CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
Exhibit 10.10
BEAR STEARNS & CO. INC.
SERVICE AGREEMENT
This Development and License Agreement (the "Agreement"), dated this 29th day of
July, 1998, is by and between Bear, Stearns & Co. Inc, a Delaware corporation,
having its principal offices at 245 Park Avenue, New York, NY 10167 and other
direct and indirect subsidiaries at the relevant time of its ultimate corporate
parent (collectively, "Bear Stearns"), and Predictive Systems, Inc, having
offices at 145 Hudson Street, New York, NY 10013 ("Predictive").
RECITALS
WHEREAS, Predictive wishes from time to time to perform Enterprise
Management services for Bear Stearns and Bear Stearns wishes to consider
engaging Predictive to perform such services (an "Assignment").
WHEREAS, in the interest of streamlining the startup phase of any such
Assignment, Bear Stearns and Predictive wish to agree in advance as to certain
terms and conditions under which such services may be rendered;
THEREFORE, for good and valuable consideration given pursuant to the
terms, conditions and covenants contained herein, Bear Stearns and Predictive
hereby agree as follows:
SECTION 1: STATEMENT OF WORK, SERVICES AND DELIVERABLES
1.1. Each Assignment will be commenced by a Statement of Work executed by
both Bear Stearns and Predictive (a "Statement of Work") referencing
this Agreement, and setting forth: (i) the deliverables to be produced
(the "Deliverables") and/or the other services to be performed (the
"Services"); (ii) the schedule for delivery of such Deliverables,
performance of such Services, and the date of completion of
Predictive's performance under the Statement of Work ("Completion
Date"); (iii) the agreed fees and costs consistent with this Agreement
for such Services and Deliverables ("Statement of Work Fees"); (iv) the
schedule for payment of such fees and costs ("Payment Schedule"); and
(v) the acceptance criteria against which the completeness of
deliverables will be measured ("Acceptance Criteria"). Notwithstanding
the foregoing, whether or not such Statement of Work sets forth the
items set forth in (i) through (v) above or refers to this Agreement,
the terms, conditions and provisions of this Agreement shall apply to
such Assignment and shall be automatically incorporated into such
Statement of Work, regardless of the terms discussed with any third
party.
1.2. As and when required by and Statement of Work and this Agreement,
Predictive shall perform for Bear Stearns the Services described in the
Statement of Work and shall deliver to Bear Stearns the Deliverables
described in the Statement of Work.
1.3. Notwithstanding the generality of Section 1.2., above and in addition
thereto, at the conclusion of each month during the term of each
Statement of Work, Predictive shall deliver to Bear Stearns all
Deliverables (including drafts and other work in progress) produced by
Predictive in the performance of the Statement of Work over the course
of that month.
1.4. Predictive warrants that it has or will provide the resources and
personnel necessary to carry out its work under each Statement of Work
and will use its best efforts to perform all work required under this
Agreement and each Statement of Work in a timely, skillful, and
efficient manner. Predictive shall not be responsible for any delay in
the performance of Services due to causes beyond reasonable control of
Predictive.
1.5. After completion of each milestone of the Statement of Work against
which a payment in the Payment Schedule is tied, (other than
obligations intended to survive acceptance by Bear Stearns), Predictive
will notify Bear Stearns in writing that Predictive has completed its
performance, that the Services are fully implemented, that the
Deliverables are fully implemented, and that Predictive's testing is
completed. Bear Stearns, with the cooperation and assistance of
Predictive, shall then be entitled to conduct a
comprehensive, integrated acceptance test of the Acceptance Criteria on
all the Services and Deliverables ("Acceptance Test"), and, if Bear
Stearns reasonably determines that any material part of the Acceptance
Criteria are not met during the Acceptance Test, to reject such
Services and/or Deliverables by notifying Predictive in writing.
"Acceptance" shall mean the receipt by Predictive of written
notification from Bear Stearns that the Acceptance Test on the Services
and Deliverables has been successfully completed. Any rejection shall
state specifically the manner in which the Services and Deliverables
are defective. In the event of rejection, Predictive shall correct any
deficiencies and shall resubmit such Services and Deliverables for
further Acceptance Testing in accordance with this paragraph. Bear
Stearns shall not be invoiced for more than 80% of the aggregate amount
due for any Services or Deliverables until such Services and
Deliverables satisfy the Acceptance Test and are accepted by Bear
Stearns pursuant to this Section 1.5.
SECTION 2: PROPRIETARY RIGHTS IN DELIVERABLES, ETC.
2.1 Predictive agrees that (i) any and all Deliverables, (ii) any and all
original other works of authorship, including, but not limited to all,
user documentation, papers, documents, drawings, databases and other
compilations which may be created, compiled or produced by Predictive
or any of its subcontractors, consultants or employees in the course of
performing Services or producing Deliverables for Bear Stearns (along
with the items described in (i) above, collectively, "Works of
Authorship"), and (iii) any and all copyrights and other proprietary
rights and all foreign and domestic, registered and unregistered,
copyrights, applications for registrations therefor and other
proprietary rights related to any Works of Authorship (collectively,
"Copyrights"), shall be deemed to be works made for hire for and the
exclusive property of Bear Stearns. Except to the extent specifically
agreed in the Statement of Work, to the extent that Predictive has or
obtains any right, title or interest in or to any Work of Authorship of
Copyright, Predictive hereby assigns and agrees to assign to Bear
Stearns all of such right, title and interest therein and thereto, and
to the extent that any employee, agent or sub-contractor of Predictive
has or obtains any right, title or interest in or to any Work of
Authorship or Copyright, Predictive shall cause such employee, agent or
sub-contractor to assign to Bear Stearns all of such right, title and
interest therein and thereto.
2.2. To the extent that any Deliverables or Services embody, contain or
disclose any ideas, concepts, know-how, inventions, formulas,
techniques, processes, ideas, algorithms, discoveries, designs,
developments, improvements, techniques or expertise that are known by
Predictive prior to Predictive's work for Bear Stearns or is developed
by Predictive during the course of Predictive's work for Bear Stearns
(collectively "Know-How") of Predictive, Predictive shall retain
ownership of such Know-How, provided that Bear Stearns shall have the
full, unrestricted and non-exclusive right to use, disclose, prepare
works of authorship based upon any Know-How embodied by, contained in
or disclosed by the Deliverables of Services and to copy, display and
distribute any such works of authorship.
2.3. Nothing herein shall prevent Predictive from providing services
substantially similar to those contemplated herein, whether for a
competitor of Bear Stearns or otherwise, and the parties expressly
agree that in providing such services, or in developing its general,
commercially available software products, Predictive may directly or
indirectly utilize residual know-how in its area of expertise not
specific to Bear Stearns resulting from the performance of the services
contemplated herein.
2.4. Upon the request of Bear Stearns, Predictive shall at Bear Stearns'
reasonable out-of-pocket cost and expense do all acts and things,
including, but not limited to, making and executing documents,
applications, deeds, license agreements, assignments, transfers,
conveyances, powers of attorney and instruments, using its best efforts
to obtain the cooperation of and bringing claims and actions against
its employees, ex-employees, agents, ex-agents and independent
contractors and giving information and testimony, in each case,
requested at any time and from time to time by Bear Stearns, in its
good faith discretion, to vest, secure, defend, protect and/or evidence
the right, title and ownership of Bear Stearns in and to any and all
Works of Authorship and Copyrights. Predictive hereby appoints Bear
Stearns and is successors and assigns as Predictive's attorney-in-fact,
with full power of substitution, in the name and stead of Predictive or
Bear Stearns, for the benefit of Bear Stearns and its successors and
assigns, to from time to time do any and all such acts and things which
Predictive is obligated to do under his paragraph. Predictive declares
that the appointment made and the powers granted hereby are coupled
with an interest and are irrevocable.
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SECTION 3: CHARGES, FEES, PAYMENTS AND INVOICING
3.1. Payment shall be made as set forth in the applicable Statement of Work.
3.2. The prices and charges hereunder do not include any excise, sales or
use taxes or duties. If any excise, sales or use taxes or duties, are,
or should ultimately be, assessed against or is required to be
collected by Predictive or by any taxing authority in connection with
their performance required hereunder, Bear Stearns agrees to pay an
amount equal to any and all such charges, except where Bear Stearns is
exempt by law and Bear Stearns provides a bona fide exemption
certificate to Predictive.
3.3. Bear Stearns shall make all payments due hereunder within 30 days from
the receipt of a correct and proper invoice.
SECTION 4. PERSONNEL
4.1. All personnel assigned to supply the Deliverables and perform the
Services shall be full-time employees of Predictive (subject to Section
11.6 hereof), shall be fully qualified to perform the tasks assigned to
them, and shall perform all such tasks in a competent and professional
manner. Predictive is an independent contractor. None of Predictive nor
Predictive's or any Predictive agent's or subcontractor's employees are
or shall be deemed for any purpose to be employees of Bear Stearns.
Bear Stearns shall not be responsible for, and Predictive shall
indemnify and hold Bear Stearns harmless against, any cost, expense,
liability, claim, damages, action, or proceeding relating to any
payroll-related taxes for any person who performs any Services,
produces and Deliverables, or provides maintenance, support or training
to be performed, produced or provided by Predictive hereunder or any
claim arising out of or relating to the employment or application for
employment of any such person.
4.2. Predictive shall maintain, throughout the performance of its
obligations under this Agreement, a policy of Worker's Compensation and
Disability Insurance with a minimum limit of $1 Million. Predictive
shall also provide Bear Stearns with a waiver of the insurers'
Subrogation Rights with respect to losses paid under the Worker's
Compensation or Employers' Liability coverage. Evidence of Predictive's
insurance shall be in the form of a certificate of insurance naming
Bear Stearns as an additional insured and including a thirty (30) day
advance written notice of change and/or cancellation of coverage.
Predictive, prior to commencement of any services, shall provide to
Bear Stearns said certificates from its insurers indicating the amount
of insurance coverage, the nature of such coverage and expiration dates
of each policy.
4.3. While this Agreement is in effect, and for a period of twelve months
subsequent to the termination of this Agreement, neither Predictive nor
Bear Stearns (including either party's subsidiaries and affiliates)
shall (i) solicit for employment any of the other party's employees,
without the prior written consent of such other party or (ii) employ,
either directly or indirectly (as a consultant, independent contractor
or otherwise), any of the other party's employees.
SECTION 5: SUPPORT
5.1. Predictive guarantees that it will make available EMS Support as
described in the Statement of Work on the terms set forth in this
Agreement for a period of at least [****] of the date hereof.
5.2. The annual maintenance fees shall not exceed [****]
5.3. Predictive shall provide training, instruction and consultation to Bear
Stearns as set forth in the relevant Statement of Work. Such services
are to be used at a time to be mutually agreed upon by the parties and
Bear Stearns shall reimburse Predictive for all reasonable
out-of-pocket expenses, including all transportation, lodging, meals
and other expenditures related to providing such services.
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
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SECTION 6. WARRANTIES
Predictive represents, warrants and covenants to Bear Stearns as the date hereof
and of Acceptance under each Statement of Work as follows:
6.1. To the best of its knowledge and belief, Predictive owns or otherwise
has the valid right by contract or otherwise to deliver and assign to
Bear Stearns the Deliverables and all other Works of Authorship and the
Copyrights and to grant to Bear Stearns the rights as defined in this
Agreement.
6.2. To the best of its knowledge, Bear Stearns may use the Deliverables and
otherwise fully exploit the rights thereto set forth herein without
infringement of any such proprietary rights of third parties, and there
is currently no actual or threatened suit by any such third party based
upon an alleged violation by Predictive of any such proprietary rights.
THE LIMITED WARRANTIES SET FORTH IN THIS AGREEMENT ARE THE ONLY WARRANTIES MADE
BY PREDICTIVE. PREDICTIVE MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS.
SECTION 7: LIMITATIONS OF LIABILITY
7.1. EXCEPT AS STATED HEREIN, NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, INDIRECT AND/OR CONSEQUENTIAL DAMAGES OF ANY KIND,
RESULTING FROM EITHER PARTY'S PERFORMANCE OR FAILURE TO PERFORM
PURSUANT TO THE TERMS OF THIS AGREEMENT OR ANY OF THE ATTACHMENTS OR
EXHIBITS HERETO, OR RESULTING FROM THE FURNISHING, PERFORMANCE OR USE
OR LOSS OF ANY LICENSED PRODUCTS OR OTHER MATERIALS DELIVERED TO BEAR
STEARNS THEREUNDER, INCLUDING WITHOUT LIMITATION ANY INTERRUPTION OF
BUSINESS, WHETHER RESULTING FROM BREACH OF CONTRACT OR BREACH OF
WARRANTY, EVEN IF THE PARTIES HERETO HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
7.2. Notwithstanding anything set forth in this Agreement, no limitation of
liability of exculpation of either party hereto shall apply to:
(a) any liability arising out of or in connection with acts or
omissions that constitute bad faith, willful misconduct, gross
negligence, or intentional breach of this Agreement;
(b) losses by the other party (or any of its affiliates) that arise
in connection with any infringement or misappropriation of the
other party's (or any of its affiliate's) intellectual property
by the party to be exculpated (or any of its affiliates);
(c) any liability, loss or claim arising out of a breach by such
party of Section 6, 8 or 9 hereof; or
(d) any liability, loss or claim arising out of or related to any
claim that any of the Deliverables infringe any copyright, trade
secret or other proprietary right of a third party.
