Exhibit 10.2

 

Subject to a request for confidential treatment, certain portions of this
agreement have been intentionally omitted.  The omitted portions subject to the
confidential treatment request are designated by three asterisks ([***]).  A
complete version of this agreement has been separately filed with the Securities
and Exchange Commission.

 

AMENDMENT NO. 7

 

TO

FIRST AMENDED AND RESTATED TRANSACTION DOCUMENT NO. 1
BETWEEN
SERVICEMASTER CONSUMER SERVICES LIMITED PARTNERSHIP

AND

INTERNATIONAL BUSINESS MACHINES CORPORATION

 

1.0          Introduction.

 

This Amendment No. 7 (herein, “Amendment”) amends the terms and conditions of
the First Amended and Restated Transaction Document No. 1 entered into between
Service-Master Consumer Services Limited Partnership (“SVM”) and International
Business Machines Corporation (“IBM”), effective November 1, 2010, as amended
(herein, “Transaction Document No. 1”). TD No. 1 is written under the terms and
conditions of the First Amendment and Restated Master Services Agreement between
SVM and IBM dated November 1, 2010 (herein, “Agreement”). Any capitalized term
not defined in this Amendment shall have the meaning ascribed to it in the
Agreement or Transaction Document No. 1. In the event of any inconsistency
between the terms of Transaction Document No. 1 and the terms of this Amendment,
the terms of this Amendment shall prevail.

 

2.0          Recitals.

 

In consideration of the foregoing premises, the mutual covenants contained
herein, and other good and valuable consideration, the sufficiency of which is
acknowledged, the Parties hereby amend Transaction Document No. 1 as set forth
below.

 

3.0          Effective Date of Amendment.

 

The effective date of this Amendment is August 1, 2012.

 

4.0          Term / Termination of Amendment.

 

The term of this Amendment will begin as of the effective date shown in
Section 3.0 above and run concurrently with the Transaction Document Term of
Transaction Document No. 1.

 

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5.0          Order of Control.

 

Except as specifically modified by this Amendment, the terms and conditions of
Transaction Document No. 1, including its Schedules, as subsequently amended,
shall remain unchanged and shall remain in full force and effect.

 

6.0          Amended Terms.

 

6.1       Changes to Schedule A — Schedule A (Definitions) to Transaction
Document No. 1 is deleted in its entirety and replaced with Attachment 1
attached hereto and incorporated herein by reference. This change revises the
definition of “Pool Percentage” by reducing it from [***] to [***].

 

6.2       Changes to Schedule D-1 — Schedule D-1 (Service Level Methodology) to
Transaction Document No. 1 is deleted in its entirety and replaced with
Attachment 2 attached hereto and incorporated herein by reference. This change
adjusts the Pool Percentage in Section 3(a)(iii)(B) of Schedule D-1.

 

6.3       Changes to Schedule D-2 - Schedule D-2 (Service Level Matrix) to
Transaction Document No. 1 is deleted in its entirety and replaced with
Attachment 3 attached hereto and incorporated herein by reference. [***].

 

6.4       Changes to Schedule D-3 - Schedule D-3 (Critical Services) to
Transaction Document No. 1 is amended by [***].

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed
by their authorized representatives as of the dates set forth below.

 

Agreed to:

 

Agreed to:

 

 

 

ServiceMaster Consumer Services Limited Partnership

 

International Business Machines Corporation

 

 

 

By:

/s/ Beth Phalen

 

By:

/s/ Eusebio Formoso

Authorized signature

 

Authorized signature

Name (type or print): Beth Phalen

 

Name (type or print): Eusebio Formoso

 

 

IBM Project Executive

 

 

 

Date: 8/17/12

 

Date: 8/13/2012

 

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Subject to a request for confidential treatment, certain portions of this
agreement have been intentionally omitted.  The omitted portions subject to the
confidential treatment request are designated by three asterisks ([***]).  A
complete version of this agreement has been separately filed with the Securities
and Exchange Commission.

 

ATTACHMENT 1 TO AMENDMENT NO. 7

 

SCHEDULE A
DEFINITIONS

 

This is Schedule A, Definitions, to the First Amended and Restated Transaction
Document No. 1 to that certain First Amended and Restated Master Services
Agreement, dated as of November 1, 2010, between ServiceMaster Consumer
Services, L.P. and International Business Machines Corporation.  The following
terms used in Transaction Document No. 1 have the meanings indicated below.

 

A.01        “AAA Rules” means the American Arbitration Association’s Commercial
Arbitration Rules.

 

A.02        “Acceptance Criteria” means the acceptance criteria applicable to
each Deliverable provided or developed by Service Provider, including Critical
Transformation and Transition Milestones and Projects, as specified by the
Parties in accordance with the “Governance and Change Control” Exhibit.

 

A.03        “ACD Agent” has the meaning set forth in the “Network” section of
Schedule E-7.

 

A.04        [***]

 

A.05        “Add/Change” has the meaning set forth in the “End User” section of
Schedule E-7.

 

A.06        “Affected Employees” means the individuals listed in the “List of
Affected Employees” Schedule, who are employed by a member of the Customer Group
prior to the Effective Date and to whom Service Provider or Network Services
Provider shall consider for offers of employment pursuant to the “Terms for
Affected Employees” Schedule.

 

A.07        “Allocation of Pool Percentage” means the portion of the Pool
Percentage that is specified for any particular CPI in the event of a Service
Level Default for such Service Level.  Any such portion shall not exceed [***]
of the At Risk Amount.

 

A.08        “Annual Satisfaction Survey” means the annual survey of Customer
designated managers / stakeholders receiving the Services from Service Provider.

 

A.09        “Application Development Resource Baseline” represents the Resource
Baseline for Application Maintenance, Application Development, and the PMO Core
Team’s application resources.

