SERVICES AGREEMENT
This Services Agreement (this "Agreement") is made and entered into as
of the 22nd day of October, 1996 by and between Intelligent Electronics, Inc., a
Pennsylvania corporation ("IE"), and XLConnect Solutions, Inc., Pennsylvania
corporation ("XLC").
BACKGROUND
A. XLC is a wholly-owned, indirect subsidiary of IE.
B. IE and XLC intend to effect an initial public offering of shares of
common stock of XLC (the "Offering").
C. Historically, IE has provided to its subsidiaries, including XLC and
its subsidiaries, cash management, insurance and risk management and certain
other administrative and management services and has permitted employees of its
subsidiaries, including XLC and its subsidiaries, to participate in certain
employee benefit plans and programs sponsored and administered by IE.
D. The parties hereto desire to provide for the continuation of certain
of such services, on an interim basis, on the terms and conditions set forth
herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Advance" means an IE Advance or an XLC Advance, as the case may
be.
(b) "Average Balance" means, with respect to an Interest Period, the
average net daily balance (positive or negative) in the intercompany account
maintained by IE pursuant to Section 2(c) hereof, which shall equal the quotient
of (i) the algebraic sum of the balances of XLC Advances or IE Advances, as the
case may be, which have not been repaid by the close of business on each day of
the applicable Interest Period, with IE Advances treated as negative amounts,
divided by (ii) the number of days in such Interest Period.
(c) "Business Day" means a day on which banks are not required or
permitted to close in New York City, New York.
(d) "Effective Date" means the date on which the purchase and sale
of shares of common stock of XLC pursuant to the Offering first occurs.
(e) "Financing Agreement" means that certain Amended and Restated
Inventory and Working Capital Financing Agreement dated as of April 5, 1996,
among IBM Credit Corporation ("IBMCC"), and IE and its subsidiaries, as the same
may be amended from time to time.
(f) "Interest Period" means a period of one month's duration;
provided, however, that the Interest Period applicable to the month in which
this Agreement terminates shall end on the third Business Day following such
termination.
(g) "XLC Account" means that certain deposit account to be
established by XLC.
(h) "XLC Lockbox Account" means that certain Lockbox Account to be
established, with the consent of IBMCC, if necessary.
In addition, as used in Sections 3 and 5 hereof, and otherwise as the
context may require, the term "IE" shall include the subsidiaries of IE, other
than XLC and its subsidiaries, and the term "XLC" shall include its
subsidiaries.
2. Liquidity and Cash Management Services.
(a) XLC Account and Lockbox Account. XLC shall establish the XLC
Account and the XLC Lockbox Account. XLC and its subsidiaries shall deposit
receipts from operations and investment activities and the proceeds thereof into
the XLC Account. So long as XLC is a party to the Financing Agreement: (i) the
XLC Account shall be subject to a contingent blocked account agreement for the
benefit of IBMCC; and (ii) the XLC Account and the XLC Lockbox Account shall be
maintained, and transactions therein conducted, in accordance with the
applicable provisions of the Financing Agreement. Pursuant to and in accordance
with the Financing Agreement, funds available under the line of credit provided
thereby shall be available to XLC up to a maximum principal amount not to exceed
$20,000,000.
(b) Advances.
(i) IE Advances. From and after the Effective Date, IE may, at the
request of XLC, as directed, or within specific parameters prescribed, from time
to time, by its board of directors, advance to XLC and/or one or more
subsidiaries of XLC, as XLC may request, funds that are requested by XLC in
order to meet any additional cash requirements (each, an "IE Advance") not met
from the proceeds of the XLC Account and the XLC Lockbox Account; provided IE
receives a request for any such IE Advance (other than an IE Advance consisting
of interest payable by XLC) no later than by 11:30 on the date on which funds
are to be transferred, which notice shall specify (i) the amount of funds to be
transferred; (ii) the account to which such funds are to be transferred; and
(iii) the repayment date with respect to such IE Advance. Any interest payable
by XLC on an IE Advance (other than interest payable on or after termination of
this Agreement) shall be treated (effective as of the fifth (5th) Business Day
next following the last day of the Interest Period in respect of which such
interest is payable) as a separate IE Advance for purposes of this Agreement.