SECTION 8: NON-DISCLOSURE
8.1. Predictive acknowledges that in the course of performing its
obligations hereunder, Predictive and its agents, representatives,
employees and sub-contractors may have access to information relating
to Bear Stearns, its business, customers, correspondents, finances,
activities, securities or future positions, software, systems,
strategies or plans that is non-public, proprietary or confidential in
nature(all the foregoing, along with the Deliverables and the
Specifications, collectively, "Bear Stearns Information"). Predictive
shall and shall cause its subcontractors and affiliates and
Predictive's and its subcontractors' and affiliates' agents,
representatives, and employees to (i) keep all Bear Stearns Information
confidential; (ii) not disclose any Bear Stearns Information or any
part thereof, in any manner whatsoever, without Bear Stearns'
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prior written consent, and (iii) not use any Bear Stearns Information
or any part thereof, other than to enable Predictive to perform its
obligations under this Agreement. Moreover, Predictive shall and shall
cause its subcontractors and affiliates and Predictive's and its
subcontractors' and affiliates' agents, representatives, and employees
to reveal Bear Stearns Information only to its agents, representatives
and employees who need to know such Information in connection with this
Agreement, who are informed by Predictive of the confidential nature of
such Bear Stearns Information and who shall agree (in writing) to act
in accordance with the terms and conditions of this provision. All
media on which any Bear Stearns Information may be recorded or located,
including, without limitation, documents, papers, outlines, samples,
photocopies, photographs, films, drawings, descriptions, reproductions,
cards, tapes, discs and other storage facilities (collectively, "Bear
Stearns Documentation") made by Predictive or any of its employees,
agents representatives, or sub-contractors in the course of performing
Services or producing Deliverables for Bear Stearns, or that come into
the possession of Predictive or any of its employees, agents
representatives, or sub-contractors in the course of performing
Services or producing Deliverables for Bear Stearns, are the property
of Bear Stearns and shall be returned to Bear Stearns by Predictive
upon the earlier of request by Bear Stearns or termination of
Predictive's engagement by Bear Stearns. Predictive shall not, and
shall cause its any of its employees, agents representatives, or
sub-contractors who obtain or have obtained possession of or develop or
have developed any Bear Stearns Documentation not to, deliver, copy, or
in any way allow any Bear Stearns Documentation to be delivered to or
used, examined or copied by any third party without the written
direction or consent of Bear Stearns. Predictive shall, and shall cause
its employees and agents to, place an appropriate emblem or other
annotation on any and all Bear Stearns Documentation that is in the
possession of Predictive or any of its employees or agents evidencing
Bear Stearns' ownership of such Bear Stearns Documentation. Predictive
acknowledges that the use or disclosure of any Bear Stearns Information
in a manner inconsistent with this Agreement may cause Bear Stearns
irreparable damage, and that Bear Stearns shall have the right to seek
injunctive relief to prevent such unauthorized use or disclosure, and
to such damages as are occasioned by such unauthorized use or
disclosure.
8.2 Notwithstanding anything set forth in this Agreement, the
confidentiality provisions of this Agreement, including, but not
limited to the above shall not apply to: (a) information which (i) is
already in the possession of the party subject to the confidentiality
obligations, ii) is or become generally available to the public other
than as a result of improper disclosure by the party subject to the
confidentiality obligations or its agents, representatives or employees
iii) is independently developed by the party subject to the
confidentiality obligations, or (iv) become available to the party
subject to the confidentiality obligations on a non-confidential basis
from a source which, to the best of such party's knowledge, is not
prohibited from disclosing such information to the party subject to the
confidentiality obligations by a legal, contractual or fiduciary
obligation to the party subject to the confidentiality obligations, or
(b) disclosures required by applicable law, rule, regulation or order
or to legal counsel or auditors of the party who are subject to an
obligation of confidentiality.
SECTION 9: INFRINGEMENT INDEMNIFICATION
9.1 Predictive shall indemnify, defend and hold harmless Bear Stearns for,
from and against any and all losses, liabilities, damages, demands,
claims (including without limitation taxes), and costs, payments and
expenses (including without limitation any and all reasonable
attorneys' fees, reasonable costs of investigation, litigation and
settlement, interest and any judgments and penalties) (collectively,
"Losses") as incurred, arising out of, or in connection with any claims
made against Bear Stearns in connection with any allegations that any
of the Deliverables or their use, sale, disclosure, execution,
reproduction, modification, adaptation, distribution, performance or
display, infringe or misappropriate any copyright, patent, trademark,
service mark, trade secret or other forms of proprietary rights of any
third party. Bear Stearns shall give Predictive prompt notice of any
such claim made against it, shall allow Predictive control of the
defense of any such claim made against it, and shall give Predictive
all reasonable assistance requested by Predictive in writing in
connection therewith.
9.2 If, as a result of any such claim, any preliminary injunction or other
injunctive relief is entered against Bear Stearns, or any temporary
restraining order is obtained affecting Bear Stearns which materially
restricts or in any way precludes any further use of any of the
Deliverables, THEN Predictive shall refund to Bear
5
Stearns all license fees and unused maintenance fees (on a pro-rata
basis) paid to Predictive by Bear Stearns, and upon such refund this
Agreement shall be deemed terminated under hereunder; provided,
however, that the foregoing shall not apply if upon issuance of any
such preliminary or other form of injunction or temporary restraining
order, Predictive either:
(a) obtains promptly for Bear Stearns the right to continue to use
the Deliverables which are the subject of the claim of
infringement without additional cost to Bear Stearns, or
(b) provides without cost to Bear Stearns an equally satisfactory
substitute Deliverables which achieve the same objectives as
the Deliverables which are the subject of the claim of
infringement, is equally practicable and functional and does
not infringe any copyright, patent, trade secret or other form
of proprietary or intellectual property rights of third
parties.
SECTION 10: TERMINATION/BANKRUPTCY
10.1 Termination For Convenience By Bear Stearns. Bear Stearns may terminate
this Agreement or a particular Statement of Work by giving thirty (30)
days advance written notice to Predictive. Bear Stearns shall then pay
within (30) days all unpaid amounts that have been incurred as of the
date of termination plus a termination charge equal to thirty percent
(30%) of the total remaining fees that would have been due under the
terminated Statement(s) of Work, if the remainder of the Services
described therein had been fully performed. The remainder balance shall
be computed by subtracting the value of paid invoices from the total
value of the Services under the terminated Statement(s) of Work. The
parties agree that such termination charge shall constitute
consideration for Predictive's time, effort and expense in preparing to
perform its obligations, hereunder, as actual damages are difficult to
ascertain. Predictive shall promptly deliver to Bear Stearns all
Deliverables performed for and prepaid by Bear Stearns prior to the
termination relating to such Statement of Work.
10.2 Termination For Breach by Bear Stearns. If Bear Stearns fails to pay
any outstanding charges within forty-five (45) days after receipt of
written notice of delinquency, or if Bear Stearns fails to perform or
observe any other material term or condition of this Agreement for
forty-five (45) days after receipt of written notice from Predictive of
such failure, Bear Stearns shall be in default and Predictive may,
without prejudice to any other right or remedy, suspend performance
under, or terminate in its entirety, or in relation to a particular
Statement of Work. Any unpaid charges or other obligations accrued to
such termination shall survive termination of this Agreement or
Statement of Work, as applicable.
10.3 Termination For Breach by Predictive. If Predictive fails to perform or
observe any other material term or condition of this Agreement and/or
Statement(s) of Work for forty-five (45) days after Predictive's
receipt of written notice from Bear Stearns of such failure and has not
commenced performance or observance of such material term or condition
within such 45-day period, Bear Stearns shall have the option of
immediately terminating the Agreement and/or Statement of Work involved
in whole or in part, without further obligation including any
additional payments, liability or penalty of any kind.
10.4 If Predictive becomes the subject of a case commenced under Title 11 of
the United States Code (the "Bankruptcy Code") and Predictive, as
debtor-in-possession, or a trustee appointed for Predictive ("Trustee")
decides to reject this Agreement and/or any Statement of Work pursuant
to Section 365(n) of the Bankruptcy Code, then Bear Stearns, in
addition to all rights conferred by the Bankruptcy Code and other
applicable law, shall have the right to treat this Agreement and/or
such Statement of Work as terminated or to retain its rights
thereunder. If Bear Stearns decides to retain its rights under this
Agreement and/or Statement of Work, as the case may be, then (i) on
written request of Bear Stearns, Predictive or the Trustee shall
provide Bear Stearns with any and all information, Deliverables and any
other Works of Authorship held by the Trustee, Escrow Agent or
Predictive; and (ii) Predictive or the Trustee shall not interfere with
the rights of Bear Stearns pursuant to this Agreement including, but
not limited to the right to obtain any information pertaining to the
foregoing from any other entity or individual, including employees,
consultants and former employees and consultants of Predictive.
Predictive acknowledges and consents that the automatic stay imposed by
Section 362 of the Bankruptcy Code shall be automatically lifted,
modified and/or vacated to allow Bear Stearns to realize any and all of
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its rights herein. The provisions of this paragraph shall also apply in
the event that Predictive or the Trustee has not rejected this
Agreement or any Statement of Work. The parties hereby agree and affirm
that the payments already paid by Bear Stearns as of the date of a
rejection under the Bankruptcy Code, as described in the first sentence
hereof, are full consideration for Predictive's obligation and
undertakings under this Agreement and all applicable Statements of
Work. These payments shall not be deemed to be royalty payments for the
purpose of Section 365(n) of the Bankruptcy Code and if Predictive or
the Trustee rejects this Agreement or any Statement of Work and Bear
Stearns decides to retain its rights thereunder, Bear Stearns shall be
relieved from its obligation to make such payments.
10.3. Notwithstanding anything set forth in this Agreement, the assignments
made and licenses granted in this Agreement shall survive the
expiration or termination of the Agreement, regardless of the cause.
SECTION 11: MISCELLANEOUS
11.1. If any provision of this Agreement is declared or found to be invalid,
illegal, unenforceable or void, then both parties shall be relieved of
all obligations arising under such provision, but only to the extent
that such provision is invalid, illegal, unenforceable or void, it
being the intent and agreement of the parties that this Agreement shall
be deemed amended by modifying such provision to the extent necessary
to make it valid, legal and enforceable while preserving its intent or,
if that is not possible, by substituting therefor another provision
that is valid, legal and enforceable and achieves the same objective.
Each party agrees that it will perform its obligations hereunder in
accordance with all applicable laws, rules and regulations now or
hereafter in effect.
11.2. Headings are for reference purposes only.
11.3 Any notices required or permitted to be sent hereunder shall be served
personally or by registered or certified mail, return receipt
requested, reputable overnight delivery services such as Federal
Express, Airborne Express or DHL, or by facsimile with confirmation of
receipt; to the addresses listed above.
11.4. This Agreement shall be interpreted and construed in accordance with
the Copyright laws of the United States and the internal law of State
of New York, without regard to the conflicts of law principles thereof,
and any action brought in relation to this Agreement shall be brought
in a Federal or state court in the City of New York and Licensee and
Licensor hereby irrevocably consent to the jurisdiction of such Courts,
and both parties hereby waiving any claim or defense that such forum is
not convenient or proper. Each party hereby consents to service of
process by any means authorized by New York law (other than by
publication). Each party waives any right to trial by jury with respect
to any dispute, suit, action or proceeding arising out of or relating
to this Agreement or otherwise relating to the relationship of the
parties, whether in contract, tort or otherwise.
11.5. This Agreement may not be modified or altered except by a written
instrument executed by both parties. The failure of either party to
exercise in any respect any right provided for herein shall not be
deemed a waiver of any rights. This Agreement, together with each
Statement of Work hereunder, constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes
and merges all prior proposals, understandings and all other
agreements, oral and written between the parties relating to such
subject matter. The rights and remedies of Bear Stearns under this
Agreement and any Statement of Work are cumulative.
11.6. Neither party may assign this Agreement or any Statement of Work or
delegate any obligations hereunder or thereunder, except that
Predictive may sub-contract some or all of its performance under the
Agreement only with the written consent of Bear Stearns, which shall
not be unreasonably withheld; provided, however, that all obligations
of Predictive under this Agreement shall apply fully to any such
sub-contractor as if it were "Predictive" under this Agreement and
Predictive shall remain fully liable for the performance of such
assignee or sub-contractor hereunder; and Bear Stearns may from time to
time assign this Agreement, in whole or in part, to one or more of its
then affiliates, and to the extent of any such assignment, the relevant
references in this agreement to shall apply to such affiliate.
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11.7. To the extent that, and only to the extent that, this Agreement
otherwise obligates Bear Stearns to reimburse Predictive for any travel
(including lodging, meals or similar expenses), such obligation is
subject to the following conditions and limitations: (a) the travel
expenses may not exceed the expense of travel to the relevant Bear
Stearns facility from the nearest Predictive facility or office, (b)
any such travel must be at the request of Bear Stearns's designated
liaison person, (c) Predictive provides Bear Stearns with a listing of
all of Predictive's support locations and indicating the nearest
support location to Bear Stearns's location, (d) the travel expenses do
not exceed $150 per day plus carrier travel (lowest coach fare), (e)
Predictive makes travel arrangements via Bear Stearns's Travel
Department, and (f) the travel is in accordance with Bear Stearns's
Travel Policies/Procedures.
11.8. Predictive acknowledges that, as is the custom and practice in Bear
Stearns's industry, from time to time Bear Stearns monitors and/or
records certain telephone lines and other communications devices going
into or out of Bear Stearns's premises, and to the extent that any such
monitoring and/or recording occurs relating to any telephone call and
other communication going into or out of Bear Stearns's premises
involving Predictive or any of its employees, agents and
sub-contractors, then Predictive, on behalf of its self and its
employees, agents and sub-contractors, consents thereto or will ensure
such other party consents thereto.
11.9. Predictive shall not use Bear Stearns's or any of its affiliates' name
or trademarks or service marks without Bear Stearns's written consent.
IN WITNESS WHEREOF, the parties, by their duly authorized representatives,
hereto have executed this Agreement as of the day and year noted below.
Bear, Stearns & Co. Inc. Predictive Systems, Inc.
- ----------------------------------- -----------------------------------
/s/ Geryl W. Darington /s/ Ronald Pettengill
- ----------------------------------- -----------------------------------
Signature Signature
Geryl W. Darington Ronald G. Pettengill
- ----------------------------------- -----------------------------------
Print or Type Name Print or Type Name
Senior Managing Director CEO
- ----------------------------------- -----------------------------------
Title Title
7/27/98 7/29/98
- ----------------------------------- -----------------------------------
Date Date
8
[LOGO]
PREDICTIVE SYSTEMS
- --------------------------------------------------------------------------------
Proposal for [****]
Redesign
for Bear, Stearns & Co., Inc.
- --------------------------------------------------------------------------------
March 17, 1999
[****]
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page i
[****]
Revision history
Version Date Comments required by Approvals required by
- --------------------------------------------------------------------------------
1.0 2/9/99 Original
- --------------------------------------------------------------------------------
2.0 3/17/99
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Predictive Systems approval:
________________________________________________________________________________
Signed Name
________________________________________________________________________________
Title Date
Proposal for [****] Redesigns
for Bear Stearns & Co.