 

A.10        “Application Development Services” has the meaning set forth in the
“Application Development and Maintenance” section of Schedule E-7.

 

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A.11        “Application Maintenance Services” has the meaning set forth in the
“Application Development and Maintenance” section of Schedule E-7.

 

A.12        “Arbitration Notice” means a written notice requesting arbitration
in accordance with Section 3(a)(iii)(D) of the “Service Level Methodology”
Schedule.

 

A.13        “ARC” means an additional resource charge to Customer by Service
Provider pursuant to the ARC/RRC process described in Section 2.4 and
Section 2.5 of Schedule E-1 for Resource Unit usage above the ARC Point.

 

A.14        “ARC Point” means the threshold point Resource Unit consumption must
exceed before an ARC will be applied.  [***]

 

A.15        “ARC Rate” means the monetary rate per unit to be charged by Service
Provider to Customer for any Resource Unit consumption for each applicable
Resource Unit [***] according to the formulas defined in Section 2.4(b) of
Schedule E-1.

 

A.16        “ARC/RRC Measurement Period” means the period of time over which
applicable Resource Units are to be measured, to determine the applicability of
an ARC or RRC.

 

A.17        “ARC/RRC Rates” means the ARC Rates and the RRC Rates.

 

A.18        “At Risk Amount” means, for any month during the Term, [***] of the
[***] for such month, which is the amount that Service Provider will have at
risk for all Service Level Credits in such month.

 

A.19        “Base Charges” means all of the recurring monthly Charges described
in Section 2.2 of Schedule E-1.

 

A.20        [***]

 

A.21        “Baseline Data” means the actual data measured during a Measurement
Period [***].

 

A.22        “Blackberry ID” has the meaning set forth in the “Messaging” section
of Schedule E-7.

 

A.23        [***]

 

A.24        “BSC” refers to Customer Business Applications for one or more
departments or subsidiaries of Customer.

 

A.25        “Change Control Procedures” means the process and procedures to be
followed by Customer and Service Provider in accordance with the “Governance and
Change Control” Exhibit when either Party wishes to make a Change to the
existing Services.

 

--------------------------------------------------------------------------------

 

A.26        “Change Management Procedure” means a detailed procedure describing
how operational IT or Service delivery Changes will be made to meet the
Customer’s business needs within the accepted timeframes and subject to specific
approvals.

 

A.27        “Change Order Log” means a historical log of Change Orders
throughout the Term.

 

A.28        “Change Threshold” means [***] occurring during a Business Day.

 

A.29        “Charge Mechanics” means the specific mechanics, formulas or
specified rates, such as ARCs, RRCs, rate cards, [***] Pass-Through Charges,
out-of-pocket expenses and other specifics used to calculate or govern the
Charges.

 

A.30        “Chargeable Project Work” means Project activities to the extent
such performance is (i) requested and approved by Customer as evidenced by a
signed Project Work Order, and (ii) are not activities otherwise required to be
performed by Service Provider pursuant to its obligations under the Master
Agreement.  Service Provider is compensated for Chargeable Project Work as
specified in Section 3.2 of Schedule E-1.

 

A.31        “Charges” Schedule describes the methodology for calculating all of
the Charges payable by Customer to Service Provider with respect to the Services
that Service Provider shall deliver to Customer pursuant to the Master
Agreement.

 

A.32        “COBRA” means continuation coverage required under Section 4980 of
the Internal Revenue Code, Part 6 of Title I of ERISA or applicable state law.

 

A.33        “Compound Service Level” means a single Service Level that is
comprised of two or more independent service metrics, conditions, components or
elements which are separately tracked, measured and reported on, and which all
together comprise the Compound Service Level.  A Compound Service Level may be a
CPI, KPI or GPI. 

 

A.34        “Consulting and Non-IT Projects” means consulting and other
non-information technology Projects that are not otherwise included in the
Services.

 

A.35        “Continuation Period” means the period beginning on the Hire Date
and ending [***] thereafter.

 

A.36        “Core Third Party Agreements” means those Proposed Transferred
Agreements identified as “core” agreements in the “Third Party Agreements”
Schedule.

 

A.37        “Critical Performance Indicators” or “CPIs” means those Service
Levels which are (i) described in the applicable “Service Level Matrix” Schedule
as a CPI and (ii) for which a Service Level Credit may be payable.  Each CPI has
an Expected Service Level and a Minimum Service Level associated with it, unless
otherwise specified.

 

A.38        “Critical Transition and Transformation Milestone” means a milestone
specified in Schedule F-3.

 

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A.39        “Cross-Tower Services” means Services that affect multiple Towers .

 

A.40        “Customer Authorized User” means a person authorized by Customer to
receive Services.

 

A.41        “Customer Business Applications” means the software applications and
their associated databases as listed in the “Customer Business Applications”
Schedule.

 

A.42        “Customer Governance Organization” means the Customer governance
organization described in Section 2.2 of the “Governance and Change Control”
Exhibit.

 

A.43        “PMOs” mean the Customer PMO and the Service Provider PMO.

 

A.44        “Customer PMO” means Customer’s program management office that
oversees all Service delivery in accordance with the “Governance and Change
Control” Exhibit.

 

A.45        “Database Instance” has the meaning set forth in the “Server,
Storage and Database” section of Schedule E-7.

 

A.46        [***]

 

A.47        [***]

 

A.48        “Deliverable Form” means the form attached as Appendix 4-F to the
“Governance and Change Control” Exhibit.

 

A.49        “Designated CPI” means those CPIs which are designated in the
“Service Level Methodology” Schedule as the subject of a Service Level
Termination Event pursuant to Section 2(c)(iv) of the “Service Level
Methodology” Schedule.

 

A.50        “Detailed Re-Solution Plan” means a fully detailed written
Re-Solution Plan prepared and agreed upon by the Parties as further described in
Section 5.3 of Schedule F-1.

