EXHIBIT 10.69
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AMENDMENT 1 TO THE MANAGED OPERATIONS SERVICES AGREEMENT
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Franklin ▇▇▇▇▇▇▇▇▇ Companies, LLC, a Delaware Limited Liability Company, having
a place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇ ("Franklin")
and International Business Machines Corporation, having place of business at
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ("IBM") (collectively referred to herein as
the "Parties"), agree that the following terms and conditions (the "Amendment")
amend and supplement the Managed Operations Services Agreement, dated February
6, 2001, between Franklin and IBM (the "Agreement"). This Amendment adds
Fiduciary Trust Company International ("Fiduciary"), an Affiliate of Franklin,
as a recipient of the Services. The affected and changed sections and Schedules
of the Agreement are as indicated below. Unless modified herein, all other terms
and conditions defined in the Agreement shall apply and have the same meaning
when used in this Amendment. In the event of any inconsistency between the terms
of the Agreement and the terms of this Amendment, the terms of this Amendment
shall prevail. All terms and conditions of the Agreement not otherwise
specifically amended or supplemented herein remain unchanged and in full force
and effect. The Term of this Amendment will begin as of the date it is executed
by the Parties (the "Fiduciary Effective Date") or upon commencement of any
Services provided hereunder, whichever is first, and will run concurrently with
the Agreement. Termination provisions of the Agreement apply to this Amendment.
REVISED AND AMENDED DOCUMENTS:
I. THE AGREEMENT:
----------------------
1. ADD THE FOLLOWING AS SECTION ▇.▇▇▇. (DEFINITIONS):
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"Fiduciary Commencement Date means the date upon which the Services for
Fiduciary commence, which shall be July 17, 2001 unless otherwise specified
herein or in a Schedule hereto."
2. SECTION 1.qq. IS HEREBY MODIFIED AS FOLLOWS:
--------------------------------------------
"Services" means those services performed by IBM as described in the Agreement,
Schedules and Supplements thereto.
3. ADD THE FOLLOWING SENTENCES TO SECTION 3.e. (PROJECT EXECUTIVE):
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"IBM shall also appoint a Data Center Site Manager for the Fiduciary Data
Center, who shall serve as the manager for all Services provided by IBM at the
Fiduciary Data Center from the date Services commence at such Data Center. The
Fiduciary Data Center Site Manager shall be considered a Protected Employee
until IBM has completed its consolidation obligations relative to the Fiduciary
Data Center, pursuant to Supplement E-1 of Schedule E."
4. ADD THE FOLLOWING SENTENCE TO SECTION 8.d. (REQUIRED CONSENTS):
---------------------------------------------------------------
"Franklin shall cause to be secured, any consents relating to Fiduciary In-Scope
Software and In-Scope Equipment, and shall be responsible for payment of all
fees associated with obtaining such consents, if any."
IBM/FRANKLIN CONFIDENTIAL Page 1 of 4
Final Amendment 1
IBM Initials /s/ BR Franklin Initials /s/ AG
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5. ADD THE FOLLOWING AS SECTION 10.a.(vi)(DESIGNATION OF PROTECTED EMPLOYEES):
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"the Data Center Site Manager for the Fiduciary Data Center shall be considered
a Protected Employee only until IBM has completed its consolidation obligations
pursuant to Supplement E-1 of Schedule E."
6. SECTION 24.a. IS HEREBY MODIFIED AS FOLLOWS:
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"IBM shall indemnify, hold harmless and defend Franklin, its Affiliates and its
and their directors, officers, employees and agents, at IBM's expense, against
any claim by a third party against Franklin, its Affiliates and its and their
directors, officers, employees and agents:"
7. ADD THE FOLLOWING AS SECTION 24.a.viii.:
----------------------------------------
" arising from IBM's use of any third party software provided to IBM by Franklin
or Franklin Affiliates, to the extent such claim results from a breach by IBM of
any provisions of the applicable third party license agreement."
8. SECTION 24.b. IS HEREBY MODIFIED AS FOLLOWS:
--------------------------------------------
"Franklin shall indemnify, hold harmless and defend IBM, its Affiliates and its
and their directors, officers, employees and agents, at Franklin's expense,
against any claim by a third party against IBM, its Affiliates and its and their
directors, officers, employees and agents:"
9. ADD THE FOLLOWING AS SECTION 24.b.vii.:
---------------------------------------
"arising as a result of Franklin's failure to obtain any consent which Franklin
is obligated to provide to IBM under this Agreement."
10. SECTION 27.f. IS HEREBY MODIFIED AS FOLLOWS:
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Compliance with Laws. The parties shall comply with all applicable Federal,
State and local laws, regulations, guidelines and ordinances as they relate to
this Agreement and the Services, including but not limited to the following:
i. SECURITY PROVISIONS FOR COMPLIANCE WITH GRAMM ▇▇▇▇▇ ▇▇▇▇▇▇ ACT
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1. Any storage of any "nonpublic personal information" of Fiduciary's
customers (whether in any IBM system, file server, file folder or
premises) shall be deemed Fiduciary Confidential Information (as such
term is defined in Section 26 of the Agreement (the "NDA") and shall
be subject to the provisions of the NDA. Despite the provisions of the
NDA, IBM shall keep such "nonpublic personal information" confidential
in perpetuity until such time that it becomes "publicly available
information." The terms "nonpublic personal information" and "publicly
available information" shall have the meanings set forth in 12 CFR
332. IBM agrees that, unless otherwise required by law, only those
persons contemplated by Section 26.a. of the Agreement can gain access
to Fiduciary Confidential Information.
2. During the term of this Agreement, upon reasonable notice by Fiduciary
and during normal business hours, IBM will allow Fiduciary access to
its premises to monitor IBM's compliance with the foregoing, to the
extent reasonably necessary, provided such monitoring does not
adversely affect IBM's ability to conduct its business. Fiduciary may
hire an independent auditor to conduct such audit on its behalf,
provided that such auditor first agrees in writing to be bound to
obligations of confidentiality at least as stringent as those set
forth in the NDA. Upon
IBM/FRANKLIN CONFIDENTIAL Page 2 of 4
Final Amendment 1
IBM Initials /s/ BR Franklin Initials /s/ AG
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request, IBM will provide Fiduciary with a copy of IBM's most recent
SAS 70 report for the service delivery center(s) where IBM will
process or store Fiduciary Confidential Information. It is understood
that IBM may redact from the SAS 70 reports confidential information
pertaining to other IBM customers.
ii PROVISION FOR COMPLIANCE WITH NEW YORK STATE BANKING BOARD SUPERVISORY
PROCEDURE G101 AND THE BANK SERVICE CORPORATION ACT.
----------------------------------------------------
In the event that data processing for Fiduciary is ever conducted at an IBM
facility, IBM agrees that, to the extent required by law, Fiduciary's state
and federal bank regulators (and their authorized representatives) shall
have the right to examine all records and material, use the equipment and
interview IBM employees to the extent necessary to protect the interests of
depositors, creditors or shareholder(s) of Fiduciary; provided such
regulators first agree in writing to be bound to obligations of
confidentiality at least as stringent as those set forth in the NDA.
iii. ALL INSTITUTIONS LETTER: VACATION POLICY FROM THE SUPERINTENDENT OF BANKS
OF THE STATE OF NEW YORK DATED AUGUST 22,1996 (THE "GUIDELINE").
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The Parties shall comply with the Guideline. Franklin/Fiduciary shall make
a reasonable effort to obtain or grant an exception for IBM employees, in a
manner consistent with the Guideline 0.
11. DELETE IN ITS ENTIRETY THE SENTENCE ON PAGE 34 WHICH READS:
"Executed by the duly authorized representatives of the parties as of the dates
corresponding with their signatures below."
