1
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE OMITTED PORTIONS HAVE BEEN REPLACED WITH THE CODE, "[** **]".
Exhibit 10.10
PROGRAM SERVICES AGREEMENT
BY AND BETWEEN
HEWLETT-PACKARD COMPANY
AND
DIRECT ALLIANCE CORPORATION
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TABLE OF CONTENTS
Page
----
RECITALS .......................................... 1
AGREEMENT .......................................... 1
Section 1. Term ..................................... 1
Section 2. The Program .............................. 1
Section 3. Definitions .............................. 2
Section 4. Payments And Invoicing ................... 5
Section 5. Staffing of Personnel .................... 13
Section 6. Use of Contractors ....................... 14
Section 7. Compliance With the Law .................. 14
Section 8. Consigned Inventory ...................... 15
Section 9. Records, Audits, and Inspections ......... 18
Section 10. Quality Assurance ........................ 19
Section 11. Insurance and Statutory Obligations ...... 20
Section 12. Warranties ............................... 21
Section 13. Default and Termination .................. 23
Section 14. Rights on Change in Control .............. 25
Section 15. Force Majeure ............................ 25
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Section 16. Indemnification .......................... 26
Section 17. Limitation of Liability .................. 26
Section 18. Trademarks and Related Matters ........... 26
Section 19. Defense Of Intellectual Property Claims .. 27
Section 20. Confidential Information ................. 28
Section 21. Publicity ................................ 30
Section 22. Notices And Approvals .................... 30
Section 23. General Provisions ....................... 31
Section 24. Parent Obligations ....................... 35
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PROGRAM SERVICES AGREEMENT
This Program Services Agreement (the "Agreement"), effective as of June
8, 1999 (the "Effective Date") is by and between Hewlett-Packard Company ("HP"),
a Delaware corporation, with its principal place of business at 0000 Xxxxxxx
Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, and Direct Alliance Corporation ("DAC"), an
Arizona corporation, with its principal place of business at 0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx, Xxxxxxx 00000. Insight Enterprises, Inc., a Delaware corporation,
having its principal place of business at 0000 Xxxxx Xxxx Xxxxxx, Xxxxx, Xxxxxxx
00000 ("Parent"), is also a party for the limited purposes described in Sections
13, 14 and 24.
RECITALS
A. HP is a leading manufacturer of personal computers, laser and inkjet
printers, and storage and networking devices;
B. DAC is a direct marketer which provides outsourcing services for
information technology products, consisting of marketing, sales, and fulfillment
functions. DAC is a wholly owned subsidiary of Parent; and
C. HP desires to outsource on a non-exclusive basis certain aspects of
a direct-channel sales operations and wishes to engage DAC in such efforts. The
parties acknowledge that the Program described in this Agreement will not
involve the storage or warehousing by DAC of products for sale, but will involve
DAC's warehousing and storage of Returned Goods.
IN CONSIDERATION of the respective commitments of the parties, as set
forth in this Agreement, DAC shall furnish certain services to HP and HP shall
make payments to DAC in exchange for such services, all as set forth in this
Agreement and the Exhibits, Attachments and Schedules attached hereto, and in
connection therewith the parties agree as follows:
AGREEMENT
Section 1. Term.
The initial term of this Agreement (the "Term") shall begin on June 8,
1999 and shall expire at the close of business on May 31, 2001. Thereafter, this
Agreement shall renew automatically for additional one-year periods, unless one
party notifies the other on or before February 28 of a particular year that it
wishes to terminate this Agreement as of the close of business on May 31 of that
year.
Section 2. The Program.
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2.1 The Program is described in further detail in the Program
Description, which is attached to this Agreement as Exhibit A. Additions,
deletions, or changes to the services, policies, or procedures, which may be
jointly developed and agreed to from time to time by DAC and an HP Authorized
Signer, may be added to the Program only when set forth in a writing which is
executed by both parties.
2.2 DAC acknowledges that it is an independent contractor retained by
HP for the limited purpose of performing its duties pursuant to this Agreement.
DAC agrees not to modify any prices, representations, equipment specifications,
or stated performance parameters provided by HP without HP's prior written
consent.
Section 3. Definitions.
As used in this Agreement, the following terms will have the meanings
set out following those terms.
3.1 "Additional Incentives" shall mean the additional consideration
described in subsection 4.7.
3.2 "Allocated Fees" shall mean the fees described in subsection 4.5.
3.3 [**1**]
3.5 "DAC" means Direct Alliance Corporation; provided, however, that
Parent shall be liable for any obligations or liabilities of DAC that arise in
connection with this Agreement as provided in Section 24 of this Agreement.
3.6 A "Downtime Event" is a prolonged disruption of an element of the
Program, which disruption deprives a significant number of potential end-user
customers interested in purchasing HP Products through the Program of access to
such Products during Program Business Hours. Examples of a Downtime Event are
(i) a prolonged disruption in access to DAC's ordering system that prevents
on-line or telephone ordering of HP Products, and (ii) a prolonged disruption in
communications between DAC and an HP Distributor that prevents DAC from
communicating orders to that Distributor for fulfillment of Goods to Program
Customers. Notwithstanding the foregoing, to the extent that such a prolonged
disruption is caused by something other than (i) the failure of DAC to act with
reasonable prudence in the operation and management of all telecommunications
and computing facilities under its control used in connection with the Program;
or (ii) DAC's negligence, gross negligence, or the reckless, willful, or
intentional acts of DAC, such prolonged disruption will not be deemed a Downtime
Event. The parties acknowledge that Force Majeure Events (as defined in Section
15) shall not constitute Downtime Events.
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3.7 "Eastern Time" means the time in Boston, New York, Philadelphia,
Washington, DC, and Atlanta. It may be Eastern Standard Time or Eastern Daylight
Time, depending on the time of year.
3.8 An "Event of Default" shall mean a Material Default in Performance
which the non-defaulting party brings to the attention of the defaulting party
by notifying the defaulting party in writing of the occurrence of the Material
Default in Performance. The non-defaulting party may not notify the defaulting
party of a Material Default in Performance, and thereby convert such Material
Default in Performance into an Event of Default, more than 30 days after the
non-defaulting party has actual knowledge of the occurrence of the Material
Default in Performance, except for Material Defaults in Performance arising
under sub-sub-subsection 4.7.2.1, as to which the 30-day period shall be
extended to 45 days as provided in sub-sub-subsection 4.7.2.2. Notwithstanding
the foregoing sentence, as provided in subsection 13.5, upon the notification by
Parent or DAC of a possible or actual Change in Control, HP shall have 60 days
to notify DAC that HP chooses to terminate in response to such possible or
actual Change in Control.
3.9 "Goods" shall mean, individually and/or collectively, all HP
Products and HP Materials ordered by end-user customers using the Program and
any products or materials manufactured by third parties ordered by end-user
customers using the Program.
3.10 "HP" shall mean HP, its affiliates, and/or subsidiaries; provided,
however, that HP shall be liable for any obligations or liabilities of any of
its subsidiaries that arise in connection with this Agreement, The parties
acknowledge that HP is currently undergoing a corporate reorganization that is
expected to result in two independent public companies, one focusing on computer
products and the other on testing and measurement products. The parties agree
that, upon the conclusion of this reorganization, HP's testing and measurement
successor, Agilent Technologies (including its subsidiaries) will have no
obligations and liabilities to DAC under this Agreement.
3.11 An "HP Authorized Signer" shall mean one of the HP employees
listed on Exhibit J. HP may identify to DAC new Authorized Signers or substitute
for existing Authorized Signers at its discretion by so notifying DAC. Any such
notification shall be in writing, and shall be effective ten (10) days after it
is provided.
3.12 An "HP Competitor" shall mean any entity (or the parent,
subsidiary, or affiliate of an entity) that competes with HP in the development,
marketing or sale of personal computers, laser printers, inkjet printers,
networking products, or storage products. The parties acknowledge that this term
includes, without limitation, the following companies: IBM, Compaq, Dell,
Gateway, Lexmark, Xerox, Seagate, Quantum, Nortel, Cisco, and 3Com.
Notwithstanding the foregoing, the term excludes HP-authorized distributors and
resellers that sell multiple brands of personal computers, laser printers,
inkjet printers, networking products or storage products, for example Xxxxxx
Micro,
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Tech Data, Computer Discount Warehouse, Inacom, and Pinacor, unless more than
ten (10) percent of any class of voting security issued by such distributor or
reseller is owned by an entity (or the parent, subsidiary, or affiliate of an
entity) that competes with HP in the development, marketing or sale of personal
computers, laser printers, inkjet printers, networking products, or storage
products.
3.13 "HP Materials" shall mean, individually and/or collectively, all
parts, materials or components supplied by HP for purposes of the Program. Such
HP Materials may be manufactured by HP or an OEM of HP.
3.14 "HP Products" shall mean, individually and/or collectively, all
products sold by HP to Program Customers for purposes of the Program. Such HP
Products may be manufactured by HP or an OEM of HP
3.15 "Intellectual Property Right" shall mean any United States patent,
copyright, trademark, trade name, trade dress, service xxxx, mask work, or trade
secret.
3.16 "Material Default in Performance" shall mean (i) DAC materially
defaulting in its performance of any of its obligations under this Agreement,
including without limitation, any warranty provided by DAC in Section 12 of this
Agreement; (ii) DAC or Parent becoming insolvent, becoming the debtor in any
bankruptcy proceeding (whether any petition filed by or relating to DAC or
Parent is voluntary or involuntary), making an assignment for the benefit of
creditors, or experiencing the appointment of a receiver, trustee, or similar
officer to take charge of all or a substantial part of DAC's assets or Parent's
assets; (iii) DAC or Parent assigning or attempting to assign, or subcontracting
or attempting to subcontract, any of its rights or obligations under this
Agreement to a third party without HP's prior written approval; (iv) DAC
repeatedly failing to meet the minimum performance metrics, as set out in
sub-sub-subsection 4.7.2.1; (v) DAC experiencing Downtime Events in excess of
the maximum permitted level of Downtime Events set forth in subsection 12.3; or
(vi) HP's delinquency in making a payment to DAC, as set out in subsection 13.3.
3.17 "Materials" shall mean, individually and/or collectively, all HP
Materials and any parts, materials or components manufactured by third parties
that are purchased by HP for the purpose of fulfilling orders to HP customers.
3.18 All references to the terms "Month" or "Monthly" will mean the
calendar month, except as otherwise stated herein.
3.19 "Net Sales" shall mean the total of all invoiced sales of Goods by
DAC to Program Customers, adjusted for returns, less all of the following: (i)
applicable sales taxes; (ii) applicable shipping and handling charges; and (iii)
any returns for credit during that same sales period.
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3.20 "Parent" shall mean Insight Enterprises, Inc., a Delaware
corporation.
3.21 "Performance Fees" shall mean the fees described in subsection 4.6
of this Agreement.
3.22 "Program" shall mean all services that will be provided by DAC
pursuant to this Agreement, plus certain policies and procedures that relate to
such services. The Program is further described in Exhibit A, attached hereto.
The parties acknowledge the Program was operational at 8:00 a.m. Eastern Time on
June 8, 1999 and that DAC was operational with respect to its Program
responsibilities at that time.
3.23 "Program Customers" shall mean purchasers of Goods who order these
Goods through use of the order-taking services provided by DAC through the
Program.
3.24 "Program Business Hours" shall mean 8 AM Eastern Time until 8 PM
Eastern Time, Mondays through Fridays, excluding the following days: January 1,
Memorial Day, July 4, Labor Day, Thanksgiving Day, and December 25. HP may
extend or reduce Program Hours at its discretion, including by adding Saturday
and Sunday hours, upon 60 days prior notice to DAC. HP acknowledges that any
increase in Program Hours may result in additional fees payable to DAC for
program management, salary, and benefits.
3.25 Except as otherwise stated herein, all references to the terms
"Quarter" or "Quarterly" shall mean HP fiscal Quarters, which comprise the
following periods: November 1 through January 3 1, February 1 through April 30,
May 1 through July 31 and August 1 through October 31.
3.26 "Returned Goods" shall mean Goods ordered by end-user customers
pursuant to the Program but returned by those end-user customers following their
receipt of those products. [**A**]
3.27 "Significant Contractor" shall mean any contractor selected by DAC
which DAC reasonably anticipates will be paid more than $100,000 in
consideration of that contractor's activities relating to the Program or this
Agreement in any 12-Month period during the Term. Notwithstanding the foregoing,
the term Significant Contractor shall not include any DAC lawyers or accountants
to the extent that such lawyers or accountants do not work exclusively on
Program-related projects on behalf of DAC.
3.28 "Start-up Fees" shall mean the fees described in subsection 4.2
3.29 "Variable Fees" shall mean the fees described in subsection 4.4.
Section 4. Payments And Invoicing.
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4.1 In general, it is intended that, unless otherwise provided in this
Agreement, all reasonable Program expenditures incurred by DAC on behalf of the
Program, shall be paid or reimbursed by HP (upon receipt of an invoice with the
appropriate purchase order number identified on such invoice), at DAC's cost;
provided, however, that HP shall not be required to pay or reimburse any
significant expenditures for which DAC did not seek prior approval, as provided
in this Section 4. DAC agrees to seek the lowest possible costs for all
expenditures required to be reimbursed by HP. Additionally, HP will pay
Performance Fees to DAC as remuneration for services provided for Program
activities.
4.2 Start-up Fees. The parties agree that the start-up costs incurred
by DAC in support of the Program will be paid by HP as further provided in this
subsection 4.2. DAC estimates that Program start-up costs will be (i) $ [**2**]
for the costs outlined in the matrix included within this subsection 4.2, plus
(ii) costs incurred by DAC in response to additional Program requirements
approved by HP in writing, plus (iii) costs incurred by DAC for salary/wages and
burden associated with personnel hires in support of the Program that are
approved in writing by HP.
4.2.1 The $ [**3**] Program start-up fee consists of the
following items:
Matrix:
------
ITEM AMOUNT NOTE
MAX system access fee $ [**3**]
Taxware software license fee $ [**3**] (1)
Electronic commerce and operating system
hardware and software $ [**3**] (2)
Initial labor and expenses $ [**3**] (3)
Personnel hires in support of program $ [**3**] (4)
TOTAL $ [**3**]
Notes to Matrix:
(1) If the Taxware software costs less than [**4**], DAC will
refund the difference to HP. If the Taxware software costs
more than [**4**], DAC will substantiate the overage to HP and
HP will reimburse DAC for the additional expense incurred in
licensing the software.
(2) If the Program requires an expenditure by DAC of less than
[**4**] for electronic commerce and operating system hardware
and software, DAC will refund the difference to HP. If the
Program requires additional system hardware or software,
including a Program operating system server, a Web server, and
associated equipment, which costs DAC more than the [**4**]
allocated, DAC will
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substantiate the need for additional system hardware and
software resources, and HP will determine whether to pay the
additional expense or modify the Program as appropriate.
(3) The [**4**] includes all start-up labor except that associated
with demand generation activities, customer database
activities, and web development activities. HP agrees to pay
DAC for all additional start-up costs that are requested of
DAC and approved in writing by HP, in advance of incurring any
such costs.
(4) The [**4**] includes costs incurred by DAC for salary/wages
and burden for anticipated Program personnel requirements, up
to, but not beyond, the Effective Date. If these costs are
less than [**4**], DAC will refund the difference to HP. If
these costs are greater than [**4**] based on Program
personnel requirements requested and/or changes to the Program
start date and approved by HP in writing, HP agrees to pay DAC
for all additional costs incurred.
4.2.2 DAC shall present for approval by HP Authorized Signers
all personnel requisitions for Program-related hiring and Program requisitions
for all other Program-related expenses, including any items not specifically
described in the above matrix, before making any expenditures related to the
Program. The approval by an HP Authorized Signer of any requisition presented to
HP shall constitute HP's promise to pay for the items or services indicated.
4.2.3 DAC acknowledges that HP has previously paid to DAC all
of the $[**5**] start-up fee referenced in sub-subsection 4.2.
4.2.4 HP agrees to pay all other HP-approved Program
expenditures within [**B**] days of receiving DAC's invoice. Such expenditures
will only be made and billed by DAC after written approval by an HP Authorized
Signer via a Program or Personnel requisition.
4.3 Capital Expenditures. Based on anticipated Program requirements, no
capital expenditures that are the responsibility of HP are anticipated except
those associated with, and indicated as "Start-Up Fees" referenced in
sub-subsection 4.2 of this Agreement. Capital expenditures not included in the
Program Start-up Fees shall be treated as Allocated Fees and shall be
capitalized by DAC for purposes of the Program. Depreciated amounts shall be
charged as Allocated Fees when items are depreciated. All depreciation will be
in conformance with General Accepted Accounting Principles for equipment or real
property of the kind being depreciated.
4.3.1 Each capital equipment requirement will be submitted by
DAC to HP for approval on a "Program Requisition Form," a sample copy of which
is attached as Exhibit D, before a corresponding expenditure is made. Any such
Program Requisition Form submitted to HP will provide HP with all information
reasonably required to permit HP to make an informed decision. To the extent
consistent with good business judgment, the parties will seek to lease real and
personal
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property for Program uses. DAC agrees that HP will have no liability with
respect to any lease for more than a 24-month period unless this Agreement is
extended or renewed for an additional term. Notwithstanding the foregoing, DAC
agrees to take all commercially reasonable measures to mitigate any loss HP
might incur by reason of DAC's continued use of real or personal property no
longer required for Program purposes. The form of any lease must be approved in
advance by HP. Approval of a lease or other capital expenditure by HP shall
signify its agreement to make payments as contemplated by this subsection 4.3.
4.3.2 DAC will also invoice HP as Allocated Fees for all
Program-related lease payments and the carrying costs associated with the
non-depreciated capital expenditures at the end of each calendar month.
4.4 Variable Fees. All fees billed by DAC to HP pursuant to this
Agreement shall be Variable Fees except for Allocated and Performance Fees as
defined in subsections 4.5 and 4.6. Any item billed as an Allocated or
Performance Fee will not also be billed as a Variable Fee.
4.4.1 Variable Fees will be submitted by DAC to HP for
approval, showing either individual items or categories, or both, on a Program
Requisition Form. Such fees will be payable [**C**] days from receipt of such
invoice. Variable Fees for services may be submitted by DAC and approved by HP
on a per-unit basis with an unknown volume or quantity (such as outbound
freight, telephone rates); or Variable Fees may be submitted by DAC and approved
by HP for a Program requirement on a per occurrence basis (such as business
related travel, special services requested by HP and the like); or Variable Fees
may be submitted based on a service occurrence that is outside the standard
scope of services covered under Allocated Fees (such as a request to mail 50,000
letters to Program customers).
4.4.2 Variable Fees shall include a flat fee of $[**6**] per
dedicated employee, per month (which amount covers general day-to-day overhead,
such as postage, printing, local telephone, fax and other items).
4.4.3 Additionally, DAC shall xxxx as Variable Fees an
employee benefits burden of [**7**] in addition to each dedicated employee's
salary and bonus.
4.4.4 Requests by DAC for increases in employee compensation
and increases in staffing positions and associated compensation for additional
dedicated Program personnel must be submitted on a Personnel Requisition Form, a
copy of which is attached as Exhibit E.
4.4.5 Except as provided in sub-subsection 4.4.9, Variable
Fees for third-party products offered in the Program and supplied by DAC will
[**D**].
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4.4.6 Except as provided in sub-subsection 4.4.9, all
reasonable inbound freight cost, if any, associated with third party products
offered in the Program and supplied by DAC, will be passed to HP [**E**].
4.4.7 All reasonable packaging material cost, if any,
associated with Program shipments and supplied by DAC, will be passed to HP
[**F**].
4.4.8 DAC will not purchase any third-party products for
inventory without HP's prior written approval. Additionally, DAC may not
recommend the purchase of any third-party products to Program customers without
HP's prior written approval.
4.4.9 All Variable Fees shall be invoiced [**G**], except with
respect to products or services acquired from vendors/suppliers that have
contracts with DAC which prohibit disclosure of DAC's costs. Currently, Federal
Express, UPS, Xxxxxx Micro, Tech Data and Merisel have contracts that prohibit
the disclosure of DAC's costs. With respect to products or services from such
vendors, DAC will provide, in advance, a rate or cost that HP can use to
determine whether HP can provide the service or product at a lower rate or cost.
HP then shall determine either to obtain such services or products from DAC or
elect to have DAC secure the services or products through HP. DAC will not use
any third-party product or service which HP makes available to DAC at an HP rate
for any purpose other than DAC's fulfillment of Program purposes. Any rate HP
has obtained for any such third-party service will be treated by DAC as HP
Confidential Information.