 

A.51        “Detailed Specification Report” means the detailed specification
report prepared by Service Provider as part of the Change Control Procedures.

 

A.52        “Detailed Transformation and Transition Plan” means the detailed
written draft of the proposed final Transformation and Transition Plan as
further described in Section 3.2(a) of Schedule F-1.

 

A.53        “Disaster Recovery” has the meaning set forth in the “Disaster
Recovery” section of Schedule E-7.

 

A.54        [***]

 

A.55        [***]

 

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A.56        “Early Rebadge Fixed Fees” has the meaning set forth in Schedule
E-3.

 

A.57        “Email ID” has the meaning set forth in the “Messaging” section of
Schedule E-7.

 

A.58        “Emergency Change” means an operational change to the environment
necessary to maintain continuity of Services prior to providing notice to
Customer or obtaining Customer’s approval of such change.

 

A.59        “Employee Service” means the duration of employment with Customer,
its Affiliates or predecessors from an employee’s date of hire with Customer (or
its Affiliate or predecessor) until the Hire Date as service with Service
Provider.

 

A.60        “End User Satisfaction Survey” means end-user satisfaction surveys
conducted in accordance with the “Governance and Change Control” Exhibit.

 

A.61        “Enhancement” means a routine, stand alone change or improvement
that does not impact a system functionality, that does not require integration
testing (but will require testing prior to placing into production), and where
the change or improvement can be completed in less than [***].  A branch move
will be treated as an Enhancement if less than [***].  Any such change or
improvement taking [***] or more is considered a Project.

 

A.62        “Essential Business Application” are those Customer Business
Applications listed in the “Critical Services” Schedule.

 

A.63        [***]

 

A.64        “Expected Service Level Default” means a recurring failure of
Service Provider to meet the Expected Service Level for the same CPI or KPI
[***] during a Service Level Reporting Period.

 

A.65        “Expected Service Level” means the expected level of performance for
a CPI or a KPI, as applicable, as set forth in the applicable “Service Level
Matrix” Schedule.

 

A.66        “General Performance Indicators” or “GPIs” means those Service
Levels which are described in the applicable “Service Level Matrix” Schedule as
a GPI.  Each General Performance Indicator has a Minimum Service Level
associated with it unless otherwise specified.  No Service Level Credits are
available in connection with GPIs.

 

A.67        “Governance and Change Control” means the Exhibit by which Service
Provider will provide Customer with the performance reporting for the Services
as specified in the “Service Level Agreement” Schedule.

 

A.68        “Governance Process Functional Responsibilities Matrix” means a
process responsibility matrix that details the responsibilities of each of the
Parties related to a given process identified in the “Governance and Change
Control” Exhibit.

 

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A.69        “Governance Transition Deliverables” are set forth in Appendix 4-A
of the “Governance and Change Control” Exhibit.

 

A.70        “Handset” has the meaning set forth in the “Network” section of
Schedule E-7.

 

A.71        “Help Desk Seat” has the meaning set forth in the “End User” section
of Schedule E-7.

 

A.72        “High Level Transformation and Transition Plan” means an initial
high level project plan for the Transformation and Transition Project prepared
by Service Provider in accordance with Schedule F-1.

 

A.73        “High Priority Governance Processes” means those high priority
governance processes identified as such in Appendix 4-B of the “Governance and
Change Control” Exhibit.

 

A.74        “Hire Date” means the date on which a Transitioned Employee begins
employment with Service Provider.  Except for employees on a Leave of Absence,
the Hire Date for the Transitioned Employees will be determined in accordance
with the “Transformation and Transition Plan” Schedule.

 

A.75        “IMAC” has the meaning set forth in the “End User” section of
Schedule E-7.

 

A.76        “Immediate Change” means any proposed Change requested by Customer
(i) that is reasonably required to comply with any Customer Law, Customer
Compliance Directive or any system or business requirement as requested by
Customer that Customer reasonably deems appropriate to avoid a substantial
impact to its systems or business, and (b) there is insufficient time to prepare
a Change Order for such Change in accordance with normal Change Control
Procedures or if the applicable charges (if any) are not agreed to prior to
Customer’s requirement to commence work related to such Change.

 

A.77        “Incident” means an event or issue that may cause interruption or
reduction in quality of the Services to an end-user.

 

A.78        [***]

 

A.79        [***]

 

A.80        “Infrastructure Project Resource Baseline” is described in Schedule
E-3 and in the “Other” section of Schedule E-7.

 

A.81        “Install” has the meaning set forth in the “End User” section of
Schedule E-7.

 

A.82        “IP Telephony Port” has the meaning set forth in the “Network”
section of Schedule E-7.

 

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A.83        “iSEC” means the Information Security Controls document described in
the “Procedures Manual” Exhibit.

 

A.84        “Issues Management Process” means the issues management process used
to track and resolve all Services performance and operational issues and other
non-operational issues according to the timeframes indicated in Appendix 4-B and
Section 2.4 of the “Governance and Change Control” Exhibit.

 

A.85        “IT Assets” means Customer’s information technology hardware and
Customer’s Software.

 

A.86        “Key Performance Indicators” or “KPIs” means those Service Levels
which are described in the applicable “Service Level Matrix” Schedule as a KPI. 
Each Key Performance Indicator has an Expected Service Level and Minimum Service
Level associated with it, unless otherwise specified.  No Service Level Credits
are available in connection with KPIs.

 

A.87        [***]

 

A.88        “Leave of Absence” or “LOA” means an approved leave of absence for
short term disability and/or the Family Medical Leave Act pursuant to the
Customer Group’s applicable policies.

 

A.89        “LOA Offer Date” means a date within [***] after any employee on an
LOA is removed from leave status.

 

A.90        [***]

 

A.91        “Massachusetts Information Security Regulation” means the
Massachusetts Standards for the Protection of Personal Information of Residents
of the Commonwealth, 201 CMR 17.00-17.04.

