06-106, Insight Consulting Services, Inc.
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AGREEMENT FOR
CONSUL T A TION SERVICES
WHEREAS, Insight Consulting Services, Inc., an Arizona LLC (hereinafter
"Consultant") has submitted a proposal to the City of Cupertino (hereinafter "City") to provide
City with consulting services consisting of the assessment and creation of new sales and use tax
revenue sources for City to be derived from Insight Direct USA, Inc., Insight Public Sector, Inc.,
Software Spectrum, Inc., and other affiliated companies doing business in the state of California
not yet identified in this agreement (all companies hereinafter collectively referred to as
"Insight"); and
WHEREAS, it is intended by Consultant and City that said services will be automatically
self-funding because Consultant is willing to receive its compensation for said services on a
contingency basis solely and entirely derived from new local sales or use tax revenue generated
by Insight for the benefit of City which City would not otherwise realize; and
WHEREAS, Consultant and City wish to enter into this Agreement for the purposes
described above:
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Services to be Performed by Consultant
Consultant shall perform the following services (collectively, the "Services") under this
Agreement:
(a) Assess and detail the current local sales and use tax revenue received by the City
from the State Board of Equalization related to Insight sales.
(b) Recommend new methodologies to increase the local sales or use tax for City to
be developed and implemented through corporate expansion efforts at Insight.
(c) Provide to City a detailed analysis and description of any new local sales and use
tax revenue received by City from Insight.
2. Compensation to be Received by Consultant
As consideration for Consultant's perfonnance of the Services, as described in Paragraph
1, above, Consultant shall receive the following compensation for each City fiscal year
during the tenn covered by this Agreement, as follows:
(a) If, for any fiscal year during the tenn covered by this Agreement, new local sales
and use tax revenue equals any amount less than Two Hundred Fifty Thousand
Dollars ($250,000), then in such event Consultant will receive no compensation
with respect to such fiscal year.
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(b) If, for any fiscal year during the term covered by this Agreement, new local sales
and use tax revenue equals Two Hundred Fifty Thousand Dollars ($250,000), then
Consultant will receive the sum of Sixty-Two Thousand Five Hundred Dollars
($62,500) as compensation with respect to such fiscal year.
(c) If, for any fiscal year during the term covered by this Agreement, new local sales
and use tax revenue exceeds Two Hundred Fifty Thousand Dollars ($250,000) but
is less than Five Hundred Thousand Dollars ($500,000), then Consultant will
receive the sum of Sixty-Two Thousand Five Hundred Dollars ($62,500) plus an
amount equal to twenty-five percent (25%) of all such additional new local sales
and use tax revenue between Two Hundred Fifty Thousand Dollars ($250,000)
and Five Hundred Thousand Dollars ($500,000) as compensation with respect to
such fiscal year.
(d) If, for any fiscal year during the term covered by this Agreement, new local sales
and use tax revenue exceeds Five Hundred Thousand Dollars ($500,000) but is
less than One Million Dollars ($1,000,000), then Consultant will receive the sum
of One Hundred Twenty-Five Thousand Dollars ($125,000) plus an amount equal
to forty percent (40%) of all such additional new local sales and use tax revenue
between Five Hundred Thousand Dollars ($500,000) but is less than One Million
Dollars ($1,000,000) as compensation with respect to such fiscal year.
(e) If, for any fiscal year during the term covered by this Agreement, new local sales
and use tax revenue exceeds One Million Dollars ($1,000,000), then Consultant
will receive the sum of Three Hundred Sixty-Two Thousand Five Hundred
Dollars ($362,500) plus an amount equal to fifty percent (50%) of all such
additional new local sales and use tax revenue in excess of One Million Dollars
($1,000,000) as compensation with respect to such fiscal year.
3. Sole Compensation
Both City and Consultant expressly acknowledge and agree that Consultant will receive
no compensation for any Services rendered under this Agreement other than the
compensation described in Paragraph 2, nor shall Consultant be entitled to any
reimbursement from the City for any costs or expenses incurred by Consultant in
performing or preparing to perform any Services under and pursuant to this Agreement.
4. Payment Schedule
Not later than thirty (30) days after the date on which City receives from the Board of
Equalization of the State of California, a total of $250,000 or more of new local sales tax
revenue which accrued from sales and use taxes paid by Insight during a fiscal year
covered by this Agreement, City shall pay the Consultant the compensation described in
Paragraph 2 of this Agreement. Within thirty (30) days, after the City receives from the
State of California new local sales tax revenue paid by Insight within the same fiscal year
as the initial payment, City shall pay to the Consultant additional compensation as
described in Paragraph 2 of this Agreement.
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5. Definitions
As used in this Agreement, the following tenns shall have the following meanings:
"Local sales and use tax revenue" means that portion of the total California sales and use
tax paid by Insight which is actually received by City.
"New local sales and use tax revenue" means total California sales and use tax paid by
Insight which is actually received by City from the State Board of Equalization of
California, as calculated for each fiscal quarter.
6. Tenn
This Agreement shall commence on July 1, 2006 and shall apply to the City's 2006-07,
2007-08, 2008-09, 2009-10 and 2010-11 fiscal years. This Agreement shall expire on
June 30, 2011, and will have no further force or effect; provided, however, that
Consultant shall be entitled to receive any compensation due to it under this Agreement
for the City fiscal year expiring on June 30, 2011, which compensation shall be paid as
provided in Paragraph 4, below.
7. Fiscal Year
For purposes of this Agreement, City and Consultant agree City's fiscal year begins on
July 1 of each calendar year and ends on June 30 of the succeeding calendar year.
8. Indemnification; City's Warranty and Representation
Consultant agrees to indemnify, defend (if so requested by City, and with counsel of
Consultant's choice but reasonably acceptable to City), and hold City, its officers and
employees, harmless from any claim, action, or lawsuit brought or maintained by any
third party against City as a result of any activity of either party in performing any acts
under this Agreement, except to the extent that any such claim, action or lawsuit arises
out of or in connection with any negligence or willful misconduct on the part of any of
the said indemnified persons. Consultant will also defend (if so requested by City, and
with counsel of Consultant's choice but reasonably acceptable to City) City, its officers
and employees from any legal action challenging the validity of this Agreement. If any
court of competent jurisdiction orders the return to City of funds paid to Consultant as
compensation for Consultant's performance of the Services under this Agreement,
Consultant shall hold, City, its officers, and employees harmless from any such claims
Consultant may have for reimbursement or contribution with respect to any such sums.
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9. Integration Clause; Modification of Agreement
The provisions of this Agreement contain the entire understanding of City and Consultant
related to the subject matter of this Agreement. No oral agreements, understandings or
promises made by the parties or their agents which are not contained in this Agreement
are binding. This Agreement may only be modified by written agreement executed by
both parties.
IN WITNESS WHEREOF, Consultant and City have executed this Agreement by their
duly authorized representatives, on the dates set forth below, to be effective as provided, above.
Date: 12... 1&.4 . D~
avid Knapp, City Mana r
City of Cupertino
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Kimberly Smith, City Clerk
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City of Cupertino
Insight Consulting Services, LLC, an
Arizona LLC
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