CONFORMED COPY
INACOM SERVICES
SERVICE LEVEL AGREEMENT
WITH
COMPAQ COMPUTER CORPORATION
Service Level Agreement (the "Agreement"), dated as of February 16,
2000, by and between Compaq Computer Corporation, a Delaware corporation, on
behalf of itself and its wholly owned subsidiaries ("Compaq"), and Inacom Corp.,
a Delaware corporation ("Inacom"). In the event of any inconsistency between
this Agreement and the Services, Supply and Sales Agreement between the parties
dated as of February 16, 2000 (the "Services, Supply and Sales Agreement") as to
the subject matter hereof, this Agreement shall control.
WHEREAS, Compaq, ITY Corp., a newly formed subsidiary of Compaq
("Compaq Sub") and Inacom have entered into an Asset Purchase Agreement dated as
of January 4, 2000, as amended (the "Asset Purchase Agreement");
WHEREAS, the execution of this Agreement is a condition to Compaq Sub
acquiring, and Inacom disposing of, the Purchased Assets (as defined in the
Asset Purchase Agreement) in connection with the Asset Purchase Agreement;
WHEREAS, Compaq has agreed to assist Inacom in the generation of
incremental revenue for Inacom's service business during the three one-year
periods following the closing of the Asset Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto hereby agree as follows:
SECTION 1. SERVICES CATEGORIES AND REVENUE TARGETS, APPLICATION AND
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RECONCILIATION.
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1.1 Compaq agrees to assist Inacom in the generation of incremental
revenues for InaCom's service business as follows:
(a) During the one year period commencing on April 1, 2000
(the "year 2000 period"), Compaq will assist Inacom in the generation of
revenues for Inacom's service business derived from the five service categories
("Service Categories") specified in Section 2.1 through 2.5 below in an
aggregate amount of $85 million (as summarized in Exhibit 1).
(b) If Inacom shall have satisfied in all material respects
the conditions to Compaq's obligations as set forth in the last paragraph of
this Section 1.1 for the year 2000 period, this Agreement shall be extended
automatically, except as otherwise terminated pursuant to Section 5.7, for an
additional one year period commencing immediately after the termination of the
year 2000 period (the "year 2001 period"). During the year 2001 period, Compaq
will assist Inacom in the generation of revenues for Inacom's service business
derived from the Service Categories in an aggregate amount of $140 million (as
summarized in Exhibit 1).
(c) If Inacom shall have satisfied in all material respects
the conditions to Compaq's obligations as set forth in the last paragraph of
this Section 1.1 for the year 2001 period, this Agreement shall be extended
automatically, except as otherwise terminated pursuant to Section 5.7, for an
additional one year period commencing immediately after the termination of the
year 2001 period (the "year 2002 period"). During the year 2002 period, Compaq
will assist Inacom in the generation of revenues for Inacom's service business
derived from the Service Categories in an aggregate amount of $195 million (as
summarized in Exhibit 1).
Compaq shall provide to Inacom for planning purposes at each quarterly
business review a rolling four-quarter forecast of estimated revenue for each
Services Category for each year. Compaq's first forecast is attached as Exhibit
1. Compaq's intent is to use commercially reasonable efforts to direct revenue
to Inacom above Compaq's annual revenue targets. It is understood that any
business above the targeted amounts will depend on the percentage of Compaq's
business that is direct to end-user.
Compaq's obligations set forth in this Section 1 shall be subject to
Inacom's ability to reasonably competitively price its services (which for these
purposes shall not require Inacom to be the lowest-priced service provider) and
to fulfill its service level obligations set forth in this Agreement and in the
associated services agreements referenced herein. If Compaq believes Inacom has
not satisfied in any material respect the foregoing conditions at any time,
Compaq shall, to the extent permitted by law, deliver a written notice to Inacom
to such effect indicating its intention to enforce its rights under this
paragraph, and Inacom shall have 90 days after the date of such notice to cure
the matters referenced in such notice. The provisions of this paragraph will not
limit the termination provisions of Section 5.7(c).
1.2 Application of Revenue. Qualifying revenue (i.e., that Inacom
service revenue that qualifies for application against Compaq's annual revenue
targets) shall be applied when paid by Compaq or when due from a party other
than Compaq.
1.3 Reconciliation of Revenue.
(a) Within sixty days of the end of each of the three annual
periods specified in Subsection 1.1 above, Compaq and Inacom will confirm
whether or not Compaq met its annual revenue target for the preceding year. If
it is determined that Compaq did not meet its revenue target for the preceding
year, Compaq shall pay to Inacom an amount equal to fifty percent (50%) of the
revenue target shortfall for that year.
(b) If Compaq had a shortfall to its revenue target for the
year 2000 period and/or year 2001 period, but meets its three-year aggregate
revenue target as set forth in Exhibit 1, as amended from time to time, before
the end of the year 2002 period, Inacom shall credit to Compaq's account an
amount equal to the total shortfall payments made by Compaq to Inacom for the
years 2000 and 2001. Such credit shall be applied against subsequent purchases
of services by Compaq from Inacom as specified by Compaq.
SECTION 2. SERVICES CATEGORIES.
--------------------
2.1 On-Site/Off-Site Compaq Warranty Services.
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(a) Definition of Work. On-site and off-site warranty services
for Compaq products as those services are more fully described in the Compaq
Guaranteed Service Provider Program "Maintainer Agreement - United States
Warranty Service" dated May 19, 1998, as from time to time may be amended by
mutual agreement of the parties ("GSP Maintainer Agreement") and in any
successor agreement.
(b) Service Capabilities. Inacom shall maintain throughout the
term of this Agreement all service capabilities, and associated training,
certification, logistics, communications and other capabilities as described in
the "GSP Maintainer Agreement".
(c) Performance Criteria. Inacom shall maintain throughout the
term of this Agreement a level of service performance which meets or exceeds the
level of satisfaction generally considered by end-users to be acceptable within
the industry. It is agreed that Compaq shall have the sole right using
reasonable and prudent judgment to determine if Inacom is providing such level
of performance.
(d) Fee Schedule. Subject to the labor rates specified in
the GSP Maintainer Agreement.
2.2 Multi-Vendor Services, Non-Warranty Compaq Product Services and Other
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Services.
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(a) Definition of Work. The services described in and
contemplated by the Master Subcontract Agreement for Warranty and Remedial
Maintenance Services between Compaq and Inacom dated August 5, 1999, as from
time to time may be amended by mutual agreement of the parties (the "Master
Subcontract Agreement"), and those installation, migration, system deployment
and other project based services as specified in the applicable project
agreement and/or statement of work; including but not limited to the following:
o Maintenance of existing Multi-vendor Contracts
o Maintenance of Warranty on new Multi-Vendor Service Contracts e.g.
Dell, HP, IBM, Apple o Off site repair for selected Compaq/Non Compaq
products
o Remedial support services for Compaq Sold Carepaq's
o Installation support services for Compaq Sold Carepaq's
o Project based work such as, installation, migration & system deployment
services
o New service offers to be jointly developed by Compaq and Inacom with
the express intent of tailoring such offers for delivery by Inacom
o Other services which are not specifically designated to one of the
other Services Categories
(b) Service Capabilities. Inacom shall maintain throughout the
term of this Agreement all service capabilities, and associated training,
certification, logistics, communications and other capabilities as described in
the Master Subcontract Agreement. In addition, Inacom shall maintain for the
term of any installation, migration, system deployment or other project based
services engagement all service capabilities specified in the applicable project
agreement and/or statement of work.
(c) Performance Criteria. Inacom shall maintain throughout the
term of this Agreement a level of service performance which meets or exceeds the
level of satisfaction generally considered by end-users to be acceptable within
the industry. It is agreed that Compaq shall have the sole right using
reasonable and prudent judgment to determine if Inacom is providing such level
of performance.
