EXHIBIT 10.18
MASTER SERVICES AGREEMENT
AGREEMENT dated as of [ ], 1996,(1) between Xxxxxx
Industries Inc., a Tennessee corporation ("Industries") and Xxxxxx Micro Inc.,
a Delaware corporation ("Micro").
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. (a) On the terms and
subject to the conditions of this Agreement, during the term of this Agreement
Industries agrees to provide to Micro and its Subsidiaries, or procure the
provision to Micro and its Subsidiaries of, and Micro (on behalf of itself and
its Subsidiaries) agrees to purchase from Industries, the services described
on the Schedules attached hereto (the "Services"), including without
limitation Services in connection with the administration of certain employee
benefit plans and arrangements set forth on such Schedules (the "Plans").
Notwithstanding anything herein to the contrary, Industries shall only perform
Services involving the administration of the Micro Thrift Plan (as defined in
the Employee Benefits Transfer and Assumption Agreement dated as of [ ],
1996 among the parties hereto) upon the written request of Micro (or an
appropriate committee designated thereby) and on the condition that the terms
of the Micro Thrift Plan are acceptable to Industries. Unless otherwise
specifically agreed by the parties, the Services to be provided or procured by
Industries hereunder shall be substantially similar in scope, quality and
nature to those provided to, or procured on behalf of, Micro and its
Subsidiaries prior to the date hereof.
_________________
(1) To be dated the Closing Date under the Exchange Agreement.
(b) Any administration of the Plans by Industries pursuant to
the terms hereof shall be subject to applicable regulatory requirements and
the terms of the governing plan documents as interpreted by the appropriate
plan fiduciaries. The parties shall cooperate fully with each other in the
administration and coordination of regulatory and administrative
requirements associated with the Plans. Such coordination, upon request,
will include (but not be limited to) the following: sharing payroll data
for determination of highly compensated associates, providing census
information (including accrued benefits) for purposes of running
discrimination tests, providing actuarial reports for purposes of
determining the funded status of any plan, review and coordination of
insurance and other independent third party contracts, and providing for
review of all summary plan descriptions, requests for determination
letters, insurance contracts, Forms 5500, financial statement disclosures
and plan documents.
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 Micro for such Service
will be determined. Micro agrees to pay to Industries in the manner set
forth in Section 1.3 the Service Fees applicable to each of the Services
provided by Industries to Micro (and its Subsidiaries) pursuant to the
terms hereof.
(b) In addition to any other amounts payable to Industries
hereunder, Micro shall reimburse Industries in the manner set forth in
Section 1.3 for (i) all out-of-pocket expenses (including without
limitation travel expenses, professional fees, printing and postage)
incurred by Industries 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 and (ii) without duplication, all costs and expenses
(including without limitation any contributions, premium costs and third-
party expenses), incurred by Industries in connection with its
administration of the Plans.
(c) In addition to any other amounts payable to Industries
hereunder, Micro shall reimburse Industries 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
Industries' income) that Industries and its Subsidiaries may be required to
pay on account of Micro (and its Subsidiaries) in connection with the
performance of Services or with respect to payments made by Micro for such
Services pursuant to this Agreement.
SECTION 1.3. Invoicing and Settlement of Costs. (a)
Industries will deliver an invoice to Micro 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 Micro
(and its Subsidiaries) and (ii) other amounts owing to Industries pursuant
to Section 1.2. Except as otherwise provided in this Agreement, each such
invoice will be prepared and delivered in a manner substantially consistent
with the billing practices used in connection with services provided to
Micro prior to the date hereof; provided that 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 Micro. In addition,
Micro shall have the right to examine any and all books and records as it
reasonably requests in order to confirm and verify the calculation of the
amount of any payment pursuant to this Section and Industries shall
cooperate in any reasonable manner in such examination as Micro shall
request.
(b) Payment (including payment of any amounts disputed
pursuant to Section 1.3(c)) of each invoice shall be due from Micro 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 Industries. If Micro 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 Micro disputes any charges invoiced by
Industries pursuant to this Agreement, Micro shall deliver a written
statement describing the dispute to Industries 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 Micro (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 Industries to the
next relevant Payment Date) shall be credited against payments owing by
Micro to Industries 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 December 31, 1996 (or, with
respect to payroll services provided to Micro, on December 31, 1997), 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.
(b) At any time, Micro may request Industries to discontinue
performing all or any portion of the Services upon 45 days' prior written
notice.
SECTION 1.5. Limited Warranty. Industries 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. Micro hereby acknowledges that Industries 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, Industries 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
Industries fails to provide a Service hereunder, or the quality of a
Service is not in accordance with Section 1.1 or Section 1.5, Micro may
give Industries prompt written notice thereof. Industries will then have
thirty days to cure the defective Service. If after such period Industries
has failed to cure the defective Service, Micro may seek an alternative
provider for such Service and Industries shall discontinue performing such
Service at the written request of Micro. Micro shall be liable to
Industries for any Service performed by Industries after Industries 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 Industries in
connection with the cessation of such Services or the transfer of such
Services back to Micro or its 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.
ARTICLE 2
INDEMNIFICATION
SECTION 2.1. Limitation of Liability. Micro agrees that
none of Industries, any of its Subsidiaries or any of their respective
directors, officers, agents and employees (each, an "Industries Indemnified
Person") shall have any liability, whether direct or indirect, in contract,
tort or otherwise, to Micro arising out of or attributable to the performance
or nonperformance of Services pursuant to this Agreement.
SECTION 2.2. Indemnification. (a) Micro agrees to and
does hereby indemnify and hold each Industries 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 Industries Indemnified Person pursuant to
this Agreement) to which such Industries 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 Micro of any Services or (ii) otherwise in connection
with this Agreement.
(b) The parties agree to follow the procedures set forth in
Section 5.3(a) and 5.3(b) of the Amended and Restated Reorganization
Agreement dated as of September 4, 1996, as amended and restated as of
October 17, 1996, among the parties hereto and Xxxxxx Entertainment Inc.
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 Micro to Industries and the reports produced by
Industries for Micro 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 Industries pursuant to this Agreement shall belong to
Industries 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) Micro shall have reasonable access to all data, records,
files, statements, records, invoices, xxxxxxxx, and other information
generated by or in custody of Industries relating to the Services provided
pursuant to this Agreement. Unless otherwise specified by Micro or
required by law, Industries 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 Micro, Industries 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 between 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 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 either 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 either party hereto to the other
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
Industries. 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 Amended and Restated
Reorganization Agreement dated as of September 4, 1996, as amended and
restated as of October 17, 1996 among the parties hereto and Xxxxxx
Entertainment Inc.
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 between 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.
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.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
XXXXXX INDUSTRIES INC.
By:____________________________
Name:
Title:
One Belle Xxxxx Place
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
XXXXXX MICRO INC.
By:____________________________
Name:
Title:
0000 Xxxx Xxxxx Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Telecopy: (000) 000-0000
