Master Agreement for Information Technology Services
EX-10.18 4 d29042exv10w18.txt MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES EXHIBIT 10.18 MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES BETWEEN ZALE DELAWARE, INC. AND ACS COMMERCIAL SOLUTIONS, INC. AUGUST 1, 2005 TABLE OF CONTENTS SECTION 1 -- DEFINITIONS..........................................................................................4 Section 1.1 Certain Definitions..........................................................................4 Section 1.2 Other Definitions............................................................................7 SECTION 2 -- MASTER AGREEMENT.....................................................................................7 Section 2.1 Master Agreement.............................................................................7 Section 2.2 Interpretation and Precedence................................................................8 SECTION 3 -- TERM.................................................................................................8 Section 3.1 Term.........................................................................................8 SECTION 4 -- SERVICES.............................................................................................8 Section 4.1 ACS Services.................................................................................8 Section 4.2 Third Party Services.........................................................................9 Section 4.3 Affiliates...................................................................................9 Section 4.4 Additional Services..........................................................................9 Section 4.5 Modification of Services.....................................................................9 Section 4.6 Employee Screening..........................................................................10 Section 4.7 Professional Practices......................................................................10 Section 4.8 Approved Subcontractors.....................................................................10 Section 4.9 Access to Zale Facilities...................................................................10 SECTION 5 -- SERVICE LEVELS/BENCHMARKING.........................................................................10 Section 5.1 Service Levels..............................................................................10 Section 5.2 Failure to Meet Service Levels..............................................................11 Section 5.3 Service Level Credits Resulting from a Single Incident......................................11 Section 5.4 Benchmarking................................................................................11 SECTION 6 -- TRANSFERS OF EQUIPMENT AND THIRD PARTY CONTRACTS....................................................12 Section 6.1 Transfers of Equipment......................................................................12 Section 6.2 Third Party Contracts.......................................................................12 SECTION 7 -- INTELLECTUAL PROPERTY RIGHTS AND OBLIGATIONS........................................................13 Section 7.1 Zale Software...............................................................................13 Section 7.2 ACS Proprietary Software....................................................................13 Section 7.3 Third Party Software........................................................................13 Section 7.4 Non-Infringement............................................................................14 SECTION 8 -- CONFIDENTIALITY.....................................................................................14 Section 8.1 Definitions.................................................................................14 Section 8.2 Rights, Restrictions and Obligations of the Receiving Party.................................15 Section 8.3 Return of Disclosing Party Information; Right to Review....................................16 Section 8.4 Ownership of Zale Data......................................................................17 Section 8.5 Return of Zale Data.........................................................................17 SECTION 9 -- ACCOUNT MANAGEMENT/PERSONNEL/CHANGE CONTROL.........................................................17 Section 9.1 Account Managers............................................................................17 Section 9.2 Key Personnel...............................................................................18 Section 9.3 Technical Change Control....................................................................18 Section 9.4 Contract Change Control.....................................................................18 Section 9.5 Employee Compensation.......................................................................19 SECTION 10 -- AUDITS.............................................................................................19 SECTION 11 -- INSURANCE; RISK OF LOSS............................................................................20 Section 11.1 Required Insurance Coverage.................................................................20 Section 11.2 Risk of Loss and General Insurance Requirement..............................................20 SECTION 12 -- CHARGES............................................................................................20 Section 12.1 Charges.....................................................................................20 Section 12.2 Taxes.......................................................................................21 SECTION 13 -- INVOICING AND PAYMENT..............................................................................21 Section 13.1 Invoices and Payment........................................................................21 Section 13.2 Out of Pocket Expenses......................................................................21 Section 13.3 Proration...................................................................................21
2 Section 13.4 Late Payment and Disputed Amounts...........................................................22 SECTION 14 -- REPRESENTATIONS, WARRANTIES AND COVENANTS..........................................................22 Section 14.1 Mutual Representation and Warranty..........................................................22 Section 14.2 Additional Covenants and Warranties.........................................................23 Section 14.3 Disclaimer..................................................................................24 SECTION 15 -- INDEMNIFICATION....................................................................................24 Section 15.1 Indemnities.................................................................................24 Section 15.2 Intellectual Property Indemnification.......................................................25 Section 15.3 Indemnification Procedures..................................................................25 SECTION 16 -- LIMITATIONS ON LIABILITY...........................................................................26 Section 16.1 Limit on Types of Damages Recoverable.......................................................26 Section 16.2 Limit on Amount of Direct Damages Recoverable...............................................26 Section 16.3 Force Majeure...............................................................................27 Section 16.4 Actions of Other Party......................................................................27 SECTION 17 -- TERMINATION........................................................................................27 Section 17.1 Termination for Cause.......................................................................27 Section 17.2 Termination for Convenience.................................................................28 Section 17.3 Termination upon ACS Change of Control......................................................28 Section 17.4 Effect of Termination.......................................................................28 Section 17.5 Termination/Expiration Assistance...........................................................28 Section 17.6 Third Party Contracts.......................................................................29 Section 17.7 Sunset Management...........................................................................29 SECTION 18 -- DISPUTE RESOLUTION.................................................................................30 Section 18.1 General.....................................................................................30 Section 18.2 Informal Dispute Resolution.................................................................30 Section 18.3 Arbitration.................................................................................30 Section 18.4 Continued Performance.......................................................................31 Section 18.5 Applicable Law..............................................................................31 Section 18.6 Jurisdiction and Venue......................................................................31 Section 18.7 Charges and Costs...........................................................................31 Section 18.8 Equitable Remedies..........................................................................31 Section 18.9 Remedies Cumulative.........................................................................32 SECTION 19 -- MISCELLANEOUS......................................................................................32 Section 19.1 Binding Nature and Assignment...............................................................32 Section 19.2 Expenses....................................................................................32 Section 19.3 Amendment and Waiver........................................................................32 Section 19.4 Further Assurances; Consents and Approvals..................................................32 Section 19.5 Severability................................................................................32 Section 19.6 Entire Agreement............................................................................33 Section 19.7 Notices.....................................................................................33 Section 19.8 Survival....................................................................................33 Section 19.9 Independent Contractor......................................................................33 Section 19.10 Non-Solicitation............................................................................34 Section 19.11 Third Party Beneficiaries...................................................................34 Section 19.12 Counterparts................................................................................34 Section 19.13 Change of Circumstance......................................................................34 Section 19.14 Acknowledgement.............................................................................34
3 MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES This Master Agreement for Information Technology Services (this "Master Agreement" or "Agreement"), dated August 1, 2005 (the "Effective Date"), is entered into by and between ACS Commercial Solutions, Inc., a Nevada corporation ("ACS"), and Zale Delaware, Inc., a Delaware corporation ("Zale"). BACKGROUND AND OBJECTIVES This Master Agreement is entered into in connection with Zale's decision to engage ACS to provide certain information technology services related to Zale's business operations. This Master Agreement sets forth the general terms and conditions governing the relationship between ACS and Zale, and the attached Schedules set forth the specific terms and conditions applicable to specific Service elements to be provided by ACS to Zale. The parties further agree as follows: SECTION 1 -- DEFINITIONS SECTION 1.1 CERTAIN DEFINITIONS In this Master Agreement, the following terms will have the indicated meanings: "ACCOUNT MANAGERS" means the individuals appointed by ACS and Zale, who have overall program management responsibility for managing the relationship with Zale, monitoring the performance of the Services and addressing performance deficiencies under this Agreement, as more fully defined in Section 9.1. "ACS COMPETITOR" means any party that competes with ACS by providing operational information technology services in a comparable manner. "ACS FACILITIES" means the facilities owned or leased by ACS and from which ACS will provide the agreed Services. These facilities will be located in Dallas or such other location as may be designated by ACS and approved by Zale, which approval shall not be unreasonably withheld. "ACS PERSONNEL" means employees of ACS and its subcontractors assigned to performing Services. "ACS PROPRIETARY SOFTWARE" means any Software owned by ACS and used in conjunction with any of the Services. "ACS THIRD PARTY SOFTWARE" means any Software owned by a Third Party Software Vendor and licensed to ACS for use on behalf of Zale or any Zale Affiliate in connection with any of the Services, or for which ACS holds an enterprise-wide license allowing is use for multiple customers. "AFFILIATE" means, with respect to any specified person or entity, any other person or entity that directly, or indirectly through one or more intermediaries, Controls or is Controlled by, or is under common Control with, the specified person or entity. "BUSINESS DAY" means Monday through Friday, excluding ACS or Zale recognized holidays. 4 "CHARGES" means the amounts set forth in Schedule B that Zale will pay to ACS for the Services performed by ACS during the Term, as more fully defined in Section 12.1. "CONFIDENTIAL INFORMATION" means information designated or otherwise defined as confidential, as more fully defined in Section 8.1. "CONTROL" means (a) the legal, beneficial, or equitable ownership, directly or indirectly, of (i) at least fifty percent (50%) of the aggregate of all voting equity interests in an Entity, or (ii) equity interests having the right to at least fifty percent (50%) of the profits of an Entity or, in the event of dissolution, to at least fifty percent (50%) of the assets of an Entity; (b) the right to appoint, directly or indirectly, a majority of the board of directors; (c) the right to control, directly or indirectly, the management or direction of the Entity by contract or corporate governance document; or (d) in the case of a partnership, the holding by an Entity (or one of its Affiliates) of the position of sole general partner. "CRITICAL ACS THIRD PARTY SOFTWARE" means any ACS Third Party Software other than that identified as generally available commercial software in Schedule F-5, as more fully defined in Section 7.3 (a). "DISCLOSING PARTY" means the party disclosing Confidential Information, as more fully defined in Section 8.1. "EFFECTIVE DATE" means the date set forth in the introductory paragraph of this Master Agreement. "EMBARGOED COUNTRIES" means countries subject to U.S. government embargo. "EQUIPMENT" means the computer equipment owned or leased by ACS or Zale and used by ACS to provide the Services and all associated accessories and peripheral devices used in the provision of Services. "EXCUSED PERFORMANCE PROBLEM" means any event which causes ACS to fail to achieve an obligation, including a Service Level, but which, because the parties agree upon their mutual consideration of such event that it was not caused by or subject to the control of ACS or a third party service provider of ACS, will not be included in any calculation of Service Level Credits that may be owed to Zale or in determining whether a breach or termination event has occurred hereunder. Examples of Excused Performance Problems include, but are not limited to: (i) errors or defects in Zale Software or Zale Equipment; (ii) any action or inaction taken by Zale or a third party service provider of Zale which causes an adverse affect on ACS' ability to provide the Services, or (iii) a manifestation of a latent unknown defect in Third Party Software or Equipment. "FREEZE PERIOD(s)" means those certain times during the year, as designated by Zale, when Zale puts in place higher service levels, increased resource availability (mandating vacation and leave restrictions), and more restrictive controls over changes to the environment and/or systems during the Holiday Seasons or Special Sales Periods. "FORCE MAJEURE EVENTS" means events such as natural disasters, fires, acts of God, governmental or third party actions, or other similar events that are beyond the reasonable control of the parties, as more fully defined in Section 16.3. 5 "HOLIDAY SEASONS" AND/OR "SPECIAL SALES PERIODS" means those days that Zale identifies each year as comprising the Holiday Seasons, but, in any event, shall always include November 1 through December 31, and the fourteen (14) day periods up to and including Mother's Day and Valentine's Day. "LOSSES" means all losses, liabilities, damages and claims, and all related costs and expenses (including any and all reasonable legal fees and reasonable costs of investigation, litigation, settlement, judgment, appeal, interest and penalties) incurred by an indemnified party in connection with a third party claim. "MASTER AGREEMENT" means this Master Agreement for Information Technology Services and, when the meaning so requires, all associated Schedules and Exhibits to the Master Agreement. "NOTICE OF ASSUMPTION OF DEFENSE" means written notification from an indemnitor to an indemnitee that the indemnitor elects to assume control of the defense and settlement of a particular claim or action, as more fully defined in Section 15.3. "RECEIVING PARTY" means the party receiving Confidential Information disclosed by the Disclosing Party, as more fully defined in Section 8.1. "RULES" means the Commercial Arbitration Rules of the American Arbitration Association, as fully defined in Section 18.3. "SCHEDULES" means any schedule, exhibit, agreement or other document (i) attached to this Master Agreement, or (ii) executed by the parties at any time, if such document states that it is a schedule to this Master Agreement. "SERVICE LEVELS" means the quantitative measurements established to calculate ACS' level of performance of certain Service elements, as more fully defined in Section 5.1. "SERVICE LEVEL CREDITS" means monetary amounts that ACS may be required to deduct from its invoices to Zale due to ACS' failure to meet certain Service Levels, as more fully defined in Section 5.2. "SERVICES" means those services provided by ACS and described in Section 4.1 and Schedule A. "SOFTWARE" means any computer software that relates to the Services provided, and includes all Zale Software, ACS Software and Third Party Software. "TERM" means the term of this Agreement, as more fully defined in Section 3.1. "TERMINATION/EXPIRATION ASSISTANCE" means the assistance provided by ACS upon termination or expiration of this Agreement to enable an orderly transition of the Services to Zale or Zale's designee, as more fully defined in Section 17.4. "THIRD PARTY CONSENTS" means the consent required from a third party to use, access or assign a Third Party Contract, or otherwise execute the transactions contemplated by this Agreement, as more fully defined in Section 6.2. "THIRD PARTY CONTRACTS" means any contract that is a Third Party Software License or Third Party Service Contract. 6 "THIRD PARTY SERVICE CONTRACTS" means, collectively, (i) the agreements between Zale and a third party pursuant to which the third party is providing to Zale, immediately before the Effective Date or at any time during the Term, any services included within the Services, and (ii) the agreements between ACS and a third party pursuant to which the third party is providing to Zale or ACS at any time during the Term any services included within the Services. "THIRD PARTY SOFTWARE" means any Software that is owned and licensed by a person other than ACS or Zale and used to provide the Services in accord with this Agreement. "THIRD PARTY SOFTWARE LICENSE" means a license agreement that authorizes Zale or ACS to use Third Party Software for the provision of Services in accord with this Agreement. "TRANSFERRED EQUIPMENT" means Zale equipment that Zale sells or assigns to ACS, as more fully defined in Section 6.1. "ZALE DATA" means all Confidential Information of Zale as well as all data and information submitted to ACS by Zale or developed or produced by ACS in connection with the Services, including, but not limited to, information relating to Zale's employees, third party vendors, technology, operations, facilities, financials, consumer markets, strategies, customers, procedures, pricing policies, merchandise mix, products, capacities, systems, procedures, security systems and practices, research development, business affairs, finances and any other similar information. "ZALE EQUIPMENT" means any Equipment owned and/or licensed by Zale and used in conjunction with any of the Services. "ZALE PROPRIETARY SOFTWARE" means any Software owned by Zale and pursuant to which ACS is granted a right to use or right of access to utilize the Software in conjunction with any of the Services. "ZALE THIRD PARTY SOFTWARE", as further defined in Section 7.3(c), means any Software that is owned by a Third Party Software Vendor and licensed to Zale, under which ACS has a right to use, right of access, or other consent from the Third Party Software Vendor allowing ACS to use the Zale Third Party Software to provide the Services in accord with this Agreement. SECTION 1.2 OTHER DEFINITIONS Other terms used in this Master Agreement and the Schedules are defined where they first appear and have the respective meanings so indicated. SECTION 2 -- MASTER AGREEMENT SECTION 2.1 MASTER AGREEMENT This Master Agreement is an agreement that contains general contractual terms for Services to be provided to Zale by ACS. The Services, Service Levels and Pricing are defined in separate Schedules and attachments, each of which is incorporated into this Master Agreement by reference. The Parties acknowledge and agree that, upon execution of this Master Agreement, the Master Agreement for Data Processing and Related Services dated as of June 7, 2002, (the "Prior Agreement), including all amendments, schedules, addendums, letters, etc., will terminate and cease to be effective. 7 SECTION 2.2 INTERPRETATION AND PRECEDENCE This Master Agreement, the Schedules and attachments that may be added are to be interpreted so that all of the provisions are given as full effect as possible. In the event of a conflict between this Master Agreement and a Schedule, the order of precedence will be: (i) the Schedules and attachments; (ii) the Master Agreement; and (iii) any other addenda, letters, etcetera, provided that the Agreement and the Schedules shall be interpreted to give effect to all provisions in both to the extent reasonably practicable. SECTION 3 -- TERM SECTION 3.1 TERM The term of this Master Agreement (the "Term") will begin as of August 1, 2005, the Effective Date, and will continue through July 31, 2012, unless earlier terminated in accordance with the provisions of this Master Agreement. SECTION 4 -- SERVICES SECTION 4.1 ACS SERVICES Throughout the Term, ACS will provide the services described in Schedule A -- Services, as such services may be amended and supplemented from time to time (collectively, the "Services"). ACS will provide the Services in accordance with the terms of this Master Agreement and the applicable Schedules. As of the Effective Date of this Master Agreement, ACS is obligated to provide the following Services to Zale, which are detailed in Schedule A: (a) Mainframe Services (b) Midrange Services (c) Operations Support Services (d) Network Management Services (e) Disaster Recovery Services (f) Transition Services (g) Termination/Expiration Assistance (h) Any other services provided by ACS under this Agreement which are described in any Schedule or which are ancillary to or implicitly required in the performance of the services described in any Schedule. 8 SECTION 4.2 THIRD PARTY SERVICES Zale shall have the right to contract with a third party to perform any services which are in addition to, or outside the scope of, the Services or which require resources not covered by the Charges. If Zale contracts with a third party to perform any such service, ACS will cooperate with Zale and such third party to the extent reasonably required by Zale. Zale will require such third parties to comply with ACS' reasonable requirements regarding operations, standards, security and the care and use of ACS' Confidential Information and ACS Software as well as any restrictions relating to access to any Third Party Software products. Zale shall be responsible for any fees or other charges or expenses charged by any Third Party Software providers to enable such third party service providers to access or otherwise use such Software. SECTION 4.3 AFFILIATES Throughout the Term, ACS may provide the Services to Zale and to those present and future Affiliates of Zale as Zale may designate from time to time, all in accordance with the terms and conditions of this Master Agreement; provided that Zale and its Affiliates will be responsible for any fees or other charges or expenses incurred by ACS or charged by any Third Party Software providers to enable such Affiliates to obtain the Services. (e.g., equipment, software transfer or upgrade fees, license or lease obligations). If at any time during the Term, Zale sells or otherwise transfers ownership of an Affiliate to a third party, ACS will continue to provide the Services to such Affiliate if requested by Zale and for the time period requested by Zale, up to the expiration or termination of the Term on the terms and conditions set forth in this Master Agreement, provided that the scope of the Services provided by ACS to the third party does not materially differ from those provided to Zale as a part of this Agreement, and that Zale and the third party will be responsible for any charge or expenses incurred by ACS or imposed by third parties (e.g., Third Party Software providers and telecommunication carriers). ACS may require the Affiliate or its new parent company to sign an agreement for services substantially similar to this Agreement, as appropriate for the new parent or divested former Affiliate, if necessary, to comply with requirements of ACS' Third Party Software providers. SECTION 4.4 ADDITIONAL SERVICES ACS shall perform all services requested by Zale that are not Services under Section 4.1 above (the "Additional Services") on a time and materials basis at the rates specified in Schedule B or as otherwise agreed. Zale shall not pay ACS for Additional Services except in accordance with the following procedure: (i) Zale shall request Additional Services in writing; (ii) ACS shall promptly provide Zale a written estimate of the total cost of performing the Additional Services (the "Task Estimate"); (iii) if Zale chooses to purchase the Additional Services, Zale shall give ACS written authorization to perform the Additional Services. Zale shall not be obligated to pay any fees for the Additional Services that exceed the Task Estimate. ACS shall maintain time records for all applicable time and work expended on the Additional Services and shall document such records with the applicable invoice, as appropriate. SECTION 4.5 MODIFICATION OF SERVICES Zale may choose from time to time to modify or alter any of the Services provided under this Agreement. ACS will provide such Modified Services as requested subject to corresponding adjustments in Fees as mutually agreed and subject to Section 12.1. To facilitate such modifications, ACS will maintain a formal, documented modification process. 9 SECTION 4.6 EMPLOYEE SCREENING ACS agrees that with regard to its personnel assigned, or to be assigned, at the Zale facilities or providing any Service or Additional Service hereunder, and other personnel of ACS subcontractors who perform significant and extended work at a Zale facility or with Zale Data, Zale may request that ACS conduct lawful background checks and tests for unlawful drug use on those individuals, or any of them, to include checks for any prior criminal convictions whether felony or misdemeanor. ACS will promptly perform such checks and will report the results to Zale. As a result of such checks, Zale may reasonably request that certain individuals are not assigned to Zale Services, and ACS will designate replacements, subject to the screening requirements set forth herein. SECTION 4.7 PROFESSIONAL PRACTICES ACS will, at a minimum, employ generally accepted industry professional "best practices" in providing the Services but never less than the operational practices required by this Agreement and applicable Schedules. SECTION 4.8 APPROVED SUBCONTRACTORS (a) In providing the Services, ACS may not subcontract any material portions of the Services, except as approved by Zale, whose approval shall not be unreasonably withheld. To the extent any subcontractor is permitted under this Section 4.8, ACS will cooperate to establish reasonable protections and controls with respect to such data and information, including having such subcontractor sign appropriate confidentiality and data protection agreements reasonably acceptable to Zale after its review. (b) ACS will be responsible for the compliance by any of its subcontractors with all of the provisions of this Agreement applicable to ACS. ACS will remain responsible for all performance under this Agreement by any of its subcontractors to the same extent as if such performance was made by ACS. ACS will remain Zale's sole point of contact regarding the Services. (c) If Zale expresses any concerns to ACS regarding material or potentially material performance issues with any ACS subcontractors, ACS will investigate the matter and implement corrective action approved by Zale. SECTION 4.9 ACCESS TO ZALE FACILITIES In its performance of the Services, ACS and its employees, contractors and agents shall have reasonable access to Zale's facilities or portions thereof, subject to Zale's security policies and procedures and Zale's Code of Conduct (as both may be amended from time to time). SECTION 5 -- SERVICE LEVELS/BENCHMARKING SECTION 5.1 SERVICE LEVELS Concurrently with entering into this Agreement, Zale and ACS agree to the quantitative measurements defined in Schedule C intended to calculate ACS' level of performance of certain Service elements ("Service Levels"). With respect to a Service element which has an associated Service Level, ACS will provide such Service element throughout the Term in a manner which meets or exceeds the associated Service Level. 10 SECTION 5.2 FAILURE TO MEET SERVICE LEVELS (a) For each particular Service, there may be certain Service Levels which have a financial consequence associated with ACS' failure to achieve them. Should ACS fail to meet any such Service Level for reasons other than those specified in Section 5.2(c) below, Zale will have the option, but not the obligation, to recover the applicable amount specified ("Service Level Credits") as liquidated damages. ACS will deduct the Service Level Credits from the next succeeding invoice or other amounts due to ACS. The election to receive any such Service Level Credits is in lieu of any and all other remedies Zale may otherwise pursue at law or in equity for breach or failure of performance, except that accepting Service Level Credits shall not affect Zale's rights under Section 17.1. If ACS' failure to meet Service Levels triggers Zale's right to terminate the Agreement, Zale must exercise its right of termination within six (6) months after Zale becomes aware of or should reasonably have become aware of the event(s) giving rise to such right of termination or Zale will be deemed to have waived such termination right with respect to that event. (b) Each time ACS incurs a Service Level Credit, ACS will: (i) investigate the root cause(s) of the failure and deliver to Zale a report identifying such root cause(s) within 10 days of the failure and (ii) correct the problem and begin meeting such Service Level as soon as practicable; provided that, if such problem is not reasonably capable of correction, the parties shall determine how ACS should provide the related service in such a way as to avoid a repetition of the problem. In any event, Zale shall be responsible for costs of such efforts where the cause of the failure is not due to acts or omissions of ACS or a third party under ACS' control. (c) To the extent any failure to meet a Service Level is caused by (i) a Force Majeure Event, or (ii) a breach by Zale of this Master Agreement, or (iii) any Excused Performance Problem, Zale will not be entitled to a Service Level Credit. SECTION 5.3 SERVICE LEVEL CREDITS RESULTING FROM A SINGLE INCIDENT If a single incident results in the failure of ACS to meet two Service Levels, Zale shall be entitled to receive two Service Level Credits. If a single incident results in the failure of ACS to meet three or more Service Levels, Zale shall be entitled to receive up to three Service Level Credits, within the provisions of Schedule C -- Service Level Agreements. SECTION 5.4 BENCHMARKING Within 18 months after the Effective Date, and in each eighteen month period thereafter, ACS will notify Zale of its option to conduct a benchmark of the performance of the Services, Charges and Service Levels. Within 15 days of Zale's decision to proceed with a benchmark, the Parties will agree on an acceptable third party, that is not an ACS Competitor, and the Parties will jointly engage such third party to benchmark ("the Benchmarker") the Services and, if such party is not available, choose a replacement Benchmarker reasonably acceptable to Zale and ACS. ACS will reasonably cooperate with the Benchmarker and provide all data relating to the provision of the Services requested by the Benchmarker, provided that ACS will not be required to provide any information relating to its margins, costs, cost elements or business processes, or to disclose any proprietary or trade secret information of ACS or its other customers. The fees and expenses charged by the Benchmarker will be shared equally by the Parties. In conducting the benchmarking, the Benchmarker will normalize the data used to perform the benchmarking to accommodate, as appropriate, differences in duration of the contract, volume of services, scope of services, service levels, financing and payment schemes (including up-front incentive payments), geographic configurations of the solution and other pertinent factors. Based upon the results 11 of such benchmarking, ACS will cooperate with Zale to investigate any unfavorable variances, determine if such unfavorable variances are due to unique Zale requirements or ACS' resource allocation and related pricing. Following a benchmarking, Zale and ACS will meet to discuss in good faith the benchmarking, and ACS will, if appropriate, put forth a recommended plan for adjusting the Services, Charges, and Service Levels. Upon Zale's approval, ACS will implement the plan so that Services or Service Levels, as the case may be, conform to the benchmark, or, if such Services or Service Levels are not reasonably capable of such adjustment, Charges are adjusted by a percentage reflecting the variance between the Services and/or Service Levels, as the case may be, and their applicable Benchmark(s). SECTION 6 -- TRANSFERS OF EQUIPMENT AND THIRD PARTY CONTRACTS SECTION 6.1 TRANSFERS OF EQUIPMENT If specified in Schedule F, Zale will assign, and ACS will assume, Zale's obligations under the applicable leases for certain Equipment that is used to provide the Services, and/or Zale may sell Equipment owned by it to ACS (the "Transferred Equipment"). Zale will obtain consents to such assignments under such leases as promptly as practicable. Schedule F will state the other terms and conditions applicable to the Transferred Equipment. Zale represents and warrants that it owns title to, free and clear of all liens and encumbrances, or is current with regard to any lease obligations with respect to, any Transferred Equipment and has maintained such Transferred Equipment in all material respects in accordance with manufacturer's specifications. SECTION 6.2 THIRD PARTY CONTRACTS (a) Schedule F will provide for the treatment of all Third Party Contracts, as follows: (i) all or certain of the Third Party Contracts may be assigned by Zale to ACS, (ii) all or certain of the Third Party Contracts may be retained by Zale, (iii) any required Third Party Consents (as defined below) will be obtained by Zale, ACS or both, as specified in the Schedule, and (iv) the respective financial, operational and other obligations of the Parties with respect to the Third Party Contracts will be set forth in the Schedule. (b) If any required Third Party Consent cannot be reasonably obtained, ACS will identify and adopt, at Zale's expense and subject to Zale's prior approval, such alternative approaches as are necessary to provide the Services without such Third Party Consent. (c) Subject to obtaining any required Third Party Consents, Zale will grant to ACS the same rights of access to, and use of, the Third Party Contracts used by Zale. If the scope of Zale's right of access to, and use of, any Third Party Software is not as extensive as required by ACS to provide the Services to any Affiliate or other entity that would be the recipient of the Services under this Agreement, Zale will obtain such rights of access and use necessary to allow ACS to utilize such Zale Third Party Software to provide such Services to the Affiliate or other entity under this Agreement. (d) The term "Third Party Consent" shall mean any consent required from a third party in order for a party to use, access, or assign a Third Party Contract or as otherwise required to effectuate the transactions contemplated by this Master Agreement. Payment by ACS or Zale of such transfer, upgrade and other fees necessary to obtain any Third Party Consents with respect to Third Party Contracts is specified in the applicable sections of this Agreement. 