(d) Fee Schedule.
o The maintenance and repair services fee schedule shall be as specified
in the Master Subcontract Agreement.
o Prices and fees for installation, migration, system deployment and other
project based services shall be as specified in an amended version of
the Master Subcontract Agreement or in the applicable purchase order,
project agreement and/or statement of work.
2.3 Call Handling Services.
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(a) Definition of Work.
o Remedial Call Center Support. Inacom will take calls that are redirected
from Compaq's Customer Support Centers (CSCs), and on an as needed basis
will take overflow calls from the CSCs. A xxxxxx description of the
services will be contained in a definitive Call Handling Services
Agreement to be entered into by the parties subsequent to the execution
of this Agreement. Such Call Handling Services Agreement shall be
substantially in the form of the Call Handling Services Agreement,
including its Service Capabilities attachment, attached hereto as
Exhibit 2.
o Customer Help Desk. Inacom will take calls from Client end users in
support of hardware and software problems. Inacom will maintain call
records, provide multi-tier support, escalations and diagnosis before
dispatch. Inacom will manage these calls in Inacom's call handling
system utilizing knowledge-based tools. Standard reports will be
provided monthly. A xxxxxx description of the services contemplated by
this paragraph will be contained in the executed Call Handling Services
Agreement.
(b) Service Capabilities. Inacom shall maintain throughout the
term of this Agreement all service capabilities, and associated training,
certifications, communications and other capabilities as described in a
definitive Call Handling Services Agreement, including its Service Capabilities
attachment, to be entered into by the parties subsequent to the execution of
this Agreement, substantially in the form and content of the Compaq Call
Handling Services Agreement, including its Service Capabilities attachment
attached hereto as Exhibit 2.
(c) Performance Criteria. Inacom shall maintain throughout the
term of this Agreement a level of service performance that meets or exceeds the
level of satisfaction generally considered by end-users to be acceptable within
the industry. It is agreed that Compaq shall have the sole right using
reasonable and prudent judgment to determine if Inacom is providing such level
of performance.
(d) Fee Schedule. Subject to the fee schedule specified in
the Call Handling Services Agreement.
2.4 Inacom Branded Services.
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(a) Definition of Work. Compaq's sale of Inacom branded
services.
(b) Service Capabilities.
o Compaq shall professionally represent Inacom's branded service
offerings. Compaq will make commercially reasonable attempts to sell
such services to its customer base and to new customers. Compaq will
provide its Sales representatives with appropriate training,
documentation and support materials, contingent upon Inacom's providing
such training, documentation and support materials to Compaq.
o Inacom shall maintain throughout the term of this Agreement all
necessary capabilities to deliver and support the Inacom branded
services sold by Compaq. Inacom shall make available to Compaq the same
level of training, sales support, literature and information that Inacom
makes available to its own sales force and resellers.
o The parties shall enter into an appropriate service agreement for this
category of services substantially in the form of the Master Agreement
for Professional Services or Master Subcontract Agreement, as
appropriate.
(c) Performance Criteria. Inacom shall maintain throughout the
term of this Agreement a level of service performance that meets or exceeds the
level of satisfaction generally considered by end-users to be acceptable within
the industry. It is agreed that Compaq shall have the sole right using
reasonable and prudent judgment to determine if Inacom is providing such level
of performance.
(d) Fee Schedule. Subject to the fee schedule in the applicable
service agreement.
2.5 Professional Services.
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(a) Definition of Work.
o Offsite Client and server staging and deployment to customer site
o Onsite client and server installation of hardware and identified
Operating Systems, desktop applications
o Project based work such as, installation, migration & system deployment
services
(b) Service Capabilities. Inacom shall maintain throughout the
term of this Agreement all service capabilities, and associated training,
certifications, communications and other capabilities as described in a
definitive Master Agreement for Professional Services to be entered into by the
parties subsequent to the execution of this Agreement, substantially in the form
and content of the Compaq Master Agreement for Professional Services attached
hereto as Exhibit 3.
(c) Performance Criteria. Inacom shall maintain throughout the
term of this Agreement a level of service performance that meets or exceeds the
level of satisfaction generally considered by end-users to be acceptable within
the industry. It is agreed that Compaq shall have the sole right using
reasonable and prudent judgment to determine if Inacom is providing such level
of performance.
(d) Fee Schedule. Subject to the labor rates specified in the
Master Agreement for Professional Services.
(e) Premier Service Partner. Compaq shall designate InaCom as
a "Premier Service Provider for Distributed Desktop Infrastructure Services."
SECTION 3 RULES OF ENGAGEMENT.
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3.1 Management Operating Model
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o Services Executive Coordinators. Compaq and Inacom will each assign a
mutually agreed to "Services Executive Coordinator" to provide
management oversight to this Agreement relationship. These Services
Executive Coordinators will be responsible for:
o ensuring compliance with the terms and conditions set forth in this
Agreement
o addressing any issues that may arise over the course of the term of
this Agreement
o escalating any unresolved issues using the escalation process outlined
in the following subsection
o conducting quarterly business reviews
o applying the appropriate resources from their respective companies to
achieve the stated objectives of this Agreement
o providing any coordination activity internal to their respective
companies required to support this Agreement
3.2 Management Escalation Process.
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o If in the course of the performance of this Agreement the two Services
Executive Coordinators are unable to mutually resolve an issue, the
issue will be brought to the Compaq Vice President and General Manager,
Customer Services and Inacom Senior Vice President, Solutions Delivery
for management resolution. Should these two individuals fail to achieve
mutually acceptable management resolution, the issue will be raised to
the Chief Executive Officer of the respective companies for management
resolution. Thereafter, if an issue is not mutually resolved, the
parties shall resolve such issue in accordance with Section 5.8 hereof.
3.3 Business Review Process.
------------------------
o A business review will be held once each calendar quarter over the term
of this Agreement. These business reviews will review performance to
date against this Agreement, review out-quarter business opportunities,
and address any open issues related to this Agreement and its
performance. The attendees, timing, location and specific agenda for
each of these business reviews will be decided upon by the two Services
Executive Coordinators.
o An executive review will be conducted on or before August 1, 2000 by the
Compaq Vice President and General Manager, Customer Services and the
Inacom Senior Vice President, Solutions Delivery, to review the year to
date performance under this Agreement and to consider the need for any
changes to this Agreement, to be mutually agreed upon by the parties.
3.4 Bid/Win Situations
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o Inacom and Compaq will agree upon a schedule of packaged solutions,
including their rate structures, that Compaq will use as the basis for
responding to customer solicitations, without the need for Inacom to
review or approve any engagement that meets the criteria for such
packaged solutions.
o For customer opportunities that are eligible for custom solutions and/or
pricing, Inacom will respond in a timely and commercially reasonable
manner to Compaq's four Customer Services Bid/Win Teams or not more than
ten designated Professional Services Acquisition Consultants requests
for information, bid resources and acceptance/refusal to bid
opportunities; and in any event in sufficient time for Compaq to respond
to a documented customer response request.
o Any revenue recognized by Inacom as a result of a services sales lead
brought to Inacom by Compaq, provided Inacom was not already engaged in
the bid process with the customer, will be applied to the annual revenue
target. Compaq and Inacom agree that the maximum sales lead revenue
applied to an annual revenue target will not exceed 30% of the total
annual revenue target for that year.
o Should Compaq and Inacom find themselves in a competitive bid situation
and Compaq wins the bid, any service business made available to Inacom
by Compaq, will be applied to the annual revenue target.
o Should Inacom refuse to accept any service business presented to them by
Compaq that meets the criteria of any of the Services Categories, the
applicable services agreement and agreed to rate schedules, the revenue
associated with such business will be applied to the annual revenue
target.
