheduling, job monitoring, and job restarts.
b. Franklin will:
1. provide IBM with the applicable Support Tier and any changes to
Support Tiers following the Change Management Process and as described
in the Procedures Manual;
2. manage test and development job scheduling, job monitoring and job
restarts;
3. provide on-site Midrange and Intel server support for the Other Sites;
4. provide mail policies, including access, retention and encryption
policies and mailbox size policies; and
5. provide IBM with tools for installation for job scheduling, job
monitoring, and job restarts.
5.0 PRODUCTION CONTROL SERVICES
IBM will provide the number of resources specified in Exhibit C-1 of Schedule C
(the "Production Control Baseline") to perform IBM's Production Control
responsibilities described in Section 5.1a. Additionally, IBM will perform
mutually agreed Projects utilizing the Production Control Baseline resources and
not charge Franklin for the additional Project support hours if the work can be
performed by the then current staff specified in the Production Control Baseline
within normal working hours, assuming there is resource bandwidth and Service
Levels are not jeopardized. Franklin and IBM will implement a methodology for
managing the workload in the Production Control baseline to include the
following:
a. submission of Projects via the standard Service Request process; and
b. joint (Franklin and IBM) evaluation and prioritization of all Production
Control work to be performed. Depending on the urgency of the additional
Project work and the existing workload level, existing work may be
reprioritized so as to perform the total workload by the then current staff
in the Production Control Baseline within normal working hours. In
situations where this reprioritization impacts IBM's ability to meet
Service Levels, IBM will not be subject to such Service Levels and will be
relieved of any associated Service Level Credits. If a determination is
made that the additional workload cannot be performed by the then current
staff described in the Production Control Baseline within normal working
hours, or if IBM performs work with members of the Production Control staff
but has to "backfill" those resources with additional resources, Franklin
will use Hourly Services to fund the additional resources., and
IBM/FRANKLIN CONFIDENTIAL PAGE 15 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
c. a reporting mechanism to track capacity and utilization
Franklin may adjust production control staffing levels up or down with ninety
(90) days notice using the Contract Change Request process.
5.1 GENERAL DESCRIPTION
IBM will maintain production schedules and cooperate with Franklin in responding
to special processing requests and new processing requirements for the Machines
specified in Schedule G which are located at the sites listed in Schedule I and
the IBM Boulder Data Center, and at the Franklin dedicated site designated in
the Disaster Recovery Plan as described below during Service Hours applicable to
each Machine. Notwithstanding the above, Production Control Services shall not
be performed on Prime-Time Basic Images, EMEA Prime-Time basic Images, and Asia
Prime-Time Basic Images.
a. IBM will:
1. review and make recommendations on Franklin's current batch job
procedures, including mainframe and distributed Servers;
2. prioritize, schedule, control and monitor running of production jobs
using scheduling and quality control procedures specified in the
Procedures Manual;
3. monitor scheduler related incidents, and develop and recommend
refinements and revisions and implement such refinements and revisions
to the scheduler database;
4. manage on-request schedules and ad-hoc processing;
5. coordinate and modify schedules for special requests, follow Franklin
priorities and notify Franklin if special requirements will affect the
timely completion of other tasks to allow Franklin to adjust
priorities;
6. to the extent reasonably possible, process all special request
activities within the requested time frames and in the sequence
Franklin defines;
7. obtain Franklin approval for and distribute major production schedules
before implementation;
8. for jobs initiated by IBM, use Franklin's documented recovery
procedures to attempt recovery of Franklin's batch applications in the
event of Abends;
9. in instances where batch jobs complete abnormally, due to Applications
Software, notify appropriate personnel as specified in the runbooks
and/or the Procedures Manual.;
10. notify appropriate personnel of non-batch failures as specified in the
runbooks and/or the Procedure Manual.;
11. schedule mutually agreeable system downtime in order to facilitate
upgrades, perform maintenance and implement other system management
tasks; and
12. perform manual pre-existing activities relating to Franklin's
Applications Software.
b. Franklin will:
1. verify that an Applications Software version/release/maintenance level
for all new Application Software versions/releases/maintenance levels
added after the Commencement Date is consistent with and will operate
with the Systems Software;
2. provide IBM with all existing run books/sheets including batch job
names and descriptions, batch job schedules, job-specific parameters
and estimated time of completion, by job
3. for new Applications Software provide schedules, manual and batch
processes, recovery procedures and instructions for input into IBM
Management Environment;
4. monitor Franklin-scheduled and initiated manual or batch processes,
including all notifications;
5. initiate on-request and ad- hoc processing consistent with IBM
processes;
6. assist IBM in the scheduling of mutually agreeable system downtime in
order to facilitate new releases and version upgrades of software and
implementation of hardware changes and upgrades and implement other
system management tasks;
IBM/FRANKLIN CONFIDENTIAL PAGE 16 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
7. review and approve schedules for batch job submission;
8. provide requirements for job Abend restart instructions;
9. provide change requirements to the batch schedule in accordance with
the change management process contained in the Procedures Manual; and
10. assist IBM in scheduling and coordinating End User test time.
11. maintain runbooks as application or support requirements change.
5.2 MAINFRAME PRODUCTION CONTROL SERVICES
a. IBM will:
1. schedule and report on batch jobs consistent with Franklin's
scheduling parameters;
2. distribute reports based on report distribution requirements that
Franklin provides; and
3. maintain scheduler database definitions to reflect changes in
production environment and monitor scheduler incidents so as to
develop and recommend refinements and revisions for Franklin's
implementation.
b. Franklin will:
1. assist IBM in implementing reasonably requested refinements and
revisions to improve operating environment; and
2. provide existing and new scheduling parameters and other direction, as
needed, to allow IBM time to provide outputs as scheduled.
6.0 SYSTEMS AND TECHNICAL SUPPORT
a. IBM will:
1. provide technical personnel to provide the Services;
2. support the operating systems and subsystems, compilers, programming
languages, products and operational tools;
3. evaluate, recommend, install, maintain and provide support for
In-Scope Hardware and Systems Software;
4. configure device descriptions based on Franklin's naming conventions
in support of day to day operations. If Franklin desires to modify its
overall naming convention the parties agree to treat as a Project;
5. plan, test and install not more than two version or release upgrade
per System Software product listed in Schedule F (Software) in each
contract year. Upon Franklin request, IBM will plan, test and install
more than two version or release upgrades per System Software product
listed in Schedule F in a contract year so long as the total number of
version or release upgrades during the year does not exceed two such
upgrades per the number of Systems Software products listed in
Schedule F;
6. selectively test and install PTF tapes for System Software. The
parties agree to jointly plan and schedule the application of PTFs as
mutually agreed. Neither party will unreasonably withhold its
agreement to support the application of PTFs;
7. notify Franklin of all implementations of PTFs installed on an
emergency basis;
8. initiate change requests in accordance with Change Management
Procedures for all PTFs which IBM determines should be implemented on
a non-emergency basis;
9. for the Systems Software, apply
(a) emergency fixes as required; and
(b) selected high impact and security PTFs monthly.
IBM/FRANKLIN CONFIDENTIAL PAGE 17 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
10. verify Systems Software version/release maintenance level is
consistent with and will operate with the Applications Software;
11. plan and configure host table entries (e.g. DNS entries) and
associated addresses based on Franklin's naming conventions;
12. provide printer queue configuration support for attached printers; and
13. provide TCP/IP address documentation to Franklin for IBM network
segments.
b. Franklin will:
1. assist IBM in the planning, testing and implementation of all system
upgrades and repair patches;
2. provide IBM, on a timely basis, with all information received from the
respective System Software manufacturers regarding repair patches and
version upgrades; and
3. retain financial responsibility for obtaining licenses to all third
party Application Software and third party System Software, excluding
SAS, upgrades and PTFs.