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Each IE Advance under this Section 2(b)(i) shall be deemed to be an Advance made
to XLC notwithstanding that such Advance may be made directly to one or more
subsidiaries of XLC.
(ii) XLC Advances. From and after the Effective Date, XLC may, as
directed, or within specific parameters prescribed, from time to time, by its
board of directors, advance to IE such funds as are not necessary to meet XLC's
daily cash requirements for short-term investment (each, an "XLC Advance") in
connection with IE's Cash Management System provided that XLC notifies IE that
it will make an XLC Advance (other than an XLC Advance consisting of interest
payable in connection with previously made XLC Advances) no later than 11:30
a.m. (New York City time) on the date funds are to be transferred, which notice
shall specify (i) the amount of funds to be transferred; and (ii) the account to
which such funds are to be transferred. Such notice shall specify the duration
of the investment requested by XLC. Any interest payable by IE on an XLC Advance
(other than interest payable on or after termination of this Agreement) shall be
treated (effective as of the day next following the last day of the Interest
Period in respect of which such interest is payable) as a separate XLC Advance
for purposes of this Agreement.
(c) Intercompany Account. Each of IE and XLC shall maintain on its
respective books an intercompany account in which all Advances and all payments
made with respect to such Advances shall be recorded. Each of IE and XLC shall
afford to the other party access, during normal business hours, to its
respective books and records relating to Advances and payments made with respect
thereto.
(d) Interest. (i) Subject to the other provisions of this Section
2(d), interest shall accrue on all Advances at a rate of interest equal to the
rate available on the date of the requested Advance under the commercial credit
facilities then available to the entity making such Advance. Interest shall be
calculated on the basis of a 360-day year consisting of 12 months having 30 days
each and shall be payable in arrears on the first day of each month for the
Interest Period ending on the immediately preceding day, and on the third (3rd)
Business Day next following termination of this Agreement. Any Advances not
repaid when they become due and payable upon the termination of this Agreement
as provided in Section 2(e) shall bear interest from and after the date of
termination to, but excluding, the date of payment at a rate per annum equal to
two percent (2%) in excess of otherwise applicable interest rates, and such
interest shall be payable upon demand.
(ii) Interest payable under this Agreement shall be calculated by
applying the interest rate specified in Section 2(d)(i) hereof to the Average
Balance for the applicable Interest Period. To the extent the Average Balance is
positive, interest shall be payable by IE, and to the extent the Average Balance
is negative, interest shall be payable by XLC. Except for interest payable upon
or after the termination of this Agreement, interest not paid by either party on
or before the fifth (5th) Business Day following the last day of the Interest
Period in respect of which such interest is payable, shall be treated as an
additional Advance to the party owing such interest, as provided in Section 2(b)
hereof, effective as of such fifth (5th) Business Day. The applicable party
shall calculate the amount of interest payable for each Interest Period, and
provide notice thereof to the other party not later than
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the Business Day next following the last day of the Interest Period in respect
of which such interest is payable. Upon the request of IE or XLC, as the case
may be, XLC or IE shall promptly provide to the other a calculation of any such
interest charge, together with reasonable support therefor.
(e) Repayment. During the term of this Agreement, IE Advances shall
be repaid to IE on the date identified in accordance with Section 2(b)(i) hereof
and XLC Advances shall be repaid to XLC upon the expiration of the investment
period identified in accordance with Section 2(b)(ii) hereof; provided that all
Advances received by either party under this Agreement shall be offset and shall
be treated as repaid to the extent of any Advances made by such party to the
other. Upon termination of this Agreement, any Advances which have not
theretofore been repaid as provided in the immediately preceding sentence will
become due and payable in full.