 

A.92        “Measured Applications” are the Customer Business Applications.  The
“tier” for each Measured Application is listed in the “Customer Business
Applications” Schedule.

 

A.93        [***]

 

A.94        “Measurement Window” means the periodic evaluation and reporting
frequency for each individual Service Level as specified in the applicable
“Service Level Matrix” Schedule (e.g., monthly, quarterly, semi-annually,
annually).

 

A.95        [***]

 

A.96        “Minimum Service Level Default” means a single failure of Service
Provider to meet the applicable Minimum Service Level for a specific CPI or KPI
in the applicable Measurement Window (e.g., monthly).

 

--------------------------------------------------------------------------------

 

A.97        “Minimum Service Level” means the minimum level of performance set
forth in the applicable “Service Level Matrix” Schedule with respect to each
CPI, KPI or GPI.

 

A.98        “Monthly Performance Scorecard Report” means the report describing
Service Provider’s performance of the Services in the preceding month in
accordance with Section 2.5.1(b) of the “Governance and Change Control” Exhibit.

 

A.99        “Move” has the meaning set forth in the “End User” section of
Schedule E-7.

 

A.100      “Network Printer” has the meaning set forth in the “End User” section
of Schedule E-7.

 

A.101      “Offer Date” means the date agreed to by the Parties in accordance
with the “Transformation and Transition Plan” Schedule, except for Customer
employees on Leaves of Absence.

 

A.102      “Operating System Instance” has the meaning set forth in the “Server,
Storage and Database” section of Schedule E-7.

 

A.103      “Operational” means, with respect to a personal computer (including
peripherals), and/or an PDA/handheld device, the point in time after which
installation and configuration of the unit by Service Provider have occurred and
the unit user has expressly acknowledged in writing that the unit has been
successfully installed and configured.

 

A.104      “Patch Management” means the process of receiving, reviewing,
installing and tracking software updates issued by a software or hardware
provider.

 

A.105      “PBX Voice Port” has the meaning set forth in the “Network” section
of Schedule E-7.

 

A.106      “PCI” and “PCI DSS” mean the PCI Data Security Standard as published
from time to time by the PCI Security Standards Council.

 

A.107      [***]

 

A.108      “Personal Computer” has the meaning set forth in the “End User”
section of Schedule E-7.

 

A.109      [***]

 

A.110      “Pool Percentage” means [***] of the At Risk Amount or, for any
period during which one or more Special CPIs has been established by Customer,
[***].  For avoidance of doubt, the applicable percentage points shall be
apportioned by Customer across the CPIs such that the individual pool
percentages shall total an amount not greater than [***], as applicable;
provided, that at least [***] shall be allocated across the Special CPIs, if
any.

 

A.111      “PPQA” means product and process quality assurance.

 

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A.112      “Preliminary Specification Report” means the preliminary
specification report prepared by Service Provider in accordance with the Change
Control Procedures.

 

A.113      [***]

 

A.114      “Problem” means the unknown underlying cause of one or more
Incidents.

 

A.115      “Problem Management” means the process by which Problems are
identified, communicated, managed, tracked, and resolved.

 

A.116      “Process Leader” means the lead Service Provider SME.

 

A.117      “Process Owner” means the designated lead Customer SME.

 

A.118      “Productive Hours” means the number of productive hours actually
worked by a Service Provider employee or Service Provider subcontractor
employee, excluding non-productive time (which includes travel, vacation,
holiday, training, education, marketing, administrative staff meetings, medical
leave and military leave) to provide the Services.  Productive Hours does not
include Service Provider internal management time

 

A.119      “Project” is a group of related, phased activities that may span
multiple days, weeks, or months that are documented through written Project Work
Orders, which may have defined milestones and Deliverables, are required for
Service Provider to perform the Services, and any such change or improvement
taking [***] or more is considered a Project.  As part of the Services, Service
Provider shall provide the services, functions, responsibilities and materials
necessary to manage, perform and complete the Projects that

 

(a)               are in progress as of the Effective Date, which are described
in the “Project” Schedule,

 

(b)               are approved but not yet in progress as of the Effective Date
that are agreed to at that time by the Parties, based upon the approach that
they used in agreeing to the Projects described in the preceding clause (a),
which are described in the “Project” Schedule, and

 

(c)               encompass future initiatives, as required to provide the
Services.

 

Service Provider shall report on the level of effort expended on Projects on a
weekly basis.

 

A.120      “Project Change Request” means a Change to a Project requested after
a Project Work Order has been approved by Customer.  Any Changes to Projects in
progress (as of the Effective Date)must be described in detail and any such
Change will be addressed through the Change Control Procedures. 

 

A.121      “Project Initiation and Authorization” process to request project
services according to the timeframes indicated in Appendix 4-B and Section 2.4
of in the “Governance and Change Control” Exhibit.

 

A.122      [***]

 

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A.123      [***]

 

A.124      “Project Rates” means charges calculated using the hourly rates set
forth in Schedule E-6.

 

A.125      “Project Schedule” refers to a “Project Work Order.”

 

A.126      “Project Work Order” means the documentation authorizing the specific
requirements, including scope, acceptance criteria, milestones, Service
Locations, Service Provider’s schedule and pricing commitment for a particular
Project (such commitment is referred to as “baselined” in the Service Levels). 
A Project Work Order is also referred to operationally as a statement of work
for a Project.

 

A.127      “Proposed Transferred Agreements” means those Managed Agreements
identified as “Proposed to be Assumed,” if any, in the “Third Party Agreements”
Schedule.

 

A.128      “RCA” means Root Cause Analysis.

 

A.129      “Remote Locations” means those locations identified with an “N” in
the “IBM on site” column in the “Customer Facilities” Schedule.

 

A.130      “Required Modification” means a software or hardware update that is
required to eliminate a program error, ensure reliability, ensure legal
compliance or that is required to enable system compatibility.