7.0 STORAGE MANAGEMENT SERVICES
IBM will provide Storage Management Service that include storage device
preparation, space and utilization management and reporting, recovery
management, performance monitoring, capacity planning and backup and restore
management which includes planning, establishing and testing recovery procedures
required to re-establish the functionality of in-scope systems in the event of a
failure.
a. IBM will:
1. keep files under IBM's control, current and available during scheduled
access times;
2. initiate and complete required data processing activities concerning
data integrity (for example, handling line transmission errors) of all
processed files, according to the procedures specified in the
Procedures Manual;
3. verify, using tools and procedures specified in the Procedures Manual,
the receipt of incoming files and the processing and transmission of
outgoing files;
4. document, maintain and, as appropriate, update and execute mutually
approved file backup and recovery procedures;
5. as described in the runbooks, provide a recovery procedure for
restoring the data image to a previous level within a mutually agreed
time frame;
6. conduct regularly scheduled backup and recovery procedures as
specified in the Procedures Manual and as prioritized by Franklin (for
example, data set restore), so as to avoid impacting scheduled
operations; ;
7. conduct routine monitoring and corrective action according to
procedures IBM prepares and Franklin approves for intermediate files
used for on-line and batch processing;
8. perform an annual formal review of storage management policy and
ongoing tactical reviews of capacity, performance and load balancing
and provide recommendations to Franklin regarding backup and recovery
considerations such as improved levels of protection, efficiencies and
cost reductions;
9. verify availability of adequate file space for processing, subject to
the provisions of Schedule C (Charges);
10. report to Franklin on Franklin's disk space utilization and
requirements for Franklin's capacity planning purposes; and
11. lay out and configure disk subsystems according to Franklin's
documented requirements; and
12. provide Franklin with reasonable assistance for random audits of
backups.
b. Franklin will:
1. define the requirements for allocation of file system space for
Applications Software; and
IBM/FRANKLIN CONFIDENTIAL PAGE 18 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
2. conduct random audits of backups.
8.0 DATA BASE MANAGEMENT SERVICES
8.1 APPLICATION AND DATA MODIFICATION
a. IBM will:
1. collaborate with Franklin on investigation and analysis of Application
Software and data modification related issues.
b. Franklin will:
1. be responsible for resolution of data and Application Software related
issues;
2. develop and test the required scripts;
3. notify IBM of intended modifications as part of Change Management and
Problem Management process; and
4. modify application or database data and enforce data integrity and
data quality.
8.2 MODIFICATIONS TO THE SERVER/ DATABASE CONFIGURATION
a. IBM will:
1. collaborate with Franklin regarding investigation and analysis; and
2. approve all modifications to the database configurations and
parameters as part of Change Management and Problem Management.
b. Franklin will:
1. be responsible for solution and implementation of all database
configuration changes
2. be responsible to define database backup strategy and solution
3. install backup tools, create backup scripts and utilities; and
4. notify IBM of the result of changes.
8.3 DATABASE PERFORMANCE TUNING
a. IBM will:
1. collaborate with Franklin regarding investigation and analysis;
2. approve intended performance-tuning modifications to the database as
part of Change Management and Problem Management process; and
3. monitor the database from the system perspective.
b. Franklin will:
1. develop required scripts;
2. prepare the tuning plan;
3. modify the database objects (tables, indexes, portions, views, etc)
and notify IBM of status; and
4. monitor the databases from a database administration ("DBA")
perspective.
8.4 SOFTWARE UPGRADES AND PATCH INSTALLATIONS
a. IBM will:
1. Run the modified system;
2. Support Franklin during the upgrade process; and
3. monitor the database from the system perspective.
b. Franklin will:
1. test In-Scope Software upgrades and patches in the development and
test environments;
2. notify Application Software development of the completion status;
3. be responsible for software upgrades and patch installations; and
4. monitor the databases from DBA perspective
c. Joint Responsibilities:
1. IBM and Franklin will approve any In-Scope Software upgrades and patch
installations through formal Change Management and Problem Management
process; and
2. IBM and Franklin will create a detailed plan of In-Scope Software
upgrades in the production environment based on the test results.
8.5 ESTABLISH TEMPORARY USER ID'S FOR FRANKLIN DATABASE ADMINISTRATORS:
a. IBM will:
1. establish temporary ID's with adequate access rights to allow all
required DBA production level work. These ID's will be temporarily
assigned to Franklin DBA's working in the production environment. Once
finished, the access will be deleted. Appropriate procedures will be
established for the assignment and required documentation as part of
the approved Change Management and Problem Management process; and
2. use the standard tools (Tivoli, BMC, or other tools approved by the
ARB) for monitoring system and database alerts for the In-Scope
Equipment pursuant to Section 15.
IBM/FRANKLIN CONFIDENTIAL PAGE 19 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
b. Franklin will:
1. contact IBM operations for access to the production environment.
9.0 TAPE MANAGEMENT SERVICES
9.1 GENERAL DESCRIPTION OF TAPE MANAGEMENT SERVICES
a. IBM will:
1. make recommendations for improvements to efficiency of tape
management;
2. complete tape mounts in sufficient time to meet application
development, testing and production processing as reasonably specified
by Franklin;
3. maintain adequate inventories of Franklin-supplied tapes for the tape
environment, including a sufficient scratch tape pool to service
required processing needs, and notify Franklin when additional tapes
and other supplies are required;
4. retain tapes for a mutually agreed upon retention period for auditing
purposes;
5. rotate tapes, as required, for off-site storage;
6. log and track physical tapes that are checked in and out by Franklin
or a Third Party in accordance with the procedures specified in the
Procedures Manual;
7. prepare output tape cartridges or tape reels for shipment and deliver
to designated staging area for pickup and transport;
8. upon return of output tape cartridges or tape reels to the designated
staging area for pickup, put such cartridges and reels back into
operation;
9. provide tapes and paper documentation, as appropriate, for storage
consistent with provisions in Procedures Manual;
10. report tape utilization to Franklin on a mutually agreed upon
frequency;
11. notify the Franklin-designated storage services provider when it is
time to scratch or return a tape in accordance with the procedures
specified in the Procedures Manual;
12. retrieve and restore files and data sets from archived tapes within
mutually agreed time frames; and
13. allow Franklin to review tape management operations, including mailing
and receipt; upon a mutually agreed upon schedule;
14. conduct an initial inventory of portable storage media and provide
documentation of initial inventory to Franklin;
15. monitor and manage tape pool resources and provide for availability of
adequate media to meet peak load, planned growth and anticipated tape
volume fluctuations;
16. manage off-site storage of In-Scope tape media for vital records and
backup and recovery;
17. perform an annual inventory of portable storage media under IBM's
control and provide documentation of annual inventory to Franklin,
including the following information:
(a) beginning inventory;
(b) media received into inventory during the reporting period (year);
(c) media sent out to other locations during the year;
(d) new media added to library;
(e) discarded media;
(f) current inventory.
18. report and account for discrepancies in inventory; and
19. retain inventory reconciliation documentation in accordance with
procedures outlined in the Procedures Manual.
IBM/FRANKLIN CONFIDENTIAL PAGE 20 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
20. separate, package, label, validate label content to job log for
accuracy, scan and track all tape output and distribute to the
mutually agreed distribution drop point;
b. Franklin will:
1. define requirements for off-site tape storage and archiving;
2. provide required off-site storage facilities and services;
3. provide tapes as IBM requests that meet the IBM-supplied tape
specifications;
4. be responsible for the costs associated with the transportation of
tapes between the Data Center and an off-site storage facility;
5. assist IBM in conducting the initial inventory; and
6. assist IBM in maintaining the inventory and in reviewing and
reconciling the annual inventory reports.