12 SECTION 7 -- INTELLECTUAL PROPERTY RIGHTS AND OBLIGATIONS SECTION 7.1 ZALE SOFTWARE Schedule F-5 will identify the Zale Software, if any, that ACS is authorized to access to perform the Services and specify the rights of ACS to use the Zale Software. SECTION 7.2 ACS PROPRIETARY SOFTWARE Schedule F-5 will identify any ACS Proprietary Software that will be used to provide the Services. ACS will install, operate and maintain any ACS Proprietary Software needed to provide the Services. As of the Effective Date, ACS grants to Zale, to the extent necessary for Zale to receive the Services from ACS, a revocable, worldwide, royalty free, nonexclusive license during the Term to use ACS Proprietary Software for the sole benefit of Zale. Except for the foregoing license, ACS retains all right, title and interest in and to the ACS Proprietary Software. In the event that Zale assumes the Services at termination, ACS will grant to Zale, solely for the benefit of Zale, a license to use the ACS Proprietary Software for the sole purpose of continuing the Services, at the then-current rates for similarly situated former customers, and as governed by the Confidential Information provisions of Section 8 of this Agreement. With regard to any ACS Third-Party Software licensed to ACS and used by ACS to provide the Services, ACS will use commercially reasonable efforts to assist Zale to obtain its own license for such software as required to provide the Services. SECTION 7.3 THIRD PARTY SOFTWARE Schedule F-5 will identify any Third Party Software required to perform the Services and specify the party which has operational and financial responsibility related to such Third Party Software, including the obligation to maintain licenses for Third Party Software Licenses and upgrade, enhance, and implement new versions of Third Party Software. (a) ACS THIRD PARTY SOFTWARE. Schedule F-5 sets forth a complete list of all ACS Third Party Software that will be used by ACS to perform the Services as of the Effective Date. ACS will update Schedule F-5, and provide such updates to Zale, as it modifies, supplements, or changes such ACS Third Party Software from time to time. All such ACS Third Party Software other than the ACS Third Party Software identified on Schedule F-5 as generally available commercial software will be deemed "CRITICAL ACS THIRD PARTY SOFTWARE" unless otherwise agreed by the Parties. ACS will inform Zale of the existence and ownership of, and the extent of ACS' rights to, all such Critical ACS Third Party Software prior to using such software in connection with the Services. ACS will use commercially reasonable efforts to assist Zale to obtain a license to use (and permit third parties to use solely on its behalf) such Critical ACS Third Party Software and all available, relevant documentation (in source and object code form) effective upon the expiration or termination of this Agreement and upon the third-party vendor's standard terms and conditions. (b) If, after exhausting the measures described in Section 7.3(a) above, ACS is unable to obtain the license (or the agreement to grant a license) described in paragraph (a) above, ACS will not use any such Critical ACS-Licensed Software to provide the Services except as follows: (i) Prior to introducing such proposed Critical ACS Third Party Software, ACS will notify Zale of its inability to obtain for Zale such a license or agreement and the cost and viability of any other software that can perform the requisite functions and with respect to which ACS has the ability to 13 grant or transfer such a license or agreement. Such notice will contain the proposed Critical ACS Third Party Software vendor's then-current terms and conditions, if any, for making the software available to Zale upon expiration or termination of this Agreement. (ii) With Zale's prior approval, ACS may then introduce such Critical ACS Third Party Software for use in providing the Services. (iii) If Zale rejects the proposed Critical ACS Third Party Software and instead decides to investigate an alternative to the proposed Critical ACS Third Party Software, then ACS and Zale will begin this same process with respect to such alternative and pursue obtaining the license rights for Zale as described in Section 7.3(a). (c) ZALE THIRD PARTY SOFTWARE. Schedule F-5 sets forth certain Zale Third Party Software, which may include tools, data, databases and methodologies licensed by Zale, (i) with respect to which Zale will retain responsibility and (ii) to which ACS will require access in order to perform under this Agreement. Such items are collectively referred to as "ZALE THIRD PARTY SOFTWARE". Zale Third Party Software will include any other subsequently identified third-party software, tools, data, databases and methodologies licensed by Zale, access to which will be provided to ACS to perform under this Agreement. As between the Parties, Zale will be the sole and exclusive owner of the rights to the Zale Third Party Software. ACS will access, use, copy, modify and enhance the Zale Third Party Software (i) solely as needed to perform under this Agreement, (ii) solely during the Agreement Term and (iii) in compliance with any applicable use restrictions and applicable license terms and conditions that are identified in writing to ACS. For any Required Consent or other permission required to allow ACS to access or use the Zale Third Party Software, Zale shall have administrative responsibility to obtain such permission or consent, with the reasonable assistance of ACS if necessary, and Zale shall pay all fees, costs, and other expenses required to obtain such consent or permission SECTION 7.4 NON-INFRINGEMENT ACS will perform its obligations under this Master Agreement in a manner that does not infringe or constitute an infringement or misappropriation of any patent, copyright, trademark, trade secret or other proprietary rights of any third party. SECTION 8 -- CONFIDENTIALITY SECTION 8.1 DEFINITIONS (a) "Disclosing Party" means the party furnishing Confidential Information and "Receiving Party" means the party receiving the Confidential Information disclosed by the Disclosing Party. (b) "Confidential Information" means (i) the following information, with or without being designated as confidential: ACS Software, Zale Data, Zale Software, all notes, schedules, summaries, charts, architectural drawings, network diagrams and other information which is derived or otherwise sourced from the Confidential Information, any information identifying the Disclosing Party's clients or suppliers, and the terms of this Master Agreement, and (ii) the following information if designated as confidential: (A) information relating to the Disclosing Party's software or hardware products or services, or to its research and development projects or plans; 14 (B) information relating to the Disclosing Party's methodologies, processes, techniques and business practices; and (C) information relating to the Disclosing Party's business, policies, strategies, operations, finances, plans or opportunities. Information disclosed orally shall be deemed "designated" as confidential unless it falls into one of the categories listed below. Notwithstanding the foregoing, Confidential Information does not include information which the Receiving Party can establish: (A) has become generally available to the public or commonly known in either party's business other than as a result of a breach by the Receiving Party of any obligation to the Disclosing Party; (B) was known to the Receiving Party prior to disclosure to the Receiving Party by the Disclosing Party by reason other than having been previously disclosed in confidence to the Receiving Party; (C) was disclosed to the Receiving Party on a non-confidential basis by a third party who did not owe an obligation of confidence to the Disclosing party with respect to the disclosed information; or (D) was independently developed by the Receiving Party without any reference to any part of the Confidential Information. SECTION 8.2 RIGHTS, RESTRICTIONS AND OBLIGATIONS OF THE RECEIVING PARTY (a) During the Term, the Receiving Party may: (i) disclose Confidential Information received from the Disclosing Party only to its subcontractors, agents, representatives, advisors, employees, officers and directors and Affiliates who have a need to know such information exclusively for the purpose of executing its obligations or exercising its rights under this Master Agreement and who are required to abide by the terms of this Agreement applicable to the Confidential Information; (ii) reproduce the Confidential Information received from the Disclosing Party only as required to execute its obligations or exercise its rights under this Master Agreement; and (iii) disclose Confidential Information as required by law, provided the Receiving Party gives the Disclosing Party prompt notice prior to such disclosure to allow the Disclosing Party to make a reasonable effort to obtain a protective order or otherwise protect the confidentiality of such information. (b) Except as otherwise specifically provided in this Master Agreement, the Receiving Party will not during the Term and after expiration or earlier termination hereof: (i) disclose, in whole or in part, any Confidential Information; or (ii) sell, rent, lease, transfer, encumber, pledge, reproduce, publish, transmit, translate, modify, reverse engineer, compile, disassemble or otherwise use the Confidential Information in whole or in part. 15 (c) The Receiving Party will keep the Confidential Information strictly confidential, exercising no less than the same care in preventing unauthorized disclosure or use of the Confidential Information that it takes to protect its own information of a similar nature, but in no event less than reasonable care. Reasonable care includes, without limiting the generality of the foregoing: (i) informing its subcontractors, agents, representatives, advisors, directors, officers, employees and Affiliates and, where applicable, their directors, officers and employees, of the confidential nature of the Confidential Information and the terms of this Master Agreement, directing them to comply with these terms, and obtaining their written acknowledgment that they have been so informed and directed, and their written undertaking to abide by these terms; and (ii) notifying the Disclosing Party immediately upon discovery of any loss, unauthorized disclosure or use of Confidential Information, or any other breach of this Section by the Receiving Party, or any breach of or intrusion into the Receiving Party's security systems and assisting the Disclosing Party in every commercially reasonable way to help the Disclosing Party regain possession of any and all Confidential Information disclosed in breach hereof and to prevent further unauthorized disclosure or use. (d) The Receiving Party acknowledges that: (i) the Disclosing Party possesses and will continue to possess Confidential Information that has been created, discovered or developed by or on behalf of the Disclosing Party, or otherwise provided to the Disclosing Party by third parties, which information has commercial value and is not in the public domain; (ii) unauthorized use or disclosure of such Confidential Information is likely to cause injury not readily measurable in monetary damages, and therefore irreparable; (iii) in the event of an unauthorized use or disclosure of Confidential Information, the Disclosing Party will be entitled, without waiving any other rights or remedies, to such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction; (iv) subject to the rights expressly granted to the Receiving Party in this Master Agreement, the Disclosing Party and its licensors retain all right, title and interest in and to its Confidential Information, regardless of whether provided by or on behalf of the Disclosing Party or created by the Receiving Party; and (v) any disclosure by the subcontractors, agents, representatives, advisors, directors, officers and employees and Affiliates of the Receiving Party and, where applicable, their directors, officers and employees will be deemed to be disclosure by the Receiving Party and the Receiving Party will be liable for any such disclosure as if the Receiving Party had disclosed the Confidential Information. SECTION 8.3 RETURN OF DISCLOSING PARTY INFORMATION; RIGHT TO REVIEW (a) As soon as practicable upon the Disclosing Party's request, and at the expiration or earlier termination of this Master Agreement, the Receiving Party will: (i) return all Confidential Information, including, without limitation, all originals, hard copies, reproductions and summaries of Confidential Information; and 16 (ii) if Confidential Information is in a form that is impractical to return, destroy all copies of Confidential Information in its possession, power or control, which are present on magnetic media, optical disk, volatile memory or other storage device, in a manner that assures the Confidential Information is rendered unrecoverable. Upon completion of those tasks, an officer of the Receiving Party will provide written confirmation to the Disclosing Party that the requirements of this Section have been satisfied. (b) The Disclosing party may visit the Receiving Party's premises, upon reasonable prior notice and during normal business hours, to review the Receiving Party's compliance with the terms of this Section. SECTION 8.4 OWNERSHIP OF ZALE DATA All Zale Data will remain the property of Zale. In addition to being protected as Confidential Information pursuant to the foregoing paragraphs of this Section 8, the Zale Data will not be (i) used by ACS other than in connection with providing the Services, (ii) disclosed, sold, assigned, leased or otherwise provided to third parties by ACS, or (iii) commercially exploited by or on behalf of ACS, its employees or agents. SECTION 8.5 RETURN OF ZALE DATA ACS will upon (i) request by Zale at any time, and (ii) the cessation of all Termination/Expiration Assistance, promptly return to Zale, in the format and on the media in use as of the date of request, all or any requested portion of the Zale Data. Any archival tapes containing any Zale Data will be destroyed in accordance with the terms of Section 8.3 (a) (ii). Further, ACS agrees that upon Zale's written request, ACS shall, within twenty-four hours, or if twenty-four hours is not reasonably practicable, as soon as is reasonably practicable, provide Zale with a copy of its business critical data (as reasonably defined by Zale) and shall provide any other Zale Data promptly using ACS' best professional efforts and in the sequence requested by Zale. Data provided pursuant to this paragraph shall be provided in media as Zale directs. Subject to the foregoing, unless furnished or paid for by Zale, the actual media on which Zale Data is stored, after the complete deletion of Zale Data or Confidential Information, is and shall remain the property of ACS. SECTION 9 -- ACCOUNT MANAGEMENT/PERSONNEL/CHANGE CONTROL SECTION 9.1 ACCOUNT MANAGERS (a) ACS and Zale each will appoint an individual with overall program management responsibility for monitoring the performance of Services and addressing performance deficiencies under this Agreement (the "Account Manager(s)"). Subject to and in accordance with the terms and requirements of this Agreement, the Account Managers will meet upon the request of either party to: (i) ensure that the Service Levels are met, and in the event of deficiencies not resolved by the personnel directly involved in the preparation and execution of the subject task, develop and implement problem recovery plans and solutions; (ii) review ACS' performance, coordinate the provision of Services to Zale and discuss future Zale requirements; 17 (iii) serve as the principal interface between Zale and ACS with respect to all issues relating to the Services; (iv) review the parties' responsibilities and any failure by either party to perform any such responsibilities; and (v) discuss and attempt to resolve, if applicable, any other matters relating to the Services that may arise from time to time. (b) To the extent that the Account Managers are unable to resolve any issue, each of them will refer that issue to a person at the appropriate level of ACS or Zale management necessary to resolve the issue, who will use reasonable efforts to promptly resolve the issue. SECTION 9.2 KEY PERSONNEL Upon entering into this Agreement, the Parties may agree that certain personnel will be defined as either "Key ACS Personnel", "Key Transferred Employees" or "Key Zale Personnel". Such individuals will be identified by job description and the parties may establish certain criteria relative to the transfer or redeployment of such individuals within each Party's respective organization. All special designations of any "Key Personnel" (both of ACS and Zale) and any agreed upon parameters surrounding their activities in support of the transactions contemplated by this Master Agreement will be specified Schedule E. SECTION 9.3 TECHNICAL CHANGE CONTROL ACS will implement any changes in the technical environment and systems used to provide the Services in accordance with Schedule A and any applicable procedures manual (the "Technical Change Control Procedures"). Furthermore, ACS will not make any change that materially affects the functions, controls, or performance of, or decreases the operational efficiency of, the Services, without first obtaining Zale's approval; provided that, if such proposed action or decision is one that, if not permitted, would cause ACS not to be able to meet an applicable Service Level, Zale's refusal to grant such request will be considered an Excused Performance Problem. Notwithstanding the foregoing, ACS may make temporary changes required by an emergency but shall, if reasonably practicable, contact appropriate Zale personnel to obtain prior approval. ACS will promptly notify Zale of any emergency changes implemented without prior Zale approval, and will provide the documentation required to meet Zale's Technical Change Control Procedures, to facilitate approvals and any further actions required. In all cases, ACS shall provide Zale with documentation to describe the Technical Change Control Procedure. SECTION 9.4 CONTRACT CHANGE CONTROL (a) From time to time during the Term, Zale or ACS may propose changes in or additions to the Services or other aspects of this Agreement. Subject to clause (c) below, all such changes shall be implemented pursuant to the procedures set forth in this Section (the "Change Control Procedures"). (b) Any change to this Master Agreement must be approved by the Account Manager of each Party and memorialized in a written amendment executed by both parties that specifically identifies this Master Agreement, the section of this Agreement that is the subject of the amendment, and the new provision. (c) If Zale desires to propose a change in or addition to the Services, it shall deliver a written notice to the ACS Account Manager describing the proposal. ACS shall respond to such proposal by preparing a written document ("Change Control Document"), indicating: (i) the effect of the proposal, if 18 any, on the amounts payable by Zale; (ii) the possible effect of the proposal, if any, on Service Levels; and (iii) the anticipated time schedule for implementing the proposal. If ACS desires to propose a change in or addition to the Services or other aspects of this Agreement, it may do so by preparing and delivering a Change Control Document to the Zale Account Manager. (d) Routine changes made in the ordinary course of ACS' provision of the Services that are performed within the then-existing resources used to provide the Services and that do not affect Service Levels (such as changes to operating procedures, schedules and Equipment configurations) may be made by ACS without the necessity of the above, subject to Zale's prior approval, which shall not be unreasonably withheld, when such changes are to Zale equipment, procedures or resources. SECTION 9.5 EMPLOYEE COMPENSATION All ACS personnel assigned to the Zale account by ACS (or its permitted subcontractors) will be and remain employees of ACS (or such permitted subcontractors), and ACS (or such permitted subcontractors) will provide for and pay the compensation and other benefits of such personnel, including salary, health, accident and workers' compensation benefits and all taxes and contributions that an employer is required to pay with respect to the employment of employees. SECTION 10 -- AUDITS ACS will maintain records and supporting documentation of all financial and non-financial transactions under this Master Agreement sufficient to permit an audit thereof in accordance with this Section 10. At its expense, ACS will provide to Zale, Zale's internal and external auditors, inspectors, regulators and such other representatives as Zale may designate from time to time reasonable access at reasonable times and after reasonable notice (which, unless circumstances reasonably preclude such notice, would be no less than five (5) Business Days) to (i) the parts of any ACS facility at which ACS is providing the Services, (ii) ACS personnel providing the Services, and (iii) all relevant data and records relating to the Services, for the purpose of performing financial, technical and other audits and inspections of ACS' provision of the services and of Zale and its business, to verify the integrity of Zale Data and the adequate protection of Zale's Confidential Information and to examine ACS' Charges under this Master Agreement. Auditors shall be subject to ACS confidentiality and security requirements and shall not be ACS Competitors. Such audits shall be conducted in a manner that does not unreasonably interfere with ACS' operations. In no event shall auditors have access to ACS cost information. Other than audits conducted or required by regulators, Zale will limit its audits to one (1) in any annual period. No later than December 31 of each calendar year throughout the Term of this Agreement, ACS will deliver to Zale reports from ACS' independent auditors of examinations in accordance with SAS No. 70, Type II, of the controls, procedures, and systems of ACS and its subcontractors related to the Services. At Zale's request and expense, ACS will expand the SAS 70 report to address Zale's particular requirements, to the extent that the independent auditors are able to address such requirements. ACS shall use commercially reasonable efforts to remediate any deficiencies that are individually or in the aggregate material, identified by and consistent with the SAS 70 audits. As requested by Zale, but no more than once during each year of the Agreement, ACS shall provide written confirmation that there have been no significant changes in its controls, procedures and systems related to the Services during the three month period following the preceding SAS 70 report. This Section will survive the expiration or earlier termination of the Term and will continue to the third (3rd) anniversary of the expiration or termination of the Term. 19 SECTION 11 -- INSURANCE; RISK OF LOSS SECTION 11.1 REQUIRED INSURANCE COVERAGE Throughout the Term, ACS will maintain in force, at minimum, the insurance coverage described below. (a) Commercial General Liability Insurance with a minimum combined single limit of $1,000,000 per occurrence, $2,000,000 in the aggregate; (b) Umbrella Liability Insurance with a minimum combined single limit of $15,000,000 per occurrence and in the aggregate; (c) Worker's Compensation Insurance or any alternative plan of benefits as permitted or as required by law, in such amount as required by law; (d) Employee Dishonesty and Computer Fraud Insurance for loss arising out of or in connection with fraudulent or dishonest acts committed by the employees of ACS in a minimum amount of $5,000,000 per occurrence; (e) Errors and Omissions Insurance with a combined single limit of $20,000,000 per occurrence and in the aggregate; and (f) Property insurance in the amount of the replacement value of all Zale Equipment or other material in ACS' possession or under its control, and ACS Equipment or other material that is used primarily in providing the Services under this Agreement. Zale shall provide ACS with the replacement cost value of all Zale equipment or other material placed under the control of ACS, however, if Zale does not provide such replacement cost value, ACS shall estimate the replacement cost value and shall not be responsible for any losses that exceed the estimated amount. SECTION 11.2 RISK OF LOSS AND GENERAL INSURANCE REQUIREMENT As of the Effective Date, each party will be responsible for risk of loss of, and damage to, any Equipment, Software or other materials in its possession or under its control. On or before the Effective Date and each year thereafter on the anniversary thereof, ACS shall provide Zale with certificates of insurance. Each insurance certificate shall require that the insurance company shall provide Zale with at least 30 days prior written notice of any material change, cancellation or non-renewal of any coverage. ACS shall require its insurance carriers to waive the right of subrogation against Zale. SECTION 12 -- CHARGES SECTION 12.1 CHARGES Subject to the other provisions of this Master Agreement, Zale will pay to ACS the amounts set forth in Schedule B as payment in full for the Services performed by ACS during the Term (the "Charges"). 20 SECTION 12.2 TAXES (a) Each party will pay any real property taxes or personal property taxes on property it either owns or leases from a third party. Taxes payable on any Transferred Equipment will be prorated as of the date of transfer based on the number of days in the applicable tax period, with Zale paying the taxes allocable to the period before such transfer date and ACS paying the taxes allocable to the period on and after such date. An estimated proration of such taxes shall be made as of the transfer date with an appropriate adjustment made at the time the actual taxes are determined. (b) ACS will pay when due any sales, use, excise, value-added, services, consumption, and other taxes and duties imposed on any goods and services acquired, used or consumed by ACS in connection with the Services (including any taxes applicable to the acquisition of the Transferred Equipment, but excluding any taxes applicable to pass-through expenses). (c) Zale will pay when due any sales, use, excise, value-added, services, consumption, or other tax imposed by any taxing jurisdiction on the provision of the Services or any component thereof. (d) The parties will cooperate in attempting to reduce the amount of any tax to the maximum extent feasible. SECTION 13 -- INVOICING AND PAYMENT SECTION 13.1 INVOICES AND PAYMENT ACS will issue to Zale, on a monthly basis, invoices for all Charges and other amounts due with respect to Services and Additional Services, if any, provided during the prior month. Base Charges shall be billed in advance on the last day of the prior month, and deviations from the base Charges (i.e., ARCs/RRCs) shall be billed or credited in arrears. Each invoice will separately state Charges for each category of Service, reimbursable expenses and taxes payable. Each invoice delivered pursuant to this Section 13.1 will be due and payable no later than thirty (30) days after the invoice date, unless subject to Zale's good faith dispute. If the invoice is received more than two business days following the invoice date, the invoice will be due and payable no later than thirty (30) days after it is received. SECTION 13.2 OUT OF POCKET EXPENSES Zale will reimburse ACS, within 30 days of receipt of invoice, for reasonable, documented and actual out-of-pocket expenses incurred by ACS with Zale's prior written approval for equipment, materials, supplies, or other Services provided under this Agreement but not otherwise charged or covered hereunder. Out-of-pocket expenses also include related taxes, duties, shipping, and insurance. SECTION 13.3 PRORATION All periodic charges under this Master Agreement (excluding charges based upon actual usage or consumption of Services) will be computed on a calendar month basis and will be prorated for any partial month. 21 SECTION 13.4 LATE PAYMENT AND DISPUTED AMOUNTS Any amount due ACS under this Master Agreement that is not paid prior to or on the date due will thereafter bear interest until paid at a rate that is the lesser of (i) six percent (6 %) per annum, or (ii) the maximum rate of interest allowed by applicable law. Zale shall pay all undisputed amounts in the time specified in Section 13.1. Zale shall provide the reasons for withholding any disputed amount within 30 days of the invoice date. SECTION 14 -- REPRESENTATIONS, WARRANTIES AND COVENANTS SECTION 14.1 MUTUAL REPRESENTATION AND WARRANTY Each party represents, warrants and covenants that: (a) It is a corporation, duly incorporated, validly existing and in good standing under the laws of the state in which it is incorporated, and is in good standing in each other jurisdiction where the failure to be in good standing would have a material adverse effect on its business or its ability to perform its obligations under this Master Agreement. (b) It has all necessary corporate power and authority to own, lease and operate its assets and to carry on its business as presently conducted and as it will be conducted pursuant to this Master Agreement. (c) It has all necessary corporate power and authority to enter into this Master Agreement and to perform its obligations hereunder, and the execution and delivery of this Master Agreement and the consummation of the transactions contemplated thereby have been duly authorized by all necessary corporate actions on its part. (d) This Master Agreement constitutes a legal, valid and binding obligation of such party, enforceable against it in connection with its terms. (e) This Agreement does not contravene any provision set forth in any contract, agreement, or order to which either party is subject. (f) It is either the owner of, or authorized to use, any and all Software provided by such party, and, in the case of Zale, including the ability to use such Software on behalf of Affiliates and third party service providers. As to any Software that a party does not own but is authorized to use, such party shall advise the other party as to the ownership and extent of its rights with regard to such Software, including the ability to use such Software on behalf of Affiliates, divested entities and other third party service providers, and to the extent any limitation in such rights would impair ACS' performance of its obligations or Zale's receipt of the services under this Agreement. (g) It shall perform its responsibilities under this Agreement in a manner that does not infringe, or constitute an infringement or misappropriation of, any patent, copyright, trademark, trade secret or other intellectual property rights of any third party. (h) It shall perform its responsibilities under this Agreement in compliance with all applicable laws related to the performance of the Services, in the case of ACS, or the receipt of the Services, in the case of Zale, or to the performance of its other obligations hereunder. 22 (i) Zale and ACS shall not export or re-export any personal computer system, part, technical data or sub-elements purchased in the United States for use under this Agreement, directly or indirectly, to any destinations or persons prohibited by the United States Government, and, notwithstanding any other term, nothing in this Agreement shall be construed to call for such export. The term 'technical data' in this context, means such data as is defined as technical data by applicable United States export regulations. Zale represents that all Software, Equipment or technical information provided by Zale to ACS under this Agreement shall be free from restriction, regulation or special procedure regarding export from the country in which such Software is developed and from the United States to any other countries, except Embargoed Countries. (A) Where appropriate, Zale shall facilitate any clearances required for using Zale Proprietary Software, Zale Third Party Software, Equipment or technical information outside of the countries in which such Software, Equipment and technical information is developed and/or the United States, as appropriate. Zale shall provide ACS with all ECCN numbers for such Software, Equipment, and technical information, upon ACS' request, if ACS is required to obtain clearance before such Software, Equipment, and/or technical information can be used to provide the Services. (B) In the event any Software for which a party is operationally responsible hereunder shall become subject to any export, import, re-export or similar restriction, regulation or special procedure, whether due to changes in the applicable law or due to changes in or upgrades to such Software such party shall (i) notify the other party of any such restrictions, regulations or special procedures of which it becomes aware, and (ii) procure, where legally possible, any such licenses, permits, registrations or other permission necessary to export, import or re-export such Software as may be reasonably necessary in connection with the Services, except that neither party shall be required to obtain licenses for export of such Software to any of the Embargoed Countries. (C) Each party shall provide all reasonable assistance to the other party, and shall supply all necessary information to the other party in order for such other party to procure necessary licenses and comply with all export control laws and the provisions of this paragraph. SECTION 14.2 ADDITIONAL COVENANTS AND WARRANTIES (a) Performance. ACS warrants that all Services will be performed in a good and workmanlike manner. (b) Viruses. Each Party will use commercially reasonable efforts, including using industry standard virus protection software and other customary procedures to screen any software provided or made available by it to the other Party under this Agreement or other software (including email) or Equipment under its control and used to perform the Services, to avoid introducing any "virus", "Trojan horse", "worm", or other disabling or destructive code that is intended to materially disrupt the proper operation of the systems. If such code is found to have been introduced by ACS into such systems, then, without limiting Zale's other remedies under this Agreement, ACS will use commercially reasonable efforts to promptly mitigate, and to assist Zale in mitigating, the effects of the virus, if any, on that portion of Zale's information technology environment. (c) Training of Employees. ACS personnel will be provided with appropriate training with respect to content of and compliance with legal or regulatory requirements and, to the extent revealed in each Benchmarking under Section 5.4, industry best practices, applicable to the Services and Service Levels required by this Agreement to the extent applicable to their tasks. 23 (d) Disabling Codes. ACS covenants that it will not, without Zale's consent, knowingly insert, or knowingly allow to be inserted, into the software used to provide the Services any code or other device that is designed to disable, damage, erase, delay, bypass Zale security or otherwise shut down all or any portion of the Services or the Equipment, software or data used in providing the Services. SECTION 14.3 DISCLAIMER EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES AND EXPLICITLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. SECTION 15 -- INDEMNIFICATION SECTION 15.1 INDEMNITIES Each party will indemnify, defend and hold harmless the other party, its Affiliates and their respective officers, directors, employees, agents, successors and assigns, from and against all Losses arising from, in connection with or relating to, third party allegations for any of the following: (i) death of or injury to any agent, employee, invitee, visitor or other person to the extent caused by the act or omission of the indemnitor, its Affiliates, or their respective agents, employees or contractors; (ii) damage to, or loss or destruction of any real or tangible personal property or Zale Data, to the extent caused by the act or omission of the indemnitor, its Affiliates, or their respective agents, employees or contractors; (iii) indemnitor's breach of any representation, warranty or covenant it has made in Section 14 (Representations, Warranties and Covenants); (iv) indemnitor's willful or fraudulent misconduct or that of its employees, contractors or agents; (v) breach of indemnitor's obligations with respect to Confidential Information; (vi) indemnitor's failure to perform any obligations required to be performed by it under any of the Third Party Contracts, Equipment leases prior to the Effective Date (in the case of Zale) or thereafter (in the case of ACS) to the extent such party has operational or financial responsibility therefore; (vii) liability accruing in connection with taxes, together with interest and penalties, that are the responsibility of such party hereunder; and (viii) claims initiated by Affiliates, employees, agents and contractors of a party or its Affiliates, or other persons or entities asserting rights under this Agreement to the extent such claims are based on the indemnitor's act or omission. Zale will indemnify, defend and hold harmless ACS, its Affiliates and its officers, directors, employees, agents, successors and assigns, from and against all Losses arising from, in connection with or relating to, third party allegations for any of the following: (i) any claims by any Zale employees who may be transferred to ACS under this Agreement for any action or inaction of Zale prior to such transfer and other claims related to the employment of individuals; and (ii) any claim relating to the Transferred Equipment accruing prior to Zale's transfer of such assets to ACS, including but not limited to liens or encumbrances or adverse claims to title, and (iii) any breach by Zale of Section 14.1 (f) or 14.1 (i). ACS will indemnify, defend and hold harmless Zale, its Affiliates and its officers, directors, employees, agents, successors and assigns, from and against all Losses arising from, in connection with or relating to third party allegations for any of the following (i) any claims by any Zale employees who may be transferred to ACS under this Agreement for any action or inaction of ACS after to such transfer and other claims related to the employment of individuals; and (ii) any claim relating to the Transferred Equipment accruing after the transfer of such assets to ACS, including but not limited to liens or encumbrances or adverse claims to title not subject to Zale's previous ownership; and (iii) any breach by ACS of Section 14.1 (f) or 14.1 (i) 24 SECTION 15.2 INTELLECTUAL PROPERTY INDEMNIFICATION Each party will indemnify, defend and hold harmless the other party, the other party's Affiliates and their respective officers, directors, employees, agents, successors and assigns, from and against all Losses arising from and to the extent that the Zale Proprietary Software, in the case of Zale, and the ACS Proprietary Software in the case of ACS, or the Confidential Information provided by the indemnitor, its affiliates or any party thereof or related thereto, (a) infringes a copyright protected under applicable law, (b) infringes a patent existing under applicable law, (c) constitutes an unlawful disclosure, use or misappropriation of another party's trade secret, or (d) otherwise infringes upon a third party's intellectual property rights. If any Party's Proprietary Software or Confidential Information becomes the subject of a claim under this Section, or in the indemnitor's opinion is likely to become the subject of such a claim, then the indemnitor may, at its option, (a) modify the Proprietary Software or Confidential Information to make it non-infringing or otherwise cure any claimed misuse, provided such modification does not adversely affect the functionality of the Proprietary Software or Confidential Information, or (b) procure for the indemnitee the right to continue using the Proprietary Software or Confidential Information, or (c) replace the Proprietary Software with substantially equivalent Software that is non-infringing or that is free of claimed misuse. Any costs associated with implementing any of the above alternatives will be borne by the indemnitor. With respect to any Software provided or developed by a party pursuant to this Agreement, such party will have no liability to the other party under this Agreement (a) to the extent that any claim of infringement is based upon the use of the Software in connection or in combination with equipment, devices or Software not supplied by that party or used in a manner for which the Software was not designed, (b) for infringements that arise as a result of specifications presented by the other party, (c) to the extent that any claim of infringement is based upon the maintenance, modifications, updates, enhancements and improvements to the Software made by any party other than the indemnitor; and (d) for infringements that arise as a result of the failure of the indemnitee to use corrections or modifications provided by the indemnitor offering equivalent features and functionality. SECTION 15.3 INDEMNIFICATION PROCEDURES (a) Promptly after receipt by an indemnitee of any written claim or notice of any action giving rise to a claim for indemnification by the indemnitee, the indemnitee will so notify the indemnitor and will provide copies of such claim or any documents relating to the action. No failure to so notify an indemnitor will relieve the indemnitor of its obligations under this Master Agreement except to the extent that the failure or delay is prejudicial. Within thirty (30) days following receipt of such written notice, but in any event no later than ten (10) days before the deadline for any responsive pleading, the indemnitor will notify the indemnitee in writing (a "Notice of Assumption of Defense") if the indemnitor elects to assume control of the defense and settlement of such claim or action. (b) If the indemnitor delivers a Notice of Assumption of Defense with respect to a claim within the required period, the indemnitor will have sole control over the defense and settlement of such claim; provided, however, that (i) the indemnitee will be entitled to participate in the defense of such claim and to employ counsel at its own expense to assist in the handling of such claim and (ii) the indemnitor will obtain the prior written approval of the indemnitee before entering into any settlement of such claim incurring liability or an admission of liability on the part of the indemnitee, or ceasing to defend against such claim. After the indemnitor has delivered a timely Notice of Assumption of Defense relating to any claim, the indemnitor will not be liable to the indemnitee for any legal expenses incurred by such indemnitee in connection with the defense of such claim; provided, that the indemnitor will pay for separate counsel for the indemnitee to the extent that conflicts or potential conflicts of interest between the Parties so require. In addition, the indemnitor will not be required to indemnify the indemnitee for any amount paid by such indemnitee in the settlement of any claim for which the indemnitor has delivered a timely Notice of Assumption of Defense if such amount was agreed to without 25 prior written consent of the indemnitor, which will not be unreasonably withheld or delayed in the case of monetary claims. An indemnitor may withhold consent to settlement of claims of infringement affecting its proprietary rights in its reasonable discretion. The parties shall cooperate with each other with respect to any claim subject to indemnification at the expense of the indemnitor. (c) If the indemnitor does not deliver a Notice of Assumption of Defense relating to a claim within the required notice period or ceases to defend against such claim, the indemnitee will have the right to defend the claim in such a manner as it may deem appropriate, at the sole cost and expense of the indemnitor. The indemnitor will promptly reimburse the indemnitee for all such costs and expenses upon written request therefor. (d) In the event that an indemnitor shall be obligated to indemnify an indemnitee pursuant to any provision of this Agreement, the indemnitor shall, upon payment of such indemnity in full, be subrogated to all rights of the indemnitee with respect to the claims to which such indemnification relates. SECTION 16 -- LIMITATIONS ON LIABILITY SECTION 16.1 LIMIT ON TYPES OF DAMAGES RECOVERABLE (a) EXCEPT AS SET FORTH IN CLAUSE (b) BELOW, NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, AND EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. (b) The above stated limitation will not apply with respect to any claims arising out of or relating to (i) the willful or fraudulent misconduct of a party, its employees, contractors or agents, (ii) a breach of a party's obligations related to Confidential Information or any allegation of violation of the United States Government export laws and regulations, as well as those of any country in which Services are being provided under this Agreement, whether prior to the Effective Date or at any time during the Term, Term Extension Period, and Termination Assistance Period, caused by either Party or its Affiliates, or any officer, director, employee, agent, successor, or assigns of either Party or its Affiliates, (iii) an indemnitor's obligation to pay such damages to the extent they are awarded by a court, and (iv) any Charges owed to ACS or Service Level Credits or other amounts owed to Zale under this Agreement. SECTION 16.2 LIMIT ON AMOUNT OF DIRECT DAMAGES RECOVERABLE Each party's cumulative liability to the other for any and all actions, whether in contract or in tort, will not exceed an amount equal to the total Charges payable to ACS for the Services provided for the twelve (12) months immediately preceding the month in which the event giving rise to the liability occurred (or, if the event giving rise to the liability occurs during the first twelve (12) months after the Effective Date, the total Charges estimated to be payable to ACS for such first twelve (12) months). This limitation will not apply to Losses attributable to claims by or related to (i) an indemnitee pursuant to Section 15 (Indemnification), (ii) the willful or fraudulent misconduct of a party, its employees, contractors or agents, or (iii) a breach of a party's obligations related to Confidential Information. Charges and other fees and expenses due to ACS pursuant to this Master Agreement shall not be considered damages for purposes of this Section 16.2. SECTION 16.3 FORCE MAJEURE 26 (a) Neither party will be liable for any failure or delay in the performance of its obligations under this Master Agreement to the extent such failure is caused, directly or indirectly, without fault by such party, by: fire, flood, earthquake, elements of nature or acts of God; third party labor disruptions or strikes; acts of war, terrorism, riots, civil disorders, rebellions or revolutions, quarantines, embargoes and other similar governmental or third party action; or any other cause beyond the reasonable control of such party. Events meeting the criteria set forth above are referred to collectively as "Force Majeure Events." (b) Upon the occurrence of a Force Majeure Event, the non-performing party will be excused from any further performance or observance of the affected obligations for as long as such circumstances prevail and such party continues to attempt to recommence performance or observance whenever and to whatever extent reasonably possible without delay. Any party so delayed in its performance will immediately notify the other by telephone or by the most timely means otherwise available (to be confirmed in writing within three (3) Business Days of the inception of such delay) and describe in reasonable detail the circumstances causing such delay. (c) If a Force Majeure Event causes a material failure or delay in the performance of any Services for more than 24 hours, Zale may, at its option, procure such Services from an alternate source until ACS is again able to reasonably demonstrate to Zale that it is able to provide such Services. All payments to be made by Zale to ACS for the affected Services for such period will be abated and ACS will not be entitled to any additional payments as a result of the Force Majeure Event. SECTION 16.4 ACTIONS OF OTHER PARTY Neither party will be liable for any failure or delay in the performance of its obligations under this Master Agreement if and to the extent such failure or delay is caused by the actions or omissions of the other party or its employees, agents or contractors or breaches of this Master Agreement by the other party provided that the party which is unable to perform has provided the other party with reasonable notice of such non-performance and has used commercially reasonable efforts to perform notwithstanding the actions, omissions or breaches of the other party. SECTION 17 -- TERMINATION SECTION 17.1 TERMINATION FOR CAUSE (a) Zale may terminate this Agreement, or one or more categories of Services, for cause: (i) for a material breach of the agreed Services by ACS that is not cured by ACS within thirty (30) days of the date on which Zale provides written notice of such breach, in accordance with Section 19.7; or (ii) for a material breach of the agreed Services by ACS or for failure by ACS to meet the Service Levels or fulfill any other obligation under this Agreement that results in Zale being unable to conduct its normal and customary business functions and such condition persists for 48 hours (24 hours during a Zale Freeze Period) and, further, ACS does not achieve recovery within 10 days of notice by Zale (4 days during a Zale Freeze Period). Notwithstanding the termination for cause provision, ACS agrees that within three days following such notice by Zale (24 hours during a Zale Freeze Period), ACS will cooperate with, and reimburse Zale for all expenses reasonably related to third party assistance in repairing or reinstating the affected Services or to provide alternate mechanisms to support Zale in conducting its business until recovery is achieved and transition back to the Services can be reasonably achieved. Such efforts by ACS in no way relieve ACS of its recovery obligations nor do they impact in 27 any way Zale's right to terminate the Agreement for cause as defined herein. Following recovery, ACS will cure the cause of its failure to provide the Services as soon as reasonably possible using industry best practices. (b) Zale will exercise its termination