4.4.10 Compensation (salary, bonus and the amounts
contemplated by sub-subsections 4.4.2 and 4.4.3 of this Agreement) for dedicated
employees for personnel services and materials shall be billed as Variable Fees
[**8**] times each month, on the dates of DAC's normal payroll payments. Such
fees will be payable within [**8**] days from receipt of each such invoice.
4.4.11 Any Variable Fees that have been approved, but are not
billed in, or with respect to, the month incurred, shall not be deemed
non-billable in a later month because of the delay; provided, however, that HP
shall not be responsible for any penalties (including, without limitation, any
interest) for late payments or any late charges on such amounts. Notwithstanding
the foregoing, HP will only be responsible to pay DAC Variable Fees for
activities actually undertaken by DAC in the period between the date on which
such Variable Fees were initially approved by HP and the date on which DAC bills
HP for such Variable Fees.
4.5 Allocated Fees. All Allocated Fees are identified in Exhibit B.
4.5.1 Allocated Fees associated with "non-dedicated Program
management personnel" and "DAC-affiliate allocated costs," as that terminology
is used in Exhibit B, shall not exceed the dollar amount set forth for those
items in Exhibit B during [**9**].
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4.5.2 Allocated Fees for "monthly depreciation of capital
equipment" and "expense for sales/administrative and distribution facilities
space," as that terminology is used in Exhibit B, may be adjusted only by
written agreement based on Program modifications requested by HP. Without
written consent from HP, neither the fees nor the associated resources or
services supplied by DAC under the Program may be increased or decreased.
4.5.3 Allocated Fees shall be billed monthly. Such fees will
be payable within[**10**] from HP's receipt of such invoice.
4.5.4 Any Allocated Fees that are not billed in, or with
respect to, the month incurred, shall not be deemed non-billable in a later
month because of the delay; provided, however, that HP shall not be responsible
for any penalties for late payments (including, without limitation, any
interest) or any late charges on such amounts. Notwithstanding the foregoing, HP
will only be responsible to pay DAC Allocated Fees for activities actually
undertaken by DAC in the period between the date on which such Allocated Fees
were initially approved by HP and the date on which DAC bills HP for such
Allocated Fees.
4.6 Performance Fees. Performance Fees shall be paid by HP to DAC as
remuneration for Program services. Performance Fees shall consist of [**H**].
4.6.1 During the months of [**11**], HP shall pay DAC a fixed
monthly fee of [**11**]. During the months [**11**], HP shall pay DAC a fixed
monthly fee of [**11**]. During the months of [**11**], HP shall pay DAC a fixed
monthly fee of [**11**]. Such fees will be invoiced monthly and will be payable
within [**12**] from receipt of such invoice.
4.6.2 Additionally, (i) during the months of [**13**], HP
shall pay DAC an amount equivalent to [**13**] of each month's Net Sales; (ii)
during the months of [**13**], HP shall pay DAC an amount equivalent to[**13**]
of each month's Net Sales; and (iii) during the months of [**13**], HP shall pay
DAC an amount equivalent to [**13**] of each month's Net Sales; [**13**].
4.6.3 Additionally, if HP requests marketing services from
DAC, HP shall pay DAC a marketing services fee, per the following schedule:
Catalog design shall be priced at cost plus [**14**]; catalog printing at cost
plus [**14**]; and database consulting at cost plus [**14**]. DAC acknowledges
receipt of [**14**] from HP as payment for activities related to a catalog of HP
Products prepared by DAC to promote the Program, as detailed in the DAC quote
for such catalog, which quote is attached hereto as Exhibit K.
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4.6.4 The fees described in sub-subsections 4.6.1, 4.6.2 and
4.6.3 of this Agreement (the "Monthly Fees") for the previous month shall be
invoiced by DAC on or about the [**15**] day of the following month. Such fees
will be payable within [**15**] from receipt of such invoice.
4.7 Incentives, Penalties and Sales Quotas. To ensure the highest
levels of customer satisfaction, the parties agree to strive to create and
maintain a best-in-class program. Accordingly, the parties agree to create
performance standards for the Program and adjust the Monthly Fee to account for
exceeding or not meeting such performance levels. To that end, the parties have
identified possible key Program metrics, examples of which are set forth in
Exhibit C hereto. On or before August 10, 1999, based on an analysis of Program
performance and other pertinent information during the period from June 8, 1999
through July 31, 1999, the parties will determine the top ten metrics (the
"Metrics"), and assign appropriate weighting values and rating scales to each.
Furthermore, the parties agree to meet once per quarter to review and change,
delete or add Metrics as appropriate for the Program. Beginning August 1, 1999,
the parties agree to utilize the following incentive, penalty and bonus
structures to ensure a quality Program.
4.7.1 Incentives. To the extent the Program exceeds the
Metrics as described below [**16**].
DAC Performance Incentive Increased Monthly Fee
------------------------ ----------------- ---------------------------------------------------
8/99-11/99 12/99-5/00 6/00-5/01
---------- ---------- ---------
[**17**] [**17**] [**17**] [**17**] [**17**]
[**17**] [**17**] [**17**] [**17**] [**17**]
[**17**] [**17**] [**17**] [**17**] [**17**]
[**17**] [**17**] [**17**] [**17**] [**17**]
4.7.2 [**18**]. To the extent the Program does not meet the
Metrics [**18**]:
DAC Performance Penalty Decreased Monthly Fee
---------------------------- ------------------ ---------------------------------------------------
8/99-11/99 12/99-5/00 6/00-5/01
---------- ---------- ---------
[**19**] [**19**] [**19**] [**19**] [**19**]
[**19**] [**19**] [**19**] [**19**] [**19**]
[**19**] [**19**] [**19**] [**19**] [**19**]
[**19**] [**19**] [**19**] [**19**] [**19**]
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4.7.2.1 If DAC does not [**20**] in any month, DAC
agrees to develop a detailed written corrective action plan, which it will
develop in cooperation with HP. Such corrective action plan will be provided to
HP upon completion, but not later than the 10th day of the following month. If
the Program does not reach performance levels of [**20**] in any month, such
nonperformance shall constitute a Material Default in Performance.
4.7.2.2 If during the next [**21**], DAC does not
[**21**].
4.7.2.3 If HP elects to [**22**].
4.7.3 [**23**] days prior to the beginning of each Quarter, HP
shall provide DAC [**23**] for the Program [**23**]. The parties agree to
determine what, if any, additional [**23**] will be required [**23**] If HP
determines that the additional required [**23**] exceed its budget for the
Program [**23**] the [**23**] shall be [**23**]. Once the [**23**] determined
and agreed to between the parties, the parties agree that [**23**]. The parties
further agree that [**23**].
4.7.4 Individual Sales Quotas and Bonus Structure. The parties
agree that at any time following [**24**] from the Effective Date, HP may elect
to offer a bonus program for telesales representatives. If HP elects to offer a
bonus program, the parties will jointly develop the sales goals and associated
bonus structure. DAC will be responsible for implementation of any such Program.
4.8 Invoices.
4.8.2 Each invoice shall be subject to verification by HP with
regard to the accuracy of the amount invoiced by DAC. Invoices shall reference
HP's Purchase Order number, if any, and shall be submitted to HP.
4.8.3 All xxxxxxxx are net [**25**]. Carrying costs of
[**25**] shall be calculated and billed on a monthly basis for all invoice
amounts that have been outstanding for [**25**].
4.9 Sales and Property Taxes. DAC will collect sales, use, and
transaction privilege taxes, on behalf of HP at HP's request. HP will be
responsible for the remittance of any sales, use, transaction privilege or
property taxes arising from Program activities to the appropriate government
agency and for any penalties or interest imposed in connection with such taxes,
unless such penalties or interest result from DAC's failure to provide such
information to HP in a timely manner, in which case said penalty or interest
amounts shall be DAC's responsibility. In situations in which services are
performed as required by this Agreement, HP will bear all applicable sales and
property taxes and will bear all state or federal income tax liability allocable
to HP pertaining to Goods. In order for the
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Program to be operational by the scheduled date, HP agrees to use Taxware
software for the collection of sales and use taxes. Without limiting the
generality of the foregoing, unless HP notifies DAC in advance when its
activities will result in the assertion by any taxing authority that DAC should
collect taxes with respect to sales into any state, country or territory, DAC
shall not be penalized or held responsible for any failure to collect such taxes
and HP shall hold DAC harmless with respect thereto. If a state determines that
HP must pay state sales, use or other transaction privilege taxes for previous
sales, HP will be responsible for paying or contesting such taxes in the legally
prescribed manner and will hold DAC harmless from and against any liability in
connection therewith (other than as provided elsewhere in this subsection 4.9).
Section 5. Staffing of Personnel.
5.1 Program staffing and associated compensation will be suggested by
DAC and approved by HP.
5.1.1 In the event of a downsizing request by HP affecting
personnel staffing, DAC will achieve reductions within 60 days of HP's written
request and make reasonable efforts to reduce headcount as soon as possible and
to minimize the associated exposure to HP.
5.1.2 No staffing and/or compensation modifications will be
made by DAC without HP's written approval. Said approval will result in HP's
agreement to pay for the approved additional costs, or recognize the additional
savings associated with the change. Compensation packages and compensation
adjustments must be approved by HP either specifically, or by approval of DAC's
policies.
5.2 Each party agrees to identify a contact to provide the necessary
support in implementation of Program business requirements and in the
performance of Program activities. HP will also make available to DAC (including
by providing at DAC's site) a program director, a credit supervisor/manager,
leasing personnel as needed and a product trainer. Each party will provide
reasonable written notice to the other party before making any changes to key
personnel.
5.3 Personnel supplied by DAC are DAC's employees and shall not for any
purpose be considered employees or agents of HP. DAC shall have all management
authority with respect to DAC's employees and DAC assumes full responsibility
for the actions of such personnel while performing services pursuant to this
Agreement. The parties contemplate that, as a general matter, HP will not be
involved in the decision to hire, promote, demote, or terminate particular DAC
personnel. Provided that HP is not so involved in a particular employment
decision, DAC will indemnify HP and hold HP harmless from any claim (including
any lawsuit, arbitral proceeding, mediation, or administrative proceeding) and
from any loss, fine, penalty, or damage of any kind (including reasonable
attorneys' fees and costs) arising from any DAC employment decision.
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5.4 Personnel supplied by HP are HP's employees and shall not for any
purpose be considered employees or agents of DAC. HP assumes full responsibility
for the actions of such personnel while performing services pursuant to this
Agreement, whether or not any of such services are performed on premises owned,
leased or maintained by DAC. Nothing in the foregoing sentence shall in any way
be construed or interpreted to relieve DAC of any duties owed to HP employees
while on DAC's owned, leased or maintained premises. Each such HP employee, if
on DAC's premises while in the performance of his or her duties as an HP
employee, shall be deemed to be a business invitee.
5.5 It is understood and agreed that neither party's employees or
contractors shall have any rights or privileges under any of the other party's
employee benefits programs. DAC agrees to inform any DAC personnel involved in
work relating to the Program that they are not eligible for HP employee
benefits. Each party agrees to indemnify the other and hold the other harmless
from any claim (including any lawsuit, arbitral proceeding, mediation, or
administrative proceeding) and from any loss, fine, penalty, or damage of any
kind (including reasonable attorneys' fees and costs) arising from any claim
asserted by the indemnifying party's employee that such employee is entitled to
any of the other party's employment benefits.
5.6 DAC agrees to perform its standard employee investigations with
respect to all prospective employees of the Program, which investigation shall,
at a minimum, include a background investigation, drug testing and certain
skills tests. HP agrees to pay a fee of [**26**] for the investigation of each
prospective employee, which amounts shall be billed with other Variable Fees on
a monthly basis.
5.7 HP reserves the right to audit the result of DAC's background
investigation results upon reasonable notice to DAC at any time during the term
of this Agreement. Investigations by either party must comply with all
applicable federal, state and local laws for background investigations. All use
of such information must be in compliance with applicable federal, state and
local laws.
Section 6. Use of Contractors.
6.1 DAC may use contractors in its performance of its duties under this
Agreement and the Program.
6.2 Notwithstanding the foregoing, if DAC anticipates using any
Significant Contractor, DAC shall submit the name of that contractor and a
description of the duties that contractor is to perform relating to this
Agreement or the Program to HP for HP's review. HP shall have the right to
approve or disapprove DAC's selection of that contractor.
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6.3 HP and DAC acknowledge that the following are Significant
Contractors which HP has approved as of the Effective Date: (i) Federal Express,
for shipment services relating to the delivery of Goods to Program Customers and
of Returned Goods from Program Customers to DAC; and (ii) AT&T, for long
distance services.
Section 7. Compliance With the Law.
7.1 DAC agrees to make, file and retain (for the periods required by
law) all required federal, state, and local reports and records, to withhold all
proper pay-roll deductions, and to pay all premiums in connection with social
security and workers compensation insurance; all federal, state and local
payroll and withholding taxes; and all other charges and taxes attributable to
the performance of its duties under this Agreement and in connection with the
Program.
7.2 In its performance under this Agreement, DAC and any associated
contractors will comply with all applicable laws and regulations pertaining to
the fulfillment of services rendered under this Agreement, including any federal
or state laws and regulations relating to hiring, employment, and management of
employees and the performance of telemarketing services, mail order services,
and leasing. DAC agrees to indemnify HP and hold HP harmless from any claim
(including any lawsuit, arbitral proceeding, mediation, or administrative
proceeding) and from any loss, fine, penalty, or damage of any kind (including
reasonable attorneys' fees and costs) arising from the failure of DAC or any DAC
contractor (other than a Significant Contractor approved by HP pursuant to
subsections 6.2 or 6.3) to comply with any applicable law or regulation relating
to the fulfillment of services rendered by DAC to HP under this Agreement.
7.3 Upon request by HP, DAC shall certify compliance with such
applicable laws and regulations, and provide such evidence of compliance as HP
may reasonably request. HP shall have the right to audit DAC's books and records
relating to the Program, for the purpose of assuring compliance with the
obligations described in this Section 7. HP will bear all costs related to such
audit; provided, however, that if such audit discloses material breaches by DAC
of its obligations under this Section 7, DAC will be responsible for all
reasonable audit-related costs. In connection with the employment of DAC's
dedicated personnel assigned to perform work hereunder, DAC will cooperate, at
its own expense, with all federal, state and local authorities in the conduct of
any audits for the purpose of determining DAC's compliance with this Section 7.
7.4 HP agrees that in all respects pertinent to the performance of this
Agreement, it will comply with all applicable federal, state, and local laws,
regulations, and ordinances.
Section 8. Consigned Inventory.
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8.1 From time to time, [**I**] the Program. Such Returned Goods will be
consigned to DAC solely for DAC's use in meeting the requirements of this
Agreement and as further defined below. DAC will be [**J**] of Returned Goods as
set out in the Program Exhibit's provisions on returned products.
8.2 HP will at all times retain title to the Returned Goods consigned
to DAC under this Agreement. DAC agrees that the Returned Goods will only be
utilized to fulfill the terms of this Agreement and the Returned Goods will not
be leased, rented, consigned, sold, or otherwise conveyed or transferred to any
third party unless expressly authorized in writing by HP. DAC shall not create
or allow or permit to exist any lien, security interest, or other encumbrance on
or otherwise affecting the Returned Goods other than the security interests and
encumbrances created in favor of HP pursuant to this Section 8. HP will, at any
time, be entitled to the prompt return of such Returned Goods at HP's expense.
DAC agrees that will give HP reasonable prior notice of the planned filing by
DAC of any voluntary petition under any bankruptcy laws, and will provide HP
with notice as soon as is reasonably practicable of any actual or planned filing
of any involuntary petition under any bankruptcy laws. If such notice is
provided, and to the extent consistent with law, DAC agrees to cooperate with
HP's efforts to reclaim the Returned Goods from DAC's possession.
8.3 DAC's Obligations to Protect Returned Goods Pre-Inspection. Upon
the delivery of Returned Goods to DAC, DAC shall store such Returned Goods in
its warehouse, and shall protect such Returned Goods from:
8.3.1 exposure to water or other liquids, fire, smoke, heat,
wind, insects, animals, and electromagnetic radiation; and
8.3.2 theft by anyone other than DAC employees, provided that
DAC shall use all reasonable efforts to prevent theft by DAC employees.
8.4 DAC's Obligations to Protect Returned Goods Post-Inspection. Except
for losses caused by DAC's failure to comply with the obligations to protect
Returned Goods expressly assumed by DAC in subsection 8.3, HP will retain risk
of loss for Returned Goods returned to DAC until such Returned Goods are opened
and inspected by DAC. Subject to the [**27**] percent shrinkage level referenced
in subsection 8.7, DAC assumes all risk of loss or damage to the Returned Goods
after the Returned Goods are inspected by DAC. DAC's obligation in this regard
shall be satisfied if the Returned Goods are delivered to a carrier approved by
HP for shipment to HP or its designee, agent or customer in the same condition
as when delivered to DAC except for minor packaging damage. If any Returned
Goods shipped by DAC are returned to DAC for any reason, DAC shall reassume risk
of loss or damage to such Returned Goods at the time they are re-delivered to
DAC.
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8.5 Except as may be necessary to protect and reserve such Goods, and
with prior approval by HP (which approval will be in writing except when exigent
circumstances justify oral approval), DAC will not relocate any HP-owned
Returned Goods to a facility other than the following location: 0000 Xxxxx
Xxxxxxxxx, Xxxxx, Xxxxxxx 00000. HP will have the right to inspect any
substitute facility and reserves the right to refuse to allow the use of any
such facility that does not meet HP's requirements. In the event of unauthorized
movement of Goods to a substitute facility, DAC assumes full responsibility and
agrees to reimburse HP for the value of such Returned Goods (as determined by
reference to the resale value of such Returned Goods) for any loss due to
damage, theft or any infidelity, conversion and/or misappropriation whether or
not known to DAC, including loss or shortage disclosed upon taking inventory. In
addition, DAC will pay all necessary freight and/or other expenses incurred in
replacing such Returned Goods.
8.6 DAC will not alter, modify or change any Returned Goods unless
expressly authorized in writing by HP. DAC agrees to indemnify HP and hold HP
harmless from any claim (including any lawsuit, arbitral proceeding, mediation,
or administrative proceeding) and from any loss, fine, penalty, or damage of any
kind (including reasonable attorneys' fees) arising from the alteration,
modification, or change by DAC of any Returned Goods, including any claim
relating to personal injury or property damage caused by DAC's release of
Returned Goods containing a hazard to the extent such hazard was introduced into
the product by DAC's modification, alteration or change to such Returned Goods.
8.7 Subject to [**28**] percent shrinkage after DAC has inspected
Returned Goods, DAC agrees to manage, control, audit, and secure all Returned
Goods to ensure accurate inventory and full accountability of all Returned
Goods. DAC agrees to check the Returned Goods, to physically tag them in a
conspicuous manner (if they are not already labeled or tagged) to identify them
as owned by HP, and to segregate them physically and electronically (including
in any DAC inventory control or order management database) from any products
that are not owned by HP which are maintained by DAC within its facilities or
Parent's facilities.
8.8 Except as provided in this subsection 8.8. HP's right and access to
all Returned Goods consigned under this Agreement will be unconditional and
unrestricted. Any entry by HP to DAC's facility for the purpose of reviewing
consigned Returned Goods will be in the presence of an authorized DAC employee
and during DAC's normal business hours.
8.9 It is the intent of the parties that the consignment of Returned
Goods to DAC constitutes a true consignment and not a consignment for security.
Nonetheless, if this consignment is construed as a consignment for security
instead of a true consignment, in order to secure DAC's obligations hereunder,
DAC hereby grants to HP a security interest and a purchase money security
interest in all Returned Goods. HP may take any action (without notice,
presentment, demand, protest, notice of protest, or dishonor, notices of
acceleration or notice of intent to accelerate, all of
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which DAC hereby waives) afforded a secured party under the Uniform Commercial
Code upon the occurrence of a material violation by DAC of its obligations under
this Section 8, and upon such occurrence, all obligations of DAC due to HP under
this Section 8 shall, upon notice by HP, become immediately due and payable;
provided if the violation giving rise to the foregoing remedies is attributable
to the insolvency of DAC or Parent, or any bankruptcy related proceeding
affecting DAC or Parent, all obligations of DAC or Parent to HP arising under
this Section shall automatically become due and payable. DAC agrees to sign
financing statements, continuation statements and such other instruments as HP
may reasonably request to maintain a first priority, perfected security interest
in the Returned Goods (if this consignment is construed as a consignment for
security instead of a true consignment).
