Form Of Master Services Agreement

EXHIBIT 10(A)


GM/EDS DRAFT
APRIL 11, 1996


MASTER SERVICE AGREEMENT


BETWEEN


GENERAL MOTORS CORPORATION


AND


ELECTRONIC DATA SYSTEMS CORPORATION


GM/EDS CONFIDENTIAL


TABLE OF CONTENTS
-----------------


Page
---- RECITALS................................................................... 1


ARTICLE I. INTRODUCTORY PROVISIONS


Section 1.1 Scope of Agreement................................... 2
Section 1.2 Definitions.......................................... 3
Section 1.3 Agreement............................................ 7
Section 1.4 Term................................................. 10
Section 1.5 Applicability of Provisions.......................... 11
Section 1.6 Fundamental Principle of Good Faith and Fair Dealing. 11
ARTICLE II. SERVICE AGREEMENTS

Section 2.1 Service Agreements................................... 11
Section 2.2 Service Agreement Objectives......................... 15
Section 2.3 Competitiveness...................................... 16
Section 2.4 Continued Services to Divested Business Units........ 17
Section 2.5 Extension of Service Agreements...................... 17
Section 2.6 Payment Terms........................................ 18
Section 2.7 Removal of PRR and Similar Provisions................ 20
ARTICLE III. OPERATIONAL PROVISIONS

Section 3.1 GM/EDS Relationship.................................. 20
Section 3.2 IT Strategy and Architecture......................... 20
Section 3.3 Contract Administration.............................. 21
Section 3.4 Attestation by Independent Public Accountants........ 25
Section 3.5 Audit by GM Central Office........................... 25
Section 3.6 Price Level Detail................................... 25
Section 3.7 Co-Negotiation....................................... 26
ARTICLE IV. STRUCTURAL COST REDUCTIONS

Section 4.1 Delco Electronics Structural Cost Reductions......... 28
Section 4.2 General IT Structural Cost Reductions................ 29
ARTICLE V. MARKET TESTING AND RESOURCING

Section 5.1 Initial Market Testing and Resourcing by GMIO........ 31
Section 5.2 Later Market Testing and Resourcing by GM............ 32
Section 5.3 General Limitations and Requirements................. 35
ARTICLE VI. GENERAL PROVISIONS

Section 6.1 Termination of MSA................................... 40
Section 6.2 Insurance............................................ 42
Section 6.3 Foreign Subsidiaries................................. 43
Section 6.4 Compliance with Advance Agreement.................... 43
Section 6.5 Amendment or Modification............................ 44
Section 6.6 Incorporation of Exhibit A........................... 44
Section 6.7 Prior Master Agreement............................... 44
Section 6.8 Governing Law........................................ 45


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EXHIBIT A. STANDARD TERMS AND CONDITIONS RECOMMENDED
FOR INCORPORATION INTO SERVICE AGREEMENTS


ARTICLE A-I. DEFINITIONS AND INTERPRETATION


Section A1.1 Definitions.......................................... A-1
Section A1.2 Interpretation....................................... A-5


ARTICLE A-II. CONTRACT ADMINISTRATION AND REVIEW


Section A2.1 Management and Administration........................ A-6
Section A2.2 Performance Review................................... A-7


ARTICLE A-III. GM ASSETS AND SPACE


Section A3.1 GM Assets............................................ A-7
Section A3.2 GM Space............................................. A-8


ARTICLE A-IV. SOFTWARE AND INTELLECTUAL PROPERTY


Section A4.1 Ownership of Software................................ A-8
Section A4.2 Software Rights and Licenses......................... A-10
Section A4.3 Changes and Upgrades to Software..................... A-15
Section A4.4 Third Party Software Developers...................... A-16
Section A4.5 Intellectual Property................................ A-16


ARTICLE A-V. DATA PROTECTION AND AUDIT RIGHTS


Section A5.1 GM Data.............................................. A-17
Section A5.2 Safeguarding of GM Data.............................. A-18
Section A5.3 Nondisclosure........................................ A-18
Section A5.4 Data Center Security................................. A-19
Section A5.5 Audit Rights......................................... A-19


