Exhibit 10.32
AMENDMENT #1
TO
TRANSITION SERVICES AGREEMENT
AMENDMENT #1
TO
TRANSITION SERVICES AGREEMENT
This amendment #1 (the "Amendment") to the Transition Services Agreement dated
as of November 1, 2001 by and between Pitney Xxxxx Inc., a Delaware corporation
("Pitney Xxxxx" or "PBI") and Imagistics International Inc., a Delaware
corporation ("Imagistics") (the "Agreement") is made effective as of the 1st day
of January, 2003.
RECITALS
WHEREAS, Pitney Xxxxx and Imagistics desire to modify the Agreement
pursuant to its Section 9.12 in order to delete or amend certain schedules
attached thereto.
NOW THEREFORE, in consideration of the covenants set forth herein as well
as other consideration the value and receipt of which is hereby acknowledged,
Pitney Xxxxx and Imagistics, for themselves, their successors and assigns,
hereby agree as follows:
1. Each schedule attached to the Agreement (the "Original Schedule") is
hereby replaced in its entirety with the corresponding schedule attached
hereto (the "Replacement Schedule").
2. The following Original Schedules are hereby terminated and deleted in
their entirety: Schedules 1B (Real Estate Transaction Services), 1C-2
(Payroll, Travel Reimbursement, Accounts Payable), 1C-4 (Fixed Assets),
1D (Benefits Administration), 1G (Safety and Environmental), 1L (Mailroom
Services), 1M (Import and Customs Compliance) and 1N (Document Services
Group Services).
3. The services set forth in the attached Replacement Schedules shall be
provided by PBI to Imagistics until June 30, 2003. Except with regard to
Schedules 1A, 1E and 1J, this date shall be extended for individual
schedules upon Imagistics' request to no later than December 31, 2003
consistent with the private letter ruling addressed to PBI from the
Internal Revenue Service dated January 7, 2003.
4. All other provisions of the Agreement remain unchanged and in full force
and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be signed
by their duly authorized representatives.
PITNEY XXXXX INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President, Mail Solutions
IMAGISTICS INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
SCHEDULE 1
PBI / Imagistics Transition Services Agreement
SCHEDULE 1 -- SUMMARY OF REPLACEMENT SCHEDULES
----------------------------------------------
SCHEDULE
--------
Service Parts Logistics 1A
Accounting
Sales, Use and Property Tax 1C-1
General Ledger 1C-3
Inventory Accounting 1C-5
Accounts Receivable 1C-6
Supplies Line Order Entry System 1E
Customer Care Call Dispatch 1F
Field Service Systems Support 1H
Non-Focus Field Service 1J
Telecom Costs in Shared Locations 1K
TechCentral Service Provisioning and Service Level Agreement 2
PBI / Imagistics Transition Services Agreement
SCHEDULE 1A -- SERVICE PARTS LOGISTICS
GENERAL
-------
PBI will furnish Imagistics with logistics support for its U.S. service parts.
This service will cover warehousing and outbound logistics for service parts.
Finished goods logistics are excluded from this agreement.
DURATION
--------
The period commencing at the Distribution Date and concluding June 30, 2003,
provided, however, that Imagistics may terminate Service Parts Logistics
services pursuant to this Schedule 1A on or after March 31, 2003 upon giving PBI
not less than 30 days advance written notice. The deadline for placing new
orders under this Schedule is May 15, 2003. All Imagistics inventory shall be
removed on or before June 30, 2003.
COST
----
$212,500 per month (excluding carrier costs).
Costs for outbound carrier services and repackaging of parts will be billed to
Imagistics by PBI based on the percentage of parts that are shipped on a monthly
basis. This charge will be an allocation of total outbound freight costs, based
on Imagistics monthly line-item volumes as a percentage of total line-items
shipped.
At the termination of the agreement, Imagistics will pay for all expenses
related to the pick/pack and transport of parts to a new facility. This charge
will be based on actual costs and overheads incurred.
Imagistics volume levels are assumed to be equal to levels supported in 2000.
Should Imagistics annual parts volumes (defined by SKUs) or space usage vary
from 2000 levels by more than 10%, a revised charge will be calculated by PBI
and will not be unreasonably refused by Imagistics.
INCLUDED SERVICES
-----------------
PBI will provide logistics for service parts:
o Receipt and repackaging of parts from vendors.
o Storage of parts in warehouse.
o Pick/pack of parts for field service.
o Load shipments onto outbound carriers.
In addition, PBI will provide the following services:
-----------------------------------------------------
Negotiate terms with outbound carriers.
Support IT systems related to parts logistics (PARTS system, Inventory Control
Integration ICI system).
Provide access to Imagistics to the ICI system to allow them to analyze and
manage inventory levels).
Insure inventory from physical loss.
Provide inventory controls.