 

A.131      “Re-Solution Milestone” has the meaning set forth in Schedule F-5.

 

A.132      “Re-Solution Plan” means the plan pursuant to which the Services will
be re-solutioned or transitioned to Successor Service Providers, as described in
Schedule F.

 

A.133      “Re-Solution Project” means the Project pursuant to which certain
Services will be restructured and certain other Services will be transitioned to
Customer or Successor Service Providers, as outlined in the Re-Solution Plan.

 

A.134      “Resource Baseline” for each applicable category of Service, means
that quantity of Resource Units that is included in the monthly Base Charges set
forth in Schedule E-3.  The Resource Baselines for each month of the Term are
set forth in Schedule E-5.

 

A.135      “Resource Unit” means, for each applicable Service, the individual
unit of resource consumption included in the Resource Baseline and used to
calculate adjustments to Base Charges in the form of either an ARC or a RRC, as
applicable, for Resource Unit consumption [***] according to the formulas
defined in Section 2.4(b) of Schedule E-1.

 

A.136      “Responsible Executive” has the meaning set forth in
Section 2.2.8(a) of the “Governance and Change Control” Exhibit.

 

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A.137      “Retained Expenses” are those expenses and costs for which Customer
is financially responsible.

 

A.138      “Root Cause Analysis” or “RCA” means the process to identify the root
cause of Problems and developing a plan for corrective actions.

 

A.139      “Router” has the meaning set forth in the “Network” section of
Schedule E-7.

 

A.140      “RRC” means a reduced resource credit issued to Customer by Service
Provider pursuant to the ARC/RRC process described in Section 2.4 and
Section 2.5 of Schedule E-1.

 

A.141      “RRC Point” means the threshold point at which Resource Unit
consumption must be reduced below the Resource Baseline before a RRC will be
applied. [***]

 

A.142      “RRC Rate” means the monetary rate per unit to be credited by Service
Provider to Customer for any Resource Unit consumption for each applicable
Resource Unit [***] according to the formulas defined in Section 2.4(b) of
Schedule E-1.

 

A.143      “Ruggedized Mobile Device” has the meaning set forth in the “End
User” section of Schedule E-7.

 

A.144      “Senior Executives” means the senior official from each Party (or the
Party’s parent company) designated in Section 2.3(c)(iii) of the “Dispute
Resolution Procedures” Exhibit.

 

A.145      “Service Authorization” means a request in the form of a Project Work
Order or similar approval for the provision of certain services that authorizes
a change in the volume of certain Resource Units which will trigger an ARC or
RRC.  For certain non-Project related Resource Units the requirement for a
Service Authorization shall be satisfied via the mutually agreed upon process by
which end-users are authorized to request a service from Service Provider.

 

A.146      [***]

 

A.147      “Service Level Credit” means the financial credits incurred by
Service Provider in favor of Customer for Service Level Defaults for CPIs
determined in accordance with the provisions of Section 6(a) of the “Service
Level Methodology” Schedule.

 

A.148      “Service Level Default” means a Minimum Service Level Default or
Expected Service Level Default.

 

A.149      “Service Level Improvement Date” means the date beginning [***] after
each applicable Service Level Commencement Date.

 

A.150      “Service Level” Schedule sets forth certain Service Levels against
which Service Provider’s performance of the Services will be measured.  Also
referred to as the “Service Level Matrix.”

 

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A.151      “Service Level Reporting Period” means each [***] beginning on each
applicable Service Level Commencement Date and continuing (rolling) monthly
throughout the Term.  [***]

 

A.152      “Service Level Termination Event” has the meaning provided in
Section 2(c)(iv) of the “Service Level Methodology” Schedule.

 

A.153      “Service Level Type” are listed in the “Service Level” Schedule.

 

A.154      “Service Provider Benefit Plans” As of the Hire Date, the
Transitioned Employees shall be immediately eligible to participate in all
employee benefit savings and defined contribution programs, plans or policies
generally maintained for similarly situated employees of Service Provider (as
the same may be modified from time to time, “Service Provider Benefit Plans”).

 

A.155      “Service Provider Governance Organization” means the Service Provider
governance organization described in Section 2.2 of the “Governance and Change
Control” Exhibit.

 

A.156      “Service Provider PMO” means the Program Management Office
established by Service Provider to oversee all Services (including Services
effective as of the Effective Date and Services added after the Effective Date)
in accordance with the “Governance and Change Control” Exhibit.

 

A.157      “Service Request” means a request for assistance or performance in
connection with the Services.

 

A.158      [***]

 

A.159      “Severity Level” has the meaning set forth in the “Service Level
Matrix” Schedule [***].

 

A.160      “SMEs” means subject matter experts.

 

A.161      “Special CPI” means a CPI defined by Customer, in accordance with
Section 3(a)(iii) of the “Service Level Methodology” Schedule, [***].

 

A.162      “Storage” has the meaning set forth in the “Server, Storage and
Database” section of Schedule E-7.

 

A.163      “Support” means labor and associated maintenance activities as
required for Service Provider to perform or provide the Services, or for
Customer to receive the Services.

 

A.164      “Switch” has the meaning set forth in the “Network” section of
Schedule E-7.

 

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A.165      “Telecom Expense Management” has the meaning set forth in the
“Network” section of Schedule E-7.

 

A.166      [***]

 

A.167      “Thin Client Device” has the meaning set forth in the “End User”
section of Schedule E-7.

 

A.168      “Transformation and Transition Charges” means Service Provider’s
Charges for the provision of the Transformation and Transition Services, as set
forth in “Pricing” Schedule.

 

A.169      “Transformation and Transition Project” has the meaning set forth in
Section 2.1 of Schedule F-1.