3.5 On-going Deal Management Situations
-----------------------------------
o Revenue from renewals of Compaq service contract business awarded to
Inacom in previous years will be applied to the applicable annual
revenue target.
3.6 New Service Offers
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o Compaq and Inacom shall commence within thirty days of the closing of
the Asset Purchase Agreement a joint effort to develop new service
offers with the express intent of tailoring such offers for delivery by
Inacom. Once established, these service offers from time to time may be
amended, replaced, added to or eliminated by mutual agreement of the
parties.
SECTION 4. OVERALL REVENUE ALLOCATION AND PERFORMANCE CRITERIA.
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4.1 Revenue Application Criteria. The purpose of this section is to set
forth or reiterate certain criteria that will be used to identify revenue to be
applied to Compaq's annual revenue targets.
o All business opportunities presented to Inacom for services anywhere in
the United States that fall within the five Services Categories will be
counted toward the annual revenue target, including:
o If Inacom does not have local service capability in the required
locations.
o If, with respect to any individual customer engagement, Inacom's service
quality is not maintained at the levels specified in Section 2 and the
applicable service agreement, Compaq at its sole discretion may
terminate Inacom with respect to that engagement in accordance with the
applicable service agreement in the area of non-performance, provided
that Inacom has not cured such service quality deficiency within 15 days
after written notice thereof (or such shorter period as required by the
applicable customer). All revenues Inacom would have received but for
such termination will be counted toward the annual revenue targets.
o The value Inacom derives from utilizing Compaq's infrastructure to
support the sale through delivery of service will be quantified (as
mutually agreed upon in good faith by Inacom and Compaq) and applied to
the annual revenue targets. Examples of such Compaq infrastructure
support include:
o Leveraging Compaq's purchase agreements
o Utilizing Compaq's on-site and off-site delivery capability
o Training that is not already included as a benefit of GSP or other
applicable service agreements.
SECTION 5 GENERAL.
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5.1 Most Favored Customer. Inacom agrees that Inacom will offer Compaq
its most favored customer fees (i.e. the lowest fees which it charges any of its
customers for comparable services under similar service environments) for the
services described in this Agreement, except in the instance where lower pricing
is offered to "meet competition" in response to a documented lower bid, as such
term is commonly used in the relevant industry.
5.2 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission) and shall
be given,
If to Inacom, to:
Inacom Corp.
Attention: Contracts Department
00000 Xxxxxx Xxxxx
Xxxxx, XX 00000
With a copy to:
Inacom Corp.
Attention: Xxx Xxxxx
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
If to Compaq, to:
Compaq Computer Corporation
Attention: Xxxx Xxxxxx
MS530112
00000 Xxxxxxx 000
Xxxxxxx, XX 00000-0000
With a copy to:
Compaq Computer Corporation
Attention: Law Department
00 Xxx Xxxxxx Xxxx
Xxxx, XX 00000
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
5.3 Amendments and Waivers. (a) Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed, in the case of an amendment, by each party to this Agreement, or in the
case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
5.4 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns; provided that no party may assign, delegate or otherwise transfer
any of its rights or obligations under this Agreement without the consent of
each other party hereto.
5.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the law of the State of New York without regard to the
conflicts of law rules of such state.
5.6 Counterparts; Third Party Beneficiaries. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
5.7 Term and Termination.
(a) This Agreement shall terminate at the end of the year 2000
period, except to the extent extended pursuant to Section 1.1, subject to
Sections 5.7(b), (c) and (d).
(b) This Agreement shall terminate upon a Fundamental Change
of Inacom (unless otherwise agreed by Compaq) or upon a Fundamental Change of
Compaq (unless otherwise agreed by InaCom). "Fundamental Change" means, with
respect to either party to this Agreement, (i) the acquisition by any person,
entity or group of beneficial ownership of voting securities representing more
than 50% of the total voting power of all voting securities of such party then
outstanding, (ii) the merger or consolidation of such party with any other
person or entity and (iii) the conveyance, transfer or leasing of all or
substantially all of the assets of such party.
(c) This Agreement shall terminate with respect to any Service
Category (unless otherwise agreed by Compaq) if Inacom is in material breach of
its service capability requirements or performance criteria with respect to such
Service Category hereunder or under the applicable service agreement, if any;
provided that Inacom has not cured such breach within 30 days after written
notice thereof. To the extent this Agreement is so terminated with respect to
any Service Category, Compaq's aggregate revenue target for each remaining year
or portion thereof will be reduced by the remaining revenue target forecast
specified in Exhibit 1, as amended from time to time, relating to such Service
Category.
(d) This Agreement shall terminate with respect to any Service
Category within 120 days after Inacom delivers a written notice to Compaq that
Inacom intends to terminate its capabilities in such Service Category. To the
extent this Agreement is so terminated with respect to any Service Category,
Compaq's aggregate revenue target for each remaining year or portion thereof
will be reduced by the remaining revenue target forecast specified in Exhibit 1,
as amended from time to time, relating to such Service Category.
5.8 Dispute Resolution. The parties wish to use reasonable measures to
avoid the litigation of any dispute under this Agreement. Therefore, any dispute
arising out of or relating to this Agreement or the breach, termination or
validity thereof shall be settled in accordance with one of the following
procedures. The parties shall use the procedures in the following order of
priority. Unless otherwise agreed, the parties shall each bear all of their
expenses incurred during the procedures. All negotiations pursuant to this
Subsection 5.8 shall be negotiated in good faith and are confidential and shall
be treated as compromise and settlement negotiations for purposes of applicable
rules of evidence.
(a) Negotiation. At the request of either party to initiate
this dispute resolution process, the parties shall negotiate for a resolution of
the dispute in a meeting or series of meetings held at the site of the
non-requesting party. The meeting shall be attended by appropriate executives of
both parties who are at a higher level of management than the persons with
direct responsibility for the administration of this Agreement.
(b) Mediation. In the event that the dispute is not resolved
by negotiation within sixty (60) days of the original request to initiate this
dispute resolution process, the parties shall negotiate for a non-binding
mediation process which is appropriate for the dispute at issue in a meeting or
series of meetings held at the site of the original non-requesting party.
(c) Binding Arbitration. In the event that the parties are
unable to agree on a mediation process within ninety (90) days of the original
request to initiate this dispute resolution process, or the mediation process
does not settle the dispute within one hundred twenty (120) days of the original
request to initiate this dispute resolution process, the parties shall consider
settlement of the dispute by binding arbitration. If the parties mutually agree
to binding arbitration, the dispute shall be settled by arbitration in
accordance with the then current CPR Institute For Dispute Resolution
Non-Administered Arbitration Rules by three independent and impartial
arbitrators, of whom each party shall appoint one and the third to be appointed
by the two appointed by Compaq and Inacom . The arbitration shall be governed by
the United States Arbitration Act, 9 U.S.C., Sections 1-16, and judgment upon
the award rendered by the arbitrators may be entered by any court having
jurisdiction thereof. The place of arbitration shall be in the city of the
original non-requesting party. The arbitrators are not empowered to award
damages in excess of compensatory damages up to any limit specified in this
Agreement and each party hereby irrevocably waives any right to recover such
damages with respect to any dispute resolved by arbitration. The statute of
limitations of the State of New York applicable to the commencement of a lawsuit
shall apply to the commencement of an arbitration hereunder, except that no
defenses shall be available based upon the passage of time during any
negotiation or mediation called for by Subsections 5.8 (a) through (c).
5.9 Reports and Audit Rights. Inacom shall maintain records and ensure
proper accounting of revenue applied toward Compaq revenue targets by Service
Category. Inacom shall provide a quarterly report to Compaq of revenue applied
against each Service Category. In the event of any disagreement with Compaq
regarding the content of any reports, Inacom agrees to permit Compaq upon
reasonable request and during normal business hours, to review Inacom's records
relating to Inacom's Compaq-related services business. Such records shall
include all records pertaining to the provision of services at Compaq customer
locations and revenue generated from Compaq-related services.