Conduct track and trace on lost/late outbound shipments. Reship if necessary.
Excluded Services
-----------------
Procurement and payment for all parts is the sole responsibility of Imagistics.
Parts inventory will be owned by Imagistics.
Ongoing support of ACESS system is covered by Field Service agreement Schedule
1H.
Any liability for damages to parts shipments or for third party claims of
damages as a result of parts shipments to Imagistics will be the sole
responsibility of Imagistics unless caused by willful misconduct by PBI.
PBI / Imagistics Transition Services Agreement
SCHEDULE 1C-1 -- ACCOUNTING SERVICES -- SALES, USE AND PROPERTY TAX
-------------------------------------------------------------------
GENERAL
-------
PBI will provide Imagistics with the following services.
DURATION
--------
Distribution Date to June 30, 2003 or, pursuant to Section 3 of Amendment #1,
the duration may be extended up to December 31, 2003. (maintenance of all tax
tables)
Cost
----
$1,000 per month.
INCLUDED SERVICES
-----------------
o Maintenance of tax tables includes:
o Maintain Spitab tables.
o Maintain use-tax tables.
o Maintain property tax depreciation tables for tangible personal tax.
o Maintain PTMS (fixed asset) tax tables.
EXCLUDED SERVICES
-----------------
o PBI will not conduct any tax research on behalf of Imagistics after August
1, 2001.
CONDITIONS
----------
o Imagistics will sign all tax returns submitted by Imagistics.
o Imagistics will indemnify PBI for all returns completed by PBI on the
behalf of Imagistics, consistent with the appropriate terms in the tax
separation agreement.
PBI / Imagistics Transition Services Agreement
SCHEDULE 1C-3 -- ACCOUNTING SERVICES -- GENERAL LEDGER
------------------------------------------------------
GENERAL
-------
Imagistics will continue to use the general ledger system within PBI's SAP
environment during the transition period. Maintenance of the system will be
provided by PBI, while most accounting activities related to the general ledger
will be conducted by Imagistics.
Imagistics accounting system structure will be maintained at a level consistent
with the period preceding the spin-off. Any changes to this structure will be
made at the sole discretion of PBI.
DURATION
--------
Distribution Date to June 30, 2003 or, pursuant to Section 3 of Amendment #1,
the duration may be extended up to December 31, 2003.
COST
----
$36,833 per month.
INCLUDED SERVICES
-----------------
o Maintenance of the SAP system (including Chart of Accounts, cost center
structure, product hierarchy, Accrual reversal, open and close posting
periods).
o Maintenance of access security to SAP.
o Reconciliation of feeder systems to general ledger.
o Reconciliation of shared accounts to general ledger.
o Prepare the feeder closing schedule for Danbury Data Center.
o Facilitate closing entries based on requests from Imagistics.
METRICS/SERVICE LEVELS
----------------------
PBI will ensure that closing schedules for Imagistics books will conform to a
monthly closing schedule that will be provided to Imagistics management,
consistent with the pre-spin-off practice. It is expected that Imagistics'
monthly close of feeder systems will conform closely with that of PBI (timing is
dictated by the timing of the run of PBI and Imagistics unique feeder systems).
PBI / Imagistics Transition Services Agreement
SCHEDULE 1C-5 -- ACCOUNTING SERVICES -- INVENTORY ACCOUNTING
------------------------------------------------------------
GENERAL
-------
Imagistics will continue to use the inventory accounting system within PBI's
financial system during the transition period.
DURATION
--------
Distribution Date to June 30, 2003 or, pursuant to Section 3 of Amendment #1,
the duration may be extended up to December 31, 2003.
COST
----
$21,250 per month.
INCLUDED SERVICES
-----------------
o Maintenance of the CIS Inventory system (includes all product code
hierarchy, depreciation rates, etc.)
o Reconciliation of feeder systems to general ledger (demos, finished goods,
rental assets).
o Ensure output from inventory system is accurately reflected within G/L and
Income Statement.
o Calculation of Purchase Material Variances on facsimile equipment and
parts.
o Ensure reconciliations are accurate and current for shared accounts.
PBI / Imagistics Transition Services Agreement
SCHEDULE 1C-6 -- ACCOUNTING SERVICES - ACCOUNTS RECEIVABLE
----------------------------------------------------------
GENERAL
-------
Imagistics will continue to use the Mechanical Accounts Receivable System during
the transition period. Maintenance of the system will be provided by PBI.
PBI will support reconciliation of Accounts Receivable to the General Ledger,
and will work in conjunction with Imagistics to ensure that cash application
through the separate lock-boxes is correct.
Imagistics invoices will be laser printed onto preprinted stock provided by
PBI's Document Services Group, inserted and mailed to customers. PBI will
continue to issue over due statements to Imagistics' customers with outstanding
invoices greater than 40 days.