option by delivering to ACS written notice of such termination, identifying the scope of the termination and the termination date. (c) ACS may terminate this Agreement, or one or more categories of services, if Zale fails to pay undisputed amounts (including, without limitation, amounts determined pursuant to Section 18 (Dispute Resolution) to be owing to ACS) within 45 days of when they become due, and Zale fails to cure such failure within fifteen (15) business days after receipt from ACS of written notice from ACS. SECTION 17.2 TERMINATION FOR CONVENIENCE (a) Zale may terminate for convenience this Master Agreement upon no less than one hundred eighty (180) days notice. In connection with any such termination, Zale will be liable to ACS for the Charges and other amounts incurred through the date of termination plus the termination fees described in Schedule B. (b) If a purported termination for cause by Zale under Section 17.1 (Termination for Cause) is determined pursuant to Section 18 (Dispute Resolution) not to be a proper termination for cause, such termination will be deemed a Termination for Convenience subject to this Section. SECTION 17.3 TERMINATION UPON ACS CHANGE OF CONTROL In the event of a change in Control of ACS (or that portion of ACS providing all or any material portion of the Services under this Agreement) or the Entity that Controls ACS (if any), where such control is acquired, directly or indirectly, in a single transaction or series of related transactions, or all or substantially all of the assets of ACS (or that portion of ACS providing all or any material portion of the Services under this Agreement) are acquired by any entity, or ACS (or that portion of ACS providing all or any material portion of the Services under this Agreement) is merged with or into another entity to form a new entity, then at any time within twelve (12) months after the last to occur of such events, Zale may at its option terminate the Term by giving ACS at least one hundred eighty (180) days prior notice and designating a date upon which such termination shall be effective. If Zale elects to terminate on this basis, Zale shall pay the Charges and other amounts incurred through the date of termination plus eighty percent (80%) of the applicable Termination for Convenience fee as set forth in Schedule B. SECTION 17.4 EFFECT OF TERMINATION Termination of this Master Agreement for any reason under this Section will not affect (i) any liabilities or obligations of either party arising before such termination or out of the events causing such termination, or (ii) any damages or other remedies to which a party may be entitled under this Master Agreement, at law or in equity, arising from any breaches of such liabilities or obligations. SECTION 17.5 TERMINATION/EXPIRATION ASSISTANCE Commencing six (6) months before the expiration of the Term or, if applicable, upon delivery of a termination notice by Zale or ACS pursuant to Section 17 (Termination), and continuing until the expiration of the Term or, if applicable, the termination date and for twelve (12) months thereafter, ACS will provide to Zale or Zale's designee the assistance reasonably requested by Zale to enable the Services to continue without interruption and to facilitate the orderly transfer of the Services to Zale or its 28 designee. The termination assistance will be defined and mutually agreed by the parties in writing, and Zale will pay for the termination assistance services in accordance with the rate structure defined in Schedule B, in addition to any one-time charges that may be imposed by any vendor or provider of software, services, or other under a Third Party Contract. If termination is pursuant to Section 17.1(c) (non-payment), Zale shall pay the estimated monthly Charges associated with the termination assistance services in advance, subject to monthly adjustments in order to reconcile estimated and actual Charges. As a part of the termination assistance service, ACS shall provide Zale with complete copies of all standards, manuals and procedures developed in accordance with Section 3.3 of Schedule A, and ACS hereby grants Zale a non-exclusive, fully paid-up, perpetual, and worldwide license to use such standards, manuals and procedures for Zale's internal business use, including the right to modify any of such standards, manuals and procedures, and hereby assigns to Zale all its right, title and interest in any customized portion of any such standards, manuals or procedures. SECTION 17.6 THIRD PARTY CONTRACTS Upon expiration or earlier termination of this Agreement, ACS will, at Zale's request and to the extent permitted by the applicable Third Party Service Contract or Equipment lease and any applicable Third Party Consent, obtained at the expense of Zale, (i) assign to Zale or its designee any Third Party Service Contracts and Equipment leases and (ii) sell, at fair market value, the ACS owned Equipment, used to provide Services to Zale on a dedicated basis. ACS will use commercially reasonable efforts to assist Zale or its designee to obtain required licenses to Third Party Software. In the case of Zale's Termination for Convenience, or ACS' Termination for Cause, Zale shall reimburse ACS for any prepayment made by ACS on Third Party Service Contracts or Equipment leases and attributable to the period after any assignment, provided that such prepayments do not exceed ten percent of the Termination for Convenience Fee that would be payable in the month the Agreement is terminated. SECTION 17.7 SUNSET MANAGEMENT During the last 90 days of ACS' operation of the Services under this Agreement whether the Agreement is ending by termination or expiration, and subject to Section 17.4, ACS shall perform according to the terms of this Agreement and, in addition, shall comply with the terms of this Section. (a) ACS will not transfer any ACS Employees or subcontractors, at the time assigned to work on Zale Services, to other assignments without agreement from Zale which shall not be unreasonably withheld if ACS demonstrates such transfer would not be to the detriment of Zale. (b) ACS will continue to issue Service Level Credits for failure to meet the Service Levels defined in Schedule C. (c) ACS will cooperate with Zale for the orderly transition of Software and the untangling of proprietary technology. (d) ACS will return Zale's materials in an orderly fashion. (e) ACS will cooperate with Zale and/or any third party designated for conversion of all Services or any of them. 29 (f) With regard to the Software identified in Schedule F-5 as owned/licensed by Zale, ACS will undertake commercially reasonable efforts to ensure that software licenses assigned to ACS by Zale are eligible for transfer back to Zale or reassigned as Zale designates. (g) ACS will use commercially reasonable efforts to support Zale's transition and will, in any event, comply with the Termination/Expiration Assistance services defined in Schedule A. SECTION 18 -- DISPUTE RESOLUTION SECTION 18.1 GENERAL Any dispute or controversy between the parties with respect to the interpretation or application of any provision of this Master Agreement or the performance by ACS or Zale of their respective obligations hereunder will be resolved as provided in this Section. SECTION 18.2 INFORMAL DISPUTE RESOLUTION The Parties may, by mutual agreement, attempt to resolve their dispute informally in the following manner: (a) Either party will submit the dispute to one (1) of their respective executives who has been chosen by that party to attempt to resolve such dispute, who will meet as often as the parties reasonably deem necessary to gather and analyze any information relevant to the resolution of the dispute. The applicable executives will negotiate in good faith in an effort to resolve the dispute. (b) During the course of negotiations, all reasonable requests made by one party to the other for non-privileged information, reasonably related to the dispute, will be honored in order that each of the parties may be fully advised of the other's position. (c) Proposals and information exchanged during the informal proceedings described in this Section between the parties will be privileged, confidential and without prejudice to a party's legal position in any formal proceedings. All such proposals and information, as well as any conduct during such proceedings, will be considered settlement discussions and proposals, and will be inadmissible in any subsequent proceedings. SECTION 18.3 ARBITRATION (a) Except as set forth in clause (b) below, any controversy or claim arising out of or relating to this Master Agreement, or any alleged breach hereof, including any controversy regarding the arbitrability of any dispute, will be settled at the request of either party by binding arbitration in Dallas, Texas, before and in accordance with the then existing Commercial Arbitration Rules of the American Arbitration Association (the "Rules"). In any dispute in which the amount in controversy is less than Two Hundred Fifty Thousand Dollars ($250,000), there will be one (1) arbitrator agreed to by the parties or, if the parties are unable to agree within fifteen (15) days after demand for arbitration is made, selected in accordance with the Rules. In all other cases there will be three (3) arbitrators, one (1) of whom will be selected by Zale within fifteen (15) days after demand for arbitration is made, one (1) of whom will be selected by ACS within fifteen (15) days after demand for arbitration is made, and one (1) of whom will be selected by the two party-appointed arbitrators within fifteen (15) days after their selection. If one or 30 more arbitrator(s) is not selected within the time period stated in the preceding sentence, such arbitrator(s) will be selected pursuant to the Rules. Any arbitrator(s) proposed by the American Arbitration Association will have at least five (5) years of experience in complex, commercial technology engagements in the area that is generally the same as the technology issue that is the subject of the dispute. Each party will pay its own attorneys' fees and one-half ( 1/2) of the other arbitration costs, subject to final apportionment by the arbitrators. The arbitrators will apply the law set forth in this Agreement to govern this Master Agreement and will have the power to award any remedy available at law or in equity; provided, however, that the arbitrators will have no power to amend this Master Agreement or any Schedule. Any award rendered pursuant to such arbitration will be final and binding on the parties, and judgment on such award may be entered in any court having jurisdiction thereof. (b) Notwithstanding clause (a) above, either party may request a court of competent jurisdiction to grant provisional injunctive relief to such party until an arbitrator can render an award on the matter in question and such award can be confirmed by a court having jurisdiction thereof. SECTION 18.4 CONTINUED PERFORMANCE Both parties will continue performing their respective obligations and responsibilities under this Master Agreement while any dispute is being resolved in accordance with this Section, unless and until such obligations are terminated or expire in accordance with the provisions of this Master Agreement. SECTION 18.5 APPLICABLE LAW All questions concerning the validity, interpretation and performance of this Master Agreement and will be governed by and decided in accordance with the laws of the State of Texas, without reference to any choice of law provisions. SECTION 18.6 JURISDICTION AND VENUE The parties hereby submit and consent to the exclusive jurisdiction of any state or federal court located in Dallas, Texas, and irrevocably agree that all actions or proceedings relating to this Master Agreement, other than any action or proceeding required by this Section to be submitted to arbitration, will be litigated in such courts, and each of the parties waives any objection which it may have based on improper venue or forum non conveniens to the conduct of any such action or proceeding in such court. SECTION 18.7 CHARGES AND COSTS In any legal action, the prevailing party will be entitled to recover, in addition to its damages (subject to limitations stated elsewhere in this Master Agreement), its reasonable attorneys' fees, expert witness fees, and other ordinary and necessary costs of litigation, as determined by the arbitrators or court. Such costs include, without limitation, costs of any legal proceedings brought to enforce a judgment or decree. SECTION 18.8 EQUITABLE REMEDIES The Parties agree that in the event of any breach or threatened breach of any provision of this Master Agreement concerning (i) Confidential Information, (ii) intellectual property rights or (iii) other matters for which equitable rights may be granted, money damages would be an inadequate remedy. Accordingly, such provisions may be enforced by the preliminary or permanent, mandatory or prohibitory injunction or other order of a court of competent jurisdiction. 31 SECTION 18.9 REMEDIES CUMULATIVE All remedies provided for in this Agreement shall be cumulative and in addition to and not in lieu of any other remedies available to either party at law, in equity or otherwise. The election by a party of any remedy provided for in this Agreement or otherwise available to such party shall not preclude such party from pursuing any other remedies available to such party at law, in equity, by contract or otherwise. SECTION 19 -- MISCELLANEOUS SECTION 19.1 BINDING NATURE AND ASSIGNMENT Neither party may assign any of its rights or obligations under this Master Agreement without the prior written consent of the other party, provided that such consent is not unreasonably withheld. No assignment by a party will relieve such party of its rights and obligations under this Master Agreement. Subject to the foregoing, this Master Agreement will be binding on the Parties and their respective successors and assigns. SECTION 19.2 EXPENSES In this Master Agreement and each applicable Schedule, unless otherwise specifically provided, all costs and expenses (including the fees and disbursements of legal counsel) incurred in connection with this Master Agreement, and the completion of the transactions contemplated by this Master Agreement or the applicable Schedules will be paid by the party incurring such expenses. SECTION 19.3 AMENDMENT AND WAIVER No supplement, modification, amendment or waiver of this Master Agreement or any Schedule will be binding unless executed in writing by the party against whom enforcement of such supplement, modification, amendment or waiver is sought. No waiver of any of the provisions of this Master Agreement or any Schedule will constitute a waiver of any other provision (whether or not similar) nor will such waiver constitute a continuing waiver unless otherwise expressly provided. SECTION 19.4 FURTHER ASSURANCES; CONSENTS AND APPROVALS Each party will provide such further documents or instruments or perform such further acts as required by the other party as may be reasonably necessary or desirable to give effect to this Agreement and to carry out its provisions. Whenever this Master Agreement or any Schedule requires or contemplates any action, consent or approval, such party will act reasonably and in good faith and, unless the Agreement expressly allows exercise of a party's sole discretion, will not unreasonably withhold or delay such action, consent or approval. SECTION 19.5 SEVERABILITY Any provision in this Master Agreement which is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions or affecting the validity or enforceability of such provision in any other jurisdiction, and such provision shall be deemed to be restated to reflect as nearly as possible the original intentions of the parties in accordance with applicable law. 32 SECTION 19.6 ENTIRE AGREEMENT This Master Agreement and each Schedule constitute the entire agreement between the parties pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, including the Prior Agreement, understandings, negotiations and discussions, whether oral or written, of the parties pertaining to the subject matter hereof. SECTION 19.7 NOTICES Any notice, demand or other communication required or permitted to be given under this Master Agreement will be in writing and will be deemed delivered to a party (i) when delivered by hand or courier, (ii) when sent by confirmed facsimile with a copy sent by another means specified in this Section, or (iii) three (3) days after the date of mailing if mailed by United States certified mail, return receipt requested, postage prepaid, in each case to the address of such party set forth below (or at such other address as the party may from time to time specify by notice delivered in the foregoing manner): If to ACS, to: President ACS Commercial Solutions, Inc. 2828 North Haskell Dallas, TX 75204 With a Copy to: Legal Department ACS Commercial Solutions, Inc. 2828 North Haskell Dallas, TX 75204 If to Zale, to: Chief Information Officer Zale Delaware, Inc. 901 West Walnut Hill Lane Irving, TX 75038 With a Copy to: General Counsel Zale Delaware, Inc. 901 West Walnut Hill Lane Irving, TX 75038 SECTION 19.8 SURVIVAL Any provision of this Master Agreement or of any Schedule which contemplates performance or observance subsequent to any termination or expiration of this Master Agreement, will survive expiration or termination of this Master Agreement. The obligations related to Confidential Information shall survive the expiration or termination of this Master Agreement for a period of twenty years. SECTION 19.9 INDEPENDENT CONTRACTOR ACS will perform its obligations under this Master Agreement as an independent contractor of Zale. Nothing in this Agreement will be deemed to constitute ACS and Zale as partners, joint venturers, or principal and agent. ACS has no authority to represent Zale as to any matters, except as expressly authorized in this Master Agreement. 33 SECTION 19.10 NON-SOLICITATION During the Term and for one year thereafter, without the employing party's prior written consent, neither party nor any of its Affiliates shall actively solicit for employment any individual who is employed, or any individual who was employed by the other party or any of its Affiliates and who was in any way related to the provision of Services. Notwithstanding the above, ACS agrees that Zale may solicit and hire or otherwise engage upon the termination or expiration of the Agreement any employee that is primarily dedicated to the provision of the Services and agrees to cooperate with such efforts and agrees not to enforce any employment or non-competition agreement with such employee. Notwithstanding the above, neither the publication of classified advertisements in newspapers, periodicals, internet bulletin boards, nor other publications of general availability or circulation nor the consideration and hiring of persons responding to such advertisements shall be deemed a breach of this provision. SECTION 19.11 THIRD PARTY BENEFICIARIES Nothing in this Master Agreement or in any Schedule, express or implied, is intended to confer rights, benefits, remedies, obligations or liabilities on any third party other than the parties or their respective successors or permitted assigns. SECTION 19.12 COUNTERPARTS This Master Agreement and each Schedule may be executed in one or more counterparts, each of which will be deemed an original but all of which taken together will constitute one and the same instrument. SECTION 19.13 CHANGE OF CIRCUMSTANCE Zale or ACS may request the other party to negotiate a change in the pricing structure based on changes to the party's business or external economic conditions. The other party shall reasonably consider such a request but shall be under no obligation to agree to such a change. SECTION 19.14 ACKNOWLEDGEMENT The parties each acknowledge that the terms and conditions of this Agreement have been the subject of active and complete negotiations, and that such terms and conditions should not be construed in favor of or against any party by reason of the extent to which any party or its professional advisors participated in the preparation of this Agreement. IN WITNESS WHEREOF, the parties have executed this Master Agreement effective as of the Effective Date. ACS COMMERCIAL SOLUTIONS, INC. ZALE DELAWARE, INC. By: /s/ M.R. O'Hara By: /s/ Sue E. Gove ----------------------------- ----------------------------- Name: M.R. O'Hara Name: Sue E. Gove ----------------------------- ----------------------------- Title: SR V.P. & Sr. Managing Director Title: EVP & COD ----------------------------- ----------------------------- 34 SCHEDULE A -- SERVICES TO MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES BETWEEN ZALE DELAWARE, INC. AND ACS COMMERCIAL SOLUTIONS, INC. AUGUST 1, 2005 TABLE OF CONTENTS SECTION 1 -- MAINFRAME SERVICES................................................3 Section 1.1 Mainframe Service Overview................................3 Section 1.2 Supported Configurations..................................3 Section 1.3 Tape Media System Upgrade.................................3 SECTION 2 -- MIDRANGE SERVICES.................................................3 Section 2.1 Midrange Service Overview.................................3 Section 2.2 Planned Upgrades..........................................4 Section 2.3 Web Hosting Services......................................5 SECTION 3 -- OPERATIONS SUPPORT SERVICES.......................................6 Section 3.1 Processing Facility.......................................6 Section 3.2 Technology Refreshment....................................6 Section 3.3 Standards and Procedures..................................7 Section 3.4 Systems Management Disciplines............................8 Section 3.5 Production Control........................................8 Section 3.6 Release Management........................................9 Section 3.7 Technical Support.........................................9 Section 3.8 Data Management..........................................10 Section 3.9 File Backup and Recovery Management......................10 Section 3.10 Storage Management.......................................10 Section 3.11 Systems Management.......................................11 Section 3.12 Security Management......................................11 Section 3.13 Performance Management...................................11 Section 3.14 Change Control...........................................12 Section 3.15 Incident Management/Problem Management...................13 Section 3.16 Disaster Recovery Support................................14 Section 3.17 Development Tools........................................15 Section 3.18 Remote System Access.....................................15 Section 3.19 Management Reporting.....................................15 Section 3.20 Help Desk Support........................................15 SECTION 4 -- NETWORK MANAGEMENT SERVICES......................................15 Section 4.1 LAN Services.............................................15 Section 4.2 WAN Services.............................................16 Section 4.3 Third Party Network Connectivity.........................16 Section 4.4 Existing Zale Network....................................16 Section 4.5 Transition Plan..........................................16 Section 4.6 Network Management Services..............................17 Section 4.7 Internet Access..........................................19 SECTION 5 -- TRANSITION SERVICES..............................................20 Section 5.1 Transition Plan..........................................20 Section 5.2 Roles and Responsibilities...............................20 Section 5.3 Project Management.......................................21 Section 5.4 Extension................................................21 SECTION 6 -- TERMINATION/EXPIRATION ASSISTANCE................................21 Section 6.1 Termination Planning and Knowledge Transfer..............21
2 SECTION 1 -- MAINFRAME SERVICES SECTION 1.1 MAINFRAME SERVICE OVERVIEW ACS will manage the mainframe systems at the ACS Facility to deliver the operational efficiency and business continuity required to meet Zale's business requirements. ACS will architect, engineer, implement and operate the agreed-to mainframe systems platforms that include, at a minimum, OS/390, z/OS (or its successors) and UNIX. Mainframe Services will be provided consistent with the Operations Support Services detailed in this Schedule A. Key aspects of mainframe operations support include production control, scheduling, console operations, change management, monitoring, problem management, notification and escalation procedures for all types of events. Services include delivery of tape, print or other output media support. Contingency resources will be available in response to all situations that might occur related to disruption of mainframe systems platforms, up to and including full-scale system recoveries. Appropriate procedures, policies and practices, consistent with this Schedule A, will be in place as of the Effective Date and are subject to annual review and enhancement by joint agreement. SECTION 1.2 SUPPORTED CONFIGURATIONS For the first two years of the Agreement, ACS will, at Zale's request, continue to manage and support the current IBM 9672 mainframe configuration used for Zale processing, utilizing the OS/390 Release 2.10 operating system. Zale acknowledges that manufacturer support for this operating system will no longer be available after December 2005. Thereafter, ACS will manage and operate the current configuration on a best effort basis, but without obligation for those certain Service Levels and other performance requirements that are beyond its control due to discontinued support. ACS will resume full accountability for Service Levels upon upgrading the mainframe to a supported z/OS operating system platform, which is scheduled for the third year of the Agreement. SECTION 1.3 TAPE MEDIA SYSTEM UPGRADE ACS will acquire, install, operate and maintain a Virtual Tape System (VTS) to support Zale's tape storage requirements for the mainframe platforms. ACS will complete the acquisition, installation and migration from the existing tape silo technology to the VTS in accordance with the Transition Plan, or as otherwise agreed by the parties. SECTION 2 -- MIDRANGE SERVICES SECTION 2.1 MIDRANGE SERVICE OVERVIEW The term "midrange" as used in this Agreement refers to all non-mainframe server systems including but not limited to the IBM iSeries (AS/400), Intel-based Windows and NT processors, and UNIX processors. Midrange servers supported by ACS as of the Effective Date are defined in Schedule F. Midrange does not include platforms or systems primarily providing end-user desktop or remote services, printers, scanners, network equipment, multi-media support, or voice telephony systems. ACS will manage the midrange systems at the ACS Facility to deliver the operational efficiency and business continuity required to meet Zale's business requirements. ACS will architect, engineer, implement and operate the agreed-to midrange systems consistent with the Operations Support Services detailed in this Schedule A. Key aspects of midrange operations support include, where applicable, 3 system administration, production control, scheduling, console operations, change management, monitoring, problem management, notification and escalation procedures for all types of events, tape and backup operations, and integration with distributed print services. Contingency resources will be available in response to all situations that might occur related to disruption of midrange systems, up to and including full-scale system recoveries. Appropriate procedures, policies and practices, consistent with this Schedule A, will be in place as of the Effective Date and are subject to annual review and enhancement by joint agreement. SECTION 2.2 PLANNED UPGRADES As a part of the Transition Services defined in Schedule D, ACS will relocate Zale's current midrange processors and operations from Zale's headquarters data center in Irving, Texas to the ACS data center in Dallas, Texas, currently located at 2828 North Haskell Avenue, Dallas, Texas 75204. 2.2.1 iSeries Processors -- ACS will relocate the four Zale iSeries processors to the ACS Dallas data center according to the Transition Plan. ACS will procure and install additional disk capacity on the iSeries with four terabytes of usable storage capacity to facilitate migration of the iSeries data from the Zale-owned EMC Storage System to local storage. Zale will continue to own the iSeries processors. 2.2.2 Intel-Based Processors -- ACS will relocate Zale's Intel-based processors to the ACS Dallas data center according to the Transition Plan. As a part of the Transition Plan, ACS will provide 21 new Intel-based processors to facilitate partial consolidation of Zale's Intel-based environment into a lesser number of physical assets, and will retire Zale's Intel-based processors after consolidation in Schedule F-1. The relocation and consolidation effort are detailed in the Schedule D, Transition Services. Zale will continue to own the current Intel-based processors documented in Schedule F-3. 2.2.3 UNIX Processors -- ACS will relocate Zale's Hewlett Packard UNIX (HP-UX) processors to the ACS Dallas data center according to the Transition Plan. As a part of the Transition Plan, ACS will provide 2 new HP-UX processors to facilitate consolidation of Zale's HP-UX environment into a lesser number of physical assets, and will retire up to 15 of Zale's HP-UX processors after consolidation. The relocation and consolidation effort are detailed in the Schedule D, Transition Services. Zale will continue to own the current HP-UX processors documented in Schedule F-3. 2.2.4 Midrange Tape Storage -- ACS will provide tape library resources in its Dallas data center to provide the required media backup and restoration services to facilitate the new ACS assets and relocated Zale assets according to the Transition Plan. ACS will continue to support Zale's legacy tape storage technologies and media located at Zale's Irving data center until they are retired as a part of the Transition Plan. 2.2.5 Midrange Disk Storage -- As a part of the Transition Plan, ACS will supplement Zale's current EMC storage capacity with an EMC Clariion that has a usable 4-terabyte storage array. The new storage capacity will be used to support transition storage requirements, can provide additional capacity for growth, and offers the potential for future consolidation and/or retirement of Zale's legacy storage devices. 4 SECTION 2.3 WEB HOSTING SERVICES Until migrated to a third party outsourcer, ACS will provide operational support services for Zale's web hosted applications and sites. Specific equipment used to support the web environment is identified in Schedule F3. In addition to those Operations Support Services defined in Section 3 of this Schedule A, ACS will perform the following specific web hosting services: (a) Backbone Access -- ACS will provide network access to the public Internet using its managed infrastructure, including access to redundant network links rated as DS3 or greater. To provide support for its web hosting and internet access services, Zale will have, at a minimum, access bandwidth on the ACS Backbone of 46.5 Mbps. This bandwidth will also provide Internet Access to other Zale systems and applications outside of the Web Hosting environment. (b) Help Desk Interface -- ACS will work with Zale Help Desk staff, Zale web development staff (as appropriate), and Zale management to resolve trouble tickets related to the web hosting environment. ACS will provide 2nd and 3rd level problem resolution (engineers on call 7x24), working with the Zale web development staff as required, to resolve operational, systems administration and network problems for the Zale web hosting environment. (c) Hardware Recovery -- ACS will work jointly with Zale to determine appropriate alarm thresholds and severity levels for all SNMP events and server events. ACS will resolve hardware problems, working with hardware vendors for resolution as necessary. During hardware outages or instability, ACS will closely monitor the web hosting systems and will confirm or initiate the appropriate failover and backup mechanisms to maintain system availability. (d) Reporting -- ACS will run and provide to Zale the system reports as generally described in Schedule C. Additionally, ACS will provide specific web performance reporting detailing network/server performance using WebTrends, availability, site visits/activity levels and capacity projections within the Web Services environment. Zale is responsible for producing any and all reports from the web server log. (e) Database Administration -- ACS will monitor the stability, integrity and performance of web hosting infrastructure and network databases (including log file utilization, data integrity, service availability, application databases, processor/memory utilization, monitoring of database size and available space, and replication) on a 7x24 basis. In support of the web applications, and as requested, ACS will provide up to 10 hours of physical database services per month. (f) System Engineering -- ACS will, on an ongoing basis, evaluate the design of the web hosting systems and will make recommendations to Zale as the systems evolve to ensure that the web hosting environment achieves and retains the characteristics of redundancy between shared servers, full mirroring or Raid Technology, caching hardware platform and a staging environment consistent with production servers. In support of the web applications, ACS will provide up to 20 hours of engineering services per month. (g) Software Responsibilities -- Zale shall be solely responsible for the operation of, and all changes to, Zale's web applications, as well as all creative content. Zale shall be solely 5 responsible for staging and for loading all application and data content onto servers. ACS shall be responsible for installation and support of all environmental software. (h) Domain Management -- With regard to the provision of DNS services, ACS shall provide administrative services and Zale will be responsible for securing the domain name(s). SECTION 3 -- OPERATIONS SUPPORT SERVICES ACS will provide the following services in support of Zale's mainframe and midrange operations. SECTION 3.1 PROCESSING FACILITY Throughout the Term of the Agreement, ACS will maintain a "Class A" processing and support facility or facilities in the general Dallas/Ft. Worth area, currently located at 2828 North Haskell Avenue, Dallas, Texas 75204, from which Zale's operations support is to be provided. The facility or facilities shall include all appropriate physical and logical security, environmental controls and emergency facilities and resources. ACS may with Zale's approval, such approval not unreasonably withheld, relocate all or portions of Zale's processing Services to other ACS-managed data centers during the Term. Operations support facilities located at Zale's corporate offices used for network interfaces, backup functionality, ACS office space, and limited server hosting shall be utilized in a manner consistent with ACS and Zale facilities and shall be maintained in a clean and orderly fashion, with the normal facilities and cleaning services provided by Zale. This space, including secured facilities and uninterruptible power supplies where appropriate, will be available to ACS, for specific use to support Zale, without cost. ACS is responsible for oversight and support of such devoted resources as described below. The term "Class A" means a facility that was purposely built or purposely renovated for major computer processing. The facility must be acceptable under generally accepted commercial processing standards and corresponding audit standards. ACS agrees that the portion of its facility which is used to provide the Services will, at a minimum, meet the EDP Audit requirements of Zale internal and external auditors. SECTION 3.2 TECHNOLOGY REFRESHMENT ACS will, both as an agent of Zale subject to funding by Zale for those technology elements owned by Zale, and on its own behalf as part of providing the Services, maintain all equipment, systems, facilities or other technology resources at reasonably-current technology levels. Under no circumstances shall ACS use equipment or software that poses clear risks to the stability of Zale's systems and formal notice under the provisions of the base Agreement must be provided should actions by Zale cause such a situation. In the initial year of the Agreement, ACS will provide the upgrades to Zale's information technology infrastructure that are described in Section 2.2 of this Schedule A. Subsequently, ACS' technology refreshment services will include: (i) upgrade to mainframe processor and z/OS operating system in Year 3 of the Agreement, provided that Zale continues to use its mainframe applications; (ii) upgrades to two HP UX processors four years after initial installation; (iii) upgrade to Zale's EMC 8730 6 storage device in Year 3 of the Agreement; and (iv) the ability for Zale to add, remove and upgrade various components of its technology infrastructure using the Additional Resource Charges (ARCs), Reduced Resource Charges (RRCs), and Hardware Provisioning Charges described in Schedule B. ACS will advise Zale of all hardware and software migration plans and related maintenance and upgrade activities. Zale may decline or defer the suggested maintenance or upgrade. Such decision must be provided in writing, and ACS will schedule notifications and reviews to allow adequate time for Zale consideration and response. Should Zale decline or defer the suggested maintenance or upgrade, ACS and Zale may temporarily redefine Service Levels to adjust ACS' responsibility for any performance failure that is directly and clearly caused by the declination or deferral, until such time as the maintenance or upgrade is completed. ACS will provide to Zale, and update from time to time, the minimum standards for hardware, software and peripherals required for ACS to manage Zale-owned assets in the ACS leveraged environment. Standards will include the requirements for minimal functionality required by ACS personnel operating in a remote Services environment, and by way of example will include, but not be limited to, redundant network interfaces, redundant power supplies, backup and remote management software, monitoring agents, security agents, scheduling software, and minimum storage requirements. Required standards may differ by manufacturer due to differences in their standards for delivery. SECTION 3.3 STANDARDS AND PROCEDURES No later than 180 days after the Effective Date, ACS will develop and publish formal operations standards and procedures documents covering all aspects of operations, documentation, process and contingency procedures related to Zale's operations. The effort will include periodic training for appropriate Zale staff and ongoing update provisions. Zale reserves the right to access and inspect these procedures as part of its audit process. 3.3.1. Participation In The Maintenance, Documentation, and Use Of Published Standards. Zale requires that all activities within the IT area, including all activities and services provided by ACS, are subject to formally documented and approved technical standards. ACS agrees that it will participate in the update and maintenance of the Zale/ACS technical standards document to be used, as amended and published no more often than annually, unless required by law or regulations throughout the life of this Agreement. 3.3.2. Zale Approval Of Standards. Zale retains the right to approve all technical standards that impact its business and/or services being provided. Proposed additions or changes to the published standards will be subject to Zale review and the joint change control process to ensure awareness and acceptance of the standards. Zale approval will not be unreasonably withheld. 3.3.3. Consistency With Zale Policies & Guidelines. The joint Zale/ACS technical standards will, in all respects, be consistent with Zale architectural standards and Zale policies & guidelines as issued in writing from time to time. ACS will ensure that all additions/changes are consistent with the other standards sources and will periodically review the documents to ensure they are mutually compatible. Discrepancies or instances that ACS believes require costs not contemplated by this Agreement are to be reported to Zale management and entered into the problem management process for resolution. 3.3.4 The parties will review (and if necessary, ACS will revise) such documents and standards annually. 