Exhibit 10.13
INTERCOMPANY AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of January 8, 1999, by
and between ALLIANCE National Incorporated, a Nevada corporation having its
principal office at 00 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
(together with the Subsidiaries specified in Section 8 hereof, "Alliance"), and
Reckson Service Industries, Inc., a Delaware corporation having its principal
office at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 ("RSI").
WHEREAS, RSI indirectly owns shares of Series C Convertible
Preferred Stock of Alliance as a result of a merger transaction, effective as of
the date of this Agreement (the "Merger"), pursuant to which RSI and certain
other persons combined their respective executive office suite businesses with
the business of Alliance; and
WHEREAS, the parties hereto deem it in their respective best
interests to provide for the provision of products and services by RSI to
Alliance, which Alliance will then offer to its Customers (as defined below),
subject to and in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties agree as follows:
1. Definitions Used in This Agreement.
(a) "Adjusted Fully Diluted Capitalization" shall have
the meaning given such term in the Fourth Amended and Restated Stockholders'
Agreement, dated as of January 8, 1999, by and among Alliance and the security
holders listed therein.
(b) "Affiliate" of a Person shall mean any (i) Person
which directly or indirectly controls, is controlled by, or is under common
control with such Person, (ii) executive officer or director of such Person,
(iii) immediate family member (spouse, child or parent) of such Person, or (iv)
trust of which such Person is either a beneficiary or a trustee. For this
purpose, "executive officer" shall have the meaning given to such term in Rule
501 promulgated under the Securities Act of 1933, as amended.
(c) "Alliance Business" shall mean the executive office
suite business in which Alliance is engaged at the time of determination, taken
as a whole and including (i) on-site and off-site operations and (ii) any
Product which is part of the executive office suite business and is being
actively pursued for development by Alliance management and which has been
presented to the Executive Committee of Alliance and not been rejected thereby
(provided that if such Product has been rejected and thereafter been taken to
the Board and not been rejected, such Product shall be considered part of the
Alliance Business). The time of determination shall be the time of any
development of a business or the making of any investment in question under
Section 5(b) by any of the Persons subject to the restrictions in Section 5(b).
(d) "Board" shall mean the Board of Directors of
Alliance.
(e) "Computer and Technology Services" shall mean
computer consulting services, information technology support services, sales of
hardware and software to Customers, and development of software for Customers.
(f) "Confidential Information" shall mean any and all
information concerning the business of any party hereto or its Affiliates
provided in connection with the transactions contemplated hereby, including,
without limitation, any information concerning Products or the development
thereof, business plans and strategies, sales and marketing information,
financial information and Customer data.
(g) "Control" shall mean the power, through voting
control, contract or otherwise, to direct the management and policies of the
Person controlled. The terms "Controlled" and Controlling" shall have
correlative meanings.
(h) "Controlled Affiliate" of a Person shall mean any
Affiliate of such Person other than a Non-Controlled Affiliate of such Person.
(i) "Customers" shall mean subtenants, customers,
clients, licensees or other Persons which are users of the executive office
suites of Alliance or its Subsidiaries and other clients or customers of
Alliance or its Subsidiaries which purchase one or more Products from Alliance
or its Subsidiaries.
(j) "Dispute" shall mean any dispute regarding the
application of the provisions of this Agreement to any particular set of facts
or circumstances, including, without limitation, any dispute as to whether (i) a
Product to be provided by an RSI Entity satisfies the General Outsourced Product
Conditions or the RSI Reserved Outsourced Product Conditions, as the case may
be, (ii) a Product is being supplied on Most Favored Nation Terms (if required)
or (iii) a proposed investment by any person that is subject to the restrictions
set forth in Section 5 hereof would violate such restrictions.
(k) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(l) "Financial Services" shall mean the provision,
sales, distribution, marketing and related services regarding any of credit
cards, health, life or other types of insurance, small business loans,
commercial banking, investment banking, securities brokerage (including online
brokerage), payroll management and other professional employee organization
services (such as employee leasing and back office employee related services),
equipment leasing, money management, financial planning and factoring. Financial
Services shall not include consulting services with respect to human resources
matters, including, without limitation, providing Customers with a package of
human resource and benefit services for their businesses except to the extent
that the specific products or services included in the package would customarily
be outsourced by businesses (which, for this purpose, shall mean businesses that
are large enough to have in-house administrators handling human resources
functions) to a third party.
