Exhibit 99.2*
* Disclosure schedules and other attachments are omitted, but will be
furnished supplementally to the Commission upon request.
C O N F I D E N T I A L
TRANSITION SERVICES AGREEMENT
BETWEEN
INFOCROSSING SERVICES, INC.
AND
EASYLINK SERVICES CORPORATION
DATED AS OF JULY 31, 2004
Confidential
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT ("Transition Services
Agreement"), dated as of July 31, 2004 (the "Agreement Date"), between
INFOCROSSING SERVICES, INC. ("BUYER"), a Delaware corporation with offices at 0
Xxxxxxxx Xxxxxxx Xxxxxx, Xxxxxx, XX 00000, and EASYLINK SERVICES CORPORATION
("EASYLINK SERVICES"), a New York corporation with offices at 00 Xxxxxxxxxxxxx
Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000. Each of BUYER and EASYLINK SERVICES are
sometimes hereinafter referred to as a "Party" and collectively as the
"Parties".
WHEREAS, BUYER and EASYLINK SERVICES have entered into the
Asset Purchase Agreement dated July 31, 2004 (the "Asset Purchase Agreement"),
pursuant to which EASYLINK SERVICES will sell certain assets to BUYER and BUYER
will assume certain obligations related to the Business (as defined in the Asset
Purchase Agreement);
WHEREAS, BUYER wishes to purchase certain services from
EASYLINK SERVICES and EASYLINK SERVICES has agreed to provide such services to
BUYER in connection with the transfer of certain operations related to the
Business during a transition period commencing on the Agreement Date; and
WHEREAS, EASYLINK SERVICES wishes to receive certain services
from BUYER and BUYER has agreed to provide such services to EASYLINK SERVICES;
NOW, THEREFORE, the Parties hereby agree as follows:
ARTICLE I
Definitions
All terms used herein and not defined herein shall have the
meanings assigned to them in the Asset Purchase Agreement.
ARTICLE II
Agreement To Provide and Accept Services
SECTION 2.01. Provision of Services. On the terms and subject
to the conditions contained herein, each of EASYLINK SERVICES and BUYER (each
party in its capacity as a provider of services hereunder, the "Provider") shall
provide to the other party (such party in its capacity as a recipient of
services hereunder, the "Recipient") the services ("Services") listed in Annex A
to this Transition Services Agreement. Each Service shall be provided in
exchange for the consideration set forth with respect to such Service in Annex A
or as the Parties may otherwise agree in writing. Each of the Services shall be
provided in accordance with the terms, limitations and conditions set forth
herein and in Annex A.
SECTION 2.02. Access. The Recipient shall make available on a
timely basis to the Provider all information and materials reasonably requested
by the Provider to enable it to provide the Services. The Recipient shall
provide to the Provider reasonable access to the Recipient's premises to the
extent necessary for the purpose of providing the Services.
ARTICLE III
Services; Payment; Independent Contractors
SECTION 3.01. Services To Be Provided.
(a) Unless otherwise agreed by the Parties, the Provider shall
be required to perform the Services only in a manner that is substantially
similar in all material respects to the manner in which such Services were
performed for the Business prior to the Agreement Date, and the Recipient shall
use such Services for substantially the same purposes and in substantially the
same manner as the Business had used such Services prior to such date; provided,
however, that in no event shall the scope of the Services required to be
performed hereunder exceed that described in Annex A unless the Provider shall
otherwise agree in writing. The Provider shall act under this Transition
Services Agreement solely as an independent contractor and not as an agent of
the Recipient.
(b) If it is necessary for the Provider to increase staffing
or acquire equipment or make any investments or capital expenditures to
accommodate an increase in the use of any Service beyond the level of use of
such Service as specified in Annex A (or if no level of use is specified in
Annex A, the level of use of such Service by the Business immediately prior to
the Agreement Date), as a result of an increase in volume of the Business or a
change in the manner in which the Business is being conducted, the Provider
shall inform the Recipient in writing of such increase in staffing level,
equipment acquisitions, investments or capital expenditures before any such cost
or expense is incurred. Upon mutual agreement of the Parties as to the necessity
of any such increase, the Recipient (unless the Recipient and the Provider shall
otherwise agree in writing) shall advance to the Provider an amount equal to the
actual costs and expenses to be incurred in connection therewith. If such mutual
agreement is not reached, the Provider's obligation to provide or cause to be
provided such Service shall be limited to the level of use of such Service as
specified in Annex A (or if no level of use is specified in Annex A, the level
of use of such Service by the Business immediately prior to the Agreement Date).
(c) The Provider shall have the right to halt provision of the
Services temporarily for any reason specified in Article V (Force Majeure)
hereof.