5.10 Confidentiality. This Agreement shall be considered a confidential
document of both parties. Except as required by law, neither party shall
disclose the contents or existence of this Agreement without the prior written
permission of the other party.
5.11 Subcontracting. Should Inacom wish to use resources other than
Inacom employees to deliver services via a subcontracting, franchise or other
form of business arrangement, except as specified in the applicable services
agreement, Compaq will have the right to refuse or accept such an arrangement;
provided that such acceptance by Compaq shall not be withheld unreasonably. If
Compaq does accept such an arrangement, Inacom shall be responsible for ensuring
the subcontractor, franchisee or other entity complies with all requirements of
this Agreement and any other applicable service agreement. Such subcontractor,
franchisee or other entity shall be deemed Inacom's agent for purposes of this
Agreement.
5.12 CONSEQUENTIAL DAMAGES
IN NO EVENT WILL EITHER PARTY HERETO BE LIABLE FOR DAMAGES CAUSED BY THE OTHER
PARTY'S NEGLIGENCE, OR FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, INDIRECT OR
PUNITIVE DAMAGES, LOST PROFITS, LOST USE OF EQUIPMENT, LOSS OF STORED MEMORY,
COST OF SUBSTITUTE EQUIPMENT OR OTHER DOWNTIME COSTS, REGARDLESS OF WHETHER SUCH
LIABILITY IS BASED ON BREACH OF CONTRACT, TORT, STRICT LIABILITY, BREACH OF
WARRANTIES, FAILURE OF ESSENTIAL PURPOSE OR OTHERWISE AND EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM AGAINST THE OTHER BY ANY OTHER
PARTY.
5.13 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both oral and written, between the parties
with respect to the subject matter of this Agreement.
5.14 Single Agreement. This Agreement and the agreements identified on
Exhibit 4 of the Services, Supply and Sales Agreement (the Services, Supply and
Sales Agreement and such other agreements, collectively, the "Operating
Agreements") were entered into pursuant to the Asset Purchase Agreement. The
undertakings of each party hereunder and thereunder constitute consideration for
the undertakings of the other parties under all of the Operating Agreements, and
all of the Operating Agreements shall constitute a single agreement. The
material performance of the obligations of each party under each Operating
Agreement shall be a condition to the performance of the obligations of each
other party under each Operating Agreement. The rightful rejection of any
Operating Agreement (which shall not include an expiration or termination
thereof) requires the rejection of all Operating Agreements.
5.15 No Offset. Neither party shall be permitted to offset any payments
to be made or credits to be applied under this Agreement with any payments to be
made or credits to be applied under the Asset Purchase Agreement or the credit
agreement contemplated by the Revolving Credit Facility Commitment Letter dated
as of February 15, 2000 from Compaq to Inacom.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
Inacom Corp.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
Date: February 16, 2000
Compaq Computer Corporation
By: /s/ Xxxxx X. Mercury
----------------------
Name: Xxxxx X. Mercury
Title: Vice President and General Manager
Customer Services Division
Date: February 16, 2000
EXHIBIT 1
FORECASTS OF ESTIMATED REVENUE BY SERVICES CATEGORIES
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Services Categories 2000 2001 2002
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1. On-Site/Off-Site Warranty Service $10 million $20 million $25 million
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2. Non-Warranty Maintenance Services $50 million $75 million $100 million
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3. Call Handling Services $5 million $10 million $20 million
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4. Asset Management Services $15 million $25 million $35 million
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5. Professional Services $5 million $10 million $15 million
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Aggregate Revenue $85 million $140 million $195 million
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EXHIBIT 2
CALL HANDLING SERVICES AGREEMENT
This Call Handling Services Agreement ("Agreement"), made this _________________
day of _____________, 2000, is by and between _________________________, having
a principal place of business at ________________________________
("Subcontractor"), and Compaq Computer Corporation, having a principal place of
business at 00 Xxx Xxxxxx Xxxx, Xxxx Xxxxxxxxxxxxx 00000 ("Compaq"). The parties
agree that the terms and conditions of this Agreement and any applicable
Purchase Order(s) that may be issued hereunder will govern the purchase of
Services by Compaq from Subcontractor for the purpose of Subcontractor providing
such Services on behalf of Compaq to a customer or customers of Compaq
(hereinafter referred to as "Customer").
This Agreement will become effective on the date specified above and will
continue for a period of one (1) year, unless otherwise terminated as provided
herein or extended by the mutual consent of the parties. Any expiration of
termination of this Agreement will not alter the rights, duties, or obligations
of the parties relating to any Purchase Orders issued by Compaq under this
Agreement prior to the date of expiration or termination of this Agreement.
This Agreement does not obligate Compaq to purchase any Services from
Subcontractor. Purchases, if any, will be as specified on a Purchase Order(s)
issued by Compaq pursuant to Section 2.
1. DEFINITIONS
a) "Acceptance" means written notification from Compaq to Subcontractor
that indicates that the Services have been evaluated and satisfy the
completion and acceptance criteria set forth or referenced in the Statement
of Work or Purchase Order. Acceptance may be partial or complete, as
specified in such notification.
b) "Invention(s)" means any designs, techniques, inventions, discoveries,
or improvements, whether patentable or not, that are conceived of or
reduced to practice by Subcontractor in providing the Services to Compaq or
Customer under this Agreement.
c) "Services" means consulting, integration, implementation, installation,
maintenance, support, design, development, training, management, and any
other work provided by Subcontractor in connection with meeting
Subcontractor's responsibilities under this Agreement.
d) "Statement of Work" means a statement agreed upon by Compaq and
Subcontractor that specifies the Services to be provided by Subcontractor,
the price, payment schedule, delivery schedule, and acceptance criteria for
such Services and, if applicable, detailed technical and administrative
requirements for the Services. The Statement of Work may also include
additional terms or modifications to this Agreement. A Statement of Work
will be created and agreed upon for each Purchase Order issued under this
Agreement.
2. PURCHASE ORDER, ORDER OF PRECEDENCE, SERVICES COORDINATORS
a) Subcontractor will furnish the Services to Compaq or Customer as
specified in the Statement of Work upon Compaq's issuance of a Purchase
Order to Subcontractor.
b) The following order of precedence will control in the event of any
conflict in terms and conditions:
1) Statement of Work,
2) Purchase Order, and
3) this Agreement.
The pre-printed terms and conditions on the reverse side of the Purchase
Order will not apply to this Agreement or any Purchase Order issued under
this Agreement.
c) Each party will appoint a coordinator for the Services to be performed
under each Purchase Order and Statement of Work. Subcontractor's
coordinator will have the authority to represent Subcontractor. Compaq's
coordinator will represent Compaq and be responsible for determining the
adequacy and acceptability of the Services provided by Subcontractor.
3. PAYMENT
Unless otherwise set forth in the Statement of Work or Purchase Order,
payment for the Services will be due forty-five (45) days from the later of
the date of Acceptance or the date Compaq receives a proper invoice from
Subcontractor.
4. RECORDS
Subcontractor will maintain account records in accordance with generally
accepted accounting practices to substantiate all invoices. Such records
will be made available to Compaq during normal business hours and will
include payroll records, expense accounts, attendance cards, and job
summaries. Subcontractor will maintain such records for three (3) years
from the date of final payment for the Services.
5. OWNERSHIP AND LICENSE
a) All Inventions will be the sole and exclusive property of Compaq.