(m) "General Outsourced Product" shall mean any Product,
other than an RSI Reserved Outsourced Product, (i) that Alliance does not elect
to supply itself or through a Subsidiary, but instead elects to procure from
another Person (including any RSI Entity) for resale by Alliance to its
Customers, or (ii) on which Alliance is entitled to earn a fee in connection
with the sale of such Product to the Customers by a Person other than Alliance
or a Subsidiary of Alliance. Subject to the term of any Product Agreement then
in effect, nothing herein shall prohibit Alliance from determining to supply any
then General Outsourced Product itself or through a Subsidiary.
(n) "General Outsourced Product Conditions" as used with
respect to the provision of General Outsourced Products by an RSI Entity to
Alliance shall mean (i) the pricing and other material terms (taken in the
aggregate and accounting for all relevant factors such as distribution and
delivery costs and the volume of the Product to be provided) on which such
Product will be furnished by such RSI Entity at the date of determination are
then no less favorable than the pricing and other material terms (taken in the
aggregate and accounting for all relevant factors such as distribution and
delivery costs and the volume of the Product to be provided) for such Product
which are then available to Alliance from a Third Party with the capacity and
willingness to deliver such Product in accordance with the offered terms, and
(ii) the quality of such Product (as measured under a Reasonably Prudent
Business Person Standard) furnished to Alliance by such RSI Entity at the date
of determination are then at least equal to the quality of alternatives for such
Product (as measured under a Reasonably Prudent Business Person Standard) which
are then available to Alliance from Third Parties with the capacity and
willingness to deliver such Products in accordance with the offered terms.
(o) "Internet Services" shall mean all services related
to the Internet, including, without limitation, (i) the provision of an
electronic commerce platform, including without limitation, infrastructure
hardware and software, network connectivity, and transaction software processes
and outclearing, and (ii) the design of a user interface acceptable to Alliance
and including "Pointcast" type channels with certain permanent button channels
dedicated to RSI and/or certain of its Affiliates (including OnSite Ventures
LLC, and OnSite Commerce and Content LLC, collectively "OnSite") and with
certain portions of the "desktop" that may be modified only by RSI or its
Affiliates (it being understood that the Product Agreement relating to Internet
Services shall address the development, ownership and revenue allocation for (x)
Products, and products of OnSite, to be distributed or sold through the Internet
to Customers, and (y) Products and products of OnSite in which Alliance has
participated in the development thereof, to be distributed or sold through the
Internet to customers of OnSite).
(p) "Most Favored Nation Terms" shall mean, with respect
to the provision of any Product by an RSI Entity to Alliance, that such Product
shall be provided by such RSI Entity to Alliance on at least as low a price and
on at least as favorable a set of other material terms and conditions (in each
case, taken in the aggregate and accounting for all relevant factors such as
distribution and delivery costs, the volume of the Product to be provided and
the geographic area where the Product to be provided) as are then made available
to any other purchaser of such Product provided by the RSI Entity.
(q) "Non-Controlled Affiliate" of a Person shall mean an
Affiliate of such Person which is not Controlled by such Person.
(r) "Person" means any individual, proprietorship,
partnership, corporation, limited liability company, trust, estate, or other
form of entity.
(s) "Product" shall mean any product or service, whether
offered by Alliance, an RSI Entity or any Third Party.
(t) "Product Agreement" shall mean any agreement that is
entered into by Alliance and an RSI Entity with respect to the provision of a
specific Product.
(u) "Reasonably Prudent Business Person Standard" shall
mean the evaluation process that would be applied by a reasonably prudent
business person who is not an Affiliate of, and is neutral with respect to,
Alliance or any RSI Entity or any of their respective Affiliates.
(v) "Reckson Affiliates" means Reckson Associates Realty
Corp. and Reckson Management Group, Inc. and their respective Controlled
Affiliates, but, with respect to any such entity, only for so long as such
entity is an Affiliate of RSI.
(w) "RSI Entity" and "RSI Entities" shall mean,
individually and collectively, as the case may be, RSI and any Affiliates of RSI
which may offer Products.
