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EXHIBIT 10.20
DATA CENTER SERVICES AGREEMENT
AGREEMENT dated as of [ ], 1996,(1) among Ingram Micro
Inc., a Delaware corporation ("MICRO"), Ingram Book Company ("BOOK"), a division
of Ingram Industries Inc., a Tennessee corporation, and Ingram Entertainment
Inc., a Tennessee corporation ("ENTERTAINMENT").
In consideration of the mutual agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties hereto agree
as follows:
ARTICLE 1
PERFORMANCE OF SERVICES
SECTION 1.1. PROVISION OF SERVICES. On the terms and subject to the
conditions of this Agreement, during the term of this Agreement Micro agrees to
provide to Book, Entertainment and their respective Subsidiaries, or procure the
provision to each of Book, Entertainment and their respective Subsidiaries of,
and each of Book and Entertainment (on behalf of itself and its Subsidiaries)
agrees to purchase from Micro, the services performed at the Ingram Micro Data
Center in La Vergne, Tennessee and described on the Schedules attached hereto
(the "SERVICES"). Unless otherwise specifically agreed by the parties, the
Services to be provided or procured by Micro hereunder shall be substantially
similar in scope, quality and nature to those provided to, or procured on behalf
of, Book, Entertainment and their respective Subsidiaries prior to the date
hereof.
SECTION 1.2. SERVICE FEES; EXPENSES. (a) The Schedules hereto
indicate, with respect to each Service listed thereon, the method by which fees
(the "SERVICE FEES") to be charged to Book or Entertainment, as the case
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(1) To be dated the Closing Date under the Exchange Agreement.
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may be, for such Service will be determined. Each of Book and Entertainment
agrees to pay to Micro in the manner set forth in Section 1.3 the Service Fees
applicable to each of the Services provided by Micro to Book (and its
Subsidiaries) and Entertainment (and its Subsidiaries), respectively, pursuant
to the terms hereof.
(b) In addition to any other amounts payable to Micro hereunder,
each of Book and Entertainment shall reimburse Micro in the manner set forth in
Section 1.3 for all out-of-pocket expenses (including without limitation travel
expenses, professional fees, printing and postage) incurred by Micro in
connection with the performance of Services pursuant to this Agreement, to the
extent that such expenses have not already been taken into account in
determining the Service Fees applicable to such Services.
(c) In addition to any other amounts payable to Micro hereunder,
each of Book and Entertainment shall reimburse Micro in the manner set forth in
Section 1.3 for any taxes, excises, imposts, duties, levies, withholdings or
other similar charges (excepting any charges for taxes due on Micro's income)
that Micro and its Subsidiaries may be required to pay on account of Book (and
its Subsidiaries) and Entertainment (and its Subsidiaries), respectively, in
connection with the performance of Services or with respect to payments made by
Book or Entertainment for such Services pursuant to this Agreement.
SECTION 1.3. INVOICING AND SETTLEMENT OF COSTS. (a) Micro will
deliver an invoice to each of Book and Entertainment on a monthly basis (not
later than the fifth day of each accounting month) for (i) Service Fees in
respect of Services provided during the prior accounting month to Book (and its
Subsidiaries) and Entertainment (and its Subsidiaries), respectively, and (ii)
other amounts owing to Micro pursuant to Section 1.2. Each such invoice shall
(A) provide sufficient detail to identify each Service, the fee therefor and the
method of calculating such fee, (B) identify all third party costs included in
the invoice to the extent specifically billed and (C) include such other data as
may be reasonably requested by Book or Entertainment. In addition, Book and
Entertainment shall have the right to examine any and all books and records as
they reasonably request in order to confirm and verify the calculation of the
amount of any payment pursuant to this Section and Micro shall cooperate in any
reasonable manner in such examination as Book or Entertainment shall request.
(b) Payment (including payment of any amounts disputed pursuant to
Section 1.3(c)) of each invoice shall
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be due from Book and Entertainment on the day (or the next business day, if such
day is not a business day) that is the later of (i) the third day prior to the
end of the accounting month in which such invoice was received and (ii) the
tenth day after the receipt of such invoice (each, a "PAYMENT DATE"), by wire
transfer of immediately available funds payable to the order of Micro. If either
Book or Entertainment fails to make any payment within 30 days of the relevant
Payment Date, the party that has failed to make such payment shall be obligated
to pay, in addition to the amount due on such Payment Date, interest on such
amount at the prime, or best rate announced by Nationsbank of Texas, N.A. per
annum compounded annually from the relevant Payment Date through the date of
payment.