March 17, 1999
Copyright (C) 1998, Predictive Systems, Inc. Predictive Systems is a trademark
of Predictive Systems, Inc.
No part of this document may be reproduced in any form or by any electronic or
mechanical means, including information storage and retrieval devices or
systems, without prior written permission from Predictive Systems, Inc. This
document or information it contains may not be used, reproduced, or disclosed
outside of Bear Stearns without authorization in writing by Predictive Systems,
Inc.
C O N F I D E N T I A L--Use, reproduction, or disclosure is subject to the
restrictions in DFARS 252.227-7013 & 252.211-7015/FAR 52.227-14 & 52.227-19 for
commercial computer software or technical data provided to the U.S. government
with limited rights, as applicable.
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page ii
================================================================================
Table of Contents
- --------------------------------------------------------------------------------
Introduction 1
Non-disclosure 1
Deadline for response 1
Overview 2
Predictive's Approach 2
Project Component Description 3
[****] 3
3
4
4
5
Assumptions 6
General Project Assumptions 6
Reporting methods 7
Status reports 7
Status meetings 7
Project Team 8
Project Team 8
Project Cost 9
Project duration 9
Estimated Costs 9
Project costs and billing 10
Network Assessment Methodology 11
Performance Assessment Tools 11
Activities 13
Documentation 13
Legal terms and conditions; limitation of liability 15
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 1
================================================================================
Introduction
- --------------------------------------------------------------------------------
Predictive Systems, Inc. (Predictive) is pleased to present this
proposal to assist in the analysis and redesign of the [****]
location at Bear, Stearns & Co. (Bear Stearns). We look forward to
continuing our work with Bear Stearns as a strategic partner. Our
engineering staff is experienced on the tools and requirements in
performing a network analysis and redesign. This coupled with our
knowledge of the Bear Stearns network, uniquely qualify us for the
project.
This proposal meets the requirements set forth in meetings and
conversations with Bear Stearns during the 5 days period of 2/2/99 -
2/9/99 and supported documentation that has been provided during
those meetings.
Non-disclosure
- --------------------------------------------------------------------------------
All information contained in this proposal and quotation is
confidential and proprietary to Predictive Systems, constituting its
trade secrets and privileged, confidential property. It is furnished
to Bear Stearns in confidence, with the understanding that it will
not, without written permission of Predictive Systems, be used for
other than evaluation purposes or be disclosed to any third party.
Duplication of this proposal and quotation is strictly forbidden,
and all copies shall be returned to Predictive Systems upon our
request.
Deadline for response
- --------------------------------------------------------------------------------
This proposal is valid for ninety (30) days unless extended in
writing by Predictive Systems.
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 2
================================================================================
Overview
- --------------------------------------------------------------------------------
[****]
Predictive's Approach
- --------------------------------------------------------------------------------
Predictive Systems has developed a methodology to perform the type of
analysis required for the design and migration of users to a new
architecture. The overall process of the network analysis is geared
towards the analytical evaluation of each building's internal traffic
patterns and bandwidth utilization. Attached to this document is a
description of the network analysis methodology and tools that will be
used by Predictive Systems for this project. Below is a brief description
of this process.
The first step in this process is a basic network audit of the
infrastructure to determine the traffic `flow'. Subsequently Predictive
Systems will perform a data collection of protocol and traffic information
to gauge network usage and to plan for the migration to the switched
environment.
The following three steps characterize the basic process involved:
o Detailed Building Review and Inventory of Infrastructure
o Data Collection: LAN/WAN Traffic Analysis; Protocol
Review
o Report on Findings: Building Summary
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 3
Project Component Description
- --------------------------------------------------------------------------------
The following lists the four components to the [****] redesign project. [****]
Each component is described with a brief list of activities. The project
will require a [****] of the existing ECN network. Predictive will require
the assessment to understand the network prior to any additions or redesigns.
Current Network/Infrastructure Assessment
- --------------------------------------------------------------------------------
There are two main areas to the assessment, the first is a detailed inventory of
all communications equipment to the level of port, application and user
identification. The second is an analysis of the network usage over the building
and inter-building network, LAN segment utilization and Top Talkers are part of
the analysis that will be performed. The information gathered will be used in
the design and migration plans for the users onto the new architecture. Refer to
the Network Assessment Section of the document for details on how the assessment
will be performed and what tools will be used during the project.
Some of the activities are;
o Identify all networks to be analyzed
o Set-up Tools to be used (probes, data collection systems)
o Capture Data for over a 3 day period
o Analyze and document results of the segment
o Physical inventory of all devices to the port identification
o Document inventory with network segment diagrams and spreadsheets.
Centillion Extension Design and Implementation
- --------------------------------------------------------------------------------
[****] We will review current network capacity and offer
suggestions on successfully extending the networks to
[****].
Some of the activities are;
o Identify subnets to extend
o Work with Bear Stearns Engineering to develop a design
for subnet extension
o Build out [****] extension
o Test and burn in equipment
o Integrate [****] design
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 4
Accelar Design and Implementation
- --------------------------------------------------------------------------------
[****] The data collected during the segment analysis along with
the current [****] will provide the required information to develop
a design. The design and migration will provide the logical and
physical requirements. The results will be the network diagrams,
equipment lists, computer room requirements (cabling and cabinets)
and configuration documentation. [****] Predictive Systems has
extensive knowledge of these processes along with the Communications
staff that will be involved in the projects.
The activities involved are;
o Propose Network Design Documentation for review with Bear
Stearns Engineering.
o Utilizing the [****] for procurement (budget forms etc...)
and implementation scheduling.
o All preparation work prior to the implementation such as
project plans, configurations of the switches and any changes
required of the routers and firewalls.
Installation of the equipment, burn in time for new devices,
configuration of the devices, EMS templates for management and
review and testing of [****] management. Finalization of the
user migrations and business unit cut windows.
Cut-Over to Production
- --------------------------------------------------------------------------------
This component of the project is comprised requires the co-ordination with
business units and other Bear Stearns departments. The migration of users will
take place over multiple weeknights and weekends with post application testing
prior to the next business day.
The following are some of the activities;
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 5
o Develop Project plans, [****] projects open for each migration
group along with following the procedures for getting windows
with clients.
o On-Site for the migration of users assisting the
Implementation team as needed during the cut. Verification
that all the devices are running properly and working with
Business Unit SA in application testing.
o On-Site for assistance first business day of running with the
new system.
Post Production Analysis
- --------------------------------------------------------------------------------
After the migration of all users to the switched network there will be a
performance analysis utilizing the some of the same tools and the pre-design
analysis. Due to the difference in topology [****] there cannot be the same
reports as the first analysis. Any and all the information that is available
will be collected and reported upon. The goal of the analysis is to evaluate
the differences in the utilization and capacity of the new network design.
Once the project is completed all the documentation and diagrams will be
transitioned to Operations. The identification of a dedicated operational
engineer would be helpful during the project and would assist with a smooth
transition from engineering to operations. [****] To ensure the successful
transition to operations there will be a meeting scheduled with operations to
set the requirements, documentation, configurations and diagrams.
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 6
================================================================================
Assumptions
- --------------------------------------------------------------------------------
In developing this proposal, there are many assumptions Predictive
Systems has made that can materially affect the outcome and cost of
the project. Should any of these assumptions prove to be incorrect,
exaggerated or underestimated, the scope and cost of the project may
change significantly.
In the event of any such material change in assumptions,
requirements or specifications, Predictive will request a Change
Order Authorization from Bear Stearns which must be signed by Bear
Stearns prior to the change being incorporated into the project
plan. The Change Order could be an addition or reduction of work,
based on the circumstances.
General Project Assumptions
- --------------------------------------------------------------------------------
1. It is in Bear Stearn's estimation that the project will
require [****] to complete. This is assuming equipment
availability, business unit cut window availability,
pre-defined user moves schedules and no major changes to the
design standards.
2. Bear Stearns will facilitate the timely installation of
equipment, power and cabling system prior to initial build out
of new network.
3. This is a collaborative Engineering project whereby Predictive
Systems is providing staff augmentation based on Bear Stearn's
defined dates and deliverables.
4. Both Predictive and Bear Stearns will assign a single point of
contact for the engineering and a point of contact for the
implementation tasks.
5. Bear Stearns will provide adequate facilities, equipment and
communications lines for the Implementation Staging. Bear
Stearns will also provide a work area with a phone and a
network connection for each Predictive consultant.
6. [****] Any and all information that is available will be
used with collection methods similar to the first analysis.
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 7
================================================================================
Reporting methods
- --------------------------------------------------------------------------------
Status reports
- --------------------------------------------------------------------------------
The Predictive Systems team will provide a weekly status report in
electronic format to the Bear, Stearns & Co. Program Manager. The
report form will be brief; listing any items that were completed
that week and the open items for the next week. The purpose of the
reports is to provide weekly information on the status of the
project and any outstanding issues from the week. The reports will
be available upon an agreed upon time frame.
Status meetings
- --------------------------------------------------------------------------------
There will be weekly status meetings with Bear, Stearns & Co. on the
overall project. The meeting will be scheduled on at a mutually
agreed time at the [****] location. The meeting will be to
review any work that was performed by the Predictive Systems' team
and review the open items list of work that is scheduled for the
next week. This meeting will also provide a platform for reviewing
any new issues or additional project requirements.
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 8
================================================================================
Project Team
- --------------------------------------------------------------------------------
Project Team
- --------------------------------------------------------------------------------
The project team will be comprised as follows:
-------------------------------------------
Estimated
Role Qty
-------------------------------------------
Managing Consultant [****]
-------------------------------------------
Sr. Internetwork Engineer [****]
-------------------------------------------
o Managing Consultant - The Managing Consultant will be utilized
[****]
o Sr. Internetwork Engineers - The Sr. Internetwork Engineers
are used for designing, testing and staging the new network
designs. The configurations of all the network devices for the
implementation team. The engineers will also provide
implementation support and operational support. Additional
responsibilities will include scheduling, assisting with
equipment procurement and loans, maintaining project plans,
and preparing weekly status reports in conjunction with
project manager.
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 9
================================================================================
Project Cost
- --------------------------------------------------------------------------------
[****]
Project duration
- --------------------------------------------------------------------------------
[****]
Estimated Costs
- --------------------------------------------------------------------------------
[****]
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
Proposal for [****] Redesign
Page 10
Project costs and billing
- --------------------------------------------------------------------------------
[****]
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 11
Network Assessment Methodology
- --------------------------------------------------------------------------------
[****]
Performance Assessment Platform
- --------------------------------------------------------------------------------
[****]
Performance Assessment Tools
- --------------------------------------------------------------------------------
Collection Tools:
[****]
Reporting Tools:
[****]
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 12
[****]
Analysis and Modeling Tools:
[****]
REPORT CATEGORIES
Router Health -
[****]
Router Performance -
[****]
LAN Performance -
[****]
RMON -
[****]
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
Proposal for [****] Redesign
Page 13
REPORTS (Names will be modified)
Hub/LAN Performance:
[****]
Router Performance:
[****]
SNMP Performance:
[****]
Activities
- --------------------------------------------------------------------------------
Predictive Systems will have the following responsibilities during
this project:
1. Development of site assessment templates and checklists.
2. Conduct site assessment inquiries.
3. Conduct basic network component audit.
4. Installation and configuration of a temporary system to
perform Baseline Instrumentation Measurements (BIM).
5. Conduct BIM Data Collection.
6. Benchmarking and preliminary testing of the network
environment, as required.
7. Generate BIM Reports.
8. Perform site analysis for all sites on all collected and
gathered site data.
9. Generation of site summary report.
Documentation
- --------------------------------------------------------------------------------
Site Evaluation Document - The individual Site Evaluation Document is the
culmination of work for the project. The document presents an accurate analysis
of the current status of the technology at each hospital site. This deliverable
will be comprised of several sub-documents. These sub-documents are described
below. Based on the scope of the analysis, the sub-documents may be combined
into a single deliverable document.
1. Site Summary Report - Analysis of each individual site
including current characteristics and present
autotopology overview and basic device configuration.
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
Proposal for [****] Redesign
Page 14
2. Site Network Performance Measurements - A detailed
traffic analysis and protocol utilization summary
including all produced reports from a collection
station.
3. Problem Identification and Solution List - A
supplementary report on all identified problems
[****]
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
Proposal for [****] Redesign
Page 15
================================================================================
Legal terms and conditions;
limitation of liability
- --------------------------------------------------------------------------------
Bear, Stearns & Co.. ("COMPANY") hereby accepts the services and the related
terms and conditions set forth in the attached Statement of Work (the "SOW") of
Predictive Systems, Inc. ("Predictive Systems"). COMPANY expressly acknowledges
that the performance of these services will require Predictive Systems to gain
access to COMPANY's confidential and proprietary network and information assets,
and authorizes this access for the purposes described in the SOW, subject,
however, to the Mutual Nondisclosure Agreement, dated September 29 1998, between
COMPANY and Predictive Systems (the "NDA").
Due to the nature of the services contemplated by the SOW, COMPANY acknowledges
that no representation or warranty can be made by Predictive Systems with
respect to such services or the efficacy thereof. In particular, COMPANY
acknowledges that damage to COMPANY's systems or information could result from
the performance of such services, and that, following completion of such
services, there can be no assurance that COMPANY's network will be secure or
that unauthorized access thereof will not occur. WITHOUT LIMITING THE FOREGOING,
PREDICTIVE SYSTEMS MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS WITH RESPECT TO
ITS PERFORMANCE OF THE SERVICES HEREUNDER OR ANY DELIVERABLES CONTEMPLATED
HEREBY, INCLUDING WITHOUT LIMITATION ANY REPRESENTATION OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. In order to induce Predictive Systems to
perform its services, COMPANY is accepting the terms and conditions and making
the representations set forth herein, COMPANY irrevocably waives and releases,
and shall be stopped from asserting, any claims for damages or otherwise arising
out of or in connection with the services, except as expressly contemplated by
the NDA.