7 SECTION 3.4 SYSTEMS MANAGEMENT DISCIPLINES ACS will, for the duration of the Agreement, maintain a set of formal system management disciplines to ensure the effective and correct application of technology to providing the Zale operations and support services. ACS will maintain formal management disciplines minimally in each of the following areas as applied both in the mainframe and midrange environments: i. Configuration Management ii. Capacity Management iii. Change and Release Management iv. Problem and Incident Management v. Continuity Management vi. Service Level Management vii. Availability Management viii. Service Delivery Management a. Systems Administration b. Network & telecommunications c. Data & database administration d. Technology planning & evaluation e. Methods and procedures f. Project management & control ACS, if requested by Zale with not less than 15 days advance notice, will provide access on an annual basis for Zale or its designated non-ACS Competitor representative to independently review and assess the status and application of each of the formal disciplines. ACS agrees that it will take corrective actions as mutually agreed in any management discipline area found to be below general industry standards after the review and assessment described herein. SECTION 3.5 PRODUCTION CONTROL With respect to mainframe and midrange systems, ACS will provide and operate the agreed-upon tools, procedures and systems to facilitate the effective production processing design, planning and routine scheduling for Zale processing. Zale processing is to include a mix of standing schedules, event-driven or special processing, user requests, demand production processing, systems management related processing (backups, maintenance, etc.) and test/development processing - all subject to priorities as defined by Zale. To achieve this production control, ACS is to maintain a combination of dedicated and shared resources devoted to the proper scheduling of Zale processing for the mainframe and/or midrange systems under ACS control. Support is to be available on a 24x7x365 basis. ACS shall provide the following scheduling and production control services: i. Maintain accurate descriptions, dependencies, and problem histories for production workloads ii. Prepare daily processing schedule and queues iii. Schedule and coordinate inter-system/platform data transfers iv. Review batch processing results v. Perform problem management, problem analysis, reschedules and work-arounds vi. Attend daily post and pre processing meetings, as required vii. Review future batch schedules viii. Implement permanent/temporary schedule changes ix. Handle on-request/demand jobs x. Restart jobs in accordance with operational procedures and within specified/established windows and timeframes 8 xi. Maintain an emergency contact list and escalation procedures to resolve abnormal terminations in a timely manner to ensure Service Levels and deadlines are met xii. Monitor prime time batch; identify schedule improvement opportunities xiii. Provide 24x7 coverage xiv. Provide backup training to contingency production control resources xv. Create components of, and participate in, disaster recovery planning/testing xvi. Support system software upgrade efforts xvii. Support internal/external audits xviii. Create/maintain recovery/restart documentation xix. Create/modify/maintain production procedures xx. Assure standards xxi. Participate, as appropriate, in Zale's Change Control procedures including acceptance testing xxii. Support application teams to install new/changed/upgraded applications xxiii. Schedule backups with application teams xxiv. Perform library management, change promotion, change back-out xxv. Report applications system performance, problems and improvement opportunities xxvi. ACS, as part of routine operations activity, will identify system and/or process/procedure changes and improvement opportunities identified through ongoing analysis of existing production operations processes. ACS will identify these opportunities to Zale management on a regular basis and will escalate situations where it believes valuable opportunities are being delayed or ignored. SECTION 3.6 RELEASE MANAGEMENT ACS is responsible for the receipt, validation per agreed-to standards, planning/scheduling, execution, and back-out/reversal for the promotion of all Zale and/or ACS initiated changes into the production systems environment (but not between stages of the development process). ACS will provide appropriate approval, staging, monitoring, reporting, notification and migration processes, consistent with Zale's approved system tools and procedures to accomplish such promotions. SECTION 3.7 TECHNICAL SUPPORT ACS will to provide both primary and backup resources to perform the technical support roles for the mainframe and midrange environments. Technical support is to include facility, hardware and environmental software installation, routine maintenance, support, monitoring, problem management, problem determination, analysis and resolution, planning and coordination with other areas as required. ACS resources will demonstrate proficiency in the areas of operating systems, subsystems, databases, telecommunications and all related environmental software, with access to other disciplines pre-established in case of need. ACS shall provide the technical support required to support the mainframe and midrange systems, including: i. System programming, system administration, architecture, engineering, support and maintenance ii. Performance reporting, enhancement and tuning iii. Capacity planning iv. Problem and incident management v. Storage management vi. Configuration management; 9 vii. System consulting viii. Conducting technology changes, exchanges, ACS presentations, and client training ix. Assistance with Applications Software testing and problem resolution x. Technical support resources are to schedule and meet with Zale at least quarterly for planning and coordination purposes. xi. Testing and installation of operating system patches, security updates, service packs, and general upgrades as required xii. Monitor the mainframe and midrange systems for systems and subsystems tuning, workload balancing, resource allocation, and capacity distribution xiii. Coordination with third party Software and Equipment maintenance providers ACS will participate in the Zale planning process conducted each year to update the 3 year master plan. ACS will provide planning input through active participation in the process and will provide operations related data as appropriate to support/aid the planning process. SECTION 3.8 DATA MANAGEMENT ACS is to provide skilled staff to provide data and database management and all related skills. Coverage is to include operating systems, database subsystems and third-party data management tools. Routine and day-to-day database and server operational and contingency/integrity support is to be included as well as planning, maintenance and resource management initiatives. ACS database resources will provide physical database consulting, analysis, and design review services to Zale application development teams to coordinate and improve the use of data resources. Provision of these services is not intended to include provision of dedicated database resources, nor to provide support for logical database design or procedures. SECTION 3.9 FILE BACKUP AND RECOVERY MANAGEMENT ACS will provide all technical and operational tools, resources and procedures to properly perform data and system backup and recovery processes, whether initiated by ACS or by Zale application systems. Frequency of backups will be determined by Zale's backup and retention policies and procedures. ACS and Zale application responsibilities for scheduling/performing backups will be mutually agreed by the parties. Recovery capabilities must support selective recovery of Zale data. Backup data (including both application and system data) is to be maintained both onsite and offsite in conjunction with both incident/error recovery and the disaster recovery program as described in Schedule G. Backup procedures are to include support for backup of all system, library and related data as well as Zale business data files and databases. Development and test data and libraries are to be included as agreed with Zale management at implementation and periodically thereafter. Except as intentionally scheduled by Zale or as dictated by volume, backups should not affect or impact resource availability for production processing. Processing costs for application data backup are to be borne by Zale. Costs for system and environmental backups are to be borne by ACS. SECTION 3.10 STORAGE MANAGEMENT ACS shall implement storage management processes, which include processes for monitoring and efficient use of DASD space, tape libraries, media temporary failures, restoration of damaged or inaccessible data (unless such restoration is impossible), maintenance of backup facilities and periodic updates to storage management parameters. ACS will assist in the formulation and implementation of policies, procedures, tools and reporting programs to improve the effectiveness of the storage resources. ACS will work actively to assist Zale in the identification of storage consolidation opportunities as well as the reduction of storage media costs. 10 ACS shall review standard error recording data for the occurrence of temporary errors to enable ACS to correct recoverable mainframe and midrange System problems before such errors become permanent. Performance data for monitoring these systems shall be inspected by ACS for performance bottlenecks related to data storage. Corrective action, such as moving databases or adding caching, shall be taken by ACS in order to meet the applicable Service Levels. ACS shall maintain and enhance the storage environment as necessary to meet agreed upon Service Levels. ACS shall leverage new technology where possible to increase storage capacity and management efficiency. SECTION 3.11 SYSTEMS MANAGEMENT ACS will provide agreed-to levels of systems management resources to support the mainframe and midrange environments. Responsibilities of the system management resources shall include general, systems software and hardware planning, all aspects of system measurement and reporting and performance reporting. As required, responsibilities will include library/directory definition, procedures and management to properly support all operational, test, development and production migrations. SECTION 3.12 SECURITY MANAGEMENT ACS will provide and maintain secure physical and data environments. Zale is responsible for developing and maintaining IT security policies for its corporation and providing copies to ACS from time to time, but no less than annually, as they are updated for integration into the Services. ACS shall review and execute each security policy upon its receipt thereof, and shall adhere to such policy until such time as it is superseded by a revised policy. Zale, after approval, will compensate ACS for additional reasonable resources, expenses or Services required to expand, enhance and implement the policies over time. ACS will administer the policies and develop procedures, with Zale's assistance, to manage, report, track, and audit the security measures adopted by ACS to implement Zale's information security policy. ACS shall be responsible for physical security at all of its locations providing Services to Zale. ACS shall comply with the security requirements and procedures within the Zale managed facilities, and Zale shall manage IT security policies and procedures to enable ACS personnel reasonable access to perform the Services. Mainframe data shall be protected by a series of complementary software security features including, but not necessarily limited to, ACF2 or its equivalent, password protection for all systems and significant audit trails for all systems access. Midrange data is protected by complementary software features and procedures, including software provided by Zale as defined in Section F-4. ACS is responsible for the staffing and provision of all such security mechanisms, including security administration except as assumed in writing by Zale. At a minimum Zale security administration duties include internal application security logic. Zale and ACS shall implement a common Syslog Server to record, archive and allow analysis of server log files. The Syslog Server shall use industry standard software and procedures. Zale will designate the server hardware from its excess inventory as it is made available during the Transition Plan. SECTION 3.13 PERFORMANCE MANAGEMENT To manage the mainframe and midrange server performance, ACS shall maintain and enhance a continuous process improvement model that includes: 11 i. Monitoring usage of CPUs, disks and networks, and forecasting the various workloads and identifying the optimum configuration to support future demand ii. Performance reporting and analysis of system components iii. Factoring new workload projections and equipment needs into long-term acquisition plans iv. Determining floor space and environmental requirements, following Change Management processes, acquiring new equipment and achieving the assigned objectives for implemented improvements v. Working with Zale to set performance expectations in accordance with the Service Levels vi. Working with Zale to implement mainframe and midrange systems and Application improvements vii. As mutually agreed by the parties, maintain historical database of statistics that will provide the ability to produce reports based on past usage and trends SECTION 3.14 CHANGE CONTROL Zale and ACS will implement a common change control process from policy development through routine procedure as described herein (the "System Change Management Process"). ACS and Zale agree that they will utilize the common System Change Management Process for all Services. 3.14.1 ACS shall be responsible for managing and implementing changes to the systems according to its documented ACS Change Management Process, as updated from time to time and communicated to Zale. ACS and Zale shall mutually agree to reasonably modify said process to effectively interface with the Zale Change Management procedures used by Zale's application development personnel. ACS shall coordinate changes to all systems affected by changes to ACS-managed systems. All changes shall be made in accordance with the System Change Management Process. The System Change Management Process shall be implemented in a manner that minimizes business disruption, and shall include changes to individual systems and the co-ordination of changes across systems comprising an end-to-end solution. 3.14.2 ACS will provide, for common use, its on-line change management system and procedures. This system will be available to both Zale and ACS staff through their normal system access procedures, i.e. no special equipment. Once the system and procedures are accepted by Zale, ACS will operate and maintain them as production systems. 3.14.3 ACS will routinely work with development projects to ensure each aspect of its Services is represented in the formative stages of new systems. ACS will report any concerns it may identify relating to actual or potential negative impact on production stability or performance to Zale management. ACS will work with Zale to track and forecast the implications of expected changes in business activity levels so as to protect the operational stability of the systems and Services it provides. 3.14.4 ACS shall be responsible for migrating Software components from the development environments to the production environments in a controlled manner and in accordance with System Change Management Process. Applications and/or system Software shall be built in a secured development environment and, as applicable, duplicate copies of the original programmed code (the "Source Code") and the code that has been compiled into machine-executable form (the "Object Code") shall be stored outside of the production environment in a designated secure environment. Zale and ACS shall ensure the process is developed in such a way as to reasonably ensure adequate and auditable source control, 12 including integration of Zale's third party source management application. Once the Software promotion package is properly built, ACS shall ensure approvals are received prior to installing the Software in the secure production environment. Subsequently, ACS shall perform minor trouble-shooting and identify problems with internal procedures as required. 3.14.5 ACS shall work with Zale application developers to bring Applications under the System Change Management Process. ACS will work with developers on a regular basis to ensure that Software is handed over pursuant to the System Change Management Process and in adherence to standardized policies and procedures; work with audit to ensure that Applications and the System Change Management Process is compliant; maintain documentation, policies and procedures current as it relates directly to the System Change Management Process and Data Centers in general; assist Zale in affecting an efficient workflow through the systems, ensuring that priorities are observed and deadlines are met within the Data Centers; and ensure that all relevant System Change Management Process documentation is completed/updated on an ongoing basis. 3.14.6 For changes initiated by ACS for Zale, ACS shall provide a change notification to Zale as soon as possible, according to the System Change Management Process, in advance of any planned changes or scheduled outages; provide a plan to reverse changes where necessary; and use commercially reasonable efforts to ensure that all such changes are problem-free and that the continuity of operations of affected systems is maintained. 3.14.7 In the event that either ACS or Zale determines the need to implement a change into the production environment after the regularly scheduled weekly Change Management meeting and before the next regularly scheduled Change Management meeting, the change will be deemed an emergency change. Emergency changes will adhere to all the requirements of a regular change, and in addition will require approval by ACS and Zale executives who have been delegated responsibility for approving emergency changes. SECTION 3.15 INCIDENT MANAGEMENT/PROBLEM MANAGEMENT 3.15.1 ACS shall provide incident and problem management services in relation to the Services as set forth herein. Problems received by the ACS Help Desk shall be logged and tracked using ACS' problem management application. Each problem will be routed to the break/fix agency most likely to resolve the problem in the shortest length of time. The tasks specific to ACS are identified below: (a) Identify and define the incident/problem and the business impact to Zale; (b) isolate the problem source or failing systems components; (c) develop bypass or recovery steps to restore the Services as soon as possible and to prevent a recurrence; (d) ensure the proper problem escalation process is in place to achieve the Service Levels; (e) escalate serious problems and problems not resolved in accordance with applicable Escalation Procedures; 13 (f) implement work-around, resolution, and obtain End-User verification before problem closure; (g) continually improve the problem management procedures, as measured by its contribution to improved information technology Service delivery; (h) provide timely, accurate and effective status updates to End-Users as required by Zale; (i) work jointly with Zale and any applicable third-party vendors to conduct root cause analyses and review high-impact problems to identify preventative measures, assess risk and bring closure; (j) develop problem management reports to ensure preventative measures are implemented and maintained; (k) produce Service Level performance reports; (l) identify significant service delivery gaps and future problem prevention measures; (m) For incidents designed highest severity ("SEV1"), provide root cause analysis on identified problems within five (5) business days; and (n) analyze problem data and produce trend, exception and forecast reports. 3.15.2 Zale and ACS will use the common incident management, tracking and reporting process in place as of the Effective Date. ACS shall base its Services on the ACS incident management process, as updated from time to time and communicated to Zale, which shall be reasonably and mutually modified to effectively interface with Zale's incident management procedures. ACS will make available a comprehensive incident and problem management system that can be operated from all points of access within the Zale network. The system must be capable of supporting all problem reporting within the entire information system functions at Zale and ACS location(s) that support Zale. ACS and Zale agree that they will utilize the common problem management system and associated procedures for all service areas. If Zale requests, ACS will work with Zale to develop and implement automated interfaces between the ACS problem management application and with the Zale problem management application(s); such effort to be at Zale expense. 3.15.3 ACS will with Zale jointly maintain a set of published procedures for the identification, logging, tracking and reporting of problems and their resolution. The design of the processes will be as mutually agreed. SECTION 3.16 DISASTER RECOVERY SUPPORT ACS will provide Disaster Recovery Services as described in Schedule G. ACS will work with Zale as required to develop, maintain and physically test, on a predetermined annual schedule, a disaster recovery plan to restore the operating environment in the event of a prolonged outage at any Zale or ACS Facility where ACS provides processing Services to Zale. The scope of each test will be mutually agreed. 14 In support of this disaster recovery support, ACS will provide media backup and off-site storage of Zale's backup files per mutually agreed-upon procedures and schedules. SECTION 3.17 DEVELOPMENT TOOLS ACS will install, maintain and operate the development tools, languages, testing aids or similar software as requested by Zale and as defined in Schedule F-5. ACS will maintain the development tools at latest release levels, unless otherwise agreed by Zale. Additional or enhanced tools will be at Zale's expense to buy and operate. SECTION 3.18 REMOTE SYSTEM ACCESS ACS will supply its standard support tools and software, which shall provide generally accepted industry standard functionality, as required to provide authorized Zale users with secure, remote access to Zale systems and data, while reasonably adhering to Zale's published security policies. SECTION 3.19 MANAGEMENT REPORTING ACS shall provide regular, planned communication with Zale management, including a monthly executive performance review meeting, status reports and Service Level reports. At a minimum ACS will host a Daily Operational Review meeting to review and report on all aspects of the daily delivery of services, and a Monthly Performance Review meeting to review ACS' performance of the preceding month.ACS will provide performance data in an electronic form. Reports and reporting schedules are identified in Schedule C. SECTION 3.20 HELP DESK SUPPORT ACS will provide second tier support to Zale's common help desk function. ACS will respond to escalated problems reported to the common help desk and will maintain problem reporting/tracking updates using the ACS problem management system. ACS will provide access for designated Zale employees to its tracking system for research and reporting. SECTION 4 -- NETWORK MANAGEMENT SERVICES The business objective of this service category is to provide Zale with consistently efficient network and voice support through the use of proven Network Management methodologies and procedures. While financial responsibility for various components of the existing network are distributed between Zale and ACS, ACS will support, manage and maintain the network. ACS will provide, support and manage the connectivity between the Zale General Office in Irving Texas and the ACS data center in Dallas, Texas. SECTION 4.1 LAN SERVICES The scope of the Local Area Network (LAN), for service purposes, includes all data communications services within a specific location, including all equipment and services whether dedicated or switched. ACS currently manages individual LANs for Zale in four (4) locations including Zale's General Offices and Pagoda Distribution Center, both in Irving Texas, the Peoples Distribution Center in Toronto, Ontario, and a private network for the Zale Web environment that is managed by ACS. 15 SECTION 4.2 WAN SERVICES The scope of the Wide Area Network (WAN), for service purposes, includes all data communications services between any two premises, including all intermediate equipment, services and intermediate premises (e.g. ACS Facility to the Zale General Office), whether dedicated or switched. Except as noted, ACS' service responsibility in this area extends from CSU/DSU to CSU/DSU (modem to modem) except that multiplexers, routers and terminal/communications controllers located immediately behind the CSU/DSU units at any Zale Facility are included. As of the Effective Date, ACS manages WAN connectivity between: o ACS' facilities and the Zale General Offices in Irving o Zale's General Office and its Distribution Center, two remote Distribution Centers, and those stores with frame relay connectivity In addition, ACS has the ability to expand WAN services domestically and internationally, should Zale request those services during the Term. SECTION 4.3 THIRD PARTY NETWORK CONNECTIVITY Zale frequently requires access to networks that are typically owned and controlled by a third party. Zale has connectivity to a number of other such networks to support third party payments, store connectivity, site-to-site connectivity, application interfaces, and other services and business requirements as defined by Zale. For service purposes, ACS supports the data communication interfaces only as direct connectivity from the Zale-defined network (whether LAN or WAN) to the third party's equipment provided for such purpose. ACS will also, as required, implement necessary network security processes with Zale approval to prevent such third party networks from gaining inappropriate access to the Zale network. SECTION 4.4 EXISTING ZALE NETWORK For service purposes, ACS supports the data operations, engineering and WAN services that are in place as of the Effective Date at the Zale General Offices, the ACS data center, and certain remote locations. ACS maintains detailed documentation and diagrams of the Zale Networks that are supported by ACS. This documentation is updated as a part of change control and is made available to Zale management as requested. Schedule F-4 lists network resources managed by ACS for Zale as of the Effective Date, including equipment, circuits, and other significant hardware. The Schedule includes information on financial responsibility, asset location, and management responsibility. The Schedule will be updated periodically during the Term to document changes in the Zale network, financial responsibility, and management responsibilities. Zale also retains records of equipment, circuits, and other network resources for which it retains management or financial responsibility, and will share with ACS such information as needed to effectively deliver the Services within the Service Levels. SECTION 4.5 TRANSITION PLAN As a part of the Transition Services defined in Schedule D, ACS will provide a number of enhancements to the Zale LAN and WAN networks to facilitate the migration of the midrange environment to its Dallas data center. These enhancements include: 1) Provisioning two additional full DS3 (45 Mbps bandwidth) circuits between the ACS facilities and the Zale General Office to facilitate the relocation of Zale midrange servers 16 to the ACS Dallas data center and to provide increased throughput for ongoing operations. These circuits may be configured as Metro point-to-point circuits or as part of a SONET fiber ring with provides much greater growth capacity. 2) ACS, at its expense, will provide and implement a number of hardware enhancements in its Dallas data center to facilitate expansion of the LAN required to support the transitioned server assets. There enhancements include high volume, redundant content switches for load balancing, firewall enhancements, and the routers, switches and other infrastructure build-out required to support the additional bandwidth between the sites. 3) As a part of the Transition Plan, certain network assets owned and maintained Zale are designated to be relocated to the Dallas data center, redeployed to alternate use within the Zale network, or decommissioned and returned to Zale for final disposition. ACS will furnish detailed schedules and diagrams of planned changes for Zale review and approval, such approval not unreasonably withheld. SECTION 4.6 NETWORK MANAGEMENT SERVICES ACS will provide the data network and services as described herein as part of the base network services charge defined in Schedule B. As changes are implemented at Zale's discretion, Zale will pay as defined in Schedule B or as mutually agreed for incremental agreed to, network services and charges and, correspondingly, ACS will credit Zale for any reduction in network services and charges. The Network Management Services to be provided throughout the term include: 4.6.1 Data Network Design and Implementation -- ACS, subject to Zale approval, is to provide the ongoing assessment, design and enhancement of Zale's data network. Zale may require changes to the data network as it serves ongoing business requirements. ACS will incorporate the necessary changes consistent both with short-term requirements and, wherever possible, with a longer-term data communications strategy. ACS will conduct network design reviews at least annually and will provide Zale with review results and recommended changes to the network and or communications strategy in writing. 4.6.2 Network Operations -- ACS, in conjunction with Zale's telecommunications vendor(s), will provide, through 7x24x365 monitoring, network problem recognition, tracking, resolution and reporting. 4.6.3 Tools and Facilities -- ACS will provide the appropriate resources, documentation, reports, tools, procedures and management methodologies to administer, comprehensively manage, monitor and reliably support the Zale network, or other third party providers supporting the Zale network. ACS will provide, as reasonably requested by Zale, current network diagrams of all network facilities under management by ACS. 4.6.4 Network Performance Management and Reporting -- ACS will monitor, forecast, tune and report to Zale management network operational and cost performance. ACS will identify, notify Zale and take corrective action as agreed in response to any performance situation that may degrade business operation. Additionally, ACS will provide, at least quarterly, electronic and paper copies of an updated WAN diagram. Zale and ACS will review and initial the diagram that will thereafter take precedence over the previous network description. 17 4.6.5 Network Asset Ownership -- From time to time, Zale may request ACS to purchase or otherwise assume, at mutually agreed prices and fee adjustments, some or all of the wide area network equipment then owned or leased by Zale. All other acquisitions required to support the network will be made by ACS with the costs incorporated in charges made to Zale for new or expanded services that require the equipment. Zale will continue to own voice communications equipment from the digital switch inward. 4.6.6 Network Capacity Management. -- ACS will monitor and project network utilization, as well as work with Zale to identify changes in business activity that may impact the data network so as to ensure adequate capacity to meet business needs while controlling costs. 4.6.7 Network Backup Provisions -- ACS will provide backup provisions consisting of either standby dedicated capacity via alternate routing or high performance switched circuit backup such that there are no single points of failure in the Zale Wide Area Network, except as specifically agreed by Zale. In conjunction with Zale and consistent with Schedule G -- Disaster Recovery Services, ACS will test designated backup provisions for network components as reasonably requested. 4.6.8 Selection of Providers -- Zale retains the right to direct that ACS acquire data telecommunications network services from Zale's vendor of choice to satisfy minimum procurement agreements that Zale may have or will enter into, however Zale will be responsible for incremental costs associated with such directive, providing that ACS demonstrates it would incur lower charges from an alternative major carrier (top five by network services-related revenue). ACS will not commit or utilize Zale data network expenditures to meet its own third party purchase or procurement level agreements without written permission of Zale. 4.6.9 Network Administration/Accounting -- ACS will provide the necessary skills and resources to support asset/contract/lease administration, utilizing procedures and mechanisms acceptable to Zale. ACS is to provide the necessary administrative and clerical support to provide proper processing of billing and related paperwork for the entire Zale wide area network. Activities include all processing, review and approval processes leading to payment of actual charges. ACS will conduct periodic (at least twice per year) assessments/audits of bills to ensure proper charges are being paid and will provide written results to Zale. Zale expects to also audit the bill payment process on a random basis, and ACS will cooperate with any such audits. After second year, ACS may reasonably charge for its direct cost of participation in such audits beyond two audits per year, except as may be warranted by documented deficiencies in immediately prior audits. 4.6.10 Problem and change management systems -- In performing all of the activities in the data and voice network area, ACS will utilize the common problem tracking/management and change control systems provided by ACS for common use in all areas. 4.6.11 Network Vulnerability Assessment and Intrusion Detection -- ACS shall provide a quarterly vulnerability assessment and analysis report of the Zale network according to the parameters mutually established as of the Effective Date through its third party partner Critical Watch (or other comparable third party if the parties agree). ACS shall provide and operate a Cisco Intrusion Detection System ("IDS") device in the Zale local and wide area network, and provide standard weekly summary reports to Zale. 18 SECTION 4.7 INTERNET ACCESS ACS will provide the internet access services to Zale based on the following requirements: 4.7.1 SMTP Mail Service -- ACS will provide SMTP mail service between Zale and the public Internet. This service will leverage hardware managed by ACS to accept and deliver mail from the Internet destined for Zale users and to accept and deliver mail from Zale users destined for the Internet. ACS will forward mail to the Internet for delivery. ACS will as requested implement SPAM control software and hardware, as provided by Zale. 4.7.2 Internet Maintenance Window -- Zale will accept a maintenance window for the server and Internet infrastructure each Sunday morning between the hours of 1:00 AM and 5:00 AM EST or as agreed by both parties. Use of the window requires prior notice and agreement by Zale, which will not be unreasonably withheld. No optional maintenance will be scheduled during a Zale Freeze Period. 4.7.3 Internet Connectivity Provision -- ACS will provide high speed access between the Zale General Office and the ACS data center to utilize the ACS firewall for access to the Internet. The additional bandwidth proposed in Section 4.5.1 is sized to provide sufficient capacity with redundant connectivity based on the utilization levels as of the Effective Date. ACS will provide network access to the Internet using its managed infrastructure, including access to redundant shared network links rated as DS3 or greater. To provide support for its web hosting and Internet access services, Zale will have, at a minimum, Internet access bandwidth of 46.5 Mbps for Web Hosting Services. The cost of this bandwidth is included as part of Network Management Services in Schedule B. 4.7.4 Internet Content Responsibility -- ACS will manage and maintain devices, including proxy servers, to filter Internet content. Zale will retain the right to establish, and change from time to time, settings and parameters to enforce its content filtering policies. ACS is not responsible for filtering what may be deemed "inappropriate" or "objectionable" content from the Internet. ACS will, as requested, implement Web Content management software and hardware, as provided by Zale. 4.7.5 Inter-company Mail Gateway -- Zale will maintain a standard SMTP gateway for the purpose of exchanging mail between the Zale and the ACS mail handling systems. 4.7.6 Internet Compliance -- Zale will comply with established etiquette with regard to activities that may jeopardize ACS' ability to maintain its Internet connectivity to its service provider. Spamming or indiscriminate unsolicited bulk mail is specifically forbidden, however, targeted email advertising campaigns are not forbidden. 4.7.7 DNS Administration -- ACS will not be responsible for, and will not initiate administrative or ownership registration updates for any Zale owned web domains. ACS is named and is responsible as the technical contact with Network Solutions and UUNET, with associated rights and privileges for the Zale owned domains. Additionally, ACS is responsible for DNS server maintenance or other deployment activities required for access to Zale domains. Zale retains ownership, administrative and financial responsibility for the domains and will work with registration authorities as required to maintain and update the domains. 19 4.7.8 Security -- ACS will provide network security to and from the Internet. This service includes firewall and intrusion detection services, not less than those defined in the ACS IT Security Policies, for existing Internet access maintained by ACS. ACS will notify Zale in writing within five business days of any changes to the ACS IT Security Policy that have a material effect on Zale operations. Joint ACS and Zale approval is required to modify the established security provisions, except in cases of immediate threat to the environment. ACS may temporarily modify, but not lessen, security rules and provisions to address such a threat. 4.7.9 System Monitoring -- ACS will provide and utilize monitoring tools, such as Candle Command Center, that routinely test the system for availability and will generate a notification to ACS and Zale of any failures or exceptions. SECTION 5 -- TRANSITION SERVICES SECTION 5.1 TRANSITION PLAN ACS and Zale will execute a first year plan ("Transition Plan") that transitions hardware, software, network resources, enterprise equipment, personnel, financial responsibilities and processes to a new operating model. Schedule D to the Agreement details the Transition Services and provides the Transition Plan, to be managed by ACS. In this plan, the following will be accomplished: 1) ACS will acquire, build out and upgrade Zale's data communications network to support relocation of most of Zale's midrange processing environment to the ACS data center in Dallas. 2) ACS will, in a phased approach, and with Zale's cooperation and support, relocate Zale's midrange processing environment from Zale's Systems & Network Command Center ("SNCC") located on the premises of Zale's General Office to the ACS data center in Dallas using proven methodologies and tools, while maintaining a highly available operating environment. As a part of the Transition Plan, ACS will acquire selected Zale assets as a part of technology refreshment for key assets (defined in Schedule F-1). ACS will also acquire, install, and maintain significant new assets including UNIX processors, Intel-based processors and storage systems, for technology upgrade and capacity expansion. Finally, ACS will migrate certain processing functions, such as backups and tape media, to existing leveraged ACS assets. 3) Transition ACS staff responsibilities during the Transition Period to the ACS leveraged personnel model, which includes 7x24 hour support and global resource utilization. SECTION 5.2 ROLES AND RESPONSIBILITIES Each Party will have specific responsibilities required for timely completion of the Transition Plan. These responsibilities will be defined as an initial planning responsibility for both parties, and will be mutually agreed. Such responsibilities will include, but not be limited to, coordination of Zale application development resources and schedules with Plan milestones, transfer of assets and information required for completion of the phased migration, coordination with ACS for transfer of software licenses and third party agreements, testing and acceptance of each new environment as transition milestones are reached, review and approval of the environment design for performance, security, integration with applications and third party interfaces, and final approval and oversight of the Transition Plan. 20 SECTION 5.3 PROJECT MANAGEMENT ACS will use proven project management resources and methodologies to define, manage, control, track and report on Transition Services responsibilities and accomplishments. ACS, with Zale's review and approval, will define and document activities, milestones and quality metrics to be performed as a part of the Transition Plan. To the extent that there is a conflict between the Transition Plan and other schedules, the provisions of the Transition Plan will control. ACS will use best efforts to comply with the transition schedule, as dictated by changing business requirements of both Zale and ACS. SECTION 5.4 EXTENSION If Zale requires a significant extension of the Transition Plan schedule due to the failure of Zale to fulfill its responsibilities under the Transition Plan or for other business reasons not related to the Transition itself, any reasonable, documented, incremental out-of-pocket costs incurred by ACS (including allocable salaries and travel expenses) will be reimbursed by Zale. If the extension is due to the activities of both ACS and Zale's failure to fulfill its responsibilities under the Transition Plan, the parties will share the collective reasonable, documented, incremental out-of-pocket costs (including allocable salaries and travel expenses) in proportion to their responsibility for the delay. SECTION 6 -- TERMINATION/EXPIRATION ASSISTANCE SECTION 6.1 TERMINATION PLANNING AND KNOWLEDGE TRANSFER Upon termination or expiration of this Agreement, ACS agrees that certain activities will be required to return control of the Zale owned portions of its technology resource to Zale or its designee. Subject to the terms of Section 17 of the Agreement, ACS will participate in good faith to successfully complete the necessary activities for the transition back to Zale or its designee, including, but not limited to, the following: 1. Planning a. Provide requested information regarding processes/systems (information for new providers) b. Participate in transition planning (including development of a plan) 2. Data Transfer a. Establish agreed data transfer approach and mechanisms b. Define specific handover events and schedule c. Coordinate handover activities 3. Knowledge Transfer a. Inventory special knowledge areas (areas include DBA, DASD administration, report distribution, software administration, tape management, etc.) b. Review and comment on proposed procedures as requested c. Identify any special methods and procedures used to support Zale d. Survey for undocumented / unpublished Zale operations / support information (survey of all ACS staff on the account and written results of the survey) e. Provide monitoring mechanism for new provider (console/remote access, etc.) f. Participate in knowledge transfer sessions 21 4. Validation & Testing a. Review and comment on all materials provided b. Identify any possible problems or oversights c. Participate in test planning and design d. Participate in scheduled testing and follow-up activities 5. Hardware Asset Rationalization a. Complete hardware inventory ACS/Zale (listing of hardware owned by Zale/ACS/Third Party) b. Conduct lease review c. Identify any transfer / acquisition of hardware as appropriate d. Review maintenance agreements and identify any issues 6. Hardware De-Installation a. Develop and obtain agreement on schedule b. Identify contingency plan and costs for delays 7. Intellectual Property a. Identify software modules, plans, schedules, proprietary documentation, etc. to be returned to each Party b. Develop transfer logistics, including any requirements for licensing, sub-licensing or assignment, and any conclusions to such transfer requirements 8. Premises a. Identify and complete the physical clean-up of designated items b. Conduct advance completion of non-time sensitive tasks c. Schedule and conduct final clean-up 9. Billing & Administration a. Identify any special contractual obligations b. Prepare ACS billing projections up to actual turnover c. Agree to late billing process for delayed items d. Prepare and submit final bill 10. Conclusion of Relationship a. Define process for ACS/Zale turnover of responsibilities and resources 22 SCHEDULE B -- PRICING TO MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES BETWEEN ZALE DELAWARE, INC. AND ACS COMMERCIAL SOLUTIONS, INC. AUGUST 1, 2005 TABLE OF CONTENTS SECTION 1 -- MAINFRAME CHARGES.................................................3 Section 1.1 CPU Charges...............................................3 Section 1.2 DASD Charges..............................................3 Section 1.3 Tape Mount and Storage Charges............................3 Section 1.4 Virtual Tape System (VTS) Charges.........................3 SECTION 2 -- MIDRANGE CHARGES..................................................4 Section 2.1 Total Midrange Charges....................................4 Section 2.2 Web Hosting Charges.......................................4 SECTION 3 -- NETWORK MANAGEMENT CHARGES........................................4 SECTION 4 -- DISASTER RECOVERY CHARGES.........................................5 SECTION 5 -- TRANSITION SERVICES CHARGES.......................................5 SECTION 6 -- ADDITIONAL RESOURCE CHARGES (ARCS) AND REDUCED RESOURCE CHARGES (RRCS)............................................................5 SECTION 7 -- HARDWARE PROVISIONING CHARGES.....................................5 Section 7.1 Intel-Based Processors....................................6 Section 7.2 HP-UX Processors..........................................6 Section 7.3 Sun Utility Model.........................................6 SECTION 8 -- PRINT CHARGES.....................................................7 SECTION 9 -- SERVICE LEVEL CREDITS.............................................7 SECTION 10 -- ADDITIONAL SERVICES..............................................7 SECTION 11 -- ACQUISITION OF ZALE ASSETS.......................................8 SECTION 12 -- TERMINATION FOR CONVENIENCE FEES.................................8
2 SECTION 1 -- MAINFRAME CHARGES SECTION 1.1 CPU CHARGES The unit of billing for CPU resources will be an IBM 3090-200 equivalent CPU hour. Beginning on the Effective Date, Zale will be billed monthly for CPU resources actually consumed at a rate of $66 per IBM 3090-200 CPU hour for the first two years of the Agreement, increasing to $125 per hour upon ACS' completion of the mainframe upgrade planned after year two of the Agreement. Zale will be billed for all TCB and SRB CPU time consumed by Zale test or production processing tasks, including all Zale batch jobs, data file backups, TSO sessions, on-line subsystems including CICS, IMS and DB2, and all other Zale-specific processing. Zale will not be billed for CPU resources consumed by the MVS operating system, including the JES2 and VTAM subsystems, nor for the CPU resource consumed by operating system maintenance tasks, service level reporting, system performance monitoring external to Zale's application subsystems, or for CPU resources consumed by ACS' Zale billing system. The mainframe charges for CPU, DASD, Tape and VTS will be itemized in conjunction with each monthly invoice, with detailed job information provided on a monthly CD-ROM for Zale's further review. MONTHLY CPU CHARGES ------------------------------------------------------------------ Months Months Months Months Months Months Months 1 - 12 12 - 24 24 - 36 36 - 48 48 - 60 60 - 72 72 - 84 ------ ------ ------ ------ ------ ------ ------ CPU Rate/Hour $66 $66 $125 $125 $125 $125 $125