Subcontractor hereby assigns to Compaq the ownership of copyright in the
Inventions. Compaq will have the right to obtain and hold in its own name
copyrights, registrations, and similar protection which may be available in
the Inventions. Subcontractor agrees to assist Compaq as may be required to
perfect such rights.
b) To the extent that any Subcontractor's pre-existing technology is
contained in the Inventions, Subcontractor grants to Compaq an irrevocable,
nonexclusive, worldwide, royalty-free license to:
1) use, execute, reproduce, display, perform, and distribute
(internally or externally) such pre-existing technology; and
2) authorize Customer to do any, some, or all of the foregoing.
6. WARRANTY
a) Subcontractor warrants that all Services will (1) be performed in a good
and workmanlike manner and in accordance with generally accepted
professional standards for such Services, and (2) conform to the
requirements specified in the Statement of Work or Purchase Order.
b) Subcontractor warrants that Services will not in any manner limit,
impair, disrupt, or jeopardize any existing Year 2000 Compliance of any
equipment or software on which Services are performed. "Year 2000
Compliance" for purposes of this provision means the capability to
correctly process, calculate, compare, and sequence date data within and
between the 20th and 21st centuries, including leap year calculations.
c) In the event of any breach of warranty, Subcontractor, without charge
and without delay, will re-perform nonconforming Services.
7. CONFIDENTIAL INFORMATION
Subcontractor will maintain all information or data, whether written or
oral, relating to Compaq or Customer which Subcontractor obtains or
otherwise has access to in the performance of Services in confidence and
will not disclose any such information or data to any third party or to
employees, agents, subcontractors, or suppliers of Subcontractor who do not
have the need for access to such information or data.
8. PERSONNEL
a) Personnel provided by Subcontractor will not be considered employees of
Compaq for any purpose. Subcontractor personnel will make no commitments on
behalf of Compaq for any purpose. Subcontractor assumes full responsibility
for the actions of its personnel and will be responsible for their
supervision, daily direction, and control. Subcontractor will retain full
responsibility for payment of salary (including withholding of income taxes
and Social Security), worker's compensation, disability benefits, and the
like. Nothing in this Agreement grants Subcontractor or any Subcontractor
personnel any right under any Compaq employee benefit plan.
b) Subcontractor personnel specified or identified by name in the Statement
of Work or Purchase Order will be considered essential to the Services to
be performed. No substitution or diversion of such personnel will be made
without the prior written consent of Compaq and Customer.
c) Compaq and Customer will retain the right to reject any of
Subcontractor's personnel whose qualifications are insufficient in Compaq's
or Customer's judgment.
9. CHANGE IN SCOPE
Each Purchase Order and Statement of Work under this Agreement is based
upon Compaq's present understanding of Compaq's obligations to Customer. In
the event Compaq's understanding changes or Customer requests a change in
Compaq's obligations affecting Subcontractor's performance, Compaq will
notify Subcontractor of such change request in writing. Within ten (10)
days of receipt of such change request, Subcontractor will notify Compaq in
writing of any increase or decrease in Subcontractor's charges and/or
alteration to delivery schedules occasioned by the change. Upon Compaq's
acceptance of Subcontractor's modified charges and delivery schedule, the
parties will modify the terms of the applicable Purchase Order and
Statement of Work to effect the change. Subcontractor will not implement
the change without Compaq's written authorization.
10. TERMINATION
a) Compaq may terminate for convenience this Agreement, any Purchase Order,
or any portions thereof by written notice to Subcontractor. In any event,
the applicable Purchase Order will terminate immediately upon termination,
for any reason, of Compaq's agreement with Customer. Upon receipt of such
notice, Subcontractor will immediately stop all activities associated with
the terminated Purchase Order. Subcontractor will be paid for the Services
provided and accepted prior to the date of termination. Such payment will
constitute Compaq's entire liability.
b) In the event of a default by Subcontractor, Compaq will provide
Subcontractor written notice thereof. If the default is not remedied within
ten (10) days or within the time stated in the notice, Compaq may terminate
this Agreement, any Purchase Order, or any portions thereof.
c) The rights and obligations of Sections 4, 5, 6, 7, 10, 11, and 12 will
continue after expiration or termination of this Agreement and will bind
the parties and their legal representatives, successors, heirs, and
assigns.
11. INDEMNIFICATIONS
a) Subcontractor will indemnify, defend, and hold Compaq harmless from any
and all claims or demands (including all losses, damages, and liabilities
resulting from such claims or demands, and all related costs and expenses,
including reasonable legal fees) arising from or in connection with (1)
Subcontractor's performance of, or failure to perform, any of its
obligations under this Agreement or (2) an act or omission of Subcontractor
in its relationships with its employees, agents, subcontractors or
suppliers.
b) Subcontractor will indemnify, defend, and hold Compaq and Customer
harmless from any and all claims or demands (including all losses, damages,
and liabilities resulting from such claims or demands, and all related
costs and expenses, including reasonable legal fees) which may result by
reason of any infringement or claim of infringement of any intellectual
property rights associated with the Services or Inventions provided in
connection with this Agreement.
12. LIMITATION OF LIABILITY
a) EXCEPT AS PROVIDED BELOW, NEITHER COMPAQ NOR SUBCONTRACTOR WILL BE
LIABLE FOR ANY DAMAGES RESULTING FROM LOSS OF DATA, PROFITS, OR USE OF
PRODUCTS, OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, EVEN IF ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. Subcontractor will be liable for any
damages, including incidental or consequential damages, which Compaq is
obligated to pay Customer or other third parties as a result of
Subcontractor's failure to perform its obligations in accordance with this
Agreement.
b) This limitation of liability does not apply to the liability of either
party for any personal injury, including death, or for willful, wanton, or
malicious acts of Subcontractor or to obligations of Subcontractor under
Section 7, "Confidential Information", or Section 11, "Indemnifications".
13. COMPLIANCE WITH LAWS
Subcontractor, at its own expense, will comply with all laws and
regulations of federal, state, and local government authorities relating to
its obligations under this Agreement.
14. GENERAL
a) Except as expressly provided in the Statement of Work or Purchase Order,
Subcontractor will be entitled to no further payment, cost reimbursement,
or other compensation for the Services provided hereunder.
b) Subcontractor shall carry during the term of this Agreement, and with
companies with a Best Rating of not less than A-:VII, insurance policies of
the kinds and in the amounts listed below:
1. Worker's Compensation - statutory limits in each state in which
Subcontractor is required to provide Worker's Compensation coverage
including Other States Endorsement or policy equivalent thereof. Policy
shall include a waiver of subrogation in favor of Compaq Computer
Corporation, its officers, directors, employees and agents
2. Employer's Liability - not less than $1,000,000
3. Comprehensive General Liability - including Contractual Liability,
Independent Contractor's Liability, Products and/or Completed
Operations Liability, and Personal Injury/Property Damage Coverage's in
a combined single limit of not less than $1,000,000 per occurrence
combined single limit and $2,000,000 General Aggregate. Compaq Computer
Corporation, its officers, directors, employees and agents shall be
named as Additional Insureds.
4. Automobile Liability - for owned, non-owned, and hired vehicles in a
combined single limit of not less than $1,000,000.
5. Umbrella Liability - a combined single limit of not less than
$2,000,000.
