Document:

Exhibit 10.04

 

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT 10.04

AMENDED AND RESTATED SERVICES AGREEMENT

         THIS AMENDED AND RESTATED SERVICES AGREEMENT (“Agreement”) is effective as
of September 11, 2001 (the “Effective Date”) by and between Intuit Inc., a
Delaware corporation, with offices at 2535 Garcia Avenue, Mountain View, CA
94043 (“Intuit”), and Ingram Micro Inc., a Delaware corporation, with principal
offices located at 1600 East St. Andrew Place, Santa Ana, California 92705
(“Vendor”).

Preamble

         Vendor and Intuit are parties to a Services Agreement (“Initial
Agreement”) pursuant to which Vendor agreed to provide Intuit with certain
services, including inventory management, order management and related
services. Vendor and Intuit now seek to amend and restate the Initial
Agreement in its entirety in accordance with the terms and conditions set forth
in this Agreement.

NOW THEREFORE, for good and valuable consideration received and to be received
by Vendor, Vendor and Intuit agree as follows:

Terms and Conditions

1.     Definitions. For purposes of this Agreement, the following terms shall have
the definitions set forth in this Section 1:

(a)  “Annualized Inventory Turn” shall refer to the number calculated by
dividing Ingram’s gross monthly shipments of Current Products (as defined
herein) by the average daily number of Current Products held by Vendor during
such month, and then multiplying the quotient by twelve (12).

(b)  “Business Day” shall mean Monday through Friday, excluding New Year’s Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day,
or in the event any of these holidays fall on a Saturday or Sunday, the day on
which the holidays observed.

(c)  “Current Products” shall mean the products in the Inventory that, at the
time the Annualized Inventory Turns are being calculated, are being offered to
Customers and shall exclude Promotional Products (as defined herein).

(d)  “Customers” shall mean Intuit’s customers.

(e)  “Intuit” shall mean Intuit and any other Intuit affiliate with respect to
which Intuit (i) owns fifty percent (50%) or more of the outstanding stock or
other equity interests, or otherwise directs the day to day management of
through a written management agreement (including, but not limited to,
apps.com, Inc., Boston Light Software Corp., Computing Resources, Inc.,
EmployeeMatters, Inc. d/b/a QuickBooks Employee, Lacerte Software Corporation,
Quicken Loans Inc., and Turning Mill Software, Inc.), and

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

(ii)  identifies in a written notice given to Vendor (provided that in the event
that the addition of such Intuit affiliate results in a material change with
respect to the cost of the Services to be provided hereunder, then such
addition shall be considered a request for a change in the scope of services
subject to Section 3(c)). With respect to the Intuit affiliates specifically
referenced in this Section 1(d), by execution of this Agreement, Vendor
acknowledges receipt of written notice that such affiliates are included in the
definition of Intuit.

(f)  “Intuit Supplier” shall mean manufacturers or other producers or
distributors of Inventory from which Vendor may be required to arrange for the
transportation and delivery of such Inventory to the Facilities or Customers.

(g)  “Inventory” shall mean product inventory acquired or owned by Intuit that
is made available to Vendor for storage and order processing under the terms of
this Agreement.

(h)  “Non-Current Products” shall mean all Intuit products in the Inventory
that, at the time the Annualized Inventory Turns are being calculated, are no
longer being offered to Customers.

(i)  “Promotional Products” shall mean non-standard Intuit products in the
Inventory that are intended to be distributed on a promotional basis (e.g., 90
day trials distributed in CD sleeves).

(j)  “Services” shall mean the inventory management, order management and
related services described in Section 3, Exhibit A and the Statement of Work
(as defined herein).

2.     Independent Contractor. In accordance with the mutual intentions of Intuit
and Vendor, this Agreement establishes between them an independent contractor
relationship, and all of the terms and conditions of this Agreement shall be
interpreted in light of that relationship. The parties do not intend to create
a partnership or employment relationship between Intuit and Vendor, and nothing
in this Agreement shall be construed to create such a relationship between the
parties.

3.     Services.

(a)  The Services and Service Level Requirements. Vendor agrees to perform, on
behalf of Intuit, the Services set forth in Exhibit A as such Services are more
fully described in a separate statement of work agreement as may be negotiated
between the parties from time to time (the “Statement of Work”). All such
Services shall be performed in the manner described herein and in accordance
with the fee schedule attached hereto as Exhibit B and the service level
requirements set forth in Exhibit C and the Statement of Work. Vendor agrees
to begin performing the Services as of September 10, 2001 (the “First Shipment
Date”), provided that Vendor shall perform

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any preparation necessary to be able to perform as of the First Shipment Date
during the period following the Effective Date and prior to the First Shipment
Date.

(b)  Changes to Scope of Services. Intuit may request in writing changes that
affect the scope of the Services to be performed hereunder. If the parties
mutually agree to such a change, then Vendor promptly shall notify Intuit if it
believes that the change should result in an adjustment in the fees to be paid
to Vendor for the Services. The parties shall then negotiate in good faith a
reasonable and equitable adjustment to the applicable fees and/or the Statement
of Work. Vendor shall continue to perform the Services pursuant to the
existing Statement of Work, and shall not be bound by any change requested by
Intuit, until such change has been agreed upon in writing by the parties.

(c)  Program Managers. Each party agrees that its principal point of contact
for all matters relating to the Services shall be its “Program Manager”
designated in the Statement of Work. Each party may designate an alternate
Program Manager by written notice to the other party, provided, however, that
each such party consults with the other party when selecting an alternate
Program Manager.

(d)  Personnel. During the Term, as more fully described in the Statement of
Work, Vendor shall dedicate a minimum of [*] full-time Vendor employees to
the provision of the Services. Vendor shall consult with Intuit regarding the
selection of and any material changes in the composition of the
managerial-level employees who are dedicated to the performance of the
Services.

(e)  Inventory. Vendor shall receive, store and process the Inventory in the
manner set forth in this Agreement and the Statement of Work. Vendor will use
and manage the Inventory only as necessary to perform the Services and as
directed by Intuit in writing. If Intuit authorizes Vendor to use other Intuit
materials in performing the Services, Vendor agrees to use such materials
solely in connection with the performance of the Services. In the event that
Vendor uses, distributes or otherwise disposes of the Inventory or other Intuit
materials, or permits any third party to use, distribute or otherwise dispose
of the Inventory or other Intuit materials other than as set forth in this
Agreement, the Statement of Work or authorized in writing by Intuit, then, in
addition to any other remedies that may be available to Intuit hereunder,
Vendor shall, upon written notice from Intuit (i) immediately cease such
unauthorized use, distribution or disposition, (ii) to the extent that any such
unauthorized use has the potential to result in a material loss or security
threat to Intuit, notify Intuit within three (3) Business Days of the results
of its investigation surrounding such circumstances, and (iii) within [*]
Business Days implement a plan that is reasonably certain to protect against
similar occurrences in the future. Vendor shall comply with all applicable
laws, rules and regulations with respect to the handling and disposition of the
Inventory, including, without limitation, all environmental and occupational
and employment laws, rules and regulations.

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

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(f)  Controls Against Theft. Vendor agrees to implement and maintain reasonable
controls against theft or misappropriation with respect to the Inventory and
any other Intuit materials under Vendor’s control. In fulfilling this
obligation, Vendor shall utilize controls that are at least equivalent to the
controls that it maintains for other similarly sensitive products or components
under its control, provided that such controls are at least comparable to the
prevailing standards used within the industry to control against theft or
misappropriation of inventory similar to the Inventory.

(g)  Cooperation. Vendor acknowledges and agrees that, in order to perform the
Services, it will be necessary for Vendor to work directly with Intuit’s
manufacturers and other third party service providers. Vendor agrees to
cooperate with such manufacturers and third party service providers, including,
without limitation, by managing shipments and returns and processing claims for
lost Inventory on behalf of Intuit.

4.     Shipping Costs; Facilities.

(a)  Shipping Costs. Vendor shall be solely responsible for arranging and
managing all transportation and shipping associated with the delivery of
Inventory to the Facilities (“Inbound Delivery”) as well as the delivery of the
Inventory from Vendor’s Facilities to Customers (“Outbound Delivery”) as stated
in the Statement of Work, including, without limitation, the selection and
management of carriers, and the processing of all records and claims with
respect to such transportation. Notwithstanding the foregoing, (i) Intuit
shall have the right to direct Vendor to refrain from shipping Inventory with
carriers that have an unacceptably high number of delays or other performance
deficiencies, and (ii) Vendor agrees to utilize such carriers and following
such shipping instructions as may be directed by Customers that have their own
transportation requirements. Intuit shall be responsible for all shipping
costs associated with Inbound Inventory. All shipping costs for Outbound
Delivery shall be based on Vendor’s freight rate schedule then in effect, the
current version of which is set forth in Exhibit B. In the event of a change
in a carrier’s freight rates or discounts offered to Vendor, Vendor may change
the freight rate schedule by notifying Intuit not less than thirty (30) days
prior to the effective date of the change. Intuit shall pay Vendor for
shipping costs in accordance with Section 7.

(b)  Facilities. Vendor shall use the facilities identified in the Statement of
Work when performing the Services (each a “Facility”). Vendor shall be fully
responsible for the maintenance and operation of each Facility, and shall bear
all costs and expenses associated with securing and maintaining the Facilities,
including, but not limited to, lease costs, improvements, insurance costs,
utilities, communication expenses, security and repair and maintenance costs.
Intuit or its agent shall have the right, upon reasonable advance notice, to
inspect the Facilities and the Inventory to verify Vendor’s compliance with
this Agreement and the Statement of Work; during any such inspection, Intuit
shall be entitled to count Inventory, monitor Vendor’s Inventory handling
procedures and review applicable bills of lading. Vendor may use other
Facilities to

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perform the Services; provided, however, that Vendor [*]. In the event that
the parties are unable, through such good faith negotiations, to agree within
forty-five (45) days following receipt of written notice of such closure on
appropriate pricing adjustments or other measures, then Intuit shall have the
right to terminate this Agreement and the Statement of Work without liability.

5.     Electronic Sharing of Information and Reporting.

(a)  Vendor shall ensure that its information management systems relating to the
Services (e.g., order processing and inventory management systems) provide the
electronic information that is required in the Statement of Work.

(b)  Vendor shall provide Intuit with a set of performance, utilization and
status reports as further described in the Statement of Work, which reports
shall be provided by Vendor to Intuit in accordance with the delivery
procedures and format(s) specified in the Statement of Work.

6.     Reviews.

[*]

(b)  Quarterly Reviews. Not less than twenty (20) days following the end of
each calendar quarter, designated team members from both parties will meet and
confer (via conference call, if necessary) to review the business and
performance during the past calendar quarter. These meetings (the “Quarterly
Reviews”) will include a performance review, continuous improvement projects,
and management status reviews, cost reduction initiatives and other operational
areas and issues. In connection with each Quarterly Review that occurs on or
after January 1, 2002, the parties shall gather the data and rate Vendor’s
performance in accordance with the a Quarterly Review form (the “Quarterly
Review Form”) that measures Vendor’s compliance with the service level
requirements set forth in Exhibit C. Such Quarterly Reviews may result in the
payment of additional compensation based on such performance ratings
(“Quarterly Review Payouts”). The maximum amount of such Quarterly Review
Payouts will be $[*] annually, and $[*] of such maximum amount will be
allocated to payouts that may be earned by Vendor based on Vendor’s performance
ratings relating to [*]. On or before January 1, 2002, the parties will
mutually agree upon (i) the content and format of the Quarterly Review Form,
(ii) the scoring process to be used for the Quarterly Review Form to determine
the amount (if any) of the Quarterly Review Payouts to be paid to Vendor, and
(iii) the allocation of the remaining $[*] of the maximum annual amount of
the Quarterly Review Payouts to the remaining areas (i.e., [*]) of Vendor’s
performance that are rated on the Quarterly Review Form and for which payouts
may be earned by Vendor.

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

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7.     Compensation and Payment.

(a)  Subject to the performance by Vendor of its obligations set forth in this
Agreement and the Statement of Work, and except as otherwise provided herein or
therein, Intuit will pay Vendor for the performance of the Services in the
amounts and in accordance with the schedule specified in Exhibit B. No
compensation shall be paid for services rendered by Vendor unless the Services
are set forth in the Statement of Work. Vendor shall invoice and Intuit shall
pay for the Services in accordance with this Section 7, [*], and (ii) comply
with the terms contained therein with regard to the payment and reporting
relating to the Services.

[*]

(c)  Vendor shall have the right, in accordance with the warehouse storage
rates set forth in Exhibit B, to charge Intuit for the warehouse storage of all
Non-Current Products and/or Promotional Products that are not shipped from
Vendor’s Facilities within ninety (90) days from the date such Non-Current
and/or Promotional Products arrive at Vendor’s Facilities.

(d)  Intuit shall pay Vendor a one-time fee of [*] dollars ($[*]) for fixed
costs associated with Vendor’s preparations to provide the Services. In no
event shall Intuit be responsible for the payment of any additional fixed costs
incurred during the period between the Effective Date and the First Shipment
Date (regardless of whether such First Shipment Date occurs on the date set
forth in the Statement of Work or at sometime thereafter, as mutually agreed
upon by the parties). Following the First Shipment Date, Vendor will submit
monthly invoices for the fixed costs outlined in Exhibit B. Vendor will submit
separate [*] invoices for (i) freight costs incurred for shipping Inventory
to Customers, (ii) supply costs, and (iii) variable costs; each such invoice
shall set forth, in reasonable detail, descriptions of the costs incurred
during the preceding week, the calculation of the costs related thereto, prior
approved disbursements or out-of-pocket expenses then due (if any), and such
other information as may be reasonably requested by Intuit. Vendor shall
invoice Intuit for travel expenses in accordance with Intuit’s then-current
reimbursable expenses guidelines. Vendor will send all invoices to Intuit Inc.,
Accounts Payable, M.S. 247, P. O. Box 391296 Mountain View, CA 94039-1296, or
to such other address as Intuit may designate from time to time. All invoices
must reference the number and date of this Agreement.

(e)  Except as otherwise provided in this Agreement, all undisputed payments
will be made by Intuit within forty-five (45) days after receipt of the
applicable invoice, and shall be sent to Vendor at its address specified in the
invoice. In the event that Intuit disputes any invoice rendered or amount
paid, Intuit promptly will notify Vendor in writing and the parties shall work
together to resolve such dispute expeditiously, provided that the time for
payment of the disputed amount on the invoice shall be extended until
resolution of the dispute.

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

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(f)  Vendor shall separately detail in each invoice provided under this
Agreement any applicable taxes for goods or services, and shall separately
enumerate each category of taxes that Intuit may be required to pay Vendor in
connection with the performance of the Services (e.g., sales, use, etc.).
Vendor will be responsible and shall pay any taxes based on Vendor’s net
income. Vendor will reimburse and indemnify Intuit for any such taxes and
contributions and interest and penalties that Intuit may be compelled to pay on
account of Vendor’s non-payment of such taxes.

(g)  Vendor agrees that the Inventory and any other Intuit materials provided by
Intuit hereunder shall remain the property of Intuit. Vendor shall at all
times hold the Inventory and any other Intuit materials free and clear of all
liens, claims, and encumbrances, except such liens, claims and encumbrances of
third parties that are unrelated to the Services, Vendor or its employees and
contractors.

(h)  Vendor will maintain complete and accurate records relating to any fees and
payments charged or made in connection with the Services provided under this
Agreement. Up to a maximum of two times in any calendar year, Intuit may audit
the books, systems, processes and records of Vendor relating to Vendor’s
fulfillment of its obligations under this Agreement at Intuit’s expense during
normal business hours. Such audit shall be for the purpose of assuring that
the Vendor’s performance is in accordance with its obligations under this
Agreement and the Statement of Work. Each audit will be conducted in a manner
designed to minimize disruption to Vendor’s normal business and shall be
conducted on a non-look back basis, i.e. periods to be audited shall exclude
periods already audited. In the event Intuit discovers a performance
deficiency during an audit, Intuit’s remedy will be as follows: (i) Intuit
shall notify Vendor in writing of the deficiency within fourteen (14) days of
discovery; and (ii) Vendor will have ten (10) days after receipt of such notice
to prepare a plan to correct the deficiency, and twenty (20) days after receipt
of such notice to complete correction of the deficiency. Notwithstanding
anything to the contrary contained herein, Intuit retains the right to pursue
any and all remedies available to Intuit under this Agreement, including, but
not limited to, the right to terminate this Agreement under Section 8(b) and
any remedies available to Intuit under law or equity.

8.     Term/ Termination.

(a)  Unless otherwise terminated in accordance with this Agreement, the term of
this Agreement shall begin on the Effective Date and will continue for a period
of three (3) year(s) after the Effective Date (the “Term”). Vendor shall begin
and complete the Services on the dates specified in the Statement of Work.

(b)  Either party may terminate this Agreement (i) due to a material breach of
this Agreement or the Statement of Work by the other party if such material
breach remains uncured for a period of thirty (30) days following receipt of
written notice by the breaching party; and (ii) by giving (30) days’ written
notice to the other party in the event

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of: (A) any sale or transfer of all or substantially all of such other party’s
assets; or (B) any acquisition of a controlling interest in such other party’s
voting stock.