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(d) The Recipient agrees to use its reasonable good faith
efforts to reduce or eliminate its dependency on the Services as soon as is
reasonably practicable consistent with Section 7.
(e) The Provider will use reasonable efforts in supplying the
Services to the Recipient. The Services will be performed in a timely manner
substantially consistent with the recent historical practice of the Business
prior to the Agreement Date.
(f) The parties will use good faith efforts to reasonably
cooperate with each other in all matters relating to the provision and receipt
of Services. Such cooperation shall include obtaining all consents, licenses or
approvals necessary to permit each party to perform its obligations hereunder;
provided that neither the Recipient nor the Provider shall be required to pay
any amounts to any third parties or to grant any accommodation, financial or
otherwise, to secure the same. The parties will, for a period of six (6) years
after the Agreement Date, maintain information relating to the Services and
cooperate with each other in making such information available as needed,
subject to appropriate confidentiality requirements, in the event of any tax
audit or litigation.
SECTION 3.02. Payment. Statements will be delivered to the
Recipient after the end of each calendar month by the Provider, and each such
statement shall set forth a brief description of such Services and reasonable
detail regarding the amounts charged therefor and such amounts shall be payable
by the Recipient net 30 days after the date of such statement. Statements not
paid within such 30-day period shall be subject to late charges, calculated
based on the then current prime or base rate (on the date the statement was
issued) of XX Xxxxxx Xxxxx & Co. plus one percentage point, for each month or
portion thereof the statement is overdue; provided that in the event that the
Recipient in good faith disputes any charge set forth on such statement and
provides written notice to the Provider, within fifteen (15) days after receipt
of the statement, of the reasons for its dispute, then such disputed charge
shall not accrue late charges, as provided for in this sentence, during the
period when such amount is disputed in good faith. In addition to the charges
for the Services provided hereunder, the Recipient will reimburse the Provider
for any and all actual out-of-pocket ancillary fees, costs, or expenses incurred
by the Provider in connection with providing for the Services hereunder,
including shipping and transportation costs, duties, taxes (other than income
taxes) and other fees or expenses, where such ancillary fees, costs or expenses
are not specifically included, or exceed, the amounts provided for such items in
Annex A.
SECTION 3.03. Limited Warranty; Disclaimer of Warranty.
Provider warrants that it will provide the Services in a workmanlike manner
substantially in accordance with the past practices of Provider. In the event
that the Services fail to conform to the warranty set forth in the preceding
sentence, Provider shall perform or re-perform the non-conforming Services in a
manner that is contemplated by such warranty. EXCEPT FOR THE WARRANTY PROVIDED
IN THE IMMEDIATELY PRECEDING SENTENCE, THE SERVICES AND GOODS TO BE PURCHASED
UNDER THIS TRANSITION SERVICES AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL
FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.
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SECTION 3.04. Taxes. The amounts set forth as the applicable
consideration in Annex A do not include any sales tax, value added tax, goods
and services tax or similar tax (collectively, "Taxes") and any such Taxes
required to be paid by the Provider in connection with this Transition Services
Agreement or the performance hereof will be promptly reimbursed to the Provider
by the Recipient, and such reimbursement shall be in addition to the amounts
required to be paid by the Recipient as set forth in Annex A. Any such taxes
will be set forth in, and included on, the monthly statement delivered by the
Provider pursuant to Section 3.02.
SECTION 3.05. Use of Services. The Provider shall be required
to provide the Services only to the Recipient and, in the case of Buyer, solely
in connection with the Business.
ARTICLE IV
Term of Services
The provision of Services shall commence on the Agreement Date
and shall terminate on the date indicated for each such Service in Annex A;
provided, however, that the Recipient may cancel any Service prior to the date
indicated in Annex A upon 30-days' prior written notice to the Provider, except
to the extent expressly provided otherwise in Annex A.
ARTICLE V
Force Majeure
The Provider shall not be liable for any interruption of
Service or delay or failure to perform under this Transition Services Agreement
that is due to acts of God, acts of a public enemy, acts of a nation or any
state, territory, province or other political division thereof, fires, floods,
epidemics, riots, labor disputes, strikes, theft, quarantine restrictions,
freight embargoes or other similar causes beyond the control of the Provider (a
"Force Majeure Event"). In any such event, the Provider's obligations hereunder
shall be postponed for such time as its performance is suspended or delayed on
account thereof. The Provider will promptly notify the Recipient, either orally
or in writing, upon learning of the occurrence of such Force Majeure Event. Upon
the cessation of the Force Majeure Event, the Provider will use reasonable
efforts to resume its performance with the least practicable delay. The
Recipient's obligation to make payments hereunder shall be tolled with respect
to any affected Service to the extent the Provider is unable to perform such
Service for such time that the Provider's performance is suspended or delayed on
account of a Force Majeure Event. Upon resumption of such Service, all payments
hereunder shall resume.