Subcontractor shall furnish Compaq with Certificates of Insurance
evidencing the specified insurance policies and stating that such insurance
policies may not be changed or terminated so as to not comply with the
foregoing insurance requirements without at least thirty (30) days prior
written notice to Compaq.
c) Nothing in this Agreement will be construed as prohibiting or
restricting Compaq from independently developing, acquiring, and/or
marketing services which are similar to and/or competitive with those
provided hereunder.
d) Any assignment, transfer, or subcontracting of rights or obligations by
Subcontractor under this Agreement in whole or in part without the prior
written consent of Compaq will be void and may subject Subcontractor to
termination.
e) During the performance by Subcontractor under a particular Purchase
Order and Statement of Work Compaq may require Subcontractor to temporarily
cease performance of some or all of the Services by issuing Subcontractor a
Work Suspension Order ("Order"). The Order will include the effective date
of the Order, a specific description of the Services to be suspended, and
the anticipated duration of the suspension. Upon receipt of an Order,
Subcontractor will take all reasonable measures to protect the Services in
progress. Compaq will notify Subcontractor in writing of the date on which
the suspended Services are to be resumed.
f) Subcontractor represents that it is not under any obligation or
restriction, nor will it assume any, which would interfere or present a
conflict of interest with the Services that it provides under this
Agreement.
g) Compaq is free to determine the price charged to Customer for the
Services that Subcontractor provides to Customer on behalf Compaq.
h) Subcontractor agrees to comply with security procedures of Compaq and
Customer.
i) Subcontractor agrees to be bound by applicable "flow down" provisions of
Compaq's agreement with Customer of which it is notified by Compaq.
j) Neither party may bring an action, regardless of form, arising out of
this Agreement more than two (2) years after the cause of action arises.
Subcontractor may not bring an action for nonpayment more than two (2)
years from the date final payment for the Services is due.
k) The laws of the State of Texas will govern this Agreement.
l) This Agreement and the documents referenced herein set forth the entire
understanding of the parties with respect to the subject matter described
herein and supersede all prior communications, whether oral or written, by
either party. Any modification to these terms and conditions must be in
writing and signed by authorized representatives of both parties.
Accepted by: Accepted by:
___________________________ COMPAQ COMPUTER CORPORATION
BY: BY:
PRINT NAME: PRINT NAME:
TITLE: TITLE:
DATE: DATE:
ATTACHMENT
SERVICE CAPABILITIES
o Inacom agrees to provide technical support to Compaq customers on
designated products. The detailed instructions, policies, and
procedures that define designated products and explain how Inacom
delivers technical support to Compaq's customers are found in
Compaq's Technical Support Work Instructions ("TSWI"). Compaq
agrees to provide Inacom with electronic access to a current
version of the TSWI and Inacom agrees to comply with all policies
incorporated in the TSWI.
o Inacom agrees to provide both Xxxxx 0 and Level 2 Technical
Support Engineers ("TSEs") to perform the work. Level 1 TSEs
provide the initial contact with customers and attempt to resolve
customers' questions or inquiries. These questions or inquires
shall be referred to heretofore as Cases. Xxxxx 0 TSEs resolve
Cases that the Level 1 TSEs cannot resolve from a technical
standpoint. Cases that Level 2 cannot resolve for technical
reasons are to be escalated to Compaq according to the procedures
documented in the Compaq Work Instructions. Inacom is allowed to
escalate to Compaq Level 2 no more than one (1) percent of the
Cases documented each month.
o Inacom agrees to provide Customer Relations support to Compaq
customers. Customer Relations support is non-technical customer
satisfaction or administrative assistance. Occasionally, there are
customers who wish to complain about Compaq offerings or policies.
Compaq expects Inacom to resolve Customer Relations Cases, but
Customer Relations Cases that Inacom cannot resolve to the
customer's satisfaction shall be escalated to Compaq according to
the process and time frames documented in the TSWI. Inacom is
allowed to escalate to Compaq Customer Relations no more than one
(1) percent of the Cases documented each month.
o Inacom will establish connectivity to the Compaq's Intranet to
gain access to Compaq electronic support resources, and Inacom
agrees to provide Compaq with a documented plan that reasonably
ensures that this information is protected from any form of
unauthorized access.
o Inacom personnel will identify themselves to Compaq customers as
Compaq at all times, without exception. Inacom may indicate, when
pressed by a Compaq customer, that they are the "Compaq location
in (City Name)."
o Inacom will not disclose or distribute any information related to
Compaq customers or Case activity to any outside party. Inacom
agrees to provide Compaq with a documented plan that ensures any
electronic access to Compaq is secured and limited to Inacom
personnel who have a business need to access to this information.
o Inacom shall document Cases in the call tracking system of
Compaq's choice.
o Inacom shall provide Compaq customers technical support without
interruption, twenty-four hours per day, seven days per week,
every day of the year. Inacom agrees to implement a documented
disaster recovery plan that ensures uninterrupted service in the
event of a power outage, internal systems outage, or internal
telecommunications system outage.
o Compaq will provide Inacom with a call volume forecast quarterly.
Inacom will staff enough TSEs to meet Compaq service levels at
call volumes up to 110% of the forecasted call volume. Compaq will
pay Inacom for actual calls, not forecasted calls. Compaq agrees
to pay the minimum minutes as specified in the Call Handling
Services Agreement.
o Compaq reserves the right to change the quarterly call volume
forecast at any time. Inacom shall have a thirty-day grace period
to adjust TSE staffing required to meet service levels in the
event that Compaq increases the call volume forecast by more than
ten (10) percent.
o Inacom agrees to maintain a point of contact for communications
with Compaq at all times. This individual shall be capable of
responding to a telephone call or page from Compaq within thirty
minutes. In addition, Inacom agrees to inform Compaq immediately
in the event of any system interruptions or performance
degradations that could potentially affect customer service.
o Inacom agrees to accommodate a Compaq employee at Inacom's
facility for any length of time. In addition, Inacom agrees to
provide Compaq employees unrestricted access to the areas in the
Inacom facility in which Compaq technical support services are
conducted. Inacom shall under no conditions prevent Compaq
employees from interviewing or conversing with any Inacom employee
assigned to Compaq technical support.
o Inacom agrees to provide Compaq with telephone statistics related
to technical support activity as defined by Compaq in the TSWI. At
minimum, Inacom shall report daily call center statistics to
Compaq. These statistics are due to Compaq by 7:00 a.m. every
business day.
o Inacom agrees to conduct business reviews with Compaq management
on a quarterly basis, conducted at mutually agreed to locations.
o Inacom agrees to provide Compaq with feedback on customer comments
and issues in formats and time frames documented in the TSWI.
Equipment and Facilities
o Compaq agrees to loan Inacom one or more of each Compaq product
model that Inacom supports. The purpose of these loaners is to
enhance TSE product knowledge and facilitate problem resolution.
Loaner models will be provided to Inacom as they become available,
and Inacom agrees to return all Compaq loaner units at such time
as the requirement to provide technical support for a specific
product ceases.
o Inacom agrees to provide a file server with adequate capacity to
support the operation of the Compaq call tracking system and
intranet data bases on each TSE's workstation. In addition the TSE
workstations must meet the minimum configuration recommended by
Compaq, which may change over time due to advances in technology.
o Inacom agrees to provide, at Inacom's expense, the following
telecommunications equipment and capabilities to support this
service:
o Compaq approved telephone switch
o T-1 dedicated access to MCI for voice (Installation cost only)
o T-1 access to MCI's Hyperstream PVC network for data and
electronic messaging. This connection is limited to Inacom
access to Compaq (Installation cost only)
o PBX with ACD statistical reporting capability
o PBX with ISDN capability on T-1's
o Ability to transfer calls to multiple Compaq telephone numbers
if the MCI ECR fails
o Dedicated primary rate ISDN T1 access to MCI
o Redundant routes to MCI via the local carrier
o Ability to accept inband signaling to carry a customer ID
number via DTMF signals
o Ability to outpulse DTMF signals to indicate readiness to
accept numbers
o Ability to conference callers to a credit card approval IVR
over an 800 number (Installation cost only)
o Compaq agrees to pay the monthly T1 charges and telephone line
usage charges, with associated inbound/outbound call charges, for
all Compaq customer technical support calls received by Inacom.
o Inacom agrees to provide Compaq technical support within a
dedicated Inacom facility. Compaq agrees to consider exceptions to
this requirement, but Compaq approval must be secured prior to
Inacom's performance of any non-Compaq related work in same
facility.
o Inacom agrees to provide, at no expense to Compaq, a training
facility that includes the Compaq hardware and software products
recommended by Compaq's Training Manager to support the hands-on
training of Inacom TSEs.