II. THE SCHEDULES
------------------
SCHEDULE A: Supplement A-1 is added, which describes the duties and
responsibilities of the Parties regarding the steady state Services that are
unique to Fiduciary.
SCHEDULE B: Supplement B-1 is added, which describes the duties and
responsibilities of the Parties related to the Service Levels that are unique to
Fiduciary.
SCHEDULE C: Supplement C-1 is added, which describes the charges provisions that
are unique to Fiduciary. Supplement C-1 includes Exhibit C-1-1, which lists the
unique rates applicable to Fiduciary.
SCHEDULE D: Change the title of Section 6.0 to read "Transition Plan Content."
Supplement D-1 is added, which describes the activities that Fiduciary and IBM
will perform during the transition period that are unique to Fiduciary.
SCHEDULE E: Supplement E-1 is added, which describes the Projects that are
unique to Fiduciary.
SCHEDULE F: Supplement F-1 is added, which lists the Fiduciary Software.
SCHEDULE G: Supplement G-1 is added, which lists the Fiduciary Machines.
SCHEDULE H: Supplement H-1 is added, which describes the responsibilities of the
Parties that are unique to the Fiduciary network.
SCHEDULE I: Supplement I-1 is added, which lists the Fiduciary facilities at
which the Services will be provided.
IBM/FRANKLIN CONFIDENTIAL Page 3 of 4
Final Amendment 1
IBM Initials /s/ BR Franklin Initials /s/ AG
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SCHEDULE J: Supplement J-1 is added, which lists the Fiduciary contracts assumed
by IBM under the Agreement.
SCHEDULE K: Supplement K-1 is added, which describes responsibilities of the
Parties with respect to the Fiduciary Affected Employees and Hired Employees.
SCHEDULE L: Supplement L-1 is added, which describes the Acquired Assets.
SCHEDULE M: Supplement M-1 is added, which describes the Business Recovery
Services that IBM shall provide to Fiduciary.
SCHEDULE N: Supplement N-1 is added, which describes the standard reports that
IBM shall provide which are applicable and unique to Fiduciary.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS AMENDMENT, UNDERSTAND IT, AND
AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE PARTIES AGREE THAT
THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES
RELATING TO THIS SUBJECT SHALL CONSIST OF 1) THIS AMENDMENT, 2) THE SCHEDULES,
AND 3) THE AGREEMENT, DATED FEBRUARY 6, 2001. Franklin's approval of this
Amendment shall be considered acceptance by Franklin of IBM's provision of the
Services to Fiduciary for the corresponding charges specified in Supplement 1 to
Schedule C. THIS STATEMENT OF THE AMENDMENT SUPERSEDES ALL PROPOSALS OR OTHER
PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE
PARTIES RELATING TO THE SUBJECT MATTER DESCRIBED IN THIS AMENDMENT.
Accepted by: Accepted by:
International Business Machines Franklin ▇▇▇▇▇▇▇▇▇ Companies, LLC.
Corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
____________________ ______________________
Authorized Signature Authorized Signature
▇▇▇▇▇ ▇▇▇▇ Date July 2, 2001 ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. Date July 2, 2001
---------- ------------ ----------------- ------------
Name (Type or Print) Name (Type or Print)
BM/FRANKLIN CONFIDENTIAL Page 4 of 4
Final Amendment 1
IBM Initials /s/ BR Franklin Initials /s/ AG
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AGREEMENT BETWEEN
FRANKLIN AND IBM
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SUPPLEMENT A-1 TO SCHEDULE A
FIDUCIARY
SERVICES AND SUPPORT RESPONSIBILITIES
I. INTRODUCTION
This Supplement A-1 to Schedule A describes the duties and responsibilities of
IBM and Fiduciary related to IBM's provision of steady state Services for
Fiduciary. For purposes of this Supplement A-1, unless specifically amended or
deleted by reference herein, the responsibilities of IBM and Franklin as stated
in Schedule A shall apply but instead shall mean the responsibilities of IBM and
Fiduciary.
II. DEFINITIONS
The following terms have the meanings set forth below when used in this
Supplement A-1 (and in the base Agreement and other Schedules). Capitalized
terms not defined in this Section II have the meanings set forth in the
Agreement or other Schedules.
1. AD HOC PRINTING - Printing of customers' statements on demand between the
hours of 8AM and 8PM Eastern Standard Time. IBM will use diligent efforts to
perform printing outside of these hours on a per request basis as requested by
Fiduciary. IBM will notify Franklin if the number of such requests materially
impacts IBM's ability to perform the Services within the current charges. If
such is the case IBM and Franklin will meet to discuss and implement a plan to
correct this problem. If such problem is not corrected in a reasonable period of
time, IBM and Franklin agree to negotiate in good faith to amend this Agreement
to provide for an equitable adjustment to the charges.
III. SERVICE HOURS
IBM will provide onsite support at 2 World Trade Center 24 hours/day, 6
days/week (Sundays are subject to On-Call support) until such as time the DEC
machines have been sunset and server relocation is complete. For the remainder
of the Term, onsite support will be supplied on an On-Call basis.
On-Call means that IBM will use diligent efforts to: i) return pager calls
within thirty (30) minutes of receipt of such calls, and ii) if required,
provide an on-site presence within three (3) hours of the identification of the
need of an on-site presence.
IV. DOCUMENTATION
a. IBM is responsible for:
5. migrating Fiduciary documents to and maintaining the electronic,
web-accessible document repository through which Franklin may
authorize IBM to provide Franklin employees with access to read,
download and print documents relating to activities which could
reasonably be expected to affect business operations, including but
not limited to Project Change Requests ("PCR's"), project plans and
schedules and the Procedures Manual; and
▇. ▇▇▇▇▇▇▇▇ will:
3. assist IBM in the migration of Fiduciary documents to the electronic
document repository.
IBM/Franklin Confidential Page 1 of 4
Final Supplement A-1 to Schedule A (Fiduciary Trust)
IBM Initials /s/ BR Franklin Initials /s/ AG
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V. DESCRIPTION OF SERVICES AND SUPPORT ACTIVITIES
2.0 SYSTEMS ENGINEERING
IBM will provide systems engineering support for the Midrange and Intel server
environments, as described in Schedule A.
DELETE SECTION 2.a.7.
DELETE SECTION 2.b.3.
4.0 SYSTEMS OPERATIONS
4.1 GENERAL DESCRIPTION OF SYSTEMS OPERATIONS
Using the IBM Management Environment, IBM will provide remote operational
services for the Machines which are located at the Fiduciary Data Center(s) and
are specified in Supplement G-1 to Schedule G.
a. IBM will:
10. provide maintenance services on the IBM In-Scope Hardware listed in
Supplement G-1 to Schedule G and the IBM Systems Software listed in
Supplement F-1 to Schedule F, and manage the maintenance services
provided under Franklin's contracts for the OEM server hardware listed
in Supplement G-1 to Schedule G and the OEM Systems Software listed in
Supplement F-1 to Schedule F until refresh;
11. provide maintenance services on the refreshed OEM In-Scope Hardware
listed in Supplement G-1to Schedule G and the refreshed OEM Midrange
and Distributed Systems Software listed in Supplement F-1 to Schedule
F after refresh;
4.3 MIDRANGE AND INTEL SYSTEMS OPERATIONS
a. IBM will:
3. operate the Lotus Notes applications in accordance with the Procedures
Manual.
▇. ▇▇▇▇▇▇▇▇ will:
2. provide on-site Midrange and Intel server support for any Other
Fiduciary sites;
DELETE SECTION 5.2
6.0 SYSTEMS AND TECHNICAL SUPPORT
▇. ▇▇▇▇▇▇▇▇ will:
3. retain financial responsibility for obtaining licenses to all third
party Application Software and third party System Software, upgrades
and PTFs.