3. Administrative and Marketing Services.
(a) Administrative Services. In addition to the foregoing Liquidity
Services, each of IE and XLC shall provide or cause to be provided to the other,
if, when and to the extent required by such other party, the administrative
services described in Exhibit A-1 and Exhibit A-2, respectively, and such other
services that IE or XLC, as the case may be, is capable of providing with its
then-current personnel and facilities without unreasonable interference with
IE's or XLC's respective normal business operations (the "Administrative
Services" and, collectively with the Liquidity Services and the Marketing
Services (defined below), the "Services").
(b) Marketing Services. IE and its subsidiaries will allow XLC the
opportunity to evaluate and participate in service opportunities which may come
to IE's attention, at competitive rates, provided that reasonable service levels
can be provided by XLC. Similarly, XLC will allow IE the opportunity to evaluate
and participate in hardware and systems opportunities which may come to XLC's
attention, at competitive rates, provided that reasonable product can be
provided by IE on reasonable terms and conditions. IE shall use its best
efforts, in the exercise of sound business judgment, to continue the employment
of or associations with such employees, business consultants and sales
associates as are necessary or desirable to assist in market and business
development activities, promote effective cooperative selling and cross selling
of hardware and services, provide technical skill transfer and cross training,
and preserve and enhance the mutual reputations of IE and XLC; provided that in
the event that IE determines that it desires to terminate any such employee, it
shall first provide to XLC at least two weeks' prior notice and an opportunity
to hire such employee.
4. Employee Benefits. From and after the Effective Date, IE shall
permit the employees of XLC and its subsidiaries (the "XLC Employees") to
continue to participate in the employee benefit plans and programs listed on
Exhibit B hereto (collectively, the "Employee Benefit Plans") on the same basis
as such employees participated immediately prior to the Effective Date;
provided, however, that nothing contained in this Agreement shall
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prohibit IE from modifying or terminating the Employee Benefit Plans so long as
such modification or termination shall apply to all participants in such
Employee Benefit Plans or, with respect to any modification or termination that
does not apply to all participants in such Employee Benefit Plans, XLC consents
thereto (any such consent not to be unreasonably withheld). IE shall provide to
XLC ninety (90) days prior written notice of its intent to terminate any
Employee Benefit Plan or effect the modification thereof in a manner adverse to
either XLC or any XLC Employee. Notwithstanding anything to the contrary
contained herein, XLC may (or with respect to the circumstance described in
clause (b) below, IE may) terminate the participation of the XLC Employees in
any Employee Benefit Plan upon the occurrence of the following: (a) the receipt
of notice of IE's intent to terminate any Employee Benefit Plan or effect the
modification thereof in a manner adverse to either XLC or any XLC Employee; or
(b) the disposition by IE of a sufficient number of shares of XLC Common Stock,
in the aggregate, such that the ability of XLC Employees to be included in such
a Plan may be terminated. The contributions of XLC Employees to any Employee
Benefit Plan shall be accounted for separately from contributions of persons who
are not XLC employees. XLC shall pay or reimburse IE for the costs associated
with participation by the XLC Employees in the Employee Benefit Plans calculated
on the basis of its respective percentage of compensation (including benefits)
of participants covered by such Plans.
5. Referral Fees. IE's direct sales force intends to continue to
provide to XLC sales leads and referrals, but is not obligated to do so. XLC
shall compensate IE for such leads and referrals that result in revenues to XLC
consistent with and substantially similar to current practices between the
companies ("referral fees"); provided, however, that nothing contained in this
Agreement shall prohibit XLC from terminating its referral fee program,
effective on or after December 31, 1997, upon XLC's provision of written notice
thereof to IE. XLC shall pay to TFN referral fees at a rate of five percent (5%)
of revenue billed and collected by XLC for services rendered in connection with
opportunities provided by TFN on behalf of XLC; provided, however, that no such
referral fees shall be payable with respect to services rendered by XLC in
connection with Power by the Hour, Break Fix, Network Management Center, Help
Desk, Telecommunications Services, and other services which are provided solely
by XLC and are not the direct result of leads or referrals from IE.