(c)  Intuit reserves the right to terminate this Agreement if Vendor fails to
comply with any of the performance requirements set forth in the Service Level
Attachment, attached hereto as Exhibit C. The termination right granted to
Intuit under this Section 8(c) shall not limit or prevent Intuit from
terminating this Agreement for any other basis permitted under this Agreement.
In addition, the rights and remedies set forth in this Section are in addition
to the corrective actions and specific remedies set forth in the Exhibit C,
which shall be cumulative. Intuit’s right to terminate pursuant to this
Section 8(c) shall be subject to the following procedure:

         (i)  Intuit may notify Vendor in writing of any performance deficiencies
within fourteen (14) days of receipt of the monthly report regarding
performance. Vendor will have ten (10) days after receipt of such notice to
prepare a plan to correct the deficiency, and twenty (20) days after receipt of
such notice to complete correction of the deficiency.

         (ii)  Intuit will have the option to terminate this Agreement if (i) Intuit
gives more than one (1) notice of deficiency relating to substantially the same
performance level requirement set forth in Exhibit C within any twelve (12)
month period during the Term, (ii) Vendor fails to prepare a plan to correct a
deficiency within ten (10) days or to fully implement a correction to a
deficiency within twenty (20) days of receipt of any notice of deficiency, or
(iii) Intuit issues three (3) or more notices of deficiency during any
consecutive eighteen (18) month period (regardless of whether such notices
relate to the same or different performance level requirements). Intuit’s
termination right under this Section 8(c) may be exercised upon thirty (30)
calendar days from the date of such notice, and Vendor shall have no further
right to cure any such deficiency.

(d)  Either party may terminate this Agreement for convenience, without cause,
upon at least one hundred eighty (180) days’ prior written notice to the other
party.

(e)  In the event of an early termination of this Agreement, Intuit shall
compensate Vendor for the Services provided on or before the effective date of
the termination and shall compensate Vendor for any approved disbursements and
out-of-pocket expenses reasonably incurred by Vendor in connection with this
Agreement. Upon termination or expiration of this Agreement, or at any prior
time upon the request of Intuit, Vendor will promptly deliver to Intuit or its
designee, all Inventory in its possession and all Confidential Information and
Materials (as hereinafter defined) Vendor agrees not to retain any copies of
Confidential Information or Materials after the termination or expiration of
this Agreement. All Inventory shall be returned in substantially the same
condition as it was received by Vendor. Notwithstanding the foregoing, if
Intuit or Vendor terminates this Agreement in accordance with Section 8, Intuit
shall be responsible for the costs of removing the Inventory and delivering it
to a new location.

(f)  Prior to the effective date of the termination or expiration of this
Agreement, Vendor and Intuit shall develop a mutually acceptable plan to permit
Intuit to transition

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the Services in a seamless manner to a succeeding service provider. Vendor
agrees to provide reasonable assistance to Intuit in the provision any
transition assistance, including, but not limited to, relocation of Inventory,
employment of full-time staffing necessary for management of the Inventory
transition plan, technical assistance in transitioning and integrating existing
databases and information technology systems with alternative solutions,
assistance in transitioning to alternative transportation providers, managing
Customer service responsibilities transition including returns processing, and
providing a dedicated program manager for a period of thirty (30) days
following the relocation of the Inventory.

(g)  The provisions of Sections 7, 8(e), 8(f), 8(g), 11, 12, 13, 14, 15, 16 and
18 as well as corresponding provisions of any of the Exhibits, will survive any
termination or expiration of this Agreement.

9.     Business Continuity.

(a)  Vendor shall (i) be responsible for business continuity of operations
within the scope of the Services being provided; (ii) within thirty (30) days
after the Effective Date, submit to Intuit for approval a business continuity
plan in a mutually agreed upon format; and (iii) update the business continuity
plan, subject to Intuit’s approval, to reflect changes in technology and
industry standards on an annual basis.

(b)  Vendor shall provide Intuit reasonable assistance in Intuit’s assessment of
Intuit’s business continuity requirements and provide, for Intuit’s approval, a
set of alternatives for the development of a viable Intuit business continuity
program, and the estimated fees associated with each alternative.

(c)  Vendor shall immediately provide Intuit with a notice of a disaster and,
upon the occurrence of a disaster at a site at which Vendor performs all or
part of the Services, use best efforts to implement the business continuity
plan for such site.

(d)  Vendor shall use its best efforts to restore the Services immediately, but
in any event within the period of time set forth in the business continuity
plan approved by Intuit. In the event of a disaster, Vendor shall not charge
Intuit any fees in excess of the fees set forth in Exhibit B for Vendor to
perform the actions outlined in the mutually agreed upon business continuity
plan. Whenever a force majeure or a disaster causes Vendor to allocate limited
resources between or among Vendor’s customers, Intuit shall receive no less
priority in respect to such allocation than any of Vendor’s other customers.

10.     Preferred Logistics Provider. Subject to the performance by Vendor of its
obligations hereunder, Intuit agrees that Vendor shall be Intuit’s preferred
logistics provider throughout the Term such that if Intuit, including any of
its business units, desires to outsource any freight and shipping management,
inventory logistics or similar order fulfillment requirements, Intuit will
advise Vendor of the opportunity (with at least as much notice as it provides
other potential service providers) and permit Vendor to

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present a proposal to perform such services. In the event that Vendor proposes
to perform the requested services at the same fee and terms (or better) as
other potential service providers, Intuit agrees that it will utilize Vendor
with respect to such services. Notwithstanding the foregoing, neither Intuit
nor any of its business units shall be required to provide Vendor with the
opportunity to make a proposal with respect to freight, shipping, inventory
logistics or similar fulfillment requirements where (i) Intuit obtains such
services together with other services, or (ii) such services are de minimus
and/or Intuit elects not to engage in a competitive bidding process with
respect to such services.

11.     Ownership. As between the parties, each party shall retain all right,
title and interest (including copyright and other proprietary or intellectual
property rights), in its respective trademarks, service marks, trade names,
logos, technical notes, technical documentation, scripts, software
documentation, training materials, Confidential Information (as defined herein)
and any other materials supplied by one party to the other or acquired by one
party, on the other’s behalf, under this Agreement, and all legally protectable
elements, derivative works, modifications and enhancements thereto (the
“Materials”). Nothing in this Agreement shall effect a transfer of copyright
rights from either party to the other. Intuit shall retain all right title and
interest in the Inventory, including without limitation, any software therein.

12.     Confidential Information.

(a)  For the purposes of this Agreement, “Confidential Information” means the
existence and terms and conditions of this Agreement, and all non-public
information about the disclosing party’s (or its suppliers’) business or
activities that is proprietary and confidential, which shall include all
business, financial, technical and other information of either party, whether
or not it is marked or designated by such party as “confidential or
“proprietary” at the time of disclosure. Confidential Information will not
include information that: (i) is in or enters the public domain without breach
of this Agreement; (ii) the receiving party lawfully receives from a third
party without restriction on disclosure and without breach of a nondisclosure
obligation; (iii) the receiving party rightfully knew prior to receiving such
information from the disclosing party; or (iv) the receiving party develops
independent of any information originating from the disclosing party.

(b)  Each party agrees that: (i) it will not disclose to any third party any
Confidential Information disclosed to it by the other party except as expressly
permitted in this Agreement; (ii) it will not use any Confidential Information
disclosed to it by the other party except as necessary to perform its
obligations under this Agreement; and (iii) it will take all reasonable
measures to maintain the confidentiality of all Confidential Information of the
other party in its possession or control, which will in no event be less than
the measures it uses to maintain the confidentiality of its own information of
similar importance. Notwithstanding the foregoing, each party may disclose
Confidential Information to the extent required by a court of competent
jurisdiction or other governmental authority or otherwise as required by law,
provided that such party uses reasonable efforts to request confidential
treatment or a protective order before such

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disclosure; or on a “need-to-know” basis under an obligation of confidentiality
to its legal counsel and accountants.

(c)  Each party acknowledges and agrees that its breach of the provisions under
this Section 12 will result in irreparable harm to Intuit and that Intuit will
have the right to enforce this Agreement and any of its provisions by
injunction, specific performance and/or other equitable relief without
prejudice to any other rights and remedies that Intuit may have.

(d)  Nothing in this Agreement shall relieve any party of any of its obligations
under any separate non-disclosure agreement between the parties, including any
obligation with respect to procedures for handling customer data or other
similarly sensitive information. Vendor agrees to comply with the Security
Requirements agreement as in effect from time to time (the current version of
which is attached as Exhibit F); provided that Vendor will not be obligated to
comply with any changes to the Security Requirements unless Intuit provides
Vendor with written notice of such changes. References in Exhibit F to
“Company” shall be deemed to refer to Vendor.

(e)  All Customer information provided by Intuit to Vendor, or obtained by
Vendor from the Customers during the course of performing the Services on
Intuit’s behalf (“Customer Information”), including, without limitation, name,
phone number, e-mail address, delivery address, company name and billing
address, shall be considered Confidential Information for purposes of this
Agreement, unless the Customer Information falls within in one of the
exceptions stated in Section 12(a). Vendor agrees that, except to the extent
necessary to fulfill its obligations hereunder, it will not use any Customer
Information for any purpose.

13.     Representations and Warranties.

(a)  Each party to this Agreement represents and warrants that: (i) it is a
corporation duly incorporated, validly existing and in good standing; (ii) it
has all requisite corporate power and authority to execute, deliver and perform
its obligations hereunder; (iii) it is duly licensed, authorized or qualified
to do business and is in good standing in every jurisdiction in which a
license, authorization or qualification is required for the ownership or
leasing of its assets or the transaction of business of the character
transacted by it except when the failure to be so licensed, authorized or
qualified would not have a material, adverse effect on its ability to fulfill
its obligations hereunder; (iv) it shall comply with all laws and regulations
applicable to the performance of its obligations hereunder and shall obtain all
applicable permits and licenses required of it in connection with its
obligations hereunder; and (v) it is not a party to any agreement with a third
party, the performance of which is reasonably likely to affect adversely its
ability or the ability of the other party to perform fully its respective
obligations hereunder.

(b)  Vendor represents and warrants that any and all Services rendered under
this Agreement shall be performed by Vendor in accordance with the highest
standards of competence within Vendor’s industry. Vendor represents and
warrants that to the extent it must perform the Services under this Agreement at Intuit’s
facilities, it will do so

11

 

 in accordance with Intuit’s performance standards and
policies attached hereto as Exhibit G. Vendor shall notify Intuit in writing
in advance of Vendor’s desire to retain any subcontractors to support the
performance of the Services, but only in such instances when such
subcontractors shall be assisting Ingram in the performance of services solely
for Intuit. Intuit reserves the right, in its sole discretion, to disapprove
such retention. Any such delegation of Vendor’s duties to any subcontractor
approved by Intuit shall not relieve Vendor of its obligations under this
Agreement.

(c)  EXCEPT FOR THE EXPRESS WARRANTIES MADE OR REFERENCED IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE SUBJECT
MATTER OF THIS AGREEMENT, AND EACH PARTY HEREBY DISCLAIMS ANY AND ALL IMPLIED
WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.

14.     Indemnification.

(a)  Vendor agrees to defend, indemnify and hold Intuit and its affiliates, and
all of their respective officers, directors, agents and employees, harmless
from and against any and all claims, including liabilities, actions, judgments,
costs, and expenses and reasonable attorneys’ fees (collectively “Claims”),
asserted by a third party arising out of or related to: (i) any breach or
alleged breach of any of Vendor’s representations and warranties hereunder;
(ii) Vendor’s negligent acts, omissions and/or willful misconduct in supplying
the Services under this Agreement; (iii) any obligations imposed by law with
respect to any withholding taxes, social security, unemployment or disability
insurance, or similar items in connection with any payments made to Vendor for
the rendering of Services hereunder; (iv) any claim that the Services infringe
or violate any third party’s copyright, U.S. patent, trade secret, or
trademark, or other intellectual property right; or, (v) any actual, alleged or
contributory patent or copyright infringement, misappropriation of Confidential
Information, or violation of other intellectual or proprietary rights related
to the provision of the Services.

(b)  Intuit agrees to defend, indemnify and hold Vendor and its affiliates, and
all of their respective officers, directors, agents and employees, harmless
from and against any and all claims, including liabilities, actions, judgments,
costs, and expenses and reasonable attorneys’ fees, asserted by a third party
arising out of or related to: (i) any breach or alleged breach by Intuit of
any of Intuit’s representations and warranties hereunder; (ii) the negligent
acts, omissions and/or willful misconduct of Intuit in using the Services
provided under this Agreement; (iii) any claim that the Inventory infringes or
violates any third party’s copyright, U.S. patent, trade secret, or trademark,
or other intellectual property right, or (iv) any actual, alleged or
contributory patent or copyright infringement, misappropriation of Confidential
Information, or violation of other intellectual or proprietary rights related
to the Inventory.

(c)  The party seeking indemnification under Section 14(a) or 14(b), as the case
may be (the “Indemnified Party”), will give prompt written notice to the other
party (the

12

 

 “Indemnifying Party”). (The failure by an Indemnified Party to give
notice as provided, above, shall not relieve the Indemnifying Party of its
obligations under this Section 14(c), except to the extent that the failure
results in the failure of actual notice and the Indemnifying Party is damaged
as a result of the failure to give notice.) In addition, the Indemnified Party
will allow the Indemnifying Party to direct the defense and settlement of any
such claim, with counsel of the Indemnifying Party’s choosing, and will provide
the Indemnifying Party, at the Indemnifying Party’s expense, with information
and assistance that is reasonably necessary for the defense and settlement of
the claim. The Indemnified Party shall have the right to employ separate
counsel and to participate in (but not control) any such action, but the fees
and expenses of such counsel shall be at the expense of the Indemnified Party
unless: (i) the employment of counsel by the Indemnified Party has been
authorized by the Indemnifying Party; (ii) the Indemnified Party has been
advised by its counsel in writing that there is a conflict of interest between
the Indemnifying Party and the Indemnified Party in the conduct of the defense
of the action (in which case the Indemnifying Party shall not have the right to
direct the defense of the action on behalf of the Indemnified Party); or (iii)
the Indemnifying Party has not in fact employed counsel to assume the defense
of the action within a reasonable time following receipt of the notice given
pursuant to this Section 14(c), in each of which cases the fees and expenses of
such counsel shall be at the expense of the Indemnifying Party. An
Indemnifying Party shall not be liable for any settlement of an action effected
without its written consent (which consent shall not be unreasonably withheld),
nor shall an Indemnifying Party settle any such action without the written
consent of the Indemnified Party (which consent shall not be unreasonably
withheld). No Indemnifying Party will consent to the entry of any judgment or
enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to the Indemnified Party a
release from all liability with respect to the claim.

15.     Insurance. Vendor will, at Vendor’s expense, maintain insurance policies
that cover Vendor’s activities under this Agreement and the Statement of Work
and the activities of Vendor’s employees, agents, and representatives,
including, but not limited to, workers compensation insurance and comprehensive
general liability, errors and omissions liability and media liability with
minimum limits of insurance of $2 million per claim and $4 million annual
aggregate. Vendor will name Intuit as an additional insured on each such
policy. Upon the request of Intuit, Vendor shall provide Intuit with a
certificate of insurance evidencing such coverages.

16.     Limitation of Liability.

(a)  NEITHER VENDOR NOR INTUIT SHALL BE LIABLE TO THE OTHER PARTY, THE
CUSTOMERS, OR ANY OTHER PARTY FOR ANY LOSS, DAMAGE, OR INJURY WHICH RESULTS
FROM THE USE BY THE PARTY, A CUSTOMER, OR ANY OTHER PARTY OF INVENTORY
DELIVERED TO THE OTHER PARTY OR A CUSTOMER UNLESS THE LOSS OR DAMAGE RESULTS
DIRECTLY FROM THE
INTENTIONALLY TORTIOUS OR FRAUDULENT ACTS OR OMISSIONS OF VENDOR OR INTUIT, AS
THE CASE MAY BE.

13

 

(b)  IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY OTHER PARTY HERETO FOR ANY
INCIDENTAL, SPECIAL, INDIRECT, PUNITIVE AND/OR CONSEQUENTIAL DAMAGES, EVEN IF
THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING FROM OR
RELATED TO THE PERFORMANCE OR ANY FAILURE TO PERFORM ANY OF SUCH PARTY’S
OBLIGATIONS UNDER THIS AGREEMENT. THE FOREGOING LIMITATION OF LIABILITY SHALL
NOT APPLY TO LIMIT DAMAGE RECOVERY WHICH ARISES FROM OR IS RELATED TO (I) A
PARTY’S GROSS NEGLIGENCE IN THE PERFORMANCE OF OR THE FAILURE TO PERFORM SUCH
PARTY’S OBLIGATIONS HEREUNDER, OR (II) A PARTY’S BREACH OF ITS OBLIGATIONS
UNDER SECTION 12 OF THIS AGREEMENT. THE FOREGOING LIMITATION ON LIABILITY ALSO
SHALL NOT SERVE TO LIMIT (A) ANY PARTY’S RECOVERY FOR DIRECT DAMAGES FOR BREACH
OF THIS AGREEMENT OR ANY REMEDY SPECIFICALLY SET FORTH HEREIN, OR (B) EITHER
PARTY’S OBLIGATION UNDER SECTION 14 TO INDEMNIFY THE OTHER AGAINST CLAIMS MADE
BY THIRD PARTIES.