8.0 DATA BASE MANAGEMENT SERVICES
a. Application and Data Modification
IBM will:
1. collaborate with Franklin on investigation and analysis of related
issues
Franklin will:
1. be responsible for resolution of data and Application related issues.
2. develop and test the required scripts.
3. notify IBM of intended modifications as part of Change Management and
Problem Management Process.
4. modify application or database data and enforce data Integrity and
data quality.
IBM/Franklin Confidential Page 2 of 4
Final Supplement A-1 to Schedule A (Fiduciary Trust)
IBM Initials /s/ BR Franklin Initials /s/ AG
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b. MODIFICATIONS TO THE SERVER/ DATABASE CONFIGURATION IBM will:
1. collaborate with Franklin regarding investigation and analysis.
2. approve all modifications to the database configurations and
parameters as part of Change Management and Problem Management.
Franklin will:
1. be responsible for solution and implementation of all Database
configuration changes.
2. notify IBM of the result of changes.
c. DATABASE PERFORMANCE TUNING:
IBM will:
1. collaborate with Franklin regarding investigation and analysis.
2. approve intended performance-tuning modifications to the database as
part of Change. Management and Problem Management process.
3. IBM shall monitor the database from the system perspective.
Franklin will:
1. develop required scripts.
2. prepare the tuning plan.
3. modify the database objects (tables, indexes, portions, views, etc)
and notify IBM of status.
4. Franklin will monitor the databases from a DBA perspective.
d. SOFTWARE UPGRADES AND PATCH INSTALLATIONS:
IBM will:
1. run the modified system.
2. support Franklin during upgrade process.
3. IBM shall monitor the database from the system perspective.
Franklin will:
1. test Software upgrades and patches in the development and test
environments.
2. notify Application development of the completion status.
3. be responsible for software upgrades and patch installations.
4. Franklin will monitor the databases from DBA perspective
Joint Responsibilities:
1. IBM and Franklin will approve any software upgrades and patch
installations through formal Change Management and Problem Management
process.
2. IBM and Franklin will create a detailed plan of software upgrade in
the production environment based on the test results.
e. [INTENTIONALLY LEFT BLANK]
f. ESTABLISH TEMPORARY ID'S FOR FRANKLIN DBA'S:
IBM will:
1. establish temporary ID's with adequate access rights to allow all
required DBA production level work. These ID's would be temporarily
assigned to the Franklin while performing their work in the production
environment. Once finished, the access would be deleted. Appropriate
procedures will be established for the assignment and required
documentation as part of approved Change Management and Problem
Management process.
IBM/Franklin Confidential Page 3 of 4
Final Supplement A-1 to Schedule A (Fiduciary Trust)
IBM Initials /s/ BR Franklin Initials /s/ AG
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2. use the standard tools mutually agreed upon for monitoring system and
database alerts.
Franklin will:
1. contact IBM operations for access to the production environment.
10. OUTPUT SERVICES
a. IBM will:
4. operate the Xerox printers or comparable printers identified in
Supplement G-1 to Schedule G as attached to the Solamar system for Ad
Hoc Printing.
5. operate the printers directly attached to the Midrange Machines and
the Intel Servers located at the Prime Site until December 31, 2001
for Fiduciary.
..
DELETE SECTION 10.a.9.
DELETE SECTION 10.b.8.
14.0 SECURITY MANAGEMENT
The Parties acknowledge that there are issues and differences of opinion
regarding the intent and scope of Section 14.0, Security Management, as
currently set forth in Schedule A of the Agreement. Each Party agrees to
negotiate in good faith to reach a mutually agreeable solution to such issues.
IBM acknowledges that Franklin/Fiduciary retains ultimate authority regarding
Franklin/Fiduciary Security Management and controls.
15.0 BUSINESS RECOVERY SERVICES
Business Recovery Services are as set forth in Supplement M-1 to Schedule M.
IBM/Franklin Confidential Page 4 of 4
Final Supplement A-1 to Schedule A (Fiduciary Trust)
IBM Initials /s/ BR Franklin Initials /s/ AG
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AMENDMENT NUMBER 2
TO THE
MANAGED OPERATIONS SERVICES AGREEMENT
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This Amendment Number 2 to the Managed Operations Services Agreement (this
"Amendment"), is made by and between Franklin ▇▇▇▇▇▇▇▇▇ Companies, LLC, a
Delaware Limited Liability Company, having a place of business at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ("Franklin") and International Business Machines
Corporation, having place of business at ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ("IBM")
(collectively referred to herein as the "Parties"). This Amendment is entered
into on this 10th day of June, 2002 (the "Amendment 2 Effective Date"). This
Amendment amends the Managed Operations Services Agreement, dated February 6,
2001, between Franklin and IBM as modified or amended prior to the date hereof
including any schedules, supplements, exhibits and attachments thereto (the
"Agreement"). Capitalized terms used but not defined herein shall have their
respective meanings as defined in the Agreement. In the event of any
inconsistency between the terms of the Agreement and the terms of this
Amendment, the terms of this Amendment shall prevail. All terms and conditions
of the Agreement not specifically amended or supplemented herein, shall remain
unchanged and in full force and effect. The Term of this Amendment will begin as
of the Amendment 2 Effective Date and will run concurrently with the Agreement.
This Amendment modifies the Agreement for purposes of clarification and change
in scope of work. Additionally, this Amendment documents the agreed to changes,
which were precipitated by the destruction of the World Trade Center, and the
Fiduciary Trust Company International Data Center, which was located therein.
The affected and changed sections and Schedules of the Agreement are as
indicated below.
I. THE AGREEMENT:
--------------
A) PAGE 1, 1st PARAGRAPH IS HEREBY AMENDED AS FOLLOWS:
Change the Franklin address to read:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇, ▇▇▇▇▇
B) SECTION 3.F. (PROCEDURES MANUAL) IS HEREBY AMENDED AS FOLLOWS:
Franklin's Senior Director of Global Systems Support shall also have
the authority to approve of and sign off on the Procedures Manual
subject to the terms of the Agreement.
C) SECTION 8.H. (EQUIPMENT CURRENCY) IS HEREBY AMENDED AS FOLLOWS:
Delete the second sentence and insert the following text and table:
"Unless otherwise agreed to by the Parties, IBM shall subsequently
refresh the In-Scope Equipment, including the Fiduciary In-Scope
Equipment according to Table 8.h.1. below. To avoid all Fiduciary
In-Scope Equipment being refreshed at one time, the Parties shall
negotiate in good faith using commercially acceptable standards, to
determine an appropriate schedule by which to execute an Initial
Refresh of the Fiduciary In-Scope Equipment. Additionally, the Parties
agree to negotiate in good faith to resolve any DASD refresh schedule
mismatches, which may exist due to partial platforms or lack of
backward compatibility. Such resolution may be by acceleration or
slowdown of the DASD refresh cycle."
IBM/FRANKLIN CONFIDENTIAL Page 1 of 11
Amendment 2 v2-FINAL.doc Amendment Number 2
TABLE 8.h.1.
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EQUIPMENT TYPE REFRESH CYCLE
-------------------------------------------- ---------------
Mainframe 60 months
-------------------------------------------- ---------------
Servers with greater than 8 CPU's 60 months
(Described in Schedule C, Section 6.1b.1.)
-------------------------------------------- ---------------
UNIX Servers with 8 or fewer CPU's 48 months
(Described in Schedule C, Section 5.3a.1.(b))
-------------------------------------------- ---------------
Intel Servers with 8 or fewer CPU's 36 months
(Described in Schedule C, 5.3b2.)
