EXHIBIT B-1
Draft Form of
Master Services Agreement
between
----------
and
CenterPoint Energy Service Company, LLC
This Master Services Agreement (the "Agreement"), dated as of
_________, 2003, is entered into in multiple parts by and between the companies
whose names appear on the signature pages hereof, (each, a "Company" or
"Recipient" and collectively, the "CenterPoint Companies" or "Recipients"), and
CenterPoint Energy Service Company, LLC, a Texas limited liability corporation
("ServiceCo").
RECITALS
A. In connection with the authorizations provided by order
dated July 5, 2002 (HCAR No. 27548), CenterPoint Energy, Inc. ("CenterPoint")
registered as a holding company under the Public Utility Holding Company Act of
1935, as amended (the "1935 Act").
B. CenterPoint has formed ServiceCo as a subsidiary company to
provide services, as set forth herein, to CenterPoint and its subsidiaries.
Accordingly, ServiceCo and the CenterPoint Companies desire to
enter into this Master Services Agreement to allow for the provision of services
by ServiceCo to the CenterPoint Companies.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
I. EFFECTIVE DATE.
This Agreement shall be effective beginning January 1, 2004 or
such other date as approved by the Securities and Exchange Commission (the
"SEC").
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II. SERVICES OFFERED.
Exhibit I to the Agreement lists and describes the services
that may be available from ServiceCo. ServiceCo offers to supply those services
to each Recipient that is a party to the Agreement. The services are and will be
provided to Recipient only at the request of Recipient. From time to time, the
parties may identify additional services that ServiceCo may provide to
Recipients under this Agreement. ServiceCo will consult with Recipients to
delineate the scope and terms of additional services that may be offered.
The services offered may be further described in Service Level
Agreements that define performance metrics or standards and other procedures and
requirements with respect to the provision of a particular category of services.
To the extent a category of service is more fully described in a Service Level
Agreement, it is incorporated into this Agreement by reference.
ServiceCo shall maintain sufficient resources to perform its
obligations under this Agreement and shall perform its obligations in a
commercially reasonable manner. If no specific performance metrics for the
provision of a service are established, ServiceCo shall provide the service
exercising the same care and skill as it exercises in performing similar
services for itself.
If a Recipient requests the level at which any service to be
provided to be scaled up to a level in excess of the level in effect during the
prior twelve months, Recipient shall give ServiceCo such advance notice as it
may reasonably require sufficient to make any necessary preparations to perform
such services on the scaled up or modified basis. The level of a service shall
be considered scaled up if providing the service at the proposed level involves
an increase in personnel, equipment or other resources that is not de minimis
and is not reasonably embraced by the agreed definition and scope of that
service prior to the proposed increase. The Recipient will be responsible for
any additional costs associated with such "scaled-up" services.
III. SERVICES SELECTED
A. Initial Selection of Services.
Each Recipient shall designate on Exhibit II to the Agreement,
which may be amended when additional services are offered, the services that it
agrees to receive from ServiceCo. Designation may also be in the form of an
opt-out where each company agrees to receive all services from ServiceCo except
those specifically enumerated in Exhibit II.
B. Annual Selection of Services.
ServiceCo shall send an annual service proposal form to each
Recipient on or about July 1 listing services proposed for the next fiscal year.
By August 31, Recipient shall notify ServiceCo of the services it has elected to
receive during the next fiscal year.
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C. Responsibility for Services.
ServiceCo's sole responsibility to Recipient for errors or
omissions in services shall be to furnish correct information and/or adjustments
in the services, at no additional cost or expense to Recipient; provided,
Recipient must promptly advise ServiceCo of any such error or omission of which
it becomes aware after having used reasonable efforts to detect any such errors
or omissions. In no event shall ServiceCo have any liability under this
Agreement or otherwise arising out of or resulting from the performance of, or
the failure to perform, services for loss of anticipated profits by reason of
any business interruption, facility shutdown or non-operation, loss of data or
otherwise or for any incidental, indirect, special or consequential damages,
whether or not caused by or resulting from negligence, including gross
negligence, or breach of obligations hereunder and whether or not Recipient was
informed of the possibility of the existence of such damages.