SECTION 1.2 DASD CHARGES The unit of billing for DASD is an allocated gigabyte (GB) of storage capacity. The monthly unit cost per GB is $38 and the unit of allocation is the DASD spindle. Zale will be charged for all test or production (non-system related) DASD space which is allocated to Zale or which is dedicated to Zale's use (by Zale request or application/application processing requirement) and unavailable for re-allocation to ACS for other purposes. MONTHLY DASD CHARGES ------------------------------------------------------------------ Months Months Months Months Months Months Months 1 - 12 12 - 24 24 - 36 36 - 48 48 - 60 60 - 72 72 - 84 ------ ------ ------ ------ ------ ------ ------ DASD Rate/GB $38 $38 $38 $38 $38 $38 $38
SECTION 1.3 TAPE MOUNT AND STORAGE CHARGES Tape Charges are determined by the number of monthly mounts and slots. The monthly unit charge for both mounts and slots will be $0.60. This charge will apply to both cartridge and reel tapes. System maintenance and support mounts initiated by ACS are not chargeable. SECTION 1.4 VIRTUAL TAPE SYSTEM (VTS) CHARGES ACS will install a new Virtual Tape System during the first year of the Agreement, as described in Schedule D -- Transition Services. The objective is to convert existing tape storage media to the VTS, effectively replacing the above Tape Mount and Storage Charges. Although used primarily for storage of mainframe data, the VTS supports some midrange requirements. The monthly unit charge for the VTS will be $1.00 per logical volume, which is defined as the equivalent of a 36-track tape. The total VTS volumes documented at the time of the Effective Date are approximately 20,000. 3 SECTION 2 -- MIDRANGE CHARGES Beginning on the Effective Date and continuing throughout the term of the Agreement, Zale will pay ACS a monthly fee for the Midrange Services defined in Schedule A, including the following processing platforms: o iSeries o Intel-Based Processors o Unix Processors o Midrange Tape and Disk Storage o Web Hosting Services o Midrange equipment upgrades detailed in Schedules A and D. SECTION 2.1 TOTAL MIDRANGE CHARGES The complete monthly charges for all of the midrange services itemized above are as follows: MONTHLY MIDRANGE CHARGES ---------------------------------------------------------------------------------------- Months Months Months Months Months Months Months 1 - 12 12 - 24 24 - 36 36 - 48 48 - 60 60 - 72 72 - 84 -------- -------- -------- -------- -------- -------- -------- Price per month $256,513 $254,428 $254,022 $246,901 $241,048 $245,708 $229,458
SECTION 2.2 WEB HOSTING CHARGES Included in the above Total Midrange Charges is the monthly charge for the Web Hosting services detailed in Schedule A, which will be $32,375. SECTION 3 -- NETWORK MANAGEMENT CHARGES Beginning on the Effective Date and continuing throughout the term of the Agreement, Zale will pay a monthly fee for the design, acquisition, implementation and management of the Network Management Services detailed in Schedule A, including the following: o WAN Services o LAN Services o Third-Party Network Connectivity o Internet Access o Network upgrade functions detailed in Schedules A and D The monthly charges for Network Management are as follows: MONTHLY NETWORK MANAGEMENT CHARGES ----------------------------------------------------------------------------------------- Months Months Months Months Months Months Months 1 - 12 12 - 24 24 - 36 36 - 48 48 - 60 60 - 72 72 - 84 -------- -------- -------- -------- -------- -------- -------- Price per month $127,212* $125,051 $116,959 $115,461 $115,228 $111,873 $111,095
*Additional one-time charge of $4,780 planned for August 2005. 4 SECTION 4 -- DISASTER RECOVERY CHARGES Beginning on the Effective Date and continuing throughout the term of the Agreement, Zale will pay a monthly fee of $21,177 for the Disaster Recovery Support detailed in Schedules A and G. SECTION 5 -- TRANSITION SERVICES CHARGES Beginning on the Effective Date and continuing throughout the term of the Agreement, Zale will pay the following monthly fees for the Transition Services detailed in Schedule D. MONTHLY TRANSITION SERVICES CHARGES --------------------------------------------------------------------------------------- Months Months Months Months Months Months Months 1 - 12 12 - 24 24 - 36 36 - 48 48 - 60 60 - 72 72 - 84 ------ ------ ------ ------ ------ ------ ------- Price per month $2,503 $2,503 $2,503 $2,503 $2,503 $2,301 $2,301
SECTION 6 -- ADDITIONAL RESOURCE CHARGES (ARCS) AND REDUCED RESOURCE CHARGES (RRCS) Beginning on the Effective Date and continuing throughout the term of the Agreement, Zale has the ability, as approved by Zale in writing, to scale its use of the Services 25 percent above or 25 percent below the Baseline Resource Units shown in the following chart. For Resource Units of service above the Baseline (an ARC), the ARC/RRC Rate in the following chart will be added to Zale's monthly charges. For services below the Baseline (a RRC), the ARC/RRC Rate will be deducted from Zale's monthly charges. Upon reaching a resource utilization level that is 25 percent above or 25 percent below the Baseline in any given month, a new Baseline will be established and the Charges for those Resource Units will be adjusted accordingly. MONTHLY ARC/RRC CHARGES - ------------------------------------------------------------------------------------------------------------------- RESOURCE UNITS BASELINE UNITS ACS SERVICES ARC/RRC RATE PER UNIT -------------- -------------- ------------ --------------------- Wintel Logical Server Image 155 - 190 Services and utilities only $462 per month UNIX Logical Server Image 24 Services and utilities only $1,177 per month iSeries Logical Server Image 4 Services and utilities only $2,149 per month Midrange SAN Storage GBs 20,000 Services and utilities only $1.50 GB per month
SECTION 7 -- HARDWARE PROVISIONING CHARGES Beginning on the Effective Date and continuing throughout the term of the Agreement, Zale will be able to purchase and use the following types of hardware through ACS at the monthly rates indicated below. These rates will be evaluated for potential adjustment, as described in Section 5.4 of the Agreement. The charges for the Intel-based processors are based on three years of usage, and the charges for the HP-UX processors are based on four years of usage. The charges for any processor used beyond the projected usage periods will be recalculated based on the current value of the asset and the extended maintenance requirements of the manufacturer. 5 At any time during the Term that a hardware asset procured exclusively for Zale is scheduled for refreshment or replacement, Zale will have the first right of refusal to acquire the asset from ACS at ACS' net book value, provided that Zale (i) declines the refreshment or replacement of the asset acquired and continues to receive the Services associated with that asset, or (ii) declines the refreshment or replacement of the asset acquired and eliminates the Services associated with that asset (invoking a RRC). SECTION 7.1 INTEL-BASED PROCESSORS MONTHLY CHARGE SIZE CONFIGURATION 36 MONTHS ---- ------------- -------------- Low HP DL380 | 1WAY | 1GB | 3-10/100 | 1 GigE | 2 HBA | 2x72GB | 3YR 24x7x4 $136 Med HP DL380 | 2WAY | 2GB | 3-10/100 | 1 GigE | 2 HBA | 2x72GB | 3YR 24x7x4 $300 High HP DL580 | 4WAY | 4GB | 3-10/100 | 1 GigE | 2 HBA | 4x72GB | 3YR 24x7x4 $1,003
SECTION 7.2 HP-UX PROCESSORS MONTHLY CHARGE SIZE CONFIGURATION 48 MONTHS - ---- ------------- -------------- Low HP rp3410 | 2WAY (800MHz) | 4GB | 1GigE | 2x10/100 | 2x36GB | 3YR 24x7x4 $439 Med HP rp4440 | 4WAY (PA8800) | 8GB | 2FC | 1GigE | 2x10/100 | 2x36GB | 3YR 24x7x4 $2,446 High HP rp7420 | 8WAY (PA8800) | 16GB | 2FC | 1GigE | 3x10/100 | 2x36GB | 3YR 24x7x4 $3,985
SECTION 7.3 SUN UTILITY MODEL ITEM QTY MODEL TYPE / CONFIGURATION UNIT RATE MONTHLY CHARGE - ---- --- -------------------------- --------- -------------- HDS TIER 1 1 Per GB of storage in 1 TB increments* (mirrored) 1.80 1,507.98 HDS TIER 2 1 Per GB of storage in 1 TB increments (mirrored) 1.15 841.72 SHADOW IMAGE 1 Per GB of Storage in 1 TB Increments 0.15 150.77 TRUECOPY 1 Per GB of Storage in 1 TB Increments 0.15 150.77 BROCADE 12000 2 Switch Port 53.01 106.01 BROCADE 3900 2 Switch Port 43.07 86.13 MCDATA 6140 2 Switch Port 55.21 110.43 V120 1 V120 | 1CPU 650 MHz | 1 GB 152.15 152.15 V210 LOW 1 1 CPU | GHz | 1GB 171.78 171.78 V210 HIGH 1 V200 | 2CPU 1000MHz 265.03 265.03 V240 LOW 1 2 CPU 1GHz | 4GB | 2 additional HD 342.33 342.33 V240 HIGH 1 2 CPU 1GHz | 4GB | 2 FC HBA 425.77 425.77 V440 LOW 1 4 CPU 1.062GHz | 8GB | 1 x1034, | 2 additional HD 596.32 596.32 V440 HIGH 1 4 CPU 1.062GHz | 8GB | 2 FC HBA and | 1 x1034 706.75 706.75 V490 LOW 1 2 CPU 1.05GHz | 8GB | 2x73GB HD | 2xFC HBA | 2 x4444A 1,288.34 1,288.34 V490 HIGH 1 4 CPU 1.05GHz | 16GB | 2x73GB HD | 2 FC HBA | 2 x4444A 2,269.94 2,269.94 V890 LOW 1 6 CPU 1.2GHz | 24GB | 6x73GB HD | 2xFC HBA | 1 x4444A 4,601.23 4,601.23 V890 HIGH 1 8 CPU 1.2GHz | 32GB | 6x73GB HD | 2xFC HBA | 1 x4444A 5,153.37 5,153.37 V2900 LOW 1 8 CPU 1.2GHz | 32GB | 2x73GB | 2xFC HBA | 2 x4444A 7,484.66 7,484.66 V2900 HIGH 1 12 CPU 1.2GHz | 48GB | 2x73GB HD | 2xFC HBA | 2 x4444A 8,282.21 8,282.21 V4900 AND ABOVE 1 4 CPUs 1.2GHz per board 16GB 1,656.44 1,656.44 F15K 1 4x8 CPU 15K 1.2GHz | 1xFC HBA | x1034 | x2222A 1,159.51 1,159.51
6 SECTION 8 -- PRINT CHARGES Beginning on the Effective Date and continuing throughout the term of the Agreement, Zale will pay the following fees for print services performed each month. ACS will provide print services from its print facility in Dallas, which will be staffed for operations on a 24x7 basis for demand printing by Zale. ACS will manage delivery of completed print by third party courier service back to the Zale General Office for subsequent internal distribution by Zale employees. Zale will agree to a fixed delivery schedule and will reimburse ACS for all courier charges at cost plus a 5 percent administration fee. Zale may modify the delivery schedule, or request additional ad hoc or scheduled deliveries, by requesting such deliveries through the established change control process. MONTHLY PRINT CHARGES ---------------------------------------------------------------- SIMPLEX Rate per image $0.0460 DUPLEX Rate per image $0.0340 MICROFICHE Originals $0.970 Duplicates $0.100
SECTION 9 -- SERVICE LEVEL CREDITS As described in Schedule C, failure by ACS to meet the Critical Service Levels will result in payment of Service Level Credits to Zale. The agreed Critical Service Levels, measurement processes and calculations for amounts payable to Zale are documented in Schedule C. SECTION 10 -- ADDITIONAL SERVICES ACS will provide services beyond those identified in the Agreement by using its own staff or mutually agreed subcontractors for the hourly rates listed below. The rates are subject to Cost of Living Adjustments (COLA) beginning in the second year of the Agreement. The rates for additional services will be included in the Benchmarking process described in Section 5.4 of the Agreement. HOURLY NEAR-SHORE HOURLY OFF-SHORE VENDOR JOB TITLE / LABOR CATEGORY HOURLY ON-SITE RATES RATES RATES - --------------------------------- -------------------- ----------------- ---------------- Applications Programmer $ 78.54 $ 74.61 $ 39.27 Business Analyst $ 64.68 $ 61.45 NA Communications Hardware Specialist $ 60.06 $ 57.06 NA Communications Network Specialist $ 60.06 $ 57.06 $ 30.03 Communications Software Specialist $ 60.06 $ 57.06 $ 30.03
7 Computer Systems Analyst $ 55.44 $ 52.67 $ 27.72 Database Administrator (DBA) $ 87.78 $ 83.39 $ 43.89 Database Analyst $ 73.92 $ 70.22 $ 36.96 Documentation Specialist $ 60.06 $ 57.06 $ 30.03 Information Systems Engineer $ 55.44 $ 52.67 $ 27.72 Network Design Engineer $ 69.30 $ 65.84 $ 34.65 Project Manager $ 78.54 $ 74.61 NA Quality Assurance Engineer $ 60.06 $ 57.06 $ 30.03 Security Systems Engineer $ 60.06 $ 57.06 $ 30.03 Software Engineer $ 69.30 $ 65.84 $ 34.65 Software Systems Specialist $ 69.30 $ 65.84 $ 34.65 Storage Operations Specialist $ 60.06 $ 57.06 $ 30.03 Storage Management Engineer $ 60.06 $ 57.06 $ 30.03 System Administrator/Operator $ 46.20 $ 43.89 $ 23.10 System Programmer $ 69.30 $ 65.84 $ 34.65 Systems Engineer $ 73.92 $ 70.22 $ 36.96 Tape Librarian $ 41.58 $ 39.50 NA Technical Architect $ 78.54 $ 74.61 $ 39.27 Training Specialist $ 55.44 $ 52.67 $ 27.72
SECTION 11 -- ACQUISITION OF ZALE ASSETS Upon the Effective Date, ACS will make a one-time payment to Zale of $600,000 to acquire the Zale assets identified in Schedule F-1. SECTION 12 -- TERMINATION FOR CONVENIENCE FEES Upon termination of this Agreement for convenience in accordance with the provisions of Section 17 of this Agreement, Zale shall pay to ACS the following amounts: o All charges for Services accrued through the termination date less any Service Level Credits due Zale; o All termination related charges and services described in Section 17 of this Agreement, including equipment, leases, licenses or other discontinuation or redeployment costs; o A Termination for Convenience Fee indicated below, which will be prorated over the Term to determine the actual amount payable by Zale in the month of termination: o End of Contract Month 12 -- $4,000,000 o End of Contract Month 24 -- $3,500,000 o End of Contract Month 36 -- $3,000,000 o End of Contract Month 48 -- $2,500,000 8 o End of Contract Month 60 -- $2,000,000 o End of Contract Month 72 -- $1,500,000 o End of Contract Month 84 -- 0 Upon Termination for Convenience, Zale may exercise any or all of the options below that are applicable to paying or offsetting the Termination for Convenience Fee: o Upon Termination for Convenience in Month 37 or later, payment of the Termination for Convenience Fee entitles Zale to assume ownership of or lease obligations for all named assets procured exclusively for Zale in the first year of the Agreement, as defined in Schedule D, provided that Zale pays any taxes and any fees imposed by the manufacturer for the ongoing licensing, use and maintenance of the assets. o Upon Termination for Convenience at any time during the Term, Zale may purchase from ACS at net book value any named assets that ACS has acquired exclusively for Zale, as defined in Schedule D and in Schedule A, Section 3.2, and the dollar amount Zale pays to purchase the assets will reduce (dollar for dollar) the amount payable by Zale as a Termination for Convenience Fee. The applicable Wintel assets are projected to be depreciated over 48 months and the HP-UX assets are projected to be leased on a 48 month term. All purchases are subject to payment by Zale of any taxes and any fees imposed by the manufacturer for the ongoing licensing, use and maintenance of the assets. o Upon Termination for Convenience at any time during the Term, ACS will, as requested by Zale, use commercially reasonable efforts to broker the sale of any named assets acquired exclusively for Zale, as defined in Schedule D and in Schedule A, Section 3.2, and the dollar amount of the proceeds minus a five percent brokerage fee will reduce (dollar for dollar) the amount payable by Zale as a Termination for Convenience Fee. o Upon Termination for Convenience at any time during the Term, ACS will, as requested by Zale, use commercially reasonable efforts to redeploy within ACS any named assets acquired exclusively for Zale, as defined in Schedule D and in Schedule A, Section 3.2, and the net book value of the redeployed assets will reduce (dollar for dollar) the amount payable by Zale as a Termination for Convenience Fee. 9 SCHEDULE C -- SERVICE LEVEL AGREEMENTS TO MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES BETWEEN ZALE DELAWARE, INC. AND ACS COMMERCIAL SOLUTIONS, INC. AUGUST 1, 2005 TABLE OF CONTENTS SECTION 1 -- SERVICE LEVEL DEFINITIONS AND GOVERNANCE POLICIES....................................................3 Section 1.1 Definitions..................................................................................3 Section 1.2 General Policies.............................................................................4 Section 1.3 Critical Service Levels......................................................................4 Section 1.4 Service Level Credits........................................................................6 SECTION 2 -- CRITICAL SERVICE LEVELS AND MEASUREMENTS.............................................................7 Section 2.1 System Availability Per Scheduled Hours......................................................7 Section 2.2 Critical Report Availability................................................................10 Section 2.3 Batch Processing Completion.................................................................11 Section 2.4 Emergency File & Database Restorations......................................................11 Section 2.5 Availability of Wide Area Network And Internet Access.......................................11 Section 2.6 Web Hosting Availability....................................................................12 Section 2.7 Planning, Management and Administration Deliverables........................................12 Section 2.8 Notifications and Alerts....................................................................12 Section 2.9 Security and Regulatory Compliance..........................................................12 SECTION 3 -- SUMMARY OF SERVICE LEVELS, ALLOCATIONS AND MEASUREMENTS.............................................13
2 SECTION 1 -- SERVICE LEVEL DEFINITIONS AND GOVERNANCE POLICIES Services will be provided against established measures of expected performance in accordance with the following definitions and policies. SECTION 1.1 DEFINITIONS (a) "At-Risk Amounts" -- shall mean, for any given month during the Term, five percent (5%) of the Charges payable by Zale to ACS during such given month (other than any Pass-Through Expenses). (b) "Availability" -- shall mean the Actual Uptime expressed as a percentage of the Scheduled Uptime for the particular Services (i.e., Availability % = ((Actual Uptime)/(Scheduled Uptime)) x 100). (c) "Critical Services" -- Critical Services are those specific Services identified by Zale as being subject to Service Level measurement including, but not limited to, mainframe, server and network availability, batch job completion, report delivery, database restorations, and other delivery functions as mutually agreed by the parties. (d) "Critical Service Levels" -- shall mean those performance standards described in Section 1.3. (e) "Expected Service Levels" -- shall mean those Service Levels designated as "Expected Service Levels" in Section 2 with respect to each Critical Service Level. (f) "Elapsed Times" -- shall mean the hours for response/repair Service Levels within Zale's business hours except where specifically stated to be continuous hours. (g) "Region" -- For Service Level purposes, the term Region also includes started tasks. (h) "Required Service Levels" -- shall mean those Service Levels designated as "Required Service Levels" in Section 2 with respect to each Critical Service Level. (i) "Required Service Level Default" -- shall have the meaning set forth in Section 1.4. (j) "Rolling Six Month Period" -- shall have the meaning set forth in Section 1.4. (k) "Service Level" -- shall mean the performance standards set forth in this Schedule, including Critical Service Levels, Expected Service Levels, Required Service Levels and Key Measurements. (l) "Service Level Credit" -- shall have the meaning set forth in Section 1.4. (m) "Service Level Credit Allocation" -- shall have the meaning set forth in Section 1.4. 3 SECTION 1.2 GENERAL POLICIES (a) Portability -- Service Levels, unless modified in this Schedule, follow a Zale application system when and if it changes technology platforms, subject to Section 1.3.3 "Initial Period" below. (b) Calculations -- Monthly calculations are based on calendar month. (c) Application Standards -- Zale will maintain its application systems consistent with Zale standards for system maintenance, change, and change management. Zale believes that its standards are consistent with the ACS production classification and will not unreasonably modify its standards in a manner that would be less compatible with ACS standards. (d) Recalls -- For all types of user service calls, a recall required to complete/repair an incomplete or incorrect/partial fix is to be considered a re-opening of the ticket with previously Elapsed Times being included in time measurements for service level purposes. SECTION 1.3 CRITICAL SERVICE LEVELS 1.3.1 A Required Service Level and an Expected Service Level are associated with each Critical Service. ACS shall perform the Services in accordance with each Expected Service Level. In the event that ACS fails to achieve a Required Service Level in any given month, ACS shall pay Zale a Service Level Credit calculated in accordance with Section 1.4. The Required Service Levels and Expected Service Levels associated with each Critical Service Level are set forth in Section 2. 1.3.2 Additions, Modifications and Deletions of Critical Service Levels -- Zale may add, modify or delete Critical Service Levels as follows a. Additions -- Zale may add Critical Service Levels by sending notice to ACS at least sixty (60) days prior to the date that such additions to Critical Service Levels are to be effective, provided that Zale may send such a notice (which notice may contain multiple changes) not more than once each calendar quarter. The sum total of the Service Level Credit Allocations percentages for new and existing Critical Service Levels identified in Section 2 will be adjusted as necessary to equal 100%. The Parties shall agree upon the Expected Service Level and the Required Service Level for each Critical Service Level. In the event that the Parties are unable to reach agreement upon such Service Levels, such Service Levels shall be established in one of the following ways: Where at least four (4) months of service measurements exist for the Service that is being provided by ACS, the Parties agree that the Service Levels shall be established as follows: o The Expected Service Level will be set at the average of the two highest monthly measures. o The Required Service Level will be set to the average of the three lowest monthly measures. 4 Where no measurements exist for a particular Service, the Parties shall attempt to agree on an Expected Service Level using industry standard measures or third party advisory services (e.g., Gartner Group, META Group). If the parties are unable to agree on an Expected Service Level the approach used to develop an Expected Service Level and a Required Service Level for a new Critical Service Level will be as follows: o ACS will implement and report on the actual performance of ACS as to the new Critical Service Level for four (4) months on a monthly basis. o The Expected Service Level will be set at the average of the two highest monthly measures. o The Required Service Level will be set to the average of the three lowest monthly measures. b. Deletions -- Zale may delete Critical Service Levels by sending notice to ACS at least sixty (60) days prior to the date that such deletions to Critical Service Levels are to be effective, provided that Zale may send such a notice (which notice may contain multiple changes) not more than once each calendar quarter. c. Modifications -- Zale may modify the Service Level Credit Allocations for any Critical Service Levels by sending notice to ACS at least sixty (60) days prior to the date that such modifications to the Service Level Credit Allocations are to be effective, provided that Zale may send such a notice (which notice may contain multiple changes) not more than once each calendar quarter. The Parties shall agree upon the Expected Service Level and the Required Service Level for each modification proposed. The sum total of the Service Level Credit Allocations percentages for all Critical Service Levels identified in Section 2 will be adjusted as necessary to equal 100%. 1.3.3 Initial Period -- During the first 60 days of ACS responsibility for a Service Level (or for the same period following the installation of a new or replacement application system), any Service Level defaults that repeatedly occur and can not be cured by joint ACS/Zale actions will be subject to joint good faith efforts to correct problem(s) or to reset the expected Service Level(s). The first quarterly and annual report production deadlines are subject to this provision. 1.3.4 Environment Changes -- When new systems or Region structures occur, the default service levels apply until and unless this Schedule is modified. For convenience, only exceptions to default values are shown in tables within Section 2. 1.3.5 Specific Corrective Actions -- Each Default of a Required Service Level, as defined in Section 1.4 of this Schedule, requires that ACS provide, at Zale's request, a written assessment of how the service level was missed and what corrective or preventative action has been/will be (with completion date) taken to prevent additional defaults. 1.3.6 Equipment Ownership -- For any computing or communications equipment which Zale owns, the service level exemptions described below will apply. Equipment failures will effectively "stop the clock" for related service levels until the equipment has been repaired/replaced and any related restoration activities are complete. This exemption is subject to the following restrictions: 5 a. No maintenance or support violations on ACS' part in the prior 120 days b. Technical support and environmental software problems are not included c. Proper maintenance schedules using authorized technicians have been followed by ACS d. Instances involving operator negligence are excluded e. No environmental problems in any related ACS equipment area have occurred in the prior 180 days f. ACS has provided at least semi-annual written equipment risk assessments to Zale for the equipment involved. Such assessment shall address performance risk with respect to supported software, equipment sizing, and functionality. g. Zale has reasonably communicated expected and material changes to the processing volumes operated on the equipment, and ACS has had sufficient time to analyze, recommend, and implement upgrade requirements. SECTION 1.4 SERVICE LEVEL CREDITS 1.4.1 Calculation--The charts set forth in Section 2 provide the information required to calculate the credits (each a "Service Level Credit") that ACS shall apply against monthly Charges in the event that ACS fails to achieve a Required Service Level and such failure is not excused as provided in this Schedule (each such failure, a "Required Service Level Default"). For each Required Service Level Default, ACS shall pay to Zale a Service Level Credit that will be computed in accordance with the following formula: SERVICE LEVEL CREDIT = A X B X C Where: A = The applicable percentage allocated to the applicable Critical Service Level in which the Required Service Level Default occurred (the "Service Level Credit Allocation"). Zale may from time to time during the Term change the Service Level Credit Allocations in accordance with this Schedule C. As of the Effective Date, the Service Level Credit Allocations are set forth in Section 2. B = The monthly At Risk Amount, in dollars C = A number determined as follows: o C = one (1) if during the six (6) consecutive months immediately preceding the applicable Critical Service Level Default (the "Rolling Six Month Period") the number of Required Service Level Defaults that have occurred with respect to the applicable Critical Service Level are less than or equal to four (4). o C = two (2) if during the Rolling Six Month Period the number of Required Service Level Defaults that have occurred with respect to the applicable Critical Service Level are equal to or greater than five (5). 1.4.2 Credits to Zale for Service Level Defaults Occurring in a Single Month--If more than one Required Service Level Default has occurred in a single month, the sum of the corresponding Service Level Credits shall be credited to Zale. If the more than one Required Service Level Defaults occur during a month in Zale's Freeze Period, a fifteen 6 (15) percent premium will be added to the Service Level Credit. In no event shall the amount of Service Level Credits credited to Zale with respect to all Required Service Level Defaults occurring in a single month exceed, in total, the At Risk Amount. ACS shall notify Zale in writing if Zale becomes entitled to a Service Level Credit, which notice shall be provided in the monthly performance report. The total dollar amount, based on Service Level Credits, that ACS will be obligated to pay to Zale, with respect to Required Service Level Defaults occurring each month, shall be reflected in a credit memo issued by ACS to Zale at the end of each such month. 1.4.3 Sample Calculation--Assume that ACS fails to meet the Required Service Level with respect to System Availability Per Scheduled Hours (as defined in Section 2). Assume that ACS' total charges to Zale for the month in which the Required Service Level Default occurred were $775,000. The Service Level Credit due to Zale for such Required Service Level Default would be computed as follows: A = 20% (the Service Level Credit Allocation for System Availability Per Scheduled Hours) Multiplied by B = $38,750 (five percent (5%) of $775,000) Multiplied by C = 1 (see Service Level Credit calculation above) = $7,750 (the amount of the Service Level Credit) SECTION 2 -- CRITICAL SERVICE LEVELS AND MEASUREMENTS Critical Service Levels and measurements have been set for the services documented in this Section. Detailed data and reports will be made available to Zale's designated users through the ACS Performance Information Center (PIC), a web portal providing instant access to service-level measurements and statistics. Additional data will be made available to the Zale management team in electronic and hardcopy form on request. SECTION 2.1 SYSTEM AVAILABILITY PER SCHEDULED HOURS System Availability means the availability of a defined group of applications or processing environments during scheduled hours each month. The mainframe and midrange systems documented in the following charts will be measured as a group to determine a collective System Availability percentage each month. System Availability shall be measured using standard system utilities and problem ticket information. A system will be considered as available if it is operating normally and available for its intended use. CALCULATION OF SYSTEM AVAILABILITY PER SCHEDULED HOURS = 100 X ((A/B + A/B) + .....A/B))/N WHERE: 7 A = The number of minutes when an individual application or system was available during the month. This calculation will include every application or system being measured. B = The number of minutes when such application or system was scheduled to be available during the month. N = The number of applications or systems being measured. SYSTEM AVAILABILITY PER SCHEDULED HOURS -- MAINFRAME Monday-Friday Saturday Sunday --------------------------------------------------------------------------------------------------- Scheduled During Scheduled During Scheduled During Service Freeze Service Freeze Service Freeze Level Period Level Period Level Period --------------------------------------------------------------------------------------------------- Up Up Up Up Up Up Up Up Up Up Up Up Region / System By Until By Until By Until By Until By Until By Until - ------------------------------------------------------------------------------------------------------------------------------ Mainframe Default 0700 2100 - - 0700 2100 - - 1000 1800 - - CICSQZLQ EDI - - - - - - - - - 2000 - - CICSQZLL ESR - - - - - 1800 - - - - - - Stock Status - - - - - 1800 - - - - - - IAS - - - - - 1800 - - - - - - IP - - - - - 1800 - - - - - - POM - - - - - 1800 - - - - - - Sales - - - - - 1800 - - - - - - Stores - - - - - 1800 - - - - - - SKU/Price Mgt - - - - - 1800 - - - - - - CICSQZLA 0300 2300 - - 0300 2300 - - 0300 2000 - -
NOTES: SYSTEM AVAILABILITY PER SCHEDULED HOURS o A - (dash) means the default service level applies o Unless specified in the schedule any system is subject to the default schedules for mainframe or midrange, as appropriate o NF means the Non-Freeze Period service level applies o N/A means the system is not scheduled up o Service Levels are applied on a per application system basis 8 SYSTEM AVAILABILITY PER SCHEDULED HOURS -- MIDRANGE Monday-Friday Saturday Sunday --------------------------------------------------------------------------------------------------- Scheduled During Scheduled During Scheduled During Service Freeze Service Freeze Service Freeze Level Period Level Period Level Period --------------------------------------------------------------------------------------------------- Up Up Up Up Up Up Up Up Up Up Up Up System By Until By Until By Until By Until By Until By Until - ------------------------------------------------------------------------------------------------------------------------------ Midrange Default 0700 2300 0600 NF 0700 2300 NF NF 1000 2000 NF NF Groupwise Servers 0000 2400 NF NF 0000 2400 NF NF 0600 2400 NF NF Novell Login Servers 0000 2400 NF NF 0000 2400 0000 NF 0800 2330 0800 NF Domain Controllers 0000 2400 NF NF 0000 2400 NF NF 0000 2400 NF NF ZaleDC1-4 Metaframe /Citrix 0000 2400 NF NF 0000 24:00 NF NF 00:00 2400 NF NF Intranet Web Servers 0000 2400 NF NF 0000 2400 NF NF 0000 2400 NF NF Intranet1-4 Proxy Servers 0000 2400 NF NF 0000 2400 NF NF 0000 2400 NF NF Proxy 1-2 ZNTPRXY3-4 Misc Appls (ProdNT1) 0000 2400 NF NF 0000 2400 NF NF 0000 2400 NF NF Pagoda Polling - - - - - - - - - - - - POLLING1-2 Business Objects 6:30 - NF NF 6:30 - NF NF 10:30 - NF NF ZaleHP12 ZNTZABO1-2 ZNTFSDOC Arthur - - - - - - - - - - - - ZaleHP22 ZNTART1-4 SQL Servers - - - - - - - - - - - - ZNTSQL1 ZaleSQL2 VisiFax (ZaleHP9) - - - - - - - - - - - - Biscom (ZNTFAX1) - - - - - - - - - - - - FedEx (ZNTSHIP1) - - - - - - - - - - - - Diamond Sourcing - - - - - - - - - - - - ZaleHP22 ZNTDISO1,2,4,6-8 Retek (ZaleHP14) Epiphany 0600 2400 NF NF 0600 2400 NF NF 0600 2400 NF NF ZaleHP20 VMSRVR02, 03 Symposium 0600 2400 NF NF 0600 2400 NF NF 0600 2400 NF NF ZNTSYMP1-4 Voice Response 0600 2400 NF NF 0600 2400 NF NF 0600 2400 NF NF ZNTIVR1,2 WorkFlow - - - - - - - - - - - - ZNTFLOW1,2 ZNTWSRV1,2 RTS - - - - - - - - - - - - ZNTRTS1,2,4 Autosys/Veritas 0000 2400 NF NF 0000 2400 NF NF 0000 2400 NF NF ZaleADM1-2
9 STS/OFA (ZaleHP12) 0630 2100 NF NF 0630 2100 NF NF P/R H/R (ZaleHP12) - - NF NF - - NF NF 0700 2300 NF NF Optum (ZaleHP14) - 2100 NF NF - 2100 NF NF 0700 2100 NF NF Oracle Finance / HR - - - - - - - - - - - - ZaleHP24, 26 Tacoma, Tundra CATS Polling - - - - - - - - - - - - Blazer1,2 ZaleADM1 Insurance (ZaleAS1) - - - - - - - - - - - - E3 (ZaleAS2)* 0900 1900 - 2100 1000 1900 NF NF - - - All Test Servers 0800 1700 0800 1700 0800 1700 0800 1700 0800 1700 0800 1700
Notes: System Availability Per Scheduled Hours o A - (dash) means the default service level applies o Unless specified in the schedule any system is subject to the default schedules for mainframe or midrange, as appropriate o NF means the Non-Freeze Period service level applies o N/A means the system is not scheduled up o Service Levels are applied on a per application system basis * Zale to waive SLA commitment for the first 30 days of the Agreement and/or pending stabilization of prerequisite factors that are not under ACS' control. SECTION 2.2 CRITICAL REPORT AVAILABILITY Availability is defined as delivered (available for viewing or printing on midrange systems) or available for pick-up if produced at an ACS print facility and couriers to Zale's General Office, as appropriate. Morning Report is to be available via email prior to the daily production meeting M-F. JOBNAME REPORT ID REPORT NAME DUE EXPECTED REQUIRED WITHIN WITHIN - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- BP*** BP Replacement Financial institution reports 0800 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- dc25010 dc25010701 letdown report 05:00 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- dc25030 dc25030a sales order audit sheets 05:00 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- dc25030 dc25030700 master picklist by item 05:00 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- ri55982 d001.otbext daily otb extract (files) 09:00 1 hour <2 hours d001.pcotb (m-f) dd01.strcntty - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- ri85090 d001.cntrldn snapshot control download (file) 06:00 1 hour <2 hours - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- ri85090 d001.countdn snapshot download (file) 06:00 1 hour <2 hours - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- st30010 st30010b polling status report 06:00 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- st20080 st20080c price changes (prcn) 13:00 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- st20100 st20100g purchase orders (pord) 13:00 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- st20170 st20170b spec. purchase orders (posq) 13:00 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- st20250 st20250d transfers (xrec) 13:00 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- st20255 st20250d2 dc shipments (xrec) 13:00 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- st20250 st20250f transfer requests (xreq) 13:00 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- --------------- multiple morning report 08:00 30 mins <1 hour - ---------------- ---------------------- ------------------------------------- ---------- -------------- ---------------
10 SECTION 2.3 BATCH PROCESSING COMPLETION JOBNAME/ EXPECTED REQUIRED CRITICAL APPLICATION TARGET BATCH EVENT REPORT ID DUE WITHIN WITHIN -------------------------------- ----------------------------- ----------------- --------- -------------- ------------- Electronic Data Interchange EDI Vendor P.O. ED29003 0400 30 mins <1 hour -------------------------------- ----------------------------- ----------------- --------- -------------- ------------- vendor p.o. fax file ed20014 0600 30 mins <1 hour -------------------------------- ----------------------------- ----------------- --------- -------------- -------------
SECTION 2.4 EMERGENCY FILE & DATABASE RESTORATIONS Dataset/database availability is defined as available for transfer, ready for access/update by other scheduled jobs or ready for on-line access as appropriate SERVICE LEVEL - MEASURED MONTHLY UNLESS SPECIFIED EXPECTED WITHIN REQUIRED WITHIN ---------------------------------------------------------------------- ------------------------- ----------------------- File & Database Restoration Requests - On-site storage Emergency Requests (Time for Full Restore to Be Underway) 1 Hr <2 hrs ---------------------------------------------------------------------- ------------------------- ----------------------- file & database restoration requests - off-site storage emergency requests (time for full restore to be underway) 2 hrs <6 hrs ---------------------------------------------------------------------- ------------------------- -----------------------
SECTION 2.5 AVAILABILITY OF WIDE AREA NETWORK AND INTERNET ACCESS SERVICE LEVEL - MEASURED MONTHLY UNLESS SPECIFIED EXPECTED REQUIRED - ------------------------------------------------------------------ ------------------------------ ----------------------- Network Availability - Non Carrier Causes Outage not to Exceed 30 Single Incident Minutes <4 hours - ------------------------------------------------------------------ ------------------------------ ----------------------- network time to heal - time to alternate service where it is available. includes management of appropriate carrier(s) 15 minutes <1 hour - ------------------------------------------------------------------ ------------------------------ ----------------------- network time to repair - time to repair where alternate service 2 hours <8 hours is not available. includes management of appropriate carrier(s) - ------------------------------------------------------------------ ------------------------------ ----------------------- network time to repair - time to repair where alternate service 8 hours <24 hours is available. includes management of appropriate carrier(s) - ------------------------------------------------------------------ ------------------------------ -----------------------
11 The Expected Service Level for availability of the wide area network and internet access is 99.8%, calculated monthly, with the exception of the Maintenance Window defined in Schedule A, and as excluded below. The Required Service Level is 99.5% for the month. A Required Service Level Default occurs if ACS requires the use of the Maintenance Window during a Zale Freeze Period. SECTION 2.6 WEB HOSTING AVAILABILITY The Expected Service Level for internet access to the Web Hosting site is 99.8% availability, calculated monthly, with the exception of the Maintenance Window defined in Schedule A and as excluded below. The Required Service Level for internet access to the Web Hosting site is 99.5%. A Required Service Level Default occurs if ACS requires the use of the Maintenance Window during a Zale Freeze Period. SECTION 2.7 PLANNING, MANAGEMENT AND ADMINISTRATION DELIVERABLES The Service Levels for providing documents identified as specific deliverables under the Agreement and its Schedules are: o The Expected Service Level is delivery within 5 business days of the event for requested Service Level Failure Analysis and Corrective Action Reports. The Required Service Level is delivery of the reports in less than 10 days. o The Expected Service Level is delivery within 10 business days of the due date for planning, evaluation, strategy and similar documents. The Required Service Level is delivery of the documents in less than 20 business days. o The Expected Service Level is delivery within 20 business days of semi-annual updates to the Operations, Disaster Recovery and Procedures manuals used to provide the Services. The Required Service Level is delivery of the updated manuals in less than 45 days. o The Expected Service Level is delivery within 20 business days of annual updates to the Equipment and Software inventories set out in Schedule F. The required Service Level is delivery of the annual inventory updates in less than 45 business days. SECTION 2.8 NOTIFICATIONS AND ALERTS The Expected Service Level for performing the required notifications in Section 3.15 of Schedule A is to be underway in 15 minutes. The Required Service Level for performing notifications is less than 45 minutes. SECTION 2.9 SECURITY AND REGULATORY COMPLIANCE Within 90 days of the Effective Date, Critical Service Levels will be established for the following: o Designation of an ACS Project Manager who will participate in Zale's compliance and regulatory planning process and in providing scheduled deliverables to assist Zale in meeting its regulatory requirements. Zale, after approval, will compensate ACS for additional reasonable resources, expenses or Services required to expand, enhance and support Zale's regulatory compliance efforts over time. 12 o Evaluation and establishment of Service Levels for turnaround times associated with the following functions: o Priority security change requests o Operational/research security requests o Provisioning of user accounts o Remediation plans for non-compliant security practices o Monthly, quarterly, and annual compliance reporting SECTION 3 -- SUMMARY OF SERVICE LEVELS, ALLOCATIONS AND MEASUREMENTS CRITICAL SERVICE LEVELS EXPECTED REQUIRED ALLOCATION EFF + MONTHS - ------------------------------------------------ ---------------- ----------------- --------------- ------------------ System Availability Per Scheduled Hours 99.8% 99.5% 20% 2/4 - ------------------------------------------------ ---------------- ----------------- --------------- ------------------ Critical Report Availability (Multiple) 30 mins 1-2 hours 10% 2/2 to 1 hour - ------------------------------------------------ ---------------- ----------------- --------------- ------------------ Batch Processing Completion (Multiple) 30 mins <1 hour 10% 2/2 - ------------------------------------------------ ---------------- ----------------- --------------- ------------------ emergency file and database restorations 1-2 hours 2-6 hours 10% 2/4 (multiple) - ------------------------------------------------ ---------------- ----------------- --------------- ------------------ wide area network availability 99.8% 99.5% 20% 2/4 - ------------------------------------------------ ---------------- ----------------- --------------- ------------------ web hosting availability 99.8% 99.5% 20% 2/4 - ------------------------------------------------ ---------------- ----------------- --------------- ------------------ planning, management and administration 5-20 days 20-45 days 10% 2/2 deliverables (multiple) - ------------------------------------------------ ---------------- ----------------- --------------- ------------------ notifications and alerts 15 min <45 min 10% 2/4 - ------------------------------------------------ ---------------- ----------------- --------------- ------------------ security and regulatory compliance tbd tbd tbd tbd - ------------------------------------------------ ---------------- ----------------- --------------- ------------------