COMPANY represents and warrants that COMPANY information systems to be accessed
by Predictive Systems do not contain confidential or proprietary information or
other property belonging to any person other than COMPANY, or any classified
information. By accepting Predictive Systems services, COMPANY assumes any and
all liability for any disclosure of any third-party confidential or proprietary
information assets, or any classified information, arising out of or resulting
from such services, and agrees to indemnify, defend and hold harmless Predictive
Systems from and against any claim, loss or liability asserted by any person
arising out of or relating to any such disclosure, subject, however, to the NDA.
COMPANY expressly authorizes Predictive Systems to gain access, including
without limitation external network access and without regard to COMPANY
Information Security Policy, to COMPANY's computer network and information
systems which is reasonable and necessary, in Predictive Systems' sole judgment,
for the purposes described in the SOW, and COMPANY acknowledges that such access
shall be obtained by Predictive Systems with the express permission of COMPANY.
To COMPANY's knowledge, such access is not a violation of any federal, state or
local laws, rules or regulations, including without limitation the Computer
Crime Act of 1986, as amended, or the Economic Espionage Act of 1996, as
amended, and COMPANY agrees not to bring any charges or claims against
Predictive Systems based on such activities. Execution of this SOW by the
representative of COMPANY shall constitute a representation and warranty by
COMPANY that such representative is duly authorized to do so and has received
all requisite governmental consents and approvals which may be necessary or
appropriate to execute this SOW and to carry out the terms hereof, including
without limitation the preceding sentence.
Legal terms and conditions are accepted and approved by: Bear, Stearns & Co...
________________________________________________________________________________
Signature Title Date
- --------------------------------------------------------------------------------
Copyright (C) 1998, Predictive Systems, Inc. All rights reserved.
[****]/ Subject to non-disclosure agreement
/ Secure disposal required
DEFERRABLE / INTERNETWORK / CONFIDENTIAL
- --------------------------------------------------------------------------------
Predictive CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
PREDICTIVE SYSTEMS
- --------------------------------------------------------------------------------
Internetworking Operations
Staff Support Proposal
for Bear, Stearns & Co. Inc.
- --------------------------------------------------------------------------------
August 10, 1999
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
Revision history
================================================================================
Version Date Comments required Approvals required
================================================================================
1.0 8/10/1999
- --------------------------------------------------------------------------------
Predictive Systems approval:
- --------------------------------------------------------------------------------
Signed Name
- --------------------------------------------------------------------------------
Title Date
Internetworking Operations
Staff Support Proposal
1.0 August 10, 1999
Copyright (C) 1999, Predictive Systems, Inc. All rights reserved. Predictive
Systems, BusinessFirst, and the Predictive Systems logo are trademarks of
Predictive Systems, Inc.
No part of this document may be reproduced in any form or by any electronic or
mechanical means, including information storage and retrieval devices or
systems, without prior written permission from Predictive Systems, Inc. This
document or information it contains may not be used, reproduced, or disclosed
outside of Bear, Stearns & Co. Inc. without authorization in writing by
Predictive Systems, Inc.
C O N F I D E N T I A L--Use, reproduction, or disclosure is subject to the
restrictions in DFARS 252.227-7013 & 252.211-7015/FAR 52.227-14 & 52.227-19 for
commercial computer software or technical data provided to the U.S. government
with limited rights, as applicable.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Internetworking Operations Staff Support Proposal ii
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Table of Contents
- --------------------------------------------------------------------------------
Introduction 1
Non-disclosure 1
Deadline for response 1
Proposed statement of work 2
Project description 2
Reporting methods 2
Status reports 2
Status meetings 3
Scope and cost 3
Project duration and staffing 3
Project costs and billing 3
Contacts 5
Project authorization 6
Legal terms and conditions; limitation of liability 7
About Predictive Systems 8
Predictive Systems'services 8
Predictive Systems'practice areas 9
Internetwork Design and Engineering practice 10
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Internetworking Operations Staff Support Proposal iii
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Introduction
- --------------------------------------------------------------------------------
[****]
Predictive Systems has profiled the resources that are required to
design and implement the proposed system. In addition, [****]
Non-disclosure
- --------------------------------------------------------------------------------
All information contained in this proposal and quotation is
confidential and proprietary to Predictive Systems, constituting its
trade secrets and privileged, confidential property. It is furnished
to Bear, Stearns & Co. Inc. in confidence, with the understanding
that it will not, without written permission of Predictive Systems,
be used for other than evaluation purposes or be disclosed to any
third party. Duplication of this proposal and quotation is strictly
forbidden, and all copies shall be returned to Predictive Systems
upon our request.
Deadline for response
- --------------------------------------------------------------------------------
This proposal is valid for 30 days from the date of issuance, unless
extended in writing by Predictive Systems.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL 1
- --------------------------------------------------------------------------------
Internetworking Operations Staff Support Proposal
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Proposed statement of work
- --------------------------------------------------------------------------------
Project description
- --------------------------------------------------------------------------------
[****]
The Predictive Systems senior engineers will utilize their technical
skills and apply Predictive Systems' methodologies in meeting Bear
Stearns' objectives. Their specific duties will be as follows:
Senior engineer: The senior engineer will have a strong focus on
internetworking technologies. The senior consultant will be based
out of [****]
The senior engineer's tasks will include the following:
[****]
Reporting methods
Status reports
- --------------------------------------------------------------------------------
The Predictive Systems team will provide a weekly status report in
electronic format to the Bear Stearns Program Manager. The report
form will be brief, listing any items that were completed that week
and the open items for the next week. The purpose of the reports is
to provide weekly information on the status of the project and any
out-
Owner: [****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Internetworking Operations Staff Support Proposal 2
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
standing issues from the week. The reports will be available on
Monday morning.
Status meetings
- --------------------------------------------------------------------------------
There will be weekly status meetings with Bear Stearns on the
overall project. The meeting should be held at the same time and day
every week (the time and day need to be determined). The meeting
will be to review any work that was performed by the Predictive
Systems team and review the open items list of work that is
scheduled for the next week. This meeting will also provide a
platform for reviewing any new issues or additional project
requirements.
Scope and cost
Project duration and staffing
- --------------------------------------------------------------------------------
[****]
Project costs and billing
- --------------------------------------------------------------------------------
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Internetworking Operations Staff Support Proposal 3
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Internetworking Operations Staff Support Proposal 4
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Contacts
- --------------------------------------------------------------------------------
Direct all business and management communications regarding this
project to [****]. The business/management contact can be reached
at [****].
Direct all technical communications regarding this project to
[****]. The technical contact can be reached at [****].
Bear, Stearns & Co. Inc. will appoint a management and technical
contact who will be responsible for serving as a liaison for any
issues that may arise during the course of this project.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Internetworking Operations Staff Support Proposal 5
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Project authorization
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signed Name
- --------------------------------------------------------------------------------
Bear Stearns & Co. Inc. title Date
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Internetworking Operations Staff Support Proposal 6
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Legal terms and conditions; limitation of liability
- --------------------------------------------------------------------------------
Bear Stearns & Co. Inc. ("COMPANY") hereby accepts the services and the related
terms and conditions set forth in the attached Statement of Work (the "SOW") of
Predictive Systems, Inc. ("Predictive Systems"). COMPANY expressly acknowledges
that the performance of these services will require Predictive Systems to gain
access to COMPANY's confidential and proprietary network and information assets,
and authorizes this access for the purposes described in the SOW, subject,
however, to the Mutual Nondisclosure Agreement, dated _______ ___, 1999, between
COMPANY and Predictive Systems (the "NDA").
Due to the nature of the services contemplated by the SOW, COMPANY acknowledges
that no representation or warranty can be made by Predictive Systems with
respect to such services or the efficacy thereof. In particular, COMPANY
acknowledges that damage to COMPANY's systems or information could result from
the performance of such services, and that, following completion of such
services, there can be no assurance that COMPANY's network will be secure or
that unauthorized access thereof will not occur. WITHOUT LIMITING THE FOREGOING,
PREDICTIVE SYSTEMS MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS WITH RESPECT TO
ITS PERFORMANCE OF THE SERVICES HEREUNDER OR ANY DELIVERABLES CONTEMPLATED
HEREBY, INCLUDING WITHOUT LIMITATION ANY REPRESENTATION OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. In order to induce Predictive Systems to
perform its services, COMPANY is accepting the terms and conditions and making
the representations set forth herein, COMPANY irrevocably waives and releases,
and shall be stopped from asserting, any claims for damages or otherwise arising
out of or in connection with the services, except as expressly contemplated by
the NDA.
COMPANY represents and warrants that COMPANY information systems to be accessed
by Predictive Systems do not contain confidential or proprietary information or
other property belonging to any person other than COMPANY, or any classified
information. By accepting Predictive Systems services, COMPANY assumes any and
all liability for any disclosure of any third-party confidential or proprietary
information assets, or any classified information, arising out of or resulting
from such services, and agrees to indemnify, defend and hold harmless Predictive
Systems from and against any claim, loss or liability asserted by any person
arising out of or relating to any such disclosure, subject, however, to the NDA.
COMPANY expressly authorizes Predictive Systems to gain access, including
without limitation external network access and without regard to COMPANY
Information Security Policy, to COMPANY's computer network and information
systems which is reasonable and necessary, in Predictive Systems' sole judgment,
for the purposes described in the SOW, and COMPANY acknowledges that such access
shall be obtained by Predictive Systems with the express permission of COMPANY.
To COMPANY's knowledge, such access is not a violation of any federal, state or
local laws, rules or regulations, including without limitation the Computer
Crime Act of 1986, as amended, or the Economic Espionage Act of 1996, as
amended, and COMPANY agrees not to bring any charges or claims against
Predictive Systems based on such activities. Execution of this SOW by the
representative of COMPANY shall constitute a representation and warranty by
COMPANY that such representative is duly authorized to do so and has received
all requisite governmental consents and approvals which may be necessary or
appropriate to execute this SOW and to carry out the terms hereof, including
without limitation the preceding sentence.
Legal terms and conditions are accepted and approved by: Bear Stearns & Co. Inc.
- --------------------------------------------------------------------------------
Signature Title Date
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Internetworking Operations Staff Support Proposal 7
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
About Predictive Systems
- --------------------------------------------------------------------------------
Predictive Systems is a network consulting and integration firm that
specializes in the design, management, and security of
business-critical networks. Recognized in the industry for its
vendor-independent perspective, the firm's expertise lies in solving
multi-faceted, complex network problems. At Predictive Systems,
network technology serves two purposes: to make money and to save
money.
Predictive Systems' unique BusinessFirst(TM) methodology helps
Fortune-1000 clients define, package, and measure network services.
BusinessFirst is rooted in the concept that a company should run its
IT organization as a business. Throughout the BusinessFirst process,
Predictive Systems translates strategic business objectives into
sound, achievable technology solutions. This approach ensures that
the technology never obscures the business goals.
Predictive Systems' BusinessFirst methodology can clarify the
business requirements driving the project in specific, measurable
terms. Predictive Systems quantifies factors such as business risk,
total cost of ownership, and operational efficiency to build a
complete financial justification for a network project. By
instrumenting every system to measure and quantify the key factors
that govern success, Predictive Systems turns complexity into
clarity.
Predictive Systems serves its clients with a collaborative practice
structure that delivers both breadth and depth of experience to all
aspects of a project. Predictive Systems has the people and
processes to build networks that mean business.
Predictive Systems' services
- --------------------------------------------------------------------------------
Predictive Systems offers a unique combination of expertise in
network management, performance management, internetwork
engineering, information security, and software development.
Predictive Systems' engineers combine skill in network management
applications with real-world experience using state-of-the-art
internetwork technologies, including Asynchronous Transfer Mode
(ATM) and Asymmetric Digital Subscriber Line (ADSL), to address the
multi-faceted challenges of designing and managing mission-critical
net-
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
PREDICTIVE SYSTEMS CONFIDENTIAL
Internetworking Operations Staff Support Proposal 8
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
works. When technology "gaps" are discovered in a client's network,
or disparate systems need to communicate with one another,
Predictive Systems' software developers build custom applications to
solve these problems. These custom applications can turn a
collection of products into an integrated system.
Predictive Systems' practice areas
- --------------------------------------------------------------------------------
Predictive Systems' consultants are organized into areas of
specialization, or practice areas. Although many engineers are
cross-skilled in a variety of technologies, and many technologies
span multiple practice areas, each practice area represents an
aspect of network technology important enough to warrant
specialization. In addition, the Software Development and Technical
Publications departments span all practice areas. Resources from all
of these groups are available to define and implement the
technological solutions that best meet our clients' business needs.
[GRAPHIC OMITTED]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Internetworking Operations Staff Support Proposal 9
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
Internetwork Design and Engineering practice
- --------------------------------------------------------------------------------
Predictive Systems' Internetwork Design and Engineering
(internetworking) practice area is dedicated to helping each client
design and implement network solutions in support of their strategic
business initiatives. To this end, we have created a team of
seasoned professionals from the three major industry proving
grounds--telecommunications providers, network equipment vendors,
and Fortune-500 end users. Using their specialized technical skills,
real-world industry experience, and methodologies that are needed to
solve the problems associated with building and maintaining network
foundations, Predictive Systems' internetwork consultants develop
innovative network solutions that provide our clients with a
measurable competitive advantage.
Our Internetwork Design and Engineering staff has extensive
experience with a wide variety of technologies and vendors. For some
clients, our consultants are involved in both technology and vendor
selection. Other clients have already selected the technology,
vendor, or both. Regardless of the pre-existing condition,
Predictive Systems offers a completely objective, "trusted advisor"
approach to our clients. Our up-to-date knowledge of all of the
major technologies and vendors is a significant part of the value
Predictive Systems brings to a project.
The Internetwork Design and Engineering practice fills the
substantial gap in the marketplace between management consulting
firms and technical staff augmentation services. With core
competencies in the areas of Backbone Technology, LAN Switching, IP
Management and Design, ATM, Remote Access, our versatile team
contributes both technical depth and breadth to client engagements.
Predictive Systems' team has the business acumen to translate
business objectives into technical solutions, the technical skills
to build the vision, the project skills to deliver the engagement on
time and on budget, and the rigorous methodologies to ensure that
the resulting system is manageable for a controlled, known cost.