17.     Dispute Resolution. Except with respect to claims involving either party’s
intellectual property rights or the breach or anticipated breach of either
party’s obligations set forth in Section 12, each party agrees to submit in
writing any dispute arising out of or relating to this Agreement to mid-level
management representatives designated by each party, who will meet by
conference or otherwise in an effort to resolve such dispute within five (5)
days. If after the fifth day, such dispute cannot be resolved, then each
party’s respective Vice-President, or substantial equivalent, shall attempt to
resolve the dispute. In the event that the Vice Presidents are unable to
resolve any such dispute within twenty (20) days, the parties shall mutually
determine a date and location for a meeting between the senior management of
each party. Notwithstanding the foregoing, the parties agree, unless otherwise
agreed in writing, (i) to try to resolve any such dispute within thirty (30)
days after the commencement of any such dispute and (ii) to continue
performance of their additional obligations hereunder that are not the subject
of dispute during such period. Either party may bring an action in any court
of competent jurisdiction if, at the expiration of such thirty (30) day period,
the parties remain unable to resolve such dispute.

18.     General.

(a)  Press Releases. The parties may agree to issue joint press releases and
other appropriate announcements and presentations regarding the existence or
performance of this Agreement, the content and timing of which shall be
mutually agreed upon by the parties in writing. Notwithstanding the foregoing,
unless required by law, neither party will, without the prior written approval
of the other party, make any public statement, press release, presentation, or
other announcement relating to the terms, existence of or performance by either
party of its obligations under this Agreement.

(b)  Assignment. Neither party may assign this Agreement, in whole or in part,
without the other party’s prior written consent, which consent shall not be
unreasonably withheld or delayed. Any attempt by either party to assign this
Agreement other than as permitted above will be null and void. Subject to the
foregoing, this Agreement shall be

14

 

 binding upon and shall inure to the benefit
of both parties, their successors and permitted assigns.

(c)  Law and Jurisdiction. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to its
conflicts of laws principles. The parties hereby consent to the exclusive
jurisdiction and venue in the state and federal courts in either Orange County
or Santa Clara County, California.

(d)  Notice. Unless otherwise stated, all notices required under this Agreement
shall be in writing and shall be considered given (i) when delivered
personally; (ii) five (5) days after mailing, when sent certified mail, return
receipt requested and postage prepaid; (iii) one (1) business day after
dispatch, when sent via a commercial overnight carrier, fees prepaid; or (iv)
upon delivery when sent by facsimile transmission confirmed by telephone. All
communications will be addressed as follows (unless changed by notice):

	 	 	 
	To Vendor:

IM-Logistics

1600 East St. Andrew Place

Santa Ana, California 92705

Attn: Bryan Moynahan, Vice President

Phone: (714) 382-4808

Fax: (714) 566-7994	 	
with a copy to:

Ingram Micro Inc.

1600 East St. Andrew Place

Santa Ana, California 92705

Attn: General Counsel

Phone: (714) 382-2924

Fax:(714) 566-9370
	
	
	
	

	 	 	 
	
	
	
	

	To Intuit:

Intuit Inc.

2650 Casey Ave.

Mountain View, California 94043

Attn: David Foster

Director, Supply Chain Management

Phone: (650) 944-2889

Fax: (650) 944-3033	 	
with a copy to:

Intuit Inc.

2632 Marine Way

Mountain View, CA 94043

Attn: General Counsel, Legal Dept.
 

Phone:
(650) 944-6000

Fax: (650) 944-6622

(e)  Force Majeure. Except with respect to delays or failures caused by
the negligent act or omission of either party, any delay in or failure of
performance by either party under this Agreement will not be considered a
breach of this Agreement and will be excused to the extent caused by war, riot
or similar civil disturbance, concerted labor action, earthquake, or similar
acts of God, provided that the party affected by such event shall immediately
begin or resume performance as soon as practicable after the circumstances
giving rise to the event of force majeure have abated. Excusable delays do not
include lockout, shortage of labor, lack of or inability to obtain raw
materials, fuel or supplies or any other industrial disturbance. In no event
shall any occurrence of a force majeure event relieve Vendor of its obligations
under Section 9. In the event that Vendor is not able to fully resume
performance within thirty (30) days after the force majeure event has
commenced, Intuit shall have the right to terminate this Agreement and/or the
Statement of Work immediately upon written notice to Vendor.

15

 

(f)  Severability. If any provision of this Agreement is found illegal or
unenforceable, such provision will be deemed restated, in accordance with
applicable law, to reflect as nearly as possible the original intention of the
parties, and the remainder of the Agreement will continue in full force and
effect.

(g)  Entire Agreement. This Agreement, including any attachments, schedules or
exhibits attached hereto, is the complete and exclusive agreement between the
parties with respect to the subject matter hereof, superseding any prior
agreements and communications (both written and oral) regarding such subject
matter, including, but not limited to, the Initial Agreement. Notwithstanding
the foregoing, nothing in this Section 18(g) shall be deemed to supercede the
Statement of Work. This Agreement may only be modified, or any rights under it
waived, by a written document executed by both parties.

(h)  Waiver. The failure by either party to enforce any term or provision of
this Agreement will not be deemed a waiver of future enforcement by that party
of that or any other term or provision.

(i)  No Third Party Beneficiaries. This Agreement is intended for the sole and
exclusive benefit of the signatories and is not intended to benefit any third
party. Only the parties to this Agreement may enforce it.

(j)  Counterparts. This Agreement may be executed in counterparts, each of
shall constitute an original, and all of which shall constitute one agreement.

(k)  Headings. The headings in this Agreement are for convenience of reference
only and have no legal effect.

16

 

         IN WITNESS WHEREOF, the authorized representatives of the parties have
executed this Agreement as of the date of Effective Date.

	 	 	 	 	 	 	 
	Ingram Micro Inc.	 	INTUIT INC.
	 
	By:	 	
/s/ BRIAN C. MOYNAHAN
	 	By:
	 	/s/ KEN R. MUDGE
	
	
	
	

	Name:	 	
Brian C. Moynahan
	 	Name:
	 	Ken R. Mudge
	
	
	
	

	Title:	 	
VP/GM, Sales
	 	Title:
	 	VP Procurement & Operations

17

 

LIST OF EXHIBITS

	 	 	 
	EXHIBIT A	 	
DESCRIPTION OF SERVICES
	 
	EXHIBIT B	 	
PAYMENTS AND FEES
	 
	EXHIBIT C	 	
SERVICE LEVEL COMMITMENTS
	 
	EXHIBIT D	 	
[*]
	 
	EXHIBIT E	 	
[*]
	 
	EXHIBIT F	 	
INTUIT SECURITY REQUIREMENTS
	 
	EXHIBIT G	 	
PERFORMANCE STANDARDS AND POLICIES

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

18

 

Exhibit A

Description of Services

         The Services shall include, but not be limited to, the following services
(as those services are more fully described in the Statement of Work): (a)
information technology services, including, but not limited to, reporting
services relating to IML’s provision of information technology; (b) inventory
management services, including, but not limited to, services relating to
postponement processes; (c) order management; (d) warehousing and receiving
services, including, but not limited to, services relating to inventory
control; (e) fulfillment services; (f) services relating to the launch and
operation of a virtual warehouse; (g) transportation services for inbound and
outbound Inventory, including, but not limited to, tracking services for the
Inventory during shipment; (h) customer services, including, but not limited
to, claims and return processes; and (i) invoicing services.

 

 

Exhibit B

Payments and Fees

Monthly Fixed Cost

	 	 	 	 	 
	•

•	 	
Dedicated Resources and Equipment

[*]
	 	$[*]

$[*]

Variable Cost

	 	 	 	 	 
	•	 	
Pick, pack and Ship (per unit)
	 	[*]
	
	
	
	

	•	 	
Pick, pack and Ship (per unit) RUSH
	 	[*]
	
	
	
	

	•	 	
Returns (per unit)
	 	[*]
	
	
	
	

	•	 	
Product Destruction (per lb.)
	 	[*]
	
	
	
	

	•	 	
[*]
	 	[*]
	
	
	
	

	 	 	
[*]	 	 
	
	
	
	

	•	 	
[*]
	 	[*]
	
	
	
	

	 	 	
[*]	 	 
	
	
	
	

	•	 	
Pallet Storage per month
	 	$[*]/pallet
	
	
	
	

	 	 	
[*]	 	 
	
	
	
	

	•	 	
Labor rates for [*]	 	 
	
	
	
	

	 	 	
    Between 8 and 5 p.m. (local time) Mon. thru Fri
	 	$[*]/hr/person
	
	
	
	

	 	 	
    Overtime
	 	$[*]/hr/person
	
	
	
	

	•	 	
Other expenses and travel cost for [*]
	 	Cost+[*]

[*]

Freight Rates

See attached freight schedules.

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

 

Proposed Intuit “CUSTOM RATES”

[*] Ground Commercial

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	weight	 	zone 2	 	zone 3	 	zone 4	 	zone 5	 	zone 6	 	zone 7	 	zone 8
	
	 	
	 	
	 	
	 	
	 	
	 	
	 	

	1	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	2	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	3	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	4	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	5	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	6	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	7	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	8	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	9	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	10	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	11	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	12	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	13	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	14	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	15	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	16	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	17	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	18	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	19	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	20	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	21	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	22	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	23	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	24	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	25	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]

Proposed Intuit Rates as a % Discount Off Street

[*] Ground Commercial

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	weight	 	Zone 2	 	zone 3	 	zone 4	 	zone 5	 	zone 6	 	zone 7	 	zone 8
	
	 	
	 	
	 	
	 	
	 	
	 	
	 	

	1	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	2	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	3	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	4	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	5	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	6	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	7	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	8	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	9	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	10	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	11	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	12	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	13	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	14	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	15	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	16	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	17	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	18	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	19	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	20	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	21	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	22	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	23	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	24	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	25	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]

[*]     [*]     [*]     [*]     

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

 

[*]

NEXT DAY PRIORITY SERVICE (BY NOON)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Zone
	 	 	

	Weight	 	A	 	B	 	C	 	D	 	E	 	F
	
	 	
	 	
	 	
	 	
	 	
	 	

	0 – 500	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	501 — 1000	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	1001 — up	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]

Minimum -     [*]

NEXT DAY SERVICE (BY 5:00 PM)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Zone
	 	 	

	Weight	 	A	 	B	 	C	 	D	 	E	 	F
	
	 	
	 	
	 	
	 	
	 	
	 	

	0 – 500	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	501 — 1000	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	1001 — up	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]

Minimum -     [*]

SECOND DAY SERVICE

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Zone
	 	 	

	Weight	 	A	 	B	 	C	 	D	 	E	 	F
	
	 	
	 	
	 	
	 	
	 	
	 	

	0 – 500	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	501 — 1000	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	1001 — up	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]

Minimum -     [*]

THREE DAY SERVICE

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Zone
	 	 	

	Weight	 	A	 	B	 	C	 	D	 	E	 	F
	
	 	
	 	
	 	
	 	
	 	
	 	

	0 – 500	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	501 — 1000	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	1001 — up	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]

Minimum -     [*]

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

 

Inbound LTL and TL – (Retail Only)

Ingram Micro will source LTL and TL carriers through our current
optimization model. Based on cost/service parameters, the selection will be
tied to the desired service level and lowest cost provider

National Inbound LTL Players

[*]

LTL Inbound Transit Times

	 	 	 	 	 	 	 
	Carrier	 	From	 	To	 	Days
	
	 	
	 	
	 	

	[*]	 	
[*]
	 	[*]
	 	[*]
	
	
	
	

	 	 	
[*]
	 	[*]
	 	[*]
	
	
	
	

	 	 	
[*]
	 	[*]
	 	[*]
	
	
	
	

	 	 	
[*]
	 	[*]
	 	[*]
	
	
	
	

	[*]	 	
[*]
	 	[*]
	 	[*]
	
	
	
	

	 	 	
[*]
	 	[*]
	 	[*]
	
	
	
	

	 	 	
[*]
	 	[*]
	 	[*]
	
	
	
	

	 	 	
[*]
	 	[*]
	 	[*]

	*	 	Indicates the preferred LTL carrier selection based on transit and “normal”
business flow.

The current Inbound LTL pricing is based on a flat rate per pound of [ * ].

National Inbound TL Players

[*]

The TL player or combo thereof will be selected based on commitment to the
TL sourcing required to meet service levels. TL carriers are insured for [*]
per load. Under no circumstance can truckload product value shipped from MMI
be over [*] in replacement cost. [*] Costs are subject to change for
various reasons including but not limited to fuel surcharge. The current rates
in effect are as follows:

	 	 	 	 	 	 	 	 	 	 	 
	From	 	To	 	Rate/Mile	 	Fuel Surcharge/Mile	 	Markup	 	Total Cost
	
	 	
	 	
	 	
	 	
	 	

	[*]	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	[*]	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	[*]	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	[*]	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

 

Outbound Freight Sourcing – (Retail Only)

IML will make available to Intuit the complete list of carriers that have
current contracts in place with IML. IML will leverage IM-First for pre-paid
carrier selection, which optimizes the freight by shipping lane. Inbound and
Outbound freight rates are subject to change at any time.

For shipments other than LTL and TL, IML will leverage the current IML volume
freight rates and will provide Intuit market competitive rates including an
administrative fee that is based on IML’s markup.

The current Outbound LTL pricing is based on a flat rate per pound of [*].

Outbound TL pricing will be addressed on an as needed basis through a process
of market spot quotation.

In the event that Intuit would instruct IML to 3rd Party Bill Freight charges,
Intuit agrees to open discussions with IML regarding the back-end costs
incurred by IML and how those can be shared.

[*]

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

 

DOMESTIC ZONE CHART

[Graphic – map of the United States showing breakdown of shipping regions for
the shipper [*]]

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

 

APPENDIX A

Ingram Micro

SAME DAY / NEXT FLIGHT OUT

	 	 	 
	Minimum	 	[*]
	Rate Per Pound	 	
[*]

PRIORITY SERVICE (BY NOON)

Minimum $ [*]

	 	 	 	 	 	 	 	 	 	 	 	 	 
	ZONE	 	A	 	B	 	C	 	D	 	E	 	F
	
	 	
	 	
	 	
	 	
	 	
	 	

	0 — 500	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	501 — 1000	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	1001 & UP	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]

NEXT DAY SERVICE (BY 5:00 PM)

Minimum $ [*]

	 	 	 	 	 	 	 	 	 	 	 	 	 
	ZONE	 	A	 	B	 	C	 	D	 	E	 	F
	
	 	
	 	
	 	
	 	
	 	
	 	

	0 — 500	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	501 — 1000	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	1001 & UP	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]

SECOND DAY SERVICE

Minimum $ [*]

	 	 	 	 	 	 	 	 	 	 	 	 	 
	ZONE	 	A	 	B	 	C	 	D	 	E	 	F
	
	 	
	 	
	 	
	 	
	 	
	 	

	0 — 500	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	501 — 1000	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	1001 & UP	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]

THREE DAY SERVICE

Minimum $ [*]

	 	 	 	 	 	 	 	 	 	 	 	 	 
	ZONE	 	A	 	B	 	C	 	D	 	E	 	F
	
	 	
	 	
	 	
	 	
	 	
	 	

	0 — 500	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	501 — 1000	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	
	
	
	

	1001 & UP	 	
[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 	[*]

	•	 	Rates are Door to Door and subject the terms and conditions of the Agreement.
	 
	•	 	[*]
	 
	•	 	[*]
	 
	•	 	[*]

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

 

Exhibit C

Service Level Commitments

Beginning January 1, 2002, IML shall be required to perform the Services in
accordance with the Service Level Commitments described in this Exhibit C.

Order Management & Customer Service

	 	•	 	[*]% of orders will be printed (released to the warehouse) on the
same business day received. This calculation will exclude all
exception orders such as new store opening, future dated orders, ship
completes, backorders, and pallet orders.
	 
	 	•	 	[*]% of all electronic proof of delivery (ePOD) data that is
provided by the carriers (that have existing EDI 214 connections with
IML) will be delivered to Intuit within [*] of report availability
from carrier to IML.
	 
	 	•	 	[*]% of all manual proof of delivery (POD) information (from
those carriers that do not have existing EDI214 connections with IML)
will be delivered to Intuit within [*] of delivery notification from
carrier to IML.
	 
	 	•	 	No less than [*]% uptime of online access to IML’s system
(Impulse) via IngramMicro.com and/or CAPS during regular business hours
due to an IML systemic failure. IML will notify Intuit a minimum of [*]
prior to any Scheduled Downtime (as defined herein) to IML’s
systems (IMpulse, IngramMicro.com and CAPS).
	 
	 	•	 	IML response to customer shipment claim inquiries (as defined in
the Statement of Work) is no more than 48 hours from the time IML
receives the customer inquiry. IML will provide final resolution
(acceptance or denial) on 98% of all claims within 15 business days.