(x) "RSI Reserved Outsourced Product" shall mean any of
the following Products: construction or property management; day care;
transportation; courier services; logistics; travel services; temporary staffing
or employee leasing at locations other than executive office suite centers owned
or managed by Alliance; Financial Services; waste management or carting;
cleaning services; security services; vending machines; catering or food
service; computer hardware and software (but, subject to the immediately
following sentence, excluding Computer and Technology Services); Internet
Services, Telecommunications Services; extended stay lodging; office supplies;
management consulting; storage and warehousing of documents in tangible (as
opposed to electronic) form at locations other than executive office suite
centers owned or managed by Alliance; and concierge services. In the event that
Alliance determines to outsource any Computer and Technology Services
(including, without limitation, any determination by Alliance to purchase (as
opposed to manufacture or develop itself) hardware and software for resale to
Customers), any such Computer and Technology Service shall be deemed to be an
RSI Reserved Outsourced Product for purposes of this Agreement, subject, in each
case, to Alliance's right to subsequently determine to supply any such Computer
and Technology Services itself or through a Subsidiary.
(y) "RSI Reserved Outsourced Product Conditions" as used
with respect to the provision of RSI Reserved Outsourced Products by an RSI
Entity to Alliance shall mean (i) the pricing and other material terms (taken in
the aggregate and accounting for all relevant factors such as distribution and
delivery costs and the volume of the Product to be provided) on which such RSI
Reserved Outsourced Product will be furnished by such RSI Entity at the date of
such determination are then no less favorable than the pricing and other
material terms (taken in the aggregate and accounting for all relevant factors
such as distribution and delivery costs and the volume of the Product to be
provided) for such RSI Reserved Outsourced Product which are then available to
Alliance from a Third Party with the capacity and willingness to deliver the
applicable Product or Products in accordance with the offered terms, and (ii)
the quality of such RSI Reserved Outsourced Product (as measured under a
Reasonably Prudent Business Person Standard) furnished to Alliance by such RSI
Entity at the date of such determination are then reasonably comparable (but not
necessarily equal or better) to the quality of other alternatives for such RSI
Reserved Outsourced Product (as measured under a Reasonably Prudent Business
Person Standard) which are then available to Alliance from Third Parties with
the capacity and willingness to deliver such Products in accordance with the
offered terms.
(z) "Subsidiary" of a Person means a Person (other than
an individual) of which a majority of the outstanding voting power, other voting
equity interests or economic interests are owned or Controlled, directly or
indirectly, by such Person.
(aa) "Telecommunications Services" shall mean all
telecommunications services, excluding, however, the ownership and management of
an individual executive office suite center's PBX, voice mail, message center
and call collection and charge-back systems, PBX-related end-user telephone,
end-user data communications equipment such as modems and NICs, and related
technical support services provided at executive office suite centers.
(bb) "Third Party" means any Person not a party hereto
or an Affiliate of any party hereto and not having any direct or indirect
material "pecuniary interest" (as such term is defined in Rule 16a-1 promulgated
under the Exchange Act and used with reference to securities of a Person) in any
party hereto or a Controlled Affiliate of any party hereto.
2. RSI's Rights to Supply RSI Reserved Outsourced Products and
General Outsourced Products to Alliance.
(a) If an RSI Entity desires to supply to Alliance an
RSI Reserved Outsourced Product, such RSI Entity and Alliance shall negotiate
the pricing and other terms on which such RSI Entity is prepared to supply such
RSI Reserved Outsourced Product to Alliance, and such RSI Entity shall have the
right, but not the obligation, to supply such RSI Reserved Outsourced Product to
Alliance, on and subject to the following terms and conditions:
(i) The RSI Reserved Outsourced Product and the terms on
which it is supplied must satisfy the RSI Reserved Outsourced Product
Conditions.
