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AMENDMENT NO. 1
TO
TRANSITION SERVICES AGREEMENT
AMENDMENT NO. 1 (this “ Amendment ”) dated as of
October 24, 2007, to the Transition Services Agreement (the
“ Agreement ”) among MPC-PRO, LLC, a Delaware limited liability
company and GATEWAY, INC., a Delaware corporation.
WHEREAS, the parties to the Agreement desire to
amend the Agreement as set forth in this Amendment; and
ACCORDINGLY, in consideration of the foregoing and
the respective representations, warranties, covenants and
agreements set forth in this Amendment and the Agreement, as
applicable, and for other good and valuable consideration (the
receipt and sufficiency are hereby acknowledged and intending to be
legally bound hereby), the parties hereto hereby agree as
follows:
1. Section
2(a) of the Agreement is hereby amended and restated in its
entirety as follows:
In consideration for the Services to be provided by
Seller hereunder, Buyer shall pay to Seller a total fee of
$6,500,000, payable as follows: (i) one payment of $723,530 due on
the second Friday after the Closing Date, (ii) one payment of
$805,880 due on the fourth Friday after the Closing Date, (iii) six
bi-weekly installments of $764,705 due on the sixth, eighth, tenth,
twelfth, fourteenth and sixteenth Friday after the Closing Date and
(iv) one payment of $382,360 due on the seventeenth Friday after
the Closing Date.
2. Section
2(b) of the Agreement is hereby amended and restated in its
entirety as follows:
If any Extended Services are provided by Seller
pursuant to Section 3(a), Buyer shall pay to Seller $626,592 for
each week or part thereof that Seller performs such Extended
Services, payable on the Friday of every week during which such
Extended Services are being performed.
3. The
Schedules to the Transition Services are hereby amended and
restated in their entirety as set forth in Attachment A to this
Amendment.
4. This
Amendment shall constitute an amendment of the Agreement pursuant
to Section 15 thereof. Except as expressly set forth in this
Amendment, the Agreement is and shall continue to be in full force
and effect and, as so amended hereby, is hereby ratified and
confirmed in all respects.
5. This
Amendment shall be governed by and construed in accordance with the
domestic laws of the State of Delaware without giving effect to any
choice or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Delaware.
(MP) 08481/006/TSA/TSA.amend1.doc
6.
This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same
instrument.
[Signature Page Follows]
(MP) 08481/006/TSA/TSA.amend1.doc
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed as of the day and year first
above written.
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MPC-PRO, LLC
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By:
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/s/ Jeffrey E. Fillmore
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Name:
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Jeffrey E. Fillmore
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Title:
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COO
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GATEWAY, INC.
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By:
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/s/ John Goldsberry
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Name:
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John Goldsberry
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Title:
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SVP & CFO
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[Signature Page to Amendment No. 1 to Transition
Services Agreement]
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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Organization
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Function
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Scope of Service
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Time Period
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Transition Governance
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Greg Salley
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Transition Governance
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• Gateway will maintain a
single point of contact with authority to manage all Gateway
resources in the performance of transition services.
• Gateway will maintain
project leads within each functional area to monitor and manage
progress against the transition project plan
• Gateway will maintain an
issue escalation and resolution process through senior management
to manage disputes and issues according to the terms of the
Purchase Agreement.
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17 weeks (120 days)
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A-1
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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Organization
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Function
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Scope of Service
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Time Period
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Operations
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Kyle Price
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New Product Introduction (NPI)
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• Validate MRD
complete
• Manage POR development and
release
• Identify EOL products and
develop EOL management plan
• Facilitate design readiness
review
• Conduct Develop Phase
Review
• Assure all Readiness
reviews complete (material, manufacturing, service,
etc...)