Fulfillment Services

	 	•	 	[*]% On-Time Fulfillment: Provided IML has adequate Inventory to
fulfill the order, and provided the order is received before the[*].
(Local Standard Time) Cut-Off Time, IML will process [*]% of all
printed orders on the business day received unless daily volume exceeds
[*] orders, [*] lines, or [*] units in the [*] facility and [ *
] orders, [*] lines, or [*] units in the [*] facility. Printed
orders in excess of these amounts will be given an additional business
day for processing. This calculation will exclude all exception orders
such as new store opening, future dated orders, ship completes,
backorders, and pallet orders. [*]% of those orders released after
the[*]. (Local Standard Time) Cut-Off Time will be processed by IML
by the Cut-Off Time on the following business day.
	 
	 	•	 	[*]% Fulfillment Accuracy: calculated by adding the total
approved short ship units (code SS) + overship units (code OS) +
warehouse picking error units (code WW) and dividing the sum by total
units shipped

[*]

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

 

ERP and IT Integration

	 	•	 	[*]% up time for any IML-operated FTP site used for scheduled
business transactions for Intuit and or its business partner(s)
	 
	 	•	 	Turnaround time of no more than one hour for an EDI997 response to
an Intuit EDI850 transaction provided no value added network (VAN)
outages.
	 
	 	•	 	[*]% Advanced Ship Notice (ASN/EDI856) accuracy as measured by
Intuit number of monthly failure notifications caused by IML.
	 
	 	•	 	No more than [*] within a given month where IML business
applications fail to process or send scheduled transactions.
	 
	 	•	 	IML will communicate any IML system failures affecting Intuit, and
provide to Intuit updates as to the status of such failures based on the
following escalation procedure:

	 	 	 	 	 	 	 
	Priority Level	 	Description	 	Escalate After	 	First Update to Customer
	
	 	
	 	
	 	

	
P1
	 	Production system is down; unable
to conduct business or possibility
of immediate severe financial
impact to business
	 	[*]
	 	1 hour from time of
original call
	
	
	
	

	 	 	 	 	 	 	 	 	 
	
	
	
	

	
P2
	 	Production system partially
impacted; business continues; some
financial impact possible
	 	[*]
	 	2 - 3 hours from
time of original call
	
	
	
	

	 	 	 	 	 	 	 	 	 
	
	
	
	

	
P3
	 	Minimal Impact to production systems
	 	[*]
	 	Within 24 hours

	 	•	 	IML will notify Intuit once per day of all rejected orders on the
FTP EDI acknowledgment report (EDP945), which will be posted, to the
Intuit/IML FTP site nightly. In addition, IML will notify Intuit
within 3 business hours of any order that is rejected the same day it
has been received by IML.
	 
	 	•	 	IML will ensure Impulse up time % of at least [*]% of the time
during the term excluding Scheduled Down time for batching and end of
fiscal month activity as follows:

For purposes of these Service Level Commitments, “Scheduled Downtime” for IML’s
CAPS and the WEB systems include downtimes that affect Intuit’s access to real
time pricing and availability, ordering, order status and rma status; provided
that such downtimes occur during the following times:

Monday thru Friday — Midnight to 4AM PST

Saturday — 8PM to Midnight PST

Sunday — Midnight to 9AM and 3PM to 7PM PST

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

 

Scheduled Downtime shall also include the following times:

IML’s system shuts down on Saturday at 3PM PST until Monday at 4AM PST on the
following dates during the remainder of this fiscal year:

August 25, 2001

September 29, 2001

October 27, 2001

November 24, 2001

December 29, 2001

IML will publish scheduled downtime dates for years 2002 & 2003 as they become
available.

These additional periods of Scheduled Downtime are necessary because IML
performs batch processing for its fiscal month ends and shuts down its systems
during these times.

Orders received during downtimes will be queued and processed when the system
is available.

Report Capabilities & Metrics

	 	•	 	Intuit will rely upon [*]% accuracy for all IML produced reports.
IML will perform self-audits to ensure accuracy and inform Intuit
immediately of any defects and provide Intuit with a corrective action
plan within 1 business day. Intuit may conduct random audits to
ensure compliance. Accuracy of IML reports is considered critical to
business and Intuit will institute the following plan:

[*]

	 	•	 	Timeliness of reports. Daily FTP files to be available by 5:30 AM
PST and the weekly FTP files to be available by 5:30 AM PST Monday
mornings.
	 
	 	•	 	Reports covered by these Service Level Commitments are described in
in Attachment C of the Statement of Work.

Warehousing & Inventory Management

	 	•	 	[*]% Sku/Product set up accuracy, based on Intuit-provided
information/Sku set up documentation.
	 
	 	•	 	[*]% Inventory Shrinkage Accuracy based on twice yearly physical
audits and calculated based on total sku level net physical inventory
adjustments in units divided by total inventory movement in units from
the previous physical inventory date. IML will resolve any inventory
discrepancy within [*] and report back data, root cause and solution
to Intuit.

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

 

	 	•	 	[*]% Inventory Accuracy based on daily cycle count/shortages.
Monthly calculation on absolute cycle count unit inventory adjustments
divided by total inventory unit movement. IML will resolve any
inventory discrepancy within [*] and report back data, root cause and
solution to Intuit.
	 
	 	•	 	No more than [*] of all Intuit’s contract manufacturer’s Less
than Truckload (LTL) and Truckload (TL) orders arriving no more than [*]
business days for Replenishment and, upon Intuit’s request, [*]
business day for expedited orders from Intuit’s contract manufacturer’s
facility to IML’s distribution center and as scheduled below.
	 

	 	•	 	Intuit’s contract manufacturer located in [*]
	 
	 	•	 	Intuit’s contract manufacturer located in [*] (except
[*], which will be [*] business days)
	 

	 	 	 	Countdown to measure this service level will start [*]. Shipment date =
day 0. Corrective action is as follows in the schedule below.

[*]

Returns Management

	 	•	 	[*]% accuracy on returns reconciliation calculated on total
Intuit-approved return unit discrepancies (code RT) divided by total
return unit inventory movement.
	 
	 	•	 	[*]% of all data collection for door logging of all inbound
RMA’s, inclusive of shipping ID number for audit purposes
	 
	 	•	 	Returns Cycle Time: No more than [*] business days to process
Intuit returns from the date of IML’s receipt of such returns.

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

 

EXHIBIT D

[*]

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

1

 

Exhibit E

[*]

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

1

 

Exhibit F: Basic Security Requirements for Customer Data

Definitions

		
	 	For the purposes of this Exhibit, the following definitions shall
apply.

		
	 	Personally-Identifiable Information: Information that identifies or can
be used to identify, contact, or locate the person to whom such information
pertains. It includes, without limitation, the following information:

		
	 	Secret Information: Information that is used to protect other
Personally-Identifiable Information. Generally, Secret Information is not
disclosed to outside parties under any circumstances. Secret Information
includes customer passwords, private encryption keys, and private
signature keys.

		
	 	Sensitive Information: Any information that could be misused in such
a way as to jeopardize the financial or legal position of its owner, or
of the person or company described by the information. Sensitive
Information includes customer account numbers, Social Security numbers,
taxpayer identification numbers, credit card numbers, customer account
balances, customer financial information and transactional activity,
medical records, and legal records.

		
	 	Restricted Information: Information that is not Secret or Sensitive,
but whose permissible use has been restricted by its owner. Restricted
information includes customer names, customer street or e-mail addresses,
customer telephone numbers, and records of customer services and other
data relating to the products and services offered, received, or
purchased by customers of Intuit or the Company.

	A.	 	Controlling Access to Personally-Identifiable Information

	 	1.	 	Access to Personally-Identifiable Information stored on Company’s
systems must not be granted to members of Company’s staff,
subcontractors, or other agents, unless all of the following conditions
are met:
	 

	 	a)	 	The staff member, subcontractor, or other agent requesting
the access can be uniquely identified (e.g., by a unique User ID)[*];
	 
	 	b)	 	The staff member, subcontractor, or other agent requesting
the access has entered a correct password or other authorizing token
to indicate that he/she is the authorized user of this account. If
passwords are the only method used for authentication, they must
satisfy certain minimal standards mutually agreeable to Intuit and
Company that make them sufficiently robust to effectively resist
both educated guessing and brute-force attacks. [*]
	 
	 	c)	 	In all cases, access permissions must be established in a
manner that allows only for the minimum access level(s) required for
each staff member, subcontractor, or other agent to perform his or
her job function. The ability to read, write, modify or delete
Personally-Identifiable Information must be limited to those
individuals who are specifically authorized to perform those data
maintenance functions.
	 
	 	d)	 	[*]
	 

	 	2.	 	Personally-Identifiable Information stored on Company’s systems
must be stored behind firewalls with access to such information limited
as described in paragraph A.1.
	 
	 	3.	 	It is recommended that Secret Information never be stored in clear
text on Company’s systems. At a minimum, it is recommended that
financial services industry-standard encryption techniques be employed
to safeguard Secret Information in Company’s systems from retrieval by
unauthorized persons. Whenever possible, it is recommended that message
digest algorithms such as SHA-1 or MD5 be used to hash and verify the
user’s password, and that “salt” be added to the input string prior to
encoding to make it unlikely that the same password text chosen by
different users will yield identical encodings.
	 
	 	4.	 	Passwords used by Company’s customers are not required to conform
to the password standards described in paragraph A.1.b; however,
Company must not provide any of its customers with access to
Personally-Identifiable Information other than that which pertains to
such customer, except as permitted in writing by the affected person or
as otherwise required by law.
	 
	 	5.	 	Procedures must be in place to modify or revoke access permissions
to Personally-Identifiable Information when staff members leave the
Company or when their job responsibilities change.
	 
	 	6.	 	Printed material that contains Personally-Identifiable Information
must be stored in secured areas to which access is limited to those
staff members who have a
business need to access it. It must also be disposed of in a secure
manner. Whenever possible, it is recommended that secure disposal
alternatives such as on-site shredding prior to recycling or placement in
publicly-accessible locked trash bins with subsequent off-site shredding
by a licensed contractor be implemented.

	B.	 	Transmitting Personally-Identifiable Information

	 	1.	 	Unless restricted by law, or as discussed in paragraph D.1,
Company must not electronically transmit Secret or Sensitive
Information over publicly-accessible networks without using 128-bit
SSL or another

	*	 	We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from
this filing and filed them separately with the SEC.

 

	 	 	 	mechanism that affords similar or greater security
and confidentiality. If legal restrictions limit the use of 128-bit
SSL encryption technology, Company must use the strongest encryption
technology permitted.
	 
	 	2.	 	Personally-Identifiable Information must never be passed in a
URL (e.g., using a Get method) in a manner that potentially exposes
the information to third parties and causes such information to
appear in log files.

	C.	 	Maintaining a Secure Environment

	 	1.	 	To protect the accuracy and integrity of Personally-Identifiable
Information, all such data stored in electronic form must be backed up
regularly (no less often than weekly), and the backups stored in
secure, environmentally-controlled, limited-access facilities.
	 
	 	2.	 	Company must use commercially-reasonable efforts to install any
security-related fixes identified by its hardware or software vendors,
if the security threat being addressed by the fix is one that
significantly threatens the privacy or integrity of any
Personally-Identifiable Information covered by this Agreement. Such
upgrades must be made as soon as they can safely be installed and
integrated into Company’s existing architecture and systems.
	 
	 	3.	 	Intuit may, from time to time, advise Company of recent security
threats that have come to its attention, and require Company to
implement specific modifications to its software, policies, or
procedures that may be necessary to counter these threats. Company must
implement these modifications within a mutually-agreeable time, or must
obtain written permission from Intuit to take some other
commercially-reasonable course of action to preserve the privacy and
integrity of any Personally-Identifiable Information.
	 
	 	4.	 	Company must immediately notify the Intuit Security SPOC (see
below) if it knows or suspects that Personally-Identifiable Information
has been compromised or disclosed to unauthorized persons, or if there
has been any meaningful or substantial deviation from the requirements
of this Exhibit.
	 
	 	5.	 	Notwithstanding the minimum standards set forth in this Exhibit,
Company must use commercially-reasonable efforts to monitor and
periodically incorporate reasonable industry-standard security
safeguards.

	D.	 	Electronic Mail

	 	1.	 	Company must not send any Secret Information in an e-mail message
over publicly-accessible networks unless the e-mail is encrypted using
a previously-approved encryption mechanism or is otherwise made secure
with an approach that has been mutually agreed upon in advance by
Intuit and Company. It is recommended that Company not send any
Sensitive or Restricted Information in an e-mail message over
publicly-accessible networks unless the e-mail is encrypted or
otherwise secured as described above.
	 
	 	2.	 	Company and its subcontractors and agents must not reveal the
Personally-Identifiable Information of one customer to any other
customer or other third party, in any e-mail or other communication,
except as permitted in writing by the affected person, as deemed
appropriate in light of the interests of the affected person, or as
otherwise required by law.

	E.	 	Reviews, Audits, and Remedies

	 	1.	 	Upon 14 days’ prior written notice to Company, Intuit (or its
agent) may enter Company’s premises and inspect such of Company’s
books, records, facilities and computer systems as Intuit and Company
shall mutually agree is necessary to ensure that Company complies with
the terms and conditions of this Exhibit. Intuit or its agent shall
comply with Company’s standard policies and procedures that apply to
third party companies that have access to Company’s premises, and
Intuit or its agent shall access Company’s premises during Company’s
normal business hours.
	 
	 	2.	 	Notwithstanding any cure period in this Agreement to the contrary,
Intuit, at Intuit’s reasonable discretion, may require correction of
any demonstrated problem that significantly threatens the security of
Personally-Identifiable Information within a shorter period of time.
Intuit shall provide written notice of the problem to Company, and
Company must immediately take appropriate steps to correct the problem.
If Company fails to correct any demonstrated security problem within a
commercially-reasonable time, factoring in the work that must be
completed to address the problem, and resulting in the material
disclosure or threatened disclosure of Personally-Identifiable
Information, Intuit may instruct Company to take such interim measures as
are necessary to protect Personally-Identifiable Information. If Company
fails or refuses to take such interim and/or permanent measures which are
necessary to prevent the material disclosure of Personally-Identifiable
Information within a commercially reasonable time, Intuit may terminate
any and all affected agreements between Intuit and Company for cause.

	F.	 	Compliance with U.S. Laws and Regulations
	 
	 	 	Company shall comply with all applicable federal, state, and local laws and
regulations.
	 
	G.	 	Changes to Requirements
	 
	 	 	Intuit may, in its sole discretion, amend these requirements from time to
time, as required by law or otherwise.

 

Page 2 of 3

 

	H.	 	Contact Information
	 
	 	 	The primary business contact person for each party under this Agreement
shall designate a primary and an alternate single point of contact for
security issues for such party (a “Security SPOC”) and provide mail, email,
telephone, home telephone, and pager or portable telephone contact
information for such persons. Both parties agree that either the primary or
alternate Security SPOC will be available at all times (“24/7/365”). Such
designation and information must be given in writing to the other party
within ten (10) business days after the effective date of the Agreement. Any
updates to the same shall be given promptly in writing to the other party.

 

Page 3 of 3

 

Exhibit G

Intuit Performance Standards and Guidelines

Vendor agrees to adhere to the following standards for performance under this
Agreement:

1) Personal Conduct. Vendor, including its employees and subcontractors, shall
adhere to the same type of rules of personal conduct governing Intuit’s
employees, including, without limitation, the following rules of conduct:

(a)  No person under the influence of intoxicants or narcotics shall be allowed
on Intuit’s property, nor shall any person have in his or her possession any
intoxicant or narcotics.

(b)  Unprofessional conduct such as horseplay, wrestling, fighting, gambling,
fighting, and threatening behavior, will not be permitted.

(c)  There shall be no instances of sexual harassment or any other type of
harassment of any kind, including harassment on the basis of sex, race, color,
religion, gender, age, mental or physical disability, medical condition,
national origin, martial status, veteran status, sexual orientation, or other
characteristic protected under federal or state law or local ordinance.
Vendor’s personnel shall not harass any other person by verbal, physical, or
visual means or in any manner.

2) Accident Prevention. Vendor, including its employees and subcontractors,
shall exercise precaution at all times during the performance of Services in
connection with this Agreement for the protection of persons (including
Vendor’s employees and subcontractors) and property. Vendor shall observe any
and all safety provisions of applicable laws and regulations. Vendor shall
guard machinery and equipment, and eliminate any other hazards in accordance
with the applicable Safety Orders of the Industrial Accident Commission of the
State of California. Vendor shall provide all necessary barriers, signs,
lights, and watchmen during the performance of Services in connection with this
Agreement. Any and all damages during the performance of the Services under
this Agreement from whatever cause, shall be borne and sustained by Vendor, and
all work shall be solely at Vendor’s risk until it has been finally approved
and accepted by Intuit.