Training and Quality Assurance
o Compaq agrees to provide Inacom with a Compaq product training
curriculum for both new hire TSEs and new product training for
experienced TSEs. Inacom agrees to provide a sufficient number of
instructors to conduct training classes for its TSEs. Inacom
agrees to document training activity, including dates, attendees,
topics, Compaq products covered for Compaq's review.
o Compaq agrees to provide adequate training to Inacom instructors
on Compaq products, policies, and procedures. Both parties shall
mutually determine when and where this "Train the Trainer"
activity will take place.
o Compaq reserves the right to audit the Inacom facilities dedicated
to Compaq, telephone switch data related to Compaq customer
support, and training events related to Compaq support without
prior notice in order to verify compliance with the requirements
stated in the Call Handling Services Agreement.
o Inacom agrees to provide Compaq the necessary access to facilitate
remote monitoring of Compaq technical support calls taken by
Inacom TSEs. Compaq agrees to share the results of these audits
with Inacom.
o Inacom agrees to prepare and establish a procedure for employees
to obtain A+ certification, at the option of the employee. Inacom
training staff will be A+ certified.
o Inacom agrees to provide Compaq with TSE staffing reports to both
the designated Compaq representative and the Compaq Training
Manager on a weekly basis. These reports include, but are not
limited to, all TSE additions and deletions from the Compaq
assignment.
o Inacom agrees to notify Compaq Consumer Customer Service and
Support's ISO Coordinator or Manager of Training and Quality of
any changes regarding Inacom's Quality System. "Quality System"
refers to ISO 9000 certification, COPC certification, Xxxxxxx
Xxxxxxxxx, or any other certification that requires Inacom to
acquire and maintain a Quality System certification.
EXHIBIT 3
MASTER AGREEMENT FOR PROFESSIONAL SERVICES
This Master Agreement for Professional Services ("Agreement"), made this
________________ day of _____________, 2000, is by and between
_________________________, having a principal place of business at
________________________________ ("Subcontractor"), and Compaq Computer
Corporation, having a principal place of business at 00 Xxx Xxxxxx Xxxx, Xxxx
Xxxxxxxxxxxxx 00000 ("Compaq"). The parties agree that the terms and conditions
of this Agreement and any applicable Purchase Order(s) that may be issued
hereunder will govern the purchase of Services by Compaq from Subcontractor for
the purpose of Subcontractor providing such Services on behalf of Compaq to a
customer or customers of Compaq (hereinafter referred to as "Customer").
This Agreement will become effective on the date specified above and will
continue for a period of one (1) year, unless otherwise terminated as provided
herein or extended by the mutual consent of the parties. Any expiration of
termination of this Agreement will not alter the rights, duties, or obligations
of the parties relating to any Purchase Orders issued by Compaq under this
Agreement prior to the date of expiration or termination of this Agreement.
This Agreement does not obligate Compaq to purchase any Services from
Subcontractor. Purchases, if any, will be as specified on a Purchase Order(s)
issued by Compaq pursuant to Section 2.
1. DEFINITIONS
a) "Acceptance" means written notification from Compaq to Subcontractor
that indicates that the Services have been evaluated and satisfy the
completion and acceptance criteria set forth or referenced in the Statement
of Work or Purchase Order. Acceptance may be partial or complete, as
specified in such notification.
b) "Invention(s)" means any designs, techniques, inventions, discoveries,
or improvements, whether patentable or not, that are conceived of or
reduced to practice by Subcontractor in providing the Services to Compaq or
Customer under this Agreement.
c) "Services" means consulting, integration, implementation, installation,
maintenance, support, design, development, training, management, and any
other work provided by Subcontractor in connection with meeting
Subcontractor's responsibilities under this Agreement.
d) "Statement of Work" means a statement agreed upon by Compaq and
Subcontractor that specifies the Services to be provided by Subcontractor,
the price, payment schedule, delivery schedule, and acceptance criteria for
such Services and, if applicable, detailed technical and administrative
requirements for the Services. The Statement of Work may also include
additional terms or modifications to this Agreement. A Statement of Work
will be created and agreed upon for each Purchase Order issued under this
Agreement.
2. PURCHASE ORDER, ORDER OF PRECEDENCE, SERVICES COORDINATORS
a) Subcontractor will furnish the Services to Compaq or Customer as
specified in the Statement of Work upon Compaq's issuance of a Purchase
Order to Subcontractor.
b) The following order of precedence will control in the event of any
conflict in terms and conditions:
1) Statement of Work,
2) Purchase Order, and
3) this Agreement.
The pre-printed terms and conditions on the reverse side of the Purchase
Order will not apply to this Agreement or any Purchase Order issued under
this Agreement.
c) Each party will appoint a coordinator for the Services to be performed
under each Purchase Order and Statement of Work. Subcontractor's
coordinator will have the authority to represent Subcontractor. Compaq's
coordinator will represent Compaq and be responsible for determining the
adequacy and acceptability of the Services provided by Subcontractor.
3. PAYMENT
Unless otherwise set forth in the Statement of Work or Purchase Order,
payment for the Services will be due forty-five (45) days from the later of
the date of Acceptance or the date Compaq receives a proper invoice from
Subcontractor.
4. RECORDS
Subcontractor will maintain account records in accordance with generally
accepted accounting practices to substantiate all invoices. Such records
will be made available to Compaq during normal business hours and will
include payroll records, expense accounts, attendance cards, and job
summaries. Subcontractor will maintain such records for three (3) years
from the date of final payment for the Services.
5. OWNERSHIP AND LICENSE
a) All Inventions will be the sole and exclusive property of Compaq.
Subcontractor hereby assigns to Compaq the ownership of copyright in the
Inventions. Compaq will have the right to obtain and hold in its own name
copyrights, registrations, and similar protection which may be available in
the Inventions. Subcontractor agrees to assist Compaq as may be required to
perfect such rights.
b) To the extent that any Subcontractor's pre-existing technology is
contained in the Inventions, Subcontractor grants to Compaq an irrevocable,
nonexclusive, worldwide, royalty-free license to:
1) use, execute, reproduce, display, perform, and distribute
(internally or externally) such pre-existing technology; and
2) authorize Customer to do any, some, or all of the foregoing.
6. WARRANTY
a) Subcontractor warrants that all Services will (1) be performed in a good
and workmanlike manner and in accordance with generally accepted
professional standards for such Services, and (2) conform to the
requirements specified in the Statement of Work or Purchase Order.
b) Subcontractor warrants that Services will not in any manner limit,
impair, disrupt, or jeopardize any existing Year 2000 Compliance of any
equipment or software on which Services are performed. "Year 2000
Compliance" for purposes of this provision means the capability to
correctly process, calculate, compare, and sequence date data within and
between the 20th and 21st centuries, including leap year calculations.
c) In the event of any breach of warranty, Subcontractor, without charge
and without delay, will re-perform nonconforming Services.
7. CONFIDENTIAL INFORMATION
Subcontractor will maintain all information or data, whether written or
oral, relating to Compaq or Customer which Subcontractor obtains or
otherwise has access to in the performance of Services in confidence and
will not disclose any such information or data to any third party or to
employees, agents, subcontractors, or suppliers of Subcontractor who do not
have the need for access to such information or data.