Predictive Systems' Internetwork Design and Engineering practice
offers the following services:
o Advanced Technology Planning and Migration
o Core Backbone and Campus Network Design and Implementation
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Internetworking Operations Staff Support Proposal 10
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
o Remote Access and VPN Solutions
o Network Audit Services ("Wellness" Studies)
o Y2K-Compliance Certification
o IP Management Solutions
o General Consulting Services
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
PREDICTIVE SYSTEMS CONFIDENTIAL
Internetworking Operations Staff Support Proposal 11
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
PREDICTIVE SYSTEMS
- --------------------------------------------------------------------------------
[****] for
Communications
Technology Group
for Bear, Stearns & Co. Inc.
- --------------------------------------------------------------------------------
May 16, 1999
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
Revision history
================================================================================
Version Date Comments required Approvals required
================================================================================
1.0 4/20/99
- --------------------------------------------------------------------------------
2.0 5/16/99
- --------------------------------------------------------------------------------
3.0 5/19/99
- --------------------------------------------------------------------------------
4.0 5/30/99
- --------------------------------------------------------------------------------
Predictive Systems approval:
- --------------------------------------------------------------------------------
Signed Name
- --------------------------------------------------------------------------------
Title Date
[****] for
Communications Technology Group
May 16, 1999
Copyright (C) 1999, Predictive Systems, Inc. All rights reserved. Predictive
Systems, BusinessFirst, and the Predictive Systems logo are trademarks of
Predictive Systems, Inc.
No part of this document may be reproduced in any form or by any electronic or
mechanical means, including information storage and retrieval devices or
systems, without prior written permission from Predictive Systems, Inc. This
document or information it contains may not be used, reproduced, or disclosed
outside of Bear, Stearns & Co. Inc. without authorization in writing by
Predictive Systems, Inc.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
PREDICTIVE SYSTEMS CONFIDENTIAL
[****] for Communications Technology Group ii
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
C O N F I D E N T I A L--Use, reproduction, or disclosure is subject to the
restrictions in DFARS 252.227-7013 & 252.211-7015/FAR 52.227-14 & 52.227-19 for
commercial computer software or technical data provided to the U.S. government
with limited rights, as applicable.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group iii
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Table of Contents
- --------------------------------------------------------------------------------
Introduction 1
Non-disclosure 1
Deadline for response 1
Proposed statement of work 2
Project Scope 2
[****] Development 3
Y2K event process life cycle 3
Y2K Response Applications and Development 6
Y2K Device Replacement / Upgrade Requirements 7
Restoration Planning 8
Deliverables 8
Y2K Crisis Management Team (CMT) 8
Deliverables 10
Coverage 10
Assumptions 10
General project assumptions 11
Specific project assumptions 11
Reporting methods 12
Status reports 12
Status meetings 12
Time estimates, resources and cost 12
Project duration and staffing 13
Project costs and billing 15
Contacts 16
Project authorization 17
Legal terms and conditions; limitation of liability 18
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group iv
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Introduction
- --------------------------------------------------------------------------------
[****]
Non-disclosure
- --------------------------------------------------------------------------------
All information contained in this proposal and quotation is
confidential and proprietary to Predictive Systems, constituting its
trade secrets and privileged, confidential property. It is furnished
to Bear, Stearns & Co. in confidence, with the understanding that it
will not, without written permission of Predictive Systems, be used
for other than evaluation purposes or be disclosed to any third
party. Duplication of this proposal and quotation is strictly
forbidden, and all copies shall be returned to Predictive Systems
upon our request.
Deadline for response
- --------------------------------------------------------------------------------
This proposal is valid for 45 days from the date of issuance, unless
extended in writing by Predictive Systems.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 1
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Proposed statement of work
- --------------------------------------------------------------------------------
Project Scope
- --------------------------------------------------------------------------------
[****]
The plan will cover the following locations and functional areas:
o Domestic sites
o Branch sites
o International
[****]
o Carrier
o Exchanges (Bear-supported components only)
The technology that will be supported in the plan is as follows:
o LAN
o WAN
o Voice
The following outlines the steps that will be taken in the
development of the [****]. There are three major areas of effort in
this process:
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 2
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
The following sections will detail the steps that will be taken in
the development of the contingency plan.
[****]
- --------------------------------------------------------------------------------
There are four major activities in the development of the
contingency plan. The first activity is to identify all network
components and possible Y2K events that will be covered under the
Y2K Contingency Plan. The second is the research, testing and
development of applications and tools that will be used to assist in
the elimination of problems or early identification of potential
problems. The third will be the identification and geographic
distribution of parts and devices per vendor utilized in today's
production network. The fourth is the restoration planning where the
process and procedures will be documented on how to recover from a
Y2K failure.
The following will detail the process in the development of the
Communications contingency plan.
Y2K Event Process Life Cycle
- --------------------------------------------------------------------------------
The goal in this section is to identify potential device failure
scenarios due to Y2K abnormalities. Each identified scenario is then
reviewed for the devices effected and business priority. [****]
Information and Identification of Network Components
The Communications [****] Plan will cover a definitive set of
devices and services. The first step in developing the plan is to
iden-
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 3
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
tify the network components and services that will be the
responsibilities of the Communication department [****] to
cover.
[****]
The use of existing inventories, diagrams and interviews of the
communication engineers will be combined into a single listing of
vendors and hardware device types. Along with identification of
device type, the number of each device type and the criticality
within the network will be critical to further [****]
The results of this activity will be utilized in the [****]
Matrix and the next step is to [****]
Scenario Development
[****] The identification of all possible events and the components
that will be involved are documented along with assignment of
business priorities.
> Possible Events
[****] An "event" is the description of a failure to a network
device. In addition to identifying the events there will be
prioritization and severity level assigned to each event. that will
be classified as "High" priority "Down". [****]
> Device Types Effected
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 4
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
The combination of the event scenarios and the network device types
will provide [****] networks effected by Y2K outages. The next step
is to identify the effects of these events on Bear Stearns business.
> Communication Business Network Review
The goal of the communication business network review is to identify
the entire business system that supports given business function and
the dependencies on the Communications services. Interviewing the
Communications Business Engineering staff will collect the data.
[****]
This process will provide the relationship between the Business Unit
functions and the specific Communication network device supporting
that function.
The following is a sample of the data fields that will be collected
and analyzed:
o Business unit contact
o Business unit technical engineer
o Business function
o Application
o Server type, name, IP, location
o Functional priority
o End-to-end communication topology per BU location
o Top 5% producers per BU
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 5
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
> Y2K Event Cycle Documentation and Matrix
[****]
Y2K Response Applications and Development
- --------------------------------------------------------------------------------
[****] The first step will be to research the market place for
programs that will assist in the identification of problems such as
audit, calendar and timing systems that will provide flexibility to
global changes in devices that did not respond properly to the "end
of year" date change. [****] Additional tools will be evaluated as
necessary.
Some of the activities would be;
1. Identify applications in the marketplace that will assist in
the restoration or management of a Y2K problem.
2. Test and evaluate the applications to determine which of the
event scenarios would benefit, either in problem
identification and isolation or in problem restoration.
3. [****] (An example is automation of upgrades for multiple
devices simultaneously or the monitoring of specific date
functions in critical devices.)
4. Document process and procedures in using the application or
management systems.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 6
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
The results of this process is to provide automated tools in the
identification and restoration of problems due to Y2K.
Resource and Device Reserves Planning
- --------------------------------------------------------------------------------
The section is the planning for the number of resources, skillet
requirements and the physical locations of the on-site engineers to
carry out restoration plans will be identified for the Y2K coverage
time period. The planning involves a review of the [****]. This
analysis will provide the data needed to determine the number of
resource and device spares.
Resource Allocation Planning
The allocation planning will detail the number of resources,
skillets and geographic location that will be required for
restoration of multiple outages simultaneously. There will be
requirements for both Bear Stearns engineering resources and
specialist from the Vendors with devices that are determined
critical to the network.
The plan will also outline the critical locations that require
on-site engineers for a specific device type and the ability to
leverage other engineers to cover multiple sites. The plan will
provide a list that will identify the number and skillset required
to resolve any of the problems that are identified [****]
[****]
Equipment Reserves and Distribution
There are two avenues that must be reviewed with the identification
of devices in reserve. The first is to determine the number of
spares that should be on-site at each major location. The second is
to determine an alternative network device to be used in place of
the current device type when there is no remediation available.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 7
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****] will be used to determine if the problem can be
best resolved by spares or an alternative network solution. The
alternatives will be reviewed with Bear Stearns Engineering and
tested.
This section will also include a review of the outside service
providers and how to move all networking from one provider to
another in a timely fashion.
Restoration Planning
- --------------------------------------------------------------------------------
The documentation of restoration process for all the scenarios
[****]
Deliverables
- --------------------------------------------------------------------------------
o [****]
Resource Allocation
Hardware Spare Requirements
[****]
Y2K Crisis Management Team (CMT)
- --------------------------------------------------------------------------------
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 8
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 9
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
Deliverables
- --------------------------------------------------------------------------------
[****]
Coverage
- --------------------------------------------------------------------------------
As the result of the contingency planning, a reasonable coverage
plan based on the levels of risk determined will be presented to
Bear Stearns. [****] The final cost associated with this
will also be provided for review.
[****]
Assumptions
- --------------------------------------------------------------------------------
In developing this proposal, there are many assumptions Predictive
Systems has made that can materially affect the outcome and cost of
the project. Should any of these assumptions prove to be incorrect,
exaggerated, or underestimated, the scope and cost of the project
may change significantly.
In the event of any such material change in assumptions,
requirements or specifications, Predictive will request a Change
Order Authorization from Bear, Stearns & Co., which must be signed
by Bear, Stearns & Co. prior to the change being incorporated into
the
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 10
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
project plan. The Change Order could be an addition or reduction of
work, based on the circumstances.
General project assumptions
- --------------------------------------------------------------------------------
1. Bear Stearns' point of contact will provide project direction
for the Predictive resources for the duration of the project.
2. The fixed price proposal provided assumes a 45-hour workweek.
If review of the monthly time indicates excessive hours per
week, Predictive will bring that to Bear Stearns management's
attention in the form of a Change Order request.
3. Additional project requirements will be accommodated to the
best of the team's ability given the current project
requirements and time frames. Any impact to the current
project time frames will be detailed in writing to the Bear
project contact as they are identified by the Predictive team.
4. Bear, Stearns & Co. will also provide a work area with a phone
and a network connection for each Predictive consultant.
Specific project assumptions
- --------------------------------------------------------------------------------
1. All outages are considered Y2K-related during a specific
timeframe until proven otherwise.
[****]
5. Bear Stearns will provide the list of Business Unit managers
responsible for participating in the contingency planning
process.
6. Senior management participation is critical, and will be
available for review and prioritization of Business Units.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 11
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
Reporting methods
- --------------------------------------------------------------------------------
Status reports
- --------------------------------------------------------------------------------
The Predictive Systems team will provide a weekly status report in
electronic format to the Bear, Stearns & Co. Program Manager. The
report form will be brief, listing any items that were completed
that week and the open items for the next week. The purpose of the
reports is to provide weekly information on the status of the
project and any outstanding issues from the week. The reports will
be available on Monday morning.
Status meetings
- --------------------------------------------------------------------------------
Predictive Systems will hold a weekly status meetings with Bear,
Stearns & Co. on the overall project. The meeting should be held at
the same time and day every week (the time and day need to be
determined). The meeting will be to review any work that was
performed by the Predictive Systems' team and review the open items
list of work that is scheduled for the next week. This meeting will
also provide a platform for reviewing any new issues or additional
project requirements.
Time estimates, resources and cost
- --------------------------------------------------------------------------------
Outlined below is the staff and duration for the project.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 12
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
Project duration and staffing
- --------------------------------------------------------------------------------
Predictive Systems' project teams will be comprised as follows:
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 13
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 14
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
Project costs and billing
- --------------------------------------------------------------------------------
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 15
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Contacts
- --------------------------------------------------------------------------------
Direct all business and management communications regarding this
project [****]. The business/management
contact can be reached at [****].
Direct all technical communications regarding this project [****].
The technical contact can be reached at [****].
Bear, Stearns & Co. will appoint a management and technical contact
that will be responsible for serving as a liaison for any issues
that may arise during the course of this project.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 16
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Project authorization
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signed Name
- --------------------------------------------------------------------------------
Bear, Stearns & Co. Inc. title Date
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 17
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Legal terms and conditions; limitation of liability
- --------------------------------------------------------------------------------
Bear, Stearns & Co. Inc. ("COMPANY") hereby accepts the services and
the related terms and conditions set forth in the attached Statement
of Work (the "SOW") of Predictive Systems, Inc. ("Predictive
Systems"). COMPANY expressly acknowledges that the performance of
these services will require Predictive Systems to gain access to
COMPANY's confidential and proprietary network and information
assets, and authorizes this access for the purposes described in the
SOW, subject, however, to the Mutual Nondisclosure Agreement, dated
_______ ___, 1998, between COMPANY and Predictive Systems (the
"NDA").
Due to the nature of the services contemplated by the SOW, COMPANY
acknowledges that no representation or warranty can be made by
Predictive Systems with respect to such services or the efficacy
thereof. In particular, COMPANY acknowledges that damage to
COMPANY's systems or information could result from the performance
of such services, and that, following completion of such services,
there can be no assurance that COMPANY's network will be secure or
that unauthorized access thereof will not occur. WITHOUT LIMITING
THE FOREGOING, PREDICTIVE SYSTEMS MAKES NO EXPRESS OR IMPLIED
REPRESENTATIONS WITH RESPECT TO ITS PERFORMANCE OF THE SERVICES
HEREUNDER OR ANY DELIVERABLES CONTEMPLATED HEREBY, INCLUDING WITHOUT
LIMITATION ANY REPRESENTATION OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. In order to induce Predictive Systems to perform
its services, COMPANY is accepting the terms and conditions and
making the representations set forth herein, COMPANY irrevocably
waives and releases, and shall be stopped from asserting, any claims
for damages or otherwise arising out of or in connection with the
services, except as expressly contemplated by the NDA.
COMPANY represents and warrants that COMPANY information systems to
be accessed by Predictive Systems do not contain confidential or
proprietary information or other property belonging to any person
other than COMPANY, or any classified information. By accepting
Predictive Systems services, COMPANY assumes any and all liability
for any disclosure of any third-party confidential or proprietary
information assets, or any classified information, arising out of or
resulting from such services, and agrees to indemnify, defend and
hold harmless Predictive Systems from and against any claim, loss or
liability asserted by any person arising out of or relating to any
such disclosure, subject, however, to the NDA.