ARTICLE A-VI. EMPLOYEES


Section A6.1 EDS' Employees....................................... A-20
Section A6.2 Notice to EDS' Employees............................. A-20
Section A6.3 Premise and Work Rules............................... A-21
Section A6.4 Right of Access...................................... A-21
Section A6.5 Key EDS Employees for Critical Projects.............. A-21


ARTICLE A-VII. EDS COMPENSATION


Section A7.1 Uniform Published Rates.............................. A-22
Section A7.2 Fixed Price Methodology.............................. A-24
Section A7.3 Cost-Plus Pricing.................................... A-26
Section A7.4 Pricing Detail....................................... A-30
Section A7.5 Tax Matters.......................................... A-31


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ARTICLE A-VIII. BILLING AND PAYMENT PROCEDURES
Section A8.1 Billing Procedures................................... A-33
Section A8.2 Time of Payment...................................... A-34


ARTICLE A-IX. DISPUTES AND TERMINATION


Section A9.1 Negotiation of Disputes.............................. A-36
Section A9.2 Resolution of Disputes............................... A-36
Section A9.3 Termination.......................................... A-37
Section A9.4 Cancellation of Services and Cancellation Charges.... A-38
Section A9.5 Termination Assistance and Transition................ A-41


ARTICLE A-X. WARRANTIES


Section A10.1 Software Warranty.................................... A-44
Section A10.2 Hardware Warranty.................................... A-44
Section A10.3 Pass-Through Warranties.............................. A-44
Section A10.4 Survival of Warranties............................... A-45
Section A10.5 Disclaimer of Warranties............................. A-45


ARTICLE A-XI. INDEMNITIES AND LIABILITY


Section A11.1 Cross Indemnity...................................... A-45
Section A11.2 Proprietary Rights Indemnity......................... A-46
Section A11.3 Hardware Damage Indemnity............................ A-46
Section A11.4 Software License Indemnity........................... A-47
Section A11.5 Limitation of Liability.............................. A-47


ARTICLE A-XII. SPECIAL PROVISIONS RELATING TO MSA SERVICES


Section A12.1 GM's IT Strategy and Architecture.................... A-48
Section A12.2 Competitiveness...................................... A-48
Section A12.3 Market Testing and Resourcing........................ A-49
Section A12.4 Co-Negotiation....................................... A-49
Section A12.5 Use of Independent Auditors.......................... A-49


ARTICLE A-XIII. MISCELLANEOUS


Section A13.1 Binding Nature and Assignment........................ A-50
Section A13.2 Notices.............................................. A-50
Section A13.3 Counterparts......................................... A-51
Section A13.4 Headings............................................. A-51
Section A13.5 Approvals and Similar Actions........................ A-51
Section A13.6 Force Majeure........................................ A-51
Section A13.7 Severability......................................... A-52
Section A13.8 Waiver............................................... A-52
Section A13.9 Relationship of Parties.............................. A-52
Section A13.10 Services for Others.................................. A-53
Section A13.11 Hiring of Employees.................................. A-53
Section A13.12 Compliance With Laws................................. A-53
Section A13.13 Media Releases....................................... A-53
Section A13.14 Survival............................................. A-54
Section A13.15 Entire Agreement..................................... A-54
Section A13.16 Amendment or Modification............................ A-54
Section A13.17 Good Faith and Fair Dealing.......................... A-54


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EXHIBIT B. GM MAJOR SECTORS AS OF THE EFFECTIVE DATE


EXHIBIT C. MSA SERVICES AND MSA SCOPE DOCUMENTS


EXHIBIT D. PROCEDURES FOR NEGOTIATING SERVICE AGREEMENTS AND
RESOLVING IMPASSES


EXHIBIT E. GUIDELINES & METHODOLOGY FOR DETERMINING
ACHIEVEMENT OF IT STRUCTURAL COST REDUCTION TARGETS
EXHIBIT F. TERMINATION UPON CHANGE OF CONTROL