10.0 OUTPUT SERVICES
IBM will provide output device processing and operational support necessary to
accomplish processing, production and delivery of files and printed output as
listed below.
a. IBM will:
1. produce and deliver output (for example, files, tapes, printed matter)
in accordance with schedules reasonably requested by Franklin;
2. track, manage, communicate and resolve problems related to output
production and delivery;
3. verify that all files are on the queue and available for transmission
to the applicable Franklin output and production control locations
within the mutually agreed time frames and monitor file transmissions
and network messages regarding network connectivity;
4. operate the Xerox system printers or comparable printers identified in
Schedule G and up to a maximum of four additional Xerox system
printers or comparable printers as reasonably requested by Franklin.
Requests to support more than the Xerox system printers or comparable
printers identified in Schedule G plus the four additional Xerox
system printers or comparable printers will subject to an adjustment
in the ASC;
5. operate the printers directly attached to the Midrange Machines and
the Intel Servers located at the Prime Sites and Remote Sites;
6. deliver hard copy output to the designated drop location(s) within the
Facility;
7. work with appropriate Franklin personnel to trace and attempt to find
missing output items;
8. execute reruns of output Franklin requests and notify Franklin if
rerunning any output will impact scheduled on-line or batch production
processing; and
9. provide on-line viewing administration for the Mobius application as
defined herein and as detailed in the procedures manual
(a) add and delete reports, as requested and in accordance with
security guidelines;
(b) create indexing; and
(c) track and report usage and output volume.
b. Franklin will:
1. provide output distribution from the designated drop location(s)
within a Facility;
2. with IBM's assistance, trace and attempt to locate missing output
items;
3. notify IBM of any required reruns of output;
4. operate all printers except those set forth in Section 10.0 (a) (5)
above;
5. be responsible for all Post Print Operations as defined in the
Procedures Manual;
IBM/FRANKLIN CONFIDENTIAL PAGE 21 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
6. maintain responsibility for output devices that are located within the
Other Sites defined in Schedule I (Facilities) (e.g., operation, paper
loading, service maintenance, output distribution, purchase of
consumables);
7. be responsible for all distribution services (for example, mail,
messenger, postage, courier);
8. support the Mobius application as follows:
(a) set up user profiles and user group access; and
(b) coordinate Mobius vendor management;
9. perform all end user workstation printer connectivity, maintenance and
print output/distribution services for print operations.
11.0 SYSTEM TESTING AND IMPLEMENTATION SERVICES
a. IBM will:
1. assist Franklin in the definition, design, and construction of the
testing environments;
2. assist in the physical establishment of test data originating from the
production environment;
3. participate in planning and preparation meetings for all changes;
4. provide physical installation support for all changes;
5. validate physical completion criteria for all changes;
6. work with Franklin to validate operational and functional completeness
of a change;
7. report to Franklin on the post-installation status and quality of
changes;
8. comply with the change management procedures set forth in the
Procedures; and
9. with Franklin assistance, test High Availability Image failover up to
twice each Contract Year.
b. Franklin will:
1. manage, with IBM's assistance, the definition, design, and
construction of testing environments;
2. plan and construct test cases;
3. define and coordinate establishment of test data originating from
production environment;
4. create and establish test data not yet in production;
5. conduct application interactive test scripts as planned within test
cases;
6. validate test results;
7. comply with problem follow-up and resolution procedures as set forth
in the Procedures Manual;
8. comply with change procedures as set forth in the Procedures Manual;
9. participate in planning and preparation meetings for changes;
10. comply with change management procedures set forth in the Procedures
Manual;
11. participate and coordinate in post installation validation testing;
and
12. assist IBM in physical installations, as appropriate; and
13. assist IBM with testing of the High Availability Image failover by:
(i) documenting test plans and expected results; and
(ii) resolving deviations from expected results through the Problem
Management Process..
12.0 MAINTENANCE SERVICES
a. IBM will:
1. provide maintenance for IBM Services Machines and Systems Software;
IBM/FRANKLIN CONFIDENTIAL PAGE 22 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
2. dispatch maintenance requests for In-Scope Hardware;
3. refer Franklin's non-IBM third-party vendor performance problems in
support of Systems Software, Application Software and In-Scope
Hardware to Franklin for resolution;
b. Franklin will provide warranty or maintenance coverage, as applicable, for
Franklin Machines, Franklin Software and the Franklin Data Network
equipment;
13.0 APPLICATION SUPPORT SERVICES
a. IBM will:
1. provide the IBM Systems Software products listed in Schedule F
(Software), to support the development of Applications Software. IBM
will not discontinue support of such software products without
Franklin's approval; provided, that Franklin will assume support
expenses for Systems Software products that Franklin requires IBM to
retain after current support is no longer reasonably commercially
available;
2. recommend and implement hardware and software architectural changes
consistent with and supportive of the strategic and technical
standards agreed upon by the parties;
3. verify that changes to the in-scope environment will not adversely
impact the application environment;
4. if Franklin requests additional application development support
products (such as an application development library management tool,
specialized compilers, rapid development tool, etc) , such request
will be considered as a Request for New Services.
b. Franklin will:
1. select, or define the requirements for all Applications Software;
2. designate and document application information requirements, including
report design and content, frequency of reports, and accessibility;
3. retain responsibility for maintenance, support and all licenses and
related charges for all Applications Software;
4. have the right to audit, control and approve new Applications Software
before its promotion into production;
5. verify the results of Application Software on-line and batch system
support processing;
6. provide Applications Software program problem determination and
resolution, including providing support for application Abends and job
recovery;
7. use commercially reasonable efforts to minimize outages caused by
application program failures;
8. follow the existing change management process for all application
changes, before submission or installation into the system;
9. follow the problem management process, according to published problem
resolution criteria the Procedures Manual contains and document
problem resolution and closure;
10. certify, in cooperation with IBM, that existing applications function
correctly when IBM installs new Systems Software or upgrades to or new
releases of current Systems Software; and
11. define requirements for application recovery management to include
such activities as job recovery management and backup and recovery
procedures.
13.1 MQ SERIES SUPPORT
IBM will provide the following Services for MQ Series Services for all current
supported platforms (excluding DEC/VAX) in the production environment and for
test and staging Servers where IBM owns the MQM ID.
a. IBM will:
1. install product code or support packs as necessary with Franklin
approval;
2. install patches or vendor provided fixes;
IBM/FRANKLIN CONFIDENTIAL PAGE 23 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
3. install upgrades and maintenance (patches, support packs, etc.) per
Franklin's request;
4. install standard IBM MQ administrative support tools (Example:
MQMaint);
5. build and configure the MQ Series infrastructure, provide definition
of MQ Series infrastructure as defined in SRM doc, use examples ; such
as: (channels, dead letter queues, system queues, transmit queues)
6. with Franklin assistance, create queue managers, channels and other MQ
Series application specific objects such as local, remote or other
queues, process definitions, or any other MQ series object required by
the application.;
7. build and configure MQ Series clusters;
8. at Franklin's request, create/alter/delete application objects such as
local, remote or other queues, process definitions, or any other MQ
series object required by the application;
9. administer MQ series to identify, describe and define infrastructure
objects such as: (channels, dead letter queues, system queues,
transmit queues);
10. own, manage and support MQM ID and MQM Group as authorized by
Franklin;
11. request Franklin to define/alter/delete security profiles for groups
and individuals;
12. configure base MQ infrastructure monitoring parameters including: MQ
Series Q_Manager process, Command Server process, Channel Initiator
process, trigger Monitor process, Dead Letter Queue, var mqm Log file
space (thresholds alerts 75/95%), and condition: Channel w/ Retry
Status;
13. receive, acknowledge, and provide support for base infrastructure and
application monitoring alerts;
14. respond to problem records related to MQ Series system/infrastructure
components, including engaging the IBM MQ Series support center if
necessary and through a Franklin procured vendor support contract;
15. open issue with vendors for support of infrastructure issues as
necessary;
16. request Franklin open change records to define/alter/delete
application objects, components, or procedures;
17. open change records to define/alter/delete system/infrastructure
objects, components, or procedures;
18. back up the system/infrastructure and all application definitions with
the regular operating system/subsystem backups and restore MQ Series
as necessary;
b. FRANKLIN WILL:
1. provide necessary approval to IBM for the installation of product code
and support packs;
2. provide necessary approval to IBM for the installation of patches or
vendor provided fixes;
3. provide necessary approval for upgrades and maintenance (patches,
support packs, etc.)