8. PERSONNEL
a) Personnel provided by Subcontractor will not be considered employees of
Compaq for any purpose. Subcontractor personnel will make no commitments on
behalf of Compaq for any purpose. Subcontractor assumes full responsibility
for the actions of its personnel and will be responsible for their
supervision, daily direction, and control. Subcontractor will retain full
responsibility for payment of salary (including withholding of income taxes
and Social Security), worker's compensation, disability benefits, and the
like. Nothing in this Agreement grants Subcontractor or any Subcontractor
personnel any right under any Compaq employee benefit plan.
b) Subcontractor personnel specified or identified by name in the Statement
of Work or Purchase Order will be considered essential to the Services to
be performed. No substitution or diversion of such personnel will be made
without the prior written consent of Compaq and Customer.
c) Compaq and Customer will retain the right to reject any of
Subcontractor's personnel whose qualifications are insufficient in Compaq's
or Customer's judgment.
9. CHANGE IN SCOPE
Each Purchase Order and Statement of Work under this Agreement is based
upon Compaq's present understanding of Compaq's obligations to Customer. In
the event Compaq's understanding changes or Customer requests a change in
Compaq's obligations affecting Subcontractor's performance, Compaq will
notify Subcontractor of such change request in writing. Within ten (10)
days of receipt of such change request, Subcontractor will notify Compaq in
writing of any increase or decrease in Subcontractor's charges and/or
alteration to delivery schedules occasioned by the change. Upon Compaq's
acceptance of Subcontractor's modified charges and delivery schedule, the
parties will modify the terms of the applicable Purchase Order and
Statement of Work to effect the change. Subcontractor will not implement
the change without Compaq's written authorization.
10. TERMINATION
a) Compaq may terminate for convenience this Agreement, any Purchase Order,
or any portions thereof by written notice to Subcontractor. In any event,
the applicable Purchase Order will terminate immediately upon termination,
for any reason, of Compaq's agreement with Customer. Upon receipt of such
notice, Subcontractor will immediately stop all activities associated with
the terminated Purchase Order. Subcontractor will be paid for the Services
provided and accepted prior to the date of termination. Such payment will
constitute Compaq's entire liability.
b) In the event of a default by Subcontractor, Compaq will provide
Subcontractor written notice thereof. If the default is not remedied within
ten (10) days or within the time stated in the notice, Compaq may terminate
this Agreement, any Purchase Order, or any portions thereof.
c) The rights and obligations of Sections 4, 5, 6, 7, 10, 11, and 12 will
continue after expiration or termination of this Agreement and will bind
the parties and their legal representatives, successors, heirs, and
assigns.
11. INDEMNIFICATIONS
a) Subcontractor will indemnify, defend, and hold Compaq harmless from any
and all claims or demands (including all losses, damages, and liabilities
resulting from such claims or demands, and all related costs and expenses,
including reasonable legal fees) arising from or in connection with (1)
Subcontractor's performance of, or failure to perform, any of its
obligations under this Agreement or (2) an act or omission of Subcontractor
in its relationships with its employees, agents, subcontractors or
suppliers.
b) Subcontractor will indemnify, defend, and hold Compaq and Customer
harmless from any and all claims or demands (including all losses, damages,
and liabilities resulting from such claims or demands, and all related
costs and expenses, including reasonable legal fees) which may result by
reason of any infringement or claim of infringement of any intellectual
property rights associated with the Services or Inventions provided in
connection with this Agreement.
12. LIMITATION OF LIABILITY
a) EXCEPT AS PROVIDED BELOW, NEITHER COMPAQ NOR SUBCONTRACTOR WILL BE
LIABLE FOR ANY DAMAGES RESULTING FROM LOSS OF DATA, PROFITS, OR USE OF
PRODUCTS, OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, EVEN IF ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. Subcontractor will be liable for any
damages, including incidental or consequential damages, which Compaq is
obligated to pay Customer or other third parties as a result of
Subcontractor's failure to perform its obligations in accordance with this
Agreement.
b) This limitation of liability does not apply to the liability of either
party for any personal injury, including death, or for willful, wanton, or
malicious acts of Subcontractor or to obligations of Subcontractor under
Section 7, "Confidential Information", or Section 11, "Indemnifications".
13. COMPLIANCE WITH LAWS
Subcontractor, at its own expense, will comply with all laws and
regulations of federal, state, and local government authorities relating to
its obligations under this Agreement.
14. GENERAL
a) Except as expressly provided in the Statement of Work or Purchase Order,
Subcontractor will be entitled to no further payment, cost reimbursement,
or other compensation for the Services provided hereunder.
b) Subcontractor shall carry during the term of this Agreement, and with
companies with a Best Rating of not less than A-:VII, insurance policies of
the kinds and in the amounts listed below:
1. Worker's Compensation - statutory limits in each state in which
Subcontractor is required to provide Worker's Compensation coverage
including Other States Endorsement or policy equivalent thereof. Policy
shall include a waiver of subrogation in favor of Compaq Computer
Corporation, its officers, directors, employees and agents
2. Employer's Liability - not less than $1,000,000
3. Comprehensive General Liability - including Contractual Liability,
Independent Contractor's Liability, Products and/or Completed
Operations Liability, and Personal Injury/Property Damage Coverage's in
a combined single limit of not less than $1,000,000 per occurrence
combined single limit and $2,000,000 General Aggregate. Compaq Computer
Corporation, its officers, directors, employees and agents shall be
named as Additional Insureds.
4. Automobile Liability - for owned, non-owned, and hired vehicles in a
combined single limit of not less than $1,000,000.
5. Umbrella Liability - a combined single limit of not less than
$2,000,000.
Subcontractor shall furnish Compaq with Certificates of Insurance
evidencing the specified insurance policies and stating that such insurance
policies may not be changed or terminated so as to not comply with the
foregoing insurance requirements without at least thirty (30) days prior
written notice to Compaq.
c) Nothing in this Agreement will be construed as prohibiting or
restricting Compaq from independently developing, acquiring, and/or
marketing services which are similar to and/or competitive with those
provided hereunder.
d) Any assignment, transfer, or subcontracting of rights or obligations by
Subcontractor under this Agreement in whole or in part without the prior
written consent of Compaq will be void and may subject Subcontractor to
termination.
e) During the performance by Subcontractor under a particular Purchase
Order and Statement of Work Compaq may require Subcontractor to temporarily
cease performance of some or all of the Services by issuing Subcontractor a
Work Suspension Order ("Order"). The Order will include the effective date
of the Order, a specific description of the Services to be suspended, and
the anticipated duration of the suspension. Upon receipt of an Order,
Subcontractor will take all reasonable measures to protect the Services in
progress. Compaq will notify Subcontractor in writing of the date on which
the suspended Services are to be resumed.
f) Subcontractor represents that it is not under any obligation or
restriction, nor will it assume any, which would interfere or present a
conflict of interest with the Services that it provides under this
Agreement.
g) Compaq is free to determine the price charged to Customer for the
Services that Subcontractor provides to Customer on behalf Compaq.
h) Subcontractor agrees to comply with security procedures of Compaq and
Customer.
i) Subcontractor agrees to be bound by applicable "flow down" provisions of
Compaq's agreement with Customer of which it is notified by Compaq.
j) Neither party may bring an action, regardless of form, arising out of
this Agreement more than two (2) years after the cause of action arises.
Subcontractor may not bring an action for nonpayment more than two (2)
years from the date final payment for the Services is due.
k) The laws of the State of Texas will govern this Agreement.
l) This Agreement and the documents referenced herein set forth the entire
understanding of the parties with respect to the subject matter described
herein and supersede all prior communications, whether oral or written, by
either party. Any modification to these terms and conditions must be in
writing and signed by authorized representatives of both parties.
Accepted by: Accepted by:
___________________________ COMPAQ COMPUTER CORPORATION
BY: BY:
PRINT NAME: PRINT NAME:
TITLE: TITLE:
DATE: DATE:
