Exhibit 1
SERVICES AGREEMENT
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This Services Agreement (the "Agreement") dated as of May 24,
2011, by and between Leverage G&A Resources, LLC, a Texas limited liability
company ("Provider"), and Huntleigh USA Corporation, a Missouri corporation
("Client") collectively, the "parties", and each individually, a "party".
RECITALS
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WHEREAS, Provider is entering into the business of providing
certain "back office" services to Client;
WHEREAS, Provider desires to provide such services to Client; and
WHEREAS, Client desires to purchase such services from Provider.
NOW, THEREFORE, Provider agrees to provide such services to
Client, and Client agrees to purchase such services from Provider, in
accordance with the terms and conditions of this Agreement.
ARTICLE 1.
DEFINITIONS
In addition to other terms defined in the preamble, the recitals and
elsewhere in this Agreement, as used in this Agreement the following
capitalized terms shall have the indicated meanings:
"Additional Services" means the tasks, functions and projects outside
the scope of the Resourced Services that Provider may provide to Client on
terms to be mutually agreed upon and set forth in a Change Order.
"Affiliate" means, with respect to a party, any entity at any tier that
controls, is controlled by, or is under common control with that party. For
purposes of this definition, the term "control" (including with correlative
meanings, the terms "controlled by" and "under common control with") means the
possession directly or indirectly of the power to direct or cause the
direction of the management and policies of an entity, whether through the
ownership of voting securities, by trust, management agreement, contract or
otherwise.
"Agency Fees" means any fees, commissions or other amounts paid to an
employment agency or search firms in the filling of the Provider Key Personnel
positions.
"Attestation" means the issuance of any Opinion, report, or other form
of language which states or implies assurance as to the reliability of any
financial information contained therein or as may be defined pursuant to any
applicable Laws.
"Base Charge" is defined on Exhibit 4.1.
"Business Day" means any day other than Saturday, Sunday or a day on
which commercial banks in Dallas, Texas are authorized or required to be
closed.
"Change" means any (i) increase, decrease, amendment or change of the
Services, (ii) an increase or decrease of the Charges for the Services, but
never less than the Base Charge or (iii) the addition of Additional Services,
in each case pursuant to the Change Control Procedure.
"Change Control Procedure" is the procedure described in Section 3.5.
"Change Order" means a document documenting a Change in accordance with
the Change Control Procedure.
"Change Request" is defined in Section 3.5(a).
"Charges" means the charges, fees and other amounts payable by Client to
Provider for Services and Pass-Through Expenses (including the Provider Key
Personnel Charge) as set forth in Exhibit 4.1, in Change Orders and as
otherwise provided by this Agreement and "Charges" includes the Base Charge.
"Client Assets" means the assets owned or used by Client to provide the
Mirror Services to itself, and the Operating Services under this Agreement,
including, on job location time clocks, computer hardware, servers, computer
systems, Client Software, Client Intellectual Property, third party systems
and facilities, including those assets identified in Exhibit 9.1.
"Client Confidential Information" means Confidential Information of the
Client and its Affiliates.
"Client Contract Administrator" is defined in Section 5.1(b)
"Client Data" is defined in Section 3.8(c).
"Client Indemnified Parties" means Client, Client's Affiliates and its
and their respective officers, directors, employees and representatives.
"Client Intellectual Property" means Intellectual Property that is owned
by Client.
"Client Software" means any computer programs (including applications,
utilities and operating systems software) or databases owned or licensed by
Client or its Affiliate, and used by Client in connection with the Services
under this Agreement including Ultipro.
"Client Third Party Service Contracts" means all contracts between or
among Client or any Affiliate of Client and any Third Party used by Client in
connection with the provision of the Services or the Operating Services under
this Agreement including those that may be entered into by Client or its
Affiliate and a Third Party during the Term in connection with the Services or
the Operating Services, including, without limitation, a payroll services
agreement with Ceridian, a technology services agreement with Contego and a
MAS 500 agreement with Rand.
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"Client TPSP's" means Client's third party service provider(s), whether
one or more, that provide Operating Services on behalf of Client under the
Client Third Party Service Contracts.
"Commencement Date" means the date upon which the Provider commences
providing the Resourced Services to the Client which is presently targeted to
be August 1, 2011, but that date is subject to the successful and timely
completion of the Migration Plan.
"Confidential Information" is defined in Section 7.1.
"Consent" means the required consent, approval or waiver of any Person
including any of same that is required for any other Person to take a
particular action that would otherwise violate the property or rights
(including contract rights) of the first Person if such consent, approval or
waiver were not granted or is otherwise required under the terms of any
contract.
"Contract Administrator" means the individual appointed by each party to
act as such party's primary point of contact with the other party in dealing
with each party's obligations under this Agreement.
"Covered Employee" means a Level One Employee and a Level Two Employee.
"Derivative Work" means a work based on one or more preexisting works,
including a condensation, transformation, expansion or adaptation, that, if
prepared without authorization of the owner of the copyright of such
preexisting work, would constitute a copyright infringement.
"Dispute" is defined in Section 13.1.
"Effective Date" is defined in Section 2.1.
"Excluded Services" means (i) human resources, (ii) banking, (iii)
operations, (iv) risk management, and (v) any other services that are not
expressly included within the Resourced Services as described on Exhibit
3.1(a) or not expressly included within the Additional Services as described
in any Change Order.
"Intellectual Property" means patents, trademarks, service marks,
copyrights, literary works or other works of authorship, design rights,
know-how, software, documentation, computer programs, computer programming
code (including source code and object code), computer program listings,
machine-readable text and files, data bases, program tools, user manuals, data
bases, trade secrets, inventions, internet domain name registrations, content
contained on internet sites, designs, blueprints, reports, drawings,
proprietary right or other intellectual property right or intangible asset or
right to use or exploit any of the foregoing and all rights or forms of
protection of a similar nature or having equivalent or similar effect to any
of the foregoing, whether or not registered and including applications for
registration of any of the foregoing.
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"Laws" means all statutes, regulations, ordinances, orders, agency
or court interpretations, or other actions of any governmental authority that
are applicable to either party's performance under this Agreement or to the
Services.
"Level One Employees" means, with respect to the applicable party or
its Affiliates, (i) all employees of such party or its Affiliates who are
located at corporate offices during the Term or who provide corporate level
services and functions during the Term and (ii) all general managers and
operation managers of such party or its Affiliates who are on location in
airports during the Term.
"Level Two Employees" means, with respect to the applicable party or
its Affiliates, all employees of such party or its Affiliates who are on
location at airports other than general managers and operation managers of
such party or its Affiliates.
"Losses" means any and all actual losses, liabilities, damages,
injuries, judgments, deficiencies, assessments, fines, penalties, awards,
amounts paid in settlement, interest and reasonable attorneys' fees and
expenses and court costs and reasonable accountants' fees and expenses and
other costs and expenses suffered or incurred including any of the same
incurred in the investigation or defense of any claim, demand, action,
lawsuit, arbitration or other legal proceeding.
"Management Committee" is defined in Section 5.1(d).
"Migration Period" means the period commencing upon the Effective
Date and ending on the Commencement Date.
"Migration Plan" is defined in Section 3.1(b).
"Mirror Services" means the services that are the same as the
Resourced Services that the Client provided to itself during the 12 month
period prior to the Commencement Date.
"Operating Services" means the services and responsibilities to be
provided by Client pursuant to this Agreement as set forth in Exhibit 3.1.
"Opinion" means a statement or other form of language on a financial
statement or report that purports to be expressed in accordance with any AICPA
standards, as to the fairness of presentation of certain information that is
used for guidance in financial transactions, for accounting, for assessing the
status of the performance of an enterprise, or as to the reliability of any
financial statements or information.
"Pass-Through Expenses" is defined in Section 4.4(a).
"Person" means any natural person, corporation, partnership, limited
liability company, limited company, company, trust, association, unincorporated
organization, governmental entity, or other legal entity.
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"Project Staff" means any personnel, including the Provider Contract
Administrator, the Provider Key Personnel and the Provider Agents, who provide
the Services on behalf of the Provider.
"Provider Agents" is defined in Section 3.10.
"Provider Confidential Information" means Confidential Information
of the Provider and its Affiliates.
"Provider Contract Administrator" is defined in Section 5.1(a).
"Provider Indemnified Parties" means Provider, Provider's Affiliates
and its and their respective officers, directors, employees and
representatives.
"Provider Intellectual Property" means Intellectual Property owned
by the Provider.
"Provider Key Personnel" means the individuals filling the job
descriptions specified in Exhibit 5.2.
"Provider Key Personnel Charge" means the total cost and expense
incurred by the Provider with respect to the Provider Key Personnel for Agency
Fees, compensation, salary, bonus, all employee benefits such as health
insurance (including the self insured portions of any such benefits incurred
by any of such Provider Key Personnel), vacation, paid time off, sick leave
and any other employee benefits, plans and programs and the employer's share
of all payroll taxes for the Provider Key Personnel payroll.
"Resourced Services" means a task, function or project, as set forth
in Exhibit 3.1, in the volume, and of the kind and quality delivered by Client
prior to the Commencement Date.
"Response" is defined in Section 3.5(a).
"Senior Management" means a senior executive of Provider and a
senior executive of Client.
"Services" means any or all of Resourced Services, Additional
Services and Termination Services, as the case may be.
"Term" is defined in Section 2.2.
"Termination Services" means the tasks, functions and projects
Provider is to perform in anticipation of and following the termination or
expiration of this Agreement that are requested by Client in order to achieve
an orderly transfer of Services from Provider to Client or to Client's
designee as set forth in Section 3.4.
"Third Party" means any Person other than Client, Provider and their
respective Affiliates.
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"Third Party Action" means a claim, demand, action, lawsuit,
arbitration or legal proceeding initiated, brought or commenced by a Third
Party; and for the avoidance of doubt a "claim" or "demand" as used in the
preceding clause does not require the initiation or pendency of an action,
lawsuit, arbitration or legal proceeding before any court or arbitrator.
"Transfer Taxes" means any federal or state and local sales, use,
privilege, value added, excise, services taxes or similar tax however called
or amounts in lieu thereof, however levied or assessed, that are due with
respect to, or on account of, the Services or the Charges.
ARTICLE 2.
CONDITIONS AND TERM
2.1. Conditions to Effectiveness of Agreement. Even though this
Agreement has been executed, this Agreement shall not become effective until
the following condition shall have been met: all terms and conditions of, for
and to the full funding of the senior revolving credit loan facility (the
"Senior Facility") between Client and Newstar Business Credit, LLC ("Newstar")
have been fully satisfied or waived and Newstar has actually funded the
initial loan proceeds of the Senior Facility. Once this condition has been
met, the Client shall certify that fact to the Provider in writing and without
qualification and the date upon which such written certification has been
received by Provider is referred to herein as the "Effective Date". If the
Effective Date shall not have occurred by June 15, 2011 (the "Drop Dead
Date"), then this Agreement shall automatically become null and void unless
Provider and Client agree in writing to extend the Drop Dead Date.