(ii) The RSI Entity supplying the RSI Reserved
Outsourced Product shall be entitled to be the exclusive supplier to Alliance of
such Product, subject to the following:
(A) with respect to courier services, Alliance
shall be entitled to offer its Customers any such services offered by Federal
Express, UPS, Airborne, DHL or the United States Postal Service;
(B) with respect to any particular geographic
market, the RSI Entity proposing to supply an RSI Reserved Outsourced Product on
an exclusive basis shall be able to meet the reasonable and actual demands of
Alliance for such Product (it being agreed and understood that the inability of
any RSI Entity to meet the reasonable and actual demands of Alliance for such
Product in any particular geographic market shall not affect such RSI Entity's
right to be the exclusive supplier in any other geographic market where it is
otherwise entitled to be the exclusive supplier);
(C) where an RSI Entity is acting as an exclusive
supplier of an RSI Reserved Outsourced Product, if from time to time such RSI
Entity is not able to timely meet the reasonable and actual demands of Alliance
with respect to such RSI Reserved Outsourced Product (after Alliance has given
the RSI Entity reasonable notice and the reasonable opportunity to supply the
Product in the specific instance, in each case, in light of the circumstances
with respect to such actual and reasonable demands, and, after such notice, the
RSI Entity is unable to timely do so), Alliance shall be entitled to utilize one
or more Third Parties to supplement the capabilities of the RSI Entity in
question when necessary;
(D) with respect to catering and food service,
Alliance shall be entitled to use local suppliers for incidental food service to
its Customers within its executive office suite centers (it being agreed and
understood that Alliance will use commercially reasonable efforts to endorse and
promote the RSI Entity Product);
(E) with respect to concierge services, Alliance
shall be entitled to use its receptionists at its executive office suite centers
(including at new centers which it may acquire or develop) for incidental
concierge services for its Customers of the type and the scope of such
incidental concierge services provided as of the date of this Agreement;
(F) with respect to Financial Services, Alliance
shall be entitled to be a licensed broker, sales agent, associated person or
other licensed person for purposes of reoffering insurance or securities
brokerage services to Customers; provided, however, that if an RSI Entity is
then offering any such insurance or securities brokerage services, then, subject
to the other terms and conditions contained in this Section 2, Alliance shall
not reoffer to Customers any equivalent insurance or securities brokerage
services that are offered by a Third Party; and
(G) with respect to any particular RSI Reserved
Outsourced Product, the Product Agreement related to such RSI Reserved
Outsourced Product, if a Product Agreement has been entered into, (i) has not
been terminated by Alliance in accordance with the terms thereof (including,
without limitation, the dispute resolution procedures contained therein) as a
result of a breach by the RSI Entity in question, or (ii) provides as a remedy
for any breach thereof that RSI or the RSI Entity shall not be entitled to be
the exclusive supplier.
(iii) Except for courier services, the RSI Reserved
Outsourced Product shall be supplied on Most Favored Nation Terms.
(iv) The supply of the RSI Reserved Outsourced Product
shall be subject to the additional terms and conditions contained in Section 4
hereof.
(v) In the event of any Dispute regarding the
satisfaction of the RSI Reserved Outsourced Product Conditions or Most Favored
Nations Terms (if applicable), Alliance shall be prohibited from entering into
any agreement with a Third Party supplier for the supply of the RSI Reserved
Outsourced Product that is the subject of the Dispute until the earlier to occur
of (i) the expiration of the 45 day period commencing on the date that the Board
meeting relating to the resolution of such Dispute has been held, and (ii) the
final resolution of the Dispute in accordance with Section 3 hereof (if such
Dispute is finally resolved in favor of Alliance).
(vi) Nothing contained in this Agreement shall require
Alliance to terminate any agreement with any Third Party relating to the supply
of any product that is the same or similar Product as an RSI Reserved Outsourced
Product if the execution, delivery and performance of such agreement by Alliance
is not prohibited by this Agreement so long as the agreement with such Third
Party was entered into on customary and commercially reasonable terms.
(vii) Alliance shall keep RSI fully apprised on a
current basis of all of its current and planned needs for RSI Reserved
Outsourced Products, and shall notify RSI of its intention to enter into any
agreements with a Third Party for the provision of any RSI Reserved Outsourced
Product.
(b) Alliance shall keep RSI fully apprised on a current basis
of all of its current and planned General Outsourced Products and, in connection
therewith, shall promptly respond to RSI's reasonable inquiries related thereto.