 

A.170      “Transformation and Transition Project” means the project undertaken
by Service Provider to facilitate the transfer of operational responsibility for
the Services from Customer and its third party vendors to Service Provider.

 

A.171      “Transition Management Office” means the TMO established in
accordance with the “Governance and Change Control” Exhibit by Service Provider
to manage and execute the Transition and Transformation projects necessary for
the commencement of the delivery of Services associated with a Transaction
Document.

 

A.172      [***]

 

A.173      “Transitioned Employees” means all Affected Employees who become
Service Provider employees in accordance with the Master Agreement, the “Terms
for Affected Employees” Schedule and the “List of Affected Employees” Schedule.

 

A.174      [***]

 

A.175      [***]

 

A.176      [***]

 

A.177      “Variable Charges” means, collectively, the ARCs/RRCs and Charges
attributable to Chargeable Project Work.

 

A.178      “Voicemail Box” has the meaning set forth in the “Network” section of
Schedule E-7.

 

A.179      “WAN Device” has the meaning set forth in the “Network” section of
Schedule E-7.

 

A.180      “WARN Act” means the Transitioned Employees for compliance with the
Worker Adjustment and Retraining Act of 1988, as amended.

 

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A.181      “Web App Project” means customer-facing Web application maintenance,
application development and content management related activities for the
Customer Business Applications relating to the internet or “world-wide web.”

 

A.182      [***]

 

A.183      [***]

 

A.184      [***]

 

A.185      “Wireless Access Point” or  “WAP” has the meaning set forth in the
“Network” section of Schedule E-7.

 

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Subject to a request for confidential treatment, certain portions of this
agreement have been intentionally omitted.  The omitted portions subject to the
confidential treatment request are designated by three asterisks ([***]).  A
complete version of this agreement has been separately filed with the Securities
and Exchange Commission.

 

ATTACHMENT 2 TO AMENDMENT NO. 7

 

SCHEDULE D-1

SERVICE LEVEL METHODOLOGY

 

This is Schedule D-1, Service Level Methodology, to the First Amended and
Restated Transaction Document No. 1 to that certain First Amended and Restated
Master Services Agreement, dated as of November 1, 2010, between ServiceMaster
Consumer Services, L.P. and International Business Machines Corporation.  Unless
otherwise defined herein, capitalized terms have the meanings set forth in the
Master Agreement, the “Definitions” Exhibit to the Master Agreement, or the
“Definitions” Schedule to the Transaction Document.

 

1.             General Provisions.

 

(a)           General.

 

(i)            The Service Levels measure whether Service Provider is meeting
certain agreed, measurable criteria for the Services that Service Provider is
contractually committed to provide to Customer.  Service Provider shall monitor,
measure, collect, record and report to Customer its performance beginning on
each Service Level Commencement Date and thereafter during the Term (including
any Termination Assistance Period prior to handover to Customer or Customer’s
Successor Service Provider) against all Service Levels then in effect.

 

(ii)           The “Service Level Matrix” Schedule sets forth certain Service
Levels against which Service Provider’s performance of the Services shall be
measured.  Service Provider shall perform the Services at or above the levels of
performance indicated for CPIs, KPIs and GPIs as set forth in this Schedule D-1
and the applicable “Service Level Matrix” Schedule, and if Service Provider
fails to do so and is not otherwise excused from such failure, Service Provider
shall take the corrective actions and may be subject to the other remedial
measures specified in this Schedule D-1 and the Agreement.

 

(iii)          Service Provider shall perform the Services that are not subject
to expressly defined Service Levels at a level of service that meets or exceeds
the greater of [***].

 

(iv)          Service Provider shall be responsible for, and have in place as of
each applicable Service Level Commencement Date, all of the measuring,
monitoring and reporting capabilities necessary for measuring, monitoring and
reporting Service Provider’s performance against the Service Levels as described
in Section 5 below.

 

(v)           Except as otherwise stated in the applicable “Service Level
Matrix” Schedule, all Service Levels shall be measured by Service Provider
[***].  Service

 

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Provider shall report to Customer its performance against Service Levels upon
the Measurement Window frequency specified for each Service Level in the
applicable “Service Level Matrix” Schedule.

 

(vi)          For a Compound Service Level, satisfaction of each and every
metric, condition, component or element is necessary for the satisfaction of the
corresponding Service Level.  Customer may create a Compound Service Level from
separate, pre-existing Service Levels.  Where a Compound Service Level is
created from a number of separate, pre-existing Service Levels, the Allocation
of Pool Percentage for such Compound Service Level shall not exceed [***].

 

(vii)         Service Provider will promptly investigate and remediate all
failures associated with Service Levels in accordance with Section 8 below.

 

(viii)        Service Provider will provide Customer with the performance
reporting for the Services as specified in this Schedule D-1, the “Reports”
Schedule, and the “Governance and Change Control” Exhibit.

 

(ix)           Service Provider will minimize recurrences of all
performance-related failures for which it is responsible in accordance with
Section 8 below.  Service Provider will also be responsible for reporting to
Customer any problems, such as outages, that appear likely to result in a
failure to meet any Service Level, within [***] of Service Provider becoming
aware of any such problem.

 

(x)            Customer will have the right to receive Service Level Credits and
ultimately to terminate the Services notwithstanding any of the aforesaid
efforts of Service Provider, if and to the extent such rights accrue in
accordance with the Agreement or this Schedule D-1.

 

(xi)           Customer and Service Provider will each provide a single point of
contact for the prompt resolution of all Service Level Defaults and all failures
to provide Services to Customer in accordance with the “Service Level Agreement”
Schedule and the Agreement.

 

(b)           Reporting of Performance Measures.

 

Commencing on the Service Level Commencement Date and continuing throughout the
Term, including during any Termination Assistance Period:

 

(i)            Service Provider shall assemble and create the reports described
in the “Reports” Schedule and the “Service Level Agreement” Schedule on the
performance of the Services, in order to assist in the effective management of
the Services and support the improvement of the Service Levels as described
herein.

