Exhibit 10.1

 

TRANSITION SERVICES AGREEMENT

 

Transition Services Agreement (this “Agreement”) dated as of this 1st day of
October, 2007, among MPC PRO, LLC, a Delaware limited liability company
(“Buyer”) and GATEWAY, INC., a Delaware corporation (“Seller”) (together, the
“Parties”).

 

RECITALS

 

WHEREAS, Purchaser and Seller are parties to an Asset Purchase Agreement dated
as of September 4, 2007 (the “Purchase Agreement”), pursuant to which Buyer is
purchasing from Seller certain assets and liabilities associated with Seller’s
“Professional Division” and that portion of its “Consumer Direct” division that
provides business-related products (collectively, the “Business”);

 

WHEREAS, in connection with and as a condition precedent to the closing of the
transactions contemplated by the Purchase Agreement, Seller has agreed to
provide certain transition services to Buyer on the terms and conditions
hereinafter set forth, all as contemplated by the Purchase Agreement;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

Section 1. Services Provided.

 

(a)           Commencing on the Closing Date and during the term of this
Agreement, Seller shall provide to Buyer the services described in the Schedules
attached hereto (collectively, the “Services”) for the time period and to the
extent specified with respect to each such Service in the applicable Schedule
and upon the other terms and conditions set forth in this Agreement for the time
period and to the extent specified with respect to each such service in the
applicable Schedule and upon the terms and conditions set forth in the
Agreement. All time periods specified in the Schedules commence on the Closing
Date. For the avoidance of doubt, the Services set forth in the Schedules
attached hereto shall be the only services of any kind that Seller shall be
obligated to provide to Buyer pursuant to this Agreement. Notwithstanding the
foregoing, under no circumstances shall Seller be obligated to (i) provide, or
cause to be provided, any Services in a manner inconsistent with the manner in
which such Services were provided to the Business prior to the Closing Date,
except to the extent explicitly provided in an exhibit or (ii) increase, or
cause to be increased, the amount or scope of such Services beyond the levels
that were provided to the Business prior to the Closing Date, except to the
extent explicitly provided in an exhibit.

 

(b)           Seller agrees to undertake certain buy/sell activity of components
on behalf of Buyer in the course of providing the Services, which shall include
the

 

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procuring of components from component suppliers and the selling of such
components to Original Design Manufacturers (“ODMs”), in connection with and in
support of the manufacture at such ODMs of finished goods that are being ordered
from such ODMs by Seller for subsequent sale to Buyer (“Buy/Sell Activity”). The
Buy/Sell Activity shall be conducted in a manner consistent with Seller’s
buy/sell activities for the Business prior to the Closing Date.

 

(c)           Each of Seller and Buyer shall appoint a person to act as its
project manager (each, a “Project Manager”) to deal with issues arising out of
the performance of this Agreement and to discuss such issues with the other
Party’s Project Manager as often as reasonably necessary or desirable in order
to facilitate the orderly provision of the Services. The names of the Project
Managers initially designated by the Parties are set forth on Exhibit 1. In the
event that any of the individuals listed on Exhibit 1 (or such individual’s
successor) shall cease for any reason to continue as a Project Manager, the
Party for whom such individual served as Project Manager shall promptly, but in
any event within 10 business days following the day such project manager ceased
to serve as such, appoint a replacement Project Manager, and provide notice to
the other Parties hereto of such individual’s name and appointment.

 

(d)           Seller shall have the right to retain third parties selected by
Seller to provide Services on its behalf from time to time. The use or selection
by Seller of any such third party shall be in Seller’s sole and absolute
discretion and shall not be subject to approval by Buyer; provided that if
requested by Buyer, Seller shall keep Buyer reasonably informed from time to
time regarding any significant use of such third parties. Seller shall remain
responsible, in accordance with the terms of this Agreement, for the performance
of any Service it causes to be so provided by a third party.

 

(e)           Notwithstanding any other provision of this Agreement, in
providing the Services, Seller shall not be obligated to: (i) hire any
additional employees; (ii) maintain the employment of any specific employee;
(iii) purchase, lease or license any additional equipment or software; or (iv)
pay any costs related to the transfer or conversion of data to Buyer or any
alternate supplier of services.

 

(f)            If Seller reasonably believes it is unable (i) to provide any of
the Services because the provision thereof would result in a significant
disruption of Seller’s operations or (ii) in the case of data systems, to
support the function which the data system relates because of a failure to
obtain necessary consents, licenses, sublicenses or approvals, the Parties shall
cooperate in good faith to determine the best alternative approach. Until such
alternative approach is found or the problem otherwise resolved to the mutual
satisfaction of the parties, Seller shall use commercially reasonable efforts to
(1) continue providing the Service or (2) in the case of data systems, support
the function to which the data system relates or permit Buyer to have access to
the data system so that Buyer can support the function itself. To the extent an
agreed-upon written alternative approach requires payment above and beyond that
which is included in Seller’s

 

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charge for the Service in question, Buyer shall be responsible for such payment
as a result of such alternative approach.

 

(g)           Notwithstanding any other provision of this Agreement, if a Buyer
Default occurs and is continuing, Seller shall have no obligation to, and may in
its sole discretion refuse to, provide Services and/or engage in Buy/Sell
Activity. For purposes of this Agreement a “Buyer Default” shall be deemed to
have occurred upon (i) the occurrence of any Event of Default under the Note (as
such term is defined in the Purchase Agreement) or (ii) any failure by Buyer (or
the Wells Fargo Business Credit operating division of Wells Fargo Bank, National
Association, on behalf on Buyer) to pay any amounts due pursuant to any Invoice
under this Agreement by the date that is five (5) Business Days after the date
on which such payment is due, subject to the procedures regarding Invoice
Objections set forth in Section 2(e) hereof. Whenever in this Agreement any
Party is permitted or required to make a determination in its “sole discretion”,
such Party shall be entitled to consider only such interests and factors as it
desires, including its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting any other Party
or person.

 

Section 2. Fees.

 

(a)           In consideration for the Services to be provided by Seller
hereunder, Buyer shall pay to Seller a total fee of $6,150,000, payable as
follows: (i) eight bi-weekly installments of $723,530 due on the second, fourth,
sixth, eighth, tenth, twelfth, fourteenth and sixteenth Friday after the Closing
Date and (ii) one payment of $361,760 due on the seventeeth Friday after the
Closing Date.

 

(b)           If any Extended Services are provided by Seller pursuant to
Section 3(a), Buyer shall pay to Seller $606,000 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.

 

(c)           Buyer shall reimburse Seller for all software license fees paid by
Seller in the course of providing the Services that would not have been incurred
by Seller but for the provision of Services to Buyer pursuant to this Agreement
(“Incremental Software License Fees”). Prior to providing the Services, Seller
shall provide Buyer with written notice setting forth the expected Incremental
Software License Fees associated with providing such Services to Buyer. If Buyer
provides written or verbal approval of such expected Incremental Software
License Fees, Buyer shall pay the actual Incremental Software License Fees on
the Friday following receipt by Buyer of a notice from Seller setting forth the
amounts actually paid by Seller and amounts owed by Buyer hereunder. If Buyer
does not approve of an expected Incremental Software License Fee, Seller may
decline to provide any Services that Seller reasonably believes requires a
software license for which Buyer has not agreed to pay the applicable
Incremental Software License Fees.