There will be no cross-divisional (i.e. Inter-company) file corrections within
the Accounts Receivable system. Imagistics will make no changes to the A/R
system beyond normal customer maintenance functions defined below.
DURATION
--------
Distribution Date to June 30, 2003 or, pursuant to Section 3 of Amendment #1,
the duration may be extended up to December 31, 2003. (A/R systems usage and
maintenance)
Distribution Date to June 30, 2003 or, pursuant to Section 3 of Amendment #1,
the duration may be extended up to December 31, 2003. (Reconciliation and
accounting support)
COST
----
MONTHLY CHARGES FOR SALARIES AND A/R SYSTEM MAINTENANCE ARE $6,883.
Charges for printing, inserting and mailing invoices shall be at Document
Services Group competitive market rates.
Forms, envelopes and postage to be reimbursed at cost.
INCLUDED SERVICES
-----------------
PBI will:
o Maintain Spitab tables (A/R aging, Bad debts, Statements/Commissions).
o Tie-out daily Trial Balance to Mechanical Invoice Load .
o Tie-out and reconciliation monthly :
o Cashbook (JV#004)
o Refunds and Manual A/R Feeder (JV#99)
o A/R to General Ledger
o Analyze, in conjunction with Imagistics, misapplied cash through
lockbox process:
o Determine if any cash received through PBI lockbox is for
payment of Imagistics invoices.
o Remove from PBI G/L and A/R systems any misapplied cash.
o Wire any misapplied Imagistics cash to Imagistics on a timely
basis, to be determined jointly by both parties.
o Set-up & maintain Imagistics employees for A/R Security.
o Provide to Imagistics usage of the A/R system, including:
o On-line functionality of A/R System (entries made by Imagistics
staff):
- Write-Off.
- File Correction.
- Refund.
o Use of all existing A/R screens:
- CMS.
- Payment history/Fiche information.
o Reporting (access to Imagistics staff to generate following
reports):
- A/R Aging Report.
- Bad Debt Reporting.
- Refund Reporting.
Imagistics invoices will be laser printed onto preprinted stock provided by
PBI's Document Services Group, inserted and mailed to customers. PBI shall issue
weekly overdue statements to Imagistics customers with invoices outstanding more
than 40 days.
IMAGISTICS SERVICES PROVIDED TO PBI
-----------------------------------
o Analyze, in conjunction with PBI, misapplied cash through lockbox process:
o Determine if any cash received through Imagistics lockbox is for
payment of PBI invoices.
o Remove from Imagistics G/L and A/R systems any misapplied PBI cash.
o Wire any misapplied PBI cash to PBI on a timely basis, to be
determined jointly by both parties.
EXCLUDED SERVICES
-----------------
o All Imagistics Fax Accounts Receivable Processes (not presently conducted
by PBI).
o Management of Imagistics lockboxes.
o Cash application of cash received through Imagistics lockboxes (conducted
by Imagistics A/R staff).
o All A/R functions related Imagistics customers (conducted by Imagistics
A/R staff) including:
o Write-Off.
o File Correction.
o Refund.
o All daily/monthly reconciliations of Imagistics A/R will be assumed by
Imagistics after 6/30/03 or, if services pursuant to this Schedule are
extended as provided above, such date not later than 12/31/03 to which
such services are extended.
PBI / Imagistics Transition Services Agreement
SCHEDULE 1E -- SUPPLIES LINE ORDER ENTRY SYSTEM
-----------------------------------------------
GENERAL
-------
Imagistics will continue to use the PBI Telemarketing order entry system for the
Supplies Line for all Copier orders. Fax orders will not use the PBI
Telemarketing order entry system.
The order entry system described in this agreement includes the order entry
system, the customer database, pricing database, product master, credit card,
shipping database and invoicing which are also key support for the overall
Telemarketing system.
DURATION
--------
Distribution Date to June 30, 2003 or, pursuant to Section 3 of Amendment #1,
the duration may be extended up to December 31, 2003.
COST
----
Normal maintenance of the system, including updates for changes in products and
or pricing, will be provided through the same arrangement as existed
pre-Spinoff.
Postage, envelopes, letter stock and other soft-costs (such as credit card fees
and other chargebacks) will be charged back to Imagistics at actual cost
incurred.
Approved Imagistics-requested system changes and testing will charged at a rate
of $150 per hour.
INCLUDED SERVICES
-----------------
Maintenance of the Order Entry System, including Cost of Sales and Billing.
Daily feed of order information to invoicing system and revenue tie-outs.
Feed to general ledger and all required reconciliations.
Limited systems changes will be provided at rates shown above. All systems
changes must be approved in advance by PBI, and tested by PBI prior to
implementation.
Fax supply line orders will not use the PBI Order entry system except when
customers use purchase power account to pay for purchase.