 

(ii)           Service Provider shall provide detailed supporting information
for each report to Customer in electronic form suitable for use on a personal
computer.  In addition, Service Provider shall make such information available
to Customer on-line using commonly available technology.  The raw data and
detailed supporting

 

--------------------------------------------------------------------------------

 

information shall be deemed to be Customer Confidential Information, and
Customer may access such information on-line at any time during the Term;
provided, that IBM may retain a copy of such data solely for its accounting
records, subject to the provisions of Section 11 of the Master Agreement.

 

(iii)          Commencing with the first Service Level Commencement Date, within
ten (10) Business Days after the last day of each month during the Term, Service
Provider will provide a monthly performance report for CPIs and KPIs that
reports various metrics, including:

 

(A)          Service Provider’s performance against and calculations with
respect to each Service Level during the preceding month;

 

(B)           the Performance Trend/Improvement Report; and

 

(C)           potential problems of which Service Provider is aware that could
reasonably be expected to result in a failure to meet a Service Level and
remedial actions including summaries of the reports submitted to Customer in
accordance with Service Provider’s obligation to periodically submit Service
Level reports and Service Level Credits.

 

Notwithstanding the above, Service Provider shall only be required to report on
GPIs upon the request of Customer, and upon such request, Service Provider shall
produce the monthly performance report within ten (10) Business Days.  Service
Provider shall only be required to provide within ten (10) Business Days
Performance Trend/Improvement Reports on GPIs upon the request of Customer.

 

(iv)          If any monthly performance report provided by Service Provider to
Customer does not have reasonably sufficient detail and accuracy for Customer to
determine whether Service Provider achieved or failed to achieve the Expected
Service Level and/or Minimum Service Level for each Service Level in the
immediately preceding Measurement Window, then Customer may provide written
notice thereof to Service Provider, which notice must contain reasonable detail
of the deficiencies in the subject monthly performance report.  If within ten
(10) days after receiving such a notice Service Provider fails to deliver to
Customer a revised or replacement monthly performance report containing
reasonably sufficient detail and accuracy for Customer to determine whether
Service Provider achieved or failed to achieve a Service Level in the applicable
Measurement Window [***].

 

2.             Service Level Obligations.

 

(a)           Service Level Obligations.

 

The metrics, measurement standards, and other pertinent features for CPIs, KPIs
and GPIs are described in “Service Level Matrix” Schedule.

 

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(b)           Commencement of Service Level Obligations.

 

The Parties agree that Service Provider will begin delivering the Services in
accordance with the Service Levels as of each applicable Service Level
Commencement Date for a particular Service.  Unless otherwise agreed in writing,
Service Provider is not accountable for Service Level performance prior to each
applicable Service Level Commencement Date.

 

(c)           Service Level Defaults, Service Level Termination Event, and
Excused Performance.

 

(i)            CPIs, KPIs and GPIs Generally.

 

The Parties acknowledge and agree that all Service Levels are important to the
proper support and operation of Customer’s business.  However, certain of the
Service Levels are of particular importance to Customer’s business and are
therefore designated as CPIs and KPIs.  Certain of the Service Levels, while
important to Customer’s business operations, are less critical to Customer and
are designated as GPIs.

 

(ii)           CPI Service Level Defaults.

 

Service Provider’s performance that results in a Service Level Default with
respect to a CPI (to the extent not excused pursuant to paragraph (v), below)
shall:

 

(A)          entitle Customer to receive a Service Level Credit;

 

(B)           be escalated to the Operations Oversight Committee; and

 

(C)           result in Service Provider promptly preparing a formal written
recovery plan designed to prevent the reoccurrence of such Service Level Default
and, once approved by Customer, Service Provider shall promptly implement at
Service Provider’s sole cost, such approved plan.

 

(iii)          KPI Service Level Defaults.

 

Service Provider’s performance that results in a Service Level Default with
respect to a KPI (to the extent not excused pursuant to paragraph (v), below)
shall:

 

(A)          be escalated to the Operations Oversight Committee; and

 

(B)           result in Service Provider promptly preparing a formal written
recovery plan designed to prevent the reoccurrence of such Service Level Default
and, once approved by Customer, Service Provider shall promptly implement at
Service Provider’s sole cost, such approved plan.

 

(iv)          Service Level Termination Events.

 

A Service Level Termination Event shall be deemed to exist if Service Provider
fails to meet the [***] in any Service Level Reporting Period.  [***].  [***].
Customer shall have available to it all of the remedies set forth in the
Agreement for the occurrence of a Service Level Termination Event.

 

--------------------------------------------------------------------------------

 

(v)           [***]

 

(d)           [***] [omitted 2 pages]

 

3.             Additions, Modifications, Deletions and Reclassifications of
Service Levels.

 

[***] [omitted 4 pages]

 

4.             [***] Service Levels.

 

(a)           [***] Availability and Dates.

 

[***]

 

(b)           [***] Methodology.

 

[***]

 

5.             Measuring Tools.

 

(a)           Commencing on each applicable Service Level Commencement Date,
Service Provider shall provide, implement, maintain and utilize the necessary
measurement and monitoring tools and procedures required to measure and report
on Service Provider’s performance of the Services against the applicable Service
Levels.  Service Provider’s measurement and monitoring of Service Level
performance shall permit reporting at a level of detail reasonably sufficient to
permit Customer to verify compliance with the Service Levels, and shall be
subject to audit by Customer pursuant to the Agreement.  Service Provider shall
provide Customer with information about and access to such procedures upon
request for purposes of verification.

 

(b)           Notwithstanding the foregoing, any new tools required for new
Service Levels added after the Execution Date shall be identified in the Change
Order or other documentation approving such new Service Level.  In connection
therewith, Service Provider shall be obligated to propose a commercially
reasonable measuring tool or methodology for a Service Level, and if it fails to
do so, such tool or methodology shall be determined using the dispute resolution
procedure set forth in the Agreement.