 

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(d)           Buyer shall reimburse Seller for all Buy/Sell Activity undertaken
by Seller in the course of providing the Services, as specified below:

 

(i)       Buyer shall reimburse Seller for all components, accessories and
finished goods purchased by Seller on behalf of Buyer in the course of providing
the Services, subject to a percentage markup over amounts paid by Seller for
such items. Such percentage markup shall be (i) one-half percent (0.5%) during
the first eight-week period following the Closing Date, (ii) one percent (1%)
during the second eight-week period following the Closing Date and (iii) two
percent (2%) thereafter. At the end of each Invoice Period, Seller shall
estimate Buyer’s portion of the total purchased components, accessories and
finished goods based on Buyer’s proportion of total product production being
produced on behalf of Seller and Buyer by ODMs, with any product production that
is in support of orders from Buyer deemed to be product that is produced for
Buyer. Seller shall then apply the appropriate percentage markup to such
estimated Buyer’s portion of the total purchased components, accessories and
finished goods to determine an estimate of the total amount owed by Buyer to
Seller for Buy/Sell Activity during such Invoice Period (the “Estimated Buy/Sell
Total”). If the actual amount of purchased components, accessories and finished
goods attributable to Buyer for an Invoice Period after applying the appropriate
percentage markup to such amount (the “Actual Buy/Sell Total”) is less than the
corresponding Estimated Buy/Sell Total, Seller will reimburse such difference to
Buyer within 15 days after the date of the Invoice for the related Invoice
Period.  If the Actual Buy/Sell Total is greater than the corresponding
Estimated Buy/Sell Total, Buyer will reimburse such difference to Seller within
15 days after the date of the Invoice for the related Invoice Period.

 

(ii)     Buyer shall reimburse Seller for its portion of ODM layering charges,
which shall be allocated to Buyer in proportion to its portion of the total
product production produced on behalf of Seller and Buyer by ODMs. In the event
that such ODM layering charges result in a credit to Buyer, such credit shall be
reflected on the Invoice for the Invoice Period in which it is determined that a
credit is due.

 

(iii)    Buyer shall reimburse Seller for its portion of ODM charges for excess
and obsolete components, which shall be allocated to Buyer where such excess and
obsolete components were ordered for Buyer’s product production (taking into
consideration any production decommits from Buyer).

 

(iv)     Buyer will reimburse Seller for its portion of those charges associated
with the movement and storage of components, accessories and finished goods,
including but not limited to transportation, warehousing and handling cost.
Buyer’s portion of such charges shall be allocated to Buyer in proportion to
Buyer’s proportion of the total product production

 

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produced on behalf of Seller and Buyer by ODMs, with any product production that
is in support of orders from Buyer deemed to be product that is produced for
Buyer.

 

On the fifth business day following the Closing Date, and at the end of each
week thereafter for so long as Seller performs Services for Buyer under this
Agreement (each, an “Invoice Period”), Seller will provide a statement to Buyer,
listing in reasonable detail the buy/sell activity undertaken by Seller
hereunder and listing the amounts paid by Seller and amounts owed by Buyer
hereunder (each, an “Invoice”).

 

(e)           If Buyer disagrees with the amount set forth on an Invoice, Buyer
shall send to Seller a reasonably detailed written notice of such disagreement
(the “Invoice Objection”) no later than the 10th day after the date of the
Invoice, in the case of an Invoice for freight costs or service costs and no
later than the 25th day after the date of the Invoice, in the case of any other
Invoice. Notwithstanding any Invoice Objection made by Buyer, Buyer shall in any
event pay any portion of the amount set forth on the Invoice with which it
agrees no later than the 15th day after the date of the Invoice, in the case of
an Invoice for freight costs or service costs, and no later than the 30th day
after the date of the Invoice, in the case of any other Invoice, to the extent
that such amount is not paid in accordance with the terms of the Intercreditor
Agreement referenced in Section 10.09 of the Purchase Agreement (the
“Intercreditor Agreement”). If no Invoice Objection is received by Seller by the
applicable date set forth in the first sentence of this Section 2(e), such
Invoice shall be deemed final and conclusive and agreed to by Buyer, and Buyer
shall pay the full amount of such Invoice by the applicable date set forth in
the second sentence of this Section 2(e). Buyer and Seller shall resolve any
Invoice Objection and any other disputes or disagreements relating to Invoices
in accordance with the procedures provided for in Section 7.

 

(f)            The Applicable Gateway Weekly Payoff Amount (as defined in the
Intercreditor Agreement) that Seller shall provide in the applicable weekly
statement to Wells Fargo, National Association (“Wells Fargo”) under the
Intercreditor Agreement shall be the amount specified as payable by Buyer on the
Invoice for the related week; provided that Seller may, in its sole discretion,
increase the Applicable Gateway Weekly Payoff Amount to be included in any
applicable weekly statement provided to Wells Fargo pursuant to the
Intercreditor Agreement by any amount payable by Buyer to Seller in respect of
Services, Extended Services or Incremental Software License Fees that is not
paid when due under this Agreement (in each case without duplication in any
subsequent weekly statement provided to Wells Fargo).

 

(g)           If on any date there exist amounts that would otherwise be payable
by Buyer to Seller in respect of Services, Extended Services, Incremental
Software License Fees or any Invoice, on the one hand, and amounts under any
agreement that would otherwise be payable by Seller to Buyer, on the other hand,

 

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then, on such date, either party may elect to set-off such amounts by written
notice to the other party, upon which each party’s obligation to make payment of
such amounts will be automatically satisfied, discharged and replaced by an
obligation upon the party by which the larger aggregate amount would have been
payable to pay to the other party the excess of the larger amount over the
smaller aggregate amount.

 

(h)           Late payments shall bear interest at a rate of 8% per annum,
compounded monthly.

 

(i)            If the total value of (x) the value of the Net Inventory Minus
Liabilities, as determined on the Final Net Inventory/Liability Statement plus
(y) $[•] (representing the amount paid by Gateway Computers, Inc. to Quanta
Computers Inc. (“Quanta”) to purchase the 40% membership interest in Gateway Pro
Partners, LLC owned by Quanta) minus (z) the total amount of Customer
Prepayments as of the Closing Date in respect of which Buyer is assuming
Liabilities to deliver Products or perform services pursuant to Section 2.01(g)
of the Purchase Agreement is less than $21,800,000, then Seller shall credit the
difference between $21,800,000 and such total value against Buyer’s payment
obligations hereunder.

 

Section 3. Term.

 

(a)           This Agreement shall continue in effect until the latest
expiration date specified for a Service in any Schedule hereto (or such other
date as may be agreed to in writing by the Parties) (the “Expiration Date”),
unless earlier terminated in accordance with Section 3(b) or Section 3(c) below;
provided that if Buyer desires a continuation of the term of this Agreement
beyond the Expiration Date (or such other applicable expiration date specified
for a Service in a Schedule hereto) and Buyer notifies Seller within 30 days
prior to the Expiration Date (or within 30 days prior to the expiration date
specified in the relevant Schedule), Seller agrees to negotiate with Buyer in
good faith regarding an extension of the term of the Services, provided that
Seller shall be under no obligation to provide any extension under this Section
3(a) and may extend or not extend the term of the Services in its sole
discretion. If the Parties agree to extend the term of this Agreement beyond the
Expiration Date, regardless of the cause, Buyer shall pay Seller for such
services (the “Extended Services”) such amounts as determined in accordance with
Section 2(b).