Imagistics will make no changes to the PBI supply line order entry system,
except the daily maintenance of the Imagistics-related portions of the following
modules, which are sole responsibility of Imagistics:
o Products
o Contracts
o Cost of Sales/Accounting
o Product Routing
o Pricing
Note that each of the above modules are maintained by Imagistics in the period
prior to the spin-off.
PBI / Imagistics Transition Services Agreement
SCHEDULE 1F -- CUSTOMER CARE
----------------------------
GENERAL
-------
The PBI Customer Care Group will support Imagistics by providing incoming
service call receipt and service call dispatch. This service includes use of
both human and electronic (Integrated Voice Response, or IVR) call receipt.
DURATION
--------
This agreement will terminate on June 30, 2003.
COST
----
Imagistics shall pay a fixed base fee of $20,000 per month.
In addition, Imagistics shall pay $1.70 for each call made up to 110% of the
applicable month's Forecasted Call Volume. Imagistics shall pay an additional
50% (totaling $2.55) for each call in excess of 110% of the applicable month's
Forecasted Call Volume. If the number of calls in a given month is below that
month's Forecasted Call Volume, Imagistics shall pay $1.70 x that month's
Forecasted Call Volume.
By January 15, 2003, Imagistics shall provide a forecast of expected call volume
for the first six (6) months of 2003, broken down by month (the "Forecasted Call
Volume"). Such volume shall be calculated consistently with the 2002
computations. The Forecasted Call Volume may be changed only upon no less than
ninety (90) days prior written notice.
INCLUDED SERVICES
-----------------
Access to both customer service representatives and the integrated voice
response system (IVR) to accept inbound telephone calls requesting service calls
or service call information related to Imagistics products.
The representative will assess the nature of inbound calls and route calls to
field service representatives via the ACESS system.
Monthly reporting of call volumes will be provided to Imagistics at comparable
levels as existed prior to spin-off.
Only service-related calls are handled by the Customer Care group. All billing
issues are routed to Imagistics agents in Denver.
Upon receipt of completed call information, the agent will assess whether the
call is billable or covered by a service contract. The agent will then code the
order appropriately in the system.
PBI will provide disaster recovery Services for the Melbourne fax diagnostic
center only. Disaster Recovery service will allow customer telephone calls to be
routed to PBI call centers. PBI agents will provide limited service to such
customers at best efforts level, following previously agreed upon plans. If
additional expenses are incurred by PBI in support of this service, they will be
charged to Imagistics.
EXCLUDED SERVICES
-----------------
Service does not include the provision of disaster recovery service for
Imagistics call centers except as noted above.
PBI / Imagistics Transition Services Agreement
SCHEDULE 1H -- FIELD SERVICE SYSTEMS SUPPORT
--------------------------------------------
GENERAL
-------
PBI will furnish Imagistics with systems support related to call dispatch, parts
order, customer billing and service history for all US regions through the ACESS
system.
DURATION
--------
The period commencing at the Distribution Date and concluding June 30, 2003 or,
pursuant to Section 3 of Amendment #1, the duration may be extended up to
December 31, 2003.
COST
----
Support of the ACESS system and handhelds will be charged at a monthly rate of
$208,000 ($2.5 Mil annually).
At the termination of this agreement, all costs associated with migrating data
to a new system will be borne by Imagistics.
INCLUDED SERVICES
-----------------
For all Imagistics business, PBI will provide the following services:
o Ongoing support of the ACESS system.
o Access to the ACESS system by Imagistics staff.
o Daily batch feeds from ACESS to Imagistics billing system.
o Update and maintenance of hardware and software required for
wireless communication system (including handheld devices and AIM
system).
o Logistics for repair and redistribution of wireless devices.
RETURN OF ASSETS
----------------
Upon the expiration or termination of this Schedule, Imagistics shall promptly
return to PBI at Imagistics' expense all assets (hardware and software copies)
in the same condition as they were provided to Imagistics, normal wear and tear
excluded.
PBI / Imagistics Transition Services Agreement
SCHEDULE 1J - NON-FOCUS AREA FIELD SERVICE
------------------------------------------
GENERAL
-------
PBI will furnish Imagistics with maintenance service to Imagistics products in
areas that were serviced on June 1, 2001 by global mailing systems
representatives (the "Non-Focus Areas").
DURATION
--------
The period commencing at the Distribution Date and concluding June 30, 2003.
This agreement can be cancelled with 90 days written notice by either party.
This agreement may be renewed annually for a one-year period if specific terms
including cost can be agreed between both parties.
COST
----
$492,000 per month based on a target service population of 6,200 copiers and
13,000 faxes. Volumes will be re-evaluated quarterly. A machine is included in
the service volume if it is a rental or has a valid EMA or has had service work
conducted upon it within the past twelve months.
Pricing will remain consistent if volume remains within 5% of the target volume.