6. Charges for Services.
(a) Services Rendered by IE. For all costs and expenses, including
third-party charges, incurred by IE in providing the Services to XLC or any of
its subsidiaries that are separately identifiable, XLC shall pay to IE the
actual cost thereof. For all costs and expenses, including third-party charges,
incurred by IE in providing the Services to XLC or any of its subsidiaries that
are not separately identifiable, XLC shall pay to IE that portion of such costs
and expenses reasonably attributable to XLC based on such methodology as is
described on Exhibit A-1 hereto, which methodology the parties have mutually
determined to be appropriate.
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(b) Services Rendered by XLC. For all costs and expenses, including
third-party charges, incurred by XLC in providing the Services to IE or any of
its subsidiaries that are separately identifiable, IE shall pay to XLC the
actual cost thereof. For all costs and expenses, including third-party charges,
incurred by XLC in providing the Services to IE or any of its subsidiaries that
are not separately identifiable, IE shall pay to XLC that portion of such costs
and expenses reasonably attributable to IE based on such methodology as is
described on Exhibit A-2 hereto, which methodology the parties have mutually
determined to be appropriate.
7. Payments.
(a) Invoices. Except for items as to which other payment
arrangements have been made, IE or XLC, as applicable, shall submit to the other
party, by the 15th day of each month an invoice for all charges associated with
the Services (and, in the case of IE, Employee Benefit Plans) for the preceding
month and any adjustments for prior months. All invoices shall describe in
reasonable detail (i) the Services provided during the preceding month and the
charges associated therewith, (ii) the charges to XLC associated with
participation by the XLC Employees in the Employee Benefit Plans during the
preceding month, and (iii) any prior month adjustments. Except as provided in
Section 7(b) hereof, each of XLC and IE, as applicable, shall remit payment in
full for all charges invoiced on or before the last day of the month in which
the invoice is received, unless such invoice is received after the 15th day of
such month, in which event, such invoice shall be paid on or before the last day
of the next succeeding month. Notwithstanding any other provision of this
Section 7(a), IE shall timely make any and all payments to third parties
necessary to ensure continued services of the types contemplated in this
Agreement.
(b) Disputes. In the event of a dispute as to an invoiced amount,
the obligor with respect to such invoice shall promptly pay all undisputed
amounts, but shall be entitled to withhold amounts in dispute. Each party shall
promptly notify the other of any such dispute. Each party will provide the other
sufficient records and information to resolve any such dispute and, without
limiting the rights and remedies of the parties hereunder, will negotiate in
good faith a resolution thereto.
(c) Method of Payment. Transfer of funds pursuant to this Agreement
shall be made in U.S. dollars by company check or wire transfer of immediately
available funds to an account or accounts specified by the party receiving such
payment. Whenever any payment hereunder is required or requested on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and any such extension of time shall be included in the computation of the
payment of interest.
8. Performance of Services.
(a) Degree of Care. Each party performing Services hereunder shall
perform such Services with the same degree of care, skill and prudence
customarily exercised by it in respect of its own business, operations and
affairs. It is understood and agreed that
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the Services shall be substantially identical in nature and quality to the
Services performed by such party for the other party immediately prior to the
Effective Date.
(b) Certain Limitations. Each party acknowledges that the Services
shall be provided only with respect to the respective businesses of IE and XLC
and their respective subsidiaries as such businesses exist as of the Effective
Date or as otherwise mutually agreed by the parties. IE will not be obligated to
provide Services for the benefit of entities other than XLC and its
subsidiaries; and XLC will not be obligated to provide Services for the benefit
of entities other than IE and its subsidiaries (other than XLC and its
subsidiaries). Each party shall use the Services only in accordance with all
applicable federal, state and local laws and regulations.