-------------------------------------------- ---------------
DASD 48 months
-------------------------------------------- ---------------
All other In-Scope Equipment 42 months
-------------------------------------------- ---------------
D) SECTION 27.K. (Notice) is hereby amended as follows:
Change the Franklin address to read: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇,
▇▇▇▇▇
II. THE SCHEDULES:
--------------
A) SCHEDULE A (SERVICES AND SUPPORT RESPONSIBILITIES) IS HEREBY AMENDED
AS FOLLOWS:
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(1) ARTICLE V - DESCRIPTION OF SERVICES AND SUPPORT ACTIVITIES:
---------------------------------------------------------------
Article V, Section 8.0 is deleted in its entirety and replaced with
the following Sections 8.0 through 8.5.
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8.0 DATA BASE MANAGEMENT SERVICES
8.1 APPLICATION AND DATA MODIFICATION
a. IBM will:
1. collaborate with Franklin on investigation and analysis
of Application Software and data modification related
issues.
▇. ▇▇▇▇▇▇▇▇ will:
1. be responsible for resolution of data and Application
Software related issues;
2. develop and test the required scripts;
3. notify IBM of intended modifications as part of Change
Management and Problem Management process; and
4. modify application or database data and enforce data
integrity and data quality.
8.2 MODIFICATIONS TO THE SERVER/DATABASE CONFIGURATION
a. IBM will:
1. collaborate with Franklin regarding investigation and
analysis; and
2. approve all modifications to the database
configurations and parameters as part of Change
Management and Problem Management.
▇. ▇▇▇▇▇▇▇▇ will:
1. be responsible for solution and implementation of all
database configuration changes
IBM/FRANKLIN CONFIDENTIAL Page 2 of 11
Amendment 2 v2-FINAL.doc Amendment Number 2
2. be responsible to define database backup strategy and
solution
3. install backup tools, create backup scripts and
utilities; and
4. notify IBM of the result of changes.
8.3 DATABASE PERFORMANCE TUNING
a. IBM will:
1. collaborate with Franklin regarding investigation and
analysis;
2. approve intended performance-tuning modifications to
the database as part of Change Management and Problem
Management process; and
3. monitor the database from the system perspective.
▇. ▇▇▇▇▇▇▇▇ will:
1. develop required scripts;
2. prepare the tuning plan;
3. modify the database objects (tables, indexes, portions,
views, etc) and notify IBM of status; and
4. monitor the databases from a database administration
("DBA") perspective.
8.4 SOFTWARE UPGRADES AND PATCH INSTALLATIONS
a. IBM will:
1. Run the modified system;
2. Support Franklin during the upgrade process; and
3. monitor the database from the system perspective.
▇. ▇▇▇▇▇▇▇▇ will:
1. test In-Scope Software upgrades and patches in the
development and test environments;
2. notify Application Software development of the
completion status;
3. be responsible for software upgrades and patch
installations; and
4. monitor the databases from DBA perspective
c. Joint Responsibilities:
1. IBM and Franklin will approve any In-Scope Software
upgrades and patch installations through formal Change
Management and Problem Management process; and
2. IBM and Franklin will create a detailed plan of
In-Scope Software upgrades in the production
environment based on the test results.
8.5 ESTABLISH TEMPORARY USER ID'S FOR FRANKLIN DATABASE
ADMINISTRATORS:
a. IBM will:
1. establish temporary ID's with adequate access rights to
allow all required DBA production level work. These
ID's will be temporarily assigned to Franklin DBA's
working in the production environment. Once finished,
the access will be deleted. Appropriate procedures will
be established for the assignment and required
documentation as part of the approved Change Management
and Problem Management process; and
2. use the standard tools mutually agreed upon for
monitoring system and database alerts.
▇. ▇▇▇▇▇▇▇▇ will:
1. contact IBM operations for access to the production
environment.
IBM/FRANKLIN CONFIDENTIAL Page 3 of 11
Amendment 2 v2-FINAL.doc Amendment Number 2
(2) ARTICLE V - DESCRIPTION OF SERVICES AND SUPPORT ACTIVITIES
--------------------------------------------------------------
Article V, Section 14 is deleted in its entirety and replaced with the
following Sections 14.0 through 14.4.
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14.0 SECURITY MANAGEMENT
The responsibilities of IBM and Franklin for each security area/task
are indicated in the following responsibilities matrices. "Perform"
shall mean to have responsibility to execute. "Assist" shall mean to
provide reasonable support to the Performing Party.
=============================================================================
14.1 GENERAL RESPONSIBILITIES IBM FRANKLIN
=============================================================================
1a. Provide an interface for day-to-day security Perform
management
=============================================================================
1b. Provide an interface for day-to-day security Perform
management
=============================================================================
2. Provide IBM with Franklin audit history (both
internal and external) and most recent security
standards and practices, including updates as they Perform
occur
=============================================================================
3a. Review security policies and procedures for
effectiveness and recommend improvements in Perform
conjunction with Franklin
=============================================================================
3b. Review security policies and procedures for
effectiveness and recommend improvements in Perform
conjunction with IBM
=============================================================================
4. Communicate the security procedures to Franklin
users that are affected by this service, such as login
procedures, password use, use of antivirus programs Assist Perform
and security for data and equipment
=============================================================================
5. Review amendments made to Franklin security
policies and standards and advise Franklin whether or
not such changes can be implemented and if Perform Assist
implemented, will be considered a New Service
=============================================================================
6. During the Transition Period develop the detailed Perform Assist
"Information Security Controls" document
=============================================================================
7. Maintain the "Information Security Controls" Perform
document
=============================================================================
8. During the Transition Period perform a review of
system accesses for all employees transferring to IBM
to confirm that same access is required and advise IBM Assist Perform
of any change.
=============================================================================
9. Notify IBM of changes Franklin plans to make to its Perform
security policies and standards before implementation.
=============================================================================
=============================================================================
14.2 PHYSICAL SECURITY IBM FRANKLIN
=============================================================================
1. Provide physical security controls at Franklin Perform
facilities
=============================================================================
2. Provide physical security controls at IBM facilities Perform
=============================================================================
3a. Restrict access to all data processing areas at
Franklin facilities, for which IBM has security Assist Perform
responsibility to authorized personnel only.
=============================================================================
3b. Restrict access to all data processing areas at
IBM facilities, for which IBM has security
responsibility to authorized personnel only. Perform
=============================================================================
IBM/FRANKLIN CONFIDENTIAL Page 4 of 11
Amendment 2 v2-FINAL.doc Amendment Number 2
=============================================================================
14.2 PHYSICAL SECURITY IBM FRANKLIN
=============================================================================
4. Conduct periodic reviews of the data processing
areas for which IBM has security responsibility
including reviews of access logs for unusual Perform Assist
occurrences and perform follow-up activities in
accordance with the procedures specified in this
document
=============================================================================
5. Protect LAN Servers and infrastructure devices as
defined in Schedule G at Franklin facilities and Perform
provide access to authorized personnel
=============================================================================
6. Protect LAN Servers and infrastructure devices at Perform
IBM facilities to authorized personnel only
=============================================================================
7. Implement controls which protect printed output Perform
from unauthorized access while under IBM's control
=============================================================================
8a. Provide secure storage for portable storage media Perform at
under IBM's control (tape drives and backup media) Franklin
=============================================================================
8b. Provide secure storage for portable storage media Perform
under IBM's control (tape drives and backup media) at IBM
=============================================================================
9. During the Transition Period, with the assistance
of Franklin, perform a baseline inventory of all
portable storage media (e.g. Tapes, disks) for which Perform Assist
IBM has security responsibility
=============================================================================
10. Perform an annual audit/reconciliation of tape
under IBM's control and promptly notify Franklin and Perform
IBM management when errors are detected
=============================================================================
11. Resolve discrepancies discovered during the annual Perform
tape audit and inform Franklin of the resolution
=============================================================================
12. Implement controls and provide effective Perform
elimination of residual information on removable
storage media before disposal or reuse outside of
Franklin
=============================================================================
==============================================================================
14.3 LOGICAL ACCESS CONTROL IBM FRANKLIN
==============================================================================
1. Install, maintain and upgrade new or existing data
access control software as deemed necessary by IBM to
provide the Service. This is viewed as a product support
role, i.e. software maintenance for RACF. This does NOT Perform Assist
include the creation or maintenance of security rules
in RACF.