Pricing will be modified on a quarterly basis if volume changes by more than 5%
from the target volume. Revised pricing will be based on a mutually agreed
formula that takes into account changes in volume and model mix.
All initial costs associated with training of new and existing service
technicians on product updates or new products will be borne by Imagistics.
All costs associated with supply of parts to field service representatives for
repairs on Imagistics products will be borne by Imagistics.
INCLUDED SERVICES
-----------------
For the specific territories described below, customer service of specific
products (listed below), including:
o Preventative, remedial and emergency customer service.
o Installation of new products.
o Preparation and reinstallation of relocated products (excluding
actual transport of products which will be charged directly to
Imagistics).
o Customer training and/or consulting.
o Specific operating procedures have been mutually agreed upon and
are on file with PBI. These operating procedures may be changed
upon mutual consent of both parties.
Included Territories
--------------------
o The included territories are identified in a list previously
provided and agreed by Imagistics, which is maintained on file by
PBI. Changes to the list of included territories will be allowed
if the changes are mutually agreed to by Imagistics and PBI.
Specific Products Covered
-------------------------
o Facsimile/Multifunction devices - products whose primary function
is the transmission and receipt of scanned images. May also have
scan and store, printing or copying functions as secondary
options. May connect to a PC as a standalone print device.
o Analog Copier/Unconnected Digital Copiers - products whose primary
function is the reproduction of scanned images locally, not
connected to a LAN or WAN. May have built-in facsimile functions
as a secondary function. May connect to a PC as a standalone print
device.
o Digital Connected Copiers - products whose primary function is the
reproduction of scanned images, which are connected to a LAN or
WAN via an external print services device or an embedded printer
controller. PBI WILL SERVICE THE COPIER/PRINT DEVICE ONLY.
IMAGISTICS WILL INSTALL AND SERVICE NETWORKING OPTIONS/SOFTWARE AT
ITS OWN EXPENSE.
o Color Copiers (connected and unconnected) - products whose primary
function is the reproduction of scanned images in a CMYK (Color)
environment, locally or connected to a LAN or WAN. PBI IS NOT
REQUIRED TO SERVICE COLOR COPIERS IN ANY LOCATIONS.
SERVICES PROVIDED BY IMAGISTICS
-------------------------------
For the products listed above and for mutually agreed to approved new products,
Imagistics is obligated to provide initial technician training to all PBI
service technicians working in the Included Territories. The level of training
will be equivalent to that provided to Imagistics service technicians.
Imagistics will train a PBI rep at no cost to PBI, within 30 days, if a machine
is moved into a non-focus area by a major or national account.
TECHNICAL PRODUCT CHANGES: Timing of training to the PBI service techs will be
reasonably concurrent with training of Imagistics, with both parties making
best-efforts to make themselves available for such training.
NEW TECHNICIAN TRAINING: New technicians will be trained at regularly scheduled
Imagistics training courses.
Imagistics will offer free technical training to all PBI reps at regularly
scheduled Imagistics training courses if space is available.
All costs associated with initial training for new territories/equipment, not
previously trained will be borne by Imagistics (including travel-related costs
and all costs related to training materials and facilities, but excluding any
charges from PBI techs for time spent in training). Where additional training is
required due to unsatisfactory performance by a previously trained PBI rep, all
costs associated with this training will be borne by PBI. Where additional
training is required due to turnover of PBI reps (defined as any rep with less
than 2 years experience with PBI), all travel costs associated with this
training will be borne by PBI.
Technical telephone support of specified products will be provided in timely
fashion by Imagistics and at no cost to PBI. Imagistics technical support may
facilitate local Imagistics support at no cost to PBI if the technical support
hotline fails to lend the support to properly repair the product.
Imagistics will provide parts to PBI service technicians in the specified
regions according to the terms of the Service Parts Logistics Schedule at no
cost to PBI.
SERVICE STANDARDS DEFINITIONS
-----------------------------
Response time - the amount of time elapsed from customer call to arrival of rep
at customer location.
Average Uptime percentage - the average of the Uptime Percentages calculated for
each month in a rolling 3-month period. Monthly Uptime Percentages is calculated
as follows:
Uptime Percentage = Hours of Operation - Equipment Downtime
---------------------------------------
Hours of Operation
"Hours of Operation" means the hours of operation of a unit of Equipment, during
the hours of 8:00 a.m. to 5:00 p.m., Monday through Friday, for each week of
each calendar month.