 

(b)           Beginning on the date that is 17 weeks after the Closing Date,
Buyer may terminate this Agreement or any Service to be provided hereunder for
any reason at any time upon at least 30 days’ prior written notice to Seller.
For the avoidance of doubt, prior to the date that is 17 weeks after the Closing
Date, Buyer shall not be permitted to terminate this Agreement except pursuant
to Section 3(c) below. Notwithstanding termination of this Agreement or any
Service by Buyer pursuant to this Section 3(b), Buyer shall remain liable for
all fees outstanding pursuant to Section 2 hereof.

 

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(c)           Notwithstanding anything to the contrary contained herein, (i)
Buyer may terminate this Agreement in whole or in part at any time in the event
of any material breach or default by Seller of any of Seller’s obligations under
this Agreement and the failure of Seller to cure, or to take substantial steps
towards the curing of, such breach or default within 30 days after receipt of
written notice from Buyer requesting such breach or default to be cured; and
(ii) Seller may terminate this Agreement in whole or in part at any time in the
event of any material breach or default by Buyer of any of Buyer’s obligations
under this Agreement and the failure of Buyer to cure such breach or default
within 30 days after receipt of notice from Seller requesting such breach or
default to be cured.

 

(d)           Upon termination of this Agreement or upon the Expiration Date, if
such date has not been extended, Seller shall retain all books and records, or
copies thereof, pertaining to the business of Buyer used or generated in the
course of the provision of Services hereunder. Thereafter, Seller will have the
right to dispose of such books and records, but will not do so within two years
of expiration or termination of this Agreement unless it has given Buyer at
least 30 days’ prior notice of such disposition and the reasonable opportunity,
to the extent practicable, to have such books and records copied or delivered to
Buyer at Buyer’s expense. If requested by Buyer and subject to Section 6 of this
Agreement, Seller will afford Buyer reasonable access to such books and records
during normal business hours at Buyer’s expense and will permit Buyer at its
expense to copy or to take original copies of such books and records to the
extent such books and records pertain solely to Buyer’s businesses and to copy
such books and records to the extent such books and records pertain to Buyer’s
businesses only in part.

 

Section 4. Indemnification.

 

(a)           Seller shall indemnify and hold harmless Buyer, its successors and
Affiliates, and their respective officers, directors, employees, shareholders
and agents from and against all damages, losses, liabilities and expenses
(including reasonable attorneys’ fees) in connection with any action, suit or
proceeding involving a third party claim (“Damages”) directly arising from the
willful misconduct of Seller in connection with the provision of Services by
Seller to Buyer; provided, however, that in the event that Damages arise out of
the willful misconduct of both Seller and Buyer, Seller shall not be required to
indemnify or hold harmless Buyer to the extent that the Damages are caused by
the willful misconduct of Buyer. Seller’s liability under this Section 4(a)
shall be subject to the provisions of Section 4(c) and shall not, in the
aggregate, exceed the aggregate amount of fees received by Seller under this
Agreement.

 

(b)           Buyer shall indemnify and hold harmless Seller, its successors and
Affiliates, and their respective directors, employees, shareholders, and agents
from and against any and all Damages directly arising from the willful
misconduct of Buyer in connection with the provision of Services by Seller to
Buyer; provided, however, that in the event that Damages arise out of the
willful

 

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misconduct of both Seller and Buyer, Buyer shall not be required to indemnify or
hold harmless Seller to the extent that the Damages are caused by the willful
misconduct of Seller. The liability of Buyer under this Section 4(b) shall be
subject to the provisions of Section 4(c).

 

(c)           NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE
CONTRARY, IN NO EVENT SHALL ANY PARTY BE LIABLE FOR INCIDENTAL, INDIRECT,
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS OR
LOST REVENUES) OF THE OTHER PARTY, ITS SUCCESSORS, ASSIGNS OR THEIR RESPECTIVE
AFFILIATES, AS A RESULT OF OR ARISING FROM THIS AGREEMENT, REGARDLESS OF WHETHER
SUCH LIABILITY ARISES IN TORT, CONTRACT, BREACH OF WARRANTY, INDEMNIFICATION OR
OTHERWISE.

 

(d)           Seller shall not be responsible for the correction of any
erroneous data provided by Seller in the course of providing the Services unless
Buyer requests in writing the correction of such data within 90 calendar days of
the provision by Seller to Buyer of such data.

 

(e)           In the event any liability arises from the performance of Services
hereunder by a third party contractor, Buyer shall be subrogated to such rights,
if any, as Seller may have against such third party contractor with respect to
the Services provided by such third party contractor to or on behalf of Seller.

 

(f)            The procedures, but none of the monetary thresholds or
limitations, contained in Section 11.05 of the Purchase Agreement shall govern
indemnification under this Section 4.

 

Section 5. Independent Contractor; No Partnership.

 

(a)           Seller shall, in its sole discretion, select the Seller employees
to provide services hereunder on a basis consistent with Seller’s past practice,
and such individuals shall not be deemed to be employees of Buyer. All work
performed hereunder by Seller shall be performed by Seller as an independent
contractor.

 

(b)           Notwithstanding anything herein to the contrary, no partnership or
joint venture has been, or under any circumstances shall have been deemed,
created in or by this Agreement or as a result of the provision of Services
hereunder.

 

(c)           Except as specifically set forth in this Agreement or as otherwise
explicitly provided in a writing signed by the Parties, none of the Parties
shall have any authority or authorization, of any nature whatsoever, to speak
for or bind the other.

 

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Section 6. Use of Information, Confidentiality. As a result of the provision of
Services to Buyer hereunder or any access to books and records contemplated by
this Agreement or otherwise after the performance of this Agreement, the Parties
hereto and their respective Affiliates may receive, have access to or obtain
Confidential Information relating to any other Party. Each of the Parties shall,
and shall cause each of its Affiliates to, (i) keep confidential any such
Confidential Information, except to the extent such information (a) is or
becomes public, except through the disclosure of such information by any Party
or any of its Affiliates; (b) becomes available to any Party or any of its
Affiliates from a third party that is not, to the knowledge of such Party,
required to keep such information confidential; or (c) is required to be
disclosed by any Party or any of its Affiliates pursuant to any law, rule,
regulation or court order; provided that, to the extent consistent with that
law, rule, regulation or court order, such Party or the relevant Affiliate shall
give the other Party or Parties prior notice of that impending disclosure and
the opportunity to object to or minimize that disclosure; (ii) distribute any
such Confidential Information only to those of its own employees and officers
and agents who have a reasonable need for it; and (iii) not use such
Confidential Information in any manner except for the purpose provided.

 

“Confidential Information” means any information concerning the businesses and
affairs of a Party or any of its Affiliates, regardless of whether such
information is specifically identified as “confidential”, including but not
limited to all trade secrets and other proprietary and confidential information
relating to such Party or any of its Affiliates or their businesses, including
products, formulas, processes, designs, computer data or programs, know-how,
data, data systems and related procedures and documentation, existing and
prospective customer, vendor and supplier lists and files, agreements and
contracts, documents, methods of conducting business, financial and accounting
statements and records, business plans, budgets and projections, prospective
customer proposals, technical information, marketing materials and concepts,
methods for developing and maintaining business relationships with customers and
prospective customers, and any information otherwise designated as Confidential
Information by such Party or any of its Affiliates.