2.2. Term of the Agreement. This Agreement shall become
effective as of the Effective Date and shall continue until the second (2nd)
anniversary of the Commencement Date at which time this Agreement will
terminate unless terminated earlier in accordance with this Agreement;
provided that if the Client is not in default of this Agreement, the Client
may notify Provider at least six (6) months prior to the second (2nd)
anniversary of the Commencement Date of Client's desire to extend the duration
of this Agreement for a period of one (1) year in which case both parties will
negotiate in good faith the terms of such extension. As used herein "Term"
means the actual term of this Agreement after taking into account any early
termination of this Agreement or any extension of this Agreement and including
the time during which Termination Services are being delivered to the Client.
ARTICLE 3.
SERVICES
3.1. In General.
(a) The Resourced Services. Beginning on the Commencement Date and
continuing as provided in this Agreement, Provider shall be the provider of
the Resourced Services to Client. The Resourced Services are set forth on
Exhibit 3.1(a). In order for the Provider to timely render the Resourced
Services, Client shall timely render the Operating Services as set forth on
Exhibit 3.1(a). Provider shall provide information to enable Client to
understand how
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Provider provides Services sufficient to enable Client to effectively render
the Operating Services. The responsibilities of Provider and Client with
respect to the Services and the Operating Services are set forth in this
Agreement, any Change Order and the Exhibits hereto and thereto. The Provider
shall not provide any Excluded Services and shall have no obligations or
responsibilities with respect to any Excluded Services.
(b) Migration Period. During the Migration Period, the parties shall
work together pursuant to the Migration Plan in the form attached as Exhibit
3.1(b) ("Migration Plan") to migrate from Client to Provider the tasks and
functions to be performed by Provider as the Resourced Services.
3.2. Service Levels. Provider shall provide the Resourced Services to
Client at service levels that are substantially the same service levels as the
Provider's parent company provides to itself. Client shall provide the
Operating Services in a manner to enable Provider to deliver the Resourced
Services to Client as required by the preceding sentence.
3.3. Additional Services. Client may request pursuant to the Change
Control Procedure that Provider provide Additional Services. If Client
requests Additional Services, the parties shall negotiate in good faith a
Change Order, including the scope of the Additional Services and the Charges
for the Additional Services.
3.4. Termination Services.
(a) Subject to the provisions of Section 3.4(c), upon receiving from
Client, at least two (2) months prior to the expiration or termination date of
this Agreement, a Change Request requesting Termination Services, Provider
shall provide the Termination Services to be set forth in a Change Order to be
negotiated by the parties in good faith which Termination Services may include
(i) assisting Client in developing and implementing a detailed task list and
migration plan for migrating the Services to Client or Client's designee, (ii)
returning to Client or destroying, as appropriate, all Client Confidential
Information, books and records and certify that it has done so, provided, that
Provider may retain a copy of Client Confidential Information, books and
records to the extent required to comply with Laws, for internal audit
purposes, and to establish or protect Provider's rights under this Agreement,
(iii) continuing to provide the Services for no more than three (3) months
after the date of expiration or termination of this Agreement, (iv) reasonably
cooperating with Client or Client's designee in the transfer of the Services
to Client or Client's designee, and (v) providing any Additional Services set
forth in the Change Order at Provider's hourly rates set forth in Exhibit 4.1.
(b) Termination Services shall not include the transfer of any
Provider Intellectual Property from Provider to Client, its Affiliates, or a
Third Party except as otherwise provided in Section 6.2. Client shall be
responsible for the cost and effort of obtaining any Consents from any Third
Party necessary for any other Third Party to render services like the Services
provided by Provider to Client, or for Client to obtain services like the
Services provided by Provider after the expiration or termination of this
Agreement.
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(c) Client shall pay Provider for such Services (including Termination
Services) contemplated by this Section 3.4 in accordance with the Change
Order; provided, however, if Provider terminates this Agreement or suspends
the provision of Services for Client's failure to make any payments under this
Agreement, Client shall pay in advance for any such Services (including
Termination Services) and any amounts due the Provider that are past due. If
Provider terminates this Agreement for Client's breach of Sections 7.3 or 7.4,
Provider shall not be obligated to provide Services (including Termination
Services) pursuant to this Section 3.4 or otherwise.
3.5. Change Control.
(a) Change Control Procedure. If either party wishes a change to the
Services then being rendered or a change that requires additional resources of
Provider, the requesting party's Contract Administrator shall submit a written
proposal to the other party's Contract Administrator describing such desired
change ("Change Request"). The receiving party's Contract Administrator shall
review the Change Request and reject or accept the Change Request in writing
within a reasonable period of time, but in no event more than thirty (30) days
after receipt of the Change Request (the "Response"). In the event that one
party submits a Change Request, the other party may not submit a Change
Request addressing the same proposed Change until any Dispute regarding the
first Change Request has been fully resolved. Further, in the event that the
Change Request is rejected, the Response shall include the reason for
rejection and, in the event that the Change Request is rejected by Provider,
Provider shall wherever possible, suggest a viable, good faith alternative to
the Change Request. It is understood and agreed that the Provider shall have
the right to reject any Change Request that would result in the Charge for the
Resourced Services being decreased below the amount set forth on Exhibit 4.1.
Client and Provider shall negotiate in good faith to agree on a proposed
Change, and its accompanying terms, within thirty (30) days after receipt of
the Response. In the event that the Change Request is accepted, the parties
shall mutually agree on the Change to be made in a Change Order. Except as
provided in Section 3.5(b), the Change or additional terms and conditions (if
any) shall be made only in a written Change Order signed by the Contract
Administrator (or other authorized representative) of each of the parties.
(b) Emergency Changes. No Change shall be implemented without Client's
approval, except temporary Changes made on an emergency basis that are
necessary to maintain the continuity of the Services. If the need for an
emergency Change arises, either party's Contract Administrator (or other
authorized representative) shall as soon as reasonably possible submit to the
other party's Contract Administrator a Change Request for such Change and each
party shall, subject to the other terms and conditions of this Agreement, use
commercially reasonable efforts to implement such Change promptly. The parties
shall thereafter agree, as soon as reasonably practicable, upon a Change Order
regarding such emergency Change.
3.6. No Accountancy. Notwithstanding anything set forth in this
Agreement or any Exhibit hereto, in no event shall the Services include, or
this Agreement be construed as requiring that Provider (i) perform any
services reserved to a licensed or certified public accountant pursuant to the
Law of any applicable jurisdiction ("Accountancy") or (ii) provide, or be
deemed or construed to have provided, any Attestation or Opinion in connection
with the
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Services or with respect to any financial statements or disclosures made by
Client. Client acknowledges that (1) Provider is not licensed to practice
Accountancy in any jurisdiction; (2) this Agreement does not require any
Provider personnel to practice Accountancy; (3) no Provider personnel are
licensed accountants or certified public accountants; and (4) Client shall
retain sole responsibility for verifying or otherwise providing any Attestation
or Opinion as to the reliability of any information contained in or derived
from any Client or its Affiliates financial statements or disclosures. During
the Term and upon reasonable notice and for a reasonable length of time during
normal business hours, the Provider will make its employees available to meet
with the Client and/or the Client's auditors to answer any questions or provide
any information regarding matters related to the Client's or the auditor's
review or examination of the Client's books for any reasonable business
purpose, including for the purposes of the Client's meeting its reporting
obligations to its senior lender.
3.7. Reliance on Instructions. In performing its obligations under
this Agreement, Provider will be entitled to rely upon routine instructions,
authorizations, approvals or other information provided to Provider by
Client's personnel, any of which may be verbal.
3.8. Client's Responsibilities.
(a) Operating Services. Client shall perform the Operating Services in
accordance with this Agreement.
(b) Client Standards. Client shall be solely responsible for
establishing, maintaining, approving, and updating all the financial
accounting standards, compliance with law standards, policies, practices,
processes, procedures and controls and associated technology architectures,
standards, products and systems associated with the performance and receipt of
the Services (the "Client Standards"). Client may modify Client Standards from
time to time after the Commencement Date pursuant to the Change Control
Procedures.
(c) Provision of Data and Information. Client shall provide, or cause
Client TPSP's to provide, to Provider the financial and accounting data,
information, materials, book, records and all other data (including historical
data) necessary for Provider to perform the Services (collectively, the
"Client Data"). Client shall answer each question of Provider promptly after
receipt by Client of Provider's question and such answer shall be considered
part of Client Data.
(d) Accuracy of Client Data. Client shall be solely responsible for
the accuracy and completeness of the Client Data and for the accuracy and
completeness of the transmission to Provider of Client Data and Provider shall
not be responsible for errors in or the delay or nonperformance of Provider's
obligations under this Agreement caused or contributed to by the inaccuracy,
incompleteness and/or failure to deliver the Client Data. Client shall
promptly notify Provider in writing of all inaccuracies, insufficiencies or
errors discovered by Client in the Client Data. Provider shall promptly notify
Client in writing of all inaccuracies or errors discovered by Provider in the
Client Data with the understanding that Provider has no obligation to review
or otherwise check for any such inaccuracies or errors in the Client Data.
Provider shall correct all such discovered inaccuracies and errors in the
Client Data (i) to the extent such correction can be made using Provider's
then-existing resource levels used to provide the Services at no additional
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charge and (ii) to the extent additional Provider resources are necessary to
make such corrections, then at the Provider's hourly rates set forth on
Exhibit 4.1.
3.9. Dependencies. Provider and Client agree that the provision of
Services shall be dependent upon the Operating Services that are provided to
the Provider by the Client and the Client TPSP's. Provider and Client shall
cooperate, and shall require the cooperation of their respective contractors,
suppliers and licensors, in order to facilitate the provision of Services.
3.10. Provider's Use of Contractors. Provider may engage consultants,
agents or subcontractors (collectively, "Provider Agents") to perform any
Service or any task or subtask within the Services; provided, however, that
each such Provider Agent shall agree to be bound by the confidentiality
provisions set forth in this Agreement. No performance of Services by a
Provider Agent shall release Provider from responsibility for its obligations
under this Agreement. Provider shall be responsible for the work and
activities in connection with the Services of each of the Provider Agents,
including compliance with the terms of this Agreement. Except as may otherwise
be provided in a Change Order, Provider shall be responsible for all payments
to the Provider Agents.