"Equipment Downtime" means the Equipment is not functioning in substantial
compliance with its specifications, begins (during the Hours of Operation) from
the time the Customer speaks to an authorized Pitney Xxxxx Service
Representative about the malfunction to the Equipment, and does not include time
when the Equipment is inoperable due to: (i) scheduled preventative maintenance
and inspections; (ii) damage by misuse, malintent, casualty, or force majeure
events; (iii) failure of Customer to perform, or cause to be performed, adequate
preventative maintenance and inspections, including, without limitation proper
cleaning, handling and servicing of the Equipment; (iv) use of damaged,
improper, or non-Imagistics approved materials and supplies in the Equipment;
(v) changes in incoming power beyond published specifications; (vi) maintenance
or repairs required as a result of the Equipment being used in excess of the
Hours of
Operation; (vii) maintenance provided by parties other than Pitney Xxxxx; (viii)
failure of a non-standard part; (ix) malfunction of equipment or software
provided by Customer or third parties which interfaces with the Equipment; (x)
the use of the Equipment for training exercises; (xi) failure of Customer to
provide suitable temperature, humidity, line voltage, or any specified
environmental conditions; and (xii) the Equipment not being used in accordance
with the agreed applications and for the ordinary purpose for which it is
designed and intended.
Zone 1 : 0-35 Miles from a PBI District Office.
Zone 2 : 35.1-75 Miles from a PBI District Office.
Zone 3 : 75.1-100 Miles from a PBI District Office.
Zone 4 : 100.1+ Miles from a PBI District Office.
SERVICE STANDARDS
-----------------
Response Time
-------------
Zone 1,2 : Average 4 hours
Zone 3 : Average 5.5 hours
Zone 4 : Average 7 hours
Uptime
Zone 1,2 : Average 98%
Zone 3 : Average 96%
Zone 4 : Average 94%
PBI / Imagistics Transition Services Agreement
SCHEDULE 1K -- TELECOM EXPENSES IN SHARED LOCATIONS
---------------------------------------------------
GENERAL
-------
Imagistics will continue to use the PBI telephone systems specified shared
locations. This will include local and long distance service for the Imagistics
employees in the specified locations.
DURATION
--------
Distribution Date to the termination or expiry of shared lease locations.
PBI may at its sole discretion, require Imagistics to acquire at Imagistics'
expense their own telephone switches for any of the specified locations with 90
days written notice. Such an action will terminate the specific allocation
related to the impacted location, but will not cause the cancellation of the
agreement as relates to the other specified locations.
COST
----
Actual monthly local and long distance charges in the specified shared locations
will be allocated to Imagistics based on the proportion of the Imagistics rented
space as a percentage of the total square footage of the location.
In addition, Imagistics will be charged a proportionate amount of depreciation
(based on PBI's standard accounting practice for depreciation) of all shared
switches based on the above allocation methodology.
Charges will be billed monthly in arrears at cost incurred. Average Imagistics
historic monthly charges have been approximately $18-$20,000 per month.
INCLUDED SERVICES
-----------------
Local and Long Distance Service.
SPECIFIED OFFICE LOCATIONS
--------------------------
The included office locations are identified in a list previously provided and
agreed by Imagistics, which is maintained on file by PBI. This list will be
reviewed on a quarterly basis by both parties and modified to adjust for any
changes in switches in the shared locations.
SCHEDULE 2
PITNEY XXXXX
IMAGISTICS INTERNATIONAL INC.
SERVICE PROVISIONING
AND
SERVICE LEVEL
AGREEMENT
TECHCENTRAL
SECTION 1. Introduction.
The purpose of this Service Level Agreement ("SLA") is to establish
measurable and mutually agreeable targets for service delivery to Imagistics
International Inc. ("Imagistics") by the Pitney Xxxxx TechCentral organization.
This SLA will act as a guide for establishing expectations for both parties for
the scope of services, the metrics associated with the services.
LOCATIONS AND BUSINESS FUNCTIONS
The following locations and functions are considered to be part of
Imagistics:
Locations
---------
o 000 Xxxxxxx Xxxxx, Xxxxxxxx XX
o 0000 Xxxx Xxxxxxx Xxx, Xxxxxx XX
o PepsiCola Drive, Melbourne FL
o Nationwide (BPC's, RDC's, Sales Offices)
Business Functions
------------------
o "Back Office" Support (GL, HR, Marketing, Product Development, etc)
o Customer Call Centers
o Sales Support
o Service
o FAX Diagnostics
o Regional Distribution Centers
Tech Central Contacts
---------------------
Xxxxx Xxxxxxxx Art Xxxxxxx
Vice President, Enterprise Business Director, Operations & Network Services
Applications Internal : 421-3979
Internal: 420-6509 External (000) 000-0000
External: (000) 000-0000
Xxxx Xxxxxx Xxxxxxx Xxxxxxxxxx
Vice President, Computer Service Vice President, Customer Support Services
Internal : 421-3673 Internal : 421-3686
External : (000) 000-0000 External : (000) 000-0000
Imagistics IT
-------------
Xxx Xxxxxx, CIO Xxxx Xxxxxx, Director Customer
Internal : 430-7431 Support
External : (000) 000-0000 Services
Internal : 430- 7036
External : (000) 000-0000
SECTION 2. Scope of Service.