 

Section 7. Dispute Resolution Procedure.

 

(a)           In the event of a dispute or a disagreement under this Agreement
or any Schedule hereto, the Parties’ respective Project Managers shall use
reasonable efforts to resolve the matter through conference calls, face-to-face
meetings and/or other communications. The entire escalation and resolution
process shall be completed in fewer than 20 calendar days; provided, however,
that the Project Managers shall have the discretion to agree in writing to
extend this time period. The written agreement to extend the time period shall
include a revised time period. If after 10 days the disagreement or dispute is
not resolved to the Parties’ mutual satisfaction, the disagreement or dispute
shall be escalated to the senior management of the Parties, which shall have an
additional 10 calendar days to resolve the matter, subject in each case to
extension as provided above.

 

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(b)           If the senior management of the Parties are not able to resolve a
disagreement or dispute within 20 calendar days after initiation of the
procedures provided for in this Section (subject to extension as provided
above), either Party may pursue any remedy available to it under this Agreement
or as permitted by law.

 

Section 8. Assignment; Non-Exclusive.

 

(a)           This Agreement is not assignable by any Party without the express
prior written consent of the other Party hereto, and any such unauthorized
assignment or transfer will be void.

 

(b)           Without in any way limiting the obligations of the Parties under
this Agreement, Seller agrees that Buyer may enter into agreements with other
Parties for the provision of any Services provided by Seller hereunder.

 

Section 9. Notices. All notices and other written communications hereunder shall
be in writing and shall be given as follows:

 

If to Seller, to:

 

Gateway, Inc.

765 Irvine Center Drive

Irvine, CA 92618-2930

Attention:  Chief Financial Officer

Facsimile No.: (949) 471-7014

 

with a copy to:

 

Davis Polk & Wardwell

1600 El Camino Real

Menlo Park, CA 94025

Attention:  Mischa Travers

Facsimile No.:  (650) 752-2111

 

If to Buyer, to:

 

MPC Corporation

906 East Karcher Road
Nampa, Idaho
Attention:  Chief Financial Officer
Facsimile No.:  (208) 893-7218

 

with a copy, to:

 

Holland & Hart LLP

101 S. Capitol Blvd., Suite 1400

 

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Boise, ID  83702
Attention:  Brian T. Hansen

Facsimile No.:  (208) 343-8869

 

or such other address or facsimile number as such Party may hereafter specify
for the purpose by notice to the other party hereto. All such notices, requests
and other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5:00 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.

 

Section 10. Governing Law. This Agreement 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.

 

Section 11. Severability. If any term of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any Party. Upon such a determination, the Parties shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the fullest extent possible.

 

Section 12. Counterparts. This Agreement 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.

 

Section 13. Waiver Of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES ITS
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR THE TRANSACTIONS BETWEEN THE PARTIES CONTEMPLATED HEREBY OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER HEREOF. THIS WAIVER IS
IRREVOCABLE AND SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED WITH THE COURT AS A WRITTEN CONSENT TO A
TRIAL WITHOUT A JURY.

 

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Section 14. Schedules. The schedules to this Agreement (collectively, the
“Schedules”) are deemed a part of this Agreement and are subject to all of the
provisions herein (including without limitation Section 4 hereof).

 

Section 15. Entire Agreement; Modification; Waivers. This Agreement and the
Schedules attached hereto constitute the entire agreement between the Parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to Services. This Agreement
and the Schedules attached hereto may not be altered, modified or amended except
by a written instrument signed by all affected parties. The failure of any Party
to require the performance or satisfaction of any term or obligation of this
Agreement, or the waiver by any party of any breach of this Agreement, shall not
prevent subsequent enforcement of such term or obligation or be deemed a waiver
of any subsequent breach.

 

Section 16. Inconsistency. In the event of any inconsistency between the terms
of this Agreement and any of the Schedules hereto, the terms of this Agreement
(other than the Expiration Date of particular Services and the charges for those
Services contained in the Schedules) shall control unless the conflicting
Schedule term specifically states that it is intended to override a term of this
Agreement.

 

Section 17. Defined Terms. Defined terms used, but not defined herein, shall
have the meanings ascribed to them in the Purchase Agreement.

 

Section 18. Force Majeure. Notwithstanding anything to the contrary in this
Agreement, performance or provision of Services by Seller or any third-party
selected by Seller as provided herein and receipt thereof by Buyer under this
Agreement may be suspended or curtailed without liability to Seller or any of
its Affiliates to the extent, and for so long as, any event (“Force Majeure
Events”) that is beyond the reasonable control of Seller or any third party
selected by Seller as provided herein (as applicable, the “Non-Performing
Party”), including but not limited to the following events, prevents or makes
commercially impracticable the performance of any obligation hereunder of the
Non-Performing Party: (i) acts of God, the elements, epidemics, explosions,
floods, tornadoes, hurricanes or other windstorms, landslides, lightning,
earthquakes, fires, storms or floods; (ii) labor trouble consisting of strikes,
walk-outs, injunctions or any other similar actions (whether or not within the
reasonable control of the Non-Performing Party; it being understood and agreed
that the settlement of strikes, walk-outs, injunctions and any other similar
actions shall be entirely within the discretion of the Non-Performing Party);
(iii) inability, despite the commercially reasonable efforts of Seller, which
shall not include expenditure by Seller of any significant additional amounts
that are not reimbursed by Buyer, to obtain material, equipment, utilities or
transportation; (iv) a failure or breakdown, despite the commercially reasonable
efforts of Seller, which shall not include expenditure by Seller of any
significant additional amounts that are not reimbursed by Buyer, of equipment or
machinery, fiber optic cable cuts, or

 

--------------------------------------------------------------------------------

 

interruption or failure of telecommunication, electrical or digital transmission
links; (v) national defense requirements, war, revolution, terrorism, blockades,
insurrections, sabotage, riots, arrests and restraints of the government, either
federal or state, civil or military; or (vi) any applicable law, regulation or
rule or the enforcement thereof by any governmental or regulatory agency having
jurisdiction, that shall prevent the Non-Performing Party from performing or
providing any Service, or shall limit the Non-Performing Party’s ability to
perform or provide such Service, or any such agency shall notify the
Non-Performing Party of its intention to fine or penalize the Non-Performing
Party or otherwise impede or limit the Non-Performing Party’s performance or
provision, or ability to perform or provide, such Service. Any delay, limitation
or failure of performance by the Non-Performing Party due to one or more Force
Majeure Events shall not be deemed a breach of or failure to perform under this
Agreement or any part hereof and this Agreement shall otherwise remain
unaffected; provided that (i) Buyer may terminate any Service that remains so
interrupted for more than 60 days pursuant to Section 3 and (ii) Buyer shall
have no obligation to pay for any Services not received as a result of any Force
Majeure Event.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 

 

GATEWAY, INC.