• Conduct MP/Launch Phase
Review
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4 weeks (30 days)
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A-2
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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Troy Pliska
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Supply Planning
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• Oversee/monitor PRO new
product and feature launch “assumptions” and changes to
existing offering/promos to ensure material feasibility
• Interface and collaborate
with PRO forecasting team to provide intelligence driving the
forecast
• Develop PRO MPS/supply plan
and pass to ODMs/GCC
• Manage Clear to Build (CTB)
and daily shortage allocation and procurement escalation
• Support ODM prioritization
and allocation
• Services Includes PRO: DT,
NB, SVR, MON, and ACCY
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6 weeks (42 days)
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A-3
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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Troy Pliska
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Configuration/Product Data Management
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• PRO Part creation, setup,
maintenance
• PRO AML creation, setup,
maintenance
• PRO Sales BOM creation,
setup, maintenance
• PRO Configuration rules
setup and maintenance
• GCC Mfg BOM creation,
setup, and maintenance
• Web Config “technical
merchandizing” – presentation/organization of core
system and options
• “What’s
Changing” document creation and management to feed the web
and downstream process
• Config Sheet development
and maintenance for PRO contract compliance
• PRO product technical spec
creation and management
• Includes system setup for
Agile, JDE, GPS (OC 1.5, 2.0, 2.4), GCC QSAP
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17 weeks (120 days)
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Kyle Price
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Quality
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• Filed escalation
support
• Manufacturing issue
support
• Product HOLD and Deviation
management
• Manufacturing improvement
support
• Vendor 8D
management
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10 weeks (70 days)
17 weeks (120 days) for data flow process
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A-4
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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Randy Johnson
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Trading Company ROHS compliance
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• Initiate RFI for new
components
• Validate conformance to
ROHS standards
• Request material
composition and test reports for conformance
• Submit composition, test
and certification reports to configuration management
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10 weeks (70 days)
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Randy Johnson
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Co-marketing, supplier funding, tracking and
collection
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• Tracking of units purchased
by commodity
• Coordinate rebate amounts
through Finance
• Follow up
Billing/Collection
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17 weeks (120 days)
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Randy Johnson
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Finished goods procurement – monitors, monitor
build planning and ODM management.
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• Forecasting of monitor
requirements for CTO demand
• Monitor IML inventory &
reconcile against forecasted demand
• Forecast material
requirements in support of monitors
• PO’s to support CTO
build requirements
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17 weeks (120 days)
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Randy Johnson
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Pro Accessory procurement for IML and EDI
accessories
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• Forecasting of accessory
requirements
• Monitor IML inventory
against forecasted demand
• Release PO’s to
support accessories
• Manage supplier
expedites
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17 weeks (120 days)
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Troy Pliska
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Supply Planning
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• Extended lead time
management for PRO delivery date promising tool (JDE &
OC)
• Service includes PRO: DT,
NB, SVR, MON, and ACCY
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17 weeks (120 days)
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A-5
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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Randy Johnson
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Trading Company
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• Evaluate CTO requirements
MPS
• Forecast consolidated
requirements to suppliers
• Monitor CTB for supply
issues & reconcile against latest MPS
• Release purchase orders for
CTO buy/sell components
• PO delivery & close
out
• Monitor COA inventory &
aging
• Maintain COA Pos to support
build requirements
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17 weeks (120 days)
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Randy Johnson
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E and O Trading company
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• Update E&O report with
current market value
• ODM interface, collection,
assembly of parts liability files across CTO ODMs
• E&O reserve database
management
• Quantity risk
assessment
• Market recovery %
assessment
• Reserve setting
• E&O disposition
management & execution
• E&O PO/SO liquidation
and management
• E&O disposition on-site
physical count, PN verification, condition inspection, scrap
verification
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17 weeks (120 days)
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A-6
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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Troy Pliska
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E&O ODM Owned
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• ODM interface, collection,
and assembly of part liability files across all CTO ODMs
• E&O reserve database
management
• Quantity “risk”
assessment
• Market recovery %
assessment
• Reserve setting
• E&O disposition
management and execution
• E&O PO/SO liquidation
creation and management
• Includes both ODM owned-GTW
liable and GTW owned at IML inventory liabilities
• E&O disposition on-site
physical count, PN verification, condition inspection, scrap
verification
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17 weeks (120 days)
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Kyle Price
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Product Qualification
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• Component Qualification
(MB, Opticals, HDD, Chassis, PS, Video, add-on, etc...)