 

(c)           If, after the Execution Date or the implementation of tools for
new Service Levels or the tools Service Provider is required to implement
pursuant to Section 5(a) above for existing Service Levels, one Party desires to
use a different measuring tool or methodology for a Service Level, such Party
shall request such change through the Change Control Procedures.  If the other
Party approves the new measuring tool or methodology, the Parties will
reasonably adjust the Service Level measurements to account for any increased or
decreased sensitivity in the new measuring tools, provided that if the Parties
cannot agree on the required adjustment, either Party may escalate the matter in
accordance with the

 

--------------------------------------------------------------------------------

 

governance procedures set forth in the “Governance and Change Control” Exhibit,
and if the dispute is not resolved thereby, the matter shall be resolved in
accordance with the Dispute Resolution Procedures.  It is not anticipated that
changes in the measuring tools or methodologies will drive changes in Service
Levels; rather, the need to collect and accurately reflect the performance data
should drive the development or change in measuring tools or methodologies.

 

6.             Service Level Credits [***].

 

(a)           Service Level Credit Calculation.

 

Subject to Section 6(f) below, for each CPI Expected Service Level Default or
Minimum Service Level Default, Service Provider shall accrue to Customer a
Service Level Credit that will be computed in accordance with the following
formula:

 

Performance Credit = A × B

 

Where A is the At Risk Amount; and

 

Where B is  the Allocation of Pool Percentage for the applicable CPI.

 

For example only, assume that Service Provider fails to meet the Minimum Service
Level for a CPI, the At Risk Amount is [***]% of the [***], and the [***] for
the month in which the Service Level Default occurred were $[***]. 
Additionally, assume that the Allocation of Pool Percentage for such CPI is
[***]%.  The Performance Credit due to Customer for such Service Level Default
would be computed as follows:

 

A (the At Risk Amount) is $[***] ($[***]  ×  [***]%);

 

Multiplied by B (the Allocation of Pool Percentage for such CPI), which is
[***];

 

Yields a Performance Credit = $[***]

 

(b)           Multiple Defaults.

 

[***]

 

(c)           Notice of Service Level Credits.

 

Service Provider shall notify Customer in writing if Customer becomes entitled
to a Service Level Credit, which notice shall be provided monthly and shall
describe the Service Level Default for the month that is the subject of the
monthly CPI report.

 

(d)           [***]

 

--------------------------------------------------------------------------------

 

(e)           Reconciliation of Service Level Credits [***].

 

Upon occurrence of the events giving rise to a Service Level Credit, Service
Provider shall owe a debt to Customer for the applicable Service Level Credit
amount.  [***].  Service Provider shall credit to Customer against the next
monthly invoice:

 

(A)          all accrued Service Level Credits [***], and

 

(B)           all accrued Service Level Credits [***].

 

If there will be no further invoices, Service Provider will pay the amount of
such Service Level Credits to Customer within thirty (30) calendar days.  [***]

 

(f)            Cumulative Remedies and Waivers.

 

The exercise by Customer of its rights under this Schedule D-1, including the
right to receive Service Level Credits [***], shall be without prejudice to its
other rights or remedies under the Agreement or at law or equity, including
Customer’s right to claim and collect damages and Customer’s right to terminate
the Agreement in whole or in part in accordance with the Agreement.  [***]

 

(g)           No Liquidated Damages.

 

Service Level Credits shall not constitute liquidated damages for the
corresponding failure to perform, and Customer shall be free to pursue any and
all remedies available under the Agreement with respect thereto, provided, that
any such credits actually paid by Service Provider to Customer shall be offset
against any damages awarded to Customer for claims arising from the
corresponding failure to perform.

 

7.             Annual Review.

 

Within twelve (12) months after each applicable Service Level Commencement Date,
and at least annually thereafter (after all initial Service Level Commencement
Dates have passed, the Parties shall agree to synchronize to a single date for
future use), or at either Party’s request, Service Provider and Customer will
review the Service Levels and any proposed adjustments to them as appropriate
pursuant to the Change Control Procedures to reflect any improved performance
capabilities associated with advances in the technology and methods used to
perform the Services or material changes in volumes and metrics used to
determine the Service Levels.  The Parties will also review any other
considerations relating to the Service Levels raised by either Party.  As part
of this review process, the Parties may jointly:  (a) determine and agree on the
addition and/or removal of Service Levels, (b) revise the categorization of
Service Levels, and (c) revise the results of the automatic continuous
improvement adjustment developed for a particular Service Level pursuant to
Section 4 above or improve a particular Service Level not subject to the
automatic continuous improvement adjustments of Section 4 above.

 

8.             Investigation and Correction.

 

[***]

 

--------------------------------------------------------------------------------

 

Service Provider shall promptly investigate and correct each failure to meet the
Service Levels (whether or not such failure constitutes a Service Level Default)
by:

 

[***]

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

Subject to a request for confidential treatment, certain portions of this
agreement have been intentionally omitted.  The omitted portions subject to the
confidential treatment request are designated by three asterisks ([***]).  A
complete version of this agreement has been separately filed with the Securities
and Exchange Commission.

 

ATTACHMENT 3 TO AMENDMENT NO. 7

 

SCHEDULE D-2

SERVICE LEVEL MATRIX

 

This is Schedule D-2, Service Level Matrix, to the First Amended and Restated
Transaction Document No. 1 to that certain First Amended and Restated Master
Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer
Services, L.P. and International Business Machines Corporation.  Unless
otherwise defined herein, capitalized terms have the meanings set forth in the
Master Agreement, the “Definitions” Exhibit to the Master Agreement, or the
“Definitions” Schedule to the Transaction Document.

 

[***] [omitted 9 pages]

 

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