EXHIBIT G. CANCELLATION LOSSES ON THE DISPOSITION OF CAPITAL
ASSETS AND LONG-TERM LEASES


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MASTER SERVICE AGREEMENT
------------------------


THIS MASTER SERVICE AGREEMENT (the "MSA"), effective as of ______________, 1996 (the "Effective Date"), is made and entered into by and between General Motors Corporation, a Delaware corporation having its principal offices at 3044 West Grand Boulevard, Detroit, Michigan 48202 ("GM Parent"), and Electronic Data Systems Corporation, a Delaware corporation having its principal offices at 5400 Legacy Drive, Plano, Texas 75024 ("EDS Parent").


RECITALS
--------


WHEREAS, in order to implement the service relationship contemplated by the acquisition of EDS Parent by GM Parent in 1984, GM Parent and EDS Parent entered into a certain Master Agreement, dated effective as of September 1, 1985 (the "Master Agreement"), which established certain standard terms and conditions pursuant to which EDS Service Organizations would provide services to GM User Organizations and set forth certain other understandings and agreements between the parties;


WHEREAS, pursuant to the Master Agreement, GM User Organizations and EDS Service Organizations have negotiated and entered into Service Agreements specifying the services to be provided to the GM User Organizations and the amounts to be paid to EDS for such services;


WHEREAS, on or about the Effective Date, GM Parent consummated a split-off and related transactions pursuant to which EDS Parent ceased to be a subsidiary of GM Parent and, in connection therewith, GM Parent and EDS Parent desire to supersede and replace the Master Agreement with this MSA in order to (i) confirm the continuation of EDS as the principal supplier to GM of information technology services, (ii) confirm the understanding of GM and EDS that GM is to continue to be the customer of EDS and will specify its IT strategy and computing and communications architecture together with its business needs, including reasonable performance levels, and that EDS will serve these requirements, on a coordinated, integrated basis, by providing


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MSA Services which are competitive with respect to quality, service, price and technology and which are appropriate for the stated business needs of GM, and will be compensated fairly therefor, (iii) provide guidelines for GM to conduct limited market testing with third party suppliers, (iv) implement certain changes in the service relationships between GM User Organizations and EDS Service Organizations governed by Service Agreements entered into prior to the Effective Date, (v) facilitate the finalization of future Service Agreements, (vi) provide a consistent basis for the interpretation of all Service Agreements, and (vii) set forth certain other understandings and agreements between the parties;


NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:


ARTICLE I. INTRODUCTORY PROVISIONS
-----------------------------------


1.1 Scope of Agreement. Subject to Section 1.3 below, this MSA establishes a
contractual framework for EDS' provision of MSA Services under Service
Agreements worldwide. In order to provide a uniform mechanism for
implementing the principles of this MSA, the provisions of this MSA, as
between EDS Parent and GM Parent, shall be applicable worldwide and shall
be implemented by GM Parent and EDS Parent, and their respective domestic
and foreign subsidiaries and business units, entering into Service
Agreements which incorporate the principles of the applicable provisions of
this MSA, modified as may be necessary by reason of local law or commercial
custom. GM Parent and EDS Parent each acknowledge and understand that their
respective subsidiaries are not parties to this MSA and will not be legally
bound by the provisions of this MSA unless and until they agree to be so
bound. However, during any period and to the extent that a locally
appropriate Service Agreement for any such MSA Services is not then
currently in effect, GM Parent and EDS Parent shall each remain obligated
to the other for the performance of the respective obligations of GM and
EDS stated herein.


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1.2 Definitions. Unless otherwise specified herein, the following terms shall
have the meanings set forth below wherever they are used in this MSA:


(a) The term "Agreement" shall mean (i) this MSA, or (ii) any Service
Agreement, including the applicable provisions of this MSA
incorporated therein.