4. design, document, and request IBM to create queue managers, channels
and other Application specific objects;
5. design and Document MQ Series cluster configurations;
6. identify, describe and define application objects such as local,
remote or other queues, process definitions, or any other MQ series
object required by the application.
7. document/script application objects such as local, remote or other
queues, process definitions, or any other MQ series object required by
the application
8. request IBM to create/alter/delete application objects such as local,
remote or other queues, process definitions, or any other MQ series
object required by the application.
9. provide IBM the MQM ID and MQM Group ID's (Franklin will relinquish
these ID's to IBM, and remove their support personnel from the ID
groups);
IBM/FRANKLIN CONFIDENTIAL PAGE 24 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
10. register approved individuals for access to the MQ Series resources
and environment;
11. identify and request ID's needed by users and applications to access
MQ Series resources;
12. define/alter/delete security profiles for groups & individuals;
13. open problem records to document and notify support of deviations from
normal expected behavior;
14. respond to and resolve problems related to application code including:
local, remote or other queues, process definitions, or any other MQ
series object required by the application;
15. open issue with vendor for support of vendor application issues;
16. open change records to define/alter/delete application objects,
components, or procedures;
17. request IBM open change records to define/alter/delete
system/infrastructure objects, components, or procedures;
18. respond to change records related to MQ Series application objects,
components, or procedures in the MQ Series environments;
19. provide and maintain run books for each application, adapter,
connector, and system architecture (per Franklin run book standards);
and
20. provide and maintain troubleshooting guides for each application,
adapter and connector.
14.0 SECURITY MANAGEMENT
The responsibilities of IBM and Franklin for each security area/task are
indicated in the following responsibilities matrices. "Perform" shall mean to
have responsibility to execute. "Assist" shall mean to provide reasonable
support to the Performing Party.
==================================================================================================================
14.1 GENERAL RESPONSIBILITIES IBM Franklin
==================================================================================================================
<s>
1a. Provide an interface for day-to-day security management Perform
==================================================================================================================
1b. Provide an interface for day-to-day security management Perform
==================================================================================================================
2. Provide IBM with Franklin audit history (both internal and external)
and most recent security standards and practices, including
updates as they occur Perform
==================================================================================================================
3a. Review security policies and procedures for effectiveness and recommend
improvements in conjunction with Franklin Perform
==================================================================================================================
3b. Review security policies and procedures for effectiveness and Assist Perform
recommend improvements in conjunction with IBM
==================================================================================================================
4. Communicate the security procedures to Franklin users that are Assist Perform
affected by this service, such as login procedures, password use, use of
antivirus programs and security for data and equipment
==================================================================================================================
5. Review amendments made to Franklin security policies and standards
and advise Franklin whether or not such changes can be implemented and if Perform Assist
implemented, will be considered a New Service
==================================================================================================================
6. During the Transition Period develop the detailed "Information Security
Controls" document (GSD331) Perform Assist
==================================================================================================================
7. Maintain the "Information Security Controls" document (GSD331) Perform Assist
==================================================================================================================
8. During the Transition Period perform a review of system accesses for
all employees transferring to IBM to confirm that same access is required Assist Perform
and advise IBM of any change.
==================================================================================================================
9. Notify IBM of changes Franklin plans to make to its security policies Perform
and standards before implementation.
==================================================================================================================
14.2 PHYSICAL SECURITY IBM Franklin
==================================================================================================================
1. Provide physical security controls at Franklin facilities Perform
==================================================================================================================
2. Provide physical security controls at IBM facilities Perform
==================================================================================================================
3a. Restrict access to all data processing areas at Franklin facilities, Assist Perform
for which IBM has security responsibility to authorized personnel only.
==================================================================================================================
IBM/FRANKLIN CONFIDENTIAL PAGE 25 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
==================================================================================================================
14.2 PHYSICAL SECURITY IBM Franklin
==================================================================================================================
3b. Restrict access to all data processing areas at IBM facilities, for which Perform
IBM has security responsibility to authorized personnel only.
==================================================================================================================
4. Conduct periodic reviews of the data processing areas for which IBM has Perform
security responsibility including reviews of access logs for unusual occurrences
and perform follow-up activities in accordance with the procedures specified in
this document
==================================================================================================================
5. Protect LAN Servers and infrastructure devices as defined in Schedule G at
Franklin facilities and provide access to authorized personnel Perform
==================================================================================================================
6. Protect LAN Servers and infrastructure devices at IBM facilities to
authorized personnel only Perform
==================================================================================================================
7. Implement controls which protect printed output from unauthorized access
while under IBM's control Perform
==================================================================================================================
8a. Provide secure storage for portable storage media under IBM's
control (tape drives and backup media) at Franklin locations Assist Perform
==================================================================================================================
8b. Provide secure storage for portable storage media under IBM's
control (tape drives and backup media) at IBM locations Perform
==================================================================================================================
9. During the Transition Period, with the assistance of Franklin, perform
a baseline inventory of all portable storage media (e.g. Tapes, disks) for which Perform Assist
IBM has security responsibility
==================================================================================================================
10. Perform an annual audit/reconciliation of tape under IBM's control and
promptly notify Franklin and IBM management when errors are detected Perform
==================================================================================================================
11. Resolve discrepancies discovered during the annual tape audit and inform
Franklin of the resolution Perform
==================================================================================================================
12. Implement controls and provide effective elimination of residual information Perform
on removable storage media before disposal or reuse outside of Franklin
==================================================================================================================
14.3 LOGICAL ACCESS CONTROL IBM Franklin
==================================================================================================================
1. Install, maintain and upgrade new or existing data access control software Perform Assist
as deemed necessary by IBM to provide the Service. This is viewed as a product
support role, i.e. software maintenance for RACF. This does NOT include the
creation or maintenance of security rules in RACF or similar maintenance of
security rules for Supported Servers.
==================================================================================================================
2. Implement the functions and features of the access control software that will
satisfy Franklin security standards as stated on the Franklin corporate intranet Assist Perform
for all platforms as defined in GSD331.
==================================================================================================================
3. Implement the security system values and features of the supported operating
systems that will satisfy Franklin security practices as defined in GSD331. Perform Assist
==================================================================================================================
4. Identify the protection requirements for operating system resources Assist Perform
==================================================================================================================
5. Implement the identified protection as specified in GSD331 for operating
system resources via the access control software for all security changes being Assist Perform
made through the Change Management process.
==================================================================================================================
6. Define and provide to IBM:
a. Data classification and control criteria,
b. Data protection and handling requirements,
c. Data protection and handling requirements
in event of security breach; and
d. Data encryption requirements. Perform
==================================================================================================================
7. Define the protection requirements for application resources via the access Perform
control software.
==================================================================================================================
8. Define and implement the protection requirements for End User data via the
access control software Perform
==================================================================================================================
9a. Provide encryption products (i.e., hardware and/or software) as described in Perform
GSD331.