8.10 Liability for Returned Goods.
8.10.1 The parties agree that DAC's care, custody, and control
("Care, Custody, and Control") over Returned Goods shall commence when DAC takes
possession of such Returned Goods at DAC's facilities and continue until DAC has
delivered such Returned Goods to a common carrier approved by HP and such
approved carrier takes possession of and verifies in writing that it has
received such Returned Goods. DAC will not tender Returned Goods valued in
excess of $5,000,000 on any one conveyance without prior notification to and
approval by HP.
8.10.2 DAC shall reconcile all inbound shipments of Goods with
expected shipments, bills of lading and packing lists and shall notify HP of any
discrepancies in quantity of the Returned Goods received and all observable
defects or damages in the Goods. For the purposes of this Agreement, "observable
defects" shall mean only those defects plainly and readily visible to the human
eye and requiring no technical skills or background to discover upon a visual
inspection. DAC shall maintain accurate inventory record counts and record all
observable defects in the Returned Goods. DAC will not be liable for concealed
or unobservable damage to the Returned Goods and will not be required to open
packages solely for the purpose of checking for damage.
8.10.3 After adjustment for permissible shrinkage, DAC will be liable
for the first [**29**] per occurrence of loss or damage occurring with respect
to HP-owned Goods under DAC's Care, Custody, and Control.
8.10.4 Once DAC has delivered any Goods to a common carrier approved by
HP and such approved carrier takes possession of and verifies in writing that it
has received such Goods, HP shall bear the risk of loss, and shall pay for
shipment of such Goods.
8.10.5 Beginning on the first Saturday following October 1, 1999, and
at least once each Quarter thereafter, [**30**] since the inception of the
Program or the last such calculation, as appropriate, and the amount thereof, if
any, shall be due and payable [**30**].
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Section 9. Records, Audits, and Inspections.
9.1 HP reserves the right to audit DAC's facilities in relation to this
Agreement to verify performance of services defined herein and/or to perform
more frequent physical inventory counts. HP will perform said audits during
DAC's normal business hours. DAC agrees fully to cooperate with HP employees in
this regard. All of such audits and inspections shall be at HP's expense;
provided, however, that (i) HP shall have no obligation to compensate DAC for
the reasonable assistance of DAC employees during the course of such audit; and
(ii) if such audit discloses any material breach by DAC of any obligation
undertaken by DAC pursuant to this Agreement, DAC will bear all reasonable costs
associated with such audit.
9.2 DAC shall maintain accounting records during the term of this
Agreement and for one year thereafter, in a consistent form to substantiate
DAC's charges hereunder. HP and its designated representatives shall have the
right to audit and review DAC's sales and customer credit records and all other
records relevant to the calculation of payments pursuant to this Agreement,
except with respect to Allocated Fees, the Variable Fees described in
sub-subsections 4.4.2 and 4.4.3 and those fees which cannot be disclosed because
of contract restrictions, as described in sub-subsection 4.4.9, upon reasonable
prior notice, during normal business hours, during the term of this Agreement
and for one year after the termination or expiration of this Agreement. All fees
and costs incurred by HP in connection with any such audit shall be at HP's
expense; provided, however, that (i) HP shall have no obligation to compensate
DAC for the reasonable assistance of DAC employees during the course of such
audit, and (ii) if such audit discloses any material breach by DAC of any
obligation undertaken by DAC pursuant to this Agreement, DAC will bear all
reasonable costs associated with such audit.
Section 10. Quality Assurance.
10.1 DAC's quality assurance policy focuses on root cause corrective
action and continuous quality improvement concepts and methodology. DAC agrees
to manage distribution operations (returns processing) to documented process
specifications that meet standard HP operational requirements. DAC's sales and
administration functions will comply with business rules and process
specifications approved by HP, including, without limitation, all business rules
contained in Exhibit A, attached hereto. DAC agrees to monitor routinely all
aspects of the Program to ensure the highest level of quality.
10.2 Downtime Events. Consistent with DAC's quality assurance policy,
DAC will use all commercially reasonable efforts to avoid Downtime Events,
including the following:
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10.2.1 DAC will schedule all regular maintenance on its
telecommunications and data computer processing infrastructure outside Program
Business Hours. In the event of expanded Program Business Hours, DAC will
schedule maintenance activities during hours that minimize the impact on the
Program.
10.2.2 On a Quarterly basis, DAC will review [**31**] DAC
controlled operating environment. [**31**]
10.2.3 Within five days following the beginning of any
Downtime Event lasting more than two hours, DAC will provide HP with a written
description of the event, including full root-cause analysis, and a detailed
written corrective action plan.
10.3 Year 2000. Not later than the close of business on September 30,
1999, DAC will plan for and test all computer and telephone systems used by DAC
in connection with the Program, including without limitation MAX, to ensure that
they will not cause material functional disruption to DAC's support of the
Program before and after January 1, 2000. DAC agrees to provide HP with the
results of such testing, provided that all such results shall be deemed
Confidential Information.
Section 11. Insurance and Statutory Obligations.
DAC shall, at its own expense, maintain during the term of this
Agreement or for such periods beyond said Term as specified herein at least the
forms and amounts of insurance set forth below:
11.1 Commercial general liability insurance, including contractual
liability under DAC's indemnification, for bodily injury and property damage at
limits of [**K**] per occurrence and [**L**] in the aggregate.
11.2 Worker's compensation insurance in such amounts as required by
applicable law. Said worker's compensation policy shall contain an alternate
employer endorsement in favor of HP and shall include a Waiver of Subrogation.
Employer's liability insurance in the amount of not less than [**M**] per
accident, [**N**] per policy limit, and [**O**] for each employee.
11.3 Automobile liability for all motor vehicles, whether owned,
non-owned or hired by DAC or its employees or subcontractors, with a combined
single limit of [**P**] per occurrence for bodily injury and property damage.
11.4 Fidelity bond or crime policy covering DAC's employees in the
amount of [**Q**] per occurrence. Said bond or policy will be endorsed to cover
employees leased by DAC.
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11.5 Excess liability insurance in the amount of [**R**] per occurrence
to cover claims covered by commercial general liability, automobile liability,
and employers's liability insurances that extend above the liability levels set
forth above.
11.6 Business Personal Property insurance in the amount of [**S**] per
occurrence.
11.7 Prior to providing any of the services contemplated by this
Agreement, and upon HP's written request: (i) DAC will provide HP with
Certificates of Insurance evidencing coverage requirements of this Section; (ii)
DAC will certify that each of the policies of insurance referenced in
subsections 11.1 through 11.6 conform in all respects to Insurance Service
Organization standard forms for policies of the same general type, or will
permit HP to inspect the policy documents, provided that all information
provided in the policy documents, including information with respect to premium
amounts, will be treated as DAC Confidential Information.
11.8 DAC will maintain in effect all insurance through valid and
enforceable policies issued by insurer(s) of responsibility and authorized to do
business in the appropriate jurisdiction, which insurer(s) will have a Best's
rating of not less than A VII.
11.9 DAC will cause the insurance, except for the insurance provided
for in subsection 11.2 above, to be endorsed and name HP and its officers,
directors, and employees as additional insures as their interest may appear.
11.10 All insurance maintained by DAC may be carried under blanket
policies.
11.11 DAC will cause the insurance to be subject to provisions to the
effect that the coverage contained therein will not be suspended, voided,
canceled, reduced in coverage limits, or materially changed without first
providing 30 days prior written notice from the insurance agent or broker to HP.
11.12 With any proposed change to or replacement of any required
insurance coverage, an amended Certificate of Insurance relating to such changed
or replacement insurance coverage be delivered by DAC to HP at least 30 days
prior to the effective date of such change or replacement.
Section 12. Warranties.
12.1 HP Products sold as part of the Program will be warranted by HP in
accordance with the warranty documentation packaged within the HP Products.
12.2 Products not manufactured by HP, yet sold as a part of the
Program, will be warranted by the manufacturer of such products in accordance
with each manufacturer's published coverage.
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Neither HP nor DAC shall be required to respond to requests for service with
respect to such products other than to provide specific telephone numbers for
the Program customers to call.
12.3 Warranty to Limit Downtime Events.
12.3.1 Provided that HP has [**32**]
12.3.2 Provided that HP has [**33**]
12.3.3 HP acknowledges that during the month of July, 1999,
DAC may experience a Downtime Event of up to 12 hours caused by the relocation
of DAC administrative offices. DAC agrees to use all commercially reasonable
efforts to limit any interruption to the Program caused by its move. [**34**]
12.3.4 HP further acknowledges that in the event HP expands
the initial Program Business Hours, DAC reserves the right to adjust the
[**35**], or to xxxx HP for all marginal costs resulting from the expanded
Program Business Hours which DAC reasonably anticipates incurring in maintaining
its [**35**].
12.3.5 HP acknowledges that the [**36**]
12.4 Year 2000 Warranty.
12.4.1 DAC represents and warrants that, not later than the
close of business on September 30, 1999, all of the computer and
telecommunications software, firmware and hardware products used by DAC to
support the Program, the failure of which would potentially materially disrupt
the Program, will be Year 2000 Compliant as defined below. Year 2000 Compliant
products will perform without material error, loss or data or loss of
functionality arising from any failure to process, calculate, compare or
sequence date data accurately, including but not limited to calculations from,
into and between centuries and the years 1999 and 2000 and leap year
calculations. In addition, Year 2000 Compliant products will not cause any
associated products or systems in which they may be used to fail to a material
extent in any of the ways described above.
12.4.2 DAC further represents and warrants that, after due
investigation, as of the close of business on September 30, 1999, all of DAC's
internal business and information systems will be Year 2000 Compliant, such that
DAC will not experience any material interruption in business or impact on
operations, including but not limited to DAC's ability to support end-users
attempting to order HP Products using the Program, from any change in the
performance or functionality of its internal business and information systems
related to date processing.
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12.4.3 DAC further represents and warrants that, as of the
close of business on October 15, 1999, it will have disclosed to HP any and all
Year 2000 issues of a material nature.
12.5 EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 12, THERE ARE NO
OTHER WARRANTIES, EXPRESS OR IMPLIED, BY DAC OR HP INCLUDING ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. HP AND DAC
EXPRESSLY DISCLAIM ANY WARRANTIES NOT STATED OR REFERRED TO HEREIN WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING. THE PARTIES ACKNOWLEDGE THAT HP HAS
MADE NO REPRESENTATIONS OR GUARANTEES, EXPRESS OR IMPLIED, REGARDING (I) THE
PROFITABILITY OF ANY BUSINESS THAT DAC MAY EXPECT FROM HP AS A RESULT OF THIS
AGREEMENT, OR (II) THE REVENUE THAT DAC MAY DERIVE FROM HP AS A RESULT OF THIS
AGREEMENT.
Section 13. Default and Termination.
13.1 Termination for Convenience. Either HP or DAC may terminate this
Agreement, for any reason or no reason, by giving the other party 90 days prior
written notice.
13.2 DAC Default. DAC shall be considered in default of this Agreement
if a Material Default in Performance occurs (except for the Material Defaults in
Performance referenced in clauses (i), (iii), and (vi) of subsection 3.16). Upon
the occurrence of such a Material Default in Performance, HP may at its option:
(i) request DAC to cure such Material Default in Performance at no additional
charge to HP; (ii) request a refund of time paid for unacceptable work or a
reduction in future charges as mutually agreed upon between DAC and HP; or (iii)
treat such failure as an Event of Default, as provided in subsection 3.8.
13.3 HP Default. HP shall be considered in default of this Agreement if
any payments for expenses or fees associated with the Program are more than 30
days delinquent, in which case DAC may request immediate payment to be delivered
by HP to DAC within 3 business days. If no such payment is forthcoming, such
non-payment will be a Material Default in Performance, and the notice period in
sub-subsection 13.4.1 for this particular Material Default in Performance, if
DAC deems such Material Default in Performance to be an Event of Default, shall
be reduced to 30 days.
13.4 Termination for Cause.
13.4.1 Either party may terminate this Agreement upon an Event
of Default by the other party, for cause, by giving the defaulting party 60 days
prior written notice.
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13.4.2 If this Agreement is terminated by either party
pursuant to sub-subsection 13.4.1, during the notice period, the terminating
party shall give or continue to give the other party reasonable opportunity to
cure its deficiencies in meeting its obligations under the Agreement for the
first 30 days following notification, except to the extent that the Event of
Default that precipitated the non-breaching party's right to terminate for cause
arises under sub-subsection 4.7.2.1, subsection 13.2, or subsection 13.3. If the
breaching party is able to cure its deficiencies to the reasonable satisfaction
of the terminating party, the Agreement shall continue in effect as if no notice
was given. If the terminating party is unable to cure its deficiencies to the
reasonable satisfaction of the terminating party, the Agreement will (except for
the surviving terms referenced in subsection 23.11 of this Agreement) terminate
as of the close of business on the 30th or 60th day following notification, as
specified above.
13.5 [**37**]
13.6 Obligation of Cooperation During Period of Termination. Without
waiving any rights either party may have at law or equity arising from the
termination of this Agreement, each party agrees to cooperate with the other to
facilitate the orderly dissolution of the business relationship set forth in
this Agreement.
13.7 Reimbursement upon Termination. Upon the termination of the
Program, DAC shall, at the request of HP, assign to HP, and HP may assume, any
leases of personal property made on behalf of the Program and HP shall reimburse
DAC for all non-depreciated capital expenditures made on behalf of the Program,
as described in subsection 4.3. Upon such assumption and reimbursement, all
leased or owned personal property with respect to which such payments were made
shall become the property of HP. If HP determines to dispose of any of such
property, DAC shall be given the opportunity to participate as a potential buyer
in connection with any such sale, but HP shall not be obligated to give DAC any
preference in connection with any such sale. HP shall also reimburse DAC for all
payments due with respect to any period prior to May 31, 2001 pursuant to any
real property leases made on behalf of the Program.
Section 14. Rights on Change in Control.
[**38**]
[**38b**]
Section 15. Force Majeure.
Neither party shall be liable or responsible for any failure to comply
with any provision of this Agreement to the extent any such failure is caused
directly or indirectly by fire; earthquake; natural
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disaster; adverse weather conditions; strike, union, or other labor problems;
war (whether or not declared); riot; insurrection; government restrictions; or
other acts or other causes beyond the control of or without fault on the part of
such party; provided, however, that the performance of a party shall not be
excused as a result of strike, union, or other labor problems occurring with
respect to its own employees or work force. Upon the occurrence of any event of
the type referred to herein (a "Force Majeure Event"), such party shall give
prompt notice thereof to the other party, together with a description of such
event and the duration for which such party expects its ability to comply with
the provisions of this Agreement to be affected thereby. Such party shall
thereafter devote its reasonable best efforts to remedy, to the extent possible,
the condition giving rise to such event and to resume performance of its
obligations hereunder as promptly as possible.
Section 16. Indemnification.
Except as provided in Section 17, Limitation of Liability, each of DAC
and HP shall defend, indemnify and hold harmless, the other and its employees,
officers, directors and agents from and against all fines, suits, proceedings,
claims, demands, debts, obligations, liabilities or actions of any kind by
anyone (including reasonable attorneys' fees and costs) allegedly arising from
or connected with (i) violations by the indemnifying party of any law,
ordinance, rule or regulation of the United States or any state or city or other
governmental body, (ii) the indemnifying party's actions or omissions in
connection with this Agreement, (iii) any breach of a representation or warranty
by or any breach or default in the performance of any obligation of the
indemnifying party under the provisions of this Agreement, (iv) the negligence
of the indemnifying party, (v) the activities or operations of the indemnifying
party, its employees, officers, directors or agents, while it or any of them are
performing the indemnifying party's obligations under this Agreement, and (vi)
the termination of the employment relationship between DAC and any of DAC's
employees, to the extent HP was directly involved in the decision to terminate
the DAC employee, or between HP and any of its employees, to the extent DAC was
directly involved in the decision to terminate the HP employee.
Section 17. Limitation of Liability.
EXCEPT AS PROVIDED IN SUB-SUBSECTION 4.7.2, IN NO EVENT WILL EITHER
PARTY BY LIABLE FOR INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
SALES OR LOST PROFITS), TO ANYONE ARISING OUT OF THIS AGREEMENT OR THE USE OF
THE GOODS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
Section 18. Trademarks and Related Matters.
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18.1 Attached as Exhibit L to this Agreement are HP's guidelines for
the use of its trademarks or trade names in connection with this Agreement. The
HP Commercial Channels Organization Marketing Communications Department shall be
the sole source for DAC of HP logo artwork. No other source will be considered
approved pursuant to this Agreement.
18.2 DAC is authorized to use HP logos. trademarks, trade names, and
service marks, and all Intellectual Property Rights associated with the visual
appearance of the HP web site (xxx.xx.xxx) only to the extent necessary to meet
the required Program service specifications and only in accordance with HP's
guidelines. No other rights with respect to the trademarks, service marks, trade
names or brand names of either HP or DAC are conferred on the other party,
either expressly or by implication, by this Agreement.
18.3 HP and DAC each recognize the other party's ownership of and title
to its respective trademarks, service marks, trade names and brand names, and
the goodwill attaching thereto, and agrees that any goodwill which accrues
because of the other party's use of the trademarks, service marks, trade names
or brand names, or because of any other activity involving the promotion of the
other party's products or services, will vest in and become the property of the
owner. Each party agrees not to contest or take any action to contest the other
party's trademarks, service marks or trade names or to use, employ or attempt to
register any trademark, service xxxx or trade name which is confusingly or
deceptively similar to the other party's trademarks, service marks or trade
names.
18.4 Permission granted relative to the trademarks, service marks,
trade names or brand names of the other party shall terminate with the
expiration or termination of this Agreement. Both parties immediately shall
cease approved use of the trademarks, service marks, trade names and brand names
of the other party upon expiration or termination of this Agreement.
Section 19. Defense Of Intellectual Property Claims.
19.1 HP will defend or settle any claim against DAC (or end-user
customer), that HP Products sold to end-user customers through the Program
(excluding custom products) infringe any Intellectual Property Right, provided
DAC:
19.1.1 Promptly notifies HP in writing of a claim of
infringement; and
19.1.2 Cooperates with HP in, and grants HP sole control of,
the defense or settlement of such claim of infringement;
19.2 HP will pay infringement claim defense costs, settlement amounts
and court-awarded damages. If such a claim appears likely, HP may modify the
Product, procure any necessary license,
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or replace it. If HP determines that none of these alternatives is reasonably
available, HP will refund any end-user's purchase price upon return of the
Product if within one year of Delivery, or the Product's net book value
thereafter.
19.3 HP has no obligation for any claim of infringement arising from:
19.3.1 Claimed infringement arising from HP's compliance with
DAC's designs, specifications or instructions;
19.3.2 Claimed infringement arising from HP's use of technical
information or technology provided by DAC;
19.3.3 Unauthorized product modifications by DAC or by any
third party;
19.3.4 Product use prohibited by product specifications or
related application notes; or
19.3.5 Use of HP products with products which are neither (i)
provided by HP to DAC, or (ii) provided by a third party to DAC but included in
the Program at HP's request.
19.4 THIS SECTION 19 STATES HP'S ENTIRE LIABILITY TO DAC FOR CLAIMS OF
INTELLECTUAL PROPERTY INFRINGEMENT.
Section 20. Confidential Information.
20.1 Definition of Confidential Information: Since the beginning of the
discussions leading to this Agreement, HP and DAC have exchanged, and will
continue to exchange, confidential information as has been and will continue to
be reasonably necessary to the negotiation and implementation of this Agreement.
When provided in written form, such information has been and will be
conspicuously marked as "CONFIDENTIAL" on the face of such information. If such
information is disclosed orally, the disclosing party has and will notify the
receiving party in writing within 30 days of the date of disclosure, summarizing
the information and requiring that such information be treated as confidential.
Information meeting the requirements of either of the two previous sentences is
defined in this Agreement as "Confidential Information." Examples of
Confidential Information disclosed by HP to DAC include its customer lists and
related demographic information, sales databases, marketing strategies, the
pricing HP makes available to certain HP Distributors, and the pricing HP
receives from its suppliers of goods and services. Examples of Confidential
Information disclosed by DAC to HP include DAC's electronic fulfillment system,
DAC's processes and related business rules, its software, and its employee
manuals relating to direct
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sales and related operations, in the form in which they exist as of the
Effective Date and as modified during the term of this Agreement.