IV. PERSONNEL
ServiceCo will provide services by using the services of
executives, accountants, financial advisers, technical advisers, attorneys,
engineers and other persons with the necessary qualifications.
If necessary, ServiceCo, after consultation with Recipient,
may also arrange for the services of affiliated or unaffiliated experts,
consultants, attorneys and others in connection with the performance of any of
the services supplied under this Agreement. ServiceCo also may serve as
administrative agent, arranging and monitoring services provided by third
parties to Recipient, whether such services are billed directly to Recipient or
through ServiceCo.
ServiceCo may contract for the services of certain employees
of the CenterPoint System Companies for the purpose of staffing its service
operations. Such contracts will be entered into in reliance on Rule 87 or, if
the contemplated services are of a recurring nature, the arrangement will be the
subject of a 60-day letter. These arrangements will comply with the applicable
provisions under the 1935 Act, including the provisions of Rule 90 thereunder
requiring the performance of services on the basis of cost.
V. COMPENSATION AND ALLOCATION
A. Basis for Charges.
As and to the extent required by law, ServiceCo will provide
such services at cost allocated on a fair, nondiscriminatory basis. The Service
Agreement Procedures Manual contains rules for determining and allocating costs.
The parties shall use good faith efforts to discuss any situation in which the
actual charge for a service is reasonably expected to exceed the estimated
charge, if any, set forth in a Service Level Agreement, provided, however, that
charges incurred in excess of any such estimate shall not justify stopping the
provision of, or payment for, services under this Agreement. ServiceCo shall
establish its charges based on the following principles:
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1. The price charged for each service or product will be the
same as that charged any other CenterPoint business unit for like
services or products at like volumes (if volume discount pricing is
applicable);
2. The price charged for each service or product shall not
include, either directly or indirectly through allocation, any costs
which generally are not allowed to be recovered through utility rates
(e.g. legislative advocacy expenses);
3. The price charged for each service or product shall reflect
only those costs, including labor, incurred by Service Co, either
directly or indirectly, which are reasonable and necessary to provide
such service or product; and
4. To the extent the price charged for each service or product
reflects an allocation of costs incurred, ServiceCo will endeavor to
ensure that such allocation reasonably approximates the actual costs
incurred in providing that service or product.
B. Adjustments to Charges During a Year.
The parties recognize that the charges for services and
products may depend on market conditions and on the quantities of services or
products taken and that the pricing established under a Service Level Agreement
reflects the quantities Recipient has stated it expects to use or consume over
the course of the year, or where no specific quantities have been established,
the pricing reflects the quantities that Recipient has consumed or contracted
for in a prior year. During the course of the year, Recipient will make
reasonable effort to inform ServiceCo of expected changes in the volumes and
patterns of Recipient's consumption of services and products, and ServiceCo will
make reasonable efforts to maintain the pricing stated in the Service Level
Agreement or a client billing plan reflecting Service Level Agreement charges.
However, charges for services and products may require true-ups at the end of
the year to adjust the pricing for the actual costs and volumes of services and
products utilized. Staff asked about contemplated scope of application of
true-up mechanism. May require representation that company will file a 60-day
letter if the amount of true-up exceeds x% of annual xxxxxxxx.
If during the course of year, Recipient foresees the need to
substantially reduce or terminate its use of a certain service or consumption of
a certain product, it shall promptly notify ServiceCo of the expected reduction
of termination. ServiceCo shall promptly prepare a new term sheet under the
affected Service Level Agreement and/or a special billing to reflect changes in
cost caused by the reduction or termination. In the event Recipient disagrees
with the new pricing and/or special billing, the dispute shall be resolved in
accordance with Section VIII of this Agreement.