==================================================================================================================
9b. Support/implement encryption products (i.e., hardware and/or software) as Perform Assist
==================================================================================================================
IBM/FRANKLIN CONFIDENTIAL PAGE 26 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
==================================================================================================================
14.3 LOGICAL ACCESS CONTROL IBM Franklin
==================================================================================================================
defined in this document
==================================================================================================================
10. Maintain security for and distribute encryption keys Perform
==================================================================================================================
==================================================================================================================
12. Establish, change, deactivate and remove logon IDs and associated access
authorities for Franklin employees Perform
==================================================================================================================
13. Establish, change, deactivate and remove logon IDs and associated access
authorities for IBM employees as performed by the Franklin GSS Help Desk. Assist Perform
==================================================================================================================
14. Review and verify annually the system logon IDs for Franklin personnel
(i.e., reverification) and delete the IDs of those individuals who no longer Perform
have a business need and/or are no longer authorized by management to access the
system
==================================================================================================================
15. Annually perform a continued business need (reverification) review of all
IBM logon ID's supporting the service, and notify Franklin to remove access for
those which are no longer authorized by management Perform Assist
==================================================================================================================
16. Establish the process criteria for resetting user's passwords and disclosing
them to authorized personnel Assist Perform
==================================================================================================================
17. Reset IBM logon ID passwords and disclose passwords to authorized personnel Assist Perform
==================================================================================================================
18. Reset Franklin logon ID passwords and disclose passwords to authorized Perform
personnel
==================================================================================================================
19. Review, approve and grant requests for privileged user authorities. Assist Perform
==================================================================================================================
Intentionally Left Blank
==================================================================================================================
20. Periodically review privileged user authorities and remove those for which
management authorization no longer exists Assist Perform
==================================================================================================================
21. Control and be responsible for the Security Officer/Administrator user
profiles on all systems (e.g., NT-Admin, Unix-Root, AIX-Root, RACF-Special, Perform
AS400-QSECOFR). Develop Process for immediate access for IBM
==================================================================================================================
Intentionally Left Blank
==================================================================================================================
22. Schedule through the Change Control Process, security/integrity fixes that
must be applied to the in-scope systems Perform
==================================================================================================================
Intentionally Left Blank
==================================================================================================================
23. Periodically perform system security health checks consisting of: Assist Perform
a. access control settings,
b. authorized privileged users,
c. operating system resources protection, and
d. installation and operation of virus control
programs on the appropriate platforms.
==================================================================================================================
24. Correct discrepancies, as described in GSD331, identified during system
security health checks (Section 14.3.24) for Locked Down In-Scope Equipment. Perform
==================================================================================================================
25. Capture and maintain platform-specific audit records for the retention
period specified in GSD331, and provide record retention reports to the Franklin Perform
Project Executive upon reasonable request for In-Scope Equipment.
==================================================================================================================
26. Promptly inform Franklin of any security issues of which IBM is aware and
suggest possible remedial action. Perform
==================================================================================================================
27. Promptly acknowledge receipt of security exposures notified to Franklin by
IBM and inform IBM of Franklin acceptance or rejection of IBM's recommended Perform
remedial action or other remedial action Franklin implements.
==================================================================================================================
28. Take appropriate corrective action to remedy security violations notified to
Franklin by IBM. Assist Perform
==================================================================================================================
29. Develop and run scripts on Supported Servers for which IBM provides Server
support administration to identify Franklin User IDs and Application IDs. Should
Franklin increase the estimated Production Lock Down schedule of - 130 Servers
per Contract Year through 2004, and 100 per Contract Year through 2007 (the Perform Assist
Parties will mutually agree on the estimated schedule beginning 2008 on a yearly
basis., additional resources will be provided as Hourly Services. This estimated
schedule is dependent on Franklin's internal scheduling processes.
==================================================================================================================
IBM/FRANKLIN CONFIDENTIAL PAGE 27 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
==================================================================================================================
14.3 LOGICAL ACCESS CONTROL IBM Franklin
==================================================================================================================
30. Develop and implement a script on the Servers for which IBM provides Server
support administration to verify that the Franklin accounts existing on the Perform
Server are consistent with a list of IDs that Franklin's approved criteria
provided to IBM.
==================================================================================================================
31. provide and approve privileged Franklin User ID and application ID criteria,
including the defined privilege access to accomplish the following;
a. perform the revalidation of OS privileged Franklin User IDs on Servers as
prioritized by Franklin for the defined privileged access; Perform
b. ensure each Franklin User ID and Franklin application ID on the Server can be
identified; and
c. ensure access to the resource can be allowed at the appropriate levels for
authorized users; and that access can be denied for unauthorized users;
==================================================================================================================
32. Communicate the Production Lock Down schedule, process, procedures,
dependencies, and expectation to the impacted Franklin groups. Assist Perform
==================================================================================================================
33. Participate in the development and approve criteria for privileged access
for revalidation for each application OS as necessary, to include group
memberships, directory access, file mounts, file read, write, execute Perform
permissions and other like rights, accesses, permissions and memberships for
privileged Franklin accounts;
==================================================================================================================
34. provide IBM with a prioritized list of application Server groups to be Perform
revalidated;
==================================================================================================================
35. execute revalidation on Servers for which Franklin owns User ID Perform
administration;
==================================================================================================================
14.4 NETWORK INFRASTRUCTURE SECURITY (IN IBM Franklin
ADDITION TO LOGICAL ACCESS ABOVE)
==================================================================================================================
1. Control the Network Operating System (NOS) security/administrative user id's, Perform
which run on any LAN or WAN.
==================================================================================================================
2a. Provide virus avoidance, detection, and elimination software for servers Assist Perform
==================================================================================================================
2b. Maintain virus avoidance, detection, and elimination software for Supported Perform Assist
Servers
==================================================================================================================
3. Identify and implement protection requirements for resources residing on End Perform
User Machines
==================================================================================================================
4. Keep virus avoidance signature files current for End User Machines Perform
==================================================================================================================
5. Maintain virus protection software on all End User Machines and perform Perform
post-incident clean-up and integrity checks.
==================================================================================================================
6. Respond to virus attacks and initiate corrective action to eliminate Perform at Perform at end
detected viruses - see process for immediate access for IBM. server level user level
==================================================================================================================
15.0 MONITORING SERVICES
15.1 NETWORK MONITORING DEFINITION AND SCOPE
Pursuant to Sections 15.5 and 15.6 below, the responsible Party will:
a. measure up/down availability of in-scope network devices, including
routers, hubs and switches.
15.2 HARDWARE/OS MONITORING DEFINITION AND SCOPE
Pursuant to Sections 15.5 and 15.6 below, the responsible Party will:
a. for the In-Scope Equipment, detect OS parameters that impact hardware and
OS availability, performance, and capacity;
b. for the In-Scope Equipment, monitor OS measurable parameters including
parameters for: server, CPU, OS, file systems, memory, directories, network
connectivity, blocked queue length (Unix only) and other components as
mutually agreed; and
c. for High Availability Images and replicating systems, monitor all systems
in the cluster for hardware and OS availability.