An RSI Entity shall have the right, but not the obligation, to be a supplier to
Alliance of any General Outsourced Product for which the pricing and other terms
on which such RSI Entity is prepared to supply such General Outsourced Product
to Alliance, and the quality of such General Outsourced Product, satisfy the
General Outsourced Product Conditions, subject to the additional terms and
conditions contained in Section 4 hereof. During a period of 45 days commencing
on the earlier of (i) the date that an RSI Entity notifies Alliance in writing
that it desires to become a supplier of a specific General Outsourced Product,
or (ii) the date that Alliance notifies RSI in writing that it is seeking bids
from potential suppliers of a specific General Outsourced Product, such RSI
Entity and Alliance shall negotiate the pricing and other terms on which such
RSI Entity is prepared to supply such General Outsourced Product to Alliance,
and Alliance shall not enter into or renew any agreement with any Third Party
relating to the provision by such Third Party to Alliance of such General
Outsourced Product; provided, however, that Alliance shall not be prohibited
during such 45 day period from (x) entering into negotiations with a Third Party
with respect to the pricing and other terms on which such Third Party is
prepared to supply such General Outsourced Product to Alliance, or (y) procuring
such General Outsourced Product from a Third Party (who has the capacity and is
willing to deliver the General Outsourced Product in question and is reasonably
likely to provide the Product on the terms offered), whether pursuant to an
existing supply agreement or otherwise, if Alliance is then offering such
Product to its Customers. After the expiration of such 45 day period, Alliance
shall be entitled to enter into or renew an agreement with a Third Party (who
has the capacity and is willing to deliver the General Outsourced Product in
question and is reasonably likely to provide the Product on the terms offered)
for the supply of such General Outsourced Product, whether or not Alliance has
reached agreement with the RSI Entity for the supply of such General Outsourced
Product.
(c) If Alliance determines in its judgment (subject, in the
case of quality determinations, to the Reasonably Prudent Business Person
Standard) that the pricing and other terms on which an RSI Entity is prepared to
provide a General Outsourced Product or the quality of such Product do not
satisfy the General Outsourced Product Conditions, or that the pricing and other
terms on which an RSI Entity is prepared to provide an RSI Reserved Outsourced
Product or the quality of such Product do not satisfy the RSI Reserved
Outsourced Product Conditions or (if applicable) are not on Most Favored Nation
Terms, as the case may be, then Alliance shall promptly so notify RSI and
specify in reasonable detail the basis for such determination, including, if
applicable, identifying a bona fide Third Party supplier and its Product which
Alliance can obtain (and which such Third Party supplier has the capacity and is
willing to deliver the Product in question and is reasonably likely to provide
the Product on the terms offered) on more favorable pricing or other terms, or
with better quality, and a description of such more favorable pricing, other
terms or better quality. Such RSI Entity may then propose modifications to its
proposed provision of the Product and resubmit the Product proposal and, if such
RSI Entity and Alliance agree that such modified proposal would satisfy the
General Outsourced Product Conditions, or the RSI Reserved Outsourced Product
Conditions or Most Favored Nation Terms, as the case may be, then such RSI
Entity shall be a supplier for such Product in accordance with the terms hereof.
If the parties do not agree as to whether the General Outsourced Product
Conditions, or the RSI Reserved Outsourced Product Conditions or Most Favored
Nation Terms, as the case may be, are satisfied with respect to the Product,
then the provisions of Section 3 hereof shall be utilized to resolve such
Dispute.
(d) If an RSI Entity desires to supply to Alliance a Product,
other than a General Outsourced Product or an RSI Reserved Outsourced Product,
it shall notify Alliance and, thereafter, the parties shall enter into good
faith discussions with respect to the provision of such Product to Alliance. Any
such discussions shall include, without limitation, the terms and conditions on
which such RSI Entity would be willing to supply such Product to Alliance,
whether the anticipated financial and/or strategic benefits to Alliance from the
offer of such Product reasonably justifies such offer and whether such Product
is a Product that is generally sought in the marketplace by businesses.
(e) In the event of any termination of any Product Agreement,
whether pertaining to an RSI Reserved Outsourced Product or a General Outsourced
Product, in accordance with the terms thereof (including, without limitation,
the dispute resolution procedures contained therein) as a result of a breach by
the RSI Entity in question, then, no RSI Entity shall be entitled to be a
supplier to Alliance of the Product in question for the six-month period
commencing on the date of the termination of such Product Agreement. If Alliance
and an RSI Entity enter into a Product Agreement (a "Second Product Agreement")
with respect to any Product that was the subject of a Product Agreement that
previously was terminated by Alliance in the manner contemplated by the
immediately preceding sentence and the Second Product Agreement is terminated in
accordance with the terms thereof (including, without limitation, the dispute
resolution procedures contained therein) as a result of a breach by such RSI
Entity, then following termination of such Second Product Agreement (i) no RSI
Entity shall be entitled to be a supplier of the Product in question, and (ii)
if applicable, such Product shall no longer be an RSI Reserved Outsourced
Product for purposes of Section 5(a) hereof.