If ServiceCo foresees the need to substantially alter the
nature of or to terminate offering a certain service or product, or if pricing
for a service or product must be significantly revised due to market conditions
or unexpected increases in costs, ServiceCo shall promptly
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notify Recipient of the expected alteration, termination or increase in pricing.
ServiceCo shall prepare a new term sheet under the affected Service Level
Agreement and/or a special billing to reflect the costs or savings incurred due
to the alteration or termination or the increase in costs ServiceCo will incur.
If Recipient disagrees with the new pricing and/or special billing, the dispute
shall be resolved in accordance with the dispute resolution process under
Section VIII of this Agreement.
VI. TAXES
Recipient shall bear all taxes, duties and other similar
charges (and any related interest and penalties), imposed as a result of its
receipt of services under this Agreement, including any tax which Recipient is
required to withhold or deduct from payments to ServiceCo. ServiceCo may collect
from Recipient any sales, use and similar taxes imposed on the provision of
services and shall pay such tax to the appropriate governmental or taxing
authority.
VII. BILLING
Charges will be rendered during the first week of each month
covering amounts incurred during the prior month. Charges will be based on
actual amounts paid. If allocations are required, they may be based on estimated
values based on estimates in budget plans for the relevant values. Estimated
amounts will be adjusted on subsequent charges either in a subsequent month or
at the end of the year. Any amount remaining unpaid after fifteen days following
receipt of the xxxx shall bear interest thereon from the date of the xxxx at the
lesser of the prime rate announced by JPMorgan Bank and in effect from time to
time plus 2% per annum or the maximum non-usurious rate of interest permitted by
applicable law.
ServiceCo's billing system will use 17 C.F.R. Section 256 et.
al, the "Uniform System of Accounts for Mutual Service Companies", established
by the Commission for holding company systems, as may be adjusted to use the
FERC uniform system of accounts. ServiceCo will support its charges with
reasonable documentation (which may be maintained in electronic form). ServiceCo
will make adjustments to charges as required to reflect the discovery of errors
or omissions in the charges.
VIII. TERMINATION AND MODIFICATION
A. Modification of Services.
Recipient may modify its selection of services at any time
during the fiscal year by giving ServiceCo written notice sixty (60) days in
advance for the additional services it wishes to receive, and/or the services it
no longer wishes to receive, from ServiceCo. ServiceCo will attempt to mitigate
costs but the Recipient will be responsible for any remaining costs as a result
of its modification of services.
B. Modification of Other Terms and Conditions.
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No other amendment, change or modification of this Agreement
shall be valid, unless made in writing and signed by all parties hereto.
C. Termination of this Agreement.
Recipient may terminate this Agreement with ServiceCo by
providing sixty (60) days advance written notice of such termination to
ServiceCo. ServiceCo may terminate this Agreement as to Recipient by providing
sixty (60) days advance written notice of such termination to Recipient.
ServiceCo will attempt to mitigate costs but the Recipient will be responsible
for any remaining costs as a result of its termination of the Agreement.
This Agreement is subject to termination or modification at
any time to the extent its performance may conflict with the provisions of the
1935 Act, or with any rule, regulation or order of the SEC adopted before or
after the making of this Agreement. This Agreement shall be subject to the
approval of any state commission or other state regulatory body whose approval
is, by the laws of said state, a legal prerequisite to the execution and
delivery or the performance of this Agreement.