 

 

 

 

 

By:

  /s/ John Goldsberry

 

 

Name:

  John Goldsberry

 

Title:

  SVP & CFO

 

 

 

 

 

MPC-PRO, LLC

 

 

 

By:

MPC Corporation, Manager

 

 

 

 

 

By:

  /s/ Curtis Akey

 

 

Name:

  Curtis Akey

 

Title:

  Chief Financial Officer, Secretary

 

 

 [Signature Page to Transition Services Agreement]

 

--------------------------------------------------------------------------------

 

Exhibit 1

 

Project Managers

 

Buyer:  [        ]

 

Seller:  [        ]

 

--------------------------------------------------------------------------------

 

Project Symphony Transition Services Schedules with Mozart Changes

 

All Time Periods begin at Closing

 

Organization

 

Function

 

Scope of Service

 

Time Period

Transition Governance

 

 

 

 

 

 

 

 

 

 

 

 

 

Greg Salley

 

Transition Governance

 

•     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.

 

17 weeks (120 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Kyle Price

 

New Product Introduction (NPI)

 

•     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

 

4 weeks (30 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Troy Pliska

 

Supply Planning

 

•     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

 

6 weeks (42 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Pliska

 

Configuration/Product Data Management

 

•     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

 

17 weeks (120 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Kyle Price

 

Quality

 

•     Filed escalation support

•     Manufacturing issue support

•     Product HOLD and Deviation management

•     Manufacturing improvement support

•     Vendor 8D management

 

10 weeks (70 days)

17 weeks (120 days) for data flow process

 

 

 

 

 

 

 

Randy Johnson

 

Trading Company ROHS compliance

 

•     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

 

10 weeks (70 days)

 

 

 

 

 

 

 

Randy Johnson

 

Co-marketing, supplier funding, tracking and collection

 

•     Tracking of units purchased by commodity

•     Coordinate rebate amounts through Finance

•     Follow up Billing/Collection

 

17 weeks (120 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Randy Johnson

 

Finished goods procurement – monitors, monitor build planning and ODM
management.

 

•     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

 

17 weeks (120 days)

 

 

 

 

 

 

 

Randy Johnson

 

Pro Accessory procurement for IML and EDI accessories

 

•     Forecasting of accessory requirements

•     Monitor IML inventory against forecasted demand

•     Release PO’s to support accessories

•     Manage supplier expedites

 

17 weeks (120 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Troy Pliska

 

Supply Planning

 

•                    Extended lead time management for PRO delivery date
promising tool. (JDE & OC).

•       Service includes PRO: DT, NB, SVR, MON, and ACCY

 

17 weeks (120 days)

 

 

 

 

 

 

 

Randy Johnson

 

Trading Company

 

•     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

 

17 weeks (120 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Randy Johnson

 

E and O Trading company

 

•     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

 

17 weeks (120 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Troy Pliska

 

E&O ODM Owned

 

•     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

 

17 weeks (120 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Kyle Price

 

Product Qualification

 

•                  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

 

12 weeks (84 days)

 

 

 

 

 

 

 

Kyle Price

 

Develop Operations

 

•     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

 

6 weeks (42 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Troy Pliska

 

Quote management, cost set-up, PO audit

 

•     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

 

17 weeks (120 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Troy Pliska

 

Pro CTO ODM management

 

•     Monthly RFQ with Quanta & Arima

•     Evaluate BOM quotes against VE costs

•     Evaluate monthly layering

•     Authorize layering

 

17 weeks (120 days)

 

 

 

 

 

 

 

Dave Schroeder

 

Inventory Management

 

•     Inventory systems support

•     BAX management

 

17 weeks (120 days)

 

 

 

 

 

 

 

Dave Schroeder

 

Traffic & Logistics

 

•     Support GCC & ODM relationship through partial transition period

 

17 weeks (120 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Information Technology Services

 

 

 

 

 

17 weeks (120 days)

 

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.

 

•                  This agreement will exclude all enhancements or new project
efforts on behalf of Mozart

 

•                  Table below outline help desk severity levels and response
times:

 

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.

 

Help Desk Service Levels are as follows:

 

Severity Levels

 

One

 

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.

Two

 

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

Three

 

A major function has become unworkable and there is an effective workaround

Four

 

No functional impact on software

 

a)                                      The Gateway Help Desk will log all calls
taken, be responsible for problem resolution and call escalation reporting.

 

--------------------------------------------------------------------------------

 

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

 

One

 

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

Two

 

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

Three

 

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

Four

 

Time to Start: Next Update/Patch

 

 

Target to Fix: Next Update/Patch

 

a)             Mozart will provide appropriate security rules for validating
user access to Help Desk Services.

 

--------------------------------------------------------------------------------

 

b)                                     Mozart will provide to Gateway
appropriate access to any data reasonably necessary to assist in the security
validation process.

c)             Mozart will provide escalation points and contacts at Gateway for
the Help Desk.

 

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.

 

--------------------------------------------------------------------------------

 

Function/Area

 

Description

 

Hours of support

 

Backups

 

 

 

 

 

 

 

JDE

 

CTO ERP

 

24X7, rotating on call

 

Full daily with offsite rotation weekly

Siebel

 

CRM

 

24X7, rotating on call

 

Full daily with offsite rotation weekly

Peoplesoft

 

HR Payroll

 

24X7, rotating on call

 

Full daily with offsite rotation weekly

Agile

 

PLM for Bill of Material Mgmt

 

24X7, rotating on call

 

Full daily with offsite rotation weekly

EDI (GenTran/Cyclone)

 

EDI translation tool

 

24X7, rotating on call

 

Full weekly, incremental daily

OC 2.4

 

Java based Order Entry tool

 

24X7, rotating on call

 

Full weekly, incremental daily

Gateway Select 1.5

 

Business Portal

 

24X7, rotating on call

 

Full weekly, incremental daily

Gateway.com

 

Commercial CTO website

 

24X7, rotating on call

 

Full weekly, incremental daily

EAD Tool

 

Estimated Arrival Date tool

 

24X7, rotating on call

 

Full weekly, incremental daily

Commissions Database

 

Commissions calculation tool

 

24X7, rotating on call

 

Full weekly, incremental daily

MOS Tool

 

Manufacturing order status tool

 

24X7, rotating on call

 

Full weekly, incremental daily

MOSSM Tool

 

Manufacturing order status Scheduling Maint too

 

24X7, rotating on call

 

Full weekly, incremental daily

CIS Database

 

Custom Integration tool

 

24X7, rotating on call

 

Full weekly, incremental daily

CF-1 Tool

 

Web Chat tool

 

24X7, rotating on call

 

Full weekly, incremental daily

SalesForce.com ASP

 

Sales Quoting Tool

 

Provided by SF.com

 

ASP provided

Quoting Tool

 

Quote generation tool

 

24X7, rotating on call

 

Full weekly, incremental daily

The Source

 

Intranet site

 

24X7, rotating on call

 

Full weekly, incremental daily

Help Desk

 

Internal Help Desk (x21911)

 

7am-8pm CST M-F

 

N/A

NOC

 

Network Operations Center

 

24x7

 

N/A

GPS

 

Web Configuration & BOM Rules

 

24X7, rotating on call

 

Full weekly, incremental daily

eSupport

 

Web based support tool

 

24X7, rotating on call

 

Full weekly, incremental daily

Telecommunications

 

Voice services

 

24X7, rotating on call

 

Full Daily

Network

 

Data and voice network services

 

24X7, rotating on call

 

Configs Full Daily

Server Services (Wintel)

 

 

 