(c) In the event that Book or Entertainment disputes any charges
invoiced by Micro pursuant to this Agreement, Book or Entertainment shall
deliver a written statement describing the dispute to Micro within 15 days
following receipt of the disputed invoice. The statement shall provide a
sufficiently detailed description of the disputed items. The parties hereto
shall use their best efforts to resolve any such disputes. Amounts not so
disputed shall be deemed accepted. Disputed amounts resolved in favor of Book or
Entertainment (together with interest on such amounts at the prime, or best rate
announced by Nationsbank of Texas, N.A. per annum compounded annually from the
date such disputed amounts were paid to Micro to the next relevant Payment Date)
shall be credited against payments owing by Book and Entertainment,
respectively, to Micro on the next relevant Payment Date.
(d) Unless otherwise specified on the Schedules hereto, in the event
that the actual utilization of a Service is less than the period specified on
such Schedules with respect to such Service, then the Service Fees for such
Service shall be prorated on the basis of actual utilization of such Service;
provided that the monthly charges shall not be prorated on any period of time
less than one day, the per diem charge shall not be prorated on any period of
time less than one-half day, and the hourly charges shall not be prorated on any
period of time less than one hour.
SECTION 1.4. TERM. (a) The term of this Agreement shall commence on
the date hereof and shall end on [ ], 1999, unless earlier terminated
pursuant to the terms hereof. The provisions of Section 1.2 (with respect to
amounts accrued prior to such termination) shall survive any termination of this
Agreement.
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[(b) At any time, Book or Entertainment may request Micro to
discontinue performing all or any portion of the Services upon 45 days' prior
written notice.]
SECTION 1.5. LIMITED WARRANTY. Micro will provide the Services
hereunder in good faith, with the care and diligence that it exercises in the
performance of such services for its divisions and Subsidiaries. Each of Book
and Entertainment hereby acknowledges that Micro does not regularly provide to
third parties services such as the Services as part of its business and that,
except as set forth in Section 1.1 or in this Section 1.5, Micro does not
otherwise warrant or assume any responsibility for its Services. The warranty
stated above is in lieu of and exclusive of all other representations and
warranties of any kind whatsoever. EXCEPT AS STATED ABOVE, THERE ARE NO
WARRANTIES RELATING TO THE SERVICES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
SECTION 1.6. PERFORMANCE REMEDY. In the event that Micro fails to
provide a Service hereunder, or the quality of a Service is not in accordance
with Section 1.1 or Section 1.5, Book or Entertainment may give Micro prompt
written notice thereof. Micro will then have thirty days to cure the defective
Service. If after such period Micro has failed to cure the defective Service,
Book or Entertainment, as the case may be, may seek an alternative provider for
such Service and Micro shall discontinue performing such Service at the written
request of Book or Entertainment, respectively. Neither Book nor Entertainment
shall be liable to Micro for any Service performed by Micro after Micro has been
given written notice of termination of such Service pursuant to this Section
1.6, except for any out-of-pocket costs incurred by Micro in connection with the
cessation of such Services or the transfer of such Services back to Book,
Entertainment or their respective designees. Except as otherwise expressly
provided in Article 2, the provisions of this Section 1.6 will provide the
exclusive remedy for any misrepresentation, breach of warranty, covenant or
other agreement or other claim arising out of this Agreement or the Services to
be performed hereunder.
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ARTICLE 2
INDEMNIFICATION
SECTION 2.1. LIMITATION OF LIABILITY. Book and Entertainment agree
that none of Micro, any of its Subsidiaries or any of their respective
directors, officers, agents and employees (each, an "MICRO INDEMNIFIED PERSON")
shall have any liability, whether direct or indirect, in contract, tort or
otherwise, to Book or Entertainment arising out of or attributable to the
performance or nonperformance of Services pursuant to this Agreement.
SECTION 2.2. INDEMNIFICATION. (a) Book agrees to and does hereby
indemnify and hold each Micro Indemnified Person harmless from and against any
and all damage, loss, liability and expense (including without limitation
reasonable expenses of investigation and reasonable attorneys' fees and expenses
in connection with any action, claim, suit or proceeding, including any expenses
incurred in connection with the enforcement of the rights of such Micro
Indemnified Person pursuant to this Agreement) to which such Micro Indemnified
Person may be subjected as a result of a claim made by a third party arising out
of or attributable, directly or indirectly, (i) to the performance or
nonperformance for Book of any Services or (ii) otherwise in connection with
this Agreement.
(b) Entertainment agrees to and does hereby indemnify and hold each
Micro Indemnified Person harmless from and against any and all damage, loss,
liability and expense (including without limitation reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection with any
action, claim, suit or proceeding, including any expenses incurred in connection
with the enforcement of the rights of such Micro Indemnified Person pursuant to
this Agreement) to which such Micro Indemnified Person may be subjected as a
result of a claim made by a third party arising out of or attributable, directly
or indirectly, (i) to the performance or nonperformance for Entertainment of any
Services or (ii) otherwise in connection with this Agreement.
(c) The parties agree to follow the procedures set forth in Section
5.3(a) and 5.3(b) of the Reorganization Agreement dated as of September 4, 1996
among the parties hereto with respect to any claim for indemnification made
pursuant to this Section 2.2.