(c) Certain Information. Each of IE and XLC shall provide, and shall
cause each of its subsidiaries to provide, in a manner consistent with the
practices employed by the parties prior to the Effective Date, any information
needed by the other party or its subsidiaries, as the case may be, to perform
the Services pursuant hereto. If the failure to provide such information renders
the performance of any requested Service impossible or unreasonably difficult,
IE or XLC, as applicable, may, upon reasonable notice to the other party hereto,
refuse to provide such Service.
(d) Further Assurances. During the term of this Agreement, each of
IE and XLC shall use their best efforts, but exercising sound business judgment,
to: (i) preserve their respective and mutual reputations and market positions in
strategic markets; (ii) promote their mutual businesses and cause the retention
and expansion of common clients (including without limitation, mutual assistance
in market and business development activities); (iii) provide technical skill
transfer and cross training to employees of each entity; and (iv) delay taking
any action which may jeopardize any such client relationships (whether now
existing or hereafter arising or developed) until it has notified the other and
has attempted less intrusive or adverse measures, including without limitation,
releasing or transferring mutually beneficial employees, including business
consultants and sales associates in branch locations; placing holds and limits
on customer credit; commencing or continuing collection and enforcement action
as to any accounts; and undertaking billing practices deviating from ordinary
course in the industry and present and past practices.
9. Limitations on Liability and Indemnification.
(a) Limitations on Liability. Neither party shall have any liability
under this Agreement (including any liability for its own negligence) for
damages, losses or expenses suffered by the other party or its subsidiaries as a
result of the performance or non-performance of such party's obligations
hereunder, unless such damages, losses or expenses are caused by or arise out of
the willful misconduct or gross negligence of such party or a breach by such
party of any of the express provisions hereof. In no event shall either party
have any liability to the other party for indirect, incidental or consequential
damages that such other party or its subsidiaries or any third party may incur
or experience on account of the performance or non-performance of such party's
obligations hereunder. Notwithstanding the foregoing, each
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party shall use its best efforts to timely cure any defect in or failure of
performance (whether as a result of negligence or otherwise) and to otherwise
correct or improve the level of performance in order to render services
substantively and qualitatively equal to or better than those presently being
rendered.
(b) Indemnification. Subject to the limitations on liability set
forth in the penultimate sentence of Section 9(a) hereof, each party shall
indemnify, defend and hold harmless the other party and its directors, officers,
employees, agents and representatives from and against all claims, liabilities,
damages, losses and expenses (including reasonable attorneys fees and expenses)
caused by or arising out of the willful misconduct or gross negligence of such
indemnifying party in the performance or non-performance of its obligations
hereunder or the breach by such indemnifying party of any of the express
provisions hereof.
(c) The provisions of this Section 9 shall survive any termination
of this Agreement.
10. Term of Agreement. This Agreement shall become effective on the
Effective Date and shall automatically terminate on the first Business Day
following the occurrence of either (a) a pro rata distribution (the
"Distribution") by IE to its shareholders of shares of common stock of XLC (the
"XLC Shares") or (b) upon the sale by IE of a sufficient number of the XLC
Shares, in the aggregate, such that IE no longer owns a majority of the
outstanding XLC Shares; in each case unless earlier terminated (i) on the date
specified on Exhibit A with respect to particular Service; or (ii) by either
party upon not less than 90 days' prior written notice to the other party;
provided, however, that, except as provided otherwise in Section 5 and Exhibit
A-2 hereof, neither party may give a notice that would result in a termination
of this Agreement or any service contemplated hereby prior to December 31, 1996.