IBM/FRANKLIN CONFIDENTIAL PAGE 28 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
15.3 BUSINESS APPLICATIONS, DATABASE, AND SYSTEM UTILITIES MONITORING DEFINITION
AND SCOPE
Pursuant to Sections 15.5 and 15.6 below, the responsible Party will:
a. For database applications and Systems Utilities, provide monitoring
functions to determine the status of application services, processes or
daemons in the executing program list;
b. For individual business applications, database applications, and Systems
Utilities, detect thresholds and error conditions based on alerts included
or implemented in automation software, or by other mutually agreed means to
provide depth of view sufficient to respond to problems within the
application
1. for batch applications, measure parameters that impact throughput,
performance and expected operation;
2. for on-line applications, measure parameters that impact application
availability, performance, expected operation;
3. for database applications, measure parameters that impact
availability, performance, capacity and utilization; and
4. for business applications, database applications, and Systems
Utilities, monitor for expected events (e.g., file transfers) and
abnormal events or conditions (e.g., parsed error log, application
exceptions) which impact proper application execution.
c. as mutually agreed, monitor adjunct elements running on In-Scope Equipment
(e.g., file transfer dependencies) required by in-scope applications;
d. for High Availability Images, monitor components necessary to provide
fail-over, including mirroring, heartbeat, availability of high
availability software, and availability of storage and network back-up
links;
15.4 IBM AND FRANKLIN MONITORING RESPONSIBILITIES
The responsibilities of IBM and Franklin for monitoring are indicated in the
following responsibilities matrices, which are in addition to those specified
throughout this Schedule. IN the event of a conflict between the matrix and the
schedule, this matrix shall prevail.
* "P" shall mean to have responsibility to execute.
* "A" shall mean to provide reasonable support to the Performing Party.
* "PP" shall mean to have responsibility to execute only if authorized
under a mutually agreed Project. IBM support will be provided via
Hourly Services.
* "AP" shall mean to provide reasonable support to the Performing Party
only if authorized under a mutually agreed Project. IBM support will
be provided via Hourly Services.
* "NA" shall mean not applicable.
IBM/FRANKLIN CONFIDENTIAL PAGE 29 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
- -------------------------------------------------------------------------------
15.5 DESIGN, DEVELOPMENT, AND DEPLOYMENT OF MONITORS
- ----------------------------------------- ------------- -------------- ------------- ------------- ----------------
The following activities applicable to NETWORK EQUIPMENT/OS SYSTEMS DATABASE BUSINESS
each monitored item on applicable UTILITIES APPLICATIONS
In-Scope Equipment must be completed
prior to commencement of steady state
monitoring specified in Section 15.6.
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
IBM FRK IBM FRK IBM FRK IBM FRK IBM FRK
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
a. Identify parameters and NA P PP PP PP
functions that affect
functionality and performance.
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
b. Determine monitor polling A P P PP AP PP AP PP
frequency
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
c. Select threshholds for NA P A PP AP AP PP PP
identified parameters
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
d. Create scripts and monitoring NA P PP AP PP AP PP
within applications.
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
e. Define operator procedures and A P P A PP AP AP PP AP PP
automated notifications
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
f. Perform unit testing P A P PP AP PP AP PP
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
g. Install monitors and scripts P PP PP PP
within monitoring tools to provide A P
alerts when a threshhold has been
exceeded or an error condition has
occurred.
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
h. Deploy monitors, scripts, and P PP PP PP
automated notifications A P
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
i. Perform system testing and P A P PP AP PP AP PP AP
post implementation testing and
validation
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
- -------------------------------------------------------------------------------------------------------------------
15.6 STEADY STATE MONITORING OPERATIONS
- -------------------------------------------------------------------------------------------------------------------
The following steady state monitoring NETWORK EQUIPMENT/OS SYSTEMS DATABASE BUSINESS
activities for applicable In-Scope UTILITIES APPLICATIONS
Equipment will occur following those
activities specified in Section 15.1,
exclusive of Prime-Time Basic Images,
EMEA Prime-Time Basic Images, and Asia
Prime-Time Basic Images:
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
IBM FRK IBM FRK IBM FRK IBM FRK IBM FRK
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
a. Monitor applications and print P P P P P
queues* with installed tools,
monitors and scripts
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
b. Respond to warning or error P P P P P
conditions as described in the
Procedures Manual
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
c. Maintain application monitors NA NA P P P
and scripts
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
d. Update monitoring tools and P P P P
IBM/FRANKLIN CONFIDENTIAL PAGE 30 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
installed monitors and keep in A P
sync with upgrades to hardware,
OS, and applications.
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
e. Analyze and trend monitoring A P P P P P
output data, report on results,
and make recommendations for
improvement.
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
f. Retire monitors when no longer A P P P A P P
required.
- ----------------------------------------- ------ ------ ------ ------- ----- ------- ------ ------ ------- --------
*Provide print queue monitoring for those applications where print queues have
had monitors and scripts developed and deployed
16.0 BUSINESS RECOVERY SERVICES
During the Term, Franklin will receive Business Recovery Services ("BR
Services") from IBM's Business Continuity and Recovery Services unit. Those
Services are described in Schedule M.
17.0 OTHER SERVICES AND RESPONSIBILITIES
a. IBM will:
1. provide Franklin with technical and quality specifications for
supplies, if any, required by IBM to perform the services;
2. maintain contact with vendors providing data processing,
telecommunications and end user Services or products related to IBM's
provision of the Services in order for IBM to keep abreast of
technological product developments that may be of value to Franklin;
3. assist Franklin in the review of vendor proposals affecting IBM's
provision of the Services, including telecommunications and data
processing proposals, so as to facilitate existing and future systems
compatibility with changing industry standards.
IBM/FRANKLIN CONFIDENTIAL PAGE 31 OF 31
SCHEDULE A-FINAL.DOC
IBM Initials: Franklin Initials:
AMENDMENT NUMBER 5
TO THE
MANAGED OPERATIONS SERVICES AGREEMENT
- --------------------------------------------------------------------------------
This Amendment Number 5 to the Managed Operations Services Agreement (this
"Amendment"), is made by and between Franklin Templeton Companies, LLC, a
Delaware Limited Liability Company, having a place of business at One Franklin
Parkway, San Mateo, CA, 94403 ("Franklin") and International Business Machines
Corporation, having place of business at Route 100, Somers, NY, 10589 ("IBM")
(collectively referred to herein as the "Parties"). This Amendment is entered
into on this 1st day of September, 2003 (the "Amendment Number 5 Effective
Date"). This Amendment amends the Managed Operations Services Agreement, dated
February 6, 2001, between Franklin and IBM as modified or amended prior to the
date hereof including any schedules, supplements, exhibits and attachments
thereto (the "Agreement"). Capitalized terms used but not defined herein shall
have their respective meanings as defined in the Agreement. In the event of any
inconsistency between the terms of the Agreement and the terms of this
Amendment, the terms of this Amendment shall prevail. All terms and conditions
of the Agreement not specifically amended or supplemented herein, shall remain
unchanged and in full force and effect. The Term of this Amendment will begin as
of the Amendment Number 5 Effective Date and will run concurrently with the
Agreement.
This Amendment modifies the Agreement for purposes of clarification and change
in scope of work regarding Business Recovery Services, which were precipitated
by the destruction of the World Trade Center, and the Fiduciary Trust Company
International Data Center, which was located therein.
The affected and changed sections and Schedules of the Agreement are as
indicated below.
I. THE SCHEDULES:
A) REVISION 2 TO SCHEDULE C (CHARGES) IS HEREBY AMENDED AS FOLLOWS:
1. ADD THE FOLLOWING AS SECTION 2.0bbb:
EXTERNAL PARTNER PHYSICAL NETWORK CONNECTION means a discrete
physical network circuit that is used for data transmission to
and/or from a non-Franklin facility.
2. ADD THE FOLLOWING AS SECTION 2.0ccc:
INITIAL RECOVERY CHARGE OR INITIAL USAGE CHARGE means the one
time charge incurred upon declaration of a Disaster and covers
the first 48 hours following such Disaster declaration subject to
Section 3.7a of this Revision 2 to Schedule C.
3. ADD THE FOLLOWING AS SECTION 2.0ddd:
SERVICED APPLICATION EFFECTIVE DATE means the effective date for
a Major Change as specified in a Service Authorization.