SECTION 2.3. OWNERSHIP OF WORK PRODUCT. (a) Except for the data
provided by Book or Entertainment to
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Micro and the reports produced by Micro for Book or Entertainment pursuant to
this Agreement, all proprietary tools and methodologies and all written material
including programs, tapes, listing and other programming documentation which
were preexisting or originated and prepared by Micro pursuant to this Agreement
shall belong to Micro except as otherwise agreed by the parties in a separate
written agreement signed by each party.
(b) No license under any trade secrets, copyrights, or other rights
is granted by this Agreement or any disclosure hereunder.
(c) Book and Entertainment shall have reasonable access to all data,
records, files, statements, records, invoices, billings, and other information
generated by or in custody of Micro relating to the Services provided pursuant
to this Agreement. Unless otherwise specified by Book or Entertainment or
required by law, Micro shall maintain all such business records pertaining to
the Services and will retain the records pertaining to each Service for a period
of twelve months after the cessation of such Service. At the request of Book or
Entertainment, Micro shall provide copies of records pertaining to the Services.
ARTICLE 3
GENERAL PROVISIONS
SECTION 3.1. PARTIES. Nothing in this Agreement, express or implied,
is intended to confer upon any person not a party any rights and remedies
hereunder.
SECTION 3.2. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, without regard
to its conflict of laws provisions.
SECTION 3.3. HEADINGS. The Section and other headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
SECTION 3.4. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties in respect of the subject matter contained herein
and neither this Agreement nor any term or provision hereof may be amended or
waived except by an instrument in writing signed, in the case of an amendment,
by each party and, in the case
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of a waiver, by the party against whom the waiver is to be effective.
SECTION 3.5. ASSIGNMENTS. This Agreement shall not be assignable by
any party without the written consent of the other parties hereto. No assignment
of any right or benefit hereunder shall relieve any obligation of the assignor
hereunder without the written consent of the other parties.
SECTION 3.6. NOTICES. Any notice, request, instruction or other
document to be given hereunder by any party hereto to another party hereto shall
be in writing (including telecopier or similar writing) and shall be given to
such party at its address set forth on the signature pages hereof, or to such
other address as the party to whom notice is to be given may provide in a
written notice to the party giving such notice, a copy of which written notice
shall be on file with the Secretary of Micro. Each such notice, request or other
communication shall be effective (i) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified on the signature pages hereof and
the appropriate confirmation is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section 3.6.
SECTION 3.7. DEFINITIONS. Terms used but not defined herein shall
have the meanings set forth in the Reorganization Agreement dated as of
September 4, 1996 among the parties hereto.
SECTION 3.8. SEVERABILITY. The invalidity or unenforceability of any
provisions of this Agreement in any jurisdiction shall not affect the validity,
legality or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this Agreement,
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
SECTION 3.9. INDEPENDENT CONTRACTORS. The parties hereto are
independent contractors. Nothing in this Agreement is intended or shall be
deemed to constitute a partnership, agency, franchise or joint venture
relationship among the parties. No party shall incur any debts or make any
commitments for the others, except to the extent, if at all, specifically
provided herein.
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SECTION 3.10. REMEDIES. The parties hereby acknowledge and agree
that in the event of any breach of this Agreement, the parties would be
irreparably harmed and could not be made whole by monetary damages. Each party
hereto agrees (i) not to assert by way of defense or otherwise that a remedy at
law would be adequate, and (ii) in addition to any other remedy to which the
parties may be entitled, that the remedy of specific performance of this
Agreement is appropriate in any action in court.
SECTION 3.11. CONSENT TO JURISDICTION. Each party hereto irrevocably
submits to the non-exclusive jurisdiction of any Tennessee State Court or United
States Federal Court sitting in the Middle District of Tennessee over any suit,
action or proceeding arising out of or relating to this Agreement. Each party
hereto waives any right it may have to assert the doctrine of forum non
conveniens or to object to venue to the extent any proceeding is brought in
accordance with this Section 3.11. Nothing in this paragraph shall affect or
limit any right to serve process in any manner permitted by law, to bring
proceedings in the courts of any jurisdiction or to enforce in any lawful manner
a judgment obtained in one jurisdiction in any other jurisdiction.
SECTION 3.12. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original with the same effect
as if the signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
INGRAM MICRO INC.
By:_________________________________________
Name:
Title:
1600 East Saint Andrew Place
Santa Ana, CA 92705
Telecopy: (714) 566-7900
INGRAM BOOK COMPANY, A
DIVISION OF INGRAM INDUSTRIES
INC.
By:_________________________________________
Name:
Title:
One Belle Meade Place
4400 Harding Road
Nashville, TN 32705
Telecopy: (615) 298-8242
INGRAM ENTERTAINMENT INC.
By:_________________________________________
Name:
Title:
Two Ingram Boulevard
La Vergne, TN 37086
Telecopy: (615) 287-4985
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