IX. DISPUTE RESOLUTION
From time to time, disputes may arise regarding the services
and products provided by ServiceCo. The employees of Recipient and the employees
of ServiceCo are encouraged to resolve those disputes on an informal basis in as
timely a manner as possible, and the ServiceCo agrees, upon reasonable request,
to provide access to relevant books and records. However, if during the course
of the year a dispute arises as to the scope of any service or the nature of any
product, the delivery terms, the related performance metrics and standards, or
the price for any service or product which cannot be resolved on an informal
basis, Recipient and ServiceCo will resolve the dispute using the following
procedures:
A. A supervisor or manager of Recipient who is responsible for
the use of the service or the consumption of the product about which there is a
dispute will notify in writing, or by email, a supervisor or manager of
ServiceCo who is responsible for providing the service or product of the nature
of the dispute, including specific examples of problems or failures which gave
rise to the dispute. The supervisor or manager of Recipient shall also present a
proposed resolution of the dispute and propose a date and time for a meeting to
resolve the dispute. The supervisor or manager of ServiceCo shall acknowledge in
writing, or by email, his or her receipt of the notice of the dispute and agree
to the meeting, suggest an alternative date and time for the meeting proposed by
the supervisor or manager of Recipient, or contact the supervisor or manager of
Recipient to schedule a meeting date and time that the two may agree upon.
B. The supervisor or manager of Recipient and the supervisor or
manager of ServiceCo may meet as often as both agree is necessary to resolve the
complaint, and their meeting or meetings may include such other employees as may
be helpful in resolving the dispute. If after such meeting or meetings, but in
no event later than thirty days after the initial
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notice of the dispute was given, the supervisor or manager of Recipient and the
supervisor or manager of ServiceCo are unable to resolve the dispute, the
dispute shall be referred to the appropriate executive of Recipient and an
executive of ServiceCo for resolution.
C. The executive of Recipient and the executive of ServiceCo shall meet
at a date and time or dates and times they mutually agree upon. Such meetings or
meetings may include any employees either executive believes will be helpful in
resolving the dispute. If, after such meeting or meetings, the executive of
Recipient and the executive of ServiceCo reasonably believe they cannot resolve
the dispute, the dispute shall be referred to the most senior executives of
Recipient and of ServiceCo for resolution in accordance with whatever procedures
senior management may establish.
X. NOTICE
Where written notice is required by this Agreement, said
notice shall be deemed given when delivered in person, by electronic mail, or
when mailed by United States registered or certified mail, postage prepaid,
return receipt requested, addressed, if to ServiceCo, to the Chief Financial
Officer and, if to Recipient, to its President at the address listed on the most
recent Exhibit II received by ServiceCo.
XI. GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to its conflict
of laws provisions.
XII. ENTIRE AGREEMENT
This Agreement, together with its exhibits, constitutes the
entire understanding and agreement of the parties with respect to its subject
matter, and effective upon the execution of this Agreement by the respective
parties hereof and thereto, any and all prior agreements, understandings or
representations with respect to this subject matter are hereby terminated and
cancelled in their entirety and of no further force or effect.
XIII. WAIVER
No waiver by any party hereto of a breach of any provision of
this Agreement shall constitute a waiver of any preceding or succeeding breach
of the same or any other provision hereof.
XIV. ASSIGNMENT
This Agreement shall inure to the benefit of and shall be
binding upon the parties and their respective successors and assigns. No
assignment of this Agreement or any party's rights, interests or obligations
hereunder may be made without the other party's consent, which shall not be
unreasonably withheld, delayed or conditioned.
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XV. SEVERABILITY
If any provision or provisions of this Agreement shall be held
to be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first above mentioned.
By Recipient:
------------------------------------
By:
---------------------------------
Name
Title
By ServiceCo:
CENTERPOINT ENERGY SERVICE COMPANY, LLC
By:
------------------------
Name
Title
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EXHIBIT I
COST ACCUMULATION AND ASSIGNMENT, ALLOCATION METHODS, AND
DESCRIPTION OF SERVICES OFFERED BY SERVICECO TO RECIPIENT
This document sets forth the methodologies used to accumulate
the costs of services that may be performed by ServiceCo and to assign or
allocate such costs to other subsidiaries and business units within the
CenterPoint registered holding company system that receive services from
ServiceCo.
Cost of Services Performed
ServiceCo shall maintain an accounting system that enables
costs to be identified by Cost Center, Account Number or Capital Project
("Account Codes"). The primary inputs to the accounting system shall be payroll
records for ServiceCo's employees, accounts payable transactions and journal
entries. Charges for labor shall be made at the employees' effective hourly
rate, including the cost of pensions, other employee benefits and payroll taxes.