SCOPE OF SERVICE
TechCentral agrees to provide Imagistics with the services summarized
below for a period not to extend beyond June 30, 2003 or, pursuant to Section 3
of Amendment #1, the duration may be extended up to December 31, 2003.
o Application maintenance support of all shared applications.
o Operational support services for all Imagistics and shared
applications hosted in Danbury including turnover, DBA services,
Scheduling, data recovery, printing, and mailing services.
o Access to and availability of the PBI mainframe computers.
o END USER SUPPORT THROUGH THE SERVICE DELIVERY SUPPORT CENTER
("SDSC") TO RESPOND TO SYSTEM PASSWORD RESETS. THE IMAGISTICS IT
TEAM WOULD HANDLE ALL OTHER DESKTOP RELATED ISSUES DIRECTLY. SDSC
WILL CONTINUE TO SUPPORT IMAGISTICS DESIGNATED SUPPORT CENTER TO
SDSC CALLS ON SERVICES PROVIDED BY PBI THAT IMAGISTICS WILL
CONTINUE TO USE THROUGH 6/30/2003 OR 12/31/2003, AS APPLICABLE,
FOR EXAMPLE: PASSWORD RESETS ON MAINFRAME APPLICATIONS.
EXCEPTIONS
o TechCentral will continue to provide WAN support to shared PBI /
Imagistics locations until final separation -- through October
2006 based on the termination of the last shared lease. As shared
facility leases terminate or as facilities are relocated,
Imagistics will provide its own WAN services to these then
dedicated facilities.
o TechCentral will not provide application development services
related to the implementation of any new ERP system by Imagistics
with the exception of:
o TechCentral will provide MQ Series support through the
management of external resources contracted by and billed
directly to Imagistics as necessary to redirect message
traffic to alternate clients.
o TechCentral will provide reasonable subject matter expertise
for shared applications in support of Imagistics data
conversion/interface efforts. These services and related
charges will be negotiated on a project basis.
After December 31, 2001, Imagistics will be responsible for providing and
supporting all telephone systems and services to their dedicated facilities.
TechCentral will continue to provide support to shared PBI / Imagistics
locations until final separation -- through October 2006 based on the
termination of the last shared lease. As shared facility leases terminate or as
facilities are relocated, Imagistics will provide its own WAN services to these
then dedicated facilities.
IMAGISTICS RESPONSIBILITIES
o Imagistics will acquire and implement their own Wide Area Network
(WAN) and network equipment for Imagistics dedicated facilities by
December 31, 2001. Any new or relocated Imagistics dedicated
facilities will be transitioned to the Imagistics WAN by December
31, 2001. Imagistics will also be responsible for the initial
setup cost plus the recurring cost of the circuits to connect the
PBI WAN to the Imagistics WAN.
o Imagistics will develop the capability (internal or external) to
design, implement and support all data and telephone network
systems and services for dedicated Imagistics locations by
December 31, 2001.
Any additional costs incurred by TechCentral above its baseline operating
expenses, to support unique technology platforms for Imagistics (e.g. ManMan)
will be borne in total, by Imagistics. Any increased licensing cost incurred as
a result of the spin off will be passed through to Imagistics.
--------------------------------------------------------------------------------------------------
HELP DESK OUTAGE RESOLUTION TARGETS
--------------------------------------------------------------------------------------------------
SEVERITY CODE CUSTOMER IMPACT RESPONSE TO RESOLUTION ESCALATION
CUSTOMER* TIME
----------------- ------------------- ------------------- ------------ ---------------------------
Severity 1 Core Business Updates every 30 <2 Hours Notify applicable
URGENT Process outage minutes. TechCentral and
----------------- ------------------- ------------------- ------------ ---------------------------
--------------------------------------------------------------------------------------------------
HELP DESK OUTAGE RESOLUTION TARGETS
--------------------------------------------------------------------------------------------------
SEVERITY CODE CUSTOMER IMPACT RESPONSE TO RESOLUTION ESCALATION
CUSTOMER* TIME
----------------- ------------------- ------------------- ------------ ---------------------------
(Catastrophic) designated Business
management within 10
minutes
----------------- ------------------- ------------------- ------------ ---------------------------
Severity 2 Subset of a Core Every 60 minutes <5 Hours Notify applicable
HIGH Business Process TechCentral and
(Urgent) outage designated Business
management if not
resolved within 3 hours
----------------- ------------------- ------------------- ------------ ---------------------------
Severity 3 Single User Outage Daily <24 Hours Notify applicable
MEDIUM TechCentral Management
(Important) if not resolved within
21 hours
--------------------------------------------------------------------------------------------------
Appropriate IVR messages will also be employed.