3.11. Compliance with Law.
(a) Client shall be solely responsible for the Services complying with
all applicable Laws and shall be responsible to inform the Provider in writing
if any of the Services, in Client's opinion, fail (or will fail) to comply
with any applicable Laws as presently existing or as hereafter changed. If any
of the Services, in Client's opinion, fail (or will fail) to comply with any
applicable Laws as presently existing or as hereafter changed, Client shall
promptly give notice to Provider of such failure or expected failure and the
Change(s) in the Services required to correct such failure or expected failure
(referred to as the "Remedial Changes"). All Remedial Changes shall be
reflected in a Change Order to be negotiated in good faith by the parties
which shall include any additional Charges if the Remedial Changes require
Provider to expend any additional Provider resources in rendering the
Services. Provider shall have no obligation regarding any Remedial Changes
except to the extent reflected in such a Change Order. In no event shall
Provider be obligated to provide any Service, and Provider shall not be liable
for the failure to provide any Service, that would cause Provider to be in
violation of any applicable Law.
(b) If the Provider Contract Administrator should be of the belief
that any of the Services are not in compliance with Law (it being understood
that the Provider shall have no obligation to assess or determine whether the
Services are in compliance with Law, but instead shall rely on Client's
obligations under Section 3.11(a) ), then the Provider will advise the Client
of its belief following which (i) the Provider's obligations to the Client
under this Section 3.11(b) shall have been satisfied and (ii) the Client shall
have the responsibility to make the determination whether or not such Services
are in compliance with Law and what Remedial Changes are needed to be made to
the Services to bring such Services into compliance with Law if necessary.
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3.12. Backlog. Backlogs which exist on the Commencement Date are
deemed acceptable by Client and represent Client's tolerance level for
backlogs during the Term; provided that Client may request Provider to reduce
such backlog pursuant to the Change Control Procedure.
3.13. No-Comingling of Accounts. The parties agree that there shall
be no comingling of funds of the parties and if either party should receive
funds belonging to the other party, then (i) the receiving party shall
immediately surrender the funds to the other party in the form received and
(ii) the parties shall take such actions if and as necessary to make sure that
there is no re-occurrence.
ARTICLE 4.
CHARGES AND PAYMENTS
4.1. Charges. In consideration for all of activities of the Provider
from and after the Effective Date and until the Commencement Date, Client
shall pay to Provider the Charges as set forth in Exhibit 4.1. In
consideration of Provider providing the Resourced Services, Client shall pay
to Provider the Charges as set forth in Exhibit 4.1. Additional Services and
Termination Services will be charged to Client at the Charges set forth in the
applicable Change Order. Notwithstanding anything to the contrary contained in
this Agreement (including Section 4.5) or any Exhibit attached hereto, the
Base Charge is the minimum fee to be paid by the Client to the Provider from
and after the Commencement Date and under no circumstance whether by the
Change Order Procedure or otherwise shall the Base Charge be reduced even as a
result of any reduction in the scope or volume of the Resourced Services.
4.2. Payment Terms.
(a) Invoice in Advance. Provider shall issue to Client on a monthly
basis, in advance, an invoice for the Charges for the Services and other
Charges and amounts due Provider hereunder and not previously invoiced. If the
Provider fails to issue an invoice in advance or if the Client fails to
receive an invoice, the Client shall nevertheless pay the Base Charge and the
Provider Key Personnel Charge on the due dates as described on Exhibit 4.1.
(b) Payments. All invoices submitted by Provider to Client are due and
payable within fifteen (15) days after the Client's receipt of the invoice,
subject to Client's right to withhold partial payment in the event of a good
faith Dispute pursuant to Section 4.2(c); provided however that the Base
Charge and the Provider Key Personnel Charge (part of the Pass-Through
Expenses) are due and payable as provided on Exhibit 4.1 which does not
require advance invoicing for these amounts. Any payment of an amount due the
Provider under this Agreement that is not received by the Provider within two
(2) Business Days of the due date for such payment shall be considered late
(each a "Late Payment"). Late Payments shall accrue interest from the due date
at four and one-half percent (4.5%) per annum until paid. If Client fails to
pay any Late Payment to Provider within seven (7) Business Days of its due
date for payment, then Provider may, in addition to any other remedies
available to it under this Agreement, immediately suspend performance of the
Services as of the close of business on such
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seventh (7th) Business Day upon written notice to the Client; provided that if
the Provider shall have already delivered to Client an advance notice of its
intent to suspend the Services in accordance with the preceding clause with
respect to any Late Payment, then no further notice of suspension of Services
shall be necessary. CLIENT AGREES THAT IF PROVIDER SUSPENDS PERFORMANCE OF THE
SERVICES OR TERMINATES THIS AGREEMENT ON ACCOUNT OF CLIENT'S FAILURE TO PAY
AMOUNTS DUE TO PROVIDER UNDER THIS AGREEMENT, CLIENT SHALL NOT HAVE ANY CLAIM
OR ACTION (AND HEREBY IRREVOCABLY WAIVES ANY SUCH CLAIM OR ACTION) AGAINST THE
PROVIDER FOR SUCH SUSPENSION OF SERVICES OR TERMINATION OF THIS AGREEMENT
INCLUDING ALL DAMAGES SUFFERRED BY THE CLIENT OR ITS BUSINESS AS A RESULT OF
SUCH SUSPENSION OF SERVICES OR TERMINATION OF THIS AGREEMENT.
(c) Disputed Amounts. The Client shall not have any right to dispute
(or withhold payment with respect to) the Base Charge or any Provider Key
Personnel Charge other than a Provider Key Personnel Charge described in the
last sentence of Section 4.7 that the Client has not agreed to. If the Client
in good faith disputes any of the remaining Charges that the Client has a
right to dispute, then the Client may withhold from its payment of the
relevant invoice the amount of the disputed Charge but not to exceed the
lesser of (i) the amount of the disputed Charge or (ii) ten percent (10%) of
the amount of the relevant invoice (excluding the Base Charge, any Provider
Key Personnel Charge that the Client has no right to dispute and any Transfer
Taxes). If Client withholds any payment pursuant to this Section 4.2(c),
Client shall notify Provider in writing by the payment due date of the basis
for such withholding and the parties shall resolve the Dispute pursuant to
Article 13. Regardless of any disputed amount, Client shall remit to Provider
in accordance with this Section 4.2(c) the invoiced amount minus the amount
properly withheld pursuant to the second sentence of this Section 4.2(c). If,
pursuant to the Dispute resolution process, it is determined that Client must
pay such withheld amounts, or some portion thereof, then in accordance with
such Dispute resolution Client shall pay to Provider such withheld amounts or
such portion thereof, plus interest accrued on such withheld amounts at the
rate set forth in Section 4.2(b) from the date such withheld amount was first
due but for Client's dispute. The parties acknowledge and agree that a
fundamental premise of this Agreement is that Provider has undertaken
expenditures in connection with its provision of the Services and requires
payment of amounts due Provider in order to meet such expenditures.
Accordingly, Client may not set off against any amounts due Provider hereunder
any amounts which Client believes are owed by Provider to Client. If the
Provider has overcharged the Client under this Agreement and the Client has
paid such overcharge (the "Over Payment") and it is later determined pursuant
to the Dispute resolution process, that such an Overpayment has occurred, then
the Provider shall, in addition to the return of the Overpayment, also pay
interest accrued on such Overpayment at the rate set forth in Section 4.2(b)
from the date the Provider first made demand in writing for the return of the
Overpayment.
4.3. Transfer Taxes.
(a) All Charges are exclusive of Transfer Taxes. Client shall bear the
cost of all Transfer Taxes. Transfer Taxes will be separately stated on the
relevant invoice and shall be paid by Client and Client shall have no right to
withhold payment with respect to Transfer Taxes.
Services Agreement Page 12
Provider shall timely remit and report such Transfer Taxes that have been paid
to the Provider by Client, as well as the sales giving rise to such Transfer
Taxes, to the appropriate taxing authorities. Client shall furnish Provider
with all material certificates or other evidence supporting applicable
exemptions from Transfer Taxes that may be provided under applicable Law.
Provider may rely in good faith on such certificates or other evidence
delivered by Client. Provider shall use reasonable commercial efforts to
provide Client with such assistance as Client may reasonably require to obtain
exemption from such Transfer Taxes.
(b) Provider shall be responsible for the payment of all interest and
penalties related to any Transfer Taxes assessed or levied as contemplated by
this Section 4.3 to the extent that Provider fails to accurately and timely
remit such Transfer Taxes (that have been paid to the Provider by Client)
directly to the applicable taxing authority and/or report such Transfer Taxes
directly to the applicable taxing authority. To the extent that any assessed
interest or penalties arise from an act or omission by Client, including the
failure to pay Transfer Taxes to the Provider, the Client shall be responsible
for the payment of such interest and/or penalties.
(c) Provider shall cooperate with Client's efforts to identify taxable
and nontaxable services pursuant to this Agreement (including segregation of
such services on invoices or in attachments thereto) and to obtain refunds of
Transfer Taxes paid where appropriate. All Transfer Tax refunds shall belong
to Client assuming the Client paid the Transfer Taxes in the first place.
After consultation with Client (which shall occur prior to the issuance of the
first invoice), Seller shall issue all invoices under this Agreement in a
format that separately sets forth the taxable Services and the non-taxable
Services. The invoice shall have a separate line item for Transfer Taxes that
are being assessed.
4.4. Pass-Through Expenses.
(a) Client shall reimburse Provider for the expenses to be paid by
Provider in connection with this Agreement and identified on Exhibit 4.1 under
the heading "Pass-Through Expenses" and any other expenses incurred by
Provider at either the request or approval of the Client (the "Pass-Through
Expenses"). Unless Client is in payment default of this Agreement, Provider
will pay all Pass-Through Expenses for the benefit of (and subject to
reimbursement from) Client; provided that Provider shall not be required to
pay any Pass-Through Expense requested by Client that is not specifically
identified on Exhibit 4.1 and is in an amount exceeding $250 individually or
exceeding $3,000 in the aggregate over any calendar month, unless such sums
are advanced by Client in good funds.
(b) Upon not less than thirty (30) days' prior written notice, and no
more than one (1) time during each quarter year during the Term, Provider
shall provide Client with access to Provider's financial records and
supporting documentation necessary to verify the Pass-Through Expenses since
the date of Client's most recent audit pursuant to this Section 4.4(b).
Client shall bear the costs for any such audit. If the audit results in a
determination that the Pass-Through Expenses were incorrect, then such
incorrect amount shall be corrected in arrears for the month in which such
incorrect amount is discovered or in the month in which the final resolution
occurs and shall be appropriately included on the next invoice.
