SERVICES AGREEMENT
THIS SERVICES AGREEMENT ("Agreement"), made and entered into as of the 1st
day of May, 2000, by and between Horizon Services, Inc., an Ohio corporation
("HSI"), and Horizon Personal Communications, Inc. ("Percom"), an Ohio
corporation.
W I T N E S S E T H:
WHEREAS, Percom (f/k/a Horizon Infotech, Inc.) and HSI entered into that
certain Agreement, dated January 1, 1996, pursuant to which HSI furnished
certain administrative, management and consulting services to Percom (the "Prior
Services Agreement");
WHEREAS, the parties hereto desire to terminate the Prior Services
Agreement and replace it with this Agreement, keeping many of the material
economic terms of the Prior Services Agreement the same, except as set forth
herein; and
NOW, THEREFORE, in consideration of the premises, the representations,
warranties and covenants herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
ARTICLE I - TERM
A. Initial Term. The initial term (the "Initial Term") of this Agreement
shall commence on the date hereof and shall continue until the third
(3rd) anniversary of such date, subject to renewal or termination as
provided below.
B. Renewal Terms. Following expiration of the Initial Term, this
Agreement will automatically renew for successive one (1) year terms,
unless either party hereto notifies the other party in writing of its
election not to renew this Agreement nine (9) months prior to the
expiration of the Initial Term or the then current term, as the case
may be. As used in this Agreement, "Term" shall mean the Initial Term,
and, if applicable, any renewal terms.
ARTICLE II - DEFAULT; TERMINATION
A. Termination by Percom. Percom may terminate this Agreement, or may
terminate any of the individual Services (defined in Article III
below) which it receives from HSI hereunder, by providing ninety (90)
days prior written notice to HSI that it will terminate this Agreement
or any of such Services.
B. Termination by HSI. This Agreement may not be terminated by HSI,
unless Percom materially breaches this Agreement (such breach a
"Default"), and HSI notifies Percom in writing of the Default and
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gives Percom ninety (90) days in which to remedy the Default and
provide evidence thereof to HSI. If the Default is not cured during
such ninety (90) day period, HSI shall have the right to terminate
this Agreement at any time thereafter by delivering written notice to
Percom.
ARTICLE III - SERVICES TO BE PROVIDED
During the Term of this Agreement, HSI will provide certain administration
and consulting services for Percom, including, but not necessarily limited to
the following services (the "Services").
A. Insurance. HSI agrees to review and recommend appropriate insurance
coverage for the properties, personnel and operations of Percom. HSI
further agrees to consolidate insurance coverages, required by Percom,
with similar insurance coverages required by others, where
consolidation of such coverages results in savings of premiums and
satisfies other requirements of Percom and HSI.
B. Administration of Funds. HSI agrees to assist Percom in (i) the
development of capital and operating budgets including variance
reporting; (ii) the administration of debt and (iii) cash management.
X. Xxxxxxxx. Subject to Percom's agreements with Sprint PCS, and as
requested by Percom, HSI will assist in the billing function for
Percom's subscribers.
D. Accounting Services. HSI will maintain proper records and books of
account in accordance with 47 CFR Part 32.27(e). If requested by
Percom, HSI shall prepare for Percom all financial, statistical, tax
and other reports which Percom is obligated by law or contract to file
with local, state, or federal governing bodies or agencies or Percom's
lenders.
E. Computer. HSI will provide reasonable computer access to Percom for
its use. HSI agrees to provide computer service to Percom for customer
billing. HSI agrees to provide local access network (LAN) maintenance
and computer application and software maintenance services.
F. Miscellaneous. As requested by Percom, HSI will provide accounting,
external relations, employee relations (human resources), regulatory
authority, archives, records, files, and other miscellaneous
administrative services not otherwise specifically provided for
herein.
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ARTICLE IV - COMPENSATION
Unless otherwise agreed to by the parties, all Services provided by HSI for
the benefit or at the request of Percom shall be charged as follows:
A. Direct labor charges shall be assessed to Percom based on time reports
of hours devoted to HSI at the established rate per hour of each
employee involved. Related labor overhead costs shall be charged to
Percom monthly as a percentage (based on direct labor) of such costs,
including, but not limited to, payroll taxes, payroll insurance and
labor fringe benefits to the direct labor of that month.
B. To the extent practicable, other expenses or costs incurred which are
directly assignable to Percom shall be charged directly to such
Percom.
C. All other costs of service provided by HSI to Percom and other
subsidiaries, not directly assignable, shall be allocated to Percom
and others on the basis of the FCC Part 32 System of Accounts and the
Part 64 cost allocation methodology. If such methodology is
subsequently changed, HSI shall maintain adequate and sufficient
documentation to explain such change.
D. The costs of Services performed under this Agreement include, without
limitation:
(i) Salaries, wages, fees and other compensation of personnel or
outside consultants performing the Services including all travel
and other expenses of such personnel and such consultants;
(ii) Insurance, including public liability and property damage, and
costs of meeting workers compensation requirements.