(b) The term "Bid Revenue" shall mean, with respect to each competitive
bid that GM may conduct pursuant to Article V hereof, the aggregate
amount of revenue that GM would pay to EDS for the performance of the
MSA Services that are the subject of that competitive bid, during the
first full year that such MSA Services are to be performed, computed
as if the competitive bid were not conducted but GM nevertheless
obtained such MSA Services from EDS pursuant to the applicable Service
Agreements and other arrangements in place at the time of the
competitive bid.


(c) The term "Contracting Party" shall mean (i) with respect to this MSA,
GM Parent or EDS Parent, and (ii) with respect to any Service
Agreement, the GM User Organization receiving MSA Services pursuant to
the Service Agreement or the EDS Service Organization providing such
MSA Services.


(d) The term "Corporate Contract Manager" shall mean the individual
designated by GM Parent or EDS Parent, respectively, pursuant to
sub-Section 3.3(a) hereof.


(e) The term "EDS" shall mean, collectively, EDS Parent and the entities
and subsidiaries owned by EDS Parent. For purposes of this
definition, an entity or subsidiary will be deemed to be "owned by EDS
Parent" if EDS Parent, either directly or indirectly, (i) is the
beneficial owner of more than 50% of the equity of that entity or
subsidiary, or (ii) is the beneficial owner of more than 35% of the
equity of, and has management control of, that entity or subsidiary.


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(f) The term "EDS Major Sector" shall mean an EDS Service Organization
designated by EDS from time to time to coordinate the provision of MSA
Services by EDS to the GM User Organizations within a GM Major Sector.


(g) The term "EDS Service Organization" shall mean any functional entity,
division, subsidiary, department or group within EDS, including an EDS
Major Sector, which has been or shall be formed to provide MSA
Services to GM User Organizations.


(h) The term "GM" shall mean, collectively, GM Parent and the entities and
subsidiaries owned by GM Parent. For purposes of this definition, an
entity or subsidiary will be deemed to be "owned by GM Parent" if GM
Parent, either directly or indirectly, is the beneficial owner of:


(1) More than 65% of the equity of, and has management control of,
that entity or subsidiary and, as of August 1, 1995, EDS was
providing services under the Master Agreement pursuant to a
Service Agreement in support of the business operations of that
entity or subsidiary.


(2) 80% or more of the equity of that entity or subsidiary if, as of
August 1, 1995, EDS was not providing services under the Master
Agreement pursuant to a Service Agreement in support of the
business operations of that entity or subsidiary.


(i) The term "GM Central Office" shall mean the corporate headquarters of
GM Parent.


(j) The term "GM Major Sector" shall mean a GM User Organization
designated by GM from time to time to coordinate the receipt of MSA
Services from EDS by numerous GM User Organizations. As of the
Effective Date, the GM Major Sectors are listed in Exhibit B hereto.


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(k) The term "GM User Organization" shall mean any functional entity,
division, subsidiary, department or group within GM, including a GM
Major Sector, which has or shall have requirements for MSA Services
applicable to that functional entity, division, subsidiary, department
or group that this MSA provides are to be obtained from EDS. Each of
the following terms shall mean the GM User Organization indicated
below and any successors thereto:


(1) "Delco" means Delco Electronics Corporation.


(2) "Delphi" means Delphi Automotive Systems.


(3) "GMAC" means General Motors Acceptance Corporation.


(4) "GMIO" means GM International Operations.


(5) "MIC" means Motors Insurance Corporation.


(6) "NAO" means GM North American Operations.


(l) The term "IT" shall mean information technology consisting of computer
and information processing and communications.


(m) The term "Major Sector Contract Manager" shall mean the person
designated by either the GM Major Sector having responsibility for the
GM Contracting Party or the EDS Major Sector having responsibility for
the EDS Contracting Party, as applicable, pursuant to sub-Section
3.3(b) hereof.