Services Agreement Page 13
(c) If Provider determines as a result of its own internal audit that
it has undercharged Client for Pass-Through Expenses, then the amount of such
undercharge shall be treated, for invoicing and payment purposes, as an
adjustment in arrears for the month in which the undercharge is discovered or
the month in which the final resolution occurs and shall be appropriately
included on the next invoice. If an audit results in a determination that
Provider has overcharged Client, then the amount of such overcharge shall be
treated, for invoicing and payment purposes, as a credit in arrears for the
month in which the overcharge is discovered or in the month in which the final
resolution occurs and shall be appropriately included on the next invoice.
(d) Provider shall retain records and supporting documentation
sufficient to document the Pass-Through Expenses paid or payable by Client
under this Agreement in accordance with Client's record retention policies in
effect as of the Commencement Date and that are provided to Provider in
writing.
4.5. Assumptions. The Charges, Resourced Services and Operating
Services are based on assumptions set forth on Exhibit 4.5 ("Assumptions"). In
the event any of the Assumptions prove incorrect or incomplete or hereafter
become incorrect or incomplete, then the parties shall negotiate in good faith
an appropriate Change Order.
4.6. Additional Savings. The parties acknowledge that from time to
time either one or both of the parties (or their Affiliates) may identify
areas in which additional savings may be delivered to the Client as a result
of leveraging resources, volume discounts and other synergies whether or not
related to the Resourced Services or the Operating Services. If such areas are
identified and either party wants to initiate discussions with the other
party, then the initiating party shall send a written request to the other
party setting forth in reasonable detail a description of the leveraging,
discounting or other synergy and the approximate amount of the savings to the
Client to be achieved. The parties agree to discuss the matter and if both
parties want to proceed (with the understanding that either party may freely
choose not to proceed), then, assuming the parties can agree on all the terms
and conditions, the parties shall sign a Change Order setting forth their
agreement. Unless the parties otherwise agree, all such Change Orders will
provide that the leveraging of resources, volume discounts and other synergies
will also expire or terminate upon the expiration or termination of this
Agreement. The fee to be paid by the Client to the Provider pursuant to the
Change Order shall be an amount equal to 50% of the savings realized by the
Client; provided that the Provider will not be entitled to any 50% of the
savings fee (the "50% Fee") under the preceding clause unless the Client shall
have realized $750,000 in total savings per year by the Provider's delivering
the Services to the Client and the Client TPSP's delivering the services under
the Third Party Service Contracts as opposed to the Client delivering all
those same Services and services to itself (collectively, the "Savings"). The
parties agree that no later than fifteen (15) months after the commencement
and on each anniversary thereof, they will cooperate with each other to
determine in good faith the amount of the Savings on an annual run rate basis
with the understanding that the Base Charge will not be reduced even if it is
determined that the Client has not realized (or will not realize) $750,000 in
Savings. Included in the determination of the Savings will be the interest
savings (if any) realized by the Client on its credit line(s) that are secured
by its accounts receivable based on an improvement in the average "days sales
outstanding" of the Client's accounts receivable as compared to the 12
Services Agreement Page 14
month period prior to the Commencement Date. Once the $750,000 in Savings is
achieved for the year in question, then the Provider will be entitled to the
50% Fee as described above. To avoid any confusion, the Provider will not be
entitled to share in any savings that the Client generates from its own efforts
that do not involve the Provider or this Agreement.
4.7. Provider Key Personnel Charge. Unless the parties agree
otherwise, the initial Provider Key Personnel Charge (exclusive of Agency
Fees) for each of the Provider Key Personnel will not exceed the amounts set
forth on Exhibit 5.2 which the Client hereby agrees to. The parties
acknowledge that (i) a portion of the Provider Key Personnel Charge are
amounts that are variable or otherwise not within the control of the Provider
including insurance premiums (including medical, health and worker's
compensation), the cost of employee benefits and payroll taxes (the "Variable
Portion") and (ii) the remaining portion of the Provider Key Personnel Charge
are amounts that are within the control of the Provider such as salary and
bonus (the "Controllable Portion"), but the Controllable Portion is subject to
market conditions and the ability of the Provider to attract and retain
qualified employees. Consequently, the parties agree that (i) any increases in
the Provider Key Personnel Charge on account of increases in the Variable
Portion and (ii) any increases in the Provider Key Personnel Charge on account
of increases in the Controllable Portion to reasonably respond to market
conditions and to attract and retain qualified employees (including any annual
increases in salary and bonus that are not in excess of the rate of annual
increases in salary and bonus for similarly situated or comparable employees
of Provider's parent company performing the same or similar job tasks or
functions) are acceptable increases in the Provider Key Personnel Charge. If
the Provider proposes to further increase the Controllable Portion beyond the
amounts contemplated by clause (ii) of the preceding sentence, then Provider
will first obtain the agreement of the Client to such further increase.
ARTICLE 5.
CONTRACT ADMINISTRATORS AND EMPLOYEES
5.1. Contract Administrators and Senior Management.
(a) Provider hereby designates Roger Zebroski as its Contract
Administrator (the "Provider Contract Administrator"). Provider shall have
the right to remove the then current Provider Contract Administrator and
replace with another individual that is reasonably acceptable to Client.
(b) Client hereby designates Richard Sporn as its Contract
Administrator (the "Client Contract Administrator"). Client shall have the
right to remove the then current Client Contract Administrator and replace
with another individual that is reasonably acceptable to Provider.
(c) The Contract Administrator shall serve as the primary
representative under this Agreement of the party that designated such
representative. Each Contract Administrator representing a party shall have
(i) overall responsibility for managing and coordinating the performance of
such party's obligations under this Agreement and (ii) the authority to act
for and bind such party and its contractors in connection with all aspects of
this Agreement.
Services Agreement Page 15
(d) The Provider Contract Administrator and Client Contract
Administrator shall together comprise the "Management Committee". During the
Migration Period, the Management Committee shall meet at such times as is
necessary to implement the Migration Plan. Upon the expiration of the
Migration Period, the Management Committee shall meet as often as needed to
discuss any matters related to the Services or this Agreement.
(e) Each party will designate a Senior Management executive to serve
as its relationship representative with respect to this Agreement. The Senior
Management executive representing Client is Manny Atzmon. The Senior
Management executive representing Provider is Dan Norman. Each party shall
have the right to remove the then current Senior Management representing such
party and replace with another individual that is reasonably acceptable to the
other party.
5.2. Provider Key Personnel. Exhibit 5.2 sets forth the Provider Key
Personnel (by job description) for purposes of this Agreement. With respect to
the Provider Key Personnel, the parties agree as follows:
(a) All Provider Key Personnel shall be dedicated solely to the
rendering of the Services under this Agreement.
(b) Before assigning or hiring an individual to a position occupied by
a Provider Key Personnel (whether as an initial assignment or hiring or as a
replacement) Provider shall (i) notify Client of the proposed assignment or
hiring, (ii) introduce the individual to appropriate representatives of
Client, (iii) provide Client with a resume and any other information regarding
the individual that may be reasonably requested by Client and (iv) obtain
Client's approval for such assignment or hiring.
(c) For a period of one (1) year following hiring or assignment,
Provider shall not replace or reassign the Provider Key Personnel unless
either (a) Client approves of such reassignment or replacement or (b) such
person (i) voluntarily resigns from Provider, (ii) is dismissed by Provider
for cause in the reasonable opinion of the Provider, (iii) fails to perform
his or her duties and responsibilities, (iv) dies or is unable to work due to
his or her disability, (v) is placed on an approved leave of absence or (vi)
requests a transfer for personal or professional reasons.
(d) Client may from time-to-time request that Provider remove or
replace Provider Key Personnel by delivering to Provider written notice to the
effect that such personnel be replaced and stating the reason for such
request. Promptly after its receipt of such notification by Client, Provider
will investigate the matters stated in the notification and confer with Client
with respect to its findings. Provider will have a reasonable period of time
to attempt to address the issue. If Provider is unable to remedy the issue and
Client still requests replacement of such personnel based upon reasonable and
lawful grounds, Provider will replace such personnel with a person of suitable
ability and qualifications. Nothing in this Section 5.2 will be deemed to give
Client the right to require Provider to terminate the employment of any
Provider personnel.
Services Agreement Page 16
(e) If the Client is in payment default of this Agreement, then the
Provider shall have the right to re-assign any of the Provider Key Personnel
to other job functions of the Provider and its Affiliates, utilize the
Provider Key Personnel for projects and matters other than this Agreement and
Provider shall have the right to terminate (or move to part-time employment)
any of the Provider Key Personnel; and Provider shall be fully protected and
exonerated in any and all such decisions made and such actions taken by
Provider with respect to the Provider Key Personnel while Client is in payment
default of this Agreement. The Client fully authorizes and permits any and all
of such decisions and actions of the Provider. The Client fully accepts all
risks and damages arising from any and all adverse results, effects and
consequences of such decisions and actions and agrees that the Provider shall
not be liable for any of the foregoing.
5.3. Project Staff. Subject to the provisions of Section 5.2(b),
Provider shall appoint to the Project Staff individuals with suitable training
and skills to perform the Services.
5.4. No-Solicit and No-Hire.
(a) Level One Employees. Subject to Section 5.4(c), during the Term
and for a period of twelve (12) months following the end of the Term, neither
party nor its Affiliates shall solicit or hire any Level One Employee of the
other party or its Affiliates. If either party or its Affiliates shall hire a
Level One Employee of the other party or its Affiliates in breach of this
Section 5.4(a), then the hiring party shall pay liquidated damages to the
other party as its sole and exclusive remedy in an amount equal to twelve (12)
months of the compensation to be paid by the hiring party to such Level One
Employee. Such payment of liquidated damages shall not be considered in the
computation of the limitations of liability in Section 12.3(b).
(b) Level Two Employees. Subject to Section 5.4(c), during the Term
neither party nor its Affiliates shall solicit or hire any Level Two Employees
of the other party or its Affiliates. If either party or its Affiliates hires
any Level Two Employee of the other party or its Affiliates in breach of this
Section 5.4(b), then the hiring party shall pay liquidated damages to the
other party as its sole and exclusive remedy in an amount equal to one (1)
month of the compensation to be paid by the hiring party to such Level Two
Employee. Such payment of liquidated damages shall not be considered in the
computation of the limitations of liability in Section 12.3(b).