==============================================================================
2. Implement the functions and features of the access
control software that will satisfy Franklin security Assist Perform
practices as defined in this document
==============================================================================
3. Implement the security system values and features
of the supported operating systems that will satisfy
Franklin security practices as defined in this Perform Assist
document for data security
==============================================================================
4. Identify the protection requirements for operating Assist Perform
system resources
==============================================================================
5. Implement the protection requirements for operating
system resources via the access control software, with
all changes being scheduled through the Change Control Perform
Process
==============================================================================
6. Define and provide to IBM:
a. Data classification and control criteria,
b. Data protection and handling requirements, and
c. Data encryption requirements Perform
==============================================================================
IBM/FRANKLIN CONFIDENTIAL Page 5 of 11
Amendment 2 v2-FINAL.doc Amendment Number 2
==============================================================================
14.3 LOGICAL ACCESS CONTROL IBM FRANKLIN
==============================================================================
7. Define and implement the protection requirements Perform
for application resources via the access control
software
==============================================================================
8. Define and implement the protection requirements Perform
for End User data via the access control software
==============================================================================
9a. Provide encryption products (i.e., hardware and/or
software) as defined in "Information Security Perform
Controls" document as defined in Section 14.1 herein
==============================================================================
9b. Support/implement encryption products (i.e., Perform Assist
hardware and/or software) as defined in this document
==============================================================================
10. Maintain security for and distribute encryption Perform
keys
==============================================================================
11. During the Transition Period, perform a baseline
inventory of access ID's for the systems - per Assist Perform
schedule G
==============================================================================
12. Establish, change, deactivate and remove logon IDs
and associated access authorities for Franklin Perform
employees
==============================================================================
13. Establish, change, deactivate and remove logon IDs Assist Perform
and associated access authorities for IBM employees
==============================================================================
14. Review and verify annually the system logon IDs
for Franklin personnel (i.e., reverification) and
delete the IDs of those individuals who no longer have
a business need and/or are no longer authorized by Perform
management to access the system
==============================================================================
15. Annually perform a continued business need
(reverification) review of all IBM logon ID's
supporting the service, and notify Franklin to remove Perform Assist
access for those which are no longer authorized by
management
==============================================================================
16. Establish the process criteria for resetting
user's passwords and disclosing them to authorized Assist Perform
personnel
==============================================================================
17. Reset IBM logon ID passwords and disclose Assist Perform
passwords to authorized personnel
==============================================================================
18. Reset Franklin logon ID passwords and disclose Perform
passwords to authorized personnel
==============================================================================
19a. Review, approve and grant requests for privileged Assist Perform
user authorities
==============================================================================
19b. Review and approve requests for privileged user Assist Perform
authorities
==============================================================================
20. Periodically review privileged user authorities
and remove those for which management authorization no Assist Perform
longer exists
==============================================================================
21. Control and be responsible for the Security
Officer/Administrator user profiles on all systems
(e.g., NT-Admin, Unix-Root, AIX-Root, RACF-Special, Perform
AS400-QSECOFR). Develop Process for immediate access
for IBM
==============================================================================
22. Implement and maintain security controls for those
subsystems and applications which do not use the Perform
access control software for their security
==============================================================================
23a. Schedule through the Change Control Process,
security/integrity fixes that must be applied to the Perform
in-scope systems
==============================================================================
23b. Schedule through the Change Control Process, Perform
security/integrity fixes that must be applied to the
in-scope systems
==============================================================================
24. Periodically perform system security health checks
IBM/FRANKLIN CONFIDENTIAL Page 6 of 11
Amendment 2 v2-FINAL.doc Amendment Number 2
==============================================================================
14.3 LOGICAL ACCESS CONTROL IBM FRANKLIN
==============================================================================
a. Access control settings,
b. Authorized privileged users,
c. Operating system resources protection, and
d. Installation and operation of virus control
programs on the appropriate platforms. Assist Perform
==============================================================================
25. Capture and maintain audit records for a mutually
agreed retention period, and provide record retention
reports to the Franklin Project Executive upon Perform
reasonable request, platform specific logging.
==============================================================================
26. Promptly inform Franklin of any security issues of Perform
which IBM is aware and suggest possible remedial action
==============================================================================
27. Promptly acknowledge receipt of security exposures
notified to Franklin by IBM and inform IBM of Franklin
acceptance or rejection of IBM's recommended remedial Perform
action or other remedial action Franklin implements
==============================================================================
28. Take appropriate corrective action to remedy Assist Perform
security violations notified to Franklin by IBM
==============================================================================
==============================================================================
14.4 NETWORK INFRASTRUCTURE SECURITY (IN ADDITION TO IBM FRANKLIN
LOGICAL ACCESS ABOVE)
==============================================================================
1. Control the Network Operating System (NOS) security Perform
/administrative user id's, which run on any LAN or WAN.
==============================================================================
2a. Provide virus avoidance, detection, and Perform
elimination software for servers
==============================================================================
2b. Maintain virus avoidance, detection, and Perform
elimination software for servers
==============================================================================
3. Identify and implement protection requirements for Perform
resources residing on End User Machines
==============================================================================
4. Keep virus avoidance signature files current for Perform
End User Machines
==============================================================================
5. Perform self audits of all diskettes and End User Perform
Machines potentially affected by a virus
==============================================================================
6. Respond to virus attacks and initiate corrective Perform at Perform at
action to eliminate detected viruses - see process for server end user
immediate access for IBM. level level
==============================================================================
B) SCHEDULE B (SERVICE LEVELS) IS HEREBY AMENDED AS FOLLOWS:
---------------------------------------------------------
Except for "Supplement B-1 to Schedule B", "Schedule B" is deleted in
its entirety and replaced with "Revision 1 to Schedule B" which is
attached hereto. "Supplement B-1 to Schedule B" shall remain in full
effect except as modified by this Amendment.
C) SCHEDULE C (CHARGES) IS HEREBY AMENDED AS FOLLOWS:
--------------------------------------------------
"Schedule C" including "Supplement C-1 to Schedule C" is deleted in
its entirety and replaced with "Revision 1 to Schedule C" which is
attached hereto.
D) SCHEDULE E (PROJECTS) IS HEREBY AMENDED AS FOLLOWS:
---------------------------------------------------
1. EXHIBIT E-1
IBM/FRANKLIN CONFIDENTIAL Page 7 of 11
Amendment 2 v2-FINAL.doc Amendment Number 2
The following rows are modified as follows:
-------------------------------------------------------------------------------------
AUTOMATION / ENTERPRISE SYSTEMS MANAGEMENT
------------------------------------- -----------------------------------------------
Automation - Event Monitoring and IBM will implement the blueprint developed
Mgmt (above) beginning January 1, 2003. This
includes continuing to utilize the current BMC
Patrol monitors, and putting Tivoli monitoring
technology across the remaining platforms,
potentially replacing, over time, the BMC
deployed monitors subject to Franklin approval.