(n) The term "Master Agreement" shall mean the Master Agreement, effective
as of September 1, 1985, made and entered into by and between GM
Parent and EDS Parent, as amended by the Addendum thereto dated May
29, 1987.


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(o) The term "MSA Scope Document" shall mean any document developed in
accordance with Section II of Exhibit C hereto.


(p) The term "MSA Services" shall mean those services described in Section
I of Exhibit C hereto.


(q) The term "Service Agreement" shall mean any written agreement, as
provided for in Section 2.1 hereof, that is entered into between a GM
User Organization and an EDS Service Organization for the provision of
MSA Services to that GM User Organization, whether entered into before
or after the Effective Date.


(r) The term "Software" shall mean the source code and object code
versions of any applications programs, operating system software,
computer software languages, utilities and other computer programs,
and documentation and supporting materials relating thereto, in
whatever form or media, including, but not limited to, the tangible
media upon which such applications programs, operating system
software, computer software languages, utilities and other computer
programs, and documentation and supporting materials relating thereto,
are recorded or printed, together with all corrections, improvements,
updates and releases thereof.


(s) The term "Unit Project Manager" shall mean any person designated
pursuant to sub-Section 3.3(c) hereof.


(t) The term "UPR Catalog" shall mean the catalog published by GM Parent
in accordance with Section A7.1 of Exhibit A hereto.


Other terms used in this MSA are defined in the context in which they are
used and, unless otherwise specified herein, shall have the meanings there
indicated wherever they are used in this MSA.


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1.3 Agreement. GM Parent and EDS Parent agree that, during the term of this
MSA and except as provided in Article V hereof and any other applicable
provision of this MSA, EDS shall supply to GM, and GM shall obtain from
EDS, GM's requirements for MSA Services, except that:


(a) With respect to any MSA Services reasonably requested from EDS by a GM
User Organization (which request shall not be unreasonably specific),
where it is mutually agreed that EDS lacks the technical proficiency
or resources to satisfactorily provide such MSA Services, either
directly or through a third party subcontract, within the timeframe
reasonably required by the GM User Organization, then the GM User
Organization may, with the prior approval of the GM Corporate Contract
Manager, obtain such MSA Services from a third party for so long as
EDS is unable to provide such MSA Services; provided, however, that
under no circumstances shall GM be required to cancel, renegotiate or
otherwise nullify a contract with a third party to obtain such MSA
Services during the period of time covered by that contract. In
addition, any MSA Services obtained by a GM User Organization from a
third party pursuant to this provision shall not count against either
the annual or aggregate limitations on competitive bidding and
resourcing set forth in Article V hereof.


(b) Unless agreed otherwise by GM Parent and EDS Parent, GM shall not be
required to obtain from EDS, and EDS shall not be required to provide
to GM, MSA Services for:


(1) Hughes Aircraft Corporation.


(2) Any other business or entity, or portion thereof, if and to the
extent that such business or entity, or portion thereof, was or
is acquired by GM Parent after January 1, 1985, except for (i)
GMAC Mortgage Corporation (but not


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including its subsidiary, Residential Funding Corporation), and
(ii) any other business or entity, or portion thereof, which
executed a Service Agreement prior to August 1, 1995. However, GM
Parent and EDS Parent acknowledge and agree that, unless it is
inappropriate in the circumstances, in the normal case it is
expected that EDS will be permitted to submit a bid to provide
MSA Services to businesses and entities, or portions thereof,
acquired by GM Parent after January 1, 1985. However, under no
circumstances shall the competitive bidding and resourcing of
such services count against either the annual or aggregate
limitations on competitive bidding and resourcing set forth in
Article V hereof.


(c) GM shall not be required to obtain from EDS, and EDS shall not be
required to provide to GM, services in any country to the extent and
for so long as the provision of those services by EDS to GM in that
country would violate any national law of that country.


(d) GM User Organizations outside of North America ("GM Overseas User
Organizations") shall not be required to obtain from EDS, and EDS
shall not be required to provide to GM Overseas User Organizations,
any MSA S ...