24X7, rotating on call

 

Full weekly, incremental daily

PathFinder

 

CTO Product Management System

 

24X7, rotating on call

 

Full daily with offsite rotation weekly

CMDB

 

Consumer Marketing Database

 

24X7, rotating on call

 

Full weekly, incremental daily

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Web

 

Gateway Select

 

 

 

 

Bart Brown
Gregg Goodman

 

New Account Setup

 

Manage the setup and deployment of new Gateway Select sites based on requests
from the Sales Team

 

0 weeks

Bart Brown
Gregg Goodman

 

Issue Resolution

 

Manage and work with IT/Marketing Ops on Gateway Select issues identified by the
Sales Team

 

17 weeks (120 days)

Bart Brown
Gregg Goodman

 

Gateway Select Admin Training

 

Provide 5 day intensive training to Mozart on Gateway Select administration

 

1 weeks (7 days)

Bart Brown
Gregg Goodman

 

Gateway Select Rep Training

 

Provide monthly training classes on Gateway Select to Sales Team

 

0 weeks

Bart Brown
Gregg Goodman

 

Gateway Select Roadmap

 

Provide Mozart with Gateway Select Roadmap documentation. Conduct a 2 day
Roadmap review with Mozart team

 

0 weeks

 

 

eMarketplace

 

 

 

 

Bart Brown
Gregg Goodman

 

New Account Setup

 

Manage the setup and deployment of new eMarketplace sites based on requests from
the Sales Team

 

0 weeks

Bart Brown
Gregg Goodman

 

Issue Resolution

 

Manage and work with IT/Marketing Ops on eMarketplace issues identified by the
Sales Team

 

17 weeks (120 days)

Greg Goodman

 

ISM

 

Transition ISM & provide Docs.

 

1 weeks, (7 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Web

 

Gateway .com

 

 

 

 

Bart Brown Gregg Goodman

 

New Product Introductions

 

Support the launch of new products for Professional Direct (Government,
Education, Medium/Large Businesses) on Gateway.com through Gateway’s existing
NPI process.

 

0 weeks

Bart Brown Gregg Goodman

 

Microsite development

 

Support the launch of product/services microsites on Gateway.com.

 

0 weeks

Bart Brown Gregg Goodman

 

Promotions

 

Manage the on-going merchandizing (coupons, banner ads within Gateway.com) for
Small Business

 

0 weeks

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Financial Services

 

 

 

 

 

 

Neal West

 

New customer Set up

 

This Service will be done Mozart resources effective Day 1

 

None

Neal West

 

Customer Record Maintenance

 

This Service will be done Mozart resources effective Day 1

 

None

Neal West

 

Customer Credits Maintenance

 

This Service will be done Mozart resources effective Day 1

 

None

Neal West

 

Sales order holds management

 

This Service will be done Mozart resources effective Day 1

 

None

Neal West

 

Customer invoice services

 

This Service will be done Mozart resources effective Day 1 Gateway will provide
Invoice data Output file to Mozart for their processing, printing and
distribution. See Assumptions!

 

None

Neal West

 

Invoice to Mozart for products shipped and other Bill through items

 

Bill will be accumulated and produced to Mozart products sold to Mozart and
service provided to Mozart as a bill through process

 

17 weeks (120 Days)

Neal West

 

Accounts receivable services (Trade sales)

 

Gateway resources moving to Mozart will be responsible for this task.

 

None

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Neal West

 

Accounts receivable services (Buy /Sell) and Mfg goods

 

Adjustments required for Buy/sell and Manufactured goods activity

 

17 weeks (120 Days)

Neal West

 

Accounts receivable services Collections

 

Gateway resources moving to Mozart will be responsible for this task. (See SOX
security assumption)

 

None

Neal West

 

New Inventory Vendor Set Up

 

Mozart transition resources will provide this function .This is anticipated to
have very limited activity because inventory tracking and management will be the
only Mozart vendor activity to continue on JDE. (See SOX Security assumption)

 

None

Neal West

 

Non Inventory new vendor set up or vendor records Maint.

 

Not anticipated to be processed on JDE.

 

None

Neal West

 

Inventory Vendor Maint.

 

Mozart transition resources will provide this function .This is anticipated to
have very limited activity because inventory tracking and management will be the
only Mozart vendor activity to continue on JDE. (See SOX Security assumption)

 

None

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Neal West

 

Service Inventory Accounts payable Invoice logging/vouchering

 

It is anticipated that other than service parts inventory there should be no
need to process invoices for Mozart on JDE. Invoices for Inventory will be
processed on JDE as they match to related receipts, this will be done via
employees moving to Mozart staff on Day1.

 

None

Neal West

 

Non-inventory Accounts payable Invoice logging/vouchering

 

It is anticipated that other than service parts inventory there should be no
need to process invoices for Mozart on JDE. All invoice that are Mozart’s
responsibility that are not for service inventory are to be forward to resources
that will voucher these bills their existing ERP or payment processing system.

 

None

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Neal West

 

Accounts payable Payment processing

 

Gateway will process invoices for ODM purchases. Buy/sell products, Freight and
other services. As such gated will process payments and route disputed pricing
to the appropriate resources to resolution. Limited to ACH or Wires.

 

17 weeks (120 Days)

Neal West

 

Commission tracking data extract and delivery service

 

Gateway will provide to Mozart data that is currently extracted from sale
activity to calculate Sales commissions. It is assumed that all employees will
stay in the same groupings that currently exist that support the current
Commission Calculation.

 

17 weeks (120 Days)

Neal West

 

Contract compliance reporting

 

This is assumed to a transitions service from Gateway utilizing Gateway
resources while the sales are processed on JDE.

 

17 weeks (120 Days)

Neal West

 

Accounting to royalties

 

This will move to Mozart along with the resources assigned to this function
after the GCC inventory is moved. Estimated time is 4 weeks after Day 1.

 

4 weeks (30 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Neal West

 

Inventory accounting services

 

Gateway will be responsible for establishing, maintaining and monitoring
inventory including physical inventory, inventory reconciliation and adherence
to SOX controls during the transitions period. For inventory accounted for on
the JDE inventory system.

 

17 weeks (120Days)

Neal West

 

Inventory Costing services

 

Gateway will be responsible for establishing and maintaining standard cost for
all parts process on JDE. For parts source solely in support of products
transitioned to Mozart these cost will be provided by Mozart. For common parts
Gateway will use the current process for establishing Standard cost. See
Assumption about Cost differences.

 

17 weeks (120 Days)

Neal West

 

Inventory finance product data management service

 

Gateway will be responsible for establishing and maintaining Product data
management information related to proper accounting to products being sold by or
supported by Mozart (includes Finance agile approval and set up).

 

17 weeks (120 Days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Neal West

 

Sales and use tax services

 

Mozart will file and report Sales tax associated all orders fulfilled on Mozart
behalf

 

17 weeks (120 Days)

Neal West

 

Credit card transaction support

 

Assuming Gateway can process payment from credit card companies for companies
other than Gateway related companies, Gateway will act as a Collection agent on
this revenue associated with both Gateway and Mozart orders. The following day
any collection of credit card payment made to Gateway on behalf of Mozart will
be transfer via a wire payment to Mozart’s bank account.