------------------------------------- -----------------------------------------------
Help Desk Interfaces If the Parties execute a mutually agreeable
Statement of Work ("SOW"), IBM will allow
Franklin access to eESM, an IBM
service-offering platform that supports Help
Desk management. This solution will be
planned and an SOW will be developed by a
team made up of IBM personnel and Franklin
personnel within 90 days from the Amendment 2
Effective Date. If after 90 days an
agreement is not met, Franklin will continue
to use Remedy and IBM will be relieved of
it's obligation to build an XML bridge
between Remedy and TSD. In the event that
the Parties do execute an SOW for eESM
service as described herein, IBM will provide
all necessary licenses, maintenance, upgrades
and training for the provision of the eESM
service in accordance with the SOW and IBM
shall be responsible for installation,
porting, developing interfaces on IBM
systems, and operation of the eESM solution.
In the event that the Parties do execute an
SOW for eESM service as described herein,
Franklin shall be responsible for any out of
pocket costs and/or expenses related to
Franklin personnel and any application
software changes (including interface changes
to Franklin systems), which may arise. This
eESM solution will replace the bridge between
Remedy and TSD.
------------------------------------- -----------------------------------------------
SYSTEMS MANAGEMENT CONTROLS
------------------------------------- -----------------------------------------------
Change Management If the Parties execute a mutually agreeable
Statement of Work ("SOW"), IBM will allow
Franklin access to eESM, an IBM
service-offering platform that supports
Change Management. This solution will be
planned and an SOW will be developed by a
team made up of IBM personnel and Franklin
personnel within 90 days from the Amendment 2
Effective Date. If after 90 days an
agreement is not met, Franklin will continue
to use Remedy and IBM will be relieved of
it's obligation to build an XML bridge
between Remedy and TSD. In the event that
the Parties do execute an SOW for eESM
service as described herein, IBM will provide
all necessary licenses, maintenance, upgrades
and training for the provision of the eESM
service in accordance with the SOW and IBM
shall be responsible for installation,
porting, developing interfaces on IBM
systems, and operation of the eESM solution.
In the event that the Parties do
IBM/FRANKLIN CONFIDENTIAL Page 8 of 11
Amendment 2 v2-FINAL.doc Amendment Number 2
execute an SOW for eESM service as described
herein, Franklin shall be responsible for any
out of pocket costs and/or expenses related to
Franklin personnel and any application
software changes (including interface changes
to Franklin systems), which may arise. This
eESM solution will replace the bridge between
Remedy and TSD.
------------------------------------- -----------------------------------------------
Problem Management IBM will implement and maintain a problem
management process, building upon the problem
management process definition work currently
being undertaken by Franklin.
If the Parties execute a mutually agreeable
Statement of Work ("SOW"), IBM will allow
Franklin access to eESM, an IBM
service-offering platform that supports
Problem Management. This solution will be
planned and an SOW will be developed by a
team made up of IBM personnel and Franklin
personnel within 90 days from the Amendment 2
Effective Date. If after 90 days an agreement
is not met, Franklin will continue to use
Remedy and IBM will be relieved of it's
obligation to build an XML bridge between
Remedy and TSD. In the event that the Parties
do execute an SOW for eESM service as
described herein, IBM will provide all
necessary licenses, maintenance, upgrades and
training for the provision of the eESM
service in accordance with the SOW and IBM
shall be responsible for installation,
porting, developing interfaces on IBM
systems, and operation of the eESM solution.
In the event that the Parties do execute an
SOW for eESM service as described herein,
Franklin shall be responsible for any out of
pocket costs and/or expenses related to
Franklin personnel and any application
software changes (including interface changes
to Franklin systems), which may arise. This
eESM solution will replace the bridge between
Remedy and TSD.
------------------------------------- -----------------------------------------------
Add the following row under Automation / Enterprise Systems Management
to read:
------------------------------------- -----------------------------------------------
Consolidation of the Franklin The Parties will address any mismatch, which
Environment may exist between the Baselines and the
Franklin data processing environment as follows,
excluding DASD. IBM and Franklin will each appoint
qualified personnel to a Project team which will
review the Franklin environment with the goal of
consolidating functions and machines, eliminating
requirements, and modifying processes in order to
bring Franklin's data processing environment in line
with the Baselines. This Project team will determine
and implement a plan by September 30, 2002 to address
the data processing environment and Baseline mismatches,
where they occur. To the extent that the Project team
determines that Franklin's requirements are not
accurately reflected
IBM/FRANKLIN CONFIDENTIAL Page 9 of 11
Amendment 2 v2-FINAL.doc Amendment Number 2
by the Baselines, the parties may agree to (1) use ARCs
and RRCs or (2) modify the Baselines in accordance with
the Planned Change methodology (Section 7.0 of Schedule C
to the Agreement).
------------------------------------- -----------------------------------------------
E) SCHEDULE H (NETWORK SERVICES) IS HEREBY AMENDED AS FOLLOWS:
1. SECTION 3.0- IVR NETWORKING RESPONSIBILITIES: Insert the
following sentence under 3.0 IVR Networking Responsibilities: The
Services described in this Section 3.0 IVR Networking
Responsibilities will be provided only in the event that Franklin
elects to receive such Services by providing thirty days written
notice to IBM.
F) SCHEDULE M (BUSINESS RECOVERY SERVICES) IS HEREBY AMENDED AS FOLLOWS:
On September 20, 2001, the Parties executed Change Authorization
#1F0001. "Revision 1 to Exhibit M-2, Supplement Number BL65803",
amends, replaces and restates both "Exhibit M-2, Supplement Number
BL65803" and Change ▇▇▇▇▇▇▇▇▇▇▇▇▇ # ▇▇▇▇▇▇ to reflect the change made
to Exhibit M-2, Supplement Number BL65803 by Change Authorization
#1F0001.
G) THE FOLLOWING IS HEREBY ADDED TO SCHEDULE M (BUSINESS RECOVERY
SERVICES):
----------------------------------------------------------------------
1. The Parties acknowledge and agree, that due to the destruction of
the Fiduciary Data Center located at the World Trade Center in
New York, the scope and coverage of Business Recovery Services
provided by IBM pursuant to the Agreement may change. The Parties
agree to negotiate in good faith, modifications to the scope and
coverage of Business Recovery Services within the four months
following the Amendment 2 Effective Date.
2. The Parties acknowledge and agree that except as expressly set
forth in this Amendment or the Agreement, there shall be no
Recovery Daily Usage Charges to support the Critical
Applications. IBM support and hardware which may be provided to
support out of scope applications shall be subject to
commercially reasonable rates.
H) THE FOLLOWING IS HEREBY ADDED TO SECTION 7.3 (A) OF SCHEDULE M
(BUSINESS RECOVERY SERVICES):
----------------------------------------------------------------------
The Parties acknowledge and agree that a Disaster, as defined in the
Agreement, may mean either a Full Site Disaster or a Partial Site
Disaster. A Full Site Disaster shall mean an event requiring the
recovery of all, or a substantial portion of all, of the applications
or platforms to a Disaster Recovery Center. A Partial Site Disaster
shall mean an event requiring the recovery of one or more but not all
or substantially all of the applications or platforms to a Disaster
Recovery Center. Franklin shall notify IBM within a commercially
reasonable time of its Disaster Declaration whether there has been a
Full Site Disaster or a Partial Site Disaster.
IBM/FRANKLIN CONFIDENTIAL Page 10 of 11
Amendment 2 v2-FINAL.doc Amendment Number 2
III. THE SUPPLEMENTS
---------------
A) SUPPLEMENT A-1:
---------------
1. Section III:
Change "2 World Trade Center" to "600 ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇".