20.2 Notwithstanding the foregoing, Confidential Information does not
include information which:
20.2.1 Becomes a matter of public knowledge without fault of
the receiving party;
20.2.2 Is already rightfully in the possession of the
receiving party prior to its receipt from the disclosing party;
20.2.3 Is rightfully received by the receiving party from a
third party with no obligation of confidentiality to the disclosing party;
20.2.4 Is independently developed by the receiving party,
provided that, as used in this sub-sub-section 20.2.4, "independently developed"
shall mean developed without any use of or access to any relevant confidential
information by those individuals within the receiving party that developed such
information;
20.2.5 Is disclosed by the disclosing party to a third party
that does not undertake a duty of non-disclosure to the disclosing party and
which is not under a duty of non-disclosure imposed by statute or regulation;
20.2.6 Is disclosed by operation of law, including in response
to a subpoena or civil investigative demand, provided, however, that prior to
disclosing such information in response to such subpoena or civil investigative
demand, the receiving party shall promptly notify the disclosing party of its
receipt of such subpoena or demand prior to its release of such information and
reasonably assist the disclosing party in obtaining adequate protection of such
information; or
20.2.7 Is disclosed by the receiving party with the disclosing
party's prior written consent.
20.3 Use of Confidential Information. Confidential Information may only
be received by and used by those employees of the receiving party that have a
reasonable need to know such information for purposes related to the negotiation
and implementation of this Agreement. Each party agrees to use the same degree
of care in protecting information disclosed to it by the other party as it uses
to protect its own sensitive business information of a similar nature, but in no
event may either party use less than a reasonable degree of care. Without
limiting the generality of the foregoing, DAC agrees that it will not share any
end-user names generated by HP with Parent, or
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with any other DAC customer. This obligation lasts for three years from the date
on which this Agreement expires or terminates.
20.4 No Licenses or Warranties. The provision of Confidential
Information by a disclosing party to a receiving party does not constitute a
license to any Intellectual Property Rights that may be contained in such
information. All such rights are expressly retained by the disclosing party,
except to the extent that such Confidential Information or any Intellectual
Property Right contained therein is licensed pursuant to an express grant
contained in this Agreement. All Confidential Information is provided "AS-IS"
with all warranties expressly disclaimed, except to the extent that the accuracy
or completeness of any item of Confidential Information is warranted pursuant to
an express warranty contained in this Agreement.
20.5 Solicitation of Customers. Anything herein to the contrary
notwithstanding, DAC may not solicit HP's customers for any purpose other than
to fulfill its duties and responsibilities hereunder. If an HP customer contacts
DAC directly and requests additional services or information from DAC regarding
products which are not the subject matter of this Agreement. DAC may communicate
with such customer regarding such request. DAC or any of its affiliates may
communicate with such customer regarding such request. DAC or any of its
affiliates may also contact or solicit any customer who is also a customer of HP
so long as such customer has been acquired as a customer or otherwise identified
by DAC or any of its affiliates independently of this Agreement.
20.6 Hiring of Other Party's Employees. Anything herein to the contrary
notwithstanding, each party agrees that, without the consent of the other party,
it will not solicit, endeavor to entice away from the other party or any of its
affiliates or otherwise attempt to hire the other party's relationship with any
employee except with the express written consent of the other party.
Notwithstanding the foregoing:
20.6.1 HP agrees only that it will not hire any DAC employee
for a position within HP's United States Commercial Channels Organization Small
and Medium Business Marketing business unit, the business unit which, as of the
Effective Date, is managed by [**T**]. To the extent that any other HP business
unit hires any DAC employee for a position physically located within the United
States, within 10 days following notice from DAC that a DAC employee has been
hired by HP, HP employees responsible for the management of HP's relationship
with DAC agree to (i) notify the manager responsible for the hiring decision of
HP's commitment to DAC pursuant to this sub-section 20.6; and (ii) to discourage
such hiring manager from hiring any additional DAC employees. If such hiring
manager hires any additional DAC employees during the Term following the
notification provided to such hiring manager, HP will be in breach of its
obligations to DAC undertaken pursuant to this sub-section 20.6.
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20.6.2 DAC further acknowledges that HP's obligations pursuant
to this sub-section 20.6 are limited to DAC management personnel who, upon being
hired by HP, would:
20.6.2.1 be directly involved: in HP's computer
products-related sales or marketing efforts; or
20.6.2.2 have supervisory responsibilities with
respect to HP's computer products-related fulfillment activities.
Section 21. Publicity
21.1 DAC Public Statements. DAC agrees that it will not make any public
statement regarding this Agreement or the Program without HP's prior written
approval.
21.2 Use of Intellectual Property. Except as provided in sub-section
18.2, neither party shall have the right to use the other party's trademarks,
service marks, trade names or brand names in connection with any service,
product, promotion, advertisement or publication without prior written approval
of the other party.
21.3 HP Statement. Notwithstanding the foregoing, HP may use the trade
names of DAC or Parent in connection with a public statement regarding the
Program. HP agrees to provide DAC not less than 48 hours prior notice of any
such public statement, provided that neither DAC nor Parent shall have the right
to prevent HP's issuance of such public statement by disapproving its issuance
Section 22. Notices And Approvals
22.1 Notices: All notices, demands and requests required or permitted
by this Agreement shall be in writing and, except as otherwise provided herein,
shall be deemed to have been given for all purposes (i) upon personal delivery,
(ii) one day after being sent, when sent by professional overnight courier
service from and to locations within the continental United States, (iii) five
days after posting when sent by United States registered or certified mail, with
postage prepaid on the date of transmission when sent by confirmed facsimile, or
(v) at the time of a confirming e-mail from the receiving party, which
acknowledges an e-mail notice or request; if directed to the person or entity to
which notice is to be given at his or its address set forth in this Section or
at any other address such person or entity has designated by notice.
22.2 Notices sent to HP will be sent to:
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Notice sent to: With a copy to:
Xxxxxx Xxxx Xxx Xxxxx
Hewlett-Packard Company Senior Attorney
Mail Stop 52U/XX Xxxxxxx-Xxxxxxx Company
0000 Xxxxxxx Xxxxx Xxxxxxxxx Mail Stop 20BQ
Xxxxx Xxxxx, XX 00000-0000 0000 Xxxxxxx Xxxxxx
Phone: 000-000-0000 Xxxx Xxxx, XX 00000
Fax: 000-000-0000 Phone: 000-000-0000
Fax: 000-000-0000
22.3 Notices to DAC will be sent to:
Notice sent to: With copies to: And:
Direct Alliance Corporation Insight Enterprises, Inc. Xxxxxxx & Xxxxx, LLP
Attn: Xxxx Xxxxx, Chief Attn: Xxxxxxx Xxxxxxxxx, Attn: P. Xxxxxx Xxxx
Operating Officer Chief Financial Officer One East Camelback Road,
0000 Xxxx Xxxxxx Xxxxxx 0000 Xxxxx Xxxx Xxxxxx Xxxxx 000
Xxxxx, XX 00000 Xxxxxxx, XX 00000 Xxxxxxx, Xxxxxxx 00000
Phone: 000-000-0000 Phone: 000-000-0000 Phone: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000 Fax: 000-000-0000
E-Mail: Xxxxxx@XxxxxxXxxxxxxx.xxx E-Mail: xxxxxxxxxx@xxxxxxx.xxx E-Mail: xxxxxx@xxxxxxx.xxx
22.4 Approvals: Approvals by or binding on HP shall be effective only
when given in writing by one of the HP Authorized Signers.
Section 23. General Provisions
23.1 Waiver. The failure of either party to insist on strict
performance of any term or condition hereof or to exercise any option contained
herein, shall not be construed as a waiver of that party's right to enforce that
term of condition in the future or any other term or condition of this Agreement
in any other instance.
23.2 Assignment. Neither party may, directly or indirectly, in whole or
in part, neither by operation of law or otherwise, assign or transfer this
Agreement or delegate any of its obligations under this Agreement without the
other party's written consent. Any attempted assignment, transfer or delegation
without such prior written consent will be void. Notwithstanding the foregoing,
HP,
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or its permitted successive assignees or transferees, may assign or transfer
this Agreement or delegate any rights or obligations hereunder without consent:
(i) to any entity controlled by, or under common control with, HP, or its
permitted successive assignees or transferees, or (ii) in connection with a
merger, reorganization, transfer, sale of assets or product lines, or change of
control or ownership of HP, or its permitted successive assignees or
transferees. Without limiting the foregoing, this Agreement will be binding upon
and inure to the benefit of the parties and their permitted successors and
assigns, except for Agilent Technologies (and its subsidiaries), the HP test and
measurement successor referenced in sub-section 3.10.
23.3 Attachments. All Exhibits, Attachments and Schedules to this
Agreement are incorporated herein by this reference as though fully set forth
herein. If there is any conflict, contradiction or ambiguity between the terms
and conditions in this Agreement and any of its Exhibits or Schedules, the terms
of this Agreement shall prevail.
23.4 Entire Agreement/Amendment. This Agreement contains the entire
agreement of the parties with respect to its subject matter and shall supersede
all prior and contemporaneous agreements and understandings between the parties
respecting the subject matter hereof This Agreement may not be changed or
terminated orally by or on behalf of any party. Additionally, except to the
extent required by law, including by any governmental agency regulating the sale
of securities, and except for disclosures to a party's employees, attorneys or
accountants, on a need-to-know basis, neither party shall disclose the terms and
conditions of this Agreement without the prior written consent of the other.
23.5 Delaware Law, Salt Lake City Forum. This Agreement shall be
construed and enforced, and the legal relations between the parties hereto shall
be determined, in accordance with the laws of the state of Delaware, without
reference to its conflict of laws principles. Any litigation between the parties
requiring the interpretation, construction, or enforcement of this Agreement
will be conducted in state or federal courts in Salt Lake City, Utah. Each party
waives any objection it may have to the jurisdiction of such courts over them in
ant action relating to this Agreement.
23.6 Captions. Construction and Interpretations. The language in all
parts of this Agreement shall in all cases be construed as a whole according to
its fair meaning and not strictly for or against either party. The Section
headings contained in this Agreement are for reference purposes only and will
not affect the meaning or interpretation of this Agreement in any way. When used
without definition the words "Section," "subsection," or "exhibit," refer to
such portions of, or exhibits to, this Agreement. All terms used in one number
or gender shall be construed to include any other number or gender as the
context may require. The parties agree that each party has reviewed this
Agreement and has had the opportunity to have counsel review the same and that
any rule of construction to the effect that ambiguities are to be resolved,
against the drafting party shall not apply in the interpretation of this
Agreement or any amendment or any exhibits thereto.
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Whenever the words "include," "includes," or "including" are used in the
Agreement, including any Exhibits or other addenda hereto, they shall be deemed
to be followed by the words "without limitation."
23.7 Independent Entities. HP and DAC each have separate and
independent rights under this Agreement. Nothing contained herein shall be
construed as creating, forming, constituting or implying any agency
relationship, partnership, joint venture, merger or consolidation of HP or DAC
for any purpose or in any respect.
23.8 Continuing Cooperation. Each party to this Agreement shall be
obligated hereunder to perform such other and further acts, including without
limitation the execution of any documents which are reasonable and may be
necessary or convenient in carrying out the purpose and intent of this
Agreement.
23.9 Severability. If a court of competent jurisdiction makes a final
determination that any term or provision hereof is invalid or unenforceable,
after the expiration of the time within which Judicial review (if permitted) of
such determination may be perfected, (i) the invalid or unenforceable term or
provision shall be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision and (ii) the remaining terms and provisions
hereof shall be unimpaired.
23.10 Remedies Cumulative. Every right or remedy in this Agreement
conferred upon or reserved to the parties will be cumulative and will be in
addition to every right or remedy now or hereafter existing at law or in equity,
and the pursuit of any right or remedy will not be construed as an election.
23.11 Sections that Survive. If this Agreement is terminated in
accordance with the terms of Section 13, Termination, the following Sections
will survive and remain in full force and not thereby be terminated:
9 Records, Audits and Inspection
12 Warranties
13.7 Reimbursement upon Termination
14 Rights on Change in Control
16 Indemnification
17 Limitation of Liability
20 Confidential Information
23.10 Remedies Cumulative
23.12 Export Laws
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23.12 Export Laws. Both parties agree, in all activities under this
Agreement, to conform to and abide by the export laws and regulations of the
United States including the Export Administration Act of 1979, as amended, and
its implementing regulations.
23.13 Exhibits. The Program will also comply with the terms and
conditions set forth in each Exhibit, Attachment and Schedule to this Agreement,
including the following:
Exhibit "A" PROGRAM DESCRIPTION
Exhibit "B" [**39**]
Exhibit "C" PROGRAM METRICS
Exhibit "D" PROGRAM REQUISITION FORM
Exhibit "E" PERSONNEL REQUISITION FORM
Exhibit "F" FINANCE REQUIREMENTS
Exhibit "G" SUMMARY REPORT REQUIREMENTS DOCUMENT
Exhibit "H" PROGRAM BUSINESS RULES
Exhibit "I" [intentionally omitted]
Exhibit "J" HP AUTHORIZED SIGNERS
Exhibit "K" [**39**]
Exhibit "L" HP TRADEMARK USE GUIDELINES
23.14 Binding Effect; Benefits. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
successors, executors, administrators and assigns, except for Agilent
Technologies and its subsidiaries. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the par-ties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
23.15 Authorizations and Signatures. By signing below, each party
represents that this Agreement has been duly authorized and constitutes an
Agreement by which it is bound.
23.16 Counterparts and Facsimile Signatures. This Agreement may be
executed simultaneously in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement. This Agreement may be executed by either or both parties by either
manual or facsimile signatures.
23.17 No Disparagement. Each of the parties agrees that it will not
make any disparaging or derogatory remarks, whether oral or written, about the
other party, or its affiliates, products or services, and agrees to instruct its
employees to behave in the same mariner and to establish procedures for the
enforcement of such instructions. DAC agrees that it will not participate in any
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advertising that promotes the products of an HP Competitor and which contains
any statement concerning or reference to the fact that DAC may operate portions
of the Program on computing and telecommunications equipment manufactured or
marketed by an HP Competitor.
Section 24. Parent Obligations
24.1 Performance Assurance. Parent hereby agrees to ensure the
performance by DAC of its obligations under this Agreement and Parent further
agrees to be liable for any claims against DAC or its employees, officers,
directors or agents in connection with DAC's obligations under this Agreement.
AGREED AND ACCEPTED:
HEWLETT-PACKARD COMPANY DAC CORPORATION
By: By: /s/ Xxxx Xxxxx
------------------------------ ---------------------------------
Printed Name: Xxx Xxxxxx Printed Name Xxxx Xxxxx
Title: Manager, U.S. Small and Medium Title: President
Business Sales and Marketing
Organization
Date of signature: Date of signature: 8/17/99
------------------- -------------------
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Parent acknowledges its obligations and
liability as stated in Sections 13.14 and 24
by signing below:
INSIGHT ENTERPRISES, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------------
Printed Name: Xxxxxxx Xxxxxxxxx
Title: Chief Financial Officer
Date of Signature: 8/20/99
-------------------
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EXHIBIT A: Business Store Program Description
General Provisions:
1. All terms used herein but not defined shall have the meanings given such
terms in the attached Program Services Agreement (the "Agreement") among
DAC, Parent and HP.
2. This Exhibit A may be amended upon mutual written agreement by and between
HP and DAC. Changes will be noted on an "Amendment Form" in the form
attached hereto as Attachment General-1. Changes will be effective upon
signature of the Amendment Form. At least once a Month, the parties will
meet to update this Exhibit A to reflect amendments made during the
previous Month.
SECTION 1.0 OVERVIEW OF THE PROGRAM
The Program will involve the sale of HP printers, storage products,
palmtop, notebook and desk-top computers, and server products to end-users, with
a focus on small- and medium - business end users.
SECTION 2.0 [This Section Intentionally Left Blank]
SECTION 3.0 BASIC CONCEPTS OF THE PROGRAM
A. Geographical Scope. Initial program sales will be limited to the fifty
United States, the District of Columbia, and Puerto Rico. Expanded
sales outside of these jurisdictions may be made upon prior written
agreement between HP and DAC. DAC will not accept orders to be shipped
to APO or FPO addresses, or to post office boxes.
B. Business Rules. Program sales shall be governed by the terms of the
Agreement and this Exhibit A (including all attachments hereto).
C. Product Offering and Pricing. Program product offering and pricing
shall be determined solely by HP. HP may discontinue offering any
product, and may change the pricing at which any product is made
available, at its discretion upon notification to DAC.
D. Program Metrics. As set forth in the Agreement, DAC's performance of
its Program responsibilities will be evaluated based, among other
things, on the Program Metrics. Sample Program metrics are provided in
Exhibit C. Once identified by agreement of the parties, the Program
Metrics may not be modified without the written consent of both
parties.
41
SECTION 4.0 PROGRAM SERVICES AND RESPONSIBILITIES.
***[MISSING PAGES 2 - 3]***
4.10 Open order backlog management. Utilizing the MAX system, dedicated
Program personnel will perform a daily review of open orders and take
appropriate action to expedite shipment of customer orders. This
information will be available to HP via online access.
4.11 Quote management. DAC will manage all open quotes with the goal of
maximizing the Program close ratio and overall Program revenue Quotes
will be valid for periods set by HP.
4.12 Overall Customer service. DAC will provide customer service with the
goal of ensuring the timely and satisfactory resolution of all Program
customer concerns. Customer service reps will handle tasks as Jointly
assigned by HP and DAC.
4.13 Order status. DAC systems will provide order status at the following
stages in the ordering process:
4.13.1 Order processing/shipping/invoicing
4.13.2 Integration (to the extent provided by HP or its fulfillment
service providers)
4.13.3 Federal Express (or other shipping service) delivery status
4.13.4 Return merchandise status
4.13.5 Detailed customer history.
4.14 FTC regulation management. DAC's systems will provide for online
management of FTC Mail Order and Telephone Order Rules requirements
for all applicable orders that do not meet customer quoted ship dates
(CQSD). This includes providing formal notices to customers when the
CQSD will not be met and proactively outbound calling customers should
the CQSD expire. All sales representatives will be trained to maintain
compliance with FTC requirements. DAC will maintain compliance with
new FTC rules relating to its performance under this Agreement
including amendments to the Telephone Order Rule and Mail Order Rule,
and any FTC regulations regarding privacy of customer information.
4.15 Fulfillment. Program fulfillment will be executed through DAC's
proprietary EDI direct ship capabilities to fulfill orders via
HP-selected fulfillment services providers. Packing slips will
reference the Program name to promote the desired seamless customer
environment. DAC's MAX system will place HP orders only with HP's
chosen distribution partners.
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4.16 Dedicated facilities. DAC will provide dedicated facility areas for
warehousing of HP Products, including returned HP Products, to
segregate those Products from other inventory within the care,
custody, or control of DAC or Parent.
4.17 Inventory management. DAC will provide complete inventory management
functions when inventory is carried in a DAC distribution center.
These functions include automated receiving, stocking, and cycle
counting using bar code technology in conjunction with RF (radio
frequency) capabilities and proprietary inventory management systems.
4.18 HP Products stored in DAC Distribution Center. HP may provide HP
Products (primarily returned HP Products) to DAC on a consigned basis.
All HP Products provided by HP shall contain bar codes located on the
exterior of the carton and shall reference the SKU and where
applicable the serial number of the unit. HP shall be responsible for
all supply management and product-line management associated with HP
Products. These functions include demand forecasting, purchase order
generation, scheduling and rescheduling, ensuring timely delivery of
HP Products and providing accurate lead-time information and stock
rotation management.
4.19 This sub-section intentionally left blank.
4.20 Supply management. DAC will provide supply management (purchasing)
support utilizing DAC's proprietary information systems to manage
Program inventory availability and status.
4.21 Order Fulfillment Rules: DAC will comply with the following rules in
forwarding received orders to the HP Service Providers who will be
fulfilling these orders:
4.21.1 All orders for HP personal computer products (palmtops,
notebooks, portables, desktops, and servers) [**U**].
4.21.2 All orders for HP printer and scanner products (laser
printers, inkjet printers, scanners, and associated
accessories and supplies) [**V**].
4.21.3 Merged orders: DAC will use all reasonable efforts to
fulfill individual orders from the same service provider.
However, DAC may divide a particular order between the two
service providers as necessary to expedite shipments. In
this situation, DAC will coordinate shipment of ordered
Products by the two service providers to maximize the
likelihood of same-day delivery of the different portions of
the order. In choosing between Service Providers, DAC will
follow the decision process set out in the Attachment 4.21.
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4.21.4 PCs and Monitors: PCs and their associated monitors must
always be shipped from the same location on the same day.
4.21.5 Back-orders (Partials)
4.21.5.1 Customers will be able to place items on backorder.
As to any back-order, DAC will provide a CQSD. DAC's
CQSD will be based on the availability of all
components within an order. During the telesales
process, the TSR will be able to modify the
components, using n a configured system to improve
the availability of the overall configuration. The
TSR will use the web configurator to do this.