(iii)All payroll taxes levied by federal state, city or other taxing
authorities applicable to employees engaged in performing the
Services.
E. Compensation shall be limited to an amount no more or no less
favorable than that amount charged to a third party.
ARTICLE V - RECORDS
A. Access to Records. Percom, through authorized representatives, shall
at all times during reasonable business hours have access to and the
right to inspect and make copies of any and all books, records and
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accounts, invoices, contracts, canceled checks, payrolls and other
documents and papers of every kind held by HSI and pertaining to the
services rendered to Percom under this Agreement.
B. Regular Reports. The parties agree that regular reports, in detail, of
all services provided by HSI for the account of or benefit of Percom
will be supplied to Percom in the manner and at all the times which
Percom may reasonably request.
C. Review by Public Utilities Commission. The parties understand that the
books and records of HSI shall be accessible to review by the Public
Utilities Commission of Ohio.
D. Audit. HSI must maintain books and records to support and document any
fees, costs, expenses or other charges due in connection with this
Agreement. The records must be retained for a period of at least three
years after the fees, costs, expenses or other charges to which such
records relate have accrued and have been paid, or such other longer
period as may be required by applicable law. On reasonable advance
notice, HSI must provide reasonable access to its appropriate records
to the independent auditors or other financial representatives
selected by Percom for purposes of conducting an audit of the fees,
costs, expenses or other charges payable in connection with this
Agreement. Percom will conduct the audit no more frequently than
annually. If the audit shows that HSI was underpaid, Percom will,
unless the amount of underpayment is contested, pay to HSI the amount
of the underpayment within ten days after HSI gives Percom written
notice of the determination of the underpayment. If the audit
determines that HSI was overpaid, HSI will, unless the amount is
contested, pay to Percom the amount of the overpayment within ten days
after HSI determines that HSI was overpaid. To the extent a Party
contests such overpayment/underpayment, Article XII shall apply. To
the extent that Percom maintains independent books and records
regarding the fees, costs, expenses or other charges due in connection
with this Agreement, Percom must maintain such books and records and
provide access rights to HSI, on the same terms and conditions as set
forth above.
ARTICLE VI - TRANSITION PERIOD
A. Transition. Upon the expiration or early termination of this
Agreement, or upon the termination of any of the individual Services,
for any reason, the Parties agree to cooperate and assist with each
other in good faith toward a smooth transition of Services, in a
manner designed to be least disruptive to the operations of both
companies and to the subscribers of Percom.
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ARTICLE VII - INDEMNIFICATION
A. Indemnification by Percom. Percom shall indemnify, defend and hold
harmless HSI and its affiliates, employees, directors, officers, and
agents from and against all claims, demands, actions, causes of
actions, damages, liabilities, losses, and expenses (including
reasonable attorney's fees) incurred as a result of:
(i) claims for damage to property and/or personal injuries (including
death) arising out of the negligence or willful act or omission
of Percom; and
(ii) Percom' failure to perform any of its obligations hereunder.
B. Indemnification by HSI. HSI shall indemnify, defend and hold harmless
Percom and its affiliates, employees, directors, officers, and agents
from and against all claims, demands, actions, causes of actions,
damages, liabilities, losses, and expenses (including reasonable
attorney's fees) incurred as a result of:
(i) claims for damages to property and/or personal injuries
(including death) arising out of the negligence or willful act or
omission of HSI; and
(ii) HSI's failure to perform any of its obligations hereunder.
ARTICLE VIII - CONFIDENTIAL INFORMATION
A. Confidentiality. Each party shall each preserve the other party's
confidential information disclosed to each party in connection with
providing Service hereunder with the same degree of care it uses in
protecting its own confidential or proprietary information and shall
not disclose, directly or indirectly, such information to any third
party without the prior written consent of the other party.
ARTICLE IX - INSURANCE
A. HSI's Insurance Requirements. HSI shall, at its own expense, obtain
and keep in full force and effect at all times for the duration of
this Agreement, with a carrier or carriers reasonably satisfactory to
Percom, insurance policies of the following kinds and in the following
amounts:
(a) Workers' Compensation Insurance in accordance with all applicable
laws;
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(b) Employer's liability insurance with limits for employer's
liability of $1,000,000 per accident;
(c) Comprehensive bodily injury and property damage liability
insurance, including automobile insurance and contractual
liability insurance, in at least the following amounts:
Bodily injury to any one person $1,000,000
Bodily injury aggregate per occurrence $1,000,000
Property damage in any one accident $1,000,000
Property damages aggregate per occurrence $1,000,000
Upon request of Percom, HSI shall furnish Percom certificates of such
insurance and/or copies of the applicable policies.