• System
Qualification
• Pilot Golden Sample
review
• Bug list
management
• MP release
support
• Sub part quality
support
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17 weeks (120 days)
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A-7
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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Kyle Price
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Develop Operations
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• Process DCR, sign-off in
Agile, route
• Implement DCR
• Create & submit CCO for
part & BOM creation
• Create & submit AML for
parts & BOM
• Move to
production
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6 weeks (42 days)
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Troy Pliska
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Quote management, cost set-up, PO audit
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• Interface and development
of A part cost roadmap to suppliers
• PRO system/feature ODM
quote development (GCC) and review/audit (ODM)
• PRO system/feature cost
setup and control
• PRO price / invoice (PPV)
variance tracking and analysis
• PRO 856/810 EDI workbench
monitoring and resolution
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17 weeks (120 days)
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Troy Pliska
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Pro CTO ODM management
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• Monthly RFQ with Quanta
& Arima
• Evaluate BOM quotes against
VE costs
• Evaluate monthly
layering
• Authorize
layering
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17 weeks (120 days)
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Dave Schroeder
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Inventory Management
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• Inventory systems
support
• BAX management
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17 weeks (120 days)
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Dave Schroeder
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Traffic & Logistics
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• Support GCC & ODM
relationship through partial transition period
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17 weeks (120 days)
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A-8
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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Dave Schroeder
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Traffic & Logistics
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• Production Support- Testing
from Order Entry to Varsity through EDI to external
parties
• Item Weight
Maintenance
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17 weeks (120 days)
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Kyle Price
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Quality Database
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Use of Qpulse
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17 weeks (120 days)
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Gary Elasser /
Phil Osako
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Software Licenses
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Assistance for securing appropriate licenses to
applications required for the continuing function of the GCC for
which MPC has no current licensing agreement, including but not
limited to:
a) SAP (26 weeks)
b) Agile
c) Softthinks
d) PC Doctor
e) Eurosoft
f) Ghost
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4 weeks (30 days), unless otherwise noted in scope
of service
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A-9
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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Organization
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Function
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Scope of Service
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Time Period
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Information Technology Services
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17 weeks (120 days)
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Responsible parties: Ger Purcell; Timm Hoffman; Hani Yassin
Information Technology services will only include
break/fix, application support and maintenance and data extracts
will be performed on a commercially reasonable effort
basis.
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This agreement will exclude all enhancements or new
project efforts on behalf of Mozart
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Table below outline help desk severity levels and
response times:
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After Transition period begins; Gateway will set up
Help Desk Services to provide Mozart with issue management,
coordination, and resolution. Gateway will provide
appropriate personnel for a Help Desk that provides Mozart 24-hour
centralized technical assistance seven days a week.
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Help Desk Service Levels are as follows:
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Severity Levels
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One
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The outage terminates the operations of any
installation and any workstations comprised therein or the outage
corrupts any database used in conjunction with the Software or
major function of normal operation and use of the Software has
become unusable and there is no workaround available.
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Two
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A major function in normal operation and use of the
Software has become unstable and there is an awkward work-around or
any other function has become unworkable and there is no known
work-around
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Three
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A major function has become unworkable and there is
an effective workaround
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Four
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No functional impact on software
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A-10
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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a)
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The Gateway Help Desk will log all calls taken, be
responsible for problem resolution and call escalation
reporting.
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b)
The Gateway Help Desk will monitor un-escalated/unresolved calls
and communicate to Gateway immediately. Status information on
all calls will be maintained by and can be obtained from the
Gateway Help Desk.
c)
The Gateway Help Desk will initiate escalation of unresolved calls
to the appropriate responsibility level as designated by Gateway
for resolution.
Time to Start and Target to Fix Times for each
Severity Levels
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One
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Time to Respond: 15 minutes
Time to Start: 0 to 2 hours
Target to Fix: 6 hours
First update will be provided within 1 hour of
initial call
Further updates will be made every 2
hours
Resolutions will be documented and provided back
within 24 hours of resolution
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Two
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Time to Respond: 15 minutes
Time to Start: 0 to 4 hours
Target to Fix: Less 24 hours
First update will be provided within 1 hour of
initial call
Further updates will be made every 2
hours
Resolutions will be documented and provided back
within 24 hours of resolution
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Three
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Time to Respond: 15 minutes
Time to Start: Less than two days
Target to Fix: Less than seven days
First update will be provided within 1 hour of
initial call
Further updates will be made every 4
hours
Resolutions will be documented and provided back
within 24 hours of resolution
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A-11
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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Four
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Time to Start: Next Update/Patch
Target to Fix: Next Update/Patch
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a)
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Mozart will provide appropriate security rules for
validating user access to Help Desk Services.
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b)
Mozart will provide to Gateway appropriate access to any data
reasonably necessary to assist in the security validation
process.
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c)
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Mozart will provide escalation points and contacts
at Gateway for the Help Desk.
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Gateway will provide application access to those
resources transitioned as of the effective date of the Purchase
Agreement. Additional requests for access must be approved by a
central point of contact within Mozart and are subject to approval
by the Gateway business application owner and IT security
management.
There will be a scheduled maintenance window for
applications and servers of approximately four hours per month.
Generally, one week’s notice will be provided. However,
Gateway reserves the right to perform maintenance as required to
ensure proper function of the systems.
Gateway will continue to provide the current level
of disaster recovery support to all in-scope
applications.
Gateway will create data extracts to support the
transition of services. Requests for data must be submitted by a
central point of contact within Mozart and is subject to the
approval of the appropriate Gateway business owner.
A-12
(MP) 08481/006/TSA/TSA.amend1.doc
Attachment A
Project Symphony Transition Services
Schedules
All Time Periods begin at Closing
Date
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