To the extent practicable, costs of services shall be directly assigned to the
applicable Account Codes. The full cost of providing services shall also include
certain indirect costs, e.g., departmental overheads, administrative and general
costs, and taxes. Indirect costs shall be associated with the services performed
in proportion to the directly assigned costs of the services or other relevant
cost allocators.
Cost Assignment and Allocation
ServiceCo's costs shall be directly assigned, distributed or
allocated to Recipients in the manner described below:
1. Costs accumulated in Cost Centers for services specifically
performed for a single Recipient shall be directly assigned or charged to such
Recipient;
2. Costs accumulated in Cost Centers for services specifically
performed for two or more Recipients shall be distributed among and charged to
such Recipients using methods determined on a case-by-case basis consistent with
the nature of the work performed and based on one of the allocation methods
described below; and
3. Costs accumulated in Cost Centers for services of a general nature
which are applicable to all Recipients or to a class or classes of Recipients
shall be allocated among or charged to such Recipients by application of one or
more of the allocation methods described below.
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Allocation Methods
The following methods shall be applied, as indicated in the
Description of Services section that follows, to allocate costs for services of
a general nature.
1. Operating Expense - A ratio based on operating expense minus fuel
and purchase power. This ratio will be determined annually based on annual plan
operating expense and will be adjusted for any known and reasonably quantifiable
events and will be trued-up at the end of the fiscal year based on actual
operating expense.
2. Total Assets Ratio - A ratio based on the total assets minus
investments in subsidiaries and goodwill. This ratio will be determined annually
based on annual plan assets and will be adjusted for any known and reasonably
quantifiable events and will be trued-up at the end of the fiscal year based on
twelve month average of actual assets.
3. Cash Flow - A ratio based on operating expense including fuel,
purchase power and capital expenditures, less depreciation expense. This ratio
will be determined annually based on annual plan cash flow and will be adjusted
for any known and reasonably quantifiable events and will be trued-up at the end
of the fiscal year based on actual cash flow.
4. Head Count - A ratio based on active and retiree headcount. This
ratio will be determined annually based on annual plan head count and will be
adjusted for any known and reasonably quantifiable events and will be trued-up
at the end of the fiscal year based on actual head count.
5. Direct Labor - A ratio based on billable hours. This ratio will be
determined monthly based monthly billable hours and may be used to allocate, for
example, certain support services on the same basis as actual legal services are
billed.
6. Client Unit Usage - This factor is determined based on the actual
unit/usage that is utilized by the applicable Recipients. This factor will be
determined annually based on units/usage utilized at the end of the previous
fiscal year and may be adjusted for any known and reasonably quantifiable
events, or at such time as may be required due to significant changes.
7. Square Footage - This factor will be determined based on actual
square footage used by the applicable Recipients. This factor will be determined
annually based on square footage utilized at the end of the previous fiscal year
and may be adjusted for any known and reasonably quantifiable events, or at such
time as may be required due to significant changes.
Description of Services
A description of each of the services performed by ServiceCo,
which may be modified from time to time, is presented below. As discussed above,
where identifiable, costs will be directly assigned or distributed to
Recipients. For costs accumulated in Cost Centers which are for services of a
general nature that cannot be directly assigned or distributed, the
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method or methods of allocation are also set forth. Substitution or changes may
be made in the methods of allocation hereinafter specified, as may be
appropriate and to the extent permitted under the SEC 60-day letter procedure,
and will be provided to state regulatory agencies and to each affected
Recipient.
1. Accounting Services.
ServiceCo may provide various services to Recipients including
corporate accounting and reporting, general ledger maintenance and all
accounting record keeping, guidance regarding adoption and application of
accounting policies, risk oversight and financial reporting for SEC, regulatory
and other purposes and support to rate and other regulatory proceedings. As
appropriate and where it would not result in duplication of functions, each
Recipient may also maintain its own corporate and accounting group and engage
ServiceCo to provide advice and assistance on accounting matters, including the
development of accounting practices, procedures and controls, the preparation
and analysis of financial reports and the filing of financial reports with
regulatory bodies, on a system-wide basis. Costs of a general nature may be
allocated using the Total Assets Ratio, Operating Expense or Cash Flow Ratio.
2. Internal Auditing.
ServiceCo may conduct periodic audits of administration and
accounting processes. Audits would include examinations of Recipients' service
agreements, accounting systems, source documents, allocation methods and
xxxxxxxx to assure proper authorization and accounting for services. Costs of a
general nature may be allocated using the Operating Expense Ratio.
3. Finance and Treasury.
ServiceCo may provide various services to Recipients including
budgeting, corporate tax, treasury, risk management (insurance), strategic
planning, financing, investments, money pool administration and cash management.
ServiceCo also will provide investor relations services to provide information
to the investment community regarding CenterPoint and its subsidiaries and will
provide stock transfer agent services to holders of its securities and to
shareholders of Texas Genco and Reliant Resources. CenterPoint is providing
shareholder services regarding the common stock of Reliant Resources on a
temporary basis pursuant to the separation arrangements between CenterPoint and
Reliant Resources. It is currently anticipated that services for Reliant
Resources will terminate by January 2004. Services are provided on an agreed
schedule of costs, based on estimated costs that would be incurred if Reliant
Resources had obtained those services from a third party.
4. Communications.
ServiceCo may assist Recipients to develop and support
branding and corporate promotions, advertising and brand equity. Individually,
Recipients may maintain independent marketing personnel to handle the day-to-day
details of marketing campaigns. Costs of a general nature may be allocated using
the Total Assets Ratio.
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5. Legal Services.
ServiceCo may provide various legal services, processing of
claims, administration of CenterPoint's corporate compliance program and general
legal oversight, as well as corporate secretarial functions and filing of
reports under securities laws and the 1935 Act for the benefit of Recipients.
Costs of a general nature may be allocated using the Operating Expense Ratio.
6. Human Resources.
ServiceCo may assist Recipients in developing policy and
planning for total compensation plans, workforce planning and training, employee
relations policies and programs, and in training personnel in a coordinated
manner throughout the CenterPoint System Companies. It will also design and
provide administration for corporate welfare and benefit plans, including
pension plans and executive benefits, and support for the negotiation of labor
contracts for the CenterPoint companies. ServiceCo will provide corporate
oversight for health and safety services for CenterPoint and its system
companies to comply with government regulations. Each Recipient may maintain a
human resources group to handle the individualized application of policies and
programs. Costs of a general nature may be allocated using the Head Count Ratio.
Costs of providing employee and executive benefits will be allocated directly to
Recipient based on costs incurred for its employees and retirees, and any costs
of a general nature which are not otherwise recovered, such as through payroll
burden charges, will be allocated using the Head Count Ratio.
7. Executive.
ServiceCo will provide its the executive staff to provide
executive management and governance for CenterPoint, including supplying
personnel to serve on boards of directors of CenterPoint system companies, and
will assist Recipients in formulating and executing general plans and policies,
including operations, issuance of securities, appointment of executive
personnel, budgets and financing plans, expansion of services, acquisitions and
dispositions of property, public relations and other related matters. The
executive staff will oversee any corporate aircraft, the costs of which will not
be allocated to Recipients except in connection with direct costs of flights on
behalf of a Recipient. Costs of a general nature may be allocated using a
composite ratio of Revenues, Employees and Total Assets.
8. Regulatory and Governmental Affairs.
ServiceCo may assist Recipients in developing policy for
regulatory strategy, implementation of electric restructuring legislation and
support for litigation and regulatory proceedings. Governmental Affairs will
develop strategy for legislative and other governmental initiatives and monitor
activities affecting the Company in the state and federal legislative arenas.
Costs of a general nature may be allocated using the Total Asset Ratio to the
extent such costs may be allocated to CenterPoint business units. Recipients may
maintain individual regulatory and governmental affairs units to support local
activities.
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9. Information Systems and Technology.
ServiceCo may provide Recipients with the following services:
Mainframe Operations, Enterprise Document Management, Data Circuit Management,
Voice Services, IT Solutions Delivery, and Desktop Data Device services. Costs
are billed to Recipients based on various metrics (e.g., CU second, billable
hour, phone line, login ID) on cost allocations (e.g., headcount, operating
expenses and direct dollars billed).
Mainframe Operations
Methodology
Legacy Mainframe CPU Utilization Client Unit Usage
Legacy Mainframe Data Storage Client Unit Usage
SAP Mainframe Data Storage Client Unit Usage
SAP Mainframe CPU Utilization Client Unit Usage
Enterprise Recipient Specific Client Unit Usage
Enterprise Document Management
Methodology: Client Unit Usage
Data Circuit Management
Methodology: Client Unit Usage
Voice Services
Methodology
Telephone Basic Line Client Unit Usage
Moves/Adds/Change (MAC) Client Unit Usage
Call Center Basic Line Client Unit Usage
Video Conferencing Client Unit Usage
IT Solutions Delivery
Methodology: Client Unit Usage
SAP Production Support
Methodology: Headcount and Operating Expense
Desktop Data Device Services
Methodology
Equipment Client Unit Usage
Lotus Notes Messaging Client Unit Usage
LAN and Security Account Creation Client Unit Usage
Network WAN/LAN Client Unit Usage
Client Support Center Help Desk Client Unit Usage
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10. Business Services.
Real Estate and Facilities Management - Provide clients with
general operating maintenance, administrative and management duties for building
operations, including project management services for facility-related projects.
Costs for Facilities Management not directly assignable are allocated based on
the square footage utilized.
Security - Provide security and security monitoring for
managed properties, security assessments and internal investigations. Costs of
providing security services will be directly charged to business units based on
the actual services used.
Office Support Services - Provide clients with copying,
inserting, mailing, call center, and graphic design functionality. This service
also includes records management and managing office supplies, forms and
convenience copiers. Costs for Office Support Services are generally allocated
based on client unit usage (e.g, number of forms, mail pieces, billable hours,
direct dollars spent). These costs are allocated on a per unit charge that is
determined by dividing (a) the total anticipated charges for providing this
service to all customers during the year by (b) the estimated volume of items to
be processed (e.g., number of pieces of mail handled, number of checks to be
issued, etc). Users are billed based on the actual number of units used, with
adjustments made for variances in total costs incurred or volume handled.
Financial Services - Provides payroll, bank reconciliation,
processing certain accounts such as accounts payable and others as may be deemed
necessary, check disbursements, escheat processing/reporting and remittance
processing. This service also provides clients with assistance in Corporate
Travel. Costs for Financial Services are generally allocated based on client
unit usage (e.g., number of payments processed, checks, billable hours).
Purchasing & Logistics - Provides clients with procurement and
Accounts Payable services. This service may also provide Recipients with
oversight of logistics operations and investment recovery services. Costs for
purchasing and logistics are generally allocated based on client unit usage
(e.g., number of transactions, billable hours, managed dollars).
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EXHIBIT II
AGREED UPON SERVICES TO BE RECEIVED FROM SERVICECO
SERVICES YES NO
1. Regulatory and Govt. Affairs
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2. Internal Auditing
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3. Accounting Services
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4. Communications
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5. Human Resources
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6. Legal Services
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7. Financial Services
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8. Information Systems and Technology
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9. Executive
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10. Business Services
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i. Purchasing and Logistics
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ii. Facilities Management
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iii. Office Support Services
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11. Other
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[Describe]
[Signature Blocks]
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(Company Name)
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(President)
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(Address)
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(Date)
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