B. Percom' Insurance Requirements. Percom shall, at its own expense,
obtain and keep in full force and effect at all times for the duration
of this Agreement, with a carrier or carriers reasonably satisfactory
to HSI, insurance policies of the following kinds and in the following
amounts:
(a) Workers' Compensation Insurance in accordance with all applicable
laws;
(b) Employer's liability insurance with limits for employer's
liability of $1,000,000 per accident;
(c) Comprehensive bodily injury and property damage liability
insurance, including automobile insurance and contractual
liability insurance, in at least the following amounts:
Bodily injury to any one person $1,000,000
Bodily injury aggregate per occurrence $1,000,000
Property damage in any one accident $1,000,000
Property damages aggregate per occurrence $1,000,000
Upon request of HSI, Percom shall furnish HSI certificates of such
insurance and/or copies of the applicable policies.
ARTICLE X - FORCE MAJEURE
A. Force Majeure. If the performance of this Agreement is interfered
with by any circumstance beyond the reasonable control of the
party affected, including without limitation governmental
authority to grant any consent, approval, waiver, or
authorization or any delay on the part of any governmental
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authority in granting any consent, approval, waiver or
authorization, manufacturer or equipment vendor delays or
deficiencies (including ability to process correctly calendar
date-related data), delays in repair or maintenance of cell sites
due to restricted access by third parties, delays or barriers to
construction or coverage resulting from local zoning restrictions
or frequency coordination issues with incumbent microwave users,
acts of God, such as fire, flood, earthquake or other natural
cause, terrorist events, riots, insurrections, war or national
emergency, strikes, boycotts, lockouts or other labor
difficulties, the party affected by the force majeure is excused
on a day-by-day basis to the extent of the interference; provide
that such party shall use its reasonable best efforts to avoid or
remove the causes of such nonperformance.
ARTICLE XI - NOTICES
A. Notices. Notices under this Agreement shall be in writing and
delivered by certified mail, return receipt requested, to the
persons whose names and business addresses appear below and such
notice shall be effective on the date of receipt or refusal
thereof by the receiving Party.
If to HSI: Horizon Services, Inc.
00 X. Xxxx Xxxxxx
P. O. Xxx 000
Xxxxxxxxxxx, XX 00000
Attn: President
If to Percom: Horizon Personal Communications, Inc.
00 X. Xxxx Xxxxxx
X. X. Xxx 000
Xxxxxxxxxxx, Xxxx 00000
Attn: President
ARTICLE XII - DISPUTES; ARBITRATION
A. Arbitration. Any dispute arising between HSI and Percom in connection
with this Agreement, which is not settled to the mutual satisfaction
of HSI and Percom within thirty (30) days (or such longer period as
may be mutually agreed upon) from the date that either party informs
the other in writing that such dispute or disagreement exists, shall
be settled by arbitration conducted in Columbus, Ohio in accordance
with the Commercial Arbitration rules of the American Arbitration
Association then in effect on the date that such notice is given. The
decision of the arbitrator shall be final and binding upon the parties
and judgment may be obtained thereon by either party in a court of
competent jurisdiction. Each party shall bear the cost of preparing
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and presenting its case. The cost of arbitration, including the fees
and expenses of the arbitrator, will be shared equally by the parties
unless the award otherwise provides.
ARTICLE XIII - MISCELLANEOUS
A. Assignment. None of the parties shall have the right to assign this
Agreement without the consent in writing of the other party; except
that at any time HSI in its sole discretion may assign all of its
rights to receive payments hereunder to a lender in connection with
any financing obtained from such lender.
B. No Partnership. This Agreement does not constitute either party as the
agent or legal representative of the other party and does not create a
partnership or joint venture between HSI and Percom. Except as
provided herein, neither party shall have any authority to enter into
an agreement for or bind the other party in any manner whatsoever.
This Agreement confers no rights of any kind upon any third party.
C. Entire Agreement. This Agreement sets forth the entire understanding
of the parties and supersedes any and all prior agreements,
arrangements or understandings relating to the subject matter hereof.
D. Severability. If any part of any provision of this Agreement or any
other agreement, document or writing given pursuant to or in
connection with this Agreement shall be invalid or unenforceable under
applicable law, said part shall be ineffective to the extent of such
invalidity only, without in any way affecting the remaining parts of
said provision or the remaining provisions of this Agreement.
E. Governing Law. This Agreement is made pursuant to and shall be
construed and enforced in accordance with the internal laws in force
in the State of Ohio.
F. Press Releases. Neither party shall issue a news release, public
announcement, advertisement, or other form of publicity concerning the
existence of this Agreement or the supplies or services to be provided
hereunder without obtaining the prior written approval of the other
party.
G. Amendments. No provision hereof shall be altered, modified, rescinded
or limited except by written agreement expressly referring hereto and
to the provisions so altered, modified and limited and signed by all
parties against whom such modification or limitation is asserted, nor
shall any such provision be modified or limited by course of conduct
or by usage of trade.
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H. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns.
HORIZON SERVICES, INC.
By:____________________________________
Name:__________________________________
Its:___________________________________
HORIZON PERSONAL COMMUNICATIONS, INC.
By:____________________________________
Name:__________________________________
Its:___________________________________