4. ADD THE FOLLOWING AS SECTION 2.0eee:
SERVICE REQUEST PROCESS means the method used by IBM and Franklin
to formally initiate changes to BR Services as described in the
Procedures Manual.
IBM/FRANKLIN CONFIDENTIAL PAGE 1 OF 9
FRANKLIN AMENDMENT FINAL.DOC AMENDMENT NUMBER 5
5. ADD THE FOLLOWING AS SECTION 2.0fff:
TRANSITION CHARGE means the one-time charge as described in a
Service Authorization for BR Services Transition for a Serviced
Application.
6. ADD THE FOLLOWING TO SECTION 3.5a.2:
The BR Services resources described in this Section 3.5 may
utilize the Hours Pool only as described in Section 8.0b of
Revision 1 to Schedule E.
7. ADD THE FOLLOWING AS SECTION 3.5c.6:
A BR Services Project Manager is an experienced individual who is
responsible for the success of a defined scope of work, typically
the services described in Revision 1 to Schedule M Section 3.0
"BR Services Transition for New & Changed Serviced Applications".
The BR Services Project Manager provides leadership and
coordinates all activity of a technical team, organizes the
effort required, and manages the staff and budget. A BR Services
Project Manager typically has 5 to 10 years of practical
experience in the technical field.
8. ADD THE FOLLOWING AS SECTION 3.5c.7:
A BR Services Senior Consultant or IT Architect provides the
capability to design, implement, and manage cost-effective,
enterprise-wide recovery programs. Capabilities span all facets
of disaster recovery planning, from identifying vital business
processes and applications to determining financial impacts of
disasters, identifying potential risks, defining critical
technology and resources, and refining recovery procedures. A BR
Services Consultant or IT Architect typically has more than 5
years of experience in the required field.
9. ADD THE FOLLOWING AS SECTION 3.5c.8:
A BR Services Consultant or IT Architect assists in the design,
implementation, and management of cost-effective, enterprise-wide
recovery programs. A BR Services Consultant or IT Architect
typically has up to 5 years of experience in the required field.
10. ADD THE FOLLOWING AS SECTION 3.5c.9:
A BR Services Senior Systems Support Specialist provides systems
support for one or more computing environments including IBM
mainframe, IBM AS/400, RS/6000, SUN, DEC, EMC, HP and networking
technologies. A BR Services Systems Support Specialists typically
has more than 5 years of experience in the required field.
11. ADD THE FOLLOWING AS SECTION 3.5c.10:
BR Services Systems Support Specialist provides systems support
assistance for one or more computing environments including IBM
mainframe, IBM AS/400, RS/6000, SUN, DEC, EMC, HP and networking
technologies. A BR Services Systems Support Specialist typically
has up to 5 years of experience in the required field.
12. SECTION 3.7 (BUSINESS RECOVERY USAGE CHARGES) IS HEREBY DELETED
IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:
3.7 BUSINESS RECOVERY CHARGES
Franklin agrees to pay the following Business Recovery charges
based on work described in Schedule M and charges described in
this Section 3.7 and Exhibit C-3, as applicable: IBM and Franklin
acknowledge that Exhibit C-2 was deleted in its entirety as a
result of Amendment Number 4 to the Agreement.
IBM/FRANKLIN CONFIDENTIAL PAGE 2 OF 9
FRANKLIN AMENDMENT FINAL.DOC AMENDMENT NUMBER 5
a. An Initial Recovery Charge for the first 48 hours post
Component or Full Site Disaster and a Daily Usage Charge as
described in Exhibit C-3 for each additional day or part
thereof:
1. for the duration of each Component Disaster or Full
Site Disaster; or
2. from the date IBM ships a Shared Recovery Configuration
to another location Franklin designates until the date
Franklin returns it to IBM.
Franklin may not credit unused Test Time against the Initial
Recovery Charge or Daily Usage Charge.
Notwithstanding the above, commencing upon the Amendment
Number 5 Effective Date and continuing for the Business
Recovery Services Term, for all Full Site Disasters and up
to three (3) Component Disasters per calendar year, IBM will
not charge Franklin the Initial Recovery Charge (as
indicated in Exhibit C-3 of this Schedule C) for any
Serviced Applications using Dedicated Recovery
Configurations (as specified in Exhibit M-1 of Revision 1 to
Schedule M). This exclusion does not apply to Serviced
Applications utilizing Shared Recovery Configurations, nor
shall any unused Component Disaster exclusions be carried
over to subsequent calendar years. Notwithstanding anything
contained in this Section 3.7 (a) (2), in the event that
Franklin makes a Componant Disaster declaration as a result
of external factors or events beyond the reasonable control
of Franklin, Franklin shall not be charged the Initial
Recovery Charge for Serviced Application(s) utilizing
Dedicated Recovery Configurations.
b. Actual travel and living expenses incurred by IBM personnel
when non-local travel is required to provide Business
Recovery Services. Franklin will not be responsible for
travel and living expenses incurred by IBM personnel in
excess of ten percent (10%) of the Business Recovery ASC for
such travel and living expenses unless prior written
authorization is provided by Franklin.
c. Additional Test Time or Test Time support hours pursuant to
Section 5.2 "Additional Test Time" of Revision 1 to Schedule
M.
d. IBM will provide Franklin with a Service Authorization,
which will detail the BR Services charges or reduction to
the BR Services Charges, if any as a result of any Change to
the original or added Serviced Applications, prior to
implementing any changes, as described in Section 3.1 of
Revision 1 to Schedule M, for Franklin's authorized
signature.
1. The addition of Serviced Applications may result in a
one-time Transition Charge and a recurring monthly
increase to the BR Services charges as set forth in the
Service Authorization.
2. The removal of Serviced Applications may result in a
recurring mutually agreed monthly reduction to the BR
Services charges. Both Parties agree to negotiate in
good faith the reduction to the BR Services charges and
acknowledge that the original Serviced Applications and
those for added Serviced Applications (as specified in
Exhibit C-3) were priced utilizing separate
methodologies which will be taken into account by both
Parties should such Serviced Applications be removed.
Additionally, calculation of the applicable reduction
shall include if applicable, any IBM prior investment
and reasonable expenses related to the displacement of
BRS Supplement equipment, interdependencies of other
Serviced Applications, and the minimum revenue
commitment described in Section 3.7e.
3. A Major Change to a Serviced Application will result in
a one-time Transition Charge and a recurring additional
or reduced monthly charge, as applicable. A Minor
Change to a Serviced Application may result in a
one-time Transition Charge and a recurring additional
or reduced monthly charge, as applicable. Both a Major
and a Minor Change shall be by mutual agreement and
shall be pursuant to the terms of the Agreement.
IBM/FRANKLIN CONFIDENTIAL PAGE 3 OF 9
FRANKLIN AMENDMENT FINAL.DOC AMENDMENT NUMBER 5
4. In the event that changes to Equipment are necessary,
the Parties shall address any such change in a Service
Authorization or a Project Change Request.
e. In no event will the Business Recovery Services ASC as
described in Exhiblit C-1 be reduced to an amount less than
$1,212,000 ($101,000 per month).
f. If IBM temporarily transfers a Shared Recovery Configuration
or a Temporary Transfer machine to a location Franklin
chooses, Franklin agrees to pay:
1. all shipping charges, taxes, tariffs, and insurance
charges incurred for shipment to such location and
return to IBM; and
2. any other charges, including Daily Usage Charges and
Initial Usage Charges specified Exhibit C-3 which
Franklin incurs while using such Configuration or
Machines.
g. Amendment Number 5 One Time Charges
1. As a result of the change in scope of work regarding
Business Recovery Services as described in this
Amendment Number 5, the parties hereby agree to the
following:
IBM will invoice Franklin a one time charge of $525,176,
which will be invoiced at a rate of $318,794 in September
2003, and $68,794 per month in October, November, and
December 2003. Franklin will pay the one time charge
pursuant to the payment terms of Section 5 of the Agreement.