4.21.5.2 DAC will send backorders to the Service Providers.
4.22 [**V1**] DAC may sell or ship products to customers identifying
themselves as resellers. However, DAC will not accept "purchase
for resale" tax exemption certificates or numbers. (DAC may
accept non-profit or government tax exemption certificates or
numbers.) All sales through the Program are to be made directly
to end-users.
4.23 Invoices, Credit Card Bills and Packing slips: All documentation
and credit card bills received by the end-user will be from "HP
Business Store" with DAC's distribution facility provided as the
return address.
4.24 Availability: DAC will receive a product stocking level each
morning before 5 A.M. Eastern Time from each Service Provider.
Product SKUs for which a Service Provider has [**W**] more units
in stock and available to ship will be marked as "In Stock."
Product SKUs for which a Service Provider has fewer than [**W**]
in stock will be marked on the website with the word "Call." The
website will never display the number of units in stock. Note:
Availability of configured product will not be displayed until
the customer creates a configuration. The DAC system will make
available to the TSRs the available product by Service Provider.
4.25 Pick-Pack-Ship. Invoicing and shipment of orders will be the
responsibility of the Service Providers selected by HP.
4.26 Serial number tracking. Where available from the Service
Providers, DAC will track serial numbers of identified SKU's on a
unit-by-unit basis as products are shipped to Program customers.
Information pertaining to serial numbers will be stored within
DAC's information system to allow access for technical support
validation and returns process management.
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4.27 Packing slip/invoices. As matter of information to DAC, but not a
DAC responsibility, to encourage the seamless structure of the
Program each Service Provider will insert a packing slip bearing
the Program name will accompany each shipment.
4.28 FedEx PowerShip system. Online delivery information will be
provided to sales representatives through the MAX operating
system. The MAX system will receive continuous real-time delivery
information from the FedEx PowerShip system.
4.29 Program Freight.
4.29.1 Inbound freight routing and associated costs for HP
Program Products shall be the responsibility of HP.
4.29.2 Inbound freight for all customer orders shall be the
responsibility of HP. Outbound freight may be billed
to a DAC freight account specifically set up for the
Program and later billed by DAC to HP, at the cost
determined in the manner set forth in sub-sections
4.4.1 and 4.4.6.
4.29.3 All freight revenue derived from Program sales shall
belong to HP. HP will determine and set all Program
freight pricing to end-user customers.
4.29.4 All freight expense associated with customer returns
(to the extent specifically authorized by HP) shall
be the responsibility of HP. Customer returns freight
may be billed to a DAC freight account specifically
set up for the Program and later billed by DAC to HP
at cost.
4.29.5 All freight expense associated with HP Products or
third-party product returns to HP, its affiliates, or
third party suppliers, shall be the responsibility of
HP. Supplier returns freight may be billed to a DAC
freight account and later billed by DAC to HP at
cost.
4.29.6 Integration. Program integration services will be
performed by HP, its Service Providers, or other HP
designees. DAC will communicate all integration
requirements to the HP-designated party by EDI.
4.30 Technical Support. DAC will provide basic presale technical
support to facilitate product sales, HP will provide or arrange
for DAC to provide required sales and technical training. Sales
personnel will be trained and capable of supporting customers'
needs for basic questions associated with the sales process.
Examples of basic questions would include but are not limited to:
Types of configurations available, whether or not a printer needs
a network card to work on a LAN, and what is the latest display
technology. HP or an HP-designated vendor shall be
-5-
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responsible for more advanced pre-sales and all post-sales
Program technical support.
4.31 Returns Processing.
4.31.1 DAC will provide to end-users the terms and conditions
for returns as defined by HP Returns will be managed by
the DAC TSRs at DAC for launch. The TSR will issue an
RMA authorizing return of product to DAC under the
program name. Returns policies are provided in
Attachment 4.31, appended hereto.
4.31.2 Returns Authorization. DAC will provide returns
management services utilizing DAC's proprietary
information systems to verify and authorize the return
of Program Goods. The process will be managed according
to policies and procedures provided by HP from time to
time on 30 days written notice in the Business Rules.
The return policy may be changed at HP's request;
however, any requested changes may result in additional
costs that must be paid by HP.
4.31.3 Customer Returns. Customer returns may be accepted in
accordance with the HP returns policy. Customer returns
will be processed on a daily basis as received,
resulting in repair, credit or replacement of products
for the customer.
4.31.4 Supplier Returns. All customer returns will be returned
to the supplier of record or HP as determined by HP.
Supplier returns will be managed per HP negotiated
specifications.
4.31.5 Out-of-policy Returns. DAC will accept returns which
fall outside the HP returns policy only when approved by
HP in writing on a case-by-case basis. DAC must receive
HP's approval prior to communicating its approval of the
return to the Program Customer. Except as provided in
the Agreement with respect to the physical custody of
Returned Goods, HP assumes full financial responsibility
for all such out-of-policy returns.
4.31.6 Responsibility for Returns. Except as provided in the
Agreement with respect to the physical custody of
Returned Goods, all product returns will be the
responsibility of HP. This includes HP Products and
third- party products. DAC will make reasonable efforts
to return third-party products to suppliers, but HP will
assume all responsibility for products returned
including integrated third party products (i.e.,
third-party products that are installed into a HP
computer). This responsibility extends to the loss in
value to any and all products.
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4.31.7 Returns Liquidation. If requested by HP, DAC will offer
returned products per HP requirements through a "Value
Center" concept. DAC agrees to comply with all HP
guidelines as to sale of used equipment or products. DAC
will make reasonable efforts to maximize recovery of
cost in such products. DAC will utilize a mutually
agreed process to maximize recovery while minimizing
inventory held. DAC anticipates that gross cost recovery
will, on the average, equal approximately [**40**] of
the invoice price to the customer for that product.
However, the parties recognize that DAC cannot guarantee
any recovery percentage and that the percentage stated
in the preceding sentence shall be reconsidered by the
parties from time to time.
4.32 Information Services. DAC and HP agree to negotiate Information
Management ("IM") and technical infrastructure specifics and any
associated costs which such IM and infrastructure specifics will
create, including the following technical areas:
4.32.1 Service level agreements for specific DAC services;
4.32.2 Disaster recovery infrastructure requirements to uphold
service level agreements;
4.32.3 Knowledge of transfer requirements from DAC to HP if
specified or all service responsibilities are
transferred to HP or its designated agent;
4.32.4 Until the parties agree to such requirements, DAC agrees
to use commercially reasonable efforts to provide IM and
technical services to the reasonable satisfaction of HP
as necessary to meet the uptime requirements as set
forth in the Program Agreement.
4.33 Program Software. DAC will provide its "MAX Business Operating
System" software package to operate the Program.
4.34 Program Hardware. DAC will provide a telecommunications system
that will manage inbound and outbound customer calls within the
DAC facilities. This includes basic IVR management capabilities
for call processing, voice mail capability and data
collection/reporting. This does not include any special features
such as sophisticated IVR or CTI applications. DAC will provide
all networking hardware associated with DAC facilities.
Notwithstanding any other provisions of this agreement. HP is
responsible for hardware and software associated with TSR
workstation computers and hardware. HP is also responsible for
remote hardware and software at HP facilities required to
remotely access DAC systems via dial-up networking.
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4.35 Electronic Mail Communication. DAC will provide access for
customers to place orders and communicate via electronic mail,
subject to HP providing or approving a program e-mail address.
4.36 Credit Card Address Verification/Authorization. DAC will provide
its online address verification and transaction authorization to
facilitate order processing and customer satisfaction.
4.37 System Access. DAC will provide real-time, online access to the
Program information database via the business management system
software. HP will be responsible for the PC's and other hardware
and software required to achieve the link to DAC's system.
4.38 EDI Capabilities. DAC will be "EDI ready" to perform business
functions via EDI transmissions. EDI transmissions to and from
DAC include but are not limited to
ANSI 832 (Sales Catalog);
ANSI 846 (Inventor, Inquiry);
ANSI 850 (Purchase Order Transaction);
ANSI 855 (Purchase Order Acknowledgment);
ANSI 856 (Shipping Advice);
ANSI 870 (Order Status Report);
ANSI 810 (Invoicing);
ANSI 997 (Functional Acknowledgment);
ANSI 820 (Payment Order/ remittance advice);
ANSI 824 (Application Advice);
ANSI 845 (Inventory);
ANSI 860 (Purchase Order Change);
ANSI 865 (Purchase Order Change Acknowledgment):
4.39 Telephony. [**X**] and Value Added Network services supplied by
DAC, [**Y**], for use in conjunction with the Program. The
Program will be menu driven with touchtone selections for
business/end user sales and customer service, providing an
expedited answer for the customer. Other services may be added
to Program touchtone menus at the request of HP.
4.40 World Wide Web. DAC will provide "Back-End" functionality for a
World Wide Web Site that will be created and maintained by HP.
DAC will provide back-end functionality which includes but is
not limited to: receipt of orders, transmission of orders to
distributors, change orders, invoicing, billing, SKU management,
price tracking and daily sales reports. Additionally, the
Program back-end functionality will support secured order entry
and inquiry capabilities. DAC will administer all orders,
requests and inquiries generated thereby.
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4.41 Reporting.
4.41.1 Online Reporting. DAC will make available to HP 24-hour
online access to a menu of reports. Standard report
formats will exist for the report types listed in
Exhibit G.
4.41.2 Periodic Reporting. DAC will provide all Program data to
HP in a raw data format (Universal Data Extract) as well
as standard DAC reports with reasonable frequency.
During the first month of operations DAC will provide
data on a weekly basis. From the second month on DAC
will provide data on a daily basis.
4.41.3 DAC agrees to use reasonable efforts to provide any
reasonably requested additional reports to HP within 96
hours after such request is made, provided, that any
additional costs incurred in preparing such reports
shall be paid by HP, when invoiced, as a Variable Fee.
DAC will provide an estimate of these costs and submit
them as a program requisition. HP will not be charged
for additional reports required to measure DAC's
performance metrics.
4.41.4 Accounting/Credit. DAC will handle all collections
(including returned checks) and credit approvals as
outlined further in Exhibit F. DAC will do the initial
research on exceptions and make a recommendation to HP's
designated on-site (or telephone) credit manager. The
information should include credit application,
financials, copy of D & B report and any other data that
DAC's or HP's personnel think relevant. HP shall also be
responsible for all costs associated with providing
financial data and losses arising from credit decisions
and fraud or misrepresentation by customers or potential
customers. Notwithstanding the foregoing, if DAC
authorizes credit to a customer that does not qualify
for credit under HP's credit policies in effect on the
date of DAC's credit decision, DAC will indemnify HP for
any loss or costs associated with providing financial
data HP experiences by reason of the customer's default
in payment to HP (including any costs associated with
providing financial data).
4.41.5 Credit responsibility. Except as provided in the
foregoing sub-sub-section 4.41.3, HP will assume
responsibility for all credit extended in connection
with the Program. DAC's systems will be tailored to
follow the credit rules defined by HP. In order for the
Program to be operational by the scheduled date, HP
agrees to use [**Z**] the Program's credit card
processor for program launch. DAC agrees to begin
transitioning to a different merchant services vendor
selected by HP on 30 days notice if required by FT.
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4.41.6 Credit process management. DAC will provide staff to
manage and expedite the credit process, including
facilitation of leasing with the goal of providing
efficient and expedited service while minimizing credit
losses. DAC will establish and follow credit processing
rules acceptable to HP. These rules will include rules
which prohibit the misuse by DAC employees of
credit-card numbers. DAC will also maintain a complete
on-line account histories to allow for quick and
accurate processing of customer credit requests. HP will
provide onsite (or by telephone) credit personnel to
facilitate credit decisions for terms, problematic
orders, and leasing services. HP will be responsible for
all Program related credit card processing fees
utilizing the systems and processes developed by DAC.
4.41.7 Financing methods. Subject to HP's credit policies, DAC
will provide Program capability for the following
financing methods:
4.41.7.1 Credit cards (Mastercard, Visa, American
Express and Discover);
4.41.7.2 Purchase orders. Purchase orders will be
accepted from approved customers;
4.41.7.3 Prepaid orders/wire transfers;
4.41.7.4 Leasing. Leasing or financed orders will follow
the process set out in Attachment 4.41.7.4.
SECTION 5.0 PRODUCT OFFERINGS
5.1 Accessories. The Program offering will consist of options,
supplies and accessories identified by HP.
5.2 Software. Selected HP software, or third party software included
in HP products, will also be offered through the Program as
approved by HP.
5.3 Hardware. The Program will carry current HP printers, storage
products, desktop, portable and server SKU's as determined by
HP. HP reserves the right to add additional products to the
program as desired.
SECTION 6.0 STAFFING AND TRAINING
6.1 Staffing:
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6.1.1 Except as otherwise provided herein, DAC will provide
staffing for the Program. DAC will provide dedicated and
shared resources to support the program as agreed by
both parties.
6.1.2 All dedicated program personnel shall be approved, in
writing, via a Personnel Requisition Form (Exhibit E)
prior to hiring (See Section 4.4.4 of the Agreement).
6.1.3 All shared program personnel shall be approved, in
writing via a Program Requisition Form, prior to
providing service or support to the program.
6.2 Training. DAC will provide initial and ongoing sales training.
HP reserves the right to attend and contribute to any training.
DAC will provide training as follows:
6.2.1 Computer and telephone systems;
6.2.2 Telephone skills training;
6.2.3 Operating system (MAX) training;
6.2.4 Basic computer systems;
6.2.5 Consultative sales skills training.
6.3 HP Training and Systems. HP will provide one onsite training
person and the following training and systems:
6.3.1 Product training with respect to the HP Products;
6.3.2 Technical support training with respect to HP Products;
SECTION 7.0 PROGRAM HOURS OF OPERATION
The contemplated Program hours of operation are Monday through Friday,
[**AA**] Eastern Time.
SECTION 8.0 PROGRAM START DATE
The Program start date is [**AB**]
SECTION 9.0 ADDITIONAL PROGRAM TERMS AND CONDITIONS
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9.1 Certain Variable Fees Calculations. The charges for certain
variable costs, as set forth below, are understood by the
parties to be appropriate in connection with the Program. Such
items are provided by way of example only, and are not intended
to be all-inclusive. Such expenditures are variable or
semi-variable in nature and are associated with Program sales
volume. Additionally, actual compensation will vary according to
the employment market and other circumstances and the items
listed below are only good-faith current estimates by DAC.
9.2 Compensation Levels:
9.2.1 Inbound Sales Representatives: [**41**] per month base
salary, plus commission of [**41**] of net sales;
9.2.2 Inbound Sales Managers: [**41**] per month, plus
[**41**] of managed net sales;
9.2.3 Director of Sales: [**41**] per month base salary, plus
commission of [**41**] of managed net sales;
9.2.4 Outbound Sales Representatives: [**41**] per month base
salary, plus commission of [**41**] of net sales;
9.2.5 Outbound Sales Managers:[**41**] per month, plus
[**41**] of managed net sales;
9.2.6 Customer Service Representatives: [**41**] per month
base salary;
9.2.7 Customer Service Manager: [**41**] per month, plus
[**41**] per month maximum bonus incentive potential;
9.2.8 Distribution Center Specialist: [**41**] , plus [**41**]
per month maximum bonus incentive potential;
9.2.9 Distribution Center Supervisor: [**41**] per month, plus
[**41**] per month maximum bonus incentive potential.
9.3 Packaging costs: Per Program requirements and usage.
9.4 Other Transactions. HP will remain responsible for any and all
costs related to transactions (including but not limited to
returns outside of standard Program return policies, special
services and the like) which are outside of DAC's policies for
the Program and which HP approves in writing.
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9.5 MAX Software. The Program will be operated through the use of
DAC's existing proprietary UNIX-based MAX software package. The
parties acknowledge that the MAX software package is the
exclusive property of XXX.
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Xxxxxxxxxx: General 1:
HP-DAC Business Store Program
Model Amendment Form
Date:
-----------------------
Description of amendment:
I. Affected section(s) of / Attachments to the Business Store Program
Description:
II. Description of proposed change:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
III. Approvals:
HP: DAC:
---------------------------------------- -------------------------
Xxx Xxxx Xxxx Xxxxx
Date: Date:
-------------------------------------------- -------------
Amendments are effective on the date last signed above.
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Attachment 4.2.1:
HP-DAC Business Store Program
Telesales Responses and Scripts
Part A. Scenarios and Responses
Subject 1: Prompting for Reseller Services:
[**AC**] :
- The rep has an intimate knowledge of the account and knows that
services could be used
- The customer places an order for a server or very large number (20+)
PCs
- The customer places an order for a "high touch" LaserJet or DesignJet
THE REPS WILL STILL TAKE THE PRODUCT ORDERS FROM THE CUSTOMER. IN THE EVENT THAT
THE CUSTOMER DESIRES THE HELP OF A RESELLER, THE REP WILL FORWARD THE CUSTOMER
TO THE MCI CALL CENTER.
If the customer wants non-HP services, the rep will forward the customer to the
MCI call center.
[**42**]
Subject 4: Product Information:
Customers calling in for product information will have their questions answered
by the inbound sales reps. The rep will make every effort to sell the individual
on the products. If the customer would like to receive a catalog, the rep will
enter their information into the database and a literature pack will be mailed.
Subject 5: Dead on Arrival ("DOA") Products
DOA calls will be initially handled by the telesales representatives ("TSR")
Subject 6: Customer Remorse
Customer remorse calls will be routed to a customer service representative or
managed by the sales representative.
Subject 7: Government Orders
Government customers must send in purchase orders on valid government
letterhead. Government credit will be applied per Business Store credit
policies. Sales through the Business Store will be not discounted along the GSA
schedule.
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Subject 8: Security / Privacy Concerns
If a customer is concerned about entering their credit card on the web, they can
enter a quote and call the TSR over the 800 number provided on the web site. The
TSR will pull the quote into MAX and take the credit card number over the phone.
[**42B**]
Subject 9: Technical Support
If a customer calls in for a technical support call the customer will be
provided the appropriate support number to call. For those numbers which are not
toll-free, the TSR will make it clear to the customer that the phone call to
technical support is not toll-free. (Due to the fact that support is not a
toll-free number, DAC will be unable to hot transfer calls.)
Toll
Description of Phone Number/Call Free
Subject/Product Products Center Location (Y/N) Notes
--------------- -------------- --------------- ----- --------------------------
PROMOTIONS AND REBATES
Promotions and [**AD**] [**AD Script: Please call this
Rebates **] number to check the status of
a rebate you have submitted
or to inquire about the
availability of a current
promotion or rebate.
PRINTERS
HP DeskJet Printers - HP DeskJet 400 [**AE**] [**AE
420, 670C, 680C, Boise, Idaho **]
690C, 700 and (Mountain Time)
895C Series
Printers
- HP DeskWriter
680C and 694C
printers
HP DeskJet/Laser All others [**AE**] [**A
Printers Boise, Idaho E**]
(Mountain Time)
HP JetDirect Print All (000) 000-0000
Servers
SCANNERS
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Toll
Description of Phone Number/Call Free
Subject/Product Products Center Location (Y/N) Notes
--------------- -------------- --------------- ----- --------------------------
HP Capshare 910 Handheld scanner [**AE**] [**A
Boise, Idaho E**]
(Mountain Time)
HP ScanJet Scanners HP ScanJet Models: [**AE**] [**A Note: Hours of operation:
- 4100C. Boise, Idaho E**] 6:00 a.m. to 6:00 p.m. MST,
- 4200C. (Mountain Time) Monday through Friday
- 5100C.
- 5200C.
- 0000X
- 0000X
- 0000X
XX XxxxXxx 0000X [**AE**] [**A Hours of Operation:
E**] - Monday through Friday:
6:00 a.m. to 10:00 p.m.
MST
- Saturday: 9 a.m. to 4:00
p.m. MST
STORAGE PRODUCTS
HP Storage Products - Colorado Tape [**AE**] [**A
Drives Loveland, Colorado E**]
- HP SureStore Tape (Mountain Time)
Drives
- HP CD-Writers
- Recording media
(tapes, CD-Rs)
PERSONAL COMPUTERS
HP Omni Book [**AE**] [**A
Notebook Loveland, Colorado E**]
Computers (Mountain Time)
HP Pavilion PC [**AE**] [**A
Boise, Idaho E**]
(Mountain Time)
HP Business - Vectra [**AE**] [**A
Desktop PCs - Brio Loveland, Colorado E**]
- Kayak (Mountain Time)
HP Palmtop PCs Jornada [**AE**] [**A
Loveland, Colorado E**]
(Mountain Time)
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Toll
Description of Phone Number/Call Free
Subject/Product Products Center Location (Y/N) Notes
--------------- -------------- --------------- ----- --------------------------
HP Servers HP NetServers [**AE**] [**A
Loveland, Colorado E**]
(Mountain Time)
NETWORKING PRODUCTS
HP Networking - AdvanceStack [**AE**] [**A
Products switches, hubs, Loveland, Colorado E**]
and networking (Mountain Time)
cards
- ProCurve switches
and hubs
Subject 10: Reseller Transfer
Transfers to a reseller locator or matching system will be based on the
following:
SITUATION A: CUSTOMER REQUESTS A RESELLER.