COMPANY expressly authorizes Predictive Systems to gain access,
including without limitation external network access and without
regard to COMPANY Information Security Policy, to COMPANY's computer
network and information systems which is reasonable and necessary,
in Predictive Systems' sole judgment, for the purposes described in
the SOW, and COMPANY acknowledges that such access shall be obtained
by Predictive Systems with the express permission of COMPANY. To
COMPANY's knowledge, such access is not a violation of any federal,
state or local laws, rules or regulations, including without
limitation the Computer Crime Act of 1986, as amended, or the
Economic Espionage Act of 1996, as amended, and COMPANY agrees not
to bring any charges or claims against Predictive Systems based on
such activities. Execution of this SOW by the representative of
COMPANY shall constitute a representation and warranty by COMPANY
that such representative is duly authorized to do so and has
received all requisite governmental consents and approvals which may
be necessary or appropriate to execute this SOW and to carry out the
terms hereof, including without limitation the preceding sentence.
Legal terms and conditions are accepted and approved by Bear,
Stearns & Co. Inc.
- --------------------------------------------------------------------------------
Signature Title Date
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] for Communications Technology Group 18
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
PREDICTIVE SYSTEMS
- --------------------------------------------------------------------------------
Clearnet Router Upgrade
and Enhancements Project
for Bear, Stearns & Co. Inc.
- --------------------------------------------------------------------------------
September 27, 1999
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
Revision history
================================================================================
Version Date Comments required Approvals required
================================================================================
1.0 9/27/1999
- --------------------------------------------------------------------------------
Predictive Systems approval:
- --------------------------------------------------------------------------------
Signed Name
- --------------------------------------------------------------------------------
Title Date
Clearnet Router Upgrade and
Enhancements Project
1.0 September 27, 1999
Copyright (C) 1999, Predictive Systems, Inc. All rights reserved. Predictive
Systems, BusinessFirst, and the Predictive Systems logo are trademarks of
Predictive Systems, Inc.
No part of this document may be reproduced in any form or by any electronic or
mechanical means, including information storage and retrieval devices or
systems, without prior written permission from Predictive Systems, Inc. This
document or information it contains may not be used, reproduced, or disclosed
outside of Bear, Stearns & Co. Inc. without authorization in writing by
Predictive Systems, Inc.
C O N F I D E N T I A L--Use, reproduction, or disclosure is subject to the
restrictions in DFARS 252.227-7013 & 252.211-7015/FAR 52.227-14 & 52.227-19 for
commercial computer software or technical data provided to the U.S. government
with limited rights, as applicable.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project ii
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Table of Contents
- --------------------------------------------------------------------------------
Introduction 1
Non-disclosure 1
Deadline for response 2
Proposed statement of work 3
Project description 3
Predictive Systems'approach 3
General router upgrade process 4
Clearnet router upgrade: specific activities 4
Project team 5
Assumptions 6
General project assumptions 6
Reporting methods 7
Status reports 7
Status meetings 7
Scope and cost 8
Project duration and staffing 8
Project costs and billing 8
Contacts 9
Project authorization 10
Legal terms and conditions; limitation of liability 11
About Predictive Systems 12
Predictive Systems'services 12
Predictive Systems'practice areas 13
Internetwork Design and Engineering practice 14
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project iii
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Introduction
- --------------------------------------------------------------------------------
[****] We look forward to continuing our work with Bear Stearns as a
strategic partner. Our expertise in Internetwork technology, coupled
with rigorous project management skills and intimate knowledge of
the Bear Stearns network, uniquely qualifies us for the project.
[****]
This proposal meets the requirements set forth in meetings and
conversations conducted by Bear Stearns and Predictive Systems
between September 2, 1999, and September 10, 1999.
Predictive Systems has profiled the resources that are required to
provide the proposed assistance. In addition, we have provided some
broad cost estimates for the delivery of these service products.
Non-disclosure
- --------------------------------------------------------------------------------
All information contained in this proposal and quotation is
confidential and proprietary to Predictive Systems, constituting its
trade secrets and privileged, confidential property. It is furnished
to Bear Stearns in confidence, with the understanding that it will
not, without written permission of Predictive Systems, be used for
other than evaluation purposes or be disclosed to any third party.
Duplication of this proposal and quotation is strictly forbidden,
and all copies shall be returned to Predictive Systems upon our
request.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 1
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
Deadline for response
- --------------------------------------------------------------------------------
This proposal is valid for 30 days from the date of issuance, unless
extended in writing by Predictive Systems.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 2
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Proposed statement of work
- --------------------------------------------------------------------------------
Project description
- --------------------------------------------------------------------------------
[****]
Predictive Systems' approach
- --------------------------------------------------------------------------------
[****]
The project team will be composed of senior engineers familiar with
Bear Stearns project process. A senior Internetworking engineer will
provide technical leadership for the project. Below is a general
description of the router upgrade project activities, followed by a
de-
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 3
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
tailed description of the specific changes to be made by the
engineering team.
General router upgrade process
- --------------------------------------------------------------------------------
In the course of the project, the Predictive Systems team will
upgrade all routers to the code version that has been fully tested
by the engineering group. All configuration changes and new hardware
replacements will also be installed as per engineering
specifications. The upgrade project will involve a specific process,
which includes, but is not limited to, the following:
[****]
o Determine the number of configuration versions in existence.
o For each configuration, develop cutover plan and fallback
plan.
o Procure all required components for cutover (hardware,
software, and cabling).
o Obtain and schedule cutover window from Bear Stearns.
Coordinate the cutover with other implementation activities.
o Stage the cutover.
o Perform the cutover.
o Test the new configuration.
o Document the new configuration.
o Assist Bear Stearns operations in monitoring cutover
environment to ensure it is stable.
The Predictive Systems team will conform to and fully adopt Bear
Stearns' implementation methodology. All implementation work will
flow through the Bear Stearns project system.
Clearnet router upgrade: specific activities
- --------------------------------------------------------------------------------
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 4
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
Other router configuration changes that will be included in the
upgrade are:
o Changing router name to conform to new standards.
o Upgrading memory.
o Adding user ID password to conform to new standards.
o Verifying router is configured and working with [****].
Project team
- --------------------------------------------------------------------------------
[****] The following is a description of each resource's project
role and tasks:
o Technical lead engineer: A technical lead engineer will
function as project manager. The technical lead engineer will
be responsi-
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 5
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
ble for scheduling, assisting with configurations, equipment
procurement, maintaining project plans, technical leadership,
and preparing weekly status reports.
o Internetworking engineers: Internetworking engineers will be
used for all phases of this project. The engineers will
perform all tasks required for the upgrade and configuration
changes in the project. The engineering resources will follow
existing Bear Stearns project processes in performing these
tasks
Assumptions
- --------------------------------------------------------------------------------
In developing this proposal, Predictive Systems has made many
assumptions that could materially affect the outcome and cost of the
project. Should any of these assumptions prove to be incorrect,
exaggerated, or underestimated, the scope and cost of the project
may change significantly.
In the event of any such material change in assumptions,
requirements, or specifications, Predictive Systems will request
from Bear Stearns a change order authorization, which must be signed
by Bear Stearns prior to the change being incorporated into the
project plan. Based on circumstances, the change order could be an
addition or reduction of work.
General project assumptions
- --------------------------------------------------------------------------------
o Device count: [****] This proposal is based on this
number of routers. If there are any major changes to the
number of devices to be upgraded or the work to be performed
on each router, a change order will be used to recalculate
project time and expense.
o Travel: This proposal includes no travel time or expenses for
travel outside of the New York metropolitan area. Should such
travel be required, actual travel and out-of-pocket costs will
be charged back to Bear Stearns.
o Single point of contact: Both Predictive Systems and Bear
Stearns will assign a single point of contact for the
implementation tasks.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 6
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
o Dedication to task: The Predictive Systems team will be
dedicated to the [****], and will not be involved in [****].
If members of Predictive Systems' project team are required
for other tasks during the engagement, a separate purchase
vehicle must be established.
o Verification of router code: Prior to the start of this
project, there will be version testing for functionality and
interoperability, including for router models used in the EMS
systems.
o Configuration standards: Bear Stearns will provide written
configuration standards, such as the Clearnet naming
convention, user ID passwords, and any [****].
o Facility: Bear Stearns will provide adequate facilities,
equipment, and communications lines for the implementation
staging. Bear Stearns will also provide a work area with a
phone and a network connection for each Predictive Systems
engineer.
o Working hours: Due to the nature of this project, the
Predictive Systems engineers will be required to perform a
significant amount of off-hours work. This has been built into
the project plan and is reflected in the overall project cost.
Reporting methods
Status reports
- --------------------------------------------------------------------------------
The Predictive Systems team will provide a weekly status report in
electronic format to the Bear Stearns program manager. The report
form will be brief, listing any items that were completed that week
and the open items for the next week. The purpose of the reports is
to provide weekly information on the status of the project and any
outstanding issues from the week. The reports will be available on
Monday morning.
Status meetings
- --------------------------------------------------------------------------------
There will be weekly status meetings with Bear Stearns on the
overall project. The meeting should be held at the same time and day
every
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 7
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
week (the time and day need to be determined). The meeting will be
to review any work that was performed by the Predictive Systems team
and review the open items list of work that is scheduled for the
next week. This meeting will also provide a platform for reviewing
any new issues or additional project requirements.
Scope and cost
Project duration and staffing
- --------------------------------------------------------------------------------
[****]
Project costs and billing
- --------------------------------------------------------------------------------
[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 8
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Contacts
- --------------------------------------------------------------------------------
Direct all business and management communications regarding this
project to [****]. The business/management contact can be reached
at [****].
Direct all technical communications regarding this project to
[****]. The technical contact can be reached at [****].
Bear Stearns will appoint a management and technical contact that
will be responsible for serving as a liaison for any issues that may
arise during the course of this project.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 9
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Project authorization
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signed Name
- --------------------------------------------------------------------------------
Bear, Stearns & Co. Inc. title Date
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 10
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Legal terms and conditions; limitation of liability
- --------------------------------------------------------------------------------
Bear, Stearns & Co. Inc. ("COMPANY") hereby accepts the services and the related
terms and conditions set forth in the attached Statement of Work (the "SOW") of
Predictive Systems, Inc. ("Predictive Systems"). COMPANY expressly acknowledges
that the performance of these services will require Predictive Systems to gain
access to COMPANY's confidential and proprietary network and information assets,
and authorizes this access for the purposes described in the SOW, subject,
however, to the Mutual Nondisclosure Agreement, dated _______ ___, 1999, between
COMPANY and Predictive Systems (the "NDA").
Due to the nature of the services contemplated by the SOW, COMPANY acknowledges
that no representation or warranty can be made by Predictive Systems with
respect to such services or the efficacy thereof. In particular, COMPANY
acknowledges that damage to COMPANY's systems or information could result from
the performance of such services, and that, following completion of such
services, there can be no assurance that COMPANY's network will be secure or
that unauthorized access thereof will not occur. WITHOUT LIMITING THE FOREGOING,
PREDICTIVE SYSTEMS MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS WITH RESPECT TO
ITS PERFORMANCE OF THE SERVICES HEREUNDER OR ANY DELIVERABLES CONTEMPLATED
HEREBY, INCLUDING WITHOUT LIMITATION ANY REPRESENTATION OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. In order to induce Predictive Systems to
perform its services, COMPANY is accepting the terms and conditions and making
the representations set forth herein, COMPANY irrevocably waives and releases,
and shall be stopped from asserting, any claims for damages or otherwise arising
out of or in connection with the services, except as expressly contemplated by
the NDA.
COMPANY represents and warrants that COMPANY information systems to be accessed
by Predictive Systems do not contain confidential or proprietary information or
other property belonging to any person other than COMPANY, or any classified
information. By accepting Predictive Systems services, COMPANY assumes any and
all liability for any disclosure of any third-party confidential or proprietary
information assets, or any classified information, arising out of or resulting
from such services, and agrees to indemnify, defend and hold harmless Predictive
Systems from and against any claim, loss or liability asserted by any person
arising out of or relating to any such disclosure, subject, however, to the NDA.
COMPANY expressly authorizes Predictive Systems to gain access, including
without limitation external network access and without regard to COMPANY
Information Security Policy, to COMPANY's computer network and information
systems which is reasonable and necessary, in Predictive Systems' sole judgment,
for the purposes described in the SOW, and COMPANY acknowledges that such access
shall be obtained by Predictive Systems with the express permission of COMPANY.
To COMPANY's knowledge, such access is not a violation of any federal, state or
local laws, rules or regulations, including without limitation the Computer
Crime Act of 1986, as amended, or the Economic Espionage Act of 1996, as
amended, and COMPANY agrees not to bring any charges or claims against
Predictive Systems based on such activities. Execution of this SOW by the
representative of COMPANY shall constitute a representation and warranty by
COMPANY that such representative is duly authorized to do so and has received
all requisite governmental consents and approvals which may be necessary or
appropriate to execute this SOW and to carry out the terms hereof, including
without limitation the preceding sentence.
Legal terms and conditions are accepted and approved by: Bear, Stearns & Co.
Inc.
- --------------------------------------------------------------------------------
Signature Title Date
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 11
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
About Predictive Systems
- --------------------------------------------------------------------------------
Predictive Systems is a network consulting and integration firm that
specializes in the design, management, and security of
business-critical networks. Recognized in the industry for its
vendor-independent perspective, the firm's expertise lies in solving
multi-faceted, complex network problems. At Predictive Systems,
network technology serves two purposes: to make money and to save
money.
Predictive Systems' unique BusinessFirst(TM) methodology helps
Fortune-1000 clients define, package, and measure network services.
BusinessFirst is rooted in the concept that a company should run its
IT organization as a business. Throughout the BusinessFirst process,
Predictive Systems translates strategic business objectives into
sound, achievable technology solutions. This approach ensures that
the technology never obscures the business goals.
Predictive Systems' BusinessFirst methodology can clarify the
business requirements driving the project in specific, measurable
terms. Predictive Systems quantifies factors such as business risk,
total cost of ownership, and operational efficiency to build a
complete financial justification for a network project. By
instrumenting every system to measure and quantify the key factors
that govern success, Predictive Systems turns complexity into
clarity.