*Eff=Number of months after the Effective Date when ACS will become responsible for providing measurement data in support of the Critical Service Levels. Months=The number of months after the Effective Date when ACS will begin to be responsible for the applicable Service Level Credits associated with the Critical Service Levels. 13 SCHEDULE D -- TRANSITION SERVICES TO MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES BETWEEN ZALE DELAWARE, INC. AND ACS COMMERCIAL SOLUTIONS, INC. AUGUST 1, 2005 TABLE OF CONTENTS SECTION 1 -- TRANSITION SERVICES OVERVIEW.........................................................................3 Section 1.1 Plan Development.............................................................................3 Section 1.2 Zale Responsibilities........................................................................3 Section 1.3 Service Levels...............................................................................4 SECTION 2 -- PROPOSED TRANSITION SCHEDULE.........................................................................4 Section 2.1 Phase 1 (August 15, 2005 to September 30, 2005)..............................................4 Section 2.2 Phase 2 (October 1, 2005 to January 9, 2006).................................................4 Section 2.3 Phase 3 (January 10, 2006 to June 28, 2006)..................................................5 Section 2.4 Disaster Recovery Plan.......................................................................5 SECTION 3 -- SNCC TRANSITION......................................................................................6 Section 3.1 ACS Enterprise Command Center................................................................6 Section 3.2 Operations...................................................................................6
2 SECTION 1 -- TRANSITION SERVICES OVERVIEW SECTION 1.1 PLAN DEVELOPMENT 1.1.1 Transition Plan-- ACS has developed and will execute a Transition Plan to selectively upgrade and relocate Zale's designated midrange processors to the ACS Dallas data center and upgrade Zale's data communications network to support that relocation. Following the Effective Date, ACS and Zale will collaboratively refine, finalize and agree on the Transition Plan, which will be approved by the Zale CIO. ACS will use best efforts to comply with the Proposed Transition Schedule in Section 2, as dictated by changing business requirements of both Zale and ACS. The objective of the transition is to complete all relocation and upgrade activities by no later than July 31, 2006. 1.1.2 Phased Approach -- The Transition Plan is defined in three phases to enable a controlled migration of the designated technical environments while reducing the opportunity for problems affecting production Services. The phases are described in general terms in Section 2 below. Generally, each group of relocated midrange servers and equipment as defined in each phase will be implemented first as a "test environment" to verify the migration has appropriate functionality, connectivity, data and performance characteristics, then a second "live conversion" with current data being transmitted. 1.1.3 Change Control -- ACS and Zale together, as a part of the overall Change Control process defined in Schedule A, will manage the Transition Plan to best meet Zale's requirements. The Transition Plan has been developed with the best knowledge of both parties as of the Effective Date, however additional planning efforts or changes to business requirements may require changes during the execution of the plan. All changes to the Transition Plan must be approved through the Change Control process, with the understanding that significant changes may affect the cost of the overall Transition Plan, including but not limited to, personnel resources, hardware, software, equipment, and network resources and circuits, such cost changes to be borne by the party requiring the change. SECTION 1.2 ZALE RESPONSIBILITIES 1.2.1 Plan Approval and Communication -- Zale shall review, approve, and communicate the Transition Plan to all affected Zale managers, employees, and business units, and Zale management will reasonably ensure that all Zale parties are able to execute the Transition Plan on a timely basis. 1.2.2 Asset Transfer, 3rd Party Approvals -- Zale and ACS will work together to complete the proposed Asset Transfer for selected Zale assets to ACS, and further to transfer any required Third Party Agreements and/or Services, such as software licenses and maintenance agreements, hardware maintenance agreements, and telecommunications circuits, between the parties as agreed. 1.2.3 Testing -- Zale shall define, provide, organize, communicate, and approve any Zale personnel required to test the Zale Systems and Applications once migrated to both the "test environment" and "live conversion" environment as defined in Section 1.1.2 above. 3 1.2.4 Personnel -- Zale shall coordinate activities and priorities for both its technical and user personnel as required to ensure that both Transition Plan tasks and applications development/support tasks are completed according to schedule. 1.2.5 Acceptance -- Zale will work with ACS during the phases to develop Acceptance Criteria to verify a particular phase has been completed as specified, and is operating as required to meet Zale's business needs. Zale shall provide written approval and acceptance for each completed phase. SECTION 1.3 SERVICE LEVELS Although unexpected, Service Level Failures may result from a Transition Plan activity. If the failure is caused by Zale, Service Levels impacted by the failure shall not be subject to Service Level Credits. If the failure is caused by ACS, its agents or subcontractors, or any other ACS personnel, in addition to any other remedies Zale may have under the Agreement, any resulting Service Level impacts shall be subject to Service Level Credits. SECTION 2 -- PROPOSED TRANSITION SCHEDULE SECTION 2.1 PHASE 1 (AUGUST 15, 2005 TO SEPTEMBER 30, 2005) o This timeframe spans Zale's year-end close, during which no changes will be made to the production IT environment. Working with Zale applications development personnel, ACS will use the time for documentation of existing environments, definition of new environments, development of detailed migration tasks and checklists, development of testing and acceptance criteria, and preparation of applicable documentation for new and revised procedures. o Zale and ACS to collaboratively refine and finalize the Transition Plan. o Hardware, Software, Network and other equipment changes, acquisitions and upgrades are defined in Schedule A, and will be reconfirmed as of the Effective Date. o ACS will initiate provisioning of network circuits and acquisition of network switches, routers, hubs, software, racks and cabling that are detailed in Section 4.5 of Schedule A. o ACS will initiate procurement of two HP-UX processors, 21 Intel-based processors (including 6 with VMware capabilities), a Clariion 4 terabyte usable storage array, a new Virtual Tape System, additional drives for the Tape Library, and added disk storage for the AS/400 as detailed in Section 2.2 of Schedule A. o ACS, with the assistance of Zale, will initiate transition of application 3rd party services (software licenses, services, maintenance, etc.) between the parties. SECTION 2.2 PHASE 2 (OCTOBER 1, 2005 TO JANUARY 9, 2006) o This timeframe spans Zale's year-end Holiday Season, during which no changes will be made to the production IT environment. 4 o ACS will complete provisioning of new network circuits and installation of equipment initiated in Phase 1. Completion of this task will be determined by the availability dates provided by the carriers for expanded connectivity between the Zale General Offices and ACS data center in Dallas. o ACS will complete acquisition and installation of new midrange processors and the storage devices initiated in Phase 1. o ACS will order and install leased EMC storage equipment to facilitate transition activities. SECTION 2.3 PHASE 3 (JANUARY 10, 2006 TO JUNE 28, 2006) o AS/400 -- ACS will install additional disk storage and move the AS/400 to the ACS Dallas data center. ACS also will assist in planning for downsizing the AS/400 due to the reduced processing requirements anticipated by Zale. o Intel-based Processors -- ACS will move Zale server images to the ACS Dallas data center and install them on both new and leased processors at the ACS Dallas data center. As part of Phase 3, ACS will work with Zale to identify an Intel-based processor that can be used as a "Syslog" server for security administration. o UNIX Processors -- ACS will transfer Zale server images over-the-wire and consolidate them into new processors at the ACS Dallas data center. o Tape Storage -- ACS will leverage an existing Tape Library at its Dallas data center to facilitate transfers. The Zale Tape Library will remain at Zale as a backup and will be moved to the ACS facility only after the migration of all associated servers is complete. Also during Phase 3, ACS will migrate Zale's existing mainframe tape system to a new Virtual Tape System. o Disk Storage -- ACS will transfer data from Zale's EMC 8730 and 8830 storage units to leased equipment at the ACS Dallas data center, then reverse the process after moving the EMC units to the ACS facility. SECTION 2.4 DISASTER RECOVERY PLAN 2.4.1 2005 Disaster Exercise -- ACS will schedule and assist Zale with the FY2006 Disaster Recovery exercise so that the exercise, post-exercise review, and appropriate remediation, if any, is completed by June 30, 2006. Zale and ACS recognize that this exercise will be completed during the Transition Period and may not be fully reflective of the final environment. 2.4.2 Disaster Recovery Plan -- ACS, with Zale's assistance and approval, will complete planning, documentation, scheduling and implementation of the Zale Disaster Recovery Plan as defined in Schedule G within 90 days of completion of Phase 3 referenced in Section 2.3 to this Schedule D. 5 SECTION 3 -- SNCC TRANSITION SECTION 3.1 ACS ENTERPRISE COMMAND CENTER 3.1.1 ECC Overview -- The ACS Enterprise Command Center (ECC), located at the Dallas data center, and with alternate support sites at other ACS locations globally, will assume overall management of daily operations from the Zale Systems and Network Command Center (SNCC), located at the Zale headquarters and staffed by ACS personnel. The ECC has responsibility for system and server monitoring, console operations, communications with technical and, as appropriate, customer personnel, performance tracking and reporting, and initiation of the incident management process. As of the Effective Date, specific teams within the ECC are already performing services for Zale to monitor and manage Zale's mainframe processing, the Zale network (Network Operations Center or "NOC"), the Zale web operations ("IS Team"), and Zale network security and intrusion detection (Security Operations Center or "SOC"). 3.1.2 Staff Transition -- ACS will begin transition of staff and responsibilities into ECC managed locations after ACS has established sufficient connectivity and implemented management tools to permit effective remote management of the SNCC operations. ACS will communicate the transition plans to Zale management in advance of migration. 3.1.3 Hands-On Support -- ACS will retain sufficient staff on site at Zale during the Transition Period to ensure that any hands-on support as may be required to manage servers, telecom equipment, tape media and media servers will be available so as to remain within designated response times. 3.1.4 Communications -- After the Effective Date ACS will, working with Zale, begin to transition inter-personal communications such as page-outs, problem tickets, and calls to application development personnel, to the standard operating procedures and tools employed in the ECC. SECTION 3.2 OPERATIONS 3.1.5 SNCC Facility -- During the Transition Period, the SNCC facility and secure environment will be maintained by Zale to allow continued operations of Zale's midrange environment. Zale and ACS employees will be permitted comparable access rights and workspace to effectively perform the Services. 3.1.5.1 Zale may, as space become available, elect to transition the equipment and personnel for their Zale Monitoring Center (ZMC) into the SNCC. ACS and Zale will work together to facilitate a successful migration. 3.1.5.2 After the Transition Period, ACS will retain management responsibility for specific midrange servers, network equipment, circuits, and other equipment that shall be located in the SNCC or other closets and secure facilities controlled by Zale. Zale and ACS employees will be permitted comparable access rights and workspace to effectively perform the Services. 3.1.6 Production Control and Scheduling -- After ACS has established sufficient connectivity and implemented management tools to permit effective remote management of the midrange systems located in the SNCC, ACS will consolidate Production Control and Scheduling operational responsibilities conducted in the SNCC into the similar teams performing these Services from the ACS data center. 6 3.1.7 LAN and UNIX Support-- After ACS has established sufficient connectivity and implemented management tools to permit effective remote management of the midrange systems located in the SNCC, ACS may relocate certain UNIX and NT Administrator positions into the similar teams performing these Services remotely, either from the ACS data center in Dallas or other ACS locations which can support these functions. During the Transition Period, and afterward as agreed by the parties, Zale will continue to provide comparable workspace and physical access for these individuals as required to deliver the Services. 7 SCHEDULE E -- PERSONNEL TO MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES BETWEEN ZALE DELAWARE, INC. AND ACS COMMERCIAL SOLUTIONS, INC. AUGUST 1, 2005 1 TABLE OF CONTENTS SECTION 1 -- PERSONNEL...........................................................................................3 Section 1.1 Approved Positions...........................................................................3 Section 1.2 ACS Technical Support........................................................................3 Section 1.3 Administrative Support.......................................................................4 Section 1.4 Organization Charts..........................................................................4 Section 1.5 Transferred Staff............................................................................4
2 SECTION 1 -- PERSONNEL SECTION 1.1 APPROVED POSITIONS In providing the Services contemplated in this Agreement ACS will provide resources in a number of positions that are key to the success of the processing services. As such, Zale requires certain approvals and restrictions on these positions. Zale requires prior approval of proposed assignments to the positions of Executive Account Manager and Service Delivery Manager or to the equivalent positions developed through the life of the Agreement. ACS agrees that these positions (or their approved replacements) will be provided throughout the duration of the Agreement. In addition, the ACS Regional Vice President or comparable executive associated with Zale will participate in quarterly strategy meetings with Zale to address personnel matters and other key issues relating to the Services. 1.1.1 Executive Account Manager --The Executive Account Manager will be responsible for the management of the delivery of the Services to Zale. This person will be designated as the primary point of contact with Zale management for purposes of administration of this Agreement. The Executive Account Manager will submit a formal written report by the 15th of each month on the status of the Agreement and delivery of the Services, performance against the service levels in Schedule C, and any other issues that have arisen in the normal execution of the Agreement during the previous month. ACS will, as necessary, name both an alternative to (temporary replacement for) and an escalation point from the Executive Account Manager that will provide Zale with points of contact at all times during this Agreement. The Executive Account Manager will participate in the Zale IT strategic planning process. 1.1.2 Service Delivery Manager - The Service Delivery Manager will be the primary operational interface with Zale. This person will coordinate the technical issues related to day-to-day operations, will attend and participate in Zale's regularly scheduled operational meetings, including change control and daily and weekly status meetings, and will be responsible for monitoring the status and escalation of reported problems. The Service Delivery Manager will be on site at the Zale Facility. 1.1.3 Transition Manager -- ACS shall assign a Transition Project Manager for the Transition Period to coordinate and communicate all activities and responsibilities of ACS and Zale required to complete the Transition according to the Transition Plan, including the integration of the Transition Plan with other support activities and daily operational responsibilities. SECTION 1.2 ACS TECHNICAL SUPPORT ACS is to provide trained and managed resources at levels required to properly perform its obligations under all aspects of the Agreement and the Schedules incorporated therein. ACS is to provide these resources from its full-time employee base or from resources obtained from the approved subcontractors. Key positions exist in the areas of operations (including production control), midrange administration, and network responsible for management, coordination and communication of ACS' delivery responsibilities under the Agreement. These other key positions do not require prior approval by Zale, but are subject to Zale acceptance of performance of duties (whether on Zale premises or not). For these positions, Zale may require reassignment/replacement of the human resources assigned by 3 providing a written statement of why Zale believes, in good faith, that service level performance is jeopardized or risk is created by the assignment. In such instances, ACS will make the replacements as requested by Zale within reasonable time with the exception that no such action will be taken if it would violate the employment obligations of ACS to the individual involved. In such situations, ACS and Zale will work in good faith to resolve the situation. SECTION 1.3 ADMINISTRATIVE SUPPORT ACS will provide trained and managed resources at levels required to properly perform its obligations under all aspects of the Agreement and the Schedules. In addition, ACS will provide: 1.3.1 Planning Support - ACS will, in performing the duties identified in Schedule A, commit a minimum of 300 hours per year, as directed by the Zale CIO, to specific, customer interactive planning activities and, further, at least one third of these hours are provided by specialist resources not routinely dedicated to the Zale account. This minimum does not relieve any ACS responsibility for the proper and timely preparation of planning and related documents identified in this Agreement. 1.3.2 Account Administration - ACS will provide a single resource that can work, as required, with Zale administrative resources to resolve all matters and questions arising from the administration of this Agreement, including, but not limited to, billing and certification issues. 1.3.3 Standards and Procedures - ACS will identify one or more specific resources that are responsible for producing, maintaining and distributing the standards, procedures and practices materials, including operational and support documentation, required to meet the obligations set forth in this Agreement. SECTION 1.4 ORGANIZATION CHARTS ACS and Zale shall each provide the other with such management and other information as shall be reasonably required. SECTION 1.5 TRANSFERRED STAFF The Parties agree that, should one or more functions or services be transferred from one Party to the other Party, the Parties will determine, in good faith, whether it is advantageous to and in keeping with the purposes and spirit of this Agreement to also attempt to transfer all or part of the staff associated with the transferred function/service. The Party from which the function/service is being transferred will have sole discretion whether associated staff may be approached or solicited for transfer. Notwithstanding these provisions, both Parties agree that (1) the prohibition on solicitation for hire of employees of the other Party without permission set forth in Section 19.10 of this Agreement is not in contradiction with this Schedule and (2) that either Party, or both Parties in cooperation, will take no actions that interfere with the individual rights of employees to seek other employment except as deemed consistent with appropriate laws and consistent with the provisions of this Agreement. 4 SCHEDULE F -- MANAGED ASSETS TO MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES BETWEEN ZALE DELAWARE, INC. AND ACS COMMERCIAL SOLUTIONS, INC. AUGUST 1, 2005 TABLE OF CONTENTS F-1: ZALE ASSETS PURCHASED AND MANAGED BY ACS.....................................................................3 Section F-1.1 Intel-based Servers..........................................................................3 Section F-1.2 HP-UX Servers................................................................................3 F-2: MAINFRAME ASSETS OWNED AND OPERATED BY ACS...................................................................5 F-3: MIDRANGE ASSETS OWNED BY ZALE AND OPERATED BY ACS............................................................6 Section F-3.1 Intel-based Servers..........................................................................6 Section F-3.2 HP-UX Servers...............................................................................11 Section F-3.3 iSeries Servers.............................................................................11 Section F-3.4 Support Equipment...........................................................................11 F-4: NETWORK ASSETS OWNED BY ZALE AND OPERATED BY ACS............................................................12 F-5: SOFTWARE ASSETS OPERATED BY ACS.............................................................................17
2 SCHEDULE F-1 F-1: ZALE ASSETS PURCHASED AND MANAGED BY ACS As a part of the Agreement, and as defined in Schedule B, Section 11, ACS will make a one-time payment to Zale for the following assets, which ACS will manage for Zale during the Transition Period and assume ownership of thereafter: SECTION F-1.1 INTEL-BASED SERVERS SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== ZaleDC1 D049FK41K846 2000 Adv Server Domain Controller - -------------------------- -------------------- --------------------- ------------------------------------ ZaleDC2 D049FK41K774 2000 Adv Server Domain Controller - -------------------------- -------------------- --------------------- ------------------------------------ ZaleDC3 D049FK41K773 2000 Adv Server Domain Controller - -------------------------- -------------------- --------------------- ------------------------------------ ZaleDC4 D922CMG10044 2000 Adv Server Domain Controller - -------------------------- -------------------- --------------------- ------------------------------------ ProdNT1 D015BX72K008 NT4 Server Application Server - -------------------------- -------------------- --------------------- ------------------------------------ TestNT1 D015BX72K000 NT4 Server Test Server - -------------------------- -------------------- --------------------- ------------------------------------ Zalints23 D016CYM1K022 2003 Server CME Test Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTDISO7 EA4YLDN72R 2000 Server ZAP Web Dev - -------------------------- -------------------- --------------------- ------------------------------------ Winterm0 D049FK41L881 2000 Server Metaframe 1.8 Server - -------------------------- -------------------- --------------------- ------------------------------------ Winterm1 D011DKN1K239 NT4 Server Metaframe 1.8 Server - -------------------------- -------------------- --------------------- ------------------------------------ Winterm2 D011DKN1K802 NT4 Server Metaframe 1.8 Server - -------------------------- -------------------- --------------------- ------------------------------------ Winterm3 D907BX520063 NT4 Server Metaframe 1.8 Server - -------------------------- -------------------- --------------------- ------------------------------------ Winterm5 D911CCT60103 2000 Server Metaframe 1.8 Server - -------------------------- -------------------- --------------------- ------------------------------------ Winterm6 D933CP41A093 2000 Server Metaframe 1.8 Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTDATA1 D038DYV1L164 2000 Server MetaXP Data Collector - -------------------------- -------------------- --------------------- ------------------------------------ ZNTCMF01 6J33LGP1S00B 2000 Server MetaXP Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTMXP02 6J33LGP1S00N 2000 Server MetaXP DISO E1 Client - -------------------------- -------------------- --------------------- ------------------------------------ ZNTCMF03 6J33LGP1R00Y 2000 Server MetaXP Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTCMF04 6J33LGP1S011 2000 Server MetaXP Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTCMF05 EBASLDN72G 2000 Server MetaXP DISO Prod Schd - -------------------------- -------------------- --------------------- ------------------------------------ ZNTCMF13 6J34LGP1R01X 2000 Server MetaXP Server - -------------------------- -------------------- --------------------- ------------------------------------ Proxy1 D038DYV1L111 2000 Adv Server Proxy Server - -------------------------- -------------------- --------------------- ------------------------------------ Proxy2 D038DYV1L163 2000 Adv Server Proxy Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTFSDOC D326FSY1H139 2000 Adv Server Business Objects Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTSOX2 M03PLGP121 2000 Server Development RCTS Server - -------------------------- -------------------- --------------------- ------------------------------------
SECTION F-1.2 HP-UX SERVERS NAME SERIAL NUMBER OS APPLICATIONS - ---------------------------------------------------------------------------------------------------- ZaleADM1 USR41304BC HPUX 11i Production Server ZaleADM2 USR41304B8 HPUX 11i Production Server Zale_HP3 3541A04727 HPUX Test Server Zale_HP9 3730A68077 HPUX 11i Production Fax Server ZaleHP12 USM41018V5 HPUX 11.0 Production Server ZaleHP13 US10076253 HPUX 11i Development Server ZaleHP14 USR40141SL HPUX 11.0 Production Server ZaleHP17 USM404173D HPUX 11.0 Development Server ZaleHP18/ZaleHP28 USM40528SE HPUX 11i Production Server ZaleHP19/ZaleHP21 USM4028491 HPUX 11i Development Server
3 SCHEDULE F-1 NAME SERIAL NUMBER OS APPLICATIONS - ---------------------------------------------------------------------------------------------------- Blazer1 USE440957E HPUX 11i Production Server Blazer2 USE440957D HPUX 11i Production Server Sapphire USR424788F HPUX 11i Production Server Sonoma USE440957C HPUX 11i Development Server HP 660 Galactica Tape Library US9JN00128 Tape Lib Tape library
4 SCHEDULE F-2 F-2: MAINFRAME ASSETS OWNED AND OPERATED BY ACS During the Term of the Agreement, ACS will operate and maintain the mainframe-related hardware necessary to provide the Services, such hardware being of a technology at least as current as follows: Main processor (CPU): IBM 9672-RC4 CMOS Processor or equivalent DASD: IBM RVA (RAMAC Virtual Array) 3390-3 or equivalent with Raid 5 protection TAPE: 3480 Cartridge (with automatic tape loader capabilities, i.e. tape silos or virtual tape system) and limited 3420 capabilities. As a part of the Transition Plan, and as defined in Schedule A, Section 1.3, ACS will convert Zale's mainframe-based tape operations to an IBM Virtual Tape System. 5 SCHEDULE F-3 F-3: MIDRANGE ASSETS OWNED BY ZALE AND OPERATED BY ACS The customer owned midrange hardware to be operated by ACS at the Effective Date is listed in the following table. The hardware will change from time to time and the Parties agree to maintain, separate from this Agreement, an updated copy of said hardware. During the Term of the Agreement, ACS is responsible for operating and overseeing the associated peripheral and support/environment equipment required to operate the listed equipment. ACS stewardship duties for this hardware include, but are not limited to, those activities and management functions defined in Schedule A. SECTION F-3.1 INTEL-BASED SERVERS Novell Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== 01ACSZale D714HWB20097 Netware5 ACS File Server - -------------------------- -------------------- --------------------- ------------------------------------ Corplan D038CXG1K125 Netware6 Novell Login Server - -------------------------- -------------------- --------------------- ------------------------------------ Email1 D018FFL1K305 Netware6 Novell Email Server - -------------------------- -------------------- --------------------- ------------------------------------ Zale_1 D114CXG1K056 Netware6 Novell Login Server - -------------------------- -------------------- --------------------- ------------------------------------ Zale_2 D038CXG1K096 Netware6 Novell Login Server - -------------------------- -------------------- --------------------- ------------------------------------ Zale_AP1 D040DYT1K765 Netware6 Novell File Server - -------------------------- -------------------- --------------------- ------------------------------------ Zale_Dev US92500559 Netware6 Novell File Server - -------------------------- -------------------- --------------------- ------------------------------------
General Purpose NT Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== - -------------------------- -------------------- --------------------- ------------------------------------ NEO 6J16FSJ1X03P NT4 Server New Employee Orientation - -------------------------- -------------------- --------------------- ------------------------------------ Zaleftz ###-###-#### 2000 Server SmartZone - -------------------------- -------------------- --------------------- ------------------------------------ ZNTSHIP1 6J34LGP1R02G 2000 Server FedEX Shipping Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTFSRV1 D333LDN1J641 2003 Ent Server Property Development File Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTFAX1 D221FPX1D025 2000 Server BisComm Fax Server - -------------------------- -------------------- --------------------- ------------------------------------ DC RF Project 6033DYSZS338 2000 Server RF Gun Mgmt Server - -------------------------- -------------------- --------------------- ------------------------------------
Microsoft SQL Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== ZaleSQL2 D933CP41A006 2000 Server Database Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTSQL1 D335LQK2H025 2000 Adv Server SQL Server - -------------------------- -------------------- --------------------- ------------------------------------
Management & Utility - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== Zautosys 6011DT63B686 Win 2000 Pro Autosys - -------------------------- -------------------- --------------------- ------------------------------------ ZNTBlade D902BX520106 2000 Server Blade Server Console - -------------------------- -------------------- --------------------- ------------------------------------ ZNTEMC1 D204JZG1L095 2000 Adv Server EMC Management Server - -------------------------- -------------------- --------------------- ------------------------------------ STSDialup D929CSF1A110 NT4 Server RAS Server - -------------------------- -------------------- --------------------- ------------------------------------ ACSMGMT1 D242KJN2D128 2000 Server ACS Management Server - -------------------------- -------------------- --------------------- ------------------------------------ ACSNT1 D738BLC10263 2000 Server NetIQ Server - -------------------------- -------------------- --------------------- ------------------------------------
6 SCHEDULE F-3 - -------------------------- -------------------- --------------------- ------------------------------------ ZNTTECHS D929CSF1A110 2003 Server Desktop File Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTAVSRV 6J33LGP1L01B 2000 Server Antivirus Update Server - -------------------------- -------------------- --------------------- ------------------------------------ Lab Server D338LDN1H296 Test Server - -------------------------- -------------------- --------------------- ------------------------------------ Lab Server D338LDN1H167 Test Server - -------------------------- -------------------- --------------------- ------------------------------------ Lab Server D338LDN1H157 Test Server - -------------------------- -------------------- --------------------- ------------------------------------
Pagoda Polling Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== - -------------------------- -------------------- --------------------- ------------------------------------ Polling1 D926CWJ1A691 NT4 Server Pagoda Polling Server - -------------------------- -------------------- --------------------- ------------------------------------ Polling2 D820BX611093 NT4 Server Pagoda Polling Server - -------------------------- -------------------- --------------------- ------------------------------------
DOT.COM Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== ZALINT05 EAWOLDN42G 2000 Server DOTCom - -------------------------- -------------------- --------------------- ------------------------------------ ZALINT06 D334LDN1H610 2000 Server DOTCom - -------------------------- -------------------- --------------------- ------------------------------------ ZALINT07 D334LDN1H366 2000 Server DOTCom - -------------------------- -------------------- --------------------- ------------------------------------ ZALINT08 D334LDN1H583 2000 Server DOTCom - -------------------------- -------------------- --------------------- ------------------------------------ ZALINT09 D333LDN1J867 2000 Server DOTCom - -------------------------- -------------------- --------------------- ------------------------------------ ZALINT10 D334LDN1H434 2000 Server Exchange server 2000 - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS11 D029CQX3K074 2000 Adv Server Web Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS12 D029CQX3K061 2000 Adv Server Web Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS13 D029CQX3K034 2000 Adv Server CME Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS14 EASY LDN42G 2003 Adv Server Web Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS15 EAOD MF41 34 2000 Adv Server SQL Cluster - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS16 EAOC MF41 34 2000 Adv Server SQL Cluster - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS17 D024DKN1N592 NT4 Server Unity Mail - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS18 D024DKN1P758 NT4 Server Domain server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS19 D030CQX3K051 NT4 Server Webtrends - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS20 D024DKN1P823 NT4 Server FTP server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS21 D024DKN1Q177 NT4 Server D.C./Backup - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS22 D023DKN1Q404 NT4 Server D.C./Global Cat/KickMail - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS27 D029CQX3K055 2000 Server Monitoring server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS28 D029CQX3K073 2000 Server DotCom Test Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS30 D024DKN1N425 2000 Server DotCom Test Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS31 D011CYM1K163 2000 Server DotCom Test Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS33 D030CQX3K055 2000 Server DotCom Test Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS34 D030CQX3K011 2000 Server DotCom Test Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS35 D112FSB1K895 2000 Server Credit Card verification - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS36 D029CQX3K085 2003 Ent Server DotCom Test Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS37 D029CQX3K069 2003 Ent Server DotCom Test Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS24 D951DDN1K370 2000 Server DotCom Test Server - -------------------------- -------------------- --------------------- ------------------------------------ ZALINTS25 D951DDN1K410 2000 Server DotCom Test Server - -------------------------- -------------------- --------------------- ------------------------------------ RA 4100 D024DBX10587 Test SAN - -------------------------- -------------------- --------------------- ------------------------------------ MSA1000 USZ0328750 Test SAN - -------------------------- -------------------- --------------------- ------------------------------------ MSA1000 9J37JN7179MZ cluster drive array - -------------------------- -------------------- --------------------- ------------------------------------
7 SCHEDULE F-3 - -------------------------- -------------------- --------------------- ------------------------------------ MSA30SB Z5JHLMPX36 cluster drive array - -------------------------- -------------------- --------------------- ------------------------------------ Fiber Ch 7-port Hub 4DH015148 Production - -------------------------- -------------------- --------------------- ------------------------------------ Fiber Ch 7-port Hub 4DK015808 Production - -------------------------- -------------------- --------------------- ------------------------------------ Fiber Channel Hub 4DH015148 Production - -------------------------- -------------------- --------------------- ------------------------------------ ACSTL891 2K80923022 Tape System - -------------------------- -------------------- --------------------- ------------------------------------ ACSTL891 3G05CR84P014 Tape System - -------------------------- -------------------- --------------------- ------------------------------------
Arthur Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== - -------------------------- -------------------- --------------------- ------------------------------------ ZNTART1 D305LDN1J451 2000 Server Arthur Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTART2 D305LDN1J510 2000 Server Arthur Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTART3 D305LDN1J542 2000 Server Arthur Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTART4 D305LDN1J491 2000 Server Arthur Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTART5 D305LDN1J539 2000 Server Arthur Server - -------------------------- -------------------- --------------------- ------------------------------------
Diamond Sourcing Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== ZNTDISO1 EBAPLDN72G 2000 Server Deployment Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTDISO2 EBCXLPN72G 2000 Server Demand Management - -------------------------- -------------------- --------------------- ------------------------------------ ZNTDISO4 6J33LGP1L01D 2000 Server DSI Enterprise - -------------------------- -------------------- --------------------- ------------------------------------ ZNTDISO5 6J33LGP1R02Z 2000 Server Business Intelligence - -------------------------- -------------------- --------------------- ------------------------------------ ZNTDISO6 EA2WOLN72R 2002 Server ZAP Web - -------------------------- -------------------- --------------------- ------------------------------------ ZNTDISO8 EA80LDN72R 2000 Server Loftware Enterprise - -------------------------- -------------------- --------------------- ------------------------------------ ZNTDISO9 EA3MLDN72R 2000 Server PSD & Demand Mgmt Dev - -------------------------- -------------------- --------------------- ------------------------------------
Call Center / Epiphany Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== ZNTCASRV 6J36LGP1J0AE 2000 Server CA ServiceDesk - -------------------------- -------------------- --------------------- ------------------------------------ ZNTIVR1 D304LDN1D643 2000 Server Edify IVR Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTIVR2 D304LDN1D636 2000 Server Edify IVR Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTIVR3 M01ZKVJ61W 2000 Server Edify Test IVR Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTSYMP1 EA6NLDN83M 2000 Server Symposium Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTSYMP2 EA6KLDN83M 2000 Server Symposium Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTSYMP3 EA6RLDN83M 2000 Server Symposium Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTSYMP4 M04CLGP13L 2000 Server Symposium Server - -------------------------- -------------------- --------------------- ------------------------------------ Vcalldev - Epiph SSCCdev Vmktgdev - Epiph mktg dev Vcustdev - Epiph custcare dev VMSRVR01 M01XMLN12T VMWare ESX2.5 Vcalltst - Epiph SSCC test - -------------------------- -------------------- --------------------- ------------------------------------ Vcust - Epiph custcare prod VMSRVR02 EAC1MND23P VMWare ESX2.5 Vsscc - Epiph SSCC prod - -------------------------- -------------------- --------------------- ------------------------------------ VMSRVR03 EAADMND23P VMWare ESX2.5 Vmktg - Epiph mktg prod - -------------------------- -------------------- --------------------- ------------------------------------
8 SCHEDULE F-3 NT GroupWise Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== - -------------------------- -------------------- --------------------- ------------------------------------ ZNTGOPO1 EADPLDN72R 2000 Server GroupWise 6.5 Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTGOPO2 EAL2LDN72R 2000 Server GroupWise 6.5 Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTGOPO3 EB6ALDN72R 2000 Server GroupWise 6.5 Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTGOPOT D933CP41A064 2000 Server GroupWise 6.5 Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTGOGWW M01ELGPD2P 2000 Server GroupWise 6.5 Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTGWIA D306LDN1H729 2000 Server GroupWise 6.5 Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTGWW D305LDN1J612 2000 Server GroupWise 6.5 Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTMTA D306LDN1H814 2000 Server GroupWise 6.5 Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTSP01 D305LDN1J459 2000 Server GroupWise 6.5 Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTSP02 D306LDN1J010 2000 Server GroupWise 6.5 Server - -------------------------- -------------------- --------------------- ------------------------------------
Citrix Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== ZNTCMF06 M01SMLN12T 2000 Server Metaframe XP Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTCMF07 M01NMLN12T 2000 Server Metaframe XP Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTCMF08 M01FMLN12T 2000 Server Metaframe XP Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTCMF09 M035MLN12T 2000 Server Metaframe XP Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTCMF10 M037MLN12T 2000 Server Metaframe XP Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTCMF11 M02EMLN12T 2000 Server Metaframe XP Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTCMF12 M02FMLN12T 2000 Server Metaframe XP Server - -------------------------- -------------------- --------------------- ------------------------------------