3) Security. Vendor shall at all times perform Services under this
Agreement in a manner to avoid the risk of loss, theft, or damage by
vandalism, sabotage or other means to any property. Vendor shall promptly
take all reasonable precautions which are necessary and adequate to
protect against conditions which involve a risk of
loss, theft or damage to its property, Intuit’s property, and the work site.
Vendor shall continuously inspect all its work, materials, and equipment
facilities to discover and determine any of the above-described conditions
and Vendor shall be solely responsible for discovery, determination and
correction of any such conditions. Vendor shall cooperate with Intuit on
all security matters and Vendor shall promptly comply with any project
security requirements established by Intuit. Compliance with these security
requirements shall not relieve Vendor of its responsibility for maintaining
adequate security, nor shall such compliance be construed as limiting
Vendor’s obligation to undertake reasonable action as required to comply
with the terms and conditions of this Agreement. Vendor shall prepare and
maintain accurate reports of incidents of loss, theft or vandalism and
Vendor shall furnish these reports to Intuit in a timely manner. Vendor is
solely responsible for the safety of its own personnel.

1

 

4) Entry on Intuit’s Property. While Vendor is on Intuit’s property, Vendor
will maintain strict work discipline and shall comply with Intuit’s site
policies, procedures, and programs relevant to Vendor’s provision of Services.
In the event of any accident or other occurrence resulting in personal injury
or illness when Vendor is on Intuit’s property, Vendor shall immediately notify
Intuit. Upon Intuit’s request, Vendor shall provide Intuit with documentation
fully describing the accident and injury or illness and the actions implemented
to prevent similar occurrences.

5) Governmental Permits and Notifications. Vendor shall investigate the need
for, and shall procure in its own name to the extent allowed by law, all
governmental permits, notifications, approvals and inspections required for the
performance of Vendor’s Services under this Agreement. Vendor shall promptly
notify Intuit in writing if any such permit or approval lapses, or is modified
or revoked. If, under applicable law, any such permits or approvals must be
procured in Intuit’s name, Vendor shall promptly so inform Intuit and shall
assist Intuit in obtaining such permits or approvals.

6) Occupational Safety and Health. All laws, interim and permanent standards,
rules and regulations of the Occupational Safety and Health Act; all state and
federal laws and regulations relating to safety and health standards,
procedures and programs relating to safety and health are incorporated into
this Agreement by this reference. Vendor agrees to perform the Services in
compliance with, and to furnish only supplies, articles, and equipment that
comply with, such laws, standards, regulations, policies, procedures, and
programs.

7) Warning Signals. To the extent required by law or necessary to protect the
health and safety of Intuit’s employees, agents and visitors, Vendor shall
ensure that the area of work where Vendor is to furnish the Services is
appropriately isolated and posted with clear and conspicuous warning notices
advising Intuit’s employees, agents
and visitors of any hazards that may be associated with the work performed by
Vendor hereunder.

8) Cooperation. Vendor shall cooperate with Intuit in performing Services under
this Agreement so as to minimize any potential interference with Intuit’s other
activities, to protect the safety and health of Intuit’s employees, agents and
visitors, and to safeguard the security and integrity of Intuit’s property.

9) Environmental Health and Safety: Vendor shall comply with Intuit’s
environmental, health, and safety site policies, procedures, and programs
that may apply to Vendor’s obligation to provide Services. Vendor
acknowledges and agrees that it is Vendor’s responsibility to understand
all site policies, procedures, and programs relating to environmental
protection, safety and health and to ensure that Vendor’s employees and
contractors understand such policies, procedures, and programs. Vendor
agrees to provide Services in compliance with, and to furnish only
supplies, articles, and equipment that comply with such policies,
procedures, and programs.

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10) Releases to Environment: In performing Services under this Agreement,
Vendor shall not discharge, release or emit, or cause to be discharged,
released or emitted, any hazardous or non-hazardous substance into the
environment, without the prior written approval of an authorized representative
of Intuit’s Environmental, Health and Safety Department. If any discharge,
release or emission not so approved by Intuit occurs, Vendor shall inform
Intuit immediately, shall promptly undertake all reasonable efforts to contain
and cease such activity, and shall restore all property to its original
condition.

11) Hazardous Materials. Whenever Vendor uses or stores flammable, explosive,
or other hazardous materials or hazardous equipment or uses hazardous or
unusual methods necessary for its performance of the Services, Vendor shall
exercise utmost care and shall carry on such activities under supervision of
properly trained personnel and in accordance with all Intuit policies, programs
and procedures related to hazardous materials. Vendor shall not take any
remedial action with regard to hazardous materials used in the performance of
the Services or enter into any settlement agreement, consent decree or other
compromise relating thereto without first notifying Intuit in writing of
Vendor’s intention to do so and affording Intuit ample opportunity to protect
its interests. Whenever Vendor is aware of any of the following actions
regarding hazardous materials that are instituted, completed or threatened,
Vendor shall immediately notify Intuit, in writing: i) any government or
regulatory action, ii) any claim against Vendor or Intuit, and iii) any
reports, complaints, notices or warnings of asserted violations to any
governmental agency.

12) Waste Handling. Vendor shall manage, handle and dispose of all wastes
generated by its Services properly and in accordance with all applicable
governmental requirements, including those applicable to hazardous waste and
all Intuit policies, programs, and procedures related to waste handling.
Vendor shall promptly deliver to Intuit copies of manifests or applicable
shipping documents reflecting the legal and proper disposal of any hazardous
materials that Vendor has caused to be removed from any of Intuit’s premises.
Except as otherwise approved in writing by an authorized representative of
Intuit, Vendor shall not (i) dispose of any waste on, in, under or about
Intuit’s property or any container thereon, or (ii) list Intuit as a waste
generator.

13) Disputes and Work Stoppages. No dispute between labor organizations and
Vendor shall be permitted to occur or be manifested on any Intuit site, and
Vendor agrees to employ personnel and other agents for the Services who will
work at all times in harmony with Intuit’s personnel and other agents. Vendor
agrees not to participate in or encourage any cessation of the Services that
may occur as a result of any such labor dispute, however Vendor may participate
in lawful negotiations. Should there be a stoppage of the Services that
involves, but is not limited to, the participation of Vendor’s personnel or
other agents, or third party actions involving informational or organizational
picketing, Vendor agrees to take appropriate and prompt action to provide
qualified personnel or other agents to perform the Services. If Vendor is
unable to provide such personnel or other agents, Vendor agrees to reimburse
Intuit any financial expenses incurred by Intuit in causing the Services to be
provided by another.

3Exhibit 10.05

 

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT 10.05

MASTER AGREEMENT

Between INTUIT INC. and MODUS MEDIA INTERNATIONAL, INC.

ARTICLE 1

PARTIES

Section 1.1 Parties to the Agreement

     THIS MASTER AGREEMENT (herein “Master Agreement” or “Agreement”) for
services,
effective November 1, 2000 (herein the “Effective Date”) is between INTUIT Inc.
(herein “INTUIT”), a Delaware corporation located at 2535 Garcia Avenue,
Mountain View, CA 94043, and MODUS MEDIA International, Inc., incorporated in
Delaware (herein “MODUS MEDIA”), located at 690 Canton Street, Westwood, MA
02090.

     In consideration of the mutual covenants contained herein, the parties
hereby agree as follows:

ARTICLES 2

SERVICES

Section 2.1 Enterprise Members

     Under this Agreement, INTUIT shall mean Intuit Inc. and any affiliate of
INTUIT and all subsidiaries and related companies, that INTUIT controls by
ownership of 45% or greater equity interest, or controls the day-to-day
management of such companies by contract or otherwise, solely in connection
with INTUIT’s relationship with such entity, provided such related company is
not a direct competitor of MODUS MEDIA. See Schedule A for the comprehensive
list of the Enterprise Members, which may be amended form time to time by
written notice from INTUIT and MODUS MEDIA.

Section 2.2 Statement of Work

     INTUIT, in its sole discretion, may engage MODUS MEDIA to perform services
under a statement of work agreed to and signed by the parties (herein
“Statement of Work”). MODUS MEDIA will provide the services (herein “Service”)
as outlined in the Statement if Work. MODUS MEDIA will also provide such
additional related services as are set out in such Statement of Work (herein
“Related Services”). All terms and conditions contained in this Master
Agreement apply to the Statement of Work. Any new Statement of Work introduced
during the Term of this Agreement may be incorporated into this Agreement if
both parties agree in writing to do so.

Section 2.3 Approved Facility

     For business based in the United States and Canada, MODUS MEDIA will
utilize a U.S. based facility or facilities (herein “Approved Facility”) for
the delivery of Services for the Statement of Work. The Facility will be
equipped with telephone systems, computer systems, and various MODUS MEDIA
support tools, such as documentation and knowledge bases, to be used in the
delivery of Services.

1

*     We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

 

     For business based in the Asia/Pacific Rim region, MODUS MEDIA may utilize
a facility in Singapore. For the European based business, MODUS MEDIA may
utilize its facility located in Apeldoorn, The Netherlands and or Kildare,
Ireland. The parties may add, delete, or change an Approved Facility at any
time through a signed Amendment to this Master Agreement.

Section 2.4 Quarterly Reviews

     Both parties agree to conduct quarterly business reviews to analyze the
ability of MODUS MEDIA to meet INTUIT’s service requirements. These reviews
will be conducted in a mode (conference call, personal visit, etc) agreed upon
by both parties. Specific dated and time for the Reviews will be schedule at
least one month prior to event. These reviews will also be utilized to assist
INTUIT in improving the overall service levels that they provide for their
customers. INTUIT shall be responsible to provide a completed Quarterly
Business Review scorecard that will be used to document and rate MMI’s
performance in all previously agreed metrics, to be set forth in the applicable
SOW.

Section 2.5 Use Of INTUIT Resources

     If given authorization to utilize INTUIT resources, MODUS MEDIA agrees to
use the resources strictly for performing the Services hereunder. “INTUIT
resources” means INTUIT’s employees and agents, and INTUIT’s tangible and
intangible property. Any other or unauthorized use will subject MODUS MEDIA to
immediate termination without further payment. Upon such termination,
INTUIT
does not waive any possible legal action arising from the unauthorized use of
INTUIT resources.

ARTICLE 3

SERVICES

Section 3.1 Orders

     An order (herein “INTUIT Order”) is defined as a single request for
services under any Statement of Work. To order Services under a Statement of
Work, INTUIT shall issue a purchase order under the referenced Statement of
Work for the Services to be performed by MODUS MEDIA. The terms and conditions
of this Master Agreement and the referenced Statement of Work shall govern the
Services and any printed terms and conditions on the purchase order or
acceptance forms shall not apply. MODUS MEDIA shall examine the INTUIT Order
and shall ask INTUIT for clarification if there is any ambiguity. MODUS MEDIA
shall not perform Services without an INTUIT Order and with proper
instructions. Services shall commence on the dated indicated in the INTUIT
Order.

Section 3.2 Delays in Shipping.

     Delays in shipping shall be reported immediately by MODUS MEDIA to INTUIT.
MODUS MEDIA shall report the source of the delay, the expected time to correct
the delay, the status of work in process, and the cost of the work in process.
INTUIT reserves the right to cancel any order resulting from this Agreement in
whole or in part if MODUS MEDIA fails to make deliveries in accordance with the
terms of an INTUIT Order and this Agreement. If INTUIT cancels any order

2

 

under this section, MODUS MEDIA shall complete any work in process and
INTUIT shall pay for such work in process based upon cost of the work in
process reported by MODUS MEDIA to INTUIT (but not more than the actual cost of
the work in process) and the other terms and conditions of this Agreement.

Section 3.3 Changes

     INTUIT may order changes in the Service under a Statement of Work, All
changes shall be evidenced by an executed Change Order form referencing the
original purchase order number and Statement of Work. If adjustments to
compensation are required, they shall be described in the Change Order. The
terms and conditions are governing the Services shall continue in full force
and effect except as expressly amended in the Change Order. If INTUIT knows it
will experience a delay after the dated Services are scheduled to commence and
requests MODUS MEDIA to remain on standby during that delay, INTUIT will
reimburse MODUS MEDIA for reasonable standby costs as agreed to by the parties
prior to commencement of the delay and described in a Change Order.

ARTICLE 4

INSURANCE

Section 4.1 Insurance

     A) In the event MODUS MEDIA is to perform work on INTUIT’s premises, MODUS
MEDIA shall take out and maintain the following minimum insurance at its
expense for the duration of any work preformed under this Agreement for each
such location:

	 	 	 
	a)   Worker’s Compensation
	 	
Statutory

	b)   Employer’s Liability
	 	
$1,000,000 each occurrence

	c)   Comprehensive General Liability

   (Bodily Injury)
	 	
$2,000,000 each occurrence

	d)   Comprehensive General Liability

   (Property Damage)
	 	
$2,000,000 each occurrence

	e)   Comprehensive Automobile Liability

   (Bodily Injury)
	 	
$1,000,000 each occurrence

	f)   Comprehensive Automobile Liability
	 	
$1,000,000 each occurrence

MODUS MEDIA shall have full and exclusive liability for the payment of, and
MODUS MEDIA shall pay, any and all taxes and contributions for unemployment
insurance, old age retirement benefits, workers’ compensation insurance or
benefits, life insurance, pensions, annuities and similar benefits and any
other employment-related costs, obligations, and duties that may now or
hereafter be imposed by law, collective bargaining agreements or otherwise with
respect to persons employed by MODUS MEDIA for the performance of Services
under this Agreement.

INTUIT to be named as an additional insured on the above policy(ies), except
for Worker’s Compensation. The public liability insurance specified in sections
c) and d) hereinabove shall include coverage for MODUS MEDIA’s contractual
liability under Indemnity with limits not less than those set forth
hereinabove. Every contract of insurance providing the coverage required
herein shall contain the following clause: “No reduction, cancellation or
expiration of this policy shall become effective until ten (10) business days
from the date written notice is

3

 

actually received by INTUIT.” MODUS MEDIA shall not undertake any Work on
INTUIT’s premises until all required insurance has been obtained and
certificates confirming such coverage has been furnished to and approved by
INTUIT.

MODUS MEDIA shall mail a certificate of insurance to the Intuit Purchasing
Department, Attention: Director, Software Operations, within ten (10) days of
receipt of the first purchase order placed under this Agreement. Mail to: 2700
C. Coast Avenue, Mountain View, CA 94043

ARTICLE 5

INVOICING AND PAYMENT

Section 5.1 Invoicing and Payment

     MODUS MEDIA will invoice INTUIT as services are rendered and on no less
than a weekly basis. MODUS MEDIA will provide separate invoices for operations
in Lindon, Utah and Raleigh, North Carolina, and any other operating divisions
performing services for INTUIT. In addition, MODUS MEDIA will bill and INTUIT
will pay for Related Services and such other charges as are provided for herein
on an as-incurred basis. Charges for Related Services not specifically
provided for in this Agreement or the Statement of Work MUST be approved by
INTUIT in advance of being incurred, otherwise INTUIT is under no obligation to
pay unapproved expenses. INTUIT will pay MODUS MEDIA upon the following terms:
net thirty (30) days from receipt of the invoice unless otherwise set forth in
the applicable SOW. Notwithstanding the foregoing, the parties shall discuss
superseding the prior provision and having INTUIT make payments by means of a
Procurement Master Card credit card. In the event of a disputed invoice,
INTUIT will pay the portion of the invoice that is not disputed, and will
promptly pay the disputed portion once resolved.

Section 5.2 Application Sales Tax

     Invoices will include local, state or federal sales, use or other similar
taxes or duties, if application. MODUS MEDIA will be responsible for the proper
computation and invoicing of sales taxes. Once submitted to INTUIT, INTUIT
shall be responsible for the payment of any such taxes.

Section 5.3 Limitation Period on Invoices

     Any and all invoices for Services must be submitted to the Intuit Accounts
Payable Department within six (6) months of date such Services are rendered.
Any invoices not received within the six (6) month timeframe shall be deemed to
be forgiven by MODUS MEDIA. Similarly, INTUIT cannot dispute any invoice or
portion thereof, paid or unpaid, more than six (6) months after the invoice
date. This provision shall not apply to invoices relating to aged inventory,
which is invoiced periodically as set forth in this Agreement or the applicable
SOW.

Section 5.4 Liens

     MODUS MEDIA shall keep INTUIT property free and clear of all third party
liens, claims, and encumbrances arising from the performance of the Services
provided under this Agreement by MODUS MEDIA. Before receiving payment for its
Services, MODUS MEDIA shall certify and provide proof satisfactory to INTUIT
that all material and equipment embodied in the work and all labor costs
incurred on the work have been fully paid and discharged.

4

 

     If any lien is filed, MODUS MEDIA shall promptly procure the release of
such lien. MODUS MEDIA shall have the right to contest the validity or amount
of any such lien; however, pending the discharge of any such lien of record,
INTUIT may retain out of any monies that are due and payable to MODUS MEDIA an
amount sufficient to discharge such lien and to reimburse INTUIT for any cost
or expense incurred in any action or proceeding for the enforcement or removal
of the lien. MODUS MEDIA agrees to reimburse INTUIT for all monies paid and
expenses incurred by INTUIT in discharging such liens or otherwise incurred in
connection with any action or proceeding for the removal or enforcement of the
lien.

MODUS MEDIA shall include a provision satisfying the requirements of this
clause as part of any and all subcontracts entered into for the work or any
portion of the work.

ARTICLE 6

TERM AND TERMINATION

Section 6.1 Term

     This agreement shall become effective as of 11/1/00 and shall continue
until either party provides at least ninety (90) days notice of its intent to
terminate the Agreement.