(c) Carve-Outs. Notwithstanding anything in Section 5.4(a) or Section
5.4(b) to the contrary, any or all of the following activities shall not be a
breach of Section 5.4(a) or Section 5.4(b): (i) the soliciting or hiring of
any Covered Employee who is no longer employed by a party or any of its
Affiliates, except for a Covered Employee who is no longer employed by reason
of a voluntary termination of employment by the Covered Employee but only if
the hiring party (or its Affiliates) had prior discussions with the Covered
Employee regarding employment by the hiring party (or its Affiliates)
following such a voluntary termination, (ii) the soliciting or hiring of any
Covered Employee who has been provided notice of termination of employment by
his or her employer, (iii) the soliciting or hiring of any Covered Employee
with the written approval of the other party, (iv) the solicitation of any
Covered Employees resulting from general advertising in the mass media, (v)
the soliciting or hiring of Level Two Employees who provide services under a
customer contract that is scheduled to expire or terminate and will not
Services Agreement Page 17
be renewed or extended by the contracting party (or its Affiliates) and such
customer, (vi) the soliciting or hiring of Level Two Employees who provide
services under a customer contract which services are to be taken out of the
scope of services to be rendered by the contracting party under the customer
contract, (vii) the soliciting or hiring of Level Two Employees who become the
subject of any planned layoffs or other reductions in force of the employing
party or whose job positions have become redundant and (viii) the soliciting or
hiring of a Level Two Employee not known, nor reasonably suspected, by the
hiring party to be a Level Two Employee of the other party (or its Affiliates).
ARTICLE 6.
PROPRIETARY RIGHTS
6.1. Intellectual Property Rights.
(a) Provider Intellectual Property. Except as expressly provided in
Section 6.2, nothing in this Agreement shall be construed as a grant of any
rights in any present or future Provider Intellectual Property from Provider
to Client, including the right to make any Derivative Works thereof, and
Client hereby expressly disclaims any rights, titles or interests in and to
any of the Provider Intellectual Property.
(b) Client Intellectual Property. Client hereby grants to Provider
during the Term (i) an irrevocable, nonexclusive, worldwide, paid-up license
to access, use, execute, reproduce, display, perform, prepare Derivative Works
of and distribute present and future Client Intellectual Property in
connection with the performance of the Services under this Agreement and (ii)
the right to sublicense its Affiliates and Third Parties to do any of the
foregoing.
(c) Derivative Works of Client Intellectual Property. Any Derivative
Works of Client Intellectual Property prepared by the Provider at Provider's
cost shall be the Intellectual Property of Provider. Any Derivative Works of
Client Intellectual Property prepared by the Provider at the cost of Client
shall be the Intellectual Property of Client. Any Derivative Works of Client
Intellectual Property prepared by Client at Client's cost shall be the
Intellectual Property of Client.
6.2. License Upon Termination. Upon expiration or termination of this
Agreement, so long as Client has fully complied with all of its obligations,
and is not in default under this Agreement, (i) Provider shall, to the extent
possible under the terms of any applicable Third Party license agreements, and
without cost to Provider, grant to Client an irrevocable, nonexclusive,
worldwide, nontransferable, paid-up (only to the extent of any fees payable to
Provider or its Affiliates but not "paid-up" as to any Third Party licensors),
perpetual license, for Client's internal use only, to the then-current, in-use
versions of any Third Party software (with modifications) utilized by Provider
to provide Services to Client under this Agreement and necessary for Client to
use after expiration or termination of this Agreement to render the Services
to itself and (ii) Provider shall without cost to Provider, grant to Client an
irrevocable, nonexclusive, worldwide, nontransferable, paid up, perpetual
license, for Client's internal use only, to the then-current, in-use versions
of any Provider Intellectual Property utilized by Provider to provide Services
to Client under this Agreement and necessary for Client to use after
Services Agreement Page 18
expiration or termination of this Agreement to render the Services to itself.
Client shall be responsible for the additional charges to receive, continue, or
expand the license rights granted by Provider under this Section 6.2 and for
any maintenance charges associated with any software.
6.3. Limitation. Any ownership or license rights herein granted to
either party are limited by and subject to the Intellectual Property rights
held by, and terms and conditions of any license agreements with, applicable
licensors, including Provider. Additionally, any license for a Derivative Work
shall include the underlying Intellectual Property upon which such Derivative
Work is based, but only to the extent such Intellectual Property is embodied
in or necessary for the use of such Derivative Work.
ARTICLE 7.
CONFIDENTIALITY
7.1. Confidential Information. Subject to the provisions of Section
7.2, "Confidential Information" means all Intellectual Property, information,
data and knowledge (in whatever form and however communicated) relating
directly or indirectly to the disclosing party (or to its Affiliates) or to
its or their respective businesses, employees, operations, customer contracts,
properties, products, markets or financial positions) that is delivered or
disclosed by such party, its Affiliate (or any of their respective officers,
directors, partners, members, employees, contractors, agents or shareholders)
to the other party in writing, electronically, orally or through visual means,
or that such party learns or obtains aurally, through observation or analyses,
interpretations, compilations, studies or evaluations of such information,
data or knowledge and is identified at the time of disclosure as confidential,
with respect to written materials, in writing and, with respect to other
information, in writing or orally, and any information that would be
reasonably deemed to be confidential when considering the nature of such
information and the circumstances surrounding its disclosure. "Confidential
Information" also includes the terms and conditions of this Agreement.
7.2. Confidential Information Carve-Outs. Confidential Information
shall not include information, data, knowledge and know-how that as shown by
written records (i) is known to the receiving party prior to disclosure to
such party, (ii) is in the public domain prior to disclosure to such party,
(iii) enters the public domain through no violation of this Agreement after
disclosure to such party, (iv) such party receives from a third party not
under any obligation of confidentiality to the disclosing party or (v) the
receiving party independently develops without reliance on Confidential
Information of the other party and/or its Affiliates.
7.3. Limited Use and Access. Each party and its Affiliates shall keep
in confidence and use at least commercially reasonable efforts to prevent the
unauthorized duplication, use and disclosure of Confidential Information of
the other party and/or its Affiliates. Confidential Information of the
disclosing party and/or its Affiliates may only be used for furthering the
purposes of this Agreement and providing the Services and Operating Services
hereunder. Each party shall, upon expiration or termination of this Agreement
or otherwise upon demand with respect to Confidential Information no longer
needed for purposes of this Agreement, at the other party's option, either
return to the other party or destroy and certify in writing to the other party
Services Agreement Page 19
the destruction of any and all documents (the term "document" includes any
writing, instrument, agreement, letter, memorandum, chart, graph, blueprint,
photograph, financial statement or data, telex, facsimile, cable, tape, disk or
other electronic, digital, magnetic, laser or other recording or image in
whatever form or medium), papers and materials and notes thereon in each
party's possession, including copies or reproductions thereof, to the extent
they contain Confidential Information of the other party and/or its Affiliates;
provided, that, each party may retain a copy of such the other party's (and/or
its Affiliates) Confidential Information only to the extent required to comply
with Laws, for internal audit purposes and to establish or protect such party's
rights under this Agreement. Each party agrees that it will protect the
confidentiality of Confidential Information of the other party and its
Affiliates through the exercise of the same procedures that it uses in
preserving and safeguarding its own Confidential Information, which procedures
shall at a minimum constitute reasonable care. Each party will limit access to
Confidential Information of the other party and/or its Affiliates to only those
of its employees, agents and contractors having a need-to-know in connection
with this Agreement. Each party and its Affiliates will advise their respective
employees to whom disclosure of Confidential Information of the other party
and/or its Affiliates is made of the obligations hereunder to protect the
Confidential Information of the other party and/or its Affiliates.
7.4. Proper Disclosures. Each party and its Affiliates shall keep the
Confidential Information of the other party and/or its Affiliates confidential
and shall not disclose such Confidential Information to any Third Party
without the prior written approval of the other party, except that (i)
Provider may disclose Client Confidential Information to Project Staff and to
Client TPSP's, to the extent the Project Staff and Client TPSP's need to know
such Confidential Information for purposes of this Agreement, (ii) Provider
may disclose information concerning this Agreement to potential buyers of
Provider and Persons engaged in the valuation of Provider, (iii) Client may
disclose information concerning this Agreement to potential buyers of Client
upon prior written notice to Provider, (iv) either party may disclose
information concerning this Agreement to bankers and other financial
institutions in the ordinary course of business, (v) either party may disclose
information concerning this Agreement to the extent required by Law and (vi)
either party may disclose information concerning this Agreement to the extent
required by demand under legal process provided the receiving party gives the
disclosing party prompt notice prior to such disclosure to allow the
disclosing party to make a reasonable effort to obtain a protective order or
otherwise protect the confidentiality of such information. The party
disclosing the Confidential Information of the other party and/or its
Affiliates (except pursuant to sub-clauses (v) or (vi)) to a Third Party shall
require the Third Party to enter into a confidentiality agreement protecting
such Confidential Information. Notwithstanding anything to the contrary,
Confidential Information of Provider and/or its Affiliates that is disclosed
to Client or its Third Party auditors or to which Client or its Third Party
auditors have access, shall only be disclosed to Client, its Affiliates and
their employees or agents who need to know such Confidential Information in
connection with Client's rights under this Agreement.
7.5. Injunctive Relief. Each party acknowledges that the other party
may suffer irreparable damage in the event of a breach or threatened breach of
any provision of this Article 7. Accordingly, in such an event, such party
shall be entitled to preliminary and final injunctive relief, as well as any
and all other applicable remedies at law or equity, including the recovery of
damages.
Services Agreement Page 20
7.6. No License. The parties acknowledge and agree that (i) each
party maintains that the Confidential Information contains valuable trade
secrets and (ii) all rights to Confidential Information are reserved by the
disclosing party. Except only as provided in Section 6.2, no license, express
or implied, by estoppel or otherwise, to any present or future Confidential
Information of either party, is granted by the disclosure of Confidential
Information under this Agreement or otherwise.
7.7. SEC Disclosure. The parties acknowledge that Client may be
obligated to file a copy of this Agreement with the U.S. Securities and
Exchange Commission (the "SEC") with its next quarterly report on Form 6-F,
Annual Report on Form 20-F, or current report on Form 6-F, or with any
registration statement filed with SEC pursuant to the Securities Act of 1933,
as amended. In the event of any such filing, or any other filing with the SEC,
the parties each agree to provide to the other reasonable prior notice of the
required filing and further agree to cooperate and work together to request
and obtain, to the maximum extent reasonably requested by either party,
confidential treatment pursuant to, and in accordance with, the rules of the
SEC and any applicable securities exchange.
ARTICLE 8.
REPRESENTATIONS AND WARRANTIES
8.1. Provider represents and warrants to Client as follows:
(a) Authorization. (i) This Agreement has been validly executed and
delivered by Provider and the provisions set forth in this Agreement
constitute legal, valid, and binding obligations of Provider enforceable
against Provider in accordance with their terms, subject to bankruptcy,
insolvency, reorganization and other laws affecting creditors' rights
generally, and with regard to equitable remedies, to the discretion of the
court before which proceedings to obtain such remedies may be pending. (ii)
Provider has all requisite power and authority to enter into this Agreement
and to carry out the transactions contemplated by this Agreement, and that the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement have been duly authorized by
all requisite action on the part of Provider. (iii) Provider's execution and
delivery of this Agreement and Provider's performance or compliance with the
terms of this Agreement will not conflict with, result in a breach of,
constitute a default under, or require the Consent of any Third Party under
any license, sublicense, lease, contract, agreement, or instrument to which
Provider is a party or by which it is bound or by which its properties are
subject. (iv) Provider has not authorized any Person to act as a broker or
finder or in any similar capacity in connection with the transactions
contemplated by this Agreement.