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ARTICLE VI
Liabilities
SECTION 6.01. Consequential and Other Damages. The Provider
shall not be liable with respect to this Transition Services Agreement, whether
in contract, tort (including negligence and strict liability) or otherwise, for
any special, indirect, incidental or consequential damages whatsoever which in
any way arise out of, relate to or are a consequence of, the performance or
nonperformance by it hereunder or the provision of, or failure to provide, any
Service hereunder, including with respect to loss of profits, business
interruptions or claims of third parties.
SECTION 6.02. Limitation of Liability. Subject to Section
6.03, in any event, the liability of the Provider with respect to this
Transition Services Agreement or any act or failure to act in connection
herewith (including, but not limited to, the performance or breach hereof, but
excluding gross negligence, willful misconduct or bad faith), or from the sale,
delivery, provision or use of any Service provided under or covered by this
Transition Services Agreement, whether in contract, tort (including negligence
and strict liability) or otherwise, shall not exceed the fees previously paid to
the Provider by the Recipient under this Transition Services Agreement in
respect of the Service from which such purported liability flows.
SECTION 6.03. Obligation To Re-perform. In the event of any
breach of this Transition Services Agreement by the Provider with respect to any
breach (which breach the Provider can reasonably be expected to re-perform in a
commercially reasonable manner) in the provision of any Service, the Provider
shall re-perform such Service at the request of the Recipient and at the expense
of the Provider. The remedy set forth in this Section 6.03 shall be the only
remedy of the Recipient for any such breach. To be effective, any such request
by the Recipient must (i) specify in reasonable detail the particular nature of
the breach, and (ii) be made no more than thirty (30) days from the date such
Service was provided.
SECTION 6.04. Release and Indemnity. Except as specifically
set forth in this Transition Services Agreement, the Recipient hereby releases
the Provider and each of its employees, agents, officers and directors
(collectively, the "Provider Indemnitees"), and the Recipient hereby agrees to
indemnify, defend and hold harmless the Provider Indemnitees, from and against
any and all claims, demands, complaints, liabilities, losses, damages, costs and
expenses arising from or relating to the use of any Service provided hereunder
by the Recipient or any other person using such Service; provided, however, this
Section 6.04 shall not apply to any portion of any such liabilities, losses,
costs and expenses resulting from the gross negligence, willful misconduct or
bad faith of such Provider Indemnitees.
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ARTICLE VII
Termination
SECTION 7.01. Termination. Notwithstanding anything herein to
the contrary, this Transition Services Agreement shall terminate, and the
obligation of the Provider to provide or cause to be provided any Service shall
cease, on the earliest to occur of (i) the last date indicated for the
termination of any Service in Annex A, (ii) the date on which the provision of
all Services has terminated or been canceled pursuant to Article IV and (iii) as
to the Provider only, upon the Recipient's insolvency, institution of bankruptcy
(voluntary or involuntary) or liquidation proceedings, appointment of a trustee
or receiver for its property or business, or any assignment, reorganization or
arrangement for the benefit of creditors.
SECTION 7.02. Breach of Transition Services Agreement. Subject
to Article VI, if either Party shall cause or suffer to exist any material
breach of any of its material obligations under this Transition Services
Agreement, including any failure to make payments when due, and that Party does
not cure such default in all material respects within 30 days after receiving
written notice thereof from the non-breaching Party, the non-breaching Party may
terminate this Transition Services Agreement, including the provision of
Services pursuant hereto, immediately (or at such later time as specified in the
notice), by providing written notice of such termination.
SECTION 7.03. Sums Due. In the event of a termination of this
Transition Services Agreement, the Provider shall be entitled to the payment of,
and the Recipient shall within the time period required under this Transition
Services Agreement pay to the Provider or its designees, all amounts for
Services under this Transition Services Agreement that accrue through the date
of termination (except the Recipient may withhold such payment to the extent the
Recipient, in good faith, has an offsetting claim hereunder as a result of this
Transition Services Agreement being terminated by the Recipient for a material
breach by the Provider).
SECTION 7.04. Effect of Termination. The provisions of this
Transition Services Agreement which by their nature would continue beyond
termination, including Sections 3.02, 3.03, 3.04, 6.01, 6.02, 6.04, 7.03, 7.04,
8.10, 8.11 and 8.12, and Article VI, shall survive any termination of this
Transition Services Agreement.