Predictive Systems serves its clients with a collaborative practice
structure that delivers both breadth and depth of experience to all
aspects of a project. Predictive Systems has the people and
processes to build networks that mean business.
Predictive Systems' services
- --------------------------------------------------------------------------------
Predictive Systems offers a unique combination of expertise in
network management, performance management, internetwork
engineering, information security, and software development.
Predictive Systems' engineers combine skill in network management
applications with real-world experience using state-of-the-art
internetwork technologies, including Asynchronous Transfer Mode
(ATM) and Asymmetric Digital Subscriber Line (ADSL), to address the
multi-faceted challenges of designing and managing mission-critical
net-
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 12
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
works. When technology "gaps" are discovered in a client's network,
or disparate systems need to communicate with one another,
Predictive Systems' software developers build custom applications to
solve these problems. These custom applications can turn a
collection of products into an integrated system.
Predictive Systems' practice areas
- --------------------------------------------------------------------------------
Predictive Systems' consultants are organized into areas of
specialization, or practice areas. Although many engineers are
cross-skilled in a variety of technologies, and many technologies
span multiple practice areas, each practice area represents an
aspect of network technology important enough to warrant
specialization. In addition, the Software Development and Technical
Publications departments span all practice areas. Resources from all
of these groups are available to define and implement the
technological solutions that best meet our clients' business needs.
[GRAPHIC OMITTED]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 13
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
Internetwook Design and Engineering practice
- --------------------------------------------------------------------------------
Predictive Systems' Internetwork Design and Engineering
(internetworking) practice area is dedicated to helping each client
design and implement network solutions in support of their strategic
business initiatives. To this end, we have created a team of
seasoned professionals from the three major industry proving
grounds--telecommunications providers, network equipment vendors,
and Fortune-500 end users. Using their specialized technical skills,
real-world industry experience, and methodologies that are needed to
solve the problems associated with building and maintaining network
foundations, Predictive Systems' internetwork consultants develop
innovative network solutions that provide our clients with a
measurable competitive advantage.
Our Internetwork Design and Engineering staff has extensive
experience with a wide variety of technologies and vendors. For some
clients, our consultants are involved in both technology and vendor
selection. Other clients have already selected the technology,
vendor, or both. Regardless of the pre-existing condition,
Predictive Systems offers a completely objective, "trusted advisor"
approach to our clients. Our up-to-date knowledge of all of the
major technologies and vendors is a significant part of the value
Predictive Systems brings to a project.
The Internetwork Design and Engineering practice fills the
substantial gap in the marketplace between management consulting
firms and technical staff augmentation services. With core
competencies in the areas of Backbone Technology, LAN Switching, IP
Management and Design, ATM, Remote Access, our versatile team
contributes both technical depth and breadth to client engagements.
Predictive Systems' team has the business acumen to translate
business objectives into technical solutions, the technical skills
to build the vision, the project skills to deliver the engagement on
time and on budget, and the rigorous methodologies to ensure that
the resulting system is manageable for a controlled, known cost.
Predictive Systems' Internetwork Design and Engineering practice
offers the following services:
o Advanced Technology Planning and Migration
o Core Backbone and Campus Network Design and Implementation
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 14
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
o Remote Access and VPN Solutions
o Network Audit Services ("Wellness" Studies)
o Y2K-Compliance Certification
o IP Management Solutions
o General Consulting Services
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
[****] Router Upgrade and Enhancements Project 15
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
PREDICTIVE SYSTEMS
- --------------------------------------------------------------------------------
Engineering Resources for
Strategic LAN Engineering
Group
for Bear, Stearns & Co. Inc.
- --------------------------------------------------------------------------------
April 19, 1999
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
Revision history
================================================================================
Version Date Comments required Approvals required
================================================================================
1.0 4/1/99 [****]
- --------------------------------------------------------------------------------
1.1 4/5/99 [****]
- --------------------------------------------------------------------------------
2.0 4/9/99 [****]
- --------------------------------------------------------------------------------
2.1 4/19/99 [****]
- --------------------------------------------------------------------------------
Predictive Systems approval:
- --------------------------------------------------------------------------------
Signed Name
- --------------------------------------------------------------------------------
Title Date
Engineering Resources for
Strategic LAN Engineering Group
April 19, 1999
Copyright (C) 1999, Predictive Systems, Inc. All rights reserved. Predictive
Systems, BusinessFirst, and the Predictive Systems logo are trademarks of
Predictive Systems, Inc.
No part of this document may be reproduced in any form or by any electronic or
mechanical means, including information storage and retrieval devices or
systems, without prior written permission from Predictive Systems, Inc. This
document or information it contains may not be used, reproduced, or disclosed
outside of Bear, Stearns & Co. Inc. without authorization in writing by
Predictive Systems, Inc.
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group ii
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
C O N F I D E N T I A L--Use, reproduction, or disclosure is subject to the
restrictions in DFARS 252.227-7013 & 252.211-7015/FAR 52.227-14 & 52.227-19 for
commercial computer software or technical data provided to the U.S. government
with limited rights, as applicable.
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group iii
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Table of Contents
- --------------------------------------------------------------------------------
Introduction 1
Non-disclosure 1
Deadline for response 1
Proposed statement of work 2
Project description 2
Fixed Income Switch Replacement Project 2
Remote Access 3
Reporting methods 4
Status reports 4
Status meetings 5
Scope and cost 5
Project duration and staffing 5
Assumptions 5
General project assumptions 6
Project costs and billing 6
Contacts 8
Project authorization 9
Legal terms and conditions; limitation of liability 10
About Predictive Systems 11
Predictive Systems'services 11
Predictive Systems'practice areas 12
Internetworking Design and Engineering practice 13
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group iv
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Introduction
- --------------------------------------------------------------------------------
[****]
Non-disclosure
- --------------------------------------------------------------------------------
All information contained in this proposal and quotation is
confidential and proprietary to Predictive Systems, constituting its
trade secrets and privileged, confidential property. It is furnished
to Bear, Stearns & Co. in confidence, with the understanding that it
will not, without written permission of Predictive Systems, be used
for other than evaluation purposes or be disclosed to any third
party. Duplication of this proposal and quotation is strictly
forbidden, and all copies shall be returned to Predictive Systems
upon our request.
Deadline for response
- --------------------------------------------------------------------------------
This proposal is valid for 45 days from the date of issuance, unless
extended in writing by Predictive Systems.
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 1
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Proposed statement of work
- --------------------------------------------------------------------------------
Project description
- --------------------------------------------------------------------------------
[****]
Fixed Income Switch Replacement Project
- --------------------------------------------------------------------------------
[****]
The following plan has been provided.
Test Plan Development:
1. Coordination with EMS, Implementation and Operations
2. Proof of concept testing at vendor site
3. Equipment Setup and Staging
4. Pilot Testing
5. Recommendations documentation
Vendor One & Two:
1. Equipment Setup and Staging
2. Performance Testing
3. Interoperability Testing
4. Network Management Testing
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 2
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
5. Document Test results
Remote Access
- --------------------------------------------------------------------------------
[****]
The following plan has been provided.
[****] Testing
1. Equipment Setup and Staging
2. Develop Test Plan
3. Performance Testing
4. Interoperability Testing
5. Network Management Testing
6. Document Test results
7. Recommendations documentation
[****] Testing
1. Vendor Product Analysis
2. Equipment Setup and Staging
3. Develop Test Plan
4. Performance Testing
5. Interoperability Testing
6. Network Management Testing
7. Document Test results
8. Recommendations documentation
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 3
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****] Evaluation
1. Vendor Product Analysis
2. Equipment Setup and Staging
3. Develop Test Plan
4. Performance Testing
5. Interoperability Testing
6. Network Management Testing
7. Document Test results
8. Recommendations documentation
[****] Testing
1. Equipment Setup and Staging
2. Develop Test Plan
3. Performance Testing
4. Interoperability Testing
5. Network Management Testing
6. Document Test results
7. Recommendations documentation
Reporting methods
- --------------------------------------------------------------------------------
Status reports
- --------------------------------------------------------------------------------
The Predictive Systems team will provide a weekly status report in
electronic format to the Bear, Stearns & Co. Program Manager. The
report form will be brief; listing any items that were completed
that week and the open items for the next week. The purpose of the
reports is to provide weekly information on the status of the
project and any outstanding issues from the week. The reports will
be available on Monday morning.
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 4
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
Status meetings
- --------------------------------------------------------------------------------
There will be a weekly status meetings with Bear, Stearns & Co. on
the overall project. The meeting should be held at the same time and
day every week (the time and day need to be determined). The meeting
will be to review any work that was performed by the Predictive
Systems' team and review the open items list of work that is
scheduled for the next week. This meeting will also provide a
platform for reviewing any new issues or additional project
requirements.
Scope and cost
- --------------------------------------------------------------------------------
Outlined below is the staff and duration for the project.
Project duration and staffing
- --------------------------------------------------------------------------------
[****]
Assumptions
- --------------------------------------------------------------------------------
In developing this proposal, there are many assumptions Predictive
Systems has made that can materially affect the outcome and cost of
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 5
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
the project. Should any of these assumptions prove to be incorrect,
exaggerated, or underestimated, the scope and cost of the project
may change significantly.
In the event of any such material change in assumptions,
requirements or specifications, Predictive will request a Change
Order Authorization from Bear, Stearns & Co. which must be signed by
Bear, Stearns & Co. prior to the change being incorporated into the
project plan. The Change Order could be an addition or reduction of
work, based on the circumstances.
General project assumptions
- --------------------------------------------------------------------------------
1. Bear Stearns point of contact will provide project direction
for the Predictive resources for the duration of the project.
2. The Fixed price proposal provided assumes a 40-hour work week.
If review of the monthly time indicates excessive hours per
week Predictive will bring that to Bear Stearns management's
attention in the form of a Change Order request.
3. Additional project requirements will be accommodated to the
best of the team's ability given the current project
requirements and time frames. Any impact to the current
project time frames will be detailed in writing to the Bear
project contact as they are identified by the Predictive team.
4. Bear, Stearns & Co. will also provide a work area with a phone
and a network connection for each Predictive consultant.
Project costs and billing
- --------------------------------------------------------------------------------
[****]
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 6
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 7
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Contacts
- --------------------------------------------------------------------------------
Direct all business and management communications regarding this
project [****] of Predictive Systems. The business/management
contact can be reached at [****].
Direct all technical communications regarding this project to
[****]. The technical contact can be reached at [****].
[****] will appoint a management and technical contact that will be
responsible for serving as a liaison for any issues that may arise
during the course of this project.
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 8
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Project authorization
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signed Name
- --------------------------------------------------------------------------------
Bear, Stearns & Co. Inc. title Date
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 9
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Legal terms and conditions; limitation of liability
- --------------------------------------------------------------------------------
Bear, Stearns & Co. Inc. ("COMPANY") hereby accepts the services and the related
terms and conditions set forth in the attached Statement of Work (the "SOW") of
Predictive Systems, Inc. ("Predictive Systems"). COMPANY expressly acknowledges
that the performance of these services will require Predictive Systems to gain
access to COMPANY's confidential and proprietary network and information assets,
and authorizes this access for the purposes described in the SOW, subject,
however, to the Mutual Nondisclosure Agreement, dated _______ ___, 1998, between
COMPANY and Predictive Systems (the "NDA").
Due to the nature of the services contemplated by the SOW, COMPANY acknowledges
that no representation or warranty can be made by Predictive Systems with
respect to such services or the efficacy thereof. In particular, COMPANY
acknowledges that damage to COMPANY's systems or information could result from
the performance of such services, and that, following completion of such
services, there can be no assurance that COMPANY's network will be secure or
that unauthorized access thereof will not occur. WITHOUT LIMITING THE FOREGOING,
PREDICTIVE SYSTEMS MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS WITH RESPECT TO
ITS PERFORMANCE OF THE SERVICES HEREUNDER OR ANY DELIVERABLES CONTEMPLATED
HEREBY, INCLUDING WITHOUT LIMITATION ANY REPRESENTATION OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. In order to induce Predictive Systems to
perform its services, COMPANY is accepting the terms and conditions and making
the representations set forth herein, COMPANY irrevocably waives and releases,
and shall be stopped from asserting, any claims for damages or otherwise arising
out of or in connection with the services, except as expressly contemplated by
the NDA.
COMPANY represents and warrants that COMPANY information systems to be accessed
by Predictive Systems do not contain confidential or proprietary information or
other property belonging to any person other than COMPANY, or any classified
information. By accepting Predictive Systems services, COMPANY assumes any and
all liability for any disclosure of any third-party confidential or proprietary
information assets, or any classified information, arising out of or resulting
from such services, and agrees to indemnify, defend and hold harmless Predictive
Systems from and against any claim, loss or liability asserted by any person
arising out of or relating to any such disclosure, subject, however, to the NDA.
COMPANY expressly authorizes Predictive Systems to gain access, including
without limitation external network access and without regard to COMPANY
Information Security Policy, to COMPANY's computer network and information
systems which is reasonable and necessary, in Predictive Systems' sole judgment,
for the purposes described in the SOW, and COMPANY acknowledges that such access
shall be obtained by Predictive Systems with the express permission of COMPANY.
To COMPANY's knowledge, such access is not a violation of any federal, state or
local laws, rules or regulations, including without limitation the Computer
Crime Act of 1986, as amended, or the Economic Espionage Act of 1996, as
amended, and COMPANY agrees not to bring any charges or claims against
Predictive Systems based on such activities. Execution of this SOW by the
representative of COMPANY shall constitute a representation and warranty by
COMPANY that such representative is duly authorized to do so and has received
all requisite governmental consents and approvals which may be necessary or
appropriate to execute this SOW and to carry out the terms hereof, including
without limitation the preceding sentence.
Legal terms and conditions are accepted and approved by Bear, Stearns & Co. Inc.
- --------------------------------------------------------------------------------
Signature Title Date
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 10
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
About Predictive Systems
- --------------------------------------------------------------------------------
Predictive Systems is a network consulting and integration firm that
specializes in the design, management, and security of
business-critical networks. Recognized in the industry for its
vendor-independent perspective, the firm's expertise lies in solving
multi-faceted, complex network problems. At Predictive Systems,
network technology serves two purposes: to make money and to save
money.