(b) Valid Existence. Provider is a Texas limited liability company,
duly formed, validly existing, duly licensed, and authorized or qualified to
do business in, and in good standing under the laws of, every jurisdiction in
which a license, authorization or qualification is required for the
transaction of business of the character transacted by it and for the
transactions contemplated by this Agreement, except where the failure to be so
licensed, authorized or
Services Agreement Page 21
qualified would not have a material adverse effect on Provider's ability to
fulfill its obligations under this Agreement.
(c) Compliance With Law. Provider will not make any Changes to the
Services after the Commencement Date that are not requested or approved by the
Client which would cause any of the Services not to be in compliance with Law.
Provider will not fail to make or maintain the Changes to the Services to
comply with Law as provided in any Change Order.
(d) Continuing Warranties. Provider covenants that each of the
representations and warranties set forth in this Section 8.1, and each other
express representation and warranty of Provider in this Agreement, will remain
true and correct during the Term. To the extent that Provider becomes aware
that any such representation or warranty becomes untrue in any material
respect during the Term, Provider will notify Client of the facts and
circumstances surrounding such situation.
(e) Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, PROVIDER MAKES NO REPRESENTATIONS, CONDITIONS, OR WARRANTIES,
WRITTEN OR ORAL, EXPRESS OR IMPLIED, TO CLIENT OR TO ANY OTHER PERSON OR
ENTITY REGARDING THE SERVICES, OR ANY SERVICES, EQUIPMENT, HARDWARE, SOFTWARE,
MATERIALS OR OTHER ITEMS PROVIDED OR USED BY PROVIDER UNDER OR IN CONNECTION
WITH THIS AGREEMENT. EXCEPT FOR THE WARRANTIES SET FORTH IN THIS AGREEMENT,
PROVIDER EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS, WARRANTIES OR
CONDITIONS, WHETHER WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, MERCHANTABLE QUALITY,
AND FITNESS FOR A PARTICULAR PURPOSE.
8.2. Client represents and warrants to Provider as follows:
(a) Authorization. (i) This Agreement has been validly executed and
delivered by Client and the provisions set forth herein constitute legal,
valid and binding obligations of Client enforceable against Client in
accordance with their terms, subject to bankruptcy, insolvency, reorganization
and other laws affecting creditors' rights generally, and with regard to
equitable remedies, to the discretion of the court before which proceedings to
obtain such remedies may be pending. (ii) Client has all requisite corporate
power and authority to enter into this Agreement and to carry out the
transactions contemplated by this Agreement, and that the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by all requisite
corporate action on the part of Client. (iii) Client's execution and delivery
of this Agreement and Client's performance or compliance with the terms of
this Agreement will not conflict with, result in a breach of, constitute a
default under, or require the Consent of any Third Party under any license,
sublicense, lease, contract, agreement, or instrument to which Client is a
party or by which it is bound or by which Client's properties are subject.
(iv) Client has not authorized any Person to act as a broker or finder in any
similar capacity in connection with the transactions contemplated by this
Agreement.
Services Agreement Page 22
(b) Valid Existence. Client is a Missouri corporation duly formed,
validly existing, duly licensed, and authorized or qualified to do business
in, and in good standing under the laws of, every jurisdiction in which a
license, authorization or qualification is required for the transaction of
business of the character transacted by it and for the transactions
contemplated by this Agreement, except where the failure to be so licensed,
authorized or qualified would not have a material adverse effect on Client's
ability to fulfill its obligations under this Agreement.
(c) No Outstanding Litigation. Except as disclosed on Exhibit 8.2(c),
there is no outstanding litigation, arbitrated matter or other dispute to
which Client is a party which, if decided unfavorably to Client, would
reasonably be expected to have a material adverse effect on Client's ability
to fulfill its obligations under this Agreement; provided that the disclosure
of the exceptions listed on Exhibit 8.2(c) shall not have any effect on any of
the other terms and provisions of this Agreement, including the obligation of
the Client to pay Provider for amounts due to the Provider under this
Agreement.
(d) Compliance with Laws Etc. The Mirror Services are in compliance
with all applicable Laws and will be in compliance with all applicable Laws as
of immediately before the Commencement Date. Client is in compliance with all
Laws applicable to the performance by Client of its obligations pursuant to
this Agreement. Client will perform its obligations under this Agreement in a
manner that complies with applicable Laws. The information contained on
Exhibit 4.5 is true, correct and complete in all material respects. The
delivery of the Resourced Services as described on Exhibit 3.1(a) will satisfy
all of the Client Standards in effect as of the Commencement Date.
(e) Client Data. Client represents and warrants to Provider that
Client has obtained all authorizations and Consents necessary (i) to transfer,
or cause the transfer, of Client Data to the Provider and (ii) to permit
Provider to use Client Data to provide the Services at least consistent with
the manner Client used the Client Data as of immediately prior to the
Commencement Date to perform equivalent services.
(f) Continuing Warranties. Client covenants that each of the
representations and warranties set forth in this Section 8.2 and each other
representation and warranty of Client in this Agreement, will remain true and
correct during the Term. To the extent that Client becomes aware that any such
representation or warranty becomes untrue in any material respect during the
Term, Client will notify Provider of the facts and circumstances surrounding
such situation.
ARTICLE 9.
HUNTLEIGH ASSETS
9.1. Client Assets. Attached hereto as Exhibit 9.1 is a list of the
material Client Assets. Client shall, at no cost to Provider, make available
to Provider such of the Client Assets as may be necessary for Provider to
provide the Services under this Agreement. Client shall be responsible at its
own cost and expense to maintain, repair and replace the Client Assets during
the Term. Client shall use commercially reasonable efforts to obtain all
Consents necessary to allow Provider and the Project Staff to access and use
such of the Client Assets as may be
Services Agreement Page 23
necessary throughout the Term. These Consents shall provide for the access or
use by Provider and the Project Staff of such of the Client Assets as may be
necessary in performing the Services and for the continued use by Client to
perform its responsibilities pursuant to this Agreement. Client and Provider
shall cooperate in approving the terms and conditions relating to such
Consents. Client shall be liable for, and shall indemnify Provider with respect
to, the expenses incurred in obtaining such Consents. Unless the parties
otherwise agree, all Third Party software that is part of the Client Assets
shall remain and be used on the computers and servers that are part of the
Client Assets.
9.2. Client Third Party Service Contracts. Client understands that in
order for Provider to carry out its responsibilities under this Agreement,
Provider may need to obtain certain limited rights under the Client Third
Party Service Contracts. Client will provide to Provider, at Client's expense,
such limited rights under the Client Third Party Service Contracts.
ARTICLE 10.
FREEDOM TO COMPETE AND FIREWALL
10.1. Freedom to Compete. Nothing in this Agreement shall be
construed or interpreted in any manner as restricting or limiting the ability
of either party (and its Affiliates) from competing against the other party
(and its Affiliates) to the full and same extent as though this Agreement had
never been entered into in the first place. Without limiting the provisions of
Section 7.3 or Section 7.4, each party affirms and agrees (on behalf of itself
and its Affiliates) that such party (and its Affiliates) will not use any
Confidential Information of the other party (and/or its Affiliates) for
purposes of competing against the other party (and/or its Affiliates). For
these purposes Confidential Information includes the termination or expiration
dates of customer contracts, but only if such termination or expiration dates
are not known by other competitors in the market.
10.2. Firewall.
(a) The Provider agrees that access to Client Confidential Information
shall be restricted to the Provider Key Personnel and that the Provider will
implement and maintain during the Term plus one (1) year after the Term a
firewall in accordance with the requirements and specifications set forth on
Exhibit 10.2(a) such that the employees of the Provider who are directly or
indirectly involved in pricing the airline industry services offered by the
Provider ("Provider's Pricing Employees") shall have no access to any Client
Confidential Information that could influence the Provider's pricing of its
airline industry services.
(b) Client agrees that it shall have no access to Provider
Confidential Information and that the Client will implement and maintain
during the Term plus one (1) year after the Term a firewall in accordance with
the requirements and specifications set forth on Exhibit 10.2(b).
Services Agreement Page 24
ARTICLE 11.
EARLY TERMINATION
11.1. Early Termination. This Agreement may be terminated early under
the following circumstances, subject to the provisions of Section 14.7.
(a) Client Termination for Convenience. At any time after the
Commencement Date Client may deliver to Provider a written notice of its
intent to terminate this Agreement for convenience which termination notice
shall specify a termination date no less than six (6) months after the date of
such notice.
(b) Client Termination for Cause. If Provider defaults in the
performance of any of its material obligations or warranties under this
Agreement and does not cure such default within thirty (30) days of receipt of
a notice of default from Client or Provider has not taken reasonable action to
cure such default, then Client may, by giving written notice to Provider,
terminate this Agreement, as of the termination date specified in the default
notice. If the default at issue is not reasonably curable within thirty (30)
days and if Provider takes reasonable actions to cure the default, then
Provider shall have a reasonable period not to exceed an additional sixty (60)
days in which to cure the default.
(c) Provider Termination for Convenience. At any time after the
Commencement Date, Provider may deliver to Client a written notice of its
intent to terminate this Agreement for convenience which termination notice
shall specify a termination date no less than six (6) months after the date of
such notice.
(d) Provider Termination for Cause. Subject only to Client's right as
set forth in Section 4.2(c) to withhold certain disputed Charges, Provider may
terminate this Agreement in the event of Client's material breach of its
obligations or warranties, if such material breach is not cured within (i) ten
(10) days of notice of default with respect to payment of money or (ii) within
thirty (30) days of notice of default with respect to any other breach. Any
default by Client with respect to the payment of money shall be considered a
material default. If the default (other than a default with respect to payment
of money) at issue is not reasonably curable within thirty (30) days and if
Client takes reasonable actions to cure the default, then Client shall have a
reasonable period not to exceed an additional sixty (60) days in which to cure
the default.
(e) Drop Dead Date Termination. If the Commencement Date shall not
have occurred by October 1, 2011, then either party may terminate this
Agreement immediately upon written notice to the other unless the parties
agree otherwise at that time.
ARTICLE 12.
REMEDIES, INDEMNITY, LIMITATIONS OF LIABILITY ETC.