Section 6.2 Termination Based on Non-Performance

     6.2.1 If MODUS MEDIA fails to perform the Services described in the
referenced Statement of Work under an INTUIT Order in a timely manner or fails
to perform any material provision of the Master Agreement of Statement of Work,
MODUS MEDIA shall immediately take appropriate steps to perform such Services
or to cure such failure. If MODUS MEDIA fails to cure the failure immediately
and such failure causes a major impact on INTUIT’s business operations (i.e. an
impact causing immediate and material harm to INTUIT’s business operations),
INTUIT will provide a written warning to MODUS MEDIA. MODUS MEDIA will provide
INTUIT reasonable assurances of future performance in writing within one (1)
day and continue to work on the problem until it is resolved within seven (7)
days of such written warning. If the failure cannot reasonably be cured within
seven (7) days, MODUS MEDIA shall so notify INTUIT and commence to cure the
failure immediately and diligently and in good faith continue to cure the
failure. Not withstanding any cure period, if INTUIT deems it necessary, in its
sole discretion, INTUIT may move the Services to another vendor without
liability to MODUS MEDIA during the cure period until such failure is cured.

     6.2.2 If the failure to perform the Services described in the application
Statement of Work under an INTUIT Order or breech of a provision of the Master
Agreement or Statement of Work causes a minor impact on INTUIT’s business
operations, INTUIT shall give MODUS MEDIA written warning of such breach, and
MODUS MEDIA must cure and maintain such cure within thirty (30) days of the
receipt of the notice by MODUS MEDIA . If the failure cannot reasonably be
cured within thirty (30) days, MODUS MEDIA shall so notify INTUIT and commence
to cure the failure immediately and diligently and in good faith continue to
cure the failure. Notwithstanding any cure period, if INTUIT deems it
necessary, in its sole discretion, INTUIT may move all or part of the Services
to another vendor without breach of this Agreement or liability to MODUS MEDIA
during the cure period until such failure is cured. INTUIT may terminate this
Agreement and/or any Statement of Work upon written notice if MODUS MEDIA fails
to cure such breach within the cure period or such longer period of time as may
be agreed by the parties.

5

 

     6.2.3 MODUS MEDIA shall have the right to charge interest at the rate of
twelve (12%) per annum under this Agreement until INTUIT remedies any payment
delinquency. MODUS MEDIA may terminate this Agreement upon forty-five (45) days
written notice if INTUIT fails to pay an undisputed invoice on two or more
occasions within one (1) year or if INTUIT otherwise commits a material breach
of this Agreement and does not remedy such breach within thirty (30) days of
receipt of written warning from MODUS MEDIA.

     6.2.4 Notwithstanding anything to the contrary in this Agreement, INTUIT
may, at any time and at its sole convenience, with or without cause, terminate
all or a portion of the Services in a particular INTUIT Order for Services
under a Statement of Work by giving written notice to MODUS MEDIA specifying
the date of termination. Should INTUIT terminate an INTUIT Order, MODUS MEDIA
shall immediately stop its performance required under such Order and shall
immediately cause any of its suppliers or subcontractors to cease such work as
soon as possible.
Upon receipt and verification of MODUS MEDIA’s invoice, INTUIT shall pay MODUS
MEDIA all amounts properly due owing up to that date, including the fees for
the Order under the Statement of Work reflecting the work in process begun
prior to the effective date of termination plus actual direct costs resulting
from such termination. MODUS MEDIA shall not be paid for any work done after
effective date of termination nor for any cost of MODUS MEDIA or of its
suppliers or subcontractors which MODUS MEDIA could reasonably have voided. If
INTUIT provides MODUS MEDIA with a written request to perform tasks as are
necessary to demobilize the Services after the termination date,

MODUS MEDIA will perform such tasks and be compensated accordingly, as agreed
to by both parties.

     Section 6.3 Termination Without Cause

     Either party shall also have the right to terminate this agreement without
cause, for any reason, by providing one hundred and twenty (120) days’ notice
to the other party.

     Section 6.4 Termination due to Bankruptcy

     Either party shall also have the right to terminate the Agreement for
cause if the other party becomes insolvent, files or has filed against it a
petition under application bankruptcy or insolvency laws which is not dismissed
within sixty (60) days, proposes any dissolution, composition or financial
reorganization with creditors, makes an assignment for the benefits of
creditors, or if a receiver, trustee, custodian or similar agent is appointed
or takes possession with respect to any property or business of the defaulting
party.

     Notwithstanding anything to the contrary in this Agreement, if MODUS MEDIA
shall file for protection under the bankruptcy laws, or if an involuntary
petition shall be filed against MODUS MEDIA and not removed within ten (10)
days, or if the MODUS MEDIA shall become insolvent, be adjudicated bankrupt, or
if it should make a general assignment for the benefit of creditors, or if a
receiver shall be appointed due to its insolvency, INTUIT may, without
prejudice to any other right or remedy, terminate the Agreement, any Statement
of Work and any INTUIT Order and, at its option may take possession of the
“Work in Process” and finish the manufacture by whatever appropriate method
INTUIT may deem expedient. To the extent reasonably possible, finished Products
shall be stored separately from other stock and marked conspicuously with
labels indicating ownership by INTUIT.

     To secure INTUIT’s progress payment prior to the shipment of the products,
title to and first security interest in the product, any Work in Process, and
materials required for the execution of

6

 

MODUS MEDIA’s obligations under this Agreement and any work which MODUS MEDIA
may subcontract in support of the performance of its obligations under this
Agreement, shall vest in INTUIT to the extent INTUIT had made progress payments
under this Agreement.

     The parties hereby agree that this Agreement shall constitute the Security
Agreement required by the Uniform Commercial Code of the appropriate states.
Each party will execute promptly any financing statement required to perfect
and protect the interest of the other as defined in this Agreement.

     Section 6.5 Obligations Upon Termination or Expiration.

     The termination or expiration of this Master Agreement shall in no way
relieve either party from its obligations to pay the other party any sums
accrued hereunder prior to such termination or expiration of affects the
limitation of liability. All warranties and confidentiality provisions shall
remain in effect for their stated duration.

     Section 6.6 Disaster Recovery

     Notwithstanding any
provision to the contrary, INTUIT and the Enterprise
Members shall have the right to take whatever reasonable actions are necessary,
without liability to MODUS MEDIA, except for Services actually performed, in
the event of a disaster (a) for the duration of a disaster and (b) for the
purpose of keeping its business functioning, Disaster shall mean an unplanned
interruption (a) in the ability of INTUIT and/or Enterprise Members to use the
Services of MODUS MEDIA due to a cause beyond the control of INTUIT and /or
Enterprise Member, which at the time of occurrence can reasonably be projected
to last over four (4) hours or (b) in telecommunications to or from one or more
of INTUIT’s and/or the Enterprise Member, which at the time of occurrence can
reasonably be projected to last over four (4) hours.

ARTICLE 7

INDEMNIFICATION

     Section 7.1 Patent and Copyright Indemnification by INTUIT

     7.1.1 “Intellectual Property Rights” means any of INTUIT’s patent, trademarks,
trade names, inventions, copyrights, design rights, know-how or trade secrets
and any other intellectual property rights of INTUIT subsisting anywhere in the
world, relating to the origin, design, manufacture, programming, operation or
service of any INTUIT products.

     7.1.2 MODUS MEDIA acknowledges INTUIT’s representation that all Intellectual
Property Rights throughout the world are vested in INTUIT absolutely, and
acknowledges that MODUS MEDIA has no right or interest in any Intellectual
Property Rights.

     7.1.3 The “Territory” consists of the countries in which MODUS MEDIA performs
Services for INTUIT and the countries into which MODUS MEDIA sells or
distributes INTUIT products on INTUIT’s behalf, under this Agreement.

7

 

     7.1.4 INTUIT shall, at its own expense, defend MODUS MEDIA against all claims, suits,
losses, expenses and liabilities (including MODUS MEDIA’s reasonable attorney’s
fees) or arising out of any claim alleging that any INTUIT products sold or distributed by MODUS
MEDIA on INTUIT’s behalf hereunder infringes any duly issued patent or
copyright of the United States or the Territory and shall pay all damages
awarded therein against MODUS MEDIA or agreed upon in settlement by INTUIT;
provided that MODUS MEDIA (i) gives INTUIT notice in writing of any such suit,
proceeding or threat thereof, (ii) permits INTUIT sole control, through counsel
of INTUIT’s choice, to defend and/or settle such suit and (iii) give INTUIT all
reasonably necessary information, assistance and authority, at INTUIT’s
expense, to enable INTUIT to defend or settle such suit.

     7.1.5 Subsection 7.1.4, above, shall not apply to and INTUIT shall have no liability or
obligation for any infringement arising from: (a) any modification, servicing
or additional made to the INTUIT products by anyone other than INTUIT or its
representative or agent, (b) the use of such INTUIT products as a part of or
in combination with any devices, parts or software not provided by INTUIT, (c)
compliance with MODUS MEDIA’s design requirements or specifications, (d) the use of
other than the then current unaltered release of the software INTUIT products
available from INTUIT or (e) the use of such INTUIT products to practice any
method or process which does not occur wholly within the INTUIT products. The
above exclusions apply to the extent that the infringement would have been
avoided but for such modifications, combinations, compliance with
specifications, used of other than the current release or practice of such
method or process.

     7.1.6 In the event the use or sale of any INTUIT product distributed by
MODUS MEDIA in accordance with the Statement of Work for the Fulfillment
Services provided under the Master Agreement is enjoined, or in the event
INTUIT wishes to minimize its potential liability hereunder, INTUIT may, at its
sole option and expense: (i) procure for MODUS MEDIA the right to use or
distribute such INTUIT products; (ii) substitute a functionally equivalent,
non-infringing unit of the equivalent in functionality; or (iv) if none of the
foregoing are commercially feasible, take back such INTUIT product and not
distribute the product.

     7.1.7 THIS SECTION
STATES INTUIT’S TOTAL RESPONSIBILITY AND LIABILITY, AND
MODUS MEDIA’S SOLE REMEDY, FOR ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY RIGHTS FOR ANY INTUIT PRODUCTS DELIVERED HEREUNDER OR ANY
PART THEREOF AND IS IN LIEU OF AND REPLACES ANY AND ALL OTHER
EXPRESS, IMPLIED
OR STATUTORY WARRANTIES OR CONDITIONS REGARDING INFRINGEMENT.

     Section 7.2 General Indemnity by INTUIT

     INTUIT shall, at its own expense, defend MODUS MEDIA against all claims,
suits, losses, expenses and liabilities (including MODUS MEDIA’s reasonable
attorney’s fee) for or arising out of any claim alleging personal injury,
death, or damage to tangible property caused by INTUIT or as the result of the
negligence or intentional wrongful acts or omissions, when there is a duty to
act of awarded therein against MODUS MEDIA or agreed upon in settlement by
INTUIT, provided that MODUS MEDIA gives INTUIT immediate notice in writing of
any such suit, proceeding, or threat thereof, and permits INTUIT, through
counsel of its choice, to answer the charges and defend and/or settle such
suit; MODUS MEDIA gives INTUIT all reasonable necessary information, that is
available to it, and all needed assistance and authority, at INTUIT’s expense,
to enable INTUIT to defend or settle such suit.

     Section 7.3 Indemnity by MODUS MEDIA

8

 

     MODUS MEDIA shall, at its own expense, indemnify and defend INTUIT against
all claims, suit, losses, expenses, and liabilities (including
INTUIT’s
reasonable attorney fees) for personal injury, death and tangible property
damages made against INTUIT caused by MODUS MEDIA or as a result of the
negligence, intentional wrongful acts or omissions, or misrepresentations of
MODUS MEDIA or any person for whose actions MODUS MEDIA is legally liable.

     MODUS MEDIA shall pay all damages awarded therein against INTUIT or agreed
upon in settlement by MODUS MEDIA relating to this indemnity, provided that
INTUIT gives MODUS MEDIA notices in writing of any such suit, proceeding, or
threat thereof, and permits MODUS MEDIA, through counsel of its choice, to
answer the charges and defend and or settle such suit; and INTUIT gives MODUS
MEDIA all reasonably necessary information that is available to it
and assistance and authority, at MODUS MEDIA’s expense, to enable MODUS MEDIA to
defend or settle such suit.

ARTICLE 8

LIMITATION OF LIABILITY

     Section 8.1 Limitation of Liability

     EXCEPT FOR LIABILITIES ARISING FROM BREACH OF SECTIONS 7.1 OR 10.1, TO THE
FULL EXTENT ALLOWED BY LAW, THE PARTIES EXCLUDED ANY LIABILITY TO THE OTHER
WHETHER BASED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE). FOR INCIDENTAL,
CONSEQUENTIAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND, OR FOR LOSS
OF REVENUE OR PROFITS, LOSS OF BUSINESS, UNDER THIS AGREEMENT.

     Section 8.2 Limitation of Damages

     NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE MAXIMUM
LIABILITY OF EITHER PARTY TO THE OTHER FOR DAMAGES HEREUNDER SHALL NOT EXCEED
THE TOTAL COST OF REPLACING THE PRODUCT GIVING RISE TO THE CLAIM, EXCEPT THAT
THIS LIMITATION SHALL NOT APPLY TO AMOUNTS OWED FOR SERVICES PROVIDED AND
UNPAID UNDER THIS AGREEMENT, DAMAGES ARISING FROM BREACH OF SECTIONS 7.1 OR
10.1.

9

 

ARTICLE 9

WARRANTY AND WARRANTY DISCLAIMERS

     Section 9.1 Warranty

     MODUS MEDIA represents and warrants that the Services furnished under an
INTUIT Order shall comply with and conform to all specifications in the
Statement of Work, to the best of MODUS MEDIA’s knowledge will be free of
defects in material and workmanship, and that it will provide the Services
under the Agreement in a workmanlike manner by competent personnel and in
conformance with generally accepted standards within its industries. MODUS
MEDIA warrants and represents that is shall comply will all federal, state and
local laws. MODUS MEDIA further warrants and represents to INTUIT that MODUS
MEDIA shall keep the equipment and appliances needed to provide Services under
an INTUIT Order in such condition as is required to perform their normal
operations and for Modus Media to perform the Services in accordance with this
Agreement. If any repairs or alterations must be made at any time MODUS MEDIA’s
equipment or appliances in order to prevent or remedy a breach of the foregoing
warranty, MODUS MEDIA will immediately undertake such repair or alteration. In
the event MODUS MEDIA is in breach of this section, INTUIT’s initial remedy
shall be to report the breach to MODUS MEDIA, and MODUS MEDIA shall cure the
breach by either repairing or replacing the defective Product or by
reperforming the Services, whichever is applicable, in accordance with the
provisions and the timetables described in Section 6.2.

     Section 9.2 Warranty Disclaimers

     TO THE FULL EXTENT ALLOWED BY LAW, MODUS MEDIA DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATIONS, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO ITS SERVICES.

ARTICLE 10

CONFIDENTIALITY, SECURITY AND PUBLICITY

     Section 10.1 Confidentiality

     During the course of this Agreement, each party may disclose to the other
certain proprietary information (both patentable and unpatentable, including
trade secrets, know how, software, source codes, techniques, future product
plans, marketing plans, customers, inventions, discoveries, improvements, and
research and development data) (“Confidential Information”) of a character
regarding by the disclosing party as confidential. Each party and each of its
employees or consultants to whom disclosure is made shall hold all Confidential
Information and the terms of this Agreement in confidence, and shall not
disclose such information to any third party or apply it to uses other than the
recipient’s performance of this Agreement.

     Such Confidential Information if disclosed in writing shall be marked or
identified as confidential or a similar designation, or if orally or visually
disclosed, shall be identified as the confidential information of the
disclosing party at the time of disclosure and then summarized in writing and
provided to the recipient in such written form within thirty (30) days after
such oral or visual disclosure.

10

 

	(a)	  	Obligation of Confidentiality. Each party agrees that for a period of
three (3) years from receipt of Confidential Information from the other
party hereunder, it shall use the same degree of care that it utilizes
to protect its own information of a similar nature, but in any event not
less than reasonable care to prevent the unauthorized use or the
disclosure of such Confidential Information to third parties. The
Confidential Information shall be disclosed only to employees and
consultants of a recipient with a “need to know” who are instructed to
and agree in writing to not disclose third party confidential
information, and who shall use the Confidential Information only for the
purpose set forth above. A recipient may not alter, decompile,
disassemble, reverse engineer, or otherwise modify any Confidential
Information received hereunder and the mingling of the Confidential
Information with information of the recipient shall not affect the
confidential nature or ownership of the same as stated hereunder.
	 
	(b)	  	Ownership of Confidential Information. All Confidential Information is,
and shall remain, the property of the disclosing party. Nothing herein
shall be construed as granting or conferring any rights by license or
otherwise in the Confidential Information except as expressly provided
herein. A recipient acquires hereunder only a limited right to use the
Confidential Information solely for the purpose of performing its
obligations under this Agreement.
	 
	(c)	  	Return of Confidential Information. Upon the written request of the
disclosing party, or upon the expiration or any earlier termination of
this Agreement, the recipient shall promptly return all copies of the
Confidential Information, in whatever form or media, to the disclosing
party or, at the direction of such party, destroy the same. The
recipient shall certify in writing to the other such return or
destruction within thirty (30) days thereafter.
	 