Predictive Systems' unique BusinessFirst(TM) methodology helps
Fortune-1000 clients define, package, and measure network services.
BusinessFirst is rooted in the concept that a company should run its
IT organization as a business. Throughout the BusinessFirst process,
Predictive Systems translates strategic business objectives into
sound, achievable technology solutions. This approach ensures that
the technology never obscures the business goals.
Predictive Systems' BusinessFirst methodology can clarify the
business requirements driving the project in specific, measurable
terms. Predictive Systems quantifies factors such as business risk,
total cost of ownership, and operational efficiency to build a
complete financial justification for a network project. By
instrumenting every system to measure and quantify the key factors
that govern success, Predictive Systems turns complexity into
clarity.
Predictive Systems serves its clients with a collaborative practice
structure that delivers both breadth and depth of experience to all
aspects of a project. Predictive Systems has the people and
processes to build networks that mean business.
Predictive Systems' services
- --------------------------------------------------------------------------------
Predictive Systems offers a unique combination of expertise in
network management, performance management, internetwork
engineering, information security, and software development.
Predictive Systems' engineers combine skill in network management
applications with real-world experience using state-of-the-art
internetwork technologies, including Asynchronous Transfer Mode
(ATM) and Asymmetric Digital Subscriber Line (ADSL), to address the
multi-faceted challenges of designing and managing mission-critical
net-
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 11
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
works. When technology "gaps" are discovered in a client's network,
or disparate systems need to communicate with one another,
Predictive Systems' software developers build custom applications to
solve these problems. These custom applications can turn a
collection of products into an integrated system.
Predictive Systems' practice areas
- --------------------------------------------------------------------------------
Predictive Systems' consultants are organized into areas of
specialization, or practice areas. Although many engineers are cross
skilled in a variety of technologies, and many technologies span
multiple practice areas, each practice area represents an aspect of
network technology important enough to warrant specialization. In
addition, the Software Development and Technical Publications
departments span all practice areas. Resources from all of these
groups are available to define and implement the technological
solutions that best meet our clients' business needs.
[GRAPHIC OMITTED]
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 12
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
Internetworking Design and Engineering practice
- --------------------------------------------------------------------------------
Predictive Systems' Internetworking Design and Engineering
(internetworking) practice area is dedicated to helping each client
design and implement network solutions in support of their strategic
business initiatives. To this end, we have created a team of
seasoned professionals from the three major industry proving
grounds--telecommunications providers, network equipment vendors,
and Fortune-500 end users. Using their specialized technical skills,
real-world industry experience, and methodologies that are needed to
solve the problems associated with building and maintaining network
foundations, Predictive Systems' internetworking consultants develop
innovative network solutions that provide our clients with a
measurable competitive advantage.
Our Internetworking Design and Engineering staff has extensive
experience with a wide variety of technologies and vendors. For some
clients, our consultants are involved in both technology and vendor
selection. Other clients have already selected the technology,
vendor, or both. Regardless of the pre-existing condition,
Predictive Systems offers a completely objective, "trusted advisor"
approach to our clients. Our up-to-date knowledge of all of the
major technologies and vendors is a significant part of the value
Predictive Systems brings to a project.
The Internetworking Design and Engineering practice fills the
substantial gap in the marketplace between management consulting
firms and technical staff augmentation services. With core
competencies in the areas of Backbone Technology, LAN Switching, IP
Management and Design, ATM, Remote Access, our versatile team
contributes both technical depth and breadth to client engagements.
Predictive Systems' team has the business acumen to translate
business objectives into technical solutions, the technical skills
to build the vision, the project skills to deliver the engagement on
time and on budget, and the rigorous methodologies to ensure that
the resulting system is manageable for a controlled, known cost.
Predictive Systems' Internetworking Design and Engineering practice
offers the following services:
o Advanced Technology Planning and Migration
o Core Backbone and Campus Network Design and Implementation
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 13
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
o Remote Access and VPN Solutions
o Network Audit Services ("Wellness" Studies)
o Y2K-Compliance Certification
o IP Management Solutions
o General Consulting Services
[****]
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Engineering Resources for Strategic LAN Group 14
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
PREDICTIVE SYSTEMS
- --------------------------------------------------------------------------------
Implementation Resource
for the Implementation
Group
for Bear, Stearns & Co. Inc.
- --------------------------------------------------------------------------------
August 18, 1999
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
Revision history
================================================================================
Version Date Comments required Approvals required
================================================================================
1.0 4/1/99 [****]
- --------------------------------------------------------------------------------
1.1 4/5/99 [****]
- --------------------------------------------------------------------------------
1.2 8/18/99 [****]
- --------------------------------------------------------------------------------
Predictive Systems approval:
- --------------------------------------------------------------------------------
Signed Name
- --------------------------------------------------------------------------------
Title Date
Implementation Resources for the
Implementation Group
August 18, 1999
Copyright (C) 1999, Predictive Systems, Inc. All rights reserved. Predictive
Systems, BusinessFirst, and the Predictive Systems logo are trademarks of
Predictive Systems, Inc.
No part of this document may be reproduced in any form or by any electronic or
mechanical means, including information storage and retrieval devices or
systems, without prior written permission from Predictive Systems, Inc. This
document or information it contains may not be used, reproduced, or disclosed
outside of Bear, Stearns & Co. Inc. without authorization in writing by
Predictive Systems, Inc.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Implementation Resource for the Implementation Group ii
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
C O N F I D E N T I A L--Use, reproduction, or disclosure is subject to the
restrictions in DFARS 252.227-7013 & 252.211-7015/FAR 52.227-14 & 52.227-19 for
commercial computer software or technical data provided to the U.S. government
with limited rights, as applicable.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Implementation Resource for the Implementation Group iii
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Table of Contents
- --------------------------------------------------------------------------------
Introduction 1
Non-disclosure 1
Deadline for response 1
Proposed statement of work 2
Project description 2
Reporting methods 3
Scope and cost 3
Project duration and staffing 3
Assumptions 4
General project assumptions 5
Project costs and billing 5
Contacts 6
Project authorization 7
Legal terms and conditions; limitation of liability 8
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Implementation Resource for the Implementation Group iv
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Introduction
- --------------------------------------------------------------------------------
[****]
The following proposal addresses those areas and more fully
describes the capabilities that Predictive can deliver for this and
future consulting engagements. Predictive Systems has profiled the
resources that are required to conduct the services discussed.
Non-disclosure
- --------------------------------------------------------------------------------
All information contained in this proposal and quotation is
confidential and proprietary to Predictive Systems, constituting its
trade secrets and privileged, confidential property. It is furnished
to Bear, Stearns & Co. in confidence, with the understanding that it
will not, without written permission of Predictive Systems, be used
for other than evaluation purposes or be disclosed to any third
party. Duplication of this proposal and quotation is strictly
forbidden, and all copies shall be returned to Predictive Systems
upon our request.
Deadline for response
- --------------------------------------------------------------------------------
This proposal is valid for 45 days from the date of issuance, unless
extended in writing by Predictive Systems.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Implementation Resource for the Implementation Group 1
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Proposed statement of work
- --------------------------------------------------------------------------------
Project description
- --------------------------------------------------------------------------------
[****]
o Cable Orders processing
o [****] Projects processing
o Wiring and Cables
o Documentation updates
o Equipment installation
[****] The following are a list of some of the projects that
Predictive Systems will be working on in the capacity of assisting
Bear Stearns Implementation.
o [****] Internetwork
o [****] IP Renumbering
o [****] Redesign
It is Predictive Systems understanding that the consultants will be
working on implementations and will require work to be performed
after hours and on weekends. The Predictive Systems consultants
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Implementation Resource for the Implementation Group 2
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
will be reporting to [****] who will assign projects and
implementation engineers to work with the consultants.
Reporting methods
- --------------------------------------------------------------------------------
> Status reports
The Predictive Systems team will provide a weekly status report in
electronic format to the Bear, Stearns & Co. Program Manager. The
report form will be brief; listing any items that were completed
that week and the open items for the next week. The purpose of the
reports is to provide weekly information on the status of the
project and any outstanding issues from the week. The reports will
be available on Monday morning.
> Status meetings
There will be a weekly status meetings with Bear, Stearns & Co. on
the overall project. The meeting should be held at the same time and
day every week (the time and day need to be determined). The meeting
will be to review any work that was performed by the Predictive
Systems' team and review the open items list of work that is
scheduled for the next week. This meeting will also provide a
platform for reviewing any new issues or additional project
requirements.
Scope and cost
- --------------------------------------------------------------------------------
Outlined below is the staff and duration for the project.
Project duration and staffing
- --------------------------------------------------------------------------------
Predictive Systems' project team will be comprised as follows:
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Implementation Resource for the Implementation Group 3
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****]
Assumptions
- --------------------------------------------------------------------------------
In developing this proposal, there are many assumptions Predictive
Systems has made that can materially affect the outcome and cost of
the project. Should any of these assumptions prove to be incorrect,
exaggerated, or underestimated, the scope and cost of the project
may change significantly.
In the event of any such material change in assumptions,
requirements or specifications, Predictive will request a Change
Order Authorization from Bear, Stearns & Co. which must be signed by
Bear, Stearns & Co. prior to the change being incorporated into the
project plan. The Change Order could be an addition or reduction of
work, based on the circumstances.
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
- --------------------------------------------------------------------------------
PREDICTIVE SYSTEMS CONFIDENTIAL
- --------------------------------------------------------------------------------
Implementation Resource for the Implementation Group 4
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
General project assumptions
- --------------------------------------------------------------------------------
1. Bear Stearns point of contact will provide project direction
for the Predictive resources for the duration of the project.
2. Additional project requirements will be accommodated to the
best of the team's ability given the current project
requirements and time frames. Any impact to the current
project time frames will be detailed in writing to the Bear
project contact as they are identified by the Predictive team.
3. Bear, Stearns & Co. will also provide a work area with a phone
and a network connection for each Predictive consultant.
Project costs and billing
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[****]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
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PREDICTIVE SYSTEMS CONFIDENTIAL
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Implementation Resource for the Implementation Group 5
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
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Contacts
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Direct all business and management communications regarding this
project [****]. The business/management contact can be reached
at [****].
Direct all technical communications regarding this project to
[****]. The technical contact can be reached at [****].
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
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PREDICTIVE SYSTEMS CONFIDENTIAL
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Implementation Resource for the Implementation Group 6
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
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Project authorization
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Signed Name
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Bear, Stearns & Co. Inc. title Date
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
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PREDICTIVE SYSTEMS CONFIDENTIAL
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Implementation Resource for the Implementation Group 7
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
================================================================================
Legal terms and conditions; limitation of liability
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Bear, Stearns & Co. Inc. ("COMPANY") hereby accepts the services and the related
terms and conditions set forth in the attached Statement of Work (the "SOW") of
Predictive Systems, Inc. ("Predictive Systems"). COMPANY expressly acknowledges
that the performance of these services will require Predictive Systems to gain
access to COMPANY's confidential and proprietary network and information assets,
and authorizes this access for the purposes described in the SOW, subject,
however, to the Mutual Nondisclosure Agreement, dated _______ ___, 1998, between
COMPANY and Predictive Systems (the "NDA").
Due to the nature of the services contemplated by the SOW, COMPANY acknowledges
that no representation or warranty can be made by Predictive Systems with
respect to such services or the efficacy thereof. In particular, COMPANY
acknowledges that damage to COMPANY's systems or information could result from
the performance of such services, and that, following completion of such
services, there can be no assurance that COMPANY's network will be secure or
that unauthorized access thereof will not occur. WITHOUT LIMITING THE FOREGOING,
PREDICTIVE SYSTEMS MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS WITH RESPECT TO
ITS PERFORMANCE OF THE SERVICES HEREUNDER OR ANY DELIVERABLES CONTEMPLATED
HEREBY, INCLUDING WITHOUT LIMITATION ANY REPRESENTATION OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. In order to induce Predictive Systems to
perform its services, COMPANY is accepting the terms and conditions and making
the representations set forth herein, COMPANY irrevocably waives and releases,
and shall be stopped from asserting, any claims for damages or otherwise arising
out of or in connection with the services, except as expressly contemplated by
the NDA.
COMPANY represents and warrants that COMPANY information systems to be accessed
by Predictive Systems do not contain confidential or proprietary information or
other property belonging to any person other than COMPANY, or any classified
information. By accepting Predictive Systems services, COMPANY assumes any and
all liability for any disclosure of any third-party confidential or proprietary
information assets, or any classified information, arising out of or resulting
from such services, and agrees to indemnify, defend and hold harmless Predictive
Systems from and against any claim, loss or liability asserted by any person
arising out of or relating to any such disclosure, subject, however, to the NDA.
COMPANY expressly authorizes Predictive Systems to gain access, including
without limitation external network access and without regard to COMPANY
Information Security Policy, to COMPANY's computer network and information
systems which is reasonable and necessary, in Predictive Systems' sole judgment,
for the purposes described in the SOW, and COMPANY acknowledges that such access
shall be obtained by Predictive Systems with the express permission of COMPANY.
To COMPANY's knowledge, such access is not a violation of any federal, state or
local laws, rules or regulations, including without limitation the Computer
Crime Act of 1986, as amended, or the Economic Espionage Act of 1996, as
amended, and COMPANY agrees not to bring any charges or claims against
Predictive Systems based on such activities. Execution of this SOW by the
representative of COMPANY shall constitute a representation and warranty by
COMPANY that such representative is duly authorized to do so and has received
all requisite governmental consents and approvals which may be necessary or
appropriate to execute this SOW and to carry out the terms hereof, including
without limitation the preceding sentence.
Legal terms and conditions are accepted and approved by Bear, Stearns & Co. Inc.
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Signature Title Date
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
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PREDICTIVE SYSTEMS CONFIDENTIAL
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Implementation Resource for the Implementation Group 8
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.
[LOGO]
[****] / Subject to non-disclosure agreement
CRITICAL / INTERNETWORK DESIGN AND ENGINEERING
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PREDICTIVE SYSTEMS CONFIDENTIAL
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Implementation Resource for the Implementation Group 9
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant
to Rule 406 under the Securities Act of 1933, as amended.