- Customer is transferred to the MCI reseller locator.
SITUATION B: CUSTOMER STATES DURING THE ORDER THAT THEY NEED SERVICE OR
CONSULTING
(i) The TSR will ascertain if the customer still wants to purchase
the hardware from the business store.
(ii) For reseller services, the customer is transferred to the MCI
reseller locator.
SITUATION C: CUSTOMER STATES THAT HIS/HER COMPANY HAS A DISCOUNT WITH HP
- The TSR will inform the customer that discounts do not apply
through the store. HP recommends that the customer see their
procurement manager to find out the appropriate process for
purchasing products under a discount.
SITUATION D: CUSTOMER REQUESTS A RETAILER
- The rep will inform the customer that the Business Store does not
handle consumer products. Customer is transferred to the MCI
reseller locator.
SITUATION E: CUSTOMER REQUESTS A CONSUMER PRODUCT (NOT IN THE HP BUSINESS
STORE)
- The rep will inform the customer that the Business Store does not
handle consumer products. Customer is transferred to the MCI
reseller locator.
SITUATION F: CUSTOMER REQUESTS EDUCATIONAL OR GOVERNMENT PROGRAMS
- [**AF**]. Customer is transferred to the MCI reseller locator.
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SITUATION G: RESELLER CALLS IN AND COMPLAINS THAT END-USER BOUGHT DIRECT AFTER
RESELLER PRE-SOLD
- TSR forwards the call to the Boise Reseller Support Line
0-000-000-0000
SITUATION H: RESELLER CALLS IN AND WHAT TO KNOW WHO THE NAME OF THEIR HP SALES
REP
- TSR will refer the reseller to the HP reseller support line (800)
544-9976 (BOISE RESELLER SUPPORT)
SITUATION I: RESELLER CALLS IN AND IS ANGRY IN GENERAL THAT HP SELLING DIRECT
- Sales rep will refer the reseller to the HP reseller support line
(000)-000-0000
FOR ALL OTHER SITUATIONS, THE TSR WILL ESCALATE THE CALL TO THEIR SALES MANAGER.
PART B. QUESTIONS AND SCRIPTED RESPONSES
1. WHO ARE YOU?
We are an HP sales center.
2. WHERE ARE YOU?
HP has multiple sales centers in Texas, Colorado, California and
Arizona. We are located in Phoenix.
3. [**AG**]
4. CAN YOU SHIP PRODUCT OUTSIDE OF THE U.S.?
[**AH**].
5. I PURCHASE FROM YOU, CAN I SHIP IT OUTSIDE OF THE U.S.?
I'm sorry but some HP products are subject to Export Control
restrictions, therefore we will not sell product to you if you
plan to ship it outside of the U.S.
6. I CANNOT FIND PRODUCT IN YOUR BUSINESS STORE SITE, CAN I STILL
GET IT BY PHONE?
We carry most HP commercial products. I would be happy to check
the database. If its not a product that we carry, I will forward
you to a reseller locator. The reseller will be able to source
whatever products you need.
7. CAN YOU FAX OR MAIL ME DATASHEETS FOR A SPECIFIC PRODUCTS?
We can send you are latest catalog, and I can answer any
specifications questions you might have. For specific datasheets
we recommend you see our website. You can also get information
from our fax on demand system at:
FAX on Demand
Pre-sales (000) 000-0000
Post sales (000) 000-0000.
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59
8. WHO HAS THE BEST PRICE, HP BUSINESS STORE OR OTHER RESELLERS?
We believe that we have competitive prices. If you need the
services of a reseller, then I can transfer you to a locator
service.
9. WILL MY NAME AND ADDRESS BE PROVIDED TO OUTSIDE COMPANIES?
No, HP keeps your name and address internal and private. [**AI**]
10. WILL I REALLY BE BUYING DIRECTLY FROM HP OR IS THERE SOME 3RD
PARTY INVOLVED?
We are a sales center managed by HP. Although product ships from
various distribution centers, your business will be transacted
directly with HP.
11. I BOUGHT THIS PRODUCT TWO WEEKS AGO, AND I NOTICED THAT YOU NOW
HAVE IT ON SALE AT A LOWER PRICE. CAN I GET THAT PRICE?
[**AJ**]
12. CAN YOU GIVE ME THE FEDEX TRACKING NUMBER FOR MY ORDER?
I'm sorry, but for fraud prevention reasons we cannot provide
that number. However, I can take your order number and get the
status for you right away. We also provide tracking information
on our website.
13. CAN I GET AN EDUCATIONAL/GOVERNMENT DISCOUNT?
The Business Store can sell to tax-exempt organizations. [**AK**]
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ATTACHMENT 4.21: DISTRIBUTOR SELECTION PROCESS
[Flow chart containing six levels. The first level has a centered
rectangular box with "Customer places order" written inside. From that box is an
arrow pointing to a diamond-shaped figure immediately below on the second level
with "Printer and PC?" written inside; an arrow extends from the right of that
diamond-shaped figure to another diamond- shaped figure on the second level with
the words "PC Only" written inside. An arrow, labelled "No," extends from the
left of the diamond-shaped figure labeled "Printer and PC?" to a diamond-shaped
figure on the third level with "Printer Only?" written inside. An arrow, labeled
"No," extends from the right of the diamond-shaped figure labeled "PC Only?" to
another diamond-shaped figure on the third level with the words "[**AK1**] has
both items?" written inside. Another arrow, labelled "Yes," extends from the
bottom of the diamond figure labelled "PC Only?" to a rectangular figure on the
right side of the fifth level which has double lines on its left and right
borders and has the words "Order to [**AK1**]" written on the inside. An arrow
extends from the diamond-shaped figure labeled "Printer Only?" to a
diamond-shaped figure on the fourth level with the words "[**AK1**] has stock?"
written on the inside and two arrows extend from this diamond-shaped figure, one
from the left side, labelled "Yes" extends to a rectangle on the left side of
the fifth level having double lines for borders on the left and right sides and
the words "Order to [**AK1**]" written inside, and the second, labelled "No"
extends from the right side to another diamond-shaped figure on the fourth level
with the words "[**AK1**] has stock?" written inside. Two arrows extend from the
diamond-shaped figure on the right on the fourth level labelled "[**AK1**] has
stock?" one, labelled "No," extends to the rectangle labelled "Order to
[**AK1**]" on the left side of the fifth level and the second, labelled "Yes"
extends to the rectangle labelled "Order to [**AK1**]" on the right side of the
fifth level. Two arrows extend from the diamond-shaped figure labeled "[**AK1**]
has both items?", one, labelled "Yes" extends to the rectangle on the right side
of the fifth level labelled "Order to [**AK1**]", and the second, labelled "No,"
extends to a rectangle on the sixth level having double lines on its left and
right borders and having the words "Split Order - PC to [**AK1**] - Printer to
[**AK1**]."]
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Attachment 4.31:
HP Returns Policies
A. Summary of Returns Policies
Product Type of Policy Customer [**44**]
Return returns to:
----------- ------------- ---------------- ------------- ---------
Printers DOA/ [**44**] [**44**] [**44**]
Defective
Printers Customer [**44**] [**44**] [**44**]
Satisfaction
/ Remorse
PCs DOA/ [**44**] [**44**] [**44**]
Defective
PCs Customer [**44**] [**44**] [**44**]
Satisfaction
/ Remorse
Individual DOA/ [**44**] [**44**] [**44**]
Storage Defective
Products
Individual Customer [**44**] [**44**] [**44**]
Storage Satisfaction
Products / Remorse
Support TBD
Packs
B. Permissible Returns Periods:
1. Notebooks, Desktops, Servers and Monitors: Customers may return these
within [**45**] of shipment from Service Provider.
2. Printers/Storage: Customers may return these products within [**45**]
of shipment from Service Provider.
3. RMA Numbers: DAC will utilize an RMA numbering system that includes a
description of the reason for a return. RMA numbers are only good for
[**45**] from time of issuance.
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4. Customer Remorse/Satisfaction: For ALL products HP will allow the
customer to return the product within [**45**] of placing the order.
This is only managed by the customer calling in. If the return is for
remorse, the customer covers the return freight charge and is liable
for risk of loss or damage of the product until it is accepted by HP.
DAC will charge a [**45**] fee on PC products. Returns shipping
charges are non-refundable. Product must contain all original items
and packaging. No returns of opened toner or inkjet cartridges will be
allowed. Printers with toner cartridges installed will not be
accepted.
5. Defective and DOA Products. Defective products may be returned within
the stated timeframes from invoice date. Product will be replaced or
exchanged. Credit will not be given except at the approval of the
Sales Manager or HP representative. HP will pay for return shipment of
defective or DOA products. DCAs must be returned with the original
packaging and materials.
6. Inspection. DAC will receive only products with approved RMA #s.
Products returned without RMA #s will not be accepted. In inspecting
products, DAC will follow the procedures set out below:
Product Inspection Procedures Comments
Personal Upon receipt DAC will:
Computers: - Physically inspect the products.
- Verify that RMA was issued within past 10 days
- Boot up PC, verify that the Windows registration or
desktop screen is displayed.
- Check via HP-supplied software that all components
are installed.
- Verify that software packages are unopened.
- Verify that all packaging, manuals and other
materials are included (HP will provide Xxxx of
Materials).
Printers: Upon receipt, DAC will:
- Verify that RMA was issued within past 10 days.
- Power up the printer.
- Print a test page.
- Verify that "throw-in" software packages, provided
with product are unopened, except for printer driver
software provided with HP printers.
- Verify that all components are installed (check
against original order)
- Verify that all packaging, manuals and other
materials are included (HP will provide Xxxx of
Materials).
7. Post-inspection procedures:
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a. Printers: (Product received under DOA conditions)
1) RMA personnel checks off that all components and materials are
included or missing
2) RMA personnel sends component checklist to customer service
3) RMA personnel authorizes exchange if no major components are
missing (see checklist)
4) If major components are missing, rep will call the customer and
inform them that credit card is charged for any missing,
pre-installed components.
5) DAC authorizes a credit and a re-buy to manage the exchange
6) Product is returned to HP or HP-designated supplier within
[**46**] of receipt of RMA# from HP or HP-designated supplier.
For a monitor we will accept a return of the base and exchange. If the
customer has bought a second unit, and its NOT DOA, we will charge for
missing items. [**AL**].
Product is working (No Problem Found)
1) RMA personnel checks off that all components and materials are
included or missing
2) RMA personnel sends component checklist (or updates MAX) to
customer service with No-Problem-Found indicated
3) Customer service or sales rep calls customer and informs them
that the product was not DOA.
4) Customer is charged re-stocking fee and freight.
7) Product is returned to HP or HP-designated supplier within
[**47**] of receipt of RMA# from HP or HP-designated supplier.
POST INSPECTION (Product received under customer remorse/satisfaction
conditions)
1) RMA personnel verifies that product is working.
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2) RMA manager sends inspection notice to customer service (or posts
in MAX).
3) Customer service reduces credit for any missing components and
applicable restocking fees.
4) Credit is authorized to end-user account/credit card
5) Product is returned to HP or HP-Designated supplier within
[**48**] of receipt of RMA# from HP or HP-designated supplier
EXAMPLE INSPECTION CHECKLIST
Component Present [**AM**]
PC Base Yes No [**49**]
Printer Yes No [**49**]
Installed Components Yes No [**49**]
- Hard Drive
- RAM
- LAN card
- Media
- Toner
- Keyboard
- Mouse
Manual Yes No [**49**]
Cables Yes No [**49**]
Packaging Yes No [**49**]
DAC will ship returned items via the carrier express program.
Refunds:
Refunds will be provided only to the account or credit card by which the
original order was placed. Customers may not get cash refunds. Credit
will only be issued to original credit card. Refunds are only provided
after receipt and inspection at the DAC facility.
Warranty:
Standard HP warranties will be offered to customers.
Rejected Shipments
If DAC receives a rejected shipment it will be returned to HP or HP's
designated return facility within [**50**].
HP RETURNS SCRIPT
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CUSTOMER: "I'd like to return my computer."
TSR: "Do you have an order number I can refer to?" (TSR can also use
customer phone number, name, business name, etc ... )
TSR: "So I can make note, may I ask why are you requesting to return your
product?"
CUSTOMER: "I just got it yesterday and it doesn't work." [ARROW pointing
to right] DOA SCRIPT
"It's not what I expected, I don't like it." [ARROW pointing to
right] CUSTOMER REMORSE SCRIPT
"It was working now it's not." [ARROW pointing to right] TECH
SUPPORT SCRIPT
D.O.A. Script:
I. TSR will be sure that order falls with in the [**51**] timeframe.
II. "Does the product turn on? Are the power and other cables properly
connected?"
YES [ARROW pointing to right] (TECH SUPPORT) Lets do everything we can to
get you up and running today. If you call XXX-XXX-XXXX our
technical support group can help you.
NO [ARROW pointing to right]
I. Rep informs customer that all original packaging and materials must be
included, and unsealed cartridges cannot be returned.
II. Rep informs customer that product will be inspected to verify it is
DOA. If it is found to be in proper working condition, an exchange
will be authorized.
III. If the customer desires, they can purchase an new unit on a new order,
and have the product shipped out while the return is being processed.
The customer will NOT be credited on the original unit until it is
received and inspected.
IV. Rep issues an RMA number and explains FEDEX return process. Rep will
prompt to replace the product with a new one. If customer rejects
this, we will credit their account. TSR Informs the customer that
exchange unit will ship (or refund occur) when their DOA system
arrives in our returns dept.
CUSTOMER REMORSE SCRIPT:
I. TSR will be sure the order falls within the [**52**] timeframe.
II. TSR will then let customer know that per policy:
- Customers will be charged at [**52**] fee for return of PC
products (desktops, workstations, notebooks, servers).
- [**52**] .
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- [**52**] .
- HP reserves the right refuse a return if there is [**52**]
- Customer is responsible for [**52**] charges back to our
returns department and is fully responsible for the product
until it arrives.
- Product must be returned in original packaging with all
materials. Incomplete returns will not be accepted.
- TSR must strongly SUGGEST that customer returning products
use an insured, traceable means of shipping (FEDEX) for this
reason. Customer will be credited by the same means in which
they purchased and not until product is returned.
TECH SUPPORT SCRIPT:
TSR will verify that order falls within the [**53**] timeframe. TSR will
then give the customer the number for post sales tech support for their
specific product If Tech Support is unable to help customer and order is
within the above-mentioned timeframe, we will process an exchange RMA
and get customer a new product when defective product is returned. If
order falls outside of the timeframe, the customer's only option is tech
support. (escalations will be handled by a manager).
NOTE: Returns will be initially handled by the TSR who owns the order
and assisted, if necessary, by customer service. The reason being that
the TSR may be able to save an order having ownership and knowledge of
customer account.
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ATTACHMENT 0.00.0.0: LEASING PROCESS
[**AN**]
-28-
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EXHIBIT B
MONTHLY ALLOCATED FEES
1. Non-dedicated Program Management Personnel:
1.1 Operations
1.1.1 Vice President of Operations [**56**]
1.1.2 Administrative Staff [**56**]
[**56**]
1.2 Product management
1.2.1 Purchasing Manager [**56**]
1.2.2 Administrative Staff [**56**]
[**56**]
1.3 Distribution (Returns Mgmt)
1.3.1 Distribution Manager [**56**]
[**56**]
1.4 Accounting
1.4.1 Controller [**56**]
[**56**]
1.5 Human Resources
1.5.1 Human Resource Specialist [**56**]
1.5.2 Trainer [**56**]
[**56**]
1.6 Security [**56**]
--------
1.7 Information Technology
1.7.1 Director IT [**56**]
1.7.2 Manager IT [**56**]
1.7.3 Web Manager [**56**]
1.7.4 Manager IS [**56**]
1.7.5 IT Technical Specialist [**56**]
1.7.6 IS Programer [**56**]
[**56**]
1.8 General and Administrative
1.8.1 COO [**56**]
1.8.2 Administrative Staff [**56**]
[**56**]
69
1.9 Facility Administration
1.9.1 Facility Administrator [**56**]
1.9.2 Receptionist [**56**]
[**56**]
2. Expense for sales/administrative and distribution facility space:
2.1 Sales/Administrative (20 Employees) [**57**]
2.2 Distribution (1,500 sq. ft.) [**57**]
3. Monthly depreciation for capital equipment:
3.1 Not applicable at program start-up
4. DAC affiliate allocated costs:
4.1 IEI Human Resources [**58**]
4.2 IEI Legal [**58**]
4.3 IEI Information systems [**58**]
4.4 IEI General Administrative [**58**]
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EXHIBIT C
PROGRAM METRICS
The following are potential metrics for the program depending on program
requirements. Program metrics identified with an "*" are the responsibility of
Program Suppliers other than DAC:
Department/ Metric Goal Measurement System
Function
1. Sales Abandon rate [**59**]of inbound calls Meridian system as reported in Access daily
sales report
2. Sales Average hold time [**59**] seconds Meridian system as reported in Access daily
sales report
3. Sales Close ratio [**59**] of sales related calls Per Access database sales report
4. Sales Line items per order [**59**] lines per order OE-05-55
5. Sales Outbound calls per day [**59**] calls per day Meridian System as reported in Access daily
sales report
6. Sales Inbound time available [**59**] hours per day Meridian System as reported in Access daily
sales report
7. Customer service Abandon rate [**59**] of inbound calls Meridian System as reported in Access daily
sales report
8. Customer service Average hold time [**59**] seconds Meridian System as reported in Access daily
sales report
9. Distribution* Peripheral same day [**59**] of all credit approved OE-02-49 (Peripheral packing slip print
ship % in-stock orders selection)
71
Department/ Metric Goal Measurement System
Function
10. Distribution* Inventory accuracy [**59**] accuracy to inventory Per cycle count and physical inventory
dollars adjustments
11. Distribution* Shipment accuracy [**59**] accuracy in line item OE-25-28
shipment
12. Distribution* Shipping performance [**59**] of all orders shipped OE-02-49
within [**59**] hours
13. Distribution* Quality assurance [**59**] audit pass As reported by DAC quality personnel
14. Distribution* Shipping performance [**59**] of all orders shipped OE-02-19
within [**59**] hours
15. Credit Credit card cycle line Non-automated CC -[**59**] OE-25-12 (Credit card selection)
within [**59**] hours
16. Credit Terms orders cycle [**59**] within [**59**] hours OE-25-12 (Credit selection)
time
17. Credit DAC leasing order [**59**] of applications Per DAC Credit reporting
cycle time submitted within [**59**] hours
18. Accounting Invoice generation [**59**] of customer invoice Per MAX order processing record
mailed within [**59**] hours
19. General CQSD [**59**] to Original CQSD OE-25-10
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EXHIBIT D
PROGRAM REQUISITION FORM
(See Attached)
73
HP Program
By Direct Alliance Corporation
Program Requisition
Direct Alliance is responsible for submitting a Program Requisition to HP based
on HP Program requirements. HP is responsible for approving or denying all
program requisitions on a timely basis. The "Approvals" section of this form
should be completed by authorized HP personnel and the form should be returned
to Direct Alliance Corporation, Accounting Department, 0000 Xxxx 0xx Xxxxxx,
Xxxxx, Xxxxxxx 00000, Attn: Cricket Xxxxxxx. (Facsimiles may be sent to
602-902-1004).
Date of Request: 3-29-99
Requesting Manager: Art Xxxxxxx, Director of Marketing
Amount of Request: $[**60**]
Explanation of Request:
Mailing list acquisition costs for July 1999 HP catalog. Please refer to DAC
invoice #800035.
Approvals:
Dir/VP/SrVP: /s/ Date: /29/99
COO: ______________________________________________ Date: _________________
HP CORPORATION:
Approved: ________________________________ Date: ________________________
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Denied: __________________________________________________
-3-
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EXHIBIT E
PROGRAM REQUISITION FORM
(See Attached)
-4-
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HP Program
By Direct Alliance Corporation
PERSONNEL REQUISITION
Direct Alliance is responsible for initiating and submitting personnel requests
to HP based on Program requirements. HP is responsible for approving or
disapproving all personnel requisitions that are additions to staff. The
"Approvals" section should be completed by authorized HP personnel and the form
should be returned to Direct Alliance Corporation, HR Dept. 0000 Xxxx 0xx
Xxxxxx, Xxxxx, Xxxxxxx 00000, Attn: Xxxxxx Xxxxxxxxxxx. (Facsimiles may be sent
to 000-000-0000.)