 

17 weeks (120 days)

Neal West

 

Lockbox services

 

Since the order are to be processed under the existing Gateway company the
Collection of funds related to these orders will be made by Mozart resources and
on a daily basis (the previous day’s applications of cash to Mozart order (order
fulfilled after Day 0) will be process over to Mozart

 

17 weeks (120 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Neal West

 

Vendor returns services

 

New and Used — where possible Gateway will drive Mozart to serve as the Return
to Vendor. However if Mozart does not have a relation ship with a given OEM
Gateway we receive the Goods from Mozart and process these RTV submit the result
of the RTV process to Mozart.

 

17 weeks (120 days)

Neal West

 

Service Billing reconciliation and Bill forward

 

Resources responsible for this function will transition to Mozart as a result
this will not be a transition service from Gateway

 

None

Neal West

 

Internal audit

 

Mozart to provide their our resources to support any Internal or external Audit
requirements

 

None

Neal West

 

Contract /Customer compliance

 

Mozart will be getting resources that Address these requirements and as a result
Gateway will not be providing this as a Transition Service

 

None

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Neal West

 

Office service

 

Gateway assumes that resources on the ground on Day 1 will continue to utilize
Gateway office services for the period of time identified here.

 

17 weeks (120 days)

Neal West

 

Data Retention (Day 1 and Forward)

 

Gateway assumes that resources on the ground on Day 1 will utilize Gateway data
retention resources for the period of time identified here.

 

17 weeks (120 days)

Neal West

 

Data Retention (History)

 

We will provide historical required Doc over the next several months

 

None

Neal West

 

General Ledger

 

Gateway will provide resources to produce monthly Financial transactions
Information on a monthly basis.

 

17 weeks (120 Days)

Neal West

 

Transportation billing

 

Gateway will continue to receive all billing for transportation. Subsequently
allocate will be based on the shipment in associated with Mozart defined in the
billing detail

 

17 weeks (120 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

CC & S

 

 

 

 

 

 

Cherie Brinkerhoff

 

Warranty obligation transfer

 

Provide list of install base customers, service entitlements for in warranty and
lifetime support obligations

 

2 weeks (14 days)

Cherie Brinkerhoff

 

Buy Sell of inventory from Mozart to/from Gateway warehouse

 

Buy & sell services of inventory to/from Mozart warehouse during inventory
planning & forecasting development, to help build inventory accuracy from first
phase of inventory transfer

 

14 weeks (92 days)

Cherie Brinkerhoff

 

Service Depot Customer & invoice

 

Manage service depot transactions during phase I until integration to separate
Mozart from Gateway dispatches is complete

 

17 weeks (120 days)

Cherie Brinkerhoff

 

COA management

 

COA management

 

4 weeks (30 day)

Cherie Brinkerhoff

 

Call Routing Services (call management)

 

Tuvox call routing, telecom management services, TNT transfer of live calls that
mis-route, serial # logic management

 

10 weeks (70 days)

Cherie Brinkerhoff

 

Onsite Dispatch

 

Onsite dispatch service – dispatch onsite services

 

0 weeks

Cherie Brinkerhoff

 

Order Entry

 

Manage order exceptions that fail to integrate from Siebel to JDE, manage order
kickbacks from

 

0 weeks

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

 

 

 

 

JDE/Siebel due to order entry mistakes from tech agent

 

 

Cherie Brinkerhoff

 

Service Dispatch

 

Manage service depot repair exception issues, out of warranty billing, WIP
management

 

0 weeks

Cherie Brinkerhoff

 

Manual Order flip of orders to Mozart Warehouse (for rpl fulfillment)

 

Manually flip orders to be filled out of Mozart Warehouse until all assets
transitioned

 

17 weeks (120 days)

Cherie Brinkerhoff

 

NEW Claims processing

 

Reconcile claims weekly for NEW processing

 

0 weeks

Cherie Brinkerhoff

 

Invoice reconciliation

 

A. Vendors where Mozart establishes direct bill relationship
B. Vendors where Mozart will not establish a relationship but provide service,
GTW will bill through

 

A. 8 weeks (60 days)

B. 17 weeks (120 days)

Cherie Brinkerhoff

 

Contact forecasting

 

Forecasting estimated number of voice & support events to meet contract
requirements with partners for staffing requirements

 

6 weeks (42 days)

Cherie Brinkerhoff

 

Inventory Forecasting

 

Forecasting inventory requirements for warranty support

 

8 weeks (56 days)

Cherie Brinkerhoff

 

Procurement of inventory

 

Procurement of inventory & knowledge transfer

 

10 weeks (70 days)

Cherie Brinkerhoff

 

IBM Parts forecasting & Parts management

 

Parts forecasting for central and forward stock locations to support 2 & 4 hour

 

0 weeks

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Cherie Brinkerhoff

 

Service Readiness for products in pipeline to be launched

 

Service planning, SBOM setup, other readiness functions

 

0 weeks

Cherie Brinkerhoff

 

Training & content management

 

Ongoing weekly training development and management

 

4 weeks (30 day)

James Vick

 

Customer Satisfaction Surveys

 

Ongoing surveys conducted by 3rd party on customer satisfaction

 

0 weeks

James Vick

 

GRIT Management

 

Receiving exceptions processing of orders – issues where orders cant be received
due to partial orders, incorrect items, system issues, etc

 

0 weeks

Cherie Brinkerhoff

 

Substitution Tables

 

Management parts substitution for parts issues/out of stock subs

 

0 weeks

Cherie Brinkerhoff

 

Gateway.com eSupport routing development

 

Development to route email & chats to Mozart

 

0 weeks

Cherie Brinkerhoff

 

Email & chat support

 

Continue email & chat support via outsourcing bill back

 

0 weeks

Cherie Brinkerhoff

 

Reporting & data analysis

 

Provide PRO reporting

 

0 weeks

Cherie Brinkerhoff

 

Physical Inventory Audit/management

 

Physical inventory of inventory transition

 

8 weeks (60 days)

Cherie Brinkerhoff

 

ERT

 

Provide Executive Routing Team escalation services

 

2 weeks (14 days)

James Vick

 

RTV

 

Provide RTV management services

 

4 weeks (30 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Products

 

 

 

 

 

 

Gary Elsasser
Dennis Stone

 

Product roadmap support

 

Supply current product planning roadmaps and product PORs

 

4 weeks (30 days)

Gary Elsasser
Dennis Stone

 

Microsoft waiver requirements (reporting, etc.)

 

Outline of existing S/W agreements.

 

2 weeks (14 days)

Gary Elsasser
Dennis Stone

 

Software imaging knowledge transfer

 

Outline of S/W Imaging tools and deployment method.

 

17 weeks (120 days)

Gary Elsasser
Dennis Stone

 

Software imaging support

 

Assist in issue resolution with respect to Image deployment.

 

17 weeks (120 days)

Gary Elsasser
Dennis Stone

 

Maintain the list of products being licensed

 

Outline of licensed products

 

2 weeks (14 days)

Gary Elsasser
Dennis Stone

 

Sustaining engineering services

 

Access to existing knowledge base and ongoing issue resolution

 

17 weeks (120 days)

Gary Elsasser
Dennis Stone

 

Documentation

 

Needed documentation

 

2 weeks (14 days)

Gary Elsasser
Dennis Stone

 

Display and Mobile

 

Engineering  Knowledge transfer and continued support of the qualification
process (specific to displays and mobiles)

 

17 weeks (14 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Segment Mkt.