Intranet Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== Intranet1 D038DYV1L065 2000 Adv Server Intranet Server - -------------------------- -------------------- --------------------- ------------------------------------ Intranet2 D038DYV1K798 2000 Adv Server Intranet Server - -------------------------- -------------------- --------------------- ------------------------------------ Intranet3 D316LDN1K717 2000 Adv Server Intranet Server - -------------------------- -------------------- --------------------- ------------------------------------ Intranet4 D316LDN1K716 2000 Adv Server Intranet Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTPROXY3 M03ZLGPD2H 2000 Adv Server Proxy Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTPROXY4 M03YLGPD2H 2000 Adv Server Proxy Server - -------------------------- -------------------- --------------------- ------------------------------------
Business Objects Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== FSDOC D849CFS10118 2000 Server Application Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTZABO1 D326FSY1H154 2000 Adv Server Business Objects Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTZABO2 D326FSY1H150 2000 Adv Server Business Objects Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTZABO3 D040DYT1L944 2000 Adv Server Application Server - -------------------------- -------------------- --------------------- ------------------------------------
WorkFlow Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== ZNTFLOW1 6J36LGP1J0C0 2000 Server Workflow Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTFLOW2 M0LXLGP11J 2000 Server Workflow Server - -------------------------- -------------------- --------------------- ------------------------------------
9 SCHEDULE F-3 ZNTWFTST 6J36LGP1J0C7 2000 Server Workflow Test Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTWSRV1 D327LDN1J112 2000 Adv Server Workflow Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTWSRV2 D327LDN1H705 2000 Adv Server Workflow Server - -------------------------- -------------------- --------------------- ------------------------------------
RTS Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== ZNTRTS1 D303LDN1D227 2000 Adv Server RTS Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTRTS2 D303LDN1D228 2000 Adv Server RTS Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTRTS3 D303LDN1D203 2000 Server RTS Test Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTRTS4 D303LDN1D229 2000 Server RTS Server - -------------------------- -------------------- --------------------- ------------------------------------
SOX Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== ZNTSOX1 M054LGP121 2000 Server Production RCTS Server - -------------------------- -------------------- --------------------- ------------------------------------
MagnaWare Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== ZLXMGW1 D024DKN1N423 RH Linux MagnaWare Capture Server - -------------------------- -------------------- --------------------- ==================================== ZLXMGW2 D016CYM1K032 RH Linux MagnaWare Web Server - -------------------------- -------------------- --------------------- ==================================== ZNTMGW3 D035FFL1K266 2000 Server MagnaWare Parsing Server - -------------------------- -------------------- --------------------- ------------------------------------
Security Camera Systems - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== ZXPSEC01 CNS0000058951 XP Pro Under DvDallas Management - -------------------------- -------------------- --------------------- ------------------------------------ ZXPSEC02 CNS0000058975 XP Pro Under DvDallas Management - -------------------------- -------------------- --------------------- ------------------------------------ ZXPSEC03 CNS0000058954 XP Pro Under DvDallas Management - -------------------------- -------------------- --------------------- ------------------------------------ ZXPSEC04 CNS0000058953 XP Pro Under DvDallas Management - -------------------------- -------------------- --------------------- ------------------------------------ ZXPSEC05 CNS0000058956 XP Pro Under DvDallas Management - -------------------------- -------------------- --------------------- ------------------------------------ ZXPSEC06 CNS0000058950 XP Pro Under DvDallas Management - -------------------------- -------------------- --------------------- ------------------------------------ ZXPSEC07 CNS0000058952 XP Pro Under DvDallas Management - -------------------------- -------------------- --------------------- ------------------------------------ ZXPSEC08 CNS0000058955 XP Pro Under DvDallas Management - -------------------------- -------------------- --------------------- ------------------------------------
NGS Environment - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== TESTAPP C9RNL71 2003 Server NGS Test App Server - -------------------------- -------------------- --------------------- ------------------------------------ TESTSQL D016CYM1K013 2003 Ent Server NGS Test SQL Server - -------------------------- -------------------- --------------------- ------------------------------------ ZNTNGS07 D035FFL1K286 2003 Server Sygate server - -------------------------- -------------------- --------------------- ------------------------------------
10 SCHEDULE F-3 Decommissioned - ---------------------------------------------------------------------------------------------------------- SERVER NAME SERIAL NUMBER OS APPLICATION ========================== ==================== ===================== ==================================== 8500-1 D022BX71K083 NA Decommissioned - -------------------------- -------------------- --------------------- ------------------------------------ 8500-2 D021CL61K033 NA Decommissioned - -------------------------- -------------------- --------------------- ------------------------------------ RA 4100 D024DBX10231 Dotcom SAN Decommissioned - -------------------------- -------------------- --------------------- ------------------------------------
SECTION F-3.2 HP-UX SERVERS NAME SERIAL NUMBER OS APPLICATIONS - ----------------------------------------------------------------------------------------------------------- ZaleHP20 USM4133926 HPUX 11i Production Server ZaleHP22 USM40192 HPUX 11i Production Server ZaleHP23/ZaleHP24 USE4414CD5 HPUX 11i Production/Development ZaleHP25/ZaleHP26 USE4414CD4 HPUX 11i Production/Development Tundra USL44049VE HPUX 11i HRIS WEB Server Tacoma USL44049VF HPUX 11i HRIS WEB Server
SECTION F-3.3 ISERIES SERVERS NAME SERIAL NUMBER OS APPLICATIONS - ------------------------------------------------------------------------------------------------------------ ZaleAS1/2/3 S1079F8B (23-YX776 OS/400 iSeries Application Server terminal)
SECTION F-3.4 SUPPORT EQUIPMENT NAME SERIAL NUMBER OS APPLICATIONS - ------------------------------------------------------------------------------------------------------------ ADIC Scaler 1000 201101359 Tape Library Tape Library 201200817 201201138 - ------------------------------------------------------------------------------------------------------------ CYBEX AVOCENT Various Console Hub Console Hub - ------------------------------------------------------------------------------------------------------------
11 SCHEDULE F-4 F-4: NETWORK ASSETS OWNED BY ZALE AND OPERATED BY ACS The customer owned network hardware to be operated by ACS at the Effective Date is listed in the following table. The hardware will change from time to time and the Parties agree to maintain, separate from this Agreement, an updated copy of said hardware. During the Term of the Agreement, ACS is responsible for operating and overseeing the associated peripheral and support/environment equipment required to operate the listed equipment. ACS stewardship duties for this hardware include, but are not limited to, those activities and management functions defined in Schedule A. HOST MSERIAL SERIAL MANUF DESCRIPTION - --------------------------------------------------------------------------------------------------------------------- Zale Irving Closet Switches - --------------------------------------------------------------------------------------------------------------------- ZALIRVX7C FOX080309J7 CISCO SYSTEMS CATALYST 4506 7C CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX7D FOX082701LS CISCO SYSTEMS CATALYST 4506 7D CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX6D FOX082501KW CISCO SYSTEMS CATALYST 4506 6D CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX4E FOX080602NV CISCO SYSTEMS CATALYST 4506 4E CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX7AW FOX072802AC CISCO SYSTEMS CATALYST 4506 7A West CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX6AW FOX0637SOEV CISCO SYSTEMS CATALYST 4506 6A West CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX6AE FOX090400ZL CISCO SYSTEMS CATALYST 4506 6A East CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX5AW FOX0645109B CISCO SYSTEMS CATALYST 4506 5A West CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX5AE FOX06381LG5 CISCO SYSTEMS CATALYST 4506 5A East CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX7BE FOX065016FL CISCO SYSTEMS CATALYST 4506 7B East CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX6BW FOX073302K1 CISCO SYSTEMS CATALYST 4506 6B West CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX6BE FOX0722027P CISCO SYSTEMS CATALYST 4506 6B East CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX5BW FOX071701Y6 CISCO SYSTEMS CATALYST 4506 5B West CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX5BE FOX071800Q9 CISCO SYSTEMS CATALYST 4506 5B East CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX4D FOX082703M8 CISCO SYSTEMS CATALYST 4506 4D CLOSET IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX07 FOX081800BK CISCO SYSTEMS CATALYST 4507 SNCC IRVING - --------------------------------------------------------------------------------------------------------------------- ZALIRVX05 FHK0703Y0F8 CISCO SYSTEMS CATALYST 2950 Switch for DMZ - --------------------------------------------------------------------------------------------------------------------- ZALIRVX5D FOX06320PA4 CISCO SYSTEMS CATALYST 4000 Switch for Call Center - --------------------------------------------------------------------------------------------------------------------- ZALIRVX06 FHK0703Z0CX CISCO SYSTEMS CATALYST 2950 Switch for DMZ - --------------------------------------------------------------------------------------------------------------------- ZALIRVX61 FHK0704X186 CISCO SYSTEMS CATALYST 2950 Switch for DC - --------------------------------------------------------------------------------------------------------------------- ZALIRVX62 FHK0704X18Q CISCO SYSTEMS CATALYST 2950 Switch for DC - --------------------------------------------------------------------------------------------------------------------- ZALIRVX63 FHK0704W18X CISCO SYSTEMS CATALYST 2950 Switch for DC - --------------------------------------------------------------------------------------------------------------------- ZALIRVX5C FOX074406SY CISCO SYSTEMS Catalyst 4506 Switch in 5C - --------------------------------------------------------------------------------------------------------------------- ZALIRVX3C FOC0746W0UY CISCO SYSTEMS Catalyst 2950 Switch in 3C - --------------------------------------------------------------------------------------------------------------------- ZALIRVX4E2 FOC0748X0V5 CISCO SYSTEMS Catalyst 2950 Switch in SNCC for Store Security Network WS- C2950G-48-EI - --------------------------------------------------------------------------------------------------------------------- ZALIRVX4E3 FOC0748X0UT CISCO SYSTEMS Catalyst 2950 Switch in 4E for Store Security Network WS-C2950G-48-EI, - ---------------------------------------------------------------------------------------------------------------------
12 SCHEDULE F-4 HOST MSERIAL SERIAL MANUF DESCRIPTION - --------------------------------------------------------------------------------------------------------------------- Zale Irving Switch Backbone - --------------------------------------------------------------------------------------------------------------------- ZALIRVX03 SMG0625A05Z CISCO SYSTEMS CATALYST 6509 "A" Wing 7AE - --------------------------------------------------------------------------------------------------------------------- ZALIRVX04 SMG0625A05S CISCO SYSTEMS CATALYST 6509 "B" Wing 7BW - --------------------------------------------------------------------------------------------------------------------- ZALIRVX01 TBA05260922 TBA05260922 CISCO SYSTEMS WS-C6509 CATALYST CHASSIS - --------------------------------------------------------------------------------------------------------------------- ZALIRVX01 TBA05260922 SAD0522009D CISCO SYSTEMS WS-X6K-S2-MSFC2 CATALYST 6500 - --------------------------------------------------------------------------------------------------------------------- ZALIRVX01 TBA05260922 SAD05200815 CISCO SYSTEMS WS-X6K-S2-MSFC2/2 CAT 6500 RED - --------------------------------------------------------------------------------------------------------------------- ZALIRVX01 TBA05260922 SAL05258PWQ CISCO SYSTEMS WS-X6348-RJ-45 CATALYST - --------------------------------------------------------------------------------------------------------------------- ZALIRVX01 TBA05260922 SAD0524056W CISCO SYSTEMS WS-X6516-GBIC CAT 6500 16-PORT - --------------------------------------------------------------------------------------------------------------------- ZALIRVX01 TBA05260922 SSAD05070ZJV CISCO SYSTEMS WS-X6516-GBIC CAT 6500 16-PORT - --------------------------------------------------------------------------------------------------------------------- ZALIRVX01 TBA05260922 SSAD05070LEH CISCO SYSTEMS WS-X6516-GBIC CAT 6500 16-PORT - --------------------------------------------------------------------------------------------------------------------- ZALIRVX01 TBA05260922 SSAD05070YX8 CISCO SYSTEMS WS-X6516-GBIC CAT 6500 16-PORT - --------------------------------------------------------------------------------------------------------------------- ZALIRVX02 TBA05260839 TBA05260839 CISCO SYSTEMS WS-C6509 CATALYST CHASSIS - --------------------------------------------------------------------------------------------------------------------- ZALIRVX02 TBA05260839 SAD052200BE CISCO SYSTEMS WS-X6K-S2-MSFC2 CATALYST 6500 - --------------------------------------------------------------------------------------------------------------------- ZALIRVX02 TBA05260839 SAD0522027T CISCO SYSTEMS WS-X6K-S2-MSFC2/2 CAT 6500 RED - --------------------------------------------------------------------------------------------------------------------- ZALIRVX02 TBA05260839 SAL05248MNY CISCO SYSTEMS WS-X6348-RJ-45 CATALYST - --------------------------------------------------------------------------------------------------------------------- ZALIRVX02 TBA05260839 SAD0524057B CISCO SYSTEMS WS-X6516-GBIC CAT 6500 16-PORT - --------------------------------------------------------------------------------------------------------------------- ZALIRVX02 TBA05260839 SSAD052600S0 CISCO SYSTEMS WS-X6516-GBIC CAT 6500 16-PORT - --------------------------------------------------------------------------------------------------------------------- ZALIRVX02 TBA05260839 SSAD05070YWW CISCO SYSTEMS WS-X6516-GBIC CAT 6500 16-PORT - --------------------------------------------------------------------------------------------------------------------- ZALIRVX02 TBA05260839 SSAD05070ZG8 CISCO SYSTEMS WS-X6516-GBIC CAT 6500 16-PORT - --------------------------------------------------------------------------------------------------------------------- Zale Irving Routers, Switches, Firewalls, Load balancers - --------------------------------------------------------------------------------------------------------------------- ZALIRVH01 Z182552 BAY NETWORKS 24 PORT 10 BASET HUB NA - --------------------------------------------------------------------------------------------------------------------- ZALIRVH02 ###-###-#### BAY NETWORKS TR WG ANALYZER W/STP - --------------------------------------------------------------------------------------------------------------------- ZALIRVF01 ###-###-#### CISCO Cisco PIX 525 at Zale - --------------------------------------------------------------------------------------------------------------------- ZALIRVF02 ###-###-#### CISCO Cisco PIX 525 at Zale - --------------------------------------------------------------------------------------------------------------------- ZALINTR03 JAB043386UH JAB043386UH CISCO SYSTEMS CISCO2610 ETHERNET ROUTER at G.O. - --------------------------------------------------------------------------------------------------------------------- ZALINTR03 JAB043386UH 19817660 CISCO SYSTEMS WIC-1T 1-PORT SERIAL WAN CARD - --------------------------------------------------------------------------------------------------------------------- ZALINTR03 JAB043386UH 19009276 CISCO SYSTEMS WIC-1DSU-T1 T1 DSU/CSU WAN - --------------------------------------------------------------------------------------------------------------------- ZALINTR04 JAB043386UJ JAB043386UJ CISCO SYSTEMS CISCO2610 ETHERNET ROUTER at G.O. - --------------------------------------------------------------------------------------------------------------------- ZALINTR04 JAB043386UJ 19853889 CISCO SYSTEMS WIC-1T 1-PORT SERIAL WAN CARD - --------------------------------------------------------------------------------------------------------------------- ZALINTR04 JAB043386UJ 19898305 CISCO SYSTEMS WIC-1DSU-T1 T1 DSU/CSU WAN - --------------------------------------------------------------------------------------------------------------------- ZALNS02-1 11151 F5 NETWORKS F5-3DNS at Irving - --------------------------------------------------------------------------------------------------------------------- ZALNS02-2 11186 F5 NETWORKS F5-3DNS at Irving - --------------------------------------------------------------------------------------------------------------------- ZALINTX03 FOX04193155 FOX04193155 CISCO SYSTEMS WS-C4006-S2 CATALYST 4000 at G.O. - --------------------------------------------------------------------------------------------------------------------- ZALINTX03 FOX04193155 JAB043701XX CISCO SYSTEMS WS-X4232-L3 - --------------------------------------------------------------------------------------------------------------------- ZALINTX03 FOX04193155 JAB042509U9 CISCO SYSTEMS WS-X4148-RJ CATALYST 4000 - --------------------------------------------------------------------------------------------------------------------- ZALINTX03 FOX04193155 JAB041907TC CISCO SYSTEMS WS-X4019 CATALYST 4006 BACKBON - --------------------------------------------------------------------------------------------------------------------- ZALINTX04 FOX04193179 FOX04193179 CISCO SYSTEMS WS-C4006-S2 CATALYST 4000 at G.O. - --------------------------------------------------------------------------------------------------------------------- ZALINTX04 FOX04193179 JAB043300DM CISCO SYSTEMS WS-X4232-L3 - --------------------------------------------------------------------------------------------------------------------- ZALINTX04 FOX04193179 JAF042100E5 CISCO SYSTEMS WS-X4148-RJ CATALYST 4000 - --------------------------------------------------------------------------------------------------------------------- ZALINTX04 FOX04193179 JAB041907T6 CISCO SYSTEMS WS-X4019 CATALYST 4006 BACKBON - --------------------------------------------------------------------------------------------------------------------- ZALIRVR08 JMX0709L42B JMX0709L42B CISCO SYSTEMS Cisco 3725 DS3 at Zale - --------------------------------------------------------------------------------------------------------------------- ZALIRVR08 JMX0709L42B 29711970 CISCO SYSTEMS WIC 1 DSU T1 Card - ---------------------------------------------------------------------------------------------------------------------
13 SCHEDULE F-4 HOST MSERIAL SERIAL MANUF DESCRIPTION - --------------------------------------------------------------------------------------------------------------------- ZALAMXR01 250667788 CISCO SYSTEMS 2524 AMEX Router at G.O. - --------------------------------------------------------------------------------------------------------------------- ZALIDS01 CNM7U11BRB CISCO SYSTEMS IDS-4215-4FE-K9 IDS system managing the AT&T Managed Internet DS3 - --------------------------------------------------------------------------------------------------------------------- ZALIRVCS01 CISCO SYSTEMS Cisco CSS11501 Content Switch w/ GE JAB083405RF SFP, LC Connector SX transceiver - --------------------------------------------------------------------------------------------------------------------- ZALIRVCS02 CISCO SYSTEMS Cisco CSS11501 Content Switch w/ GE JAB083405RP SFP, LC Connector SX transceiver - --------------------------------------------------------------------------------------------------------------------- ZALINTR01 JAB043386V0 JAB043386V0 CISCO SYSTEMS 2610 ETHERNET ROUTER to G.O. - --------------------------------------------------------------------------------------------------------------------- ZALINTR01 JAB043386V0 19853968 CISCO SYSTEMS WIC-1T 1-PORT SERIAL WAN CARD - --------------------------------------------------------------------------------------------------------------------- ZALINTR01 JAB043386V0 19901367 CISCO SYSTEMS WIC-1DSU-T1 T1 DSU/CSU WAN - --------------------------------------------------------------------------------------------------------------------- ZALINTR02 JAB043386V1 JAB043386V1 CISCO SYSTEMS 2610 ETHERNET ROUTER to G.O. - --------------------------------------------------------------------------------------------------------------------- ZALINTR02 JAB043386V1 19854285 CISCO SYSTEMS WIC-1T 1-PORT SERIAL WAN CARD - --------------------------------------------------------------------------------------------------------------------- ZALINTR02 JAB043386V1 19951458 CISCO SYSTEMS WIC-1DSU-T1 T1 DSU/CSU WAN - --------------------------------------------------------------------------------------------------------------------- ZALIRVR09 JAB04358AZQ JAB04358AZQ CISCO SYSTEMS CISCO2610 ETHERNET ROUTER - --------------------------------------------------------------------------------------------------------------------- ZALIRVR09 JAB04358AZQ 20173394 CISCO SYSTEMS WIC-1DSU-T1 T1 DSU/CSU WAN - --------------------------------------------------------------------------------------------------------------------- ZALIRVR01 50015877 50015877 CISCO SYSTEMS CISCO 7505 5-SLOT - --------------------------------------------------------------------------------------------------------------------- ZALIRVR01 50015877 25251045 CISCO SYSTEMS FEIP2-DSW-2TX - --------------------------------------------------------------------------------------------------------------------- ZALIRVR02 ###-###-#### ###-###-#### CISCO SYSTEMS CISCO3640 4-SLOT MODULAR RTER - --------------------------------------------------------------------------------------------------------------------- ZALIRVR02 ###-###-#### 15154067 CISCO SYSTEMS NM-1E1R2W 1 ETHR TOKEN RG CARD - --------------------------------------------------------------------------------------------------------------------- ZALIRVR02 ###-###-#### 11422094 CISCO SYSTEMS NM-1E1R2W 1 ETHR TOKEN RG CARD - --------------------------------------------------------------------------------------------------------------------- ZALIRVR02 ###-###-#### 11928792 CISCO SYSTEMS NM-1E1R2W 1 ETHR TOKEN RG CARD - --------------------------------------------------------------------------------------------------------------------- ZALIRVR02 ###-###-#### 13868049 CISCO SYSTEMS WIC-1T 1-PORT SERIAL WAN CARD - --------------------------------------------------------------------------------------------------------------------- ZALIRVR02 ###-###-#### 13857813 CISCO SYSTEMS WIC-1DSU-T1 T1 DSU/CSU WAN - --------------------------------------------------------------------------------------------------------------------- ZALIRVR02 ###-###-#### 25164306 CISCO SYSTEMS NM-1FE-TX 1-PORT ETH NETWK MOD - --------------------------------------------------------------------------------------------------------------------- ZALIRVR02 ###-###-#### 19252179 CISCO SYSTEMS WIC-1DSU-T1 T1 DSU/CSU WAN - --------------------------------------------------------------------------------------------------------------------- ZALIRVR10 JMX0808L8JE JMX0808L8JE CISCO SYSTEMS 2611 DUAL ETHERNET MOD ROUTER - --------------------------------------------------------------------------------------------------------------------- ZALIRVR10 JMX0808L8JE 29693449 CISCO SYSTEMS WIC 1 DSU T1 CARD - --------------------------------------------------------------------------------------------------------------------- ZALINTLD1 12395 F5 NETWORKS BIG IP Load Balancer - --------------------------------------------------------------------------------------------------------------------- ZALINTLD2 12346 F5 NETWORKS BIG IP Load Balancer - --------------------------------------------------------------------------------------------------------------------- No Name Multiple MultiTech Polling Modem farm - --------------------------------------------------------------------------------------------------------------------- Haskell Routers, Switches, Firewalls, Load balancers - --------------------------------------------------------------------------------------------------------------------- ZALIRVFW1 ###-###-#### CISCO Cisco PIX 515 at ACS Haskell - --------------------------------------------------------------------------------------------------------------------- ZALINTX01 FOX04183789 FOX04183789 CISCO SYSTEMS CATALYST 4000 at Haskell - --------------------------------------------------------------------------------------------------------------------- ZALINTX01 FOX04183789 JAE042218U1 CISCO SYSTEMS WS-X4148-RJ Catalyst 4000 - --------------------------------------------------------------------------------------------------------------------- ZALINTX01 FOX04183789 JAB041907SL CISCO SYSTEMS WS-X4019 Catalyst 4006 Backbone - --------------------------------------------------------------------------------------------------------------------- ZALINTX01 FOX04183789 JAB0450048K CISCO SYSTEMS WS-X4232-L3 - --------------------------------------------------------------------------------------------------------------------- ZALINTX02 FOX04193068 FOX04193068 CISCO SYSTEMS CATALYST 4000 at Haskell - --------------------------------------------------------------------------------------------------------------------- ZALINTX02 FOX04193068 JAB042509X4 CISCO SYSTEMS WS-X4148-RJ Catalyst 4000 - --------------------------------------------------------------------------------------------------------------------- ZALINTX02 FOX04193068 JAB041907SB CISCO SYSTEMS WS-X4019 Catalyst 4006 Backbone - --------------------------------------------------------------------------------------------------------------------- ZALINTX02 FOX04193068 JAB042409F3 CISCO SYSTEMS WS-X4232-L3 - --------------------------------------------------------------------------------------------------------------------- ZALINTF01 ###-###-#### CISCO SYSTEMS Cisco PIX 525 - --------------------------------------------------------------------------------------------------------------------- ZALINTF02 ###-###-#### CISCO SYSTEMS Cisco PIX 525 - --------------------------------------------------------------------------------------------------------------------- ZALNS01-1 10927 F5 NETWORKS F5-3DNS at Haskell - --------------------------------------------------------------------------------------------------------------------- ZALNS01-2 10943 F5 NETWORKS F5-3DNS at Haskell - --------------------------------------------------------------------------------------------------------------------- ZALDALR01 50015999 CISCO SYSTEMS 7505 5 SLOT ROUTER - ---------------------------------------------------------------------------------------------------------------------
14 SCHEDULE F-4 HOST MSERIAL SERIAL MANUF DESCRIPTION - --------------------------------------------------------------------------------------------------------------------- ZALDALR02 JAB043586KV CISCO SYSTEMS 2620 ETHERNET ROUTER - --------------------------------------------------------------------------------------------------------------------- ZALDALR03 72641123 CISCO SYSTEMS 7206 6 SLOT ROUTER CHASSIS 1A - --------------------------------------------------------------------------------------------------------------------- ZALDALR04 ###-###-#### CISCO SYSTEMS 3640 at Haskell support - --------------------------------------------------------------------------------------------------------------------- ZALDALR05 JMX0707L8JE JMX0707L8JE CISCO SYSTEMS 2610 for New DMZ - --------------------------------------------------------------------------------------------------------------------- ZALDALR05 JMX0707L8JE 29693011 CISCO SYSTEMS WIC 1 DSU T1 CARD - --------------------------------------------------------------------------------------------------------------------- Remote Routers, Switches, Firewalls, Load balancers - --------------------------------------------------------------------------------------------------------------------- ZALTORX01 FOC0733Y11U CISCO SYSTEMS Catalyst 2950 Switch in Toronto DC WS-C2950G-48-EI - --------------------------------------------------------------------------------------------------------------------- ZALIR2X01 FOX07071TL9 Catalyst 4506 Switch at Pagoda Irving - --------------------------------------------------------------------------------------------------------------------- ZALTORR02 JAB04358AZN JAB04358AZN CISCO SYSTEMS CISCO2610 ETHERNET ROUTER ISDN Canada - --------------------------------------------------------------------------------------------------------------------- ZALTORR02 JAB04358AZN 20166217 CISCO SYSTEMS WIC-1DSU-T1 T1 DSU/CSU WAN - --------------------------------------------------------------------------------------------------------------------- ZALIR2R01 JAB050280LE CISCO SYSTEMS 2610 at Pagoda - --------------------------------------------------------------------------------------------------------------------- ZALIR2R02 JMX0514K2ZZ CISCO SYSTEMS 2611 at Pagoda - --------------------------------------------------------------------------------------------------------------------- ZALTORR01 SHN032902Q5 CISCO SYSTEMS 2610 at Peoples - --------------------------------------------------------------------------------------------------------------------- VoIP Equipment - --------------------------------------------------------------------------------------------------------------------- ZNTPUB1 USE515A60Y CISCO SYSTEMS Cisco Call Manager at GO (Win2k OS) - --------------------------------------------------------------------------------------------------------------------- ZNTPUB2 USE515A61V CISCO SYSTEMS Cisco Call Manager at GO (Win2k OS) - --------------------------------------------------------------------------------------------------------------------- ZALIRVR11 FTX0918A27J CISCO SYSTEMS Cisco 2821 router at GO - --------------------------------------------------------------------------------------------------------------------- ZALIRVR12 FTX0918A27C CISCO SYSTEMS Cisco 2821 router at GO - --------------------------------------------------------------------------------------------------------------------- ZALTORR03 FTX0918A2KQ CISCO SYSTEMS Cisco 2851 router at Toronto - --------------------------------------------------------------------------------------------------------------------- ZALTORR04 FTX0918A2KF CISCO SYSTEMS Cisco 2851 router at Toronto - --------------------------------------------------------------------------------------------------------------------- ZALTORX03 CAT0916Y1AQ CISCO SYSTEMS Cisco 3560 switch at Toronto - --------------------------------------------------------------------------------------------------------------------- ZALTORX04 CAT0916X0EA CISCO SYSTEMS Cisco 3560 switch at Toronto - --------------------------------------------------------------------------------------------------------------------- ZALTORW01 FOC09130LPF CISCO SYSTEMS Cisco AP1200 WAP at Toronto - --------------------------------------------------------------------------------------------------------------------- ZALTORW02 FOC09114B8X CISCO SYSTEMS Cisco AP1200 WAP at Toronto - --------------------------------------------------------------------------------------------------------------------- ZALTORW03 FOC09121XWW CISCO SYSTEMS Cisco AP1200 WAP at Toronto - --------------------------------------------------------------------------------------------------------------------- ZALTORW04 FOC09130LY9 CISCO SYSTEMS Cisco AP1200 WAP at Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C42969EB CISCO SYSTEMS Cisco VoIP Phone - M7960 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A71F6 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C3D7716F CISCO SYSTEMS Cisco VoIP Phone - M7960 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A72B0 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C4286397 CISCO SYSTEMS Cisco VoIP Phone - M7960 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A71F4 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A724D CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C461BCEC CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C461BC98 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C3C45B59 CISCO SYSTEMS Cisco VoIP Phone - M7960 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C3E23E90 CISCO SYSTEMS Cisco VoIP Phone - M7940 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C461BC83 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7365 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - ---------------------------------------------------------------------------------------------------------------------
15 HOST MSERIAL SERIAL MANUF DESCRIPTION - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7245 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7453 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A6E3E CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A73BE CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A6A5B CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7134 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C4296A15 CISCO SYSTEMS Cisco VoIP Phone - M7960 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C461BDF8 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7387 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP00138054D64D CISCO SYSTEMS Cisco VoIP Phone - M7905 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP00138054D5A2 CISCO SYSTEMS Cisco VoIP Phone - M7905 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C4286582 CISCO SYSTEMS Cisco VoIP Phone - M7960 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C3C45F33 CISCO SYSTEMS Cisco VoIP Phone - M7960 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C461BECD CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A71E3 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A720D CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A749D CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C3BABC69 CISCO SYSTEMS Cisco VoIP Phone - M7940 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP00138054D4BB CISCO SYSTEMS Cisco VoIP Phone - M7905 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP00138054D6BB CISCO SYSTEMS Cisco VoIP Phone - M7905 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A71F9 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7221 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C461C226 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7399 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7461 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C3E23DA7 CISCO SYSTEMS Cisco VoIP Phone - M7940 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A71AB CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7376 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7317 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C461BDE0 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A73AD CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7449 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A7459 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C42863A4 CISCO SYSTEMS Cisco VoIP Phone - M7960 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C44A6CA9 CISCO SYSTEMS Cisco VoIP Phone - M7912 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone SEP0013C3D77D8B CISCO SYSTEMS Cisco VoIP Phone - M7940 Toronto - --------------------------------------------------------------------------------------------------------------------- VoIP Phone INM091115LB CISCO SYSTEMS Cisco VoIP Phone - M7910G Irving - --------------------------------------------------------------------------------------------------------------------- Decommissioned Equipment - --------------------------------------------------------------------------------------------------------------------- ZALINTR07 JAB04358B06 CISCO SYSTEMS 2610 ETHERNET ROUTER; WIC-1 DSU-T1 T1 DSU/CSU WAN - --------------------------------------------------------------------------------------------------------------------- ZALINTR08 JAB04358AZP CISCO SYSTEMS 2610 ETHERNET ROUTER; WIC-1 DSU-T1 T1 DSU/CSU WAN - ---------------------------------------------------------------------------------------------------------------------
16 SCHEDULE F-5 F-5: SOFTWARE ASSETS OPERATED BY ACS Owner/Licensee - The Party who holds the license for the software. Maintenance - The Party that has financial responsibility for maintaining the software and financial responsibility for updates/upgrades per the requirements in Schedules A and D. Except as stated in this Schedule or as provided under the technology refreshment provisions of Schedule A, ACS as operator of the software is responsible for acquiring, testing and installing, in conjunction with Zale, all environmental software maintenance, fixes and upgrades and Zale is responsible for acquiring, developing, testing and installing, in conjunction with ACS, all applications software maintenance, fixes and upgrades. Desktop Software - For purposes of this Schedule, all desktop software utilized on Zale-owned PC equipment is assumed to be Zale owned, licensed and maintained, except as explicitly noted in this Schedule. Table Omissions - In the event that a software package is erroneously omitted from the following table, the Parties will work in good faith to determine whether the software is/was part of the software in use by the Parties in connection with this Agreement at the Effective Date and will determine the ownership and maintenance responsibilities by mutual agreement. PLATFORM OWNER/ MAINTENANCE VENDOR SOFTWARE PACKAGE LICENSEE RESPONSIBILITY ---------------------------------------------------------------------------------------------------------------- Network Associates PGP Unix Zale Zale ---------------------------------------------------------------------------------------------------------------- Adobe Acrobat Unix Zale Zale ---------------------------------------------------------------------------------------------------------------- ADP CSS Horizon WIN/UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- ADP PC Payroll for Windows Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- ADS/SRS Reportsmith WIN/UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- AJB Retail Transaction Switch Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- BISCOM Faxcom for NT W2K Zale Zale ---------------------------------------------------------------------------------------------------------------- BMC 3270 Super Optimizer/CICS M/F Zale ACS ---------------------------------------------------------------------------------------------------------------- BMC Load Plus IMS M/F Zale ACS ---------------------------------------------------------------------------------------------------------------- BMC Secondary Index Utility M/F Zale ACS ---------------------------------------------------------------------------------------------------------------- Business Objects Broadcast Agent Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Business Objects Designer License Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Business Objects Explorer Server Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Business Objects Info Server Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Business Objects IS Bundle (Supv & Designer) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Business Objects Report Server Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Candle Corporation Omegamon II CICS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Candle Corporation Omegamon II MVS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Checkfree Checkfree Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Citrix MetaFrame Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Citrix WinFrame (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Citrix MetaFrame XP Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- CLR Insource W2K Zale Zale ---------------------------------------------------------------------------------------------------------------- Compaq Insight ManagerCIM Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Computer Associates Service Desk Intel Zale Zale ----------------------------------------------------------------------------------------------------------------
17 SCHEDULE F-5 Computer Associates Asset Management Manager Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Computer Associates Remote Control Manager Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Computer Associates Software Delivery Manager Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Computer Associates Service Desk Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Computer Associates TNG Base Manager (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Computer Associates ETrust Access Control UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Computer Associates ACF2/CICS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates ACF2/MVS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Autosys UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Computer Associates DADS/Plus M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Disk M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Earl M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates CA-11 M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Endevor/MVS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Endevor/PDM M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Erwin (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Computer Associates Faver/MVS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Harvest UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Computer Associates Intertest M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Jars M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Librarian (Base) M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Netspy M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates CA-90 (Services) M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates CA-1 M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Optimizer M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Optimizer II M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates PDSMAN M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Prevail/Deliver M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Prevail/XP-view M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates CA-7 M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates SYSVIEW/E M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Vantage M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Verify M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates View M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Vision Results M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Computer Associates Xcom M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Compuware Abend-Aid IMS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Compuware Abend-Aid MVS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Compuware CICS Abend-Aid FX M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Compuware File-Aid/IMS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Compuware File-Aid/MVS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Compuware Shared Services M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Deloitte and Touche Remediation and Compliance Tracking Intel Zale Zale System ---------------------------------------------------------------------------------------------------------------- Diversified Software Docutext M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Diversified Software Jobscan M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- DSI Transcollector, Loftware Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- ECORA Audit Works for Windows & Novell Intel Zale Zale ----------------------------------------------------------------------------------------------------------------