12.1. Provider Indemnification of Client Indemnified Parties.
Provider will indemnify, defend, and hold harmless the Client Indemnified
Parties from and against any and all Losses suffered or incurred by any of the
Client Indemnified Parties in any Third Party Actions to the extent arising
out of or relating to any of the following:
Services Agreement Page 25
(i) Provider's breach of any of its express representations and
warranties contained in this Agreement;
(ii) Provider's fraud, bad faith, gross negligence, willful
misconduct, repudiation of Provider's obligations hereunder or recklessness in
the performance or nonperformance of Provider's obligations hereunder;
(iii) Provider's non-compliance with Law in the rendering of
Services but only if and to the extent (i) that the Provider makes Changes to
the Services after the Commencement Date that are not requested or approved by
the Client which cause any of the Services not to be in compliance with Law or
(ii) to the extent that the Provider fails to make or maintain the Changes to
the Services to comply with Law as provided in any Change Order; and
(iv) the Provider's failure to remit or timely remit Transfer
Taxes (that have been paid to the Provider by Client) to the appropriate
taxing authority as required by Section 4.3(a) and any penalties and interest
resulting from such failure.
12.2. Client Indemnification of Provider Indemnified Parties. Client
will indemnify, defend and hold harmless the Provider Indemnified Parties from
and against any and all Losses suffered or incurred by any of the Provider
Indemnified Parties in any Third Party Actions to the extent arising out of or
relating to any of the following:
(i) Client's breach of its obligations under the Client Third
Party Service Contracts;
(ii) Client's failure to obtain any required Consents;
(iii) Client's breach of any of its express representations and
warranties contained in this Agreement;
(iv) Client's fraud, bad faith, gross negligence, willful
misconduct, repudiation of Client's obligations hereunder or recklessness in
the performance or nonperformance of Client's obligations hereunder;
(v) Transfer Taxes and any penalties and interest thereon except
as provided in clause (iv) of Section 12.1;
(vi) any violation of any Law to the extent caused by acts or
omissions of Client;
(vii) acts or omissions of Provider taken or not taken at the
express direction of Client pursuant to this Agreement;
(viii) acts or omissions of Provider made by the Provider in good
faith in accordance with the Client Standards;
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(ix) acts or omissions of Provider for which Provider is not
liable to Client under the provisions of Section 12.3(a);
(x) the Excluded Services; and
(xi) the Client's business including the Client's receipt of the
Services in the operation of its business.
12.3. Limitations of Liability.
(a) Exoneration of Provider's Liability to Client. Provider
shall not be liable to Client (or any of the other Client Indemnified Parties)
for its failure to perform the Services (and Provider's failure to perform the
Services shall be excused) to the extent Provider's failure to perform the
Services is a result of (i) the acts, errors and omissions of Client, its
Affiliates or any Client TPSP, (ii) a failure by Client to timely and
accurately perform its duties, responsibilities and obligations as set forth
in this Agreement including the rendering of the Operating Services and
payment of amounts due to the Provider, (iii) a failure by Client to obtain
Consents for Provider and the Project Staff to use the Client Assets, (iv) a
failure by Client to timely and accurately provide Client Data or any
inaccuracy or incompleteness in Client Data, (v) a failure by Client to timely
and accurately review output produced by Provider as a result of the Services,
or (vi) Client's failure to satisfy its obligations under the Migration Plan
or any other action plan approved by the parties. Furthermore, Provider shall
have no liability to Client (or any of the other Client Indemnified Parties)
for any errors or mistakes made by Provider in the rendering of the Services
that do not constitute fraud, bad faith, gross negligence, willful misconduct,
repudiation of Provider's obligations hereunder or recklessness in the
performance or nonperformance of Provider's obligations hereunder.
(b) General Limitation. Subject to the last sentence of this
Section 12.3(b), the aggregate liability of the Provider to the Client, and
the aggregate liability of the Client to the Provider, arising out of or
related to this Agreement including the Services contemplated hereby and
including amounts described in Section 14.5, regardless of the form of the
claim, action or cause of action that imposes liability, whether in contract,
warranty, equity, negligence, gross negligence, willful conduct, tort, strict
liability or any other theory of liability or otherwise, will be limited to
and will not exceed, in the aggregate for all such claims, actions and causes
of action of every kind and nature, an amount equal to the lesser of (i) the
Base Charge for the Term of this Agreement if the Term is less than 12 months
or (ii) Three Hundred Seventy Five Thousand Dollars ($375,000). This Section
12.3(b) shall not apply to (i) the liability of the Provider under Section
12.1, (ii) the liability of the Client under Section 12.2, (iii) the
liability of Client to pay the Provider for amounts due to the Provider under
this Agreement, (iv) claims based on personal injury or death and (v)
liquidated damages paid under Section 5.4.
(c) Limitation on Types of Damages. Subject to the last sentence
of this Section 12.3(c), in no event will the liability for Losses payable by
either party include, nor will
Services Agreement Page 27
either party be liable for, any amounts for exemplary, punitive, indirect,
incidental, special and/or consequential damages and all such damages are
expressly disclaimed. This Section 12.3(c) shall not apply to (i) the
liability of the Provider under Section 12.1, (ii) the liability of Client
under Section 12.2 and (iii) claims based on personal injury or death.
(d) Contractual Statute of Limitations. Subject to the last
sentence of this Section 12.3(d), no claim or demand for mediation or
arbitration or cause of action which arose out of an event or events which
occurred more than two (2) years prior to the filing of a claim or demand for
mediation or arbitration or cause of action may be asserted by the either
party against the other party. This Section 12.3(d) shall not apply to (i)
claims based on fraud, (ii) claims arising under Section 12.1, (iii) claims
arising under Section 12.2 and (iv) claims of any taxing authorities with
respect to Transfer Taxes.
(e) Acknowledgement. The parties expressly acknowledge that the
limitations and exclusions set forth in this Section 12.3 have been the
subject of active and complete negotiation between the parties and represent
the parties' agreement taking into account each party's level of risk
associated with the performance or nonperformance of its respective
obligations under this Agreement and the payments and other benefits to be
derived by each party pursuant to this Agreement. The provisions of this
Article 12 will survive the expiration or termination for any reason of this
Agreement and every Change Order.
(f) Force Majeure. Neither party shall be liable for any delay
or failure of performance (except for the payment of money) affecting such
party or its contractors arising from any cause, circumstance or contingency
beyond the reasonable control of such party, including acts of God, acts of
terrorism, governmental acts, accidents, wars, riots or civil unrest, labor
disputes, fires, storms, earthquakes, floods and latent defects which are not
reasonably discoverable and cannot be reasonably remedied.
ARTICLE 13.
DISPUTE RESOLUTION
13.1. General. Subject to the provisions of Section 13.4 and Section
13.5, any dispute, controversy or claim arising under or in connection with
this Agreement, an alleged breach of this Agreement or the relationship of the
parties under this Agreement, whether based on contract, tort, common law,
equity, statute, regulation, order or otherwise (each, a "Dispute") shall be
resolved in accordance with the following.
13.2. Informal Resolution. Except as otherwise provided herein, the
parties will attempt to resolve any Dispute through informal resolution before
proceeding to arbitration as provided below. The Management Committee shall
first consider and attempt to resolve any Disputes. If the Management
Committee is unable to resolve, or does not anticipate resolving a Dispute
within twenty (20) days after first considering it, the parties must submit
the Dispute to Senior Management. Senior Management shall consider and attempt
to resolve any Disputes that are not resolved by the Management Committee.
Senior Management shall negotiate in good faith to resolve such Dispute within
twenty (20) days. Upon mutual agreement, Senior Management may utilize other
alternative dispute resolution procedures to assist in the
Services Agreement Page 28
negotiations. Each party's representatives shall negotiate in good faith. The
location, format, frequency, duration and conclusion of the discussions shall
be left to the discretion of the representatives involved. Discussions and
correspondence among such representatives for purposes of these negotiations
shall be treated as Confidential Information and information developed for
purposes of settlement, exempt from discovery and production, which shall not
be admissible in subsequent proceedings between the parties. Documents
identified in or provided with such communications, which are not prepared for
purposes of the negotiations, are not so exempted and may, if otherwise
admissible, be admitted in evidence in such subsequent proceeding. Except as
provided in Section 13.4, formal proceedings (including arbitration) for the
resolution of a Dispute may not be commenced until the earlier of (i) Senior
Management concluding in good faith that amicable resolution through continued
negotiation of the matter does not appear likely or (ii) the expiration of the
twenty (20) day period described above.
13.3. Arbitration. Failing informal resolution, the Dispute shall be
finally settled by binding arbitration with the American Arbitration
Association ("AAA"). The parties hereby agree that the Federal Arbitration Act
will apply to any Dispute. Any party may initiate an arbitration following
failure of informal resolution by filing a demand for arbitration at any AAA
office located in Dallas, Texas and simultaneously delivering a copy of such
demand to the other parties involved in the Dispute. The delivery of a demand
for arbitration shall have the same effect as the filing of a civil action in
a court of competent jurisdiction for purposes of all statutes of limitations
applicable to the claims covered by the Dispute. Unless otherwise agreed by
the parties, the arbitration hearing shall be conducted in Dallas, Texas,
before a single arbitrator, acting under the Commercial Arbitration Rules of
the AAA except as modified herein. If the amount in controversy equals or
exceeds $1,000,000 then three (3) arbitrators shall be required. Unless the
parties agree to a mutually acceptable arbitrator within thirty (30) days of a
demand for arbitration, the arbitrator shall be selected by the AAA. The
arbitrator shall be bound by the provisions of this Agreement, including the
governing law provision. It is the intent of the parties that the arbitration
shall be conducted in an efficient, economical and expeditious manner.
Accordingly, the parties and the arbitrator shall meet in a pre-hearing
conference as promptly as practicable after selection of the arbitrator to
establish the scope and extent of discovery and the schedule of the
arbitration. If the parties cannot agree as to the scope of discovery, then
discovery shall be limited to that which is necessary to a fair resolution of
the Dispute, in the judgment of the arbitrator. Unless the parties otherwise
agree or the arbitrator determines that it is impracticable, discovery shall
be completed within 60 days after the pre-hearing conference, and the hearing
on the merits shall be held within 90 days after the pre-hearing conference.
The decision of the arbitrator as to all matters involved in the Dispute shall
be set forth in a written award, which shall state the relief granted and a
brief statement of the reasons for same. The award shall be binding and
conclusive upon the parties to this Agreement, subject only to challenges on
grounds provided in the Federal Arbitration Act. The arbitrator shall issue
the award within thirty (30) days after completion of the arbitration hearing
and shall deliver such decision to the parties involved in the Dispute.
Judgment upon any award rendered by the arbitrator may be entered in any court
having jurisdiction. The non-substantially prevailing parties shall pay the
reasonable expenses (including attorneys' fees) of the substantially
prevailing parties and the arbitrator fees and administrative expenses
associated with the arbitration.