IE will provide (i) at least five (5) Business Days' prior written notice to XLC
of the date of any Distribution, and (ii) at least thirty (30) days' prior
written notice of any sale of XLC Shares as a result of which IE will no longer
hold a majority of the outstanding XLC Shares. Termination under this Section 10
or otherwise shall have no effect on the respective obligations of the parties
prior to the effective date of such termination or their respective obligations
to make any payment required to be made pursuant to the terms hereof.
11. Confidentiality. Each party will hold in trust and maintain
confidential and, except as required by law, not disclose to others without the
prior written approval of the other party, any information received by it from
the other party or developed or otherwise obtained by it in connection with the
performance of its obligations hereunder (the "Information"). Within ninety (90)
days after the date of termination of this Agreement, each party will return to
the other party, or, with the written consent of the other party, destroy all
documents, data and other materials of whatever nature relating to the
businesses of the other and its subsidiaries that it obtained in connection with
the performance of its obligations hereunder, provided that the parties may
retain any Information to the extent reasonably needed to comply with applicable
tax, accounting or financial reporting requirements or to resolve any legal
issues identified at the time of termination. The provisions of this Section 11
shall survive any termination of this Agreement.
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12. Miscellaneous.
(a) Successors and Assigns. This Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned by either
party hereto to any other person except that either party may assign this
Agreement to any of its affiliates.
(b) No Third-Party Beneficiaries. Except for the persons entitled to
indemnification pursuant to Section 9(b) hereof, each of whom is an intended
third-party beneficiary hereunder, nothing expressed or implied in this
Agreement shall be construed to give any person or entity other than the parties
hereto any legal or equitable rights hereunder.
(c) Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof.
(d) Amendment. This Agreement may not be amended except by an
instrument signed by the parties hereto.
(e) Waivers. Either party hereto may (i) extend the time for the
performance of any of the obligations or other act of the other party or (ii)
waive compliance with any of the agreements contained herein. No waiver of any
term shall be construed as a waiver of the same term, or a waiver of any other
term, of this Agreement. The failure of any party to assert any of its rights
hereunder will not constitute a waiver of any such rights.
(f) Severability. If any provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, such
provision shall be deemed severable and all other provisions of this Agreement
shall nevertheless remain in full force and effect.
(g) Headings. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
(h) Notices. All notices given in connection with this Agreement
shall be in writing. Service of such notices shall be deemed complete (i) if
hand delivered, on the date of delivery, (ii) if by mail, on the fourth business
day following the day of deposit in the United States mail, by certified or
registered mail, first-class postage prepaid, or (iii) if sent by FedEx or
equivalent courier service, on the next business day, or (iv) if by telecopier,
upon receipt by the sender of confirmation of successful transmission. Such
notices shall be addressed to the parties at the following addresses or at such
other address for a party as shall be specified by like notice (except that
notices of change of address shall be effective upon receipt):
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If to IE:
000 Xxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Attention: President
Telecopier: 000-000-0000
If to XLC:
000 Xxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Attention: President
Telecopier: 000-000-0000
(i) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the Commonwealth of Pennsylvania,
without giving effect to the principles of conflict of laws thereof.
(j) Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
but one and the same instrument.
IN WITNESS WHEREOF, IE and XLC have caused this Services Agreement to
be executed on the date first above written.
INTELLIGENT ELECTRONICS, INC.
By: /s/ Xxxxxxxx X. Xxxx
-----------------------------
Name: Xxxxxxxx X. Xxxx
Title: Secretary
XLCONNECT SOLUTIONS, INC.