18 SCHEDULE F-5 Edify Edify IVR Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- EMC EMC Control Center UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- EMC EMC Storage Scope UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- EMC Timefinder UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- EMC ESN Manager UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- EMC PowerPath UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- EMC (fka Softworks) Catalog Solutions M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Epiphany Various bundled components UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Foresight Marcam UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- FTZ FTZ Smartzone NT4 Zale Zale ---------------------------------------------------------------------------------------------------------------- Harte Hanks Directory of Major Malls Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- HP DCE Programming & Archive Libraries UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- HP DCE/9000 Executive (Client) Only UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- HP DCE/9000 Quickstart Bundle UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- HP FDDI/9000 Series 800 UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- HP HP C/ANSI C Developer Bundle UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- HP HP Glance Plus/UX Pak for s800 UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- HP HP-UX 11.0, 11i Support Tools UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- HP HP-UX Media Kit UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- HP Mirror Disk/UX UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- HYDE SPATCH - CGI PAGE UNIX ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM Backup Recovery & Media Svcs AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- IBM Performance Tools - Iseries AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- IBM Query for Iseries AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- IBM Operating System/400 AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- IBM DB2 Query Mgr & SQL Dev Kit AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- IBM Valupak for Iseries AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- IBM Iseries Client Accsss Win Fam AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- IBM Websphere Development Studio AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- IBM 3270 File Transfer Prog M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM ACF/SSP M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM ACF/VTAM for ESA M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM AD/CYCLE C/370 M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM AD/CYCLE C/370 DEBUGGER M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM AOC/MVS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM Assembler H M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM BDT/FTF/NJE M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM BTAM M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM CICS/ESA M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM COBOL COMP LIB M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM COBOL FOR MVS (ALT) M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM COBOL II COMP LIB M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM DCF M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM DFSMS/MVS M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM DLF M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM DW/370 M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM EREP M/F ACS ACS ----------------------------------------------------------------------------------------------------------------
19 SCHEDULE F-5 IBM GAM/SP M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM GDDM M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM GDDM IMAGE VIEW UTIL M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM GDDM INTERACTIVE MAP DEF M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM GDDM OS/2 link M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM GDDM PCLKF M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM IMS/ESA DB M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM IMS/ESA TM M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM ISPF M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM JES/328x Print Facility M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM MVS DITTO M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM NCP M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM NETVIEW FILE TRAN PROG M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM NETVIEW V3 M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM OGL/370 M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM OS/390 V2 BASE M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM OS/390 V2 C/C++ W/O DEBUG M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM OS/390 V2 DFSORT M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM OS/390 V2 DSS HSM (ALT 3) M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM OS/390 V2 RMF M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM OS/390 V2 SDSF M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM PL/I COMP LIB V2 M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM PPFA/370 M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM PSF V2 BASE M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM REXX COMPILER M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM REXX LIBRARY M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- IBM RMF/SAM M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- JDA Arthur Forecasting (not in use) WINNT/Unix Zale Zale ---------------------------------------------------------------------------------------------------------------- JDA Arthur Planning WIN/Unix Zale Zale ---------------------------------------------------------------------------------------------------------------- JDA E3/Slim AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- JDA Profile Intellect AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- JDA AIM AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- JDA Performance Analysis AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- JDA Synsort AS/400 Zale Zale ---------------------------------------------------------------------------------------------------------------- MacKinney Systems ISPF VSAM Utility M/F Zale ACS ---------------------------------------------------------------------------------------------------------------- Macromedia Cold Fusion Studio (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Macromedia Coldfusion (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Message M Unity Mail Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Microsoft Commerce Server 2000 Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Microsoft MSDN Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Microsoft NT4 Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Microsoft Proxy Server 2000 Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Microsoft Site Server Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Microsoft SQL Server Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Microsoft Windows 2000 Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Microsoft Windows Terminal Server Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Microsoft Windows 2003 Intel Zale Zale ----------------------------------------------------------------------------------------------------------------
20 SCHEDULE F-5 Microsoft Internet Server Accelerator Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- NetIQ App Manager Intel/UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- NetIQ NetIQ Intel Zale ACS ---------------------------------------------------------------------------------------------------------------- NetIQ Webtrends Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- NetIQ Mail Marshall Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- NetIQ Web Marshall Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Network Associates Groupshield Security Suite Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Network Associates Netshield Security Suite Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Network Associates PGP Unix Zale Zale ---------------------------------------------------------------------------------------------------------------- Novell Groupwise Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Novell Intranetware (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Novell Managewise (not in use) Intel ACS ACS ---------------------------------------------------------------------------------------------------------------- Novell Netware Intel ACS Zale ---------------------------------------------------------------------------------------------------------------- Novell Netware Cluster Services (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Novell Netware SAA (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Novell Support Connection (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Novell ZenWorks Intel ACS ACS ---------------------------------------------------------------------------------------------------------------- NSB Group (STS) Auditworks UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Octel New Employee Orientation NT4 Zale Zale ---------------------------------------------------------------------------------------------------------------- OpenHand Guinevere NT 2000 Zale Zale ---------------------------------------------------------------------------------------------------------------- Optum Move UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Oracle Database UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Oracle Developer UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Oracle Enterprise Server UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Oracle Express Server UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Oracle Forms UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Oracle Oracle Financial Analyzer UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Oracle Oracle Financials UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Oracle SQR Reportwriter UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Oracle HRIS UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Oracle Portal UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- PCDesigns Cratchit a'la Carte WIN Zale Zale ---------------------------------------------------------------------------------------------------------------- Peoplesoft Enterprise One Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- PKZIP PKZIP for UNIX UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- PKZIP PKZIP for Mainframe OS/390 Zale Zale ---------------------------------------------------------------------------------------------------------------- Respond Respond III W2K Zale Zale ---------------------------------------------------------------------------------------------------------------- Retek Retek UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- SAS SAS/Base M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Seagate Backup Exec (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Serena Comparex M/F Zale Zale ---------------------------------------------------------------------------------------------------------------- Simware Rexxware (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Software Diversified Stash (SDS) M/F Zale Zale Svcs ---------------------------------------------------------------------------------------------------------------- Spatch Wireless Text Messaging Intel ACS ACS ---------------------------------------------------------------------------------------------------------------- StarBase StarTeam SCM Tool Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Sterling Software Connect: Direct UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Sterling Software Connect: Mailbox UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Sterling Software Connect:Direct M/F ACS ACS ----------------------------------------------------------------------------------------------------------------
21 Sterling Software Gentran M/F Zale ACS ---------------------------------------------------------------------------------------------------------------- Sterling Software TRACS/EP M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Sterling Software TRACS/SNA M/F ACS ACS ---------------------------------------------------------------------------------------------------------------- Stone Eagle S-Credit-AS400 AS400 Zale Zale ---------------------------------------------------------------------------------------------------------------- Systemware JHS M/F Zale ACS ---------------------------------------------------------------------------------------------------------------- Tequila SW SWSoftware RetailLease WIN Zale Zale ---------------------------------------------------------------------------------------------------------------- Tobit Faxware Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Tripwire Tripwire for servers UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Unitech ACR Summary M/F Zale Zale ---------------------------------------------------------------------------------------------------------------- VeriSign Pay Flow Pro W2K Zale Zale ---------------------------------------------------------------------------------------------------------------- Veritas* Backup Exec Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Veritas Backup Exec for Windows NT 2000 Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Veritas NetBackup Datacenter UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Esker Software VSIFAX UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Weiland Fin. Bank Relationship Manager WIN Zale Zale ---------------------------------------------------------------------------------------------------------------- WRQ Reflections Terminal Emulator (not in use) Intel Zale Zale ---------------------------------------------------------------------------------------------------------------- Xcellnet Connect Remote NT4 Zale Zale ---------------------------------------------------------------------------------------------------------------- Zale Bonus WIN/UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Zale Commissions WIN/UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Zale Elvis UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Zale EPIP WIN/UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Zale Incentives WIN/UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Zale InfoPak WIN Zale Zale ---------------------------------------------------------------------------------------------------------------- Zale Pagoda Time Cards WIN/UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Zale PIC WIN/UNIX Zale Zale ---------------------------------------------------------------------------------------------------------------- Zale Sample Room WIN Zale Zale ---------------------------------------------------------------------------------------------------------------- Zale Website W2K Zale Zale ---------------------------------------------------------------------------------------------------------------- Zale CATS Polling UNIX Zale Zale ----------------------------------------------------------------------------------------------------------------
*ACS to provide ACS-licensed Veritas software for all Intel-based processors within the scope of the Services, all HP UX processors owned by ACS or acquired from Zale (after assumption of ownership), and any processors ACS puts into service for Zale as part of an Additional Resource Charge (ARC). 22 SCHEDULE G -- DISASTER RECOVERY SERVICES TO MASTER AGREEMENT FOR INFORMATION TECHNOLOGY SERVICES BETWEEN ZALE DELAWARE, INC. AND ACS COMMERCIAL SOLUTIONS, INC. AUGUST 1, 2005 TABLE OF CONTENTS SECTION 1 -- DISASTER RECOVERY PLANNING...........................................................................3 Section 1.1 Scope of Services............................................................................3 Section 1.2 Disaster Recovery Plan.......................................................................4 SECTION 2 -- DISASTER RECOVERY EXERCISE...........................................................................6 Section 2.1 Disaster Recovery Testing....................................................................6 SECTION 3 -- DISASTER PROCEDURES..................................................................................6 Section 3.1 Disaster Invocation..........................................................................6 Section 3.2 Disaster Management Procedures...............................................................7 Section 3.3 Service Levels...............................................................................7 SECTION 4 -- OPTIONAL SERVICES...................................................................................8 Section 4.1 Alternate Site Access/Business Recovery......................................................8 Section 4.2 Alternate Strategies.........................................................................8 TABLES AND EXHIBITS...............................................................................................9 Table G-1: Systems Subject to Disaster Recovery................................................................9 Table G-2: Disaster Recovery Plan - Key Components............................................................10 Table G-3: Sungard Exercise Request...........................................................................12
2 SECTION 1 -- DISASTER RECOVERY PLANNING SECTION 1.1 SCOPE OF SERVICES 1.1.1 ACS & Zale Facilities -- The recovery capabilities developed to satisfy the requirements of this Schedule must support components at multiple locations, including, as impacted, Zale user locations, Zale processing facilities, ACS equipment deployments at Zale facilities, the ACS primary processing facility and any other facilities that may be incorporated into the system architecture supported under this Agreement. Support for the facilities includes equipment, software, operation and oversight and interfaces or linkages to other components as required to establish a recovered environment. 1.1.2 Recoverability Targets -- The Disaster Recovery Plan ("Disaster Recovery Plan") developed by ACS shall meet Zale's requirement to have recovered essential functionality of critical mainframe and midrange applications (and associated system and third party communications access), as defined by Zale, within 72 hours of a declared disaster, with other applications following on an urgent basis with full recovery of key business applications as described and prioritized in the Disaster Recovery Plan. Recoverability Targets are based on the ready and uninterrupted availability of commercial ground and air transportation to transport data and recovery personnel to the designated offsite recovery location, especially during a force majeure event where such availability is limited. To limit risk related to this threat, Zale may consider additional Advanced Data Management capabilities such as those described in Section 4.2 of this Schedule. 1.1.3 Systems -- ACS will provide a disaster recovery capability for Zale's mainframe and midrange processing environments. Recovery is to include recovery of the necessary technology components, including communications, from a site other than ACS' primary processing facility, or the systems' normal processing facility if different, to allow use of applicable Mission Critical Applications as defined in Section 1.2.2 and Table G-1 within agreed time periods, but not to exceed the time specified in Section 1.1.2, following a declared disaster. The cost of mainframe and midrange disaster recovery services is included in Schedule B. ACS recognizes that critical components of Zale's midrange processing environment may be resident at Zale facilities, at ACS facilities, or at both, and that the plan must provide recoverability for these components. Recovery must allow recovered systems to work in conjunction with other mainframe or midrange components that may or may not have been relocated by the recovery effort. 1.1.4 Operations Services -- Recovery is to include the support functions defined in Schedule A associated with the recovered environment, including but not limited to, printing services, production control and scheduling, technical support, production migration and application management, computer operations, escalation and supervisory support and help desk escalation. Recovery is to include adequate voice and related communications capability to support the 3 large amount of coordination that would be required in a disaster recovery situation. 1.1.5 Interfaces -- The scope of disaster recovery is to include recovery of the logical data interfaces between Zale systems and platforms and between Zale systems and external systems. The cost of interface support is included in the disaster recovery fees in Schedule B. 1.1.6 Communications Networks -- In addition to the communications links between system components (whether used in normal operating conditions or as part of recovery operations) the disaster recovery capability provided by ACS is to include support for the Zale data communications network. This support includes links to other Zale facilities, store polling, EDI linkages and other communications that may be implemented within the scope of the included systems. Dial and internet communications for both support and end user access to Zale applications must be available as part of the recovery. Zale, as holder of certain communication assets, will need to provide proper authorization and complete information to ACS to act on Zale's behalf for recovery and relocation of Services. The cost of communications disaster recovery is included in the disaster recovery fees in Schedule B. 1.1.7 Desktop Recovery -- ACS will support the existing data backup mechanism that provides end user retention of data on servers that are subject to routine off-site backup for recovery purposes. Recovery plans for each plan scenario (i.e. partial or total loss of any of the facilities involved in the technology architecture) will include consideration of providing recovered server access, either from the original desktop workstations or from an alternate site equipped with emergency desktop workstations as described in Section 4.1below. SECTION 1.2 DISASTER RECOVERY PLAN 1.2.1 Disaster Recovery Plan Management -- As of the Effective Date, ACS shall continue to manage disaster recovery using the existing Disaster Recovery Plan currently maintained by ACS for Zale. Once a year, ACS and Zale will jointly review, update, publish and then maintain a comprehensive Disaster Recovery Plan that will encompass the entire scope of disaster recovery support described in this Schedule. Zale shall communicate its priorities and preferences to ACS on how to meet the Disaster Recovery Plan objectives. ACS is to take the lead role for development and maintenance of the plan. In conjunction with the operations Disaster Recovery Plan required by this Schedule, Zale will develop and publish a corresponding application system disaster recovery plan (or provide a section of the Disaster Recovery Plan). The plan is to include the provision of reviews to ensure ongoing recoverability of applications, emergency deployment of resources once production processing is recovered, adaptation and optimization efforts once a recovery situation is known, and provision for returning to normal processing (and recovery of missed processing) once recovery mode can be terminated. 1.2.2 Mission Critical Applications -- During each Benchmark, Zale shall review, update and approve the list of mission critical Applications, which shall include 4 (unless otherwise agreed by Zale) those Applications deemed mission critical by Zale as of the Effective Date ("Mission Critical Applications"). Subsequent to the recovery of Mission Critical Applications, all other Services shall be recovered in accordance with the Disaster Recovery Plan. The list of Mission Critical Applications is provided as Table G-1 in this Schedule. 1.2.3 Recovery Priorities/Sequence -- Zale will define the business recovery requirements for each area within the scope of the disaster recovery program. Information provided by Zale is to include identification of critical applications and subsystems, recovery sequences, and priorities for user access recovery. For business recoveries, Zale will also define the number of critical employees needing access and their terminal and logical access requirements. 1.2.4 Data -- ACS and Zale will jointly develop and ACS will implement and maintain the mainframe and midrange tape and DASD backup and off-site storage mechanisms that are needed to meet requirements to assure timely recovery of the computing environments per the Disaster Recovery Plan. Zale and ACS are responsible for maintaining application system backup processes and procedures in a manner that support the Disaster Recovery Plan. Failure by Zale to develop the backup requirements/provisions as part of developing or modifying the application systems will relieve ACS of the requirement to recover any directly related functions. To avoid this situation wherever possible, ACS will review disaster recovery data backups as part of the change control/change migration process. 1.2.5 The Plan -- The Disaster Recovery Plan is maintained by ACS, stored in one or more secure offsite locations, and is distributed electronically as required on CD or comparable electronic media. A sample of the typical plan components is provided for reference as Table G-2 to this Schedule. 1.2.6 Updating the Plan -- ACS shall ensure that the Disaster Recovery Plan is kept up to date and is capable of implementation. The process for approving changes to the Disaster Recovery Plan shall be managed by Zale which will review risks presented by any modifications to the Disaster Recovery Plan and accept and implement substantial modifications which materially impact the Services, in accordance with the Change Management Procedure. Changes to the Disaster Recovery Plan requiring additional resources at the offsite recovery location may generate additional charges which will be passed on to Zale. 1.2.7 System Changes -- ACS shall advise Zale at least thirty (30) days in advance of any changes to the systems or Services being implemented, including any planned workload or capacity changes, that could negatively impact the Disaster Recovery Plan. Such changes to the systems or Services will be coordinated through the System Change Management Process, and shall not be implemented without Zale's prior approval. 1.2.8 Training -- ACS shall train ACS Personnel and any Zale personnel (as required by Zale) in disaster recovery procedures and ensure immediate access to procedures and relevant documents in a Disaster. 5 SECTION 2 -- DISASTER RECOVERY EXERCISE SECTION 2.1 DISASTER RECOVERY TESTING 2.1.1 Test Schedule -- ACS and Zale will jointly test the Disaster Recovery Plan on an annual basis, as scheduled by mutual agreement but never during a Zale Freeze Period. ACS and Zale will agree on goals and objectives for the annual disaster recovery test prior to the scheduled testing date. Zale shall be involved in establishing test dates, developing test plans, and be involved in the actual test to validate the results. ACS shall document results as Zale determines, and shall identify and implement process improvements required as a result of the tests. 2.1.2 Test Scope -- The portion of the Disaster Recovery Plan established for testing will be as agreed but must include core applications, polling, new applications and any systems that did not pass on a previous test. The Plan (or segment thereof) may be tested in its entirety at one time or in more than one focused test area and must generally executed within the environments specified for exercise in Table G-3, although no more than one test per year will be conducted with the external provider except as provided in Section 2.1.4--Re-tests below. Test scenarios are to include, over time, each of the loss scenarios defined in the disaster recovery plan. 2.1.3 Walk-Thru -- In addition to full testing, Zale and ACS, at Zale's direction, will conduct one annual walk-through of each element of the Zale's Disaster Recovery Plan. 2.1.4 Re-tests -- After each disaster recovery test, ACS and Zale shall jointly determine if the agreed upon goals and objectives for the disaster recovery test were reasonably achieved. If an agreed upon goal or objective was not achieved, ACS and Zale will assign responsibility for not achieving the goal or objective and determine if re-testing is required prior to the next scheduled disaster recovery test. If ACS and Zale determine that re-testing is required prior to the next scheduled disaster recovery test, the cost of the re-test shall be borne by the party for which responsibility for not achieving the goal or objective was assigned. 2.1.5 Testing Affect on Service Levels--Disaster recovery testing shall be designed and executed to have no impact on the Service Levels. 2.1.6 Audits -- The ACS plan will meet Zale's audit requirements and will be subject to the annual general audit provisions of the Agreement. Zale agrees to bear any cost for ACS to comply with Zale's audit requirements which fall outside normal industry standards. SECTION 3 -- DISASTER PROCEDURES SECTION 3.1 DISASTER INVOCATION 3.1.1 Invocation -- A Disaster can only be declared by Zale. Zale and ACS shall each immediately inform the other, and Zale management, of any circumstances of 6 which it becomes aware which could amount to, or might lead to, a Disaster. This shall include any instance of an actual or threatened force majeure event. ACS shall consult with Zale and obtain Zale's consent prior to declaring a disaster, which consent will not be unreasonably withheld. With regard to those circumstances in which only the business of Zale is impacted, Zale may request that ACS declare a disaster; such request shall not be unreasonably denied. 3.1.2 Irrevocable -- Charges related to declaration of a disaster at the designated recovery facility are generally irrevocable, even if recovery is no longer needed and Zale never actually utilizes the recovery facility. 3.1.3 Notifications -- Notification by either party of a disaster situation is to be made immediately. SECTION 3.2 DISASTER MANAGEMENT PROCEDURES 3.2.1 Execution Procedure -- In the event of a Disaster, ACS shall: (i) immediately implement the relevant Zale Disaster Recovery Plan and or segments of the Plan; (ii) provide operational and technical support for disaster recovery planning, development, documentation, testing and execution; and (iii) provide continuous, non-stop effort and escalation to senior management of ACS and Zale to minimize disruptions caused by any Disaster. 3.2.2 Reporting -- ACS shall make available to Zale various reports reflecting the status of its Disaster recovery activities. Zale's existing Disaster Recovery Plan provides for continuity of IT services. It does not include the broader scope of overall business continuity in the event of a "disaster" event. 3.2.3 Executive Communications -- In addition to normal provisions for communications, ACS agrees that it will assign an executive/senior management resource to provide communications and recovery oversight services to Zale in the event of the invocation of disaster recovery. The senior ACS resource is to be identified and accepted by the Zale CIO in advance, with both parties conducting such working sessions and procedures development/agreement as may be deemed necessary by the Zale CIO to be able to meet the reasonable expectation of senior and executive Zale management. This communications and oversight function is to be independent from, but coordinated with the interaction at the account management, administration, operations and support levels. SECTION 3.3 SERVICE LEVELS 3.3.1 Affected Services -- If the Disaster is caused by a force majeure event, Service Levels impacted by the Disaster shall not be subject to Service Level Credits. If the Disaster is caused by ACS, its agents or subcontractors, or any other ACS personnel, in addition to any other remedies Zale may have under the Agreement, any resulting Service Level impacts shall be subject to Service Level Credits. 3.3.2 Non-Affected Services -- In the event of a Disaster, ACS shall provide additional technical resources to Zale to ensure Service Levels for non affected areas are maintained. 7 SECTION 4 -- OPTIONAL SERVICES SECTION 4.1 ALTERNATE SITE ACCESS/BUSINESS RECOVERY ACS will, as reasonably requested, assist Zale in the development of a business recovery plan designed to allow Zale to resume critical data processing and voice communications functions in support of business activity in the event of a disaster at a General Office facility. The plan will provide for an alternative workspace in the Dallas metropolitan area for critical Zale employees, with appropriate terminal and/or desktop equipment, telecommunications, and voice communication capability to allow the resumption of critical processing functions as defined in the plan. Any hardware, software, network, facilities or third party consulting resources required to provide such plan and capability shall be at Zale's sole expense. SECTION 4.2 ALTERNATE STRATEGIES 4.2.1 Advanced Recovery Data Management --To reduce the risk of extending recovery timelines beyond those specified in Section 1.1.2--Recoverability Targets, at Zale's request, ACS will work with third-party offsite recovery facility providers to provide Advanced Recovery Data Management services, such as data transportation and remote storage and/or remote data mirroring to reduce or eliminate delays resulting from the data relocation to a designated recovery facility. These Services are currently not within the scope of the Agreement and would carry additional charges. 4.2.2 Standby Equipment -- ACS and Zale will work to develop a disaster recovery approach that utilizes Zale acquisition of application and network servers in an effective manner. The use of backup and/or development/test servers, based at alternate sites where practical, to defer the cost of further equipment is a planning objective. Zale and ACS will agree as to which servers/platforms are to be backed up by owned/leased standby equipment, by third party reserved resources, or by emergency acquisition of replacement equipment. Acquisition of backup server equipment is to be at Zale's discretion. 4.2.3 Emergency Acquisitions -- Both parties agree that emergency implementation of all or part the Disaster Recovery Plan may involve emergency acquisition of certain equipment, typically small servers and workstations, that are readily available. Disaster recovery process cannot be dependent on the availability of this (or any other singular) communication mechanism. 4.2.4 Reciprocal Agreements -- Wherever practical, and with Zale's sole approval, Zale and ACS may enter into reciprocal agreements with other third parties to provide each other alternate processing facilities or environments at reduced expense. 8 TABLES AND EXHIBITS TABLE G-1: SYSTEMS SUBJECT TO DISASTER RECOVERY HARDWARE & SYSTEMS SUBJECT TO DISASTER RECOVERY The following Recovery Components are subject to Disaster Recovery as defined in Schedule A and this Schedule G, as it may be revised from time to time, but no less than annually. Zale, upon approval, will compensate ACS for additional reasonable resources, expenses or Services required as a result of such revisions. Recovery includes communications access and all related interfaces to recovered or external systems. PLATFORM SYSTEM/FUNCTION RECOVERY COMPONENT - --------------------- ------------------------------------------- --------------------------------------- Mainframe DCS DCS Batch and On-line - --------------------- ------------------------------------------- --------------------------------------- RIS RIS Batch and On-line - --------------------- ------------------------------------------- --------------------------------------- - --------------------- ------------------------------------------- --------------------------------------- Midrange Polling - Pagoda Polling1/2 - --------------------- ------------------------------------------- --------------------------------------- Polling - non-Pagoda PROD POLL - --------------------- ------------------------------------------- --------------------------------------- Polling Support PRODNT1 - --------------------- ------------------------------------------- --------------------------------------- Sales Audit HP12 - --------------------- ------------------------------------------- --------------------------------------- RETEK HP14 - --------------------- ------------------------------------------- --------------------------------------- SKU Forecasting/E3 ZALAS2 - --------------------- ------------------------------------------- --------------------------------------- Optum/Move HP14 - --------------------- ------------------------------------------- --------------------------------------- Payroll/HR HP12 - --------------------- ------------------------------------------- --------------------------------------- Novell Component - Login Server ZALE1 - --------------------- ------------------------------------------- --------------------------------------- 17 Desktop PC's 17 Desktop PC's - --------------------- ------------------------------------------- --------------------------------------- Zale Insurance ZALAS1 - --------------------- ------------------------------------------- --------------------------------------- E.Piphany HP20 - --------------------- ------------------------------------------- --------------------------------------- Oracle Financials HP24, HP26 - --------------------- ------------------------------------------- ---------------------------------------
9 TABLE G-2: DISASTER RECOVERY PLAN - KEY COMPONENTS MASTER TABLE OF CONTENTS 1. CLIENT RECOVERY 1.1. CR - ZALE GROUP 1.1.1. Disaster Recovery Plan Overview 1.1.2. ZALE Main Plan 2. DATA CENTER RECOVERY 2.1. DCR - TECHNICAL SERVICES GROUP 2.1.1. Data Storage Work Group 2.1.2. Database OS/390 Work Group 2.1.3. Mainframe System Software Work Group 2.1.4. Automation Work Group 2.1.5. Communications Work Group 2.1.6. Open Systems Work Group 2.2. DCR - OPERATIONS GROUP 2.2.1. Computer Operations Work Group 2.2.2. Production Control Work Group 2.2.3. Media Services Work Group 2.3. DCR - OPERATIONS SUPPORT GROUP 2.3.1. Recovery Services Work Group 3. SUPPORT RECOVERY 3.1. SR - SUPPORT SERVICES GROUP 3.1.1. Client/Server Work Group 3.2. SR - SOFTWARE ASSET MANAGEMENT GROUP 3.2.1. Passcode Administration Work Group 3.3. SR - ENTERPRISE NETWORK PARTNERS GROUP 3.3.1. Network Engineering Work Group 3.4. SR - ACCOUNT MANAGEMENT GROUP 3.4.1. Account Management Work Group BRIEF SECTION DESCRIPTIONS DISASTER RECOVERY PLAN OVERVIEW - Serves as an overview and a guide on how to read the Disaster Recovery Plan ZALE MAIN PLAN - Covers alert notifications and recovery strategies. DATA STORAGE PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Data Storage work group. DATABASE OS/390 PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Database OS/390 work group. MAINFRAME SYSTEM SOFTWARE PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Mainframe System Software work group. AUTOMATION PLAN - Contains disaster notification, contact information, responsibilities, assumptions and 10 recovery procedures for the Automation work group. COMMUNICATIONS PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Communications work group. OPEN SYSTEMS PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Open Systems work group. Typically addresses recovery procedures for AIX, SUN, UNIX and RISC environments. COMPUTER OPERATIONS PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Computer Operations work group. PRODUCTION CONTROL PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Production Control work group. MEDIA SERVICES PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Media Services work group. RECOVERY SERVICES PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Recovery Services work group. CLIENT/SERVER PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Client/Server work group. Typically addresses recovery procedures for NT and Intel environments. PASSCODE ADMINISTRATION PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Passcode Administration work group. NETWORK ENGINEERING PLAN - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Network Engineering work group. ACCOUNT MANAGEMENT - Contains disaster notification, contact information, responsibilities, assumptions and recovery procedures for the Account Management work group. Plan includes process of establishing communication between ACS Account Management and Client. 11 TABLE G-3: SUNGARD EXERCISE REQUEST EXAMPLE OF ACS RECOVERY EXERCISE REQUEST GENERAL INFORMATION CLIENT: Zale MAINFRAME MIPS 40 DASD (GBS) 587 MIDRANGE ZALEHP18 HP N Class 4 CPUs 8 gig RAM 36 gig mirrored internal boot drive 2gig fiber connection to SAN ZALEHP22 HP N Class 8 CPUs 16 gig RAM 36 gig mirrored internal boot drive 2gig fiber connection to SAN ZALEHP24 HP RP8420 4 CPUs 8 gig RAM 36 gig mirrored internal boot drive 2gig fiber connection to SAN ZALEHP26 HP RP8420 6 CPUs 12 gig RAM 36 gig mirrored internal boot drive 2gig fiber connection to SAN ZALEADM1 HP L3000 4 CPUs 16 gig RAM 36 gig mirrored internal boot drive 2gig fiber connection to SAN ZALEDC1 HP/Compaq Proliant 6500 12 2 CPUs, 700mhz 1 gig RAM 36 gig internal disks ZALEDC3 HP/Compaq Proliant 6500 2 CPUs, 700mhz 1 gig RAM 100 gig internal disks ZNTRTS1 HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 100 gig internal disks ZNTIVR1 HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 100 gig internal disks ZALEAP1 - Netware 6.x HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 72 gig internal disks ZNTDISO1 HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 100 gig internal disks ZNTDISO2 HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 100 gig internal disks ZNTDISO3 HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 100 gig internal disks ZNTDISO4 HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 100 gig internal disks ZNTDISO5 HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 13 100 gig internal disks ZNTDISO6 HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 100 gig internal disks ZNTDISO7 HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 100 gig internal disks ZNTDISO8 HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 100 gig internal disks ZNTDISO9 HP/Compaq DL380G2 2 CPUs, 2.4 Ghz 1 gig RAM 100 gig internal disks LTO1 Tape Library 20 LTO1 drives, 2 gig fiber connection to SAN SAN - EMC Disk Space Needed -----ZALEHP24----- vgERPDBP 621468 vgERPPBIN 8631 TOTAL 630099MB -----ZALEHP26----- vgERPAPP 60417 vgERPAPPSW 17262 TOTAL 77679MB -----ZALEHP18----- vg9ias 17858 vgLOGS 8929 vgMIXP 20913 vgZESCP 43155 vgapps 8929 vgmisr 17858 vgtest 8929 vguora 8929 TOTAL 135500MB -----ZALEADM2----- DBASHAREdg 88632 IGNITEdg 66768 ORABINdg 8929 RECPdg 14386 harvest 8929 veritas 63296 14 TOTAL 250940MB -----ZALEHP22----- dgARCH 57543 dgDATA1 115088 dgDATA2 115088 dgDATA3 115088 dgDATA4 115088 dgDATA5 159137 dgDATA6 138104 dgIDB 17858 dgIDX1 115088 dgIDX2 115088 dgOID 28772 dgORAHOME 8631 dgPR1P 8929 dgRBS 28772 dgREDO 57544 dgTEMP 57543 dgZAPP 120834 rootdg 8929 TOTAL 1383124MB -----ZALEHP19----- AIMDdg 647370 BORDdg 14386 DRWDdg 187018 OFAdg 100702 OFINdg 23315 STSDdg 28772 ZAPDdg 111118 rootdg 28772 TOTAL 1141453MB -----ZALEADM1----- ORABINdg 8929 POLPdg 28772 autosys 17560 TOTAL 55261 15