 

 

 

 

 

 

Jeff Hodges

 

Forecasting

 

•   Develop PRO ongoing demand plan (weekly basis) and pass to supply planning

•    Train Mozart representatives on processes and tools used in demand planning

 

6 weeks (42 days)

Jeff Hodges

 

Pricing and Configuration

 

•   Manage PRO new product and feature launch “assumptions” and changes to
existing offerings

•   Interface with forecasting team to provide intelligence driving the forecast

•    Maintain pricing models and configuration / promotion roadmaps.

 

12 weeks (90 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Jeff Hodges

 

Segment Marketing

 

•    Transition specific segment marketing initiatives and activities to
Mozart’s marketing team.

•    Small Business

•    CCP

•    1-to-1 Computing

 

2 weeks (14 days)

Jeff Hodges

 

Analytics

 

•    Continue driving daily / weekly mgt. reporting / metrics

•    Support forecasting team in big deal pipeline mgt. and forecasting

•    Transition BI relationships to Mozart

 

8 weeks (60 days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Facilities Support Services

 

 

 

 

 

 

Garry Jaquess
Lazane Smith

 

Facilities Build-out Project Management

 

Gateway will plan and manage the initial facilities build-out.

 

17 weeks (120 days)

Garry Jaquess
Lazane Smith

 

Facilities access

 

Gateway will maintain the physical security system for the Argentina building
location. Additional requests for access will be approved by on-site Mozart
management and submitted to the Gateway security manager for approval and
implementation.

 

17 weeks (120 days)

Garry Jaquess
Lazane Smith

 

Maintenance services

 

Gateway will continue to provide the current level of maintenance services to
the physical plant until MPC relocates to the Argentina building.  At that
point, MPC will handle this service directly.

 

12 weeks (90 days)

Garry Jaquess
Lazane Smith

 

Custodial services

 

Gateway will continue to provide the current level of custodial services to the
physical plant

 

8 weeks (60 days)

Garry Jaquess
Lazane Smith

 

Initial move of transitioned employees, furniture and equipment

 

Gateway will move the transitioned employees to the designated locations in the
Argentina facility.

 

17 weeks (120 days)

Garry Jaquess

 

Employee physical

 

On an on-going basis Gateway

 

12 weeks (90

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Lazane Smith

 

moves

 

will perform physical moves & changes for the Argentina employees’ furniture &
equip until MPC has completely relocated to the Argentina building.  At that
point, MPC will handle this service directly.

 

days)

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Human Resource Services

 

 

 

 

 

 

Anitta Spenner
Lazane Smith

 

HR

 

Requests for research, reporting, issues resolution and/or other HR Services
that may be required to support MPC in a successful transition

 

6 weeks (42 days)

Covering 2 payroll cycles

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

Marketing Communications & Training

 

 

 

 

 

 

John Carson

 

Advertising & Media

 

Program training & knowledge transfer Assumption: No Advertising & Media
personnel will transfer to Mozart We will train on all key facets of Pro demand
generation:

•    Variable Demand Generation (operations)

•    Budgeting, Planning

•   Sales/Campaign Synchronization

•    ROI expectations

•    Variable Demand Generation (vehicles)

•    e-Mail, Direct Mail, Search, Banner, Affiliates, Print, Catalogs

•    Fixed Demand Generation (not including CRM)

•    Vendors (expectations & contract status)

•    CRM (transition of CMDB)

•    Required Resources & Processes

•    Database Management (Do Not Email process, CAN/Spam)

 

2 weeks (14 days)

John Carson

 

Sales Communications

 

Program training & knowledge transfer Assumption: the NSC Sales Communications
person (Jonathan Jansen) will become part of Mozart
We will train on the goals and process of managing all sales communications to
both the inside and field sales people:

•    Monthly Calendar

•    Types and Content

•    Schedule and approval process

 

0 weeks

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

John Carson

 

CRM

 

Program training & knowledge transfer Assumption: No CRM personnel will transfer
to Mozart
We will train on the CRM Partners and Processes

•    Transition of Pro Customers from CMDB

•    Required Resources (internal and 3rd party)

•    Database Management (Do Not Email process, CAN/Spam)

 

0 weeks

John Carson

 

Trade Shows

 

Program training & knowledge transfer Assumption: Our NSC Trade Show personnel
will transfer to Mozart
The Senior Manager, Trade Shows will train on all aspects of budgeting,
planning, execution, lead tracking and ROI.

 

0 weeks

John Carson

 

Public Relations

 

Program training & knowledge transfer Assumption: No PR personnel will transfer
to Mozart
We will train on all key facets of our Pro PR program:

•    PC Technology Enthusiasts, business press, major newspapers, second-tier
newspapers, wire services, online & columnists, TV (via tours), radio,
freelancers and contributors.

 

1 weeks (7 days)

John Carson

 

Branding

 

Program training & knowledge transfer Assumption: No Branding personnel will
transfer to Mozart
No training required.

 

0 weeks

John Carson

 

Messaging

 

Program training & knowledge transfer Assumption: No Messaging personnel will
transfer to Mozart
We will provide training on the creation and usage of our “Whys” messaging,
including product/solutions message guides, the Whys PowerPoint presentations
(for NDA prior to announcements, and training), and the connection with
marketing, PR and all customer and sales communications.

 

0 weeks

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

John Carson

 

Product Training

 

Program training & knowledge transfer Assumption: our NSC Training team will
take primary responsibility for Product Training (no Irvine Product Training
personnel will transfer to Mozart)
We will provide training on the process and components of product training (see
sales tools below). We will describe our product and solutions training
processes and timing.

 

0 weeks

John Carson

 

3rd Party Training

 

Program training & knowledge transfer Assumption: our NSC Training team will
take primary responsibility for 3rd Party Training & Coordination
We will provide an overview of our coordination and management of Intel,
Microsoft, Hitachi, Epson and other vendor training.

 

0 weeks

John Carson

 

Sales Tools

 

Program training & knowledge transfer Assumption: our Irvine Sales Tools &
Training team will not transfer to Mozart
We will provide training on all tools, starting with the Symphony Sales tool
(how it’s organized, update process and schedule, etc.) and including
collateral, and ROI calculators.

 

1 week (7 days)

John Carson

 

Skills & Solutions training

 

Tools training & knowledge transfer Assumption: our NSC Training team will
transfer to Mozart and manage this training
We will train on the Skills Training (prospect qualification, presenting skills,
objection handling, negotiating, etc), and on our process of Solutions Training.

 

0 weeks

 

--------------------------------------------------------------------------------

 

Organization

 

Function

 

Scope of Service

 

Time Period

John Carson

 

Market readiness

 

Program training & knowledge transfer Assumption: No Market Readiness personnel
will transfer to Mozart
We will train on the Market Readiness process we’ve adopted to track all
activities that need to occur during the product development process (master
process steps, red/yellow/green spec process, tracking and reporting, engagement
with development and OEM partners for all dependent components, etc.).

 

0 weeks

John Carson

 

Event Marketing

 

Program training & knowledge transfer We will train on the customer advisory
board and EBC processes and programs.

 

2 weeks (14 days)

John Carson

 

MDF

 

Third Party Funding

 

2 weeks (14 days)

 

--------------------------------------------------------------------------------