B) SUPPLEMENT H-1:
---------------
1. Section 1.0:
Change "▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇" to "600 ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇".
2. Section 2.0,a.,4.:
Change "World Trade Center" to "600 ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇".
C) SUPPLEMENT I-1:
---------------
1. Section 1.0:
Change "2 ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇" to
"600 ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇".
THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS AMENDMENT, UNDERSTAND IT, AND
AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE PARTIES AGREE THAT
THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES
RELATING TO THIS SUBJECT SHALL CONSIST OF 1) THIS AMENDMENT, 2) THE SCHEDULES
AND SUPPLEMENTS TO THE SCHEDULES, AND 3) THE AGREEMENT, DATED FEBRUARY 6, 2001,
AS PREVIOUSLY AMENDED. Franklin's approval of this Amendment shall be considered
acceptance by Franklin of IBM's provision of the Services for the corresponding
charges specified in THE aGREEMENT, AS AMENDED. THIS STATEMENT OF THE AMENDMENT
SUPERSEDES ALL PROPOSALS OR OTHER PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL
OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER
DESCRIBED IN THIS AMENDMENT.
Accepted by: Accepted by:
INTERNATIONAL BUSINESS MACHINES FRANKLIN ▇▇▇▇▇▇▇▇▇ COMPANIES, LLC
CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------- ---------------------
Authorized Signature Authorized Signature
▇▇▇▇ ▇. ▇▇▇ Date 6/17/02 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Date June 10, 2002
----------- ------- ----------------- -------------
Name (Type or Print) Name (Type or Print)
IBM/FRANKLIN CONFIDENTIAL Page 11 of 11
Amendment 2 v2-FINAL.doc Amendment Number 2
Amendment Number 3
to the
Managed Operations Services Agreement
--------------------------------------------------------------------------------
This Amendment Number 3 to the Managed Operations Services Agreement (this
"Amendment"), is made by and between Franklin ▇▇▇▇▇▇▇▇▇ Companies, LLC, a
Delaware Limited Liability Company, having a place of business at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ("Franklin") and International Business Machines
Corporation, having place of business at ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ("IBM")
(collectively referred to herein as the "Parties"). This Amendment is entered
into on this 3rd day of February, 2003 (the "Amendment 3 Effective Date"). This
Amendment amends the Managed Operations Services Agreement, dated February 6,
2001, between Franklin and IBM as modified or amended prior to the date hereof
including any schedules, supplements, exhibits and attachments thereto (the
"Agreement"). Capitalized terms used but not defined herein shall have their
respective meanings as defined in the Agreement. In the event of any
inconsistency between the terms of the Agreement and the terms of this
Amendment, the terms of this Amendment shall prevail. All terms and conditions
of the Agreement not specifically amended or supplemented herein, shall remain
unchanged and in full force and effect. The Term of this Amendment will begin as
of the Amendment 3 Effective Date and will run concurrently with Schedule M
(Business Recovery Services) of the Agreement.
This Amendment modifies the Agreement such that, IBM shall provide move install
and support services as described herein for the equipment as specifically set
forth in Attachment 1 hereto, including but not limited to a mainframe, FEP,
terminal controllers, tape controllers, and ATL/VTS (the "Amendment 3
Equipment"). Attachment "1" attached hereto is made part of this Amendment by
this reference.
I. DESCRIPTION OF SERVICES:
Under this Amendment, the Amendment 3 Equipment is to be moved, installed and
kept in a state of readiness by IBM for test Events and Disaster recovery events
at the IBM Boulder Recovery Center (the "Recovery Center") as described in
Schedule M. The Amendment 3 Equipment will be provided by Franklin and includes
the mainframe, FEP, terminal controllers, and tape controller, which are located
at the Franklin Rancho ▇▇▇▇▇▇▇ Facility prior to this Amendment, and the
ATL/VTS, which is located at the Franklin St. Petersburg Facility prior to this
Amendment. The Amendment 3 Equipment will be packed, shipped, installed, and
supported by IBM at building 9 in the Recovery Center as described in this
Amendment.
Service Levels as described in Revision 1 to Schedule B and the Baselines
specified in Revision 1 to Schedule C do not apply to the Amendment 3 Equipment.
Services under this Amendment shall begin within ten (10) business days of the
Amendment 3 Effective Date. The move and installation of the Amendment 3
Equipment is estimated to conclude sixty (60) days from the commencement of
Services.
IBM/FRANKLIN CONFIDENTIAL Page 1 of 6
IBM Amendment 3 FINAL.doc
1. PROJECT MANAGERS:
The persons listed below shall be Project Managers pursuant to this
Amendment. IBM's Project Manager(s) shall be responsible for
performing the following tasks: Oversee the IBM resources allocated to
this Amendment, communicate the status of the work being done by IBM
under this Amendment to Franklin, oversee the work being performed
under this Amendment for consistency with this Amendment, and any
other obligations set out in the Agreement.
* IBM Project Manager: Nick Dancer
* Franklin Project Manager: ▇▇▇▇▇▇ ▇▇▇▇▇▇
2. DEFINITIONS
(a) "Amendment 3 Equipment" means the dedicated mainframe
configuration as specified in Attachment 1 and includes the
mainframe, FEP, terminal controllers, tape controller, and
ATL/VTS.
(b) "ATL/VTS" means automated tape library/virtual tape storage
device.
(c) "FEP" means front end processor.
(d) "IPL" means initial program load.
3. ASSUMPTIONS AND DEPENDENCIES
(a) IBM shall maintain system code, applications, and database data
on EMC DASD which will be co-resident with other Franklin
equipment at the Recovery Center and kept up to date by IBM with
Franklin's production data center located in Rancho Cordova, CA
via a SRDF process to meet the RTO/RPO requirements as specified
in the Agreement. However, the EMC DASD and SRDF solution are not
in scope of this Amendment and will be handled separately. If,
for any reason, Franklin decides not to implement SRDF
technology, the mainframe will continue to be kept at a ready
state pending any Disaster declaration.
(b) The Amendment 3 Equipment as listed in Attachment 1 is accurate
and will be validated prior to shipment by Franklin. Franklin
shall reconfirm the accuracy of Attachment 1 during installation
by IBM.
4. IBM RESPONSIBILITIES
IBM will:
I. MOVE AND INSTALL THE AMENDMENT 3 EQUIPMENT AS FOLLOWS:
(a) pack the Amendment 3 Equipment to be moved to the Recovery
Center;
(b) insure the Amendment 3 Equipment during the move to the Recovery
Center;
(c) ship the Amendment 3 Equipment to the Recovery Center;
(d) install the Amendment 3 Equipment in the Recovery Center;
(e) connect the mainframe system to the Franklin network environment
in the Recovery Center;
IBM/FRANKLIN CONFIDENTIAL Page 2 of 6
IBM Amendment 3 FINAL.doc
(f) design, implement and maintain the front end processor (FEP) and
local network in the Recovery Center, including routers,
switches, cabling, fiber connections, and SONET access facilities
to carrier points of presence; and
(g) perform the following installation tests to certify the
completion of the successful installation and notify Franklin of
the successful installation:
(1) an IPL on the mainframe from data on the connected DASD;
(2) a restore on the ATL/VTS of any file from a tape produced at
Rancho ▇▇▇▇▇▇▇ and a backup from any file created on the
Recovery Center mainframe; and
(3) a line test to any one of the existing Franklin partner
connections on the FEP.