Services Agreement Page 29
13.4. Civil Actions Permitted For Certain Purposes. Notwithstanding
the provisions of Section 13.2 and Section 13.3, a party may initiate a civil
action in court for the purposes of (i) enforcing the dispute resolution
provisions of this Agreement, (ii) judgment upon, and enforcement and
collection of, an arbitral award, (iii) obtaining provisional relief such as a
temporary restraining order, temporary injunction, garnishment, attachment and
similar relief available under applicable Law, without first requesting
informal dispute resolution or initiating arbitration, (iv) avoiding
expiration of any applicable limitations period and (v) preserving a superior
position with respect to other creditors. The parties agree that jurisdiction
and venue for any such civil action shall be in the state courts in and for
the State of Texas or the United States District Court for the Northern
District of Texas as well as to all appellate courts to which an appeal may be
taken from such trial court unless such courts do not have jurisdiction over
the particular proceedings or parties in which case jurisdiction and venue for
any such civil action shall be in any court with proper jurisdiction. The
parties agree not to commence any suit, action or proceeding contemplated by
this subsection except in the courts specified in the preceding sentence. Each
of the parties to this Agreement expressly waives, to the fullest extent
permitted by Law, the right to move to dismiss or transfer any action brought
in such courts on the basis of any objection to personal jurisdiction, venue
or inconvenient forum in any of such courts. Notwithstanding the provisions of
this Section 13.4, (i) the merits of any Dispute shall be resolved by
arbitration and (ii) each of the parties hereby agrees that a judgment or
arbitral award in any such Dispute may be enforced in other applicable
jurisdictions by suit on the judgment or award or in any other manner provided
by Law.
13.5. Excluded Disputes. The following matters are excluded from the
Dispute resolution requirements of this Article 13: (i) a cross-claim pursuant
to an indemnification obligation set forth in this Agreement in a proceeding
filed by a Third Party and (ii) a Dispute regarding ownership, infringement or
violation of intellectual property rights that involves the intellectual
property rights of any Third Party. The filing of a court action to enable the
recording of a notice of pending action, receivership, or injunction shall be
permitted.
13.6. Waiver of Jury Trial. EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION RELATED TO OR ARISING OUT OF
THIS AGREEMENT.
ARTICLE 14.
MISCELLANEOUS
14.1. Independent Contractors. Each of Provider and Client is an
independent contractor. Neither party shall have any authority to bind the
other party unless expressly agreed in writing. Nothing in this Agreement
shall be construed to create a partnership, agency or employer-employee
relationship between Provider and Client, and in no event shall Provider and
Client be deemed joint employers.
14.2. Entire Agreement. Except as otherwise provided herein, this
Agreement, including the Exhibits hereto, represent the entire understanding
and agreement between the parties, and supersedes any prior agreement,
understanding or communication between the parties, with respect to the
subject matter hereof. This Agreement may only be amended by a
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writing executed by both parties. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
taken together shall constitute a single instrument.
14.3. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any of the provisions of this Agreement.
14.4. Rules of Interpretation. The term "including" means "including,
without limitation" unless the context clearly states otherwise. Unless
otherwise specifically provided for herein, the term "or" shall not be deemed
to be exclusive. All references in this Agreement to Articles, Sections and
Exhibits, unless expressed or indicated otherwise, are to the Articles,
Sections and to this Agreement. Words importing the singular include the
plural and vice versa. Words of the masculine gender are deemed to include the
correlative words of the feminine and neuter genders. All references to a
number of days mean calendar days, unless expressly indicated otherwise. All
references to dollars, Dollars, U.S. Dollars or $ means the lawful currency of
the United States. The recitals to this Agreement are deemed to be a part of
this Agreement. A Change Order may only amend an Exhibit or this Agreement by
express reference to the term or condition of the Exhibit or this Agreement
that is to be amended. All reference herein to this "Agreement" shall include
the Exhibits attached to this Agreement. The Exhibits are deemed to be a part
of this Agreement and are incorporated by reference herein. In each case in
which a party's approval is expressly required under this Agreement, such
party shall not unreasonably withhold, condition or delay such approval unless
the Agreement expressly states otherwise and any such approval may be verbal
unless specifically required to be in writing. The Article, Section and
Exhibit headings are for reference and convenience only and shall not be
considered in the interpretation of this Agreement.
14.5. Legal Fees and Costs. If any action or proceeding relating to
or arising out of this Agreement and the activities contemplated by this
Agreement or the enforcement of any provision of this Agreement is brought
against any party thereto, the substantially prevailing party shall be
entitled to recover from the non-substantially prevailing party reasonable
attorneys' fees, costs and disbursements in addition to any other relief to
which the substantially prevailing party may be entitled and if any appeal is
taken from such decision, reasonable attorney fees and costs as determined on
appeal.
14.6. Assignment. This Agreement shall be binding on the parties and
their respective successors and permitted assigns. Neither party may, nor
shall either party have the power to, assign this Agreement or any of its
rights and obligations under this Agreement without the prior written approval
of the other party, except that either party may assign its rights and
obligations under this Agreement, in whole or in part, without the approval of
the other party (i) to an Affiliate of such party or (ii) to any successor in
a merger or acquisition of such party, or an entity that acquires all or
substantially all of the assets of such party. In no event will any assignment
relieve the assigning party of its obligations under this Agreement and in the
event of any assignment permitted hereunder, the assignee shall agree in
writing to be bound by this
Services Agreement Page 31
Agreement. Any attempted assignment, delegation, or subcontracting in
contravention of this Section 14.6 shall be void and ineffective.
14.7. Survival. The rights and obligations of the parties arising
prior to the end of the Term of this Agreement or arising prior to any
termination or expiration of this Agreement, the rights and obligations of the
parties that by their terms extend beyond the Term or any such termination or
expiration of this Agreement and any provisions which by their very nature
extend beyond the Term or any such termination or expiration of this Agreement
to fully effectuate the agreement of the parties (including Articles 1, 4, 6,
7, 8, 12, 13 and 14) shall survive the end of the Term and any such
termination or expiration of this Agreement.
14.8. Required Approvals. Each party shall obtain all necessary
licenses, permits and approvals of this Agreement required by any governmental
agency, at its sole cost and expense.
14.9. Waiver. The failure of either party to insist upon the strict
and punctual performance of any provision hereof shall not constitute a waiver
of, or estoppel against asserting the right to require such performance, nor
should a waiver or estoppel in one case constitute a waiver or estoppel with
respect to a later breach whether of a similar nature or otherwise.
14.10. Unenforceable Terms. In the event any term or provision of
this Agreement shall for any reason be declared or held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, each party
shall agree that (i) such invalidity, illegality or unenforceability shall not
affect any other term or provision of this Agreement and (ii) such term or
provision shall be (1) reformed to the extent necessary to render such term or
provision valid and enforceable and to reflect the intent of the parties to
the maximum extent possible under applicable Law or (2) interpreted and
construed as if such term or provision, to the extent unenforceable, had never
been contained herein.
14.11. Governing Law and Submission to Jurisdiction. ALL RIGHTS AND
OBLIGATIONS OF THE PARTIES RELATING TO THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS, WITHOUT GIVING
EFFECT TO ANY CHOICE-OF-LAW PROVISION OR RULE (WHETHER OF THE STATE OF TEXAS
OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
OTHER JURISDICTION.
14.12. Notices. All notices, requests, demands and other
communications given or made in accordance with the provisions of Articles 11
and 12 and this Section 14.12 shall be deemed to have been given (i) three (3)
days after mailing when mailed (by registered or certified mail, postage
prepaid, only), (ii) on the date sent when made by facsimile transmission with
confirmation of receipt (with hard copy to follow by registered or certified
mail, postage prepaid, only), (iii) on the date when emailed upon the
successful completion of the email and (iv) on the date received when
delivered in person or by courier, to the address set forth below or such
other place or places as such party may from time to time designate in
writing. Either party
Services Agreement Page 32
may alter its address set forth below by notice in writing to the other party
in accordance with this Section 14.12.
If to Provider: Leverage G&A Resources, LLC
5010 Riverside Drive, Suite 300
Irving, TX 75039
Attention: Dan Norman
Telephone: (972) 915-1245
Facsimile: (972) 915-1299
Email: dnorman@g2securestaff.com
With a copy to: Robert Q. Stanton, Esq.
Robert Q. Stanton, P.C.
3811 Turtle Creek Blvd., Suite 600
Dallas, Texas 75219
Telephone: (214) 458-5677
Facsimile: 1-800-492-1966
Email: bob@rqslaw.com
If to Client: Huntleigh USA Corporation
10332 Old Olive Street Road
St Louis Missouri 63141-5922
Attention: Richard Sporn
Telephone: (314) 753-5008
Facsimile: (314) 447-5150
Email: rsporn@huntleighusa.com
With a copy to: David W. Sass, Esq.
McLaughlin & Stern, LLP
260 Madison Avenue, 18th Floor
New York, New York 10016
Telephone: (212) 448-6215
Facsimile: (212) 448-6277
Email: DSASS@mclaughlinstern.com
14.13. No Third Party Beneficiary Status. Except as expressly
provided herein, the terms and provisions of this Agreement are intended
solely for the benefit of each party hereto and their respective successors or
permitted assigns, and it is not the intention of the parties to confer
third-party beneficiary rights upon any other party.
14.14. Roll to Business Day. If any notification, communication or
other action is required or permitted to be given or taken within a certain
period of time and the last date for doing so falls on a day that is not a
Business Day, then the last day for such notification, communication or other
action shall be extended to the first day thereafter that is a Business Day.
Services Agreement Page 33
14.15. Publicity. Subject to Article 7 and except for announcements
intended solely for internal distribution, or releases to meet regulatory or
legal requirements, there shall be no media releases, public announcements or
any other public disclosures by either party relating to this Agreement or to
the subject matter of this Agreement.
14.16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument even if all
parties are not signatories to each counterpart. If a party to this Agreement
signs the signature page and faxes (or scans and emails) the signature page to
the other party, then such signature page shall be deemed an original
signature page to this Agreement and shall constitute the execution and
delivery of this Agreement by the sending party unless otherwise noted by the
sending party at the time of sending. Any signature page to any counterpart
may be detached from such counterpart without impairing the legal effect of
the signatures thereon and thereafter attached to another counterpart
identical thereto except having attached to it additional signature pages.
(Signature Page Follows)
Services Agreement Page 34
IN WITNESS WHEREOF, each of the parties hereto, by its duly authorized
representative, has hereby executed this Agreement as of the day and year
first above written.
LEVERAGE G&A RESOURCES, LLC HUNTLEIGH USA CORPORATION
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By: /s/Dan Norman By: /s/Richard Sporn
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Name: Dan Norman Name: Richard Sporn
Title: Authorized Representative Title: President
Services Agreement Signataure Page