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ARTICLE VIII
Miscellaneous
SECTION 8.01. Assignment. Neither this Transition Services
Agreement nor any rights or obligations hereunder may be assigned or otherwise
transferred by either party (including by operation of law) without the prior
written consent of the other party, except that either party may assign its
rights under this Transition Services Agreement to any person in connection with
the transfer of all or substantially all of the Assets and Business, in the case
of Buyer, or the assets used in providing the Services under this Transition
Services Agreement in the case of EASYLINK SERVICES. Any purported assignment or
transfer in violation of this Section 8.01 shall be null and void and of no
effect.
SECTION 8.02. No Third Party Beneficiaries. Except as provided
in Section 6.04 with respect to release and indemnity, this Transition Services
Agreement is for the sole benefit of the Parties, their Affiliates and their
permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any person, other than the Parties, such Affiliates and
such permitted assigns, any legal or equitable rights hereunder, whether as
third party beneficiaries or otherwise.
SECTION 8.03. Amendments. No amendment to this Transition
Services Agreement shall be effective unless it shall be in writing and signed
by each Party.
SECTION 8.04. Waivers. No failure or delay of any Party and
their Affiliates in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. No provision of this Transition Services Agreement may be
waived except pursuant to a writing executed by the waiving Party.
SECTION 8.05. Notices. All notices or other communications
required or permitted to be given hereunder shall be in writing and shall be
delivered by hand or sent by facsimile or sent, postage prepaid, by registered,
certified or express mail or reputable overnight courier service and shall be
deemed given when so delivered by hand or facsimile, or if mailed, three days
after mailing (one Business Day in the case of express mail or overnight courier
service), as follows (or at such other address for a Party as shall be specified
by notice given in accordance with this Section 8.05):
(i) if to EASYLINK SERVICES:
Easylink Services Corporation
00 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Fax: 000-000-0000
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with a copy to:
Easylink Services Corporation
00 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Legal Department
Fax: 000-000-0000
(ii) if to BUYER:
Infocrossing, Inc.
0 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Vice Chairman
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
SECTION 8.06. Interpretation. The headings contained in this
Transition Services Agreement or in any Annex hereto are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Transition Services Agreement. All Annexes annexed hereto or referred to herein
are hereby incorporated in and made a part of this Transition Services Agreement
as if set forth in full herein. Any capitalized terms used in any Annex but not
otherwise defined therein, shall have the meaning as defined in this Transition
Services Agreement. When a reference is made in this Transition Services
Agreement to an Article, Section, or Annex, such reference shall be to an
Article or Section of, or Annex to, this Transition Services Agreement unless
otherwise indicated. For all purposes hereof, the terms "include" and
"including" shall be deemed followed by the words "without limitation". The
words "hereof", "herein" and "hereunder" and words of similar import when used
in this Transition Services Agreement shall refer to this Transition Services
Agreement as a whole and not to any particular provision of this Transition
Services Agreement. Any agreement, instrument or statute defined or referred to
herein or in any agreement or instrument that is referred to herein means such
agreement, instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and references to all attachments thereto and instruments incorporated
therein. A "person" means any individual, firm, corporation, partnership, joint
stock company, limited liability company, trust, joint venture, Governmental
Authority or other entity. References to a person are also to its permitted
successors and assigns and, in the case of an individual, to his or her heirs
and estate, as applicable.
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SECTION 8.07. Counterparts. This Transition Services Agreement
may be executed in one or more counterparts, all of which shall be considered
one and the same agreement, and shall become effective when one or more such
counterparts have been signed by each of the Parties and delivered to the other
Parties.
SECTION 8.08. Entire Agreement. This Transition Services
Agreement, including the Annexes hereto, contains the entire agreement and
understanding between the Parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
SECTION 8.09. Severability. If any provision of this
Transition Services Agreement or the application of any such provision to any
person or circumstance shall be held invalid, illegal or unenforceable in any
respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof.
SECTION 8.10. Dispute Resolution. Any disputes or claims of
any nature arising out of or relating to this Transition Services Agreement or
the services provided hereunder shall be resolved solely and exclusively
pursuant to the dispute resolution provisions as specified in the Asset Purchase
Agreement.
SECTION 8.11. Governing Law. This Transition Services
Agreement shall be governed by, and construed and enforced in accordance with,
the internal laws of the State of New Jersey applicable to agreements made and
to be performed entirely within such State.
SECTION 8.12. Representatives. The parties shall each appoint
representatives (a "Representative") to facilitate communications and
performance under this Transition Services Agreement. The initial
Representatives for each of the parties shall be as specified in Annex B,
attached hereto. Each party shall have the right at any time and from time to
time to replace its Representative by giving written notice thereof to the other
party.
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IN WITNESS WHEREOF, the Parties have executed this Transition
Services Agreement as of the date first written above.
INFOCROSSING SERVICES, INC.
By: s/Xxxxxx X. Xxxxxxx
-------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
EASYLINK SERVICES CORPORATION
By: s/Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer & President
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