	(d)	  	Exceptions to Obligations of Confidentiality. This Agreement shall
impose no obligation of confidentiality upon a recipient with respect to
any portion of the Confidential Information received hereunder which:

	       	(i)	  	now or hereafter, though no unauthorized act or failure to act on
recipient’s part, becomes generally known or available;
	 
	       	(ii)	  	is lawfully known to the recipient without an obligation of
confidentiality at the time recipient receives the same from the
disclosing party, as evidenced by written records;
	 
	       	(iii)	  	is hereafter lawfully furnished to the recipient by a third party
without restriction on disclosure;
	 
	       	(iv)	  	is furnished to others by the disclosing party without
restriction on disclosure; or
	 
	       	(v)	  	is independently developed by the recipient without use of the
disclosing party’s Confidential Information.

	 	  	       Nothing is this Agreement shall prevent the receiving party from
disclosing Confidential Information to the extent the receiving party is
legally compelled to do so by any

11

 

	 	  	governmental investigative or judicial agency pursuant to
proceedings over which such agency has jurisdiction; provided, however,
that prior to any such disclosure, the receiving party shall:

	       	(a)	  	assert the confidential nature of the
Confidential Information to the agency;
	 
	       	(b)	  	immediately notify the disclosing party in
writing of the agency’s order or request
to disclose; and
	 
	       	(c)	  	cooperate fully with the disclosing party in
protecting against any such disclosure and/or obtaining a
protective order narrowing the scope of the compelled
disclosure and protecting its confidentiality.

     Section 10.2 Security

     MODUS MEDIA shall at all times conduct all operations under this Agreement
in a manner to avoid the risk of loss, theft, or damage by vandalism, sabotage
or other means to any property. MODUS MEDIA shall promptly take all reasonable
precautions which are necessary and adequate to protect against conditions
which involve a risk of loss, theft or damage to its property, INTUIT’s
property, and the work site. MODUS MEDIA shall continuously inspect all its
work, materials, and equipment facilities to discover and determine any of the
above-described conditions and MODUS MEDIA shall be solely responsible for
discovery, determination and correction of any such conditions. MODUS MEDIA
shall cooperate with INTUIT on all security matters and MODUS MEDIA shall
promptly comply with any project security requirements established by INTUIT.
Compliance with these security requirements shall not relieve MODUS MEDIA of
its responsibility for maintaining adequate security, nor shall such compliance
be construed as limiting MODUS MEDIA’s obligation to undertake reasonable
action as required to comply with the terms and conditions of this Agreement.
MODUS MEDIA shall prepare and maintain accurate reports of incidents of loss,
theft or vandalism and MODUS MEDIA shall furnish these reports to INTUIT in a
timely manner. MODUS MEDIA is solely responsible for the safety of its own
personnel.

     Section 10.3 Publicity

     Neither party shall disclose, advertise or publish the terms or conditions
of this Agreement
without the prior written consent of the other party, except as may be required
by law or pursuant to a lawful request of a government agency in which event
the party required to make such disclosure shall notify the other party and
provide the other party with reasonable opportunity to prevent such disclosure.
This Section shall survive the expiration or termination of the Master
Agreement.

ARTICLE 11

GENERAL PROVISIONS

     Section 11.1 Relationship of Parties

     MODUS MEDIA is an independent contractor and represents INTUIT solely for
the purpose of performing its obligations on behalf of INTUIT as stated in this
Master Agreement. MODUS MEDIA does not have the authority to bind INTUIT except
as expressly stated herein. No provision of this Agreement or any act of the
parties under this Agreement shall be construed to express or imply a joint
venture, partnership, or relationship other than vendor and purchaser of the
Services described in this Agreement.

12

 

     Except as expressly noted herein, no employee, agent, or representative of
either party shall have the authority to bind the other party in any way. No
employee, agent, or other representative of either party shall at any time be
deemed to be under the control or authority of the other party, or under the
joint control of both parties, Each party shall be fully liable for all
workers’ compensation premiums and liability, federal, state and local
withholding taxes or charges with respect to its respective employees, and each
agrees to indemnify and defend the others from any claims brought against the
other with respect to such claims.

     Section 11.2 Compliance with Laws

     MODUS MEDIA understands and acknowledges that, in performing any Services
under an INTUIT Order, it may act only on instructions from INTUIT, and shall
take appropriate technical and organizational measures against unauthorized or
unlawful processing of confidential information and against accidental losses
or destruction of, or damage to confidential information.

     MODUS MEDIA shall perform its obligations under this Master Agreement in
compliance with all applicable laws and regulations, including Generally
Accepted Accounting Principles (GAAP).

     Each party acknowledges and agrees that the Software, all documentation
and other technical information delivered hereunder (“Technical Data”) are
subject to export controls imposed by the United States Export Administration
Act 1979, as amended (the “Act”) (or any future export control laws) and the
Export Administration Regulations (“EAR”) promulgated there under. MODUS MEDIA
agrees not to export, reexport, or transmit, directly or indirectly, any
Technical Data outside the United States or Canada without complying with the
Act and without the prior written consent of the Bureau of Export
Administration of the U.S. Department of Commerce, or such other governmental
entity as may have jurisdiction over such export or transmission. MODUS MEDIA
certifies that neither the Technical Data nor its direct product: (a) is
intended to be used for any purpose prohibited under the Act of EAR including,
without limitations, nuclear related activities or chemical or biological
weapons or missiles; or (b) is intended to be shipped, exported or transmitted,
either directly or indirectly to any foreign destination outside the United
States or Canada. This section shall survive any termination or expiration of
this Agreement.

     INTUIT and MODUS MEDIA represents and warrant all products provided to
MODUS MEDIA hereunder, including commodities, technology, and software, will be
imported or exported in accordance with application laws and regulations
including specifically U.S. laws and regulations.
Diversion contrary to U.S. law is prohibited. Resale or reexport to Iraq,
Sudan, Iran, Syria, Cuba, Libya or North Korea is prohibited. Transfer or
resale to nuclear, missile, chemical or biological weapons end users or end
uses is prohibited. Resale or reexport to Albania, Armenia, Azerbaijan,
Belarus, Bulgaria, Cambodia, Estonia, Georgia, Kazakhstan, Kyrgystan, Laos,
Latvia, Lithuania, Moldova, Mongolia, People’s Republic of China (excluding
Hong Kong), Romania, Russia, Tajikstan, Turkmenistan, Ukraine, Uzbekistan, or
Vietnam without approval of the U.S. Government is
prohibited. MODUS MEDIA shall subscribe to the publications
“Denied Parties; Specification Designated Nationals” and “The Entity List”, (the “Lists”) from a
qualified service such as OCR, RegData or other regulatory provider approved by
INTUIT. All Customer Orders should be screened against said List at initiation
of order. MODUS MEDIA shall retain documentation, entering the dates of the
screenings, the name of the person(s) performing the screenings, and the date
of the list used to perform the screening, in an electronic file. This log or
file MUST BE MAINTAINED FOR AUDIT PURPOSES for a period of 6 years after which
MODUS MEDIA will notify INTUIT before destroying. If a Customer appears on any
of the Lists, MODUS MEDIA shall immediately cancel all

13

 

pending orders and stop any in-transit shipments to the Customer, to the extent
legally possible, and shall promptly notify INTUIT of such Customer.

     MODUS MEDIA is responsible for obtaining the required licenses, paying
permit fees, duties and customs fee in order to perform its obligations under
this contract. INTUIT is responsible for providing MODUS MEDIA with an Export
License Requirement Matrix, outlining the commodity Name, ECCN, Schedule B and
License Requirement by Country Group for all products and technology, being
exported. MODUS MEDIA is responsible for preparing and submitting all required
documentation in connection with the invoicing of INTUIT products. If MODUS
MEDIA delivers products to any customer in accordance with INTUIT’s directions,
INTUIT agrees to indemnify MODUS MEDIA for any consequent direct or indirect
violation of the application export control laws. MODUS MEDIA will retain for a
period of 6 years. Documents and other evidence sufficient to enable INTUIT to
support governmental reviews or audits. MODUS MEDIA further agrees to assist
INTUIT, upon request, in any appropriate legal or administrative proceedings
regarding the validity of such licenses, fees and taxes.

     Section 11.3 Work Product

     Work product MODUS MEDIA has developed to provide the Services in this
Agreement is the exclusive property of MODUS MEDIA. Information contained
within the work products which is INTUIT confidential, relates to INTUIT’s
customer information, and purchases. And INTUIT inventory standard cost, is the
exclusive property of INTUIT and will be surrendered to INTUIT upon demand.

     Section 11.4 Validity

     If any of the provisions of this Agreement are declared to be invalid,
such provisions shall be severed from this Agreement and the surviving
provisions shall remain in full force and effect.

     Section 11.5 Waiver

     A waiver of any default hereunder or of any of the terms and conditions of
this Agreement shall not be deemed to be a continuing waiver or a waiver of any
other default or of any other term or conditions, but shall apply solely to the
instance to which such waiver is directed. The exercise of any right or remedy
provided in this Agreement shall be without prejudice to the right to exercise
any other right or remedy provided by law or equity.

     Section 11.6 Assignability

     This Agreement shall not be assigned by either party without the prior
written consent of the other party, which shall not be unreasonably withheld or
delayed; provided that the assignee is of the same or greater creditworthiness as the assignor. Notwithstanding the preceding
sentence, INTUIT and MODUS MEDIA may assign their rights and obligations
hereunder to any subsidiary or affiliate or in connection with a merger or
other business combination in which it is not the surviving entity, except if
the assignee is a competitor of the nonassigning party. Any such attempted
assignment in violation of this provision shall be null and void.

     Section 11.7
Governing Law

14

 

     THE VALIDITY, PERFORMANCE, CONSTRUCTION, AND INTERPRETATION OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA, EXCLUDING
CONFLICTS OF LAWS PRINCIPLES AND EXCLUDING THE UNITED NATIONS CONVENTION ON
CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS.

     Section 11.8 Disputed Resolution

     The parties will attempt in good faith to promptly resolve any controversy
or claim arising out of or relating to this Master Agreement or Statement of
Work, except for matters pertaining to Intellectual Property, through
negotiations between the parties before resorting to other remedies available
to them. Any such dispute shall be referred to appropriate senior executives of
each party who shall have the authority to resolve the matter. If the senior
executives are unable to resolve the dispute within ten (10) business days from
the date the senior executives receive notification of the disputed in writing,
the parties may by agreement refer the matter to an appropriate forum of
alternative dispute resolution ranging from mediation to arbitration. If the
parties cannot resolve them matter or if they cannot agree upon an alternative
form of dispute resolution, then either party may pursue resolution of the
matter through litigation.

     Section 11.9 Force Majeure

     Neither party shall be liable to the other party for any alleged loss or
damages resulting from delays in performance caused by acts of the other party,
acts of civil or military authority, governmental priorities, earthquake, fire,
flood, epidemic, quarantine, energy crisis, strike, labor trouble, war, riot,
accident, shortage, delay in transportation, service outage of a telephone
provider or public utility, or any other causes beyond the reasonable control
of the party whose performance is so delayed, except that INTUIT shall at all
times be responsible for the prompt payment of all if its financial obligations
to MODUS MEDIA. If MODUS MEDIA’s performance of Services is
delayed by Force Majeure, the time for performance shall be extended for the period of Force
Majeure.

     Section 11.10 Employee Solicitation Prohibited

     Each of the parties hereto recognizes that the experience, dedication, and
know-how of their employees represent an important, valuable, unquantifiable
asset and a significant training investment. Therefore, for Term of this Master
Agreement and for six (6) months after an employee is involved in any work
pursuant to or related to this Agreement, neither party may, without the prior
written permission of the other party, directly solicit for employment for
similar duties as currently performed, any employee of the other party. For the
purposes of this Section, “directly solicit” shall be defined as a party and or
search firm employed by the party and acting on the party’s behalf initiating a
discussion with an employee of the other party regarding a job at the
soliciting party, and requesting that the employee of the party submit a resume
and/or interview for the job. “Directly solicit” shall not be deemed to include
public advertising (e.g., in newspapers, trade publications, or solicitation by
independent recruiters).

     Section 11.11 Authorized Representatives

     Each party shall, at all times, designate one representative who shall be
authorized to take any and all action and/or grant any approvals required in
the course of performance of this Agreement. Such representative shall be fully
authorized to act for and bind such party including the approval of

15

 

amendments to this Agreement. Until written notice to the contrary, the
authorized representatives of the parties are as follows:

	 	 	 
	For INTUIT:	 	
For MODUS MEDIA:
	 
	Dave Kinser	 	
Ron Leitch
	Sr. Vice President	 	
President, Americas Region
	Intuit Inc.	 	
Modus Media International, Inc.
	2535 Garcia Avenue	 	
690 Canton Street
	Mountain View, CA 94043	 	
Westwood, MA 02090
	Telephone Number 650-944-6656	 	
Telephone Number 781-407-2000
	 
	Copy to Catherine Valentine, General Counsel	 	
General Counsel

     The authorized representative’s manager and manager’s manager, and any
corporate officer shall also have the power to bind the party. No other
employee, agent. Or representative has the authority to bind the party.

     Section 11.12 Notices

     Any notice regarding non-performance, breach, termination, or renewal
required or permitted to be given under this Master Agreement shall be given in
writing and shall be hand delivered or deposited, postage prepaid, registered
or certified mail, in the United States or other country’s mail, or sent by
express delivery, addressed to MODUS MEDIA, or INTUIT, as the case may be, at
the address shown below or at such other address as shall be given by either
one to the other in writing. All other notices may be sent by regular mail or
facsimile. All notices shall be deemed to have been given and received on the
earlier of actual delivery or three (3) days for the date of postmark.

	 	 	 
	For INTUIT:	 	
For MODUS MEDIA:
	 
	Dave Kinser	 	
Ron Leitch
	Sr. Vice President	 	
President, Americas Region
	Intuit Inc.	 	
Modus Media International, Inc.
	2535 Garcia Avenue	 	
690 Canton Street
	Mountain View, CA 94043	 	
Westwood, MA 02090
	 
	Copy to Catherine Valentine, General Counsel	 	
General Counsel

     Section 11.13 Time is of the essence in this Agreement.

     Modus Media and Intuit agree that with respect to any projects under this
Agreement, time is of the essence.

16

 

     Section 11.14 Costs of Litigation

     If any legal action, arbitration or other judicial proceeding is brought
based on an alleged dispute, breach, default, or misrepresentation regarding
this Agreement, the prevailing party or parties shall be entitled to recover
reasonable attorney’s fees and the other costs incurred in that action or
proceeding, including costs relating to the collection of overdue invoices.
The prevailing party or parties shall also be entitled to obtain any other
relief to which the prevailing party or parties may be entitled.

     Section 11.15 Severability

     If any provision of this Agreement is held invalid or unenforceable by any
court of final jurisdiction, (a) said provision shall be reconstrued in a
manner that will eliminate only the part of the provision that is invalid or
unenforceable and that will give effect to the intent of the parties as
discerned from the remaining provisions of the agreement, (b) the remainder of
this Agreement shall remain in full force and effect, and (c) all other
provisions of this Agreement be construed to remain fully valid, enforceable,
and binding on the parties.

     Section 11.16 Entire Agreement

     All parties acknowledge having read this Agreement and agree to be bound
by its terms. This Master Agreement and the Schedules, Exhibits and Statements
of Work attached hereto contain the complete, final and exclusive statement of
the terms of the agreement between the parties relating to the subject matter
hereof and supersedes all prior understandings, writing, proposals,
representations or communications, oral or written, relating to the subject
matter hereof. This Agreement may not be modified except in writing executed by
both parties. The terms and conditions of the Agreement shall prevail
notwithstanding any conflict with the terms and conditions of any Invoices or
other form used by MODUS MEDIA, or any purchase order of any other form used by
INTUIT.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
effective date set forth in Section 1.1:

INTUIT INC.

By:   /s/ DAVID KINSER

Its:   Vice President and Chief Information Officer

MODUS MEDIA INTERNATIONAL, INC.

By:   /s/ RON LEITCH

Its:   President, Americas Region

17

 

Exhibit 1

RIGHT TO COPY OBJECT CODE AND DOCUMENTATION LICENSE

               1. License Software and Documentation. The software
(“License Software”) and related documentation (“Licensed Documentation”)
included under this Exhibit 1 are listed on Exhibit 1, attached hereto. INTUIT
will provide MODUS MEDIA with a “Golden Master” of the Licensed Software and
Licensed Documentation.

               2. License Grant. Subject to the
terms of this Exhibit 1, INTUIT
hereby grants to MODUS MEDIA and MODUS MEDIA hereby accepts a non-exclusive,
non-royalty bearing, personal, non-transferable license to reproduce verbatim
the License Software and the Licensed Documentation, which may be customized or
modified, to be distributed by MODUS MEDIA to Customers upon request by such
Customer, in accordance with MODUS MEDIA’s obligations as stated in the Master
Agreement. MODUS MEDIA agrees and acknowledges that this license does not grant
any rights or title to patents, copyrights, trade secrets, trademarks, or
rights of ownership in the Licensed Software or Licensed Documentation, in
whatever form.

               3. License Fee. No license fee are due and payable by MODUS MEDIA to
INTUIT for the license(s) granted pursuant to this Exhibit 1.