By: /s/ Xxxxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxxxx Xxxxx
Title: Chief Financial Officer
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EXHIBIT A-1
Administrative Services to be Provided by IE
1. BILLING SERVICES:
o Use of AS400 for XLC's billing and general ledger and accounts receivable
function o Payment by XLC shall be consistent with current practices
o Upon termination of XLC's use of the AS400, XLC shall contribute its
interest, if any, in the AS400 to IE at book value
o IE shall not be obligated to maintain the AS400 for more than 180 days
after the date herein
2. PAYROLL:
o Use of ADP or other common paymaster
o Payment by XLC shall be made as billed by IE, with XLC's allocable share
calculated on the basis of its respective number of employees
3. TREASURY FUNCTIONS:
o Daily reports
o Account reconciliation
o Cash Management as needed
4. INSURANCE AND RISK MANAGEMENT:
o Provision of insurance coverage through group policies issued under
American Phoenix Programs or successor policies
o Administration of risk management matters
o Insurance premiums shall be paid either directly by XLC to American
Phoenix as billed for the account of XLC, or to IE on account of XLC's
portion of the aggregate premium for IE and all of its subsidiaries,
consistent with the premiums described in Annex 1 hereto, based on a
reasonable allocation methodology for each type of coverage.
5. TAX:
o Preparation and filing of all consolidated tax returns
o Assistance with state and local sales, use and services taxes and property
tax compliance
o Assistance with financial accounting for taxes
o Supervision of all federal, state and local tax audits, protests,
administrative proceedings and litigation
o Qualification and design of all employee benefit plans
o Preparation and submission of all tax ruling requests
A-1
o Rendering and obtaining all tax opinions
o Qualification and reporting of stock options o Services provided by the
Tax Director and his or her support personnel shall be billed to XLC on
the basis of reasonable, actual time spent at reasonable hourly rates to
be mutually agreed, from time to time, by IE and XLC.
6. HUMAN RESOURCES:
o Advice and assistance with respect to employee benefits, plan
administration, and other employee matters
o Payment by XLC shall be made as billed, with XLC's allocable share
calculated on the basis of its respective percentage of compensation.
7. OPERATION AND UTILITIES:
o Phone and communications services, water and sewer, electricity, gas and
other fuel
o Mechanisms will be established to permit employees to specifically identify
services provided for XLC.
o To the extent amounts are not specifically identifiable, allocation will
be consistent with current practices and calculated based on the respective
portion of space in a given facility occupied by each party in accordance
with the Space Sharing Agreement dated as of May 31, 1996.
8. MATTERS RELATING TO HARDWARE
o Sales of hardware, configuration and distribution, including with respect
to returns and "refresh" of hardware used in XLC service programs; provided
that with respect to service program arrangements arising after the date
hereof, IE shall be consulted with respect to the hardware component of any
such program and shall use its best efforts to make reasonable
accommodations in connection with the retention of hardware risk.
o Reserves for such equipment and functions to be retained by IE and, if
collected by XLC, remitted to IE.
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XXXXXXX X-0
Administrative Services to be Provided by XLC
1. VENDOR FUNDING
o XLC will continue to receive an allocated share of vendor funding revenues
for XLC's training of technical staff and sales force and assistance in
certain marketing and advertising programs.
o Allocation, calculated in a manner consistent with present practices, is
$315,000 per quarter, payable in three monthly installments, until
September 30, 1997.
2. SERVICE CALLS
o XLC will xxxx IE and its subsidiaries, at XLC's standard billing rates, for
services rendered to IE or its subsidiaries in connection with service
calls. Such services may include break fix, on-site configuration.
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EXHIBIT B
Employee Benefits Plans
o Intelligent Electronics, Inc. 1995 Employee Stock Purchase Plan
o Intelligent Electronics, Inc. 1995 Long Term Incentive Plan (Stock Option
Plan, including non-wholly-owned subs.)
o Intelligent Electronics, Inc. 1995 Long Term Incentive Plan amended and
restated (Options granted before June 1995 - valid only for employees of
wholly-owned subs.)
o Intelligent Electronics, Inc. 401(k) Tax Deferred Savings Plan
o Intelligent Electronics, Inc. Life AD&D Medical and Dental Plan
o Intelligent Electronics, Inc. Long Term Disability Plan
B-1