Date Required: 6/1/99 Dept: Accounting Recruiting Sup/Mgr: Xxxxxx Xxxxxxxx
Position Title: Credit Manager Number of Positions: 1
Duties/Responsibilities: Responsible for managing all HP financial services.
This includes compliance with program policy regarding terms, credit cards and
collections. This also includes following specific guidelines for determining
credit limits with authority up to $50,000. High volume position requiring the
management of five to ten employees.
POSITION STATUS:
Reason for Hire: Addition Reason: New Program
Replacement For: _________________
Employment Status: Full Time XXX Part Time __________ Temporary __________
Hourly ______________ Coefficient ____________ Exempt XXX
Pay Period: Bi-weekly ______________ Semi-Monthly XXX
Pay Structure: $ [**61**]/year to [**61**]/year , Commission/Bonus Plan $
/Potential/Month
Work Hours/Shift: M-F: 8 - 5 , Sat: - , Sun: - , Other: ________________
POSITION REQUIREMENTS:
Basic Skills: Data Entry X Ten key Typing Speed: __________ Phone Skills Physical Req's
Software Skills: MS Word X Excel X Lotus X PowerPoint Access Other:
Education: High School Associate Degree Bachelor's Degree X
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Previous Experience/# Years: Prefer four years experience in credit order
processing and in establishing and reviewing credit limits with some experience
in collections and credit cards.
Special Knowledge/Skills/Training: Knowledge of credit rating systems including
Dun and Bradstreet.
APPROVALS:
Dir/VP: /s/ Date: 4/22/99
COO: __________________________________________ Date: _______________________
HR: ___________________________________________ Date: _______________________
HP:
Approved: /s/ Date: 5/11/99
[ ] Denied: ___________________________ Date: ____________________
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EXHIBIT "F"
FINANCE REQUIREMENTS
DAC Responsibilities:
1. DAC will make all payables to the Service Providers on behalf of HP. HP
will provide in writing the Service Providers whom DAC can pay.
2. DAC will manage all receivables for the program on behalf of HP.
3. HP will determine the specific accounts and maximum amounts that DAC can
pay on HP's behalf. DAC will do the following in the management of HP's
payables and receivables:
(a) Halt payment to any account immediately upon request from an HP
Authorized Signer.
(b) Notify HP immediately of any discrepancies in xxxxxxxx or
collections from HP customers or suppliers.
4. DAC can authorize returns up to [**62**] per occurrence. Any return over
this amount requires the approval of an HP Authorized Signer.
Taxation:
DAC will charge sales tax in all in those jurisdictions which tax sales, as
directed by HP.
Credit/Collections:
DAC will administer all credit and collections subject to credit policies
provided by HP. HP reserves the right to modify its policies at will.
Approved Credit Cards:
MasterCard, Visa, American Express, and Discover.
Credit Card Processing:
First of Omaha Bank will be used as of the Effective Date to process credit
cards. Check clearing will be conducted as of the Effective Date through the
First Omaha Scan system.
Purchase Orders:
Customers wanting to use a purchase order will apply for credit through DAC's
credit approval process.
79
- DAC will take the appropriate customer information per HP's credit
requirements
- DAC credit processors will verify customer credit
- HP will assign a dollar credit limit policy
- If customer meets HP criteria, terms of [**62**] days will be provided
- DAC will invoice the customer upon shipment
- DAC will not accept a PO for which a credit application has not been
submitted by the customer and approved per HP policies
- DAC will not accept a PO on which the customer has written in any
changes to the HP terms and conditions
Credit Card Invoicing:
Credit card customers will be sent an invoice as proof of purchase.
Prepayment:
If a customer wants, they may mail a check in to DAC and pre-pay for orders.
Shipments will be authorized once the check has been cleared.
Customer Credit Information:
Customer credit card data will never be sent by e-mail to anyone.
Processes:
Price Verification: DAC will check once per week that prices from the Service
Providers are the same as those on the HP Reseller America Website. DAC will
immediately inform HP of any discrepancies.
DAC WILL PROVIDE TO HP EACH MONTH THE FINANCIAL REPORTS AS LISTED IN EXHIBIT
"G".
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EXHIBIT "G"
SUMMARY REPORT REQUIREMENTS DOCUMENT
Sales
1. Sales by product and Product line will be provided each day to HP
2. Returns will be provided weekly
3. Average order size
4. # SKUs per order
5. Status of Daily backorders
6. Other reports including average number of SKUs per order, number of
quotes generated per day, number of quotes closed
Call Information
1. Abandon rate
2. Average hold time
3. Close ratio
4. Talk time
5. Line items per order
6. Time logged on
7. % accounts profiled
Distribution
1. Same day ship %
2. Returned goods Inventory accuracy
3. Shipment accuracy
4. CQSD ratings
5. Returns cycle time
6. 48 hour ship %
7. System quality rating of Service Providers
8. Returns cycle time
Credit
1. Credit card cycle time
2. Terms (purchase order) cycle time
3. Leasing order cycle time
Web
1. DAC will provide daily reporting as to web orders
2. HPCC will provide daily reporting as to web hits, trends, etc.
3. DAC will provide reporting in Downtime Events (as defined in Agreement)
81
Financial Reports
1. Sales by product category
2. Product costs from distributors by category
3. Variable costs (e.g., telephone, headcount, VAN charges, etc.)
4. Allocated Fees
5. Tax-30 Report
6. Accounts Payable, Accounts Receivable by Month
7. Bad Debt
8. Freight costs and revenues
9. Credit card processing costs
Other reports as may be mutually agreed upon by HP and DAC.
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EXHIBIT "H"
PROGRAM BUSINESS RULES
I. TELESALES RULES
Phone Answer:
The phone will be answered "Thank you for calling the HP Business Store, this is
____"
Credit Card Verification:
The MAX system will automatically verify credit cards for fraud before the order
is accepted. Under standard credit card rules, DAC will allow Visa and
MasterCard order to have a different ship to address than the billing address.
American Express orders must have the same ship to and billing addresses or
written (e-mail or fax) authorization from American Express when addresses are
not the same. DAC reps will receive standard DAC training to handle situations
in which the customers credit is rejected or the rep has reason to believe that
the caller is engaging in fraudulent activities.
Sales Tax:
Under the agency model, applicable sales tax will be calculated by DAC using
TaxWare software integrated into MAX.
Quotes:
Telesales reps will be able to provide quotes to customers. Those quotes will be
good for [**63**] within the MAX system. Quotes are not stored on the website.
Hours of Operation:
The Website will operate [**64**]. Uptime requirements are provided in the
Agreement, subsection ______. It will be brought down only for maintenance or
upgrades which will occur as provided in Agreement, subsection ______. During
the first 3 months of operations, the phone will be answered from [**64**].
During evenings and weekends, callers will hear a message asking them to either
go to the website, or leave a phone number for a callback. As call volume
increases over time, additional reps can be added for evening or weekend
operations.
# Rings:
DAC phone systems should pick up within [**65**].
On-Hold Scenarios:
At HP's request and upon notice to DAC, during periods when a customer is on
hold (e.g. rep is checking on a special with manager), the customer will hear a
message talking about specials of the week.
Telephone Extensions/E-mail address for reps:
83
Reps will have individual telephone extensions and e-mail addresses that will be
provided to customers. TSRs will have e-mail address with @xxxxxxxx.xxx at the
end.
Team Structure:
No more than [**AO**] Outbound Manager and not more than [**AP**] per Inbound
manager.
Prompting for Upsell:
Reps will be trained to prompt for the following with each sale:
- Upsell to next appropriate product (especially when desired
product is not available)
- Accessories/supplies that go with the product
- Leasing (primarily for orders over [**66**])
- Product Support packs
- Cross-sell (e.g. printer with PC, PC with printer)
Prompting for Reseller Services:
The HP Business Store will not sell services at launch. In order to reduce
channel conflict, reps will suggest reseller services if they encounter the
following types of situations:
- The rep has an intimate knowledge of the customer and knows that
services are typically needed with product sold.
- The customer places an order for a server or very large number [**66A**]
PCs.
- The customer places an order for a High Touch LaserJet 8500 printer
product.
THE REPS WILL STILL TAKE THE PRODUCT ORDERS FROM THE CUSTOMER.
If the customer wants non-HP services, the rep will forward the customer to the
MCI call center.
[**67**]
Multiple Credit Card Orders:
Customers may NOT place a single order and charge it to multiple credit cards.
Product Information:
Customers calling in for product information will have their questions answered
by the inbound sales reps. The rep will make every effort to sell the individual
on the products. If they would like to instead receive a catalog, the rep will
enter their information into the database and a literature pack will be mailed.
Government Orders:
Government customers must send in purchase orders on valid government
letterhead. Government credit will be applied per Business Store credit
policies. [**AQ**].
Security/ Privacy Concern:
If a customer is concerned about entering their credit card on the web, they can
enter a quote and call the TSR. The TSR will pull the quote into MAX and take
the credit card number over the phone.
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84
Reps will ask the customer if they want to be contacted regarding upcoming
promotions either by e-mail, phone or regular mail.
Tech Support:
If a customer calls in for a technical support call the customer will be
provided the appropriate support number to call.
Tracked Database Codes:
The following line items are tracked per customer within the DAC database at
launch.
Business Profile:
1 Company name 6 City
2 Department 7 State
3 AP Contact; fname 8 Zip
AP Contact, Middle 9 AP Position
AP Contact, Lname 10 Active/Inactive flag
AP Contact, Title 11 Xxxx to phone
4 Address 12 Alternate phone
5 Address 13 Fax phone
14 Sales #
15 Fraud flag
16 VPA (Valumen Purchase Agreement)
17 Last Contact date
18 Last Sales date
19 Create date
20 Original source code
Last source code
21 System type
22 Fax broadcast y/n
23 Auto catalog y/n
24 Don't call me y/n
25 Sell name y/n
26 DAC company
27 Network y/n
28 # of PC's All Sites
29 Annual budget
30 Annual sales
31 # Employees all sites
32 SIC code (we're finalizing what level of
detail and how many to include)
33 SIC Abbreviation
34 Preferred brand
35 Plan to buy months
36 Profile date
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37 Catalog sent
38 Ship complete
39 ABI Ult #
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86
EXHIBIT "J"
HP AUTHORIZED SIGNERS
[**AR**]
87
EXHIBIT "K"
DAC QUOTE FOR CATALOG
88
DIRECT ALLIANCE CORPORATION
0000 X 0xx Xxxxxx XXXXXXX
Xxxxx, XX 00000 800034
Telephone: 000-000-0000
Fax: 000-000-0000
SOLD TO SHIP TO
Hewlett-Packard Company Hewlett-Packard Company
0000 Xxxxxxx Xxxxx Xxxxxxxxx 0000 Xxxxxxx Xxxxx Xxxxxxxxx
XX Xxx 00000, XX 52UVL XX Xxx 00000, XX 00XXX
Xxxxx Xxxxx, Xxxxxxxxxx 00000-0000 Xxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxx Xxxxxx Attn: Xxxxx Xxxxxx
ACCOUNT # CUSTOMER PHONE # PAYMENT TERMS REFERENCE # ORDER #
(000) 000-0000 NET 30 [**AS**]
PURCHASE ORDER # SALES REPRESENTATIVE'S INTERNET ADDRESS SHIP
02B06744 xxxxxxxx@xxxxxxxxxxxxxx.xxx
SALES REPRESENTATIVE SALES DIRECT 2000 TECHNICAL SUPPORT # INVOICE DATE
[**AS**] [**AS**] -- 03/29/99
QTY P/O SHIPPED PRODUCT CODE PRODUCT DESCRIPTION UNIT COST TOTAL
INVOICE TO COMPLETE
HEWLETT PACKARD CATALOG #1
Hewlett Packard Catalog [**AS**]
xcopies, 32 pages.
1 1 6511-HPD Design, Production $[**AS**]
$[**AS**]
1 1 6521-HPD Print, Paper, Project $[**AS**]
management, Misc Freight $[**AS**]
1 1 6441-HPD Database/List processing $[**AS**]
fees* @ [**AS**] mailing $[**AS**]
1 1 6531-HPD Postage est. @ [**AS**] $[**AS**]
units $[**AS**]
1 1 6521-HPD Additional Freight/ $[**AS**]
circulation/overage
allowance $[**AS**]
*Please note: any requested outside list
purchases will be additional and are not
included in the above.
MERCHANDISE SALES TAX SHIP/HANDLING MISC TOTAL AMOUNT PAID BALANCE DUE
[**AS**] 0.00 0.00 0.00 [**AS**] 0.00 $[**AS**]
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EXHIBIT "L"
HP TRADEMARK USE GUIDELINES
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90
Exhibit L: HP Trademark Use Guidelines
HP-DAC Program Services Agreement, Exhibit L, Page 1
91
[Cover page with "HP," "Corporate Identity," and "Trademark Standards" near the
top. In the middle of the page is a graphic containing a larger letter "R" a
part of a circle. Written vertically in large font from the bottom of the page
to the top of the graphic is "trademark standards"]
92
TRADEMARK Letter from the
STANDARDS President
Managing HP's company identity is critical to the long-term growth and success
of our business. I am consistently reminded of how valuable our identity is
when talking with new customers, employees, investors and the general public.
They admire our company for its innovative spirit and technological leadership,
our financial stability, and commitment to economic, educational and social
contributions in the areas of the world in which we operate.
Our audiences may see variety in Hewlett-Packard's products and service, but
they should also see consistency in HP's identity. Our identity, the collective
shared values and attributes found at HP, should be reflected in all contacts
with our various audiences. We accomplish this objective by bringing together
standards and policies that promote and protect a consistent company identity.
I have asked Corporate Brand Management and Communications, in conjunction with
HP Legal, and Corporate Real Estate to bring together these standards and
policies for trademarks and service marks to ensure we present an integrated
and consistent brand identity worldwide.
The success of this effort depends upon the ownership of its goals and values by
every HP employee. So I ask each of you to read and enthusiastically support
these standards. We can continue to provide a strong foundation for all our
future endeavors by effectively managing HP's brand identity.
/s/ Xxx Xxxxx
-----------------------------------------
Xxx Xxxxx
President and
Chief Executive Officer
93
TRADEMARK 1 Introduction and System Objectives
STANDARDS
INTRODUCTION
The following information and visual examples demonstrate the proper use of the
Hewlett-Packard company logotype, Expanding Possibilities signature, and other
HP trademarks.
Specifications are provided for company logotype, color palette,
marketing-program insignias, joint-venture logotypes, product names, product
numbers, the use of trademarks and service marks on non-HP products, new
graphic symbols, company trade names, company brand names, and company initials.
At the end of these standards, you will find a list of organizations available
for consulting and their phone numbers. A glossary of terms is also included.
These standards replace Hewlett-Packard Corporate Identity Trademarks Standards
(publication number 5091-7523E May 1993), and supersede all other previously
documented trademark guidelines.
OBJECTIVES
1. To present a well-articulated, consistent, and legally-protected corporate
identity worldwide.
2. To lay the foundation for recognition of and preference for the HP brand
among customers, employees, vendors, investors, and the general public.
94
TRADEMARK 2 Company HP Signature
STANDARDS
COMPANY LOGOTYPE FORMAT
The company logotype is the unique combination of the HP symbol positioned to
the left of the stacked words Hewlett and Packard in HP typography. The
elements of the company logotype are registered trademarks and service marks.
This is identified by the registration symbol following the HP logotype.
The HP symbol consists of the italic lowercase letters "hp" in an open circle
within a round cornered rectangle. The HP symbol is registered in most
countries as a trademark and/or service xxxx.
The company logotype is much like a legal signature on a formal document; it is
not a design element. It authenticates a product or document as being
officially from HP. The company logotype is designed to stand alone. It should
be displayed in accordance with these standards, as well as the defined
standards for communication materials, products and facilities.
[Hewlett-Packard company logotype enclosed in a rectangle. Along the left side
of the rectangle written vertically from bottom to top is "1/2x," "x," and
"1/2x" where x is shown to equal the height of the rounded cornered rectangle
of the HP symbol. Along the bottom is written, from left to right, "1/2x," "x"
and "1/2x" where x is shown to equal the length of the round cornered rectangle
of the HP symbol.]
-- The HP logotype must be surrounded by a minimum of open space as indicated
in this example.
Elements of the HP logotype should not be used independently.
The registration symbol is not required on product labels or signage.
The company logotype should be used only in the form and for the types of
applications specified by Corporate Brand Management and Communications, in
conjunction with existing specifications for industrial design, real estate and
the HP Legal department.
REPRODUCING THE LOGOTYPE
The company logotype should be reproduced only from the masters that originate
in Corporate. To obtain approved electronic logotype files, go to
xxxx://xxxxx-xxx.xxxx.xx.xxx (internal HP access only). The company logotype
should not be changed into another alphabet or character set, for example
Arabic or Chinese, without review and approval by Corporate Brand Management
and Communications, HP Legal, and Executive Management staff. To initiate a
review contact the Brand Identity Manager in HP Brand Management and
Communications.
[Graphic depiction of a cover page with the Hewlett-Packard company logotype
printed in the top right corner and a circle drawn around it.]
95
TRADEMARK 3 HP Signature
STANDARDS Incorrect Uses
--------------------------------------------------------------------------------
Do not change the appearance, shape, or size of any [variation of the
elements in the company logotype. Hewlett-Packard
company logotype]
--------------------------------------------------------------------------------
Do not combine the company logotype with any other [variation of the
graphic element. Hewlett-Packard
company logotype]
--------------------------------------------------------------------------------
Do not use the elements of the company logotype inde- [variation of the
pendent from one another. Exceptions are the use of the Hewlett-Packard
HP symbol on employee service awards, small product company logotype]
parts, or components where there is insufficient room for
the complete company logotype to be reproduced legibly.
--------------------------------------------------------------------------------
Do not use any element of the company logotype as a [variation of the
substitute for the company initials, the trade name, or the Hewlett-Packard
company brand name, such as in headlines, titles of text. company logotype]
--------------------------------------------------------------------------------
Do not split any element of the company logotype. [variation of the
Hewlett-Packard
company logotype]
--------------------------------------------------------------------------------
Do not use the company logotype as a design device or [variation of the
element, such as in a repetitive or three-dimensional Hewlett-Packard
manner. Consult with Corporate Brand Management and company logotype]
Communications for video guidelines.
--------------------------------------------------------------------------------
Do not use the company logotype in a size that is not
specified in communication, signage or product standards
being followed. Refer to the Resources section on page 22
for information on company standards.
96
TRADEMARK 4 HP Signature
STANDARDS Color Specifications
COMPANY LOGOTYPE COLOR
In two-color applications, the HP symbol should be printed in HP Blue (in lieu
of HP Blue use Pantone(R) 286), with the words Hewlett and Packard printed in
black. Unique to the HP stationery system is a two-color application of HP Blue
and HP Dark Warm Xxxx.
In single-color applications, the entire company logotype may be printed in HP
Blue, black, HP Dark Warm Xxxx, or it may be reversed out of a color to white.
In reverse applications, the entire company logotype should reverse white from
a solid background. The background color should provide sufficient contrast to
the company logotype and should never be lighter than a 50% value of black.
Blind embossing and foil stamping in the colors specified above, as well as in
gold and silver, are also acceptable for appropriate special applications such
as formal invitations.
- THESE EXAMPLES DEMONSTRATE THE ONLY AUTHORIZED COLOR COMBINATIONS FOR THE
COMPANY LOGOTYPE.
IN LIEU OF HP BLUE, USE PANTONE(R) 286 COLOR STANDARD. IN LIEU OF HP DARK WARM
XXXX, USE PANTONE(R) WARM XXXX 10C COLOR STANDARD.
[variation of the Hewlett-Packard company logotype]
[variation of the Hewlett-Packard company logotype]
[variation of the Hewlett-Packard company logotype]
[variation of the Hewlett-Packard company logotype]
97
TRADEMARK 5 HP Signature Color Specifications
STANDARDS Incorrect Uses
_______________________________________________________________________________
Do not use colors other than those [variation of the Hewlett-Packard
specified by the trademark standards. Company logotype]
_______________________________________________________________________________
Do not reverse the company logotype out [variation of the Hewlett-Packard
of color or tone lighter than a 50% Company logotype]
value of black.
_______________________________________________________________________________
Do not apply color in the open circle [variation of the Hewlett-Packard
containing the italic HP initials. The Company logotype]
color in the open circle is to be the
color of the surface on which the
company logotype is applied.
_______________________________________________________________________________
Do not halftone screen any portion of [variation of the Hewlett-Packard
the company logotype. Company logotype]
98
TRADEMARK 6 Expanding Possibilities Signature
STANDARDS
The Expanding Possibilities Signature may be used in place of the HP signature.
