Lynnda Speer, Donor, et al. - Page 13

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          maintenance system continued to be handled by Pioneer on the IBM            
          System 36 using the Local Software until Burroughs completed that           
          portion of the software sometime around January 1986.  Until                
          then, the inventory information was passed between the IBM System           
          36 computer and the Burroughs computer on a daily basis.  Even              
          after the Burroughs computer was handling inventory maintenance,            
          Pioneer continued to generate certain reports related to                    
          inventory and rework inventory (i.e., returned merchandise) using           
          the Local Software on the IBM System 36 until early 1993.                   
               During the development of the National Software, Mr.                   
          Pfeiffer added several improvements to the Local Software, which            
          continued to be used in HSC’s business in the Tampa Bay area.               
          Mr. Pfeiffer also added specific modules in the Local Software to           
          handle the functions required by HSN.  These modules provided a             
          backup system in case the Burroughs system was not ready or                 
          failed in operation.                                                        
               On June 17, 1985, HSN hired Stella Tavilla and Carl Brewer             
          to run the Burroughs computer system for HSN.  By that time, all            
          the design and specifications of the order entry system had been            
          completed, although Burroughs was still performing the code                 
          writing, programming, and testing in anticipation of the July, 1,           
          1985, deadline.                                                             
               On July 1, 1985, HSN began operating in a studio located in            
          the Levitz Shopping Center in Clearwater, Florida, separate from            
          HSC’s operations.  Although HSN and HSC used the same warehouse             




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