II. PROVIDE SUPPORT SERVICES FOR AMENDMENT 3 EQUIPMENT AS FOLLOWS:
(a) maintain the Amendment 3 Equipment in a production-ready
state (available for IPL) for maintenance, test Events and
Disaster Events, but only perform IPLs during scheduled
maintenance, test Events or declared Disaster Events;
(b) support test Events and Disaster Events in a manner
consistent with Schedule M;
(c) for scheduled test Events and for Disaster Events, the
mainframe will be initialized with the current system code,
application and data images;
(d) coordinate maintenance of the system (i.e. contact
maintenance vendors when maintenance is required and assist
with logistics at the Recovery Center); and
(e) assist Franklin and Franklin's telecom carriers to prepare
for and effect network changes required to support test
Events and Disaster Events.
5. FRANKLIN RESPONSIBILITIES
Franklin will:
(a) provide all information that is reasonably necessary and
available for IBM to provide the Services set forth
hereunder;
(b) assign a part time Project Manager to work with IBM;
(c) take financial responsibility for and provide all necessary
software (including, but not limited to: operating system,
utilities, middleware, applications, and database management
system) and the Amendment 3 Equipment required to provide
the Services, including leases, license fees, refresh,
upgrade fees and maintenance fees. Franklin shall determine
when and if refresh and/or upgrades shall occur;
(d) provide the maintenance agreement for the mainframe, FEP,
and ATL/VTS configurations;
(e) provide IBM with authorization to contact maintenance
vendors and coordinate maintenance with Franklin's consent
and provide maintenance assistance;
(f) assist with the coordination of vendors;
(g) work with Franklin's telecom carriers, with IBM assistance,
to prepare for and effect network changes required to
support test Events and Disaster Events;
(h) formally acknowledge in writing the successful installation
of all Amendment 3 Equipment upon completion of the
installation tests as outlined in Section I(4)(I)(g)(1-3)
herein;
IBM/FRANKLIN CONFIDENTIAL Page 3 of 6
IBM Amendment 3 FINAL.doc
(i) provide all equipment reasonably necessary in order to
provide the Services set forth herein, including the
Amendment 3 Equipment, and upgrades and associated
maintenance therefore. Franklin shall determine when and if
upgrades shall be used.
6. MOVE AND INSTALLATION COMPLETION CRITERIA
IBM will have fulfilled its Move and Installation obligations when the
one-time set-up tasks as set forth in Section I(4)(I) herein have been
completed and notification has been provided to Franklin of the
successful installation of the Amendment 3 Equipment as described in
Section I(4)(I)(g) and Franklin has formally acknowledged in writing
that the Move and Installation has occurred.
--------------------------------------------------------------------------------
II. CHARGES
1. SERVICE CHARGES
(a) One-Time Fee: : There shall be a one time fee for the Services
rendered hereunder in the amount of $94,492 USD. This Fee shall
be invoiced upon the Amendment 3 Effective Date.
(b) On-going Support Services Charges: Once the Move and Installation
Completion Criteria is met, IBM shall provide ongoing Support
Services as described herein at the Charges specified in Table
II.1 below, which are hereby added to the ASC specified in
Revision 1 to Schedule C. Additionally, at the time the Move and
Installation Completion Criteria is met, the BR ASC specified in
Exhibit C-1 is reduced by the Charges specified in the following
Table II.1 due to the removal of Supplement Number BL65805.
Charges will be prorated for any partial month:
TABLE II.1
--------------------------------------------------------------------------------------------------------
Ongoing Support Charges (Monthly Charges)
----------------------- ------------- ------------ ------------ ----------- -------------- -------------
Contract Year 2003 2004 2005 2006 2007 2008
(Jan and Feb
only)
----------------------- ------------- ------------ ------------ ----------- -------------- -------------
ADDITION to SO 21,446 21,437 21,439 21,462 21,462 23,917
ASC per Month
----------------------- ------------- ------------ ------------ ----------- -------------- -------------
REDUCTION to BR 14,613 14,613 14,613 14,613 14,613 14,613
ASC per Month
----------------------- ------------- ------------ ------------ ----------- -------------- -------------
2. AMENDMENT 3 TERMINATION CHARGE
Franklin may terminate the Services described in this Amendment for
convenience by providing thirty (30) days written notice to IBM and
paying the Amendment 3 Termination Charge specified in Table II.2
below (the "Amendment 3 Termination Charge"). Should Franklin
terminate the Agreement for convenience, the Amendment 3 Termination
Charge will be added to the Termination Charges specified in Revision
1 to Schedule C. Termination of the Amendment will not reinstate
Supplement Number BL65805, however, in the event that this Amendment
is terminated by Franklin and Supplement Number BL65805 is
subsequently terminated, the Reduction to BR ASC per month as set
forth above in Table II.1 shall survive the termination of this
Amendment and be applicable to the BR ASC Charges specified in the
Agreement. At the time of termination or expiration of the Term,
Franklin shall be responsible for the packaging and shipping of the
Amendment 3 Equipment within thirty (30) days.
IBM/FRANKLIN CONFIDENTIAL Page 4 of 6
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TABLE II.2
---------------------- ------------ ------------- ------------ ------------ ------------- -------------
Calendar Year: 2003 2004 2005 2006 2007 2008
(Jan and Feb
only)
---------------------- ------------ ------------- ------------ ------------ ------------- -------------
Amendment 3 57,992 44,865 30,429 28,408 16,461 5,634
Termination Charge:
---------------------- ------------ ------------- ------------ ------------ ------------- -------------
3. TRAVEL AND LIVING EXPENSES
Until such time as the Move and Installation Completion Criteria is
met, Franklin is responsible for actual and reasonable Travel and
Living Expenses incurred by IBM personnel when non-local travel is
required to provide the Services described in this Amendment. Franklin
will not be responsible for Travel and Living Expenses incurred by IBM
personnel in excess of ten percent (10%) of the One Time Fee set forth
in this Amendment unless Franklin provides prior written
authorization. After the Move and Installation Completion Criteria is
met, no Travel and Living expenses will be reimbursed without
Franklin's written authorization.
--------------------------------------------------------------------------------
III. SCHEDULE M (BR SERVICES) IS HEREBY AMENDED AS FOLLOWS:
At such time as the Move and Installation Completion Criteria is met, Supplement
Number BL65805 in Exhibit M-2 is deleted in its entirety.
--------------------------------------------------------------------------------
IBM/FRANKLIN CONFIDENTIAL Page 5 of 6
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IV. SIGNATURES AND ACKNOWLEDGEMENT
THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS AMENDMENT, UNDERSTAND IT, AND
AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE PARTIES AGREE THAT
THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES
RELATING TO THIS SUBJECT SHALL CONSIST OF 1) THIS AMENDMENT, 2) THE SCHEDULES
AND SUPPLEMENTS TO THE SCHEDULES, AND 3) THE AGREEMENT, DATED FEBRUARY 6, 2001,
AS PREVIOUSLY AMENDED. FRANKLIN'S APPROVAL OF THIS AMENDMENT SHALL BE CONSIDERED
ACCEPTANCE BY FRANKLIN OF IBM'S PROVISION OF THE SERVICES FOR THE CORRESPONDING
CHARGES SPECIFIED IN THE AGREEMENT, AS AMENDED. THIS STATEMENT OF THE AMENDMENT
SUPERSEDES ALL PROPOSALS OR OTHER PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL
OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER
DESCRIBED IN THIS AMENDMENT.
Accepted by: Accepted by:
INTERNATIONAL BUSINESS MACHINES FRANKLIN ▇▇▇▇▇▇▇▇▇ COMPANIES, LLC
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------- --------------------
Authorized Signature Authorized Signature
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Date 2/3/03 ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Date 2/3/03
-------------- ------ ---------------- ------
Name (Type or Print) Name (Type or Print)
IBM/FRANKLIN CONFIDENTIAL Page 6 of 6
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