The new brand statement attached to the HP logo must never be removed from the
track shape and used independently. The Expanding Possibilities Signature must
be used in all consumer communications.
EXPANDING POSSIBILITIES SIGNATURE FORMAT
The HP Expanding Possibilities Signature is composed of the HP signature with
the Expanding Possibilities brand statement in an outline track shape. The
signature must be surrounded by clear space that is a minimum of half the height
of the HP logotype on all sides.
[Hewlett-Packard company logotype with a rounded rectangle below containing the
words "Expanding Possibilities"]
THE HP EP SIGNATURE MUST BE SURROUNDED BY A MINIMUM OF OPEN SPACE AS INDICATED
IN THIS EXAMPLE.
ELEMENTS OF THE HP EP SIGNATURE SHOULD NOT BE USED INDEPENDENTLY.
THE REGISTRATION SYMBOL IS NOT REQUIRED ON PRODUCT LABELS OR SIGNAGE.
EXPANDING POSSIBILITIES SIGNATURE COLOR
The only colors that may be applied to the Expanding Possibilities Signature
include all black, all white, all EP Blue, or the HP logo in HP blue and black
with the attached Expanding Possibilities brand statement in black.
[graphic depiction of a cover page with a circle at the upper right corner
containing the Hewlett-Packard company logotype in a rounded rectangle below
containing the words "Expanding Possibilities"]
99
TRADEMARK 7 Expanding Possibilities Signature
STANDARDS Incorrect Uses
--------------------------------------------------------------------------------
Do not use the EP brand statement [rounded rectangle with "Expanding
in its track shape, independent Possibilities" written inside]
of the HP logo.
--------------------------------------------------------------------------------
Do not use colors other than those [variation of the Hewlett-Packard
specified by the trademark company logotype with a rounded
standards. rectangle below containing the
words "Expanding Possibilities"]
--------------------------------------------------------------------------------
Do not resize the EP brand statement [variation of the Hewlett-Packard
and track shape. company logotype with a rounded
rectangle below containing the
words "Expanding Possibilities"]
100
TRADEMARK 8 Marketing Program Insignias
STANDARDS
MARKETING-PROGRAM INSIGNIAS
Marketing-program insignias are specifically designed versions of the HP
logotype. They have received corporate approval through HP Legal and the Brand
Identity Manager in HP Brand Management and Communications for special
applications, including use by certain third parties such as those listed in
the paragraphs following. Elements of these special program insignias are
registered trademarks or service marks.
The following marketing-program insignias have been developed specifically for
U.S. programs. For European, Americas, or Asia-Pacific versions of these
program insignias, contact the appropriate country channel manager.
The Channel Partner insignia, may be used by third parties who have been
qualified and have signed contracts with HP authorizing use of the Channel
Partner insignia.
The Authorized Reseller insignia may be used only by third parties who qualify
under the Authorized Reseller program specifications and have signed contracts
with HP.
INSIGNIA COLOR
Color for each of these insignias is limited to all black, all HP Blue, or
reversed to white. In reverse applications, the background should provide
sufficient contrast to the company logotype and should never be lighter than a
50% value of black.
THESE EXAMPLES DEMONSTRATE THE U.S. VERSIONS OF CHANNEL PARTNER INSIGNIAS.
[variation of the Hewlett-Packard company logotype enclosed in a rectangle with
a rectangle below containing the words "Authorized Distributor"]
[variation of the Hewlett-Packard logo enclosed in a rectangle with another
rectangle below, containing the words "Channel Partner"]
101
TRADEMARK 9 Marketing-Program Insignias
STANDARDS Incorrect Uses
--------------------------------------------------------------------------------
Do not modify marketing-program insignias
for uses other than those permitted in the
contracts. (Contact HP Legal for contracts.)
[variation of the Hewlett-Packard
company logo type enclosed in a
rectangle with a rectangle
immediately below containing the
words "Exciting Offer!" and the
words "Channel Partner."]
--------------------------------------------------------------------------------
Do not modify the shape, typography (see
example), or HP logotype in marketing-
program insignias.
[variation of the Hewlett Packard
company logotype enclosed in a
rectangle with another rectangle
immediately below containing the
words "Channel Partner."]
--------------------------------------------------------------------------------
Do not use colors that are not defined
for marketing-program insignias.
[variation of the Hewlett Packard
company logotype enclosed in a
rectangle with another rectangle
immediately below containing the
words "Channel Partner."]
102
TRADEMARK 10 Joint-Venture and Wholly-Owned
STANDARDS Subsidiary Logotypes
JOINT-VENTURE AND SUBSIDIARY LOGOTYPES
Joint-venture logotypes are identity elements approved for use by companies
formed through a formal partnership between HP and one or more other companies.
An example is the logotype of Xxxxx Xxxxxxx-Xxxxxxx. The elements of
joint-venture logotypes are registered trademarks.
-- Use of wholly-owned subsidiary name on business card
This example demonstrates an approved joint-venture logotype.
Specific joint-venture logotype proposals must first be reviewed and approved by
the Corporate Brand Identity Manager in HP Brand Management and Communications,
and HP Legal. Final approval must be given by executive management, prior to use
by a joint-venture company.
Although legally separate companies, joint-venture companies and wholly-owned
subsidiaries are subject to the HP brand identity standards in their use of the
HP trademarks and service marks they are authorized to use. This includes color
and format specifications.
[graphic depiction at a business card containing at the top right, the HP
Expanding Possibilities Signature]
[Hewlett-Packard company logotype with a horizontal line below and a rectangle
above containing the word "EDISA."]
103
TRADEMARK 11 Joint-Venture and Wholly-
STANDARDS Owned Subsidiary Logotypes
Incorrect Uses
--------------------------------------------------------------------------------
Do not modify the elements of HP logotype when [variation of the Hewlett-
developing joint-venture logotypes. Packard company logotype
containing the words "New
Corp."]
--------------------------------------------------------------------------------
Do not use colors that are not specified for [variation of the Hewlett-
joint-venture logotypes. Packard company logotype
with a rectangle above
contain the word "EDISA."]
--------------------------------------------------------------------------------
104
TRADEMARK 12 Non-HP Products/Communications
STANDARDS
HP Logotype Use By Other Companies
No other company is allowed to use HP trademarks or service marks on its goods
or services without express, written permission from HP. The most common
circumstances under which HP grants this permission are:
OEM Products
Occasionally, HP may wish to include in its product line a product manufactured
by another company. To facilitate this, HP general managers may authorize the
OEM to put HP trademarks on the products they make for us.
Joint Promotions
Occasionally, HP enters into an agreement with another company to jointly
promote a product offer or service. HP may allow the use of its trademarks on
communications to endorse the offer or product. Joint promotions require a full
review of content and design by an HP marketing or marcom manager. Consultation
is also available from the Corporate Brand Identity manager. Ads require an
additional review by Corporate Advertising. The HP logotype must be used in
accordance with these standards. Both company logos should be of equal size and
separated by enough space to ensure separation of identities in the costumer's
mind.
Promotional Products
Promotional products such as pens, sportswear, and coffee cups, used as
premiums, gifts and employee awards may display HP trademarks. Refer to HP's
Promotional Merchandise Catalogue (xxx.xxxxx.xxxxxxxxx.xxx) for ordering
products displaying the HP logotype.
In all such cases, HP trademarks may only be put on products and communications
by another company if there is written agreement between the company and HP. The
written agreement must be approved by the HP Legal Department to ensure the
proper use and protection of the trademarks.
105
TRADEMARK 13 New Graphic Symbols
STANDARDS
PRODUCT, PROGRAM AND SERVICE SYMBOLS
The creation and use of new symbols are discouraged because they dilute the
effectiveness of the HP company logotype. However, if executive management of
an entity has determined that a new symbol is required for a major new product
family, service, or program, the following steps must be followed to obtain
approval of the new symbol:
1. Define the marketing objectives for a new symbol or logo.
- Will it endure over time so equity and value can be achieved?
- Is the proper funding in place to promote the logo and build equity over
time?
- Will there be cross-product/or cross-entity benefits?
- What is the product branding strategy?
2. Obtain approval for the logo strategy from the general manager and
marketing manager.
3. Develop a rough sketch of the logo or symbol and submit these with the
approved marketing strategy to the Corporate Brand Identity Manager. The Brand
Identity Manager will check for conflict with existing HP trademarks and brand
standards.
4. Request initiation of a legal check from the HP Legal department. The
check will determine whether the use of the proposed symbol will infringe upon
an existing trademark or service xxxx. This critical step in the process is
similar to that described in the booklet Legal Checking of Product and Program
Names, but can take considerably longer due to the difficulty of trademark
searches for symbols. For information regarding this booklet, contact your
legal department.
All symbols require the approval of the Executive Management staff prior to
implementation.
106
TRADEMARK 14 Company Trade Name
STANDARDS
COMPANY TRADE NAME
The company trade name of the U.S. parent corporation is Hewlett-Packard
Company, regardless of the typeface in which it appears. While each subsidiary
has its own company trade name, for example, Hewlett-Packard Ltd. in the U.K.,
the parent and subsidiary companies are usually referred to simply as
Hewlett-Packard.
Hewlett-Packard Company is the official name of the U.S. parent corporation and
is always used as a noun. When we refer informally to the company organization,
we may use Hewlett-Packard or HP, for example, "HP is a reliable company". Each
subsidiary has its own company trade name that includes the words
Hewlett-Packard, and an indication of corporate form, for example,
Hewlett-Packard Hong Kong Ltd.
Whenever the company trade name is used in text, the word "Company" must be
spelled out in full.
The Company Trade name may be abbreviated to Hewlett-Packard or HP, and must
appear in the same typeface as the rest of the text. If used in a title or
headline Hewlett-Packard or HP should be followed by a (R) registration symbol.
For information on how to use HP trademarks in written materials and
acknowledging other companies' trademarks, refer to the HP Writing Style Guide.
For information regarding this publication go to xxxx://xxxxxxxx.xxxx.xx.xxx.
-- THIS IS AN EXAMPLE OF THE COMPANY TRADE NAME.
A REGISTRATION SYMBOL IS NOT REQUIRED WHEN USING THE FULL COMPANY TRADE NAME.
[graphic depiction of the first page of a press release with a circle
surrounding a portion of the text]
[blow up of the circle with text contained in the graphic depiction of the
press release above]
107
TRADEMARK 15 Company Trade Name
STANDARDS Incorrect Uses
--------------------------------------------------------------------------------
Do not follow the words Hewlett-Packard with the words [written in large
Inc., Corp., or any other indication of corporate form bold font are the
(except Company) when referring to the U.S. parent cor- words: "New From
poration. Subsidiary company trade names may include Hewlett-Packard
the appropriate indicator of corporate form, for example, Corporation"]
Hewlett-Packard GmbH in Germany.
[written in large
bold font are the
words: "New From
Hewlett-Packard
Inc."]
--------------------------------------------------------------------------------
Do not refer to the company as only Hewlett, or only [written in large
Packard. bold font are the
words: "Hewlett's
New Machine"]
--------------------------------------------------------------------------------
Do not print the trade name in HP typography (formerly [written in large
referred to as HP Gothic). The single exception is on com- bold font are the
pany stock certificates. words: "HEWLETT-
PACKARD COMPANY"]
108
TRADEMARK 16 Company Brand Name
STANDARDS
COMPANY BRAND NAME
The company brand name is Hewlett-Packard, regardless of the typeface in which
it appears. It is registered in most countries as a trademark and/or service
xxxx.
When referring to our brand of products or services, the company brand name is
always used as an adjective, for example, Hewlett-Packard computers,
Hewlett-Packard support services, and Hewlett-Packard LaserJet printers.
Whenever the company brand name is used in text, it must (1) always be written
with initial capital letters followed by lowercase letters, (2) appear in the
same typeface as the rest of the text, and (3) always appear with a hyphen
between the two words. When used in headlines and titles Hewlett-Packard should
be followed by a (R) registration symbol. This is particularly important for
packaging and labels.
For information on how to use HP trademarks in written material and
acknowledging other companies' trademarks, refer to the HP Writing Style Guide.
For information regarding this publication go to xxxx://xxxxxxxx.xxxx.xx.xxx.
THIS IS AN EXAMPLE OF THE COMPANY BRAND NAME.
ONLY APPLY THE REGISTRATION XXXX WHEN USED IN TITLES OR HEADLINES, NOT TEXT.
[graphic depiction of a cover page with the following written in large bold
font: "Hewlett-Packard(R) Powers Your E-business."]
109
TRADEMARK 17 Company Brand Name
STANDARDS Incorrect Uses
-------------------------------------------------------------------------------
Do not use the HP symbol or any other portion of the [In large bold type is the
company logotype as a substitute in text for the HP symbol preceded by the
company brand name. word "New" and followed by
the word "Printer"]
--------------------------------------------------------------------------------
Do not print the company brand name in HP typography [In large bold type are
(formerly referred to as HP Gothic) anywhere but in the words "Support
the company logotype. Services from Hewlitt-
Packard"]
-------------------------------------------------------------------------------
Do no use the company brand name as a design device [In large type are the
or design element. letter "H-E-W-L-E-T-T-
P-A-C-K-A-R-D" each
surrounded by a rounded
rectangle"]
110
TRADEMARK 18 Company Initials
STANDARDS
COMPANY INITIALS
The company initials are HP, regardless of the typeface in which they appear.
They are registered in most countries as a trademark and/or service xxxx.
The company initials are used when an abbreviation of the company brand name
or trade name is desired. They may be used in headlines, in text, and with
product model numbers and names.
When the company initials are used in front of product model numbers of names,
there must be a minimum of one-half character space between the company
initials and the product model number or name. Examples include HP OpenView,
HP JetSend and HP 8566B. The only exceptions to this are product names
consisting of two or three letters, such as HP-IB or HP-HIL, where a hyphen is
permitted between the company initials and the letters that follow.
A (R) registration symbol should only follow the initials HP in titles and
headlines on communications including packaging and labels. It is not required
in product names or numbers.
-- This is an example of the company's initials.
Applying the registration xxxx to the initials
in a chart is optional.
[Graphic depiction of a page containing text and graphics including a bar graph
containing a bar labelled "HP" inside of a circle]
111
TRADEMARK 19 Company Initials
STANDARDS Incorrect Uses
_______________________________________________________________________________
Do not put periods after the letters in the [In large bold type is
company initials. "H.P. Has Done It Again"]
_______________________________________________________________________________
Do not use the company initials as a signature [In large bold type is
or substitute for the company logotype. "HP" and "Hewlett Packard"]
_______________________________________________________________________________
Do not put a hyphen between the letters in [In large bold type is
the company initials. "H-P Has Done It Again"]
_______________________________________________________________________________
Do not use the company initials in [In large bold type is
lowercase type. "hp had done it again"]
_______________________________________________________________________________
Do not make slogans for which the company [In large bold type is
initials are an abbreviation. "HP (High Productivity)"]
_______________________________________________________________________________
Do not use the company initials as a design [Graphic depictions of two cubes
device or design element. the face of one contains the
letter "H" and the face of the
other contains the letter "P"]
_______________________________________________________________________________
Do not print the company initials in script ["HP in large, bold italicized
or other decorative type styles. HP Sans is font]
the recommended typeface for communications.
_______________________________________________________________________________
112
TRADEMARK 20 Product Names
STANDARDS and Numbers
PRODUCT, PROGRAM, AND SERVICE NAMES
HP products can be identified by model number or names. For marketing reasons,
product and service names and numbers should be leveraged across product
families.
Names and numbers should not be confused with generic descriptors which are
categories of product or services, such as personal computers or 24-hour
service. A distinctive product or service name, or number, when managed
effectively over a long period of time, may attain brand value. A brand
symbolizes the attributes and personality that positively differentiates one
product, service or company from another.
-- THIS IS AN EXAMPLE
OF A PRODUCT NAME
[graphic depiction of a page containing text and graphics with "875JE HP Vector"
written in a large font and enclosed in a circle]
Because names are considered trademarks or service marks, they must be reviewed
and approved in accordance with company standards. Examples include HP Vectra,
HP DeskJet, and HP EtherTwist, as well as product names inherited from acquired
companies such as Verifone. Many product names are registered trademarks.
DEVELOPING A NAME
A proposed product, program, or service name must undergo a trademark search
through the HP Legal department and must be approved by the Executive
Management staff. This process is described in the booklet, Legal Checking of
Product and Program Names. A trademark search is time consuming and must be
planned at least three months in advance. For information regarding this
booklet, contact your legal department.
The company initials should form a part of all product names and model numbers.
If an individual brand not endorsed by the company brand, is desired, Executive
Management staff approval is required.
There must be a minimum of one-half character space between "HP" and the words
or numbers that follow, for example, HP Wire-Test service or HP 9000 enterprise
servers. If there are only two or three characters following "HP", a hyphen may
be used between the company initials and the letters that follow, for example,
HP-IB.
When used in printed materials, a product name or model number is always
followed by a generic descriptor, for example, HP PageWriter cardiograph, HP
LaserJet 6 LXI printer, and HP 3585B spectrum analyzer.
113
TRADEMARK 21 Product Names and Numbers
STANDARDS
PRODUCT LABELING
On products, the company logotype must appear with the product name or number.
The only exception is plug-in modules for HP computer products. On these
modules, the company initials may be used with the product number and/or name.
The HP logotype does not require a registration symbol on products.
THESE EXAMPLES DEMONSTRATE THE USE OF PRODUCT NUMBERS ON HP PRODUCTS AND
PACKAGING.
[Hewlett-Packard Company logotype with "12345A" and "MODEL 12" written on the
right]
[graphic depiction of an advertisement containing various text and graphics
with the HP Expanding Possibilities Signature at the top left]
114
TRADEMARK 22 Resources
STANDARDS
FOR THE LATEST INFORMATION VISIT THESE WEBSITES:
HP BRAND IDENTITY STANDARDS AND ELECTRONIC FILES
Go to: xxxxxxxx.xxxx.xx.xxx
LEGAL CHECKING OF PRODUCT AND PROGRAM NAMES
Go to: xxxxxxx.xxxx.xx.xxx/xxxxxxxx
HP PROMOTIONAL MERCHANDISE CATALOG
Go to: xxx.xxxxx.xxxxxxxxx.xxx
Or order: P/N 5966-3241E
HP WRITING STYLE GUIDE
Go to: xxxxxxxx.xxxx.xx.xxx
TO CONTACT AN ORGANIZATION BY PHONE OR FACSIMILE:
HP BRAND MANAGEMENT AND COMMUNICATIONS
Provides consulting and develops policies for the use of HP trademarks in
external marketing, communications, and other brand activities. Provides
specifications, film masters and electronic files for approved uses of HP
trademarks and service marks.
Phone: (000) 000-0000
Telnet: 000-0000
Fax: (000) 000-0000
CORPORATE LEGAL DEPARTMENT, INTELLECTUAL PROPERTIES
Provides consultation on all legal matters affecting trademark and service xxxx
rights, including the availability of proposed marks for use by HP,
registration of marks, proper (legal) use of marks, licensing of marks, and
other intellectual property rights issues.
Phone: (000) 000-0000
Telnet: 000-0000
Fax: (000) 000-0000
CORPORATE COMMUNICATIONS
Provides consulting on the use of trademarks by non-profit organizations and
internal HP organizations.
Phone: (000) 000-0000
Telnet: 000-0000
Fax: (000) 000-0000
115
TRADEMARK 24 Glossary
STANDARDS
MARKETING-PROGRAM INSIGNIAS
Corporate-approved insignias designed using HP trademarks and specific
nomenclature. Insignias are used to identify marketing programs or channel
programs. Examples include the Channel Partner and Authorized Reseller
insignias.
MASTERS
Film negatives or electronic files necessary for accurate reproduction of all
approved corporate trademarks and service marks. Available from HP Brand
Management and Communications.
PANTONE*
A standard color matching system for color reproduction and color reproduction
materials developed by Pantone, Inc.
REGISTRATION SYMBOL (R)
The letter R enclosed within a circle used to give notice that a trademark or
service xxxx has been registered in the U.S. Patent and Trademark Office.
SERVICE XXXX
A word, symbol, letter and combination thereof that is used by a company to
distinguish its service from those of other companies.
TRADEMARK
A word, symbol, letter and combination thereof that is used by a company to
distinguish its goods from those of other companies.
UPPERCASE AND LOWERCASE
A typographic specification referring to the use of capital letters (uppercase)
and small letters (lowercase).
WHOLLY-OWNED SUBSIDIARY
A separate legal entity owned entirely by another legal entity. For example,
Hewlett-Packard S.A. in Switzerland is a wholly-owned subsidiary of
Hewlett-Packard Company.