               4. Copyright Notice. INTUIT’s
copyright notice as contained in
the Golden Master(s) must be included on each copy made by MODUS MEDIA of the
License Software and Documentation, in whatever form.

               5. Term. The term of this Exhibit 1 shall be coterminous with that of the Master Agreement, unless
terminated earlier by either party by the other party as provided in the Master
Agreement. Upon termination or expiration of this Exhibit 1 MODUS MEDIA will
destroy all Golden Masters and so certify to INTUIT, and MODUS MEDIA will not
make any additional copies.

               6. Transferability. MODUS MEDIA may not transfer or assign Golden Master
to another party. MODUS MEDIA may not transfer, assign, or sublicense the
license granted hereunder to another party.

               7. Confidentiality. MODUS MEDIA hereby acknowledges that the structure
and organization of the Licensed Software are valuable trade secrets of INTUIT
and its intellectual property. MODUS MEDIA agrees to hold such trade secrets
and intellectual property in confidence. MODUS MEDIA further acknowledges that
INTUIT retains title to the Licensed Software and Licensed Documentation
recorded on the original media and all subsequent copies of the Licensed
Software regardless of the form or media. Modification, reverse engineering,
reverse compiling or disassembly of the License Software are expressly
prohibited.

18

 

RIGHT TO COPY OBJECT CODE AND DOCUMENTATION LICENSE

EXHIBIT 1A to MASTER AGREEMENT

between

INTUIT INC. and MODUS MEDIA INTERNATIONAL, INC.

EXHIBIT 1A

LICENSED SOFTWARE

MODUS MEDIA is authorized to duplicate software copies of, for the purposes of
this Agreement only.

LICENSED DOCUMENTATION

MODUS MEDIA is authorized to duplicate all collateral and media for end users
or channel partners, for the purpose of this Agreement only.

19

 

EXHIBIT 2

Intuit’s Privacy Policy for Partners

In addition to the obligations under the Agreement between Intuit and its
Partner, Intuit requires that its Partners comply with certain policies in
order to safeguard the confidentiality of Personally Identifiable Information
relating to Intuit’s customers. For this reason, Intuit has adopted the
following Privacy Policy for Partners that must be adhered to as a condition of
Partners doing business with Intuit.

The Privacy Policies for Partners are intended to apply only to Intuit’s
business conducted in the United States. All Partner agreements and amendments
that become effective on or after April 3, 2000, must incorporate this Privacy
Policy for Partners.

Definitions

	      	•	  	Partner – For the purpose of this document only, a “Partner”
is any third party that has a contractual agreement to provide
marketing, products or services to Intuit or Intuit’s customers,
and/or has access to Personally Identifiable Information. Except as
expressly stated in this Policy, this Policy shall not be
interpreted or construed to create an association, agency, joint
venture or legal partnership between Intuit and such third parties
or to impose any liability attributable to such a relationship upon
either party. Neither party shall have any right, power or authority
to enter into any agreement for or on behalf of, or incur any
obligation or liability of, or to otherwise bind the other party.

	      	•	  	Intuit Customer – Users who view Intuit-owned/controlled Web sites,
register at Intuit-owned/controlled Web sites, order or use Intuit
products, services or software trials. Pursuant to specific
Intuit-Partner agreements, a Partner may have particular rights to use
Personally Identifiable Information.

	      	•	  	Personally Identifiable Information – For the purpose of this
document, Personally Identifiable Information relates to information
about Intuit Customers that, among other things, identifies or can
be used to identify, contact, or locate the person to whom such
information relates. Personally Identifiable Information includes,
but is not limited to name, address, phone number, fax number, email
address, social security number and credit card information. To the
extent unique information (which by itself is not personally
identifiable), such as a personal profile, unique identifier, and IP
address is associated with Personally Identifiable Information, then
such unique information will also be considered Personally
Identifiable Information. Personally Identifiable Information

20

 

	      	 	  	does not include information that is collected anonymously or
demographic information not connected to an identified individual,
provided that certain types of such non-identifiable information may
still be subject to restrictions on use and disclosure by law, e.g.,
tax return information.

Partners’ General Responsibilities

	      	•	  	Partners must agree to comply with this Privacy Policy for
Partners and to clearly communicate and enforce this Policy among
their employees, agents and any third parties used to perform any of
the Partners’ obligations under their Agreement with Intuit or this
Policy.
	 
	      	•	  	Partners shall treat Personally Identifiable Information as
confidential and proprietary information of Intuit and to protect it
from disclosure to any third party (that is not an agent of the
Partner contracted to do work pertaining to the Agreement), subject
to this Policy, their Agreement with Intuit, and otherwise required
by law.
	 
	      	•	  	Partners shall limit their collection and use of Personally
Identifiable Information to the expressed business purpose(s) set
forth in the relevant Agreement(s) between the Partners and Intuit.
	 
	      	•	  	Partners shall employ appropriate security measures to
maintain the integrity and confidentiality of Personally
Identifiable Information, and take reasonable precautions to protect
it from loss, misuse or accidental or unauthorized access or
alteration.
	 
	      	•	  	Partners shall ensure that only authorized employees and
agents, who are trained in the proper handling of Personally
Identifiable Information and who are subject to obligations to
maintain the confidentiality and restricted use of such information,
have access to Personally Identifiable Information.
	 
	      	•	  	Partners must transmit Personally Identifiable Information in
a secure manner and store it in a secure environment.
	 
	      	•	  	Except where Personally Identifiable Information is
“co-owned,” or the customer provides Personally Identifiable
Information to the Partner without restriction, Partners shall not
rent, sell, or otherwise disclose Personally Identifiable
Information. In those circumstances where Partners “co-own”
Personally Identifiable Information, or the customer provided such
information to the partner without restriction, Partners may rent,
sell, or otherwise disclose Intuit Personally Identifiable
Information only if they provide a method for Intuit Customers to
“opt out” of such activity (see Opt Out Choice below).

21

 

	      	•	  	Intuit encourages its Partners to adopt privacy policies and
practices (beyond what is covered here in this Policy) at least as
protective as those used by Intuit.
	 
	      	•	  	Partners shall comply with applicable law in their use and
disclosure of all information provided to them by Intuit, whether or
not such information falls within the definition of Personally
Identifiable Information.
	 
	      	•	  	Partners who collect Personally Identifiable Information
related to Intuit customers shall identify to customers the
organization(s) collecting this Information and describe to
customers how this Information will be used.

Suppression

	      	•	  	Intuit maintains in-house suppression file(s) that include
Personally Identifiable Information relating to those individuals
who have indicated the circumstances under which they may not want
to be contacted or solicited by Intuit. Partners who work on
Intuit’s behalf, i.e. outsourcers or vendors, shall comply with
Intuit’s policies relating to the use of such suppression file(s) to
suppress names and addresses in the services they perform and the
databases they use, maintain, and/or manage on behalf of Intuit.
	 
	      	•	  	Except where Personally Identifiable Information is
“co-owned,” Partners shall not use Personally Identifiable
Information maintained in Intuit’s in-house suppression files.
	 
	      	•	  	Partners who conduct mail solicitation to prospective
customers on behalf of Intuit shall utilize the Direct Marketing
Association’s Mail Preference Service.

Telemarketing

	      	•	  	Partners who conduct telemarketing activities on Intuit’s
behalf shall comply with all applicable laws and regulations
including “Do Not Call” laws.
	 
	      	•	  	Partners who conduct telemarketing activities on Intuit’s
behalf shall comply with Intuit’s Do Not Call Policy (attached).
	 
	      	•	  	Partners who conduct telemarketing activities on behalf of
Intuit shall employ the Direct Marketing Association’s Telephone
Preference Service, as well as any applicable federal and/or
local/state-managed preference services when phoning prospective
customers.

Fax

22

 

	      	•	  	Partners who work on Intuit’s behalf to conduct fax
activities shall comply with all applicable laws and regulations
relating to fax marketing activities.
	 
	      	•	  	Partners who work on Intuit’s behalf to conduct fax
activities shall not send any unsolicited facsimile to any recipient
who does not have a prior business relationship with Intuit, unless
the recipient has given Intuit prior express permission to receive
such a facsimile.
	 
	      	•	  	Partners who work on Intuit’s behalf to conduct fax
activities to prospective Intuit customers shall include the date
and time of transmission, and the name and telephone number of
Intuit, or Partner working on Intuit’s behalf, as well as notice of
how to opt-out of future facsimile communications.

Email

	      	•	  	Partners who conduct email marketing activities on Intuit’s
behalf shall not send unsolicited email to any recipient who does
not have a preexisting relationship with Intuit or who has not
consented to receive such email. Consent from a prospective
customer is considered to be given when such a prospect opts in to
receiving communications from Intuit or opts in to a program where
the prospect chooses to receive communications from companies like
Intuit, i.e. companies engaged in financial services. Marketing
email sent on Intuit’s behalf shall contain notice of how to opt-out
of future marketing email communications.

Opt Out Choice

	      	•	  	Intuit customers may choose their contact preferences for the
manner in which Intuit will use Personally Identifiable Information.
Partners that provide products or services on Intuit’s behalf must
agree to employ procedures in a timely manner to honor these
preferences.
	 
	      	•	  	Partners that provide co-branded Web sites with Intuit, shall
give customers of the co-branded Web site the opportunity to choose
their preferences for the manner in which the co-branding Partner
will use Personally Identifiable Information for marketing and list
rental purposes.
	 
	      	•	  	Partners, to whom Intuit refers Intuit Customers, or provides
Personally Identifiable Information, shall give customers the
opportunity to choose their preferences for the manner in which the
Partner will use Personally Identifiable Information for marketing
and list rental purposes.

Reviews

	      	•	  	Partners that provide products or services on Intuit’s
behalf, i.e. outsourcers or vendors, shall reasonably cooperate with
Intuit so as to allow Intuit to verify their compliance with
Intuit’s Privacy Policies for Partners and shall allow Intuit to
audit their records and practices to determine compliance with such
Policy.

23

 

	      	•	  	All Partners must be able to demonstrate compliance with
these policies.

Ad Servers

Intuit hires companies that serve ads on Intuit’s Web sites; these companies
are known as ‘ad servers’.

	      	•	  	Intuit shall not disclose Personally Identifiable
Information, which Intuit collects, to ad servers.
	 
	      	•	  	Ad servers shall offer an opt-out mechanism to customers,
that when used, will prohibit ad servers from associating Personally
Identifiable Information with customers’ anonymous customer profile.
	 
	      	•	  	Intuit shall have the option of disclosing the ad server by
name in its privacy statement(s) along with links to the ad server’s
privacy statement and opt-out mechanism(s).

When an Intuit Customer Becomes a Partner’s Customer

	      	•	  	Intuit’s Web sites may include services or information
provided by Partners, for example, insurance companies. Intuit is
not responsible for any information provided to or transactions
entered into by customers with such Partners. In the event Intuit’s
Web site customers provide information or engage in transactions
with such Partner, the terms governing the collection and use of any
Personally Identifiable Information provided in connection therewith
shall be governed by the terms of such Partner’s privacy policies
and/or practices, and Intuit shall have no liability therefor.
	 
	      	•	  	Pursuant to an Intuit-Partner agreement, Intuit and the
Partner may independently control Personally Identifiable
Information. In such cases, the Partner’s privacy policies apply to
the Partner’s practices.

Marketing to Children

Intuit’s Web sites are not intended for children (ages 13 and under) nor does
Intuit knowingly collect personal data from children. Partners may not market
Intuit’s site to their customers who may be children, nor link Intuit sites to
those intended for children.

Compliance with U.S. Laws and Regulations

Partners shall comply with all applicable federal, state, and local laws and
regulations.

24

 

Policy Changes

Intuit may, in its sole discretion, amend this policy from time to time, as
required by law or otherwise.

25

 

EXHIBIT 3

Privacy Technology Guidelines

	       	1.	  	Disclosure. Post a prominent privacy policy (linked from
your home page) to tell consumers what you collect, how and why,
and what their rights are.
	 
	       	2.	  	Access. Customers must be able to “login” to a website to
see information collected about them. They should be able at any
time to change or delete information collected, with the
exception that certain transactional information (e.g., a
purchase record) is owned by the merchant.
	 
	       	3.	  	SSL. Always use https/ssl (vs email or clear http etc)
for transmission of any information which is considered private
(financial information like credit card numbers, personally
identifiable information like email or street address or phone
number, etc), to prevent http snooping. (Data centers should
tcp-snoop all traffic to grep for passwords.)
	 
	       	4.	  	Encryption. Always oneway encrypt all passwords—never
store any unencrypted or two-way hashed passwords on disk. This
means that customer support must never be able to get someone’s
password, but must instead only be allowed to reset it, else
(better) let the user reset it themselves, with coded-URL email
confirmation.
	 
	       	5.	  	URL Parameters. Do not pass user identifiable information
as URL parameters, as this causes them to be logged in the http
logfiles. (And also sends this information in the clear if you
forget to use SSL.) Instead, use hidden form fields or cookies
or encrypted session IDs.
	 
	       	6.	  	Email Login. Use email address to uniquely indentify
users vs. making them create yet another unambiguous login id
which they will forget and write down (and thus open a
security/privacy hole).
	 
	       	7.	  	Password Email. Never ever send any passwords (even
temporary ones) by email, as they can easily be tcp snooped.
	 
	       	8.	  	Precedence: Bulk. All bulk email should have Precedence:
Bulk in the header, to allow systems and users to correctly
prioritize bulk invasions.
	 
	       	9.	  	Actual “To” Address. All bulk email should have the
actual recipient address on the To line (this means one email
per recipient!) to allow recipient to know which of their many
email addresses were used.
	 
	       	10.	  	Actual “From” Address. Make sure all of your email is
sent with an accurate From address, so consumers can simply hit
the Reply key in their mail client to reply to a human. The From
address should also include a descriptive “full name”.

26

 

	       	11.	  	List Exposure. Do not ever list all recipient email
addresses in the mail headers, else this will expose recipients
to other recipients. (Also, the BCC field should not be used for
this.)
	 
	       	12.	  	One Click Removal. All bulk email messages should include
a personalized/coded removal URL to allow single click removal.
The coded URL should not contain the email address itself. Do not use
systems which require the user to reply-to the bulk
email with some special address or Subject convention, as these
do not work for people whose known email was forwarded to
another of their email addresses.
	 
	       	13.	  	Opt-in for mailing lists (promotions, newsletters, etc),
with a separate opt-in for the “selected partners” lists. (Need
guidelines as to when to use opt-in vs opt-out...)
	 
	       	14.	  	Victim Signup. In cases where there is an email signup
that might be abused (bad guys signing up victims to random high
volume newsletters), consider sending coded-URL opt-in email to
confirm the opt-in email address.
	 
	       	15.	  	RFC822. Allow fully RFC822 compliant email addresses, including
ones like paul+amazon@example.com (the +amazon part is used by
many privacy advocates to track down where/how their email
addresses are used).
	 
	       	16.	  	Law Enforcement. Provide customer information to legal
authorities as required, but take steps to verify their identity
and authority, only sending them the minimal set of information
which will satisfy their requests.
	 
	       	17.	  	htaccess should never be used as the secure web site
login mechanism for mass market / consumer applications, as it
is a lousy user interface.
	 
	       	18.	  	Forced Changes. Do not force consumers (vs. internal
corporate/enterprise users) to regularly change their passwords,
as this will cause them to forgot them, and to write them down
somewhere (and thus open a security/privacy hole).
	 
	       	19.	  	Digital Certificates. Do not use digital certificates
for mass market consumer applications, as they are way too hard
to use for this. (They are appropriate for server-to-server
authentication, or for corporate/enterprise applications.)

27

 

FIRST AMENDMENT TO MASTER AGREEMENT

Between INTUIT INC. and MODUS MEDIA INTERNATIONAL, INC.

THIS FIRST AMENDMENT TO MASTER AGREEMENT (“First Amendment”) shall be effective
as of August 27, 2001 (herein the “Effective Date”) and it is between INTUIT
Inc. (herein “INTUIT”), a Delaware corporation located at 2535 Garcia Avenue,
Mountain View, CA 94043, and MODUS MEDIA INTERNATIONAL, INC., incorporated in
Delaware (herein “MODUS MEDIA” or “MMI”), located at 690 Canton Street,
Westwood, MA 02090, and shall run coterminous with the Master Agreement between
the parties of the same effective date (“Master Agreement”).

Whereas, the parties desire to facilitate Intuit’s purchase of goods and
services provided by MMI;

Therefore, the parties agree to amend the Master Agreement by adding the
following text:

[ * ]

13. The parties agree that the terms and conditions set forth in this First
Amendment do not impact the current pricing negotiated by the parties. In the
event that any additional charges are incurred, the parties shall negotiate in
good faith to revise the pricing schedule accordingly.

IN WITNESS WHEREOF, the parties hereto have signed this First Amendment as of
August 27, 2001.

INTUIT INC.

By:   /s/ KEN R. MUDGE

Its:   VP, Procurement

MODUS MEDIA INTERNATIONAL, INC.

By:   /s/ FRED LASKEY

Its:   VP & GM, Americas Operation

*     We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (SEC). We omitted such portions from this
filing and filed them separately with the SEC.

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