--------------------------------------------------------------------------------
HELP DESK CALL HANDLING TARGETS
--------------------------------------------------------------------------------
PERFORMANCE METRIC TARGET
-------------------------------------------------- -----------------------------
Calls Abandoned by Caller <8%
-------------------------------------------------- -----------------------------
Time before speaking with HD analyst <75 seconds - 90% of the time
-------------------------------------------------- -----------------------------
Severity 3 Tickets resolved in 24 hours 90% (100% within 3 days)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
SYSTEM AVAILABILITY
--------------------------------------------------------------------------------------------------
SERVICE DESCRIPTION HOURS OF AVAILABILITY
-------------------- -------------------------------- --------------------------------------------
IMSPROD IMS transaction region hosted 07:00 - 23:00 Monday - Friday
on the IBM mainframe System A, 07:00 - 20:00 Saturday
not specific business No availability on Sunday.
applications. No availability on Holidays - Memorial
Day, July 4th, Labor Day, Christmas Day.
-------------------- -------------------------------- --------------------------------------------
CICSFAXP The CICS transaction region 07:00 - 21:00 Monday - Friday
hosted on the IBM mainframe 07:00 - 20:00 Saturday
System C, not specific No availability on Sunday.
business applications. No availability on Holidays - Memorial
Day, July 4th, Labor Day, Christmas Day.
-------------------- -------------------------------- --------------------------------------------
-HP 9000 HP 9000 hardware functioning 07:00 - 23:00 Monday - Friday
AIM1/AIM2 as front-end processor
converting x25 to SNA, No availability on Saturday or Sunday.
supporting the ACESS
application.
-------------------- -------------------------------- --------------------------------------------
VOICE Availability of PBX's the 24 hours a day/7 days a week
COMMUNICATION voice network (AT&T), PBI Voice Technology provides
network routing and voice consultant level services.
mail.
-------------------- -------------------------------- --------------------------------------------
MQ SERIES Support of all current message 24 hours a day/7 days a week
queues serving Imagistics
applications. Configuration of
additional MQ clients and
redirection of existing Queues
on a chargeable project basis.
--------------------------------------------------------------------------------------------------
---------------------------------------------------------
SYSTEM AVAILABILITY METRICS
---------------------------------------------------------
SERVICE PRIME SHIFT
(7AM -- 11PM EST)
SYSTEM AVAILABILITY
---------------------------------- ----------------------
IMSPROD 99.7%
---------------------------------- ----------------------
CICSFAXP 99.7%
---------------------------------- ----------------------
HP9000 AIM1/AIM2 99.7%
---------------------------------- ----------------------
VOICE COMMUNICATIONS 99.7%
---------------------------------- ----------------------
PBI NOTES DOMAIN 99.7%
---------------------------------------------------------
SECTION 3. Proposed Charges.
COMPUTER SUPPORT SERVICES
TechCentral's proposed 2003 charge to Imagistics for Computer Support Services
is approximately $3.5 million and includes all direct charges, mainframe
computer utilization based on past utilization rates, and other indirect
expenses. This charge will be paid in monthly payments in January and February,
2003, based on a six (6) month pro-rata calculation with the remaining balance
paid in equal installments over the ten (10) month period from March to
December, 2003.
SOFTWARE LICENSE
The estimated license fees are as set forth below, which cover the
renewal/continuation of software licenses which are required by Imagistics but
are no longer used by Pitney Xxxxx or are contractually required because of
Imagistics separation status. This charge will be based on actual costs incurred
and shall be charged to Imagistics when PBI is invoiced by its applicable
vendor.
HARDWARE/MAINTENANCE
Estimated charges for building and maintaining the capacity necessitated by
extra transaction volume due to Imagistics' testing activities. This charge will
be based on actual costs incurred and shall be charged to Imagistics when PBI is
invoiced by its applicable vendor. Some portion of these costs may be incurred
and billed in 2002 due to early upgrade request from Imagistics.
CHARGEBACK SUMMARY
Application Support Services $ 0
Computer Support Services 3,544,000
Software License/Hardware/Maintenance 2,456,000
(est.)
------------------
Total 2003 Charges $6,000,000
(est.)
==================
Any additional enhancements shall be charged at a rate of $120/hour for internal
development resources or at PBI's cost for external resource.
Imagistics agrees that in the event Imagistics terminates this Schedule before
December 31, 2003, it shall immediately pay the full amount remaining for the
foregoing Computer Support Services and any monthly Software License fees
required under the IBM software agreement arising from early termination.
Imagistics further agrees that in the event Imagistics terminates this Schedule
before June 30, 2003, that it shall pay the remaining monthly lease payments for
IBM hardware.
The parties acknowledge and agree that the estimated Software
License/Hardware/Maintenance fee set forth above includes an estimated $75,000
fee for migration costs that will be billed to Imagistics after
termination/expiration of this Schedule and once such migration services have
been performed.