In the event that Franklin has paid any amount in excess of
that which is required as a result of this Amendment Number
5, IBM shall credit such amount toward the next monthly
invoice under the Agreement.
h. Addition of Charles River application Charles River is
hereby added to the list of Serviced Applications as part of
this Amendment Number 5. The Parties agree that the solution
was determined based on the proposal (Charles River-Proposal
082803.doc) presented to Franklin on September 30, 2003 (the
"Proposal"). Should additional or reduced scope be required
to the solution outlined in the Proposal, the Parties agree
to negotiate in good faith incremental changes, increases
and or reductions, to the one time and recurring monthly
Charges applicable for support of the Charles River
application.
i. Franklin Vendor Charges and Fees
Franklin will:
1. be responsible for charges and fees from Franklin's
vendors, contractors, and carriers when their services
are requested and/or authorized by Franklin or
Franklin's designee in association with the BR
Services; and
2. to the extent that responsibility for management of
Franklin's third party vendor relationships relating to
BR Services have not been assumed by IBM in this
Agreement, be responsible for any failure and/or
performance problems by Franklin's vendors (other than
IBM), contractors or carriers contracted by Franklin or
its designee which affect IBM's performance of the BR
Services.
j. SRDF Transition Services
1. IBM will provide BR Services Transition to modify the
currently implemented Rapid Recovery Solution to
accommodate EMC's Symmetrix Remote Data Facility (the
"SRDF Transition Services") for up to seven (7) of the
Serviced Applications listed in Table 3.7(j) below at a
discounted one-time Transition Charge calculated as
follows: IBM will discount the one-time Transition
Charge for such elected Serviced Applications by twenty
(20) percent however, should IBM and Franklin mutually
agree to perform the SRDF Transition Services for three
(3) or more Serviced Applications simultaneously, the
one-time Transition Charge for the applicable
IBM/FRANKLIN CONFIDENTIAL PAGE 4 OF 9
FRANKLIN AMENDMENT FINAL.DOC AMENDMENT NUMBER 5
Serviced Applications will be discounted an
additional three (3) percent. Applicable discounts
will be mutually agreed pursuant to the Service
Request Process and documented in a Service
Authorization. This discount will be applied against
the one-time Transition Charges. IBM represents that
the scope of effort estimated shall be reasonable
under the circumstances and shall be consistent in
fees with similar projects for IBM clients
requesting similar services. IBM shall certify, if
requested by Franklin, via its Vice President of
Business Recovery and Continuity Services that it
has met this requirement. Franklin shall have no
additional audit rights under this Section
3.7(j)(1). The methodology used for calculation of
the Transition Charges specified in this section
3.7(j)(1) shall be based upon the Hourly Rates set
forth in Exhibit C-1 blended to give an average of
all hours purchased, minus the discounts set forth
in this section 3.7(j)(1). There will be no
adjustment to the recurring monthly charges for the
applications in Table 3.7j that receive SRDF
Transition Services unless such a change is mutually
agreed upon in a Service Authorization as a result
of additional changes other than SRDF Transition
Services (i.e. hardware configurations, complexity,
other new requirements, etc.).
2. Franklin accepts that the BR Services Transition is
complete for the Serviced Applications listed in Table
3.7j below and any subsequent requirements to modify
Rapid Recovery Solutions will be handled via the
Service Request Process and will be priced at the time
of the request pursuant to Section 3.7(d) and Section
3.7(j) (1), as applicable. For the discounts set forth
in Section 3.7(j) (1) to apply, Franklin must initiate
a Service Request for each elected Serviced Application
requesting such change for each elected Serviced
Application by December 31, 2004 or at such date which
is mutually agreeable by the Parties. Additionally, the
Parties must mutually agree and execute the Service
Authorization for such Service Request by the
expiration date of the Service Authorization, which
shall not be unreasonably withheld by IBM.
3. Any changes to hardware configurations or complexity of
the applications are not subject to the discount set
forth in Section 3.7(j) (1).
Table 3.7j
---------------------------------------
SERVICED APPLICATION
---------------------------------------
TAAS
---------------------------------------
WAS32
---------------------------------------
CFW
---------------------------------------
Global Max
---------------------------------------
Pega Central/Pega Satellite
---------------------------------------
MBS Expert
---------------------------------------
Global Plus
---------------------------------------
Cache
---------------------------------------
MINT
---------------------------------------
IBM/FRANKLIN CONFIDENTIAL PAGE 5 OF 9
FRANKLIN AMENDMENT FINAL.DOC AMENDMENT NUMBER 5
13. CERTAIN PARTS OF EXHIBIT C-1 AS APPLICABLE TO BR SERVICES ARE
MODIFIED AS FOLLOWS:
See Amendment Number 5 Exhibits to Schedule C
***************************End of Page***************************
IBM/FRANKLIN CONFIDENTIAL PAGE 6 OF 9
FRANKLIN AMENDMENT FINAL.DOC AMENDMENT NUMBER 5
PAGE 7 IS INTENTIONALLY LEFT BLANK
IBM/FRANKLIN CONFIDENTIAL PAGE 7 OF 9
FRANKLIN AMENDMENT FINAL.DOC AMENDMENT NUMBER 5
14. ADD THE FOLLOWING AS EXHIBIT C-3:
See Amendment Number 5 Exhibits to Schedule C
***************************End of Page***************************
IBM/FRANKLIN CONFIDENTIAL PAGE 8 OF 9
FRANKLIN AMENDMENT FINAL.DOC AMENDMENT NUMBER 5
B) SCHEDULE M (BUSINESS RECOVERY SERVICES) IS HEREBY AMENDED AS FOLLOWS:
"Schedule M" as amended, including "Supplement M-1 to Schedule M" is
deleted in its entirety and replaced with "Revision 2 to Schedule M"
which is attached hereto.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS AMENDMENT, UNDERSTAND IT, AND
AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE PARTIES AGREE THAT
THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES
RELATING TO THIS SUBJECT SHALL CONSIST OF 1) THIS AMENDMENT, 2) THE SCHEDULES
AND SUPPLEMENTS TO THE SCHEDULES, AND 3) THE AGREEMENT, DATED FEBRUARY 6, 2001,
AS PREVIOUSLY AMENDED. FRANKLIN'S APPROVAL OF THIS AMENDMENT SHALL BE CONSIDERED
ACCEPTANCE BY FRANKLIN OF IBM'S PROVISION OF THE SERVICES FOR THE CORRESPONDING
CHARGES SPECIFIED IN THE AGREEMENT, AS AMENDED. THIS STATEMENT OF THE AMENDMENT
SUPERSEDES ALL PROPOSALS OR OTHER PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL
OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER
DESCRIBED IN THIS AMENDMENT.
Accepted by: Accepted by:
INTERNATIONAL BUSINESS MACHINES FRANKLIN TEMPLETON COMPANIES, LLC
CORPORATION
By: /s/ Shirley S. Reilich By: /s/ Jennifer J. Bolt
---------------------------- ------------------------
Authorized Signature Authorized Signature
Shirley S. Reilich Date: 9/1/03 Jennifer J. Bolt Date: 9/1/03
- ------------------ ------ ---------------- -------
Name (Type or Print) Name (Type or Print)
IBM/FRANKLIN CONFIDENTIAL PAGE 9 OF 9
FRANKLIN AMENDMENT FINAL.DOC AMENDMENT NUMBER 5