3. Dispute Resolution.
(a) Any Dispute and the facts and circumstances related
thereto shall be presented to the Board. If a majority of the members of the
Board present and voting with respect to such Dispute shall agree with the RSI
Entity's position with respect to such Dispute, such determination shall be
final and binding on the parties. If less than a majority of the members of the
Board present and voting with respect to such Dispute agree with the RSI Entity
position with respect to such Dispute, then the parties shall submit such
Dispute, other than Disputes arising under Section 5, to binding arbitration in
accordance with Section 3(b) hereof. Notwithstanding anything to the contrary
contained herein, the Board shall not have the authority to award damages to any
party in connection with the resolution of any Dispute.
(b) Except for Disputes arising under Section 5, any (i)
Dispute which has not been resolved by the parties or by the Board and (ii) any
claim for breach of this Agreement and any damages related thereto shall be
settled by arbitration in accordance with the Expedited Procedures of the
Commercial Arbitration Rules of the American Arbitration Association (the "AAA")
then in effect except as modified below. The arbitration shall be held in New
York, New York. Any such Dispute or claim for breach shall be determined by a
panel of three arbitrators with each party to be provided a list of no less than
ten possible arbitrators and to be permitted no more than four strikes, and if
three arbitrators are not selected on the basis of the first list then provided,
another list of no less than ten possible arbitrators shall be provided for the
selection of any additional arbitrators needed, with each party again receiving
no more than four strikes, and this process shall continue until a full panel is
selected. The AAA shall be requested to include on its lists, to the extent it
finds reasonably possible, potential arbitrators with at least 5 years business
experience at a senior management level in outsourcing in the business services
sector or the closest equivalent experience. The decision of the arbitrators
shall be final and binding upon the parties. Judgment upon the award may be
entered in any court having jurisdiction. This Agreement and the rights and
obligations of the parties shall remain in full force and effect pending the
determination in any arbitration proceeding hereunder. The arbitrators shall (i)
award to the prevailing party, if any, all of its costs and fees, which shall
include all reasonable pre-determination expenses of the arbitration, including
the arbitrators' fees, administrative fees, travel expenses, out-of-pocket
expenses, court costs, and attorneys' fees and (ii) have the power to grant
injunctive relief.
(c) In the event that either party believes that any proposed
investment or business by any of the Persons subject to the restrictions set
forth in Section 5 would violate such restrictions, it shall so notify the other
party within six months after the date the party alleging such breach first
receives written notice from the other party of such investment or business. The
failure of a party to so notify the other party within such six-month period
shall constitute an irrevocable waiver by the party receiving notice of such
investment or business to contest such investment or business. Any Dispute
arising under Section 5 shall be resolved by a court of competent jurisdiction
located in the State of New York as set forth in Section 16 hereof.
(d) Except as provided in Section 3(c), the provisions of this
Section 3 shall be the exclusive means of resolving any controversy or claim
arising out of this Agreement or the transactions contemplated hereby.
4. Terms and Conditions Regarding Provision of Products. The
provision of Products by an RSI Entity to Alliance and the offer of such
Products by Alliance to the Customers shall in all cases be subject to the
following additional terms and conditions:
(a) With respect to each such Product to be supplied by an RSI
Entity (whether a General Outsourced Product or an RSI Reserved Outsourced
Product), Alliance shall devise as promptly as is reasonably possible an
execution plan for the sales, marketing and distribution of such Product to its
Customers, including the advertising and promotion of such Product to the
Customers, the timing of commencement of offering the Product and how it is
rolled out (e.g. distributed and marketed) through Alliance's executive office
suite centers, the pricing of the Product to Customers, and the content of any
marketing or advertising materials relating to the Product (it being agreed and
understood that in no event shall Alliance delay the production of an execution
plan for purposes of delaying the offering of any General Outsourced Product or
RSI Reserved Outsourced Product). In devising such execution plan, Alliance
shall consult with the RSI Entity that will be supplying such Product. All sales
of the Product by the RSI Entity shall be made in accordance with the execution
plan. If, with respect to any Product, Alliance advises the RSI Entity that
Alliance does not desire to control the marketing of the Product to the
Customers by means of an execution plan, the RSI Entity shall be entitled to
directly market such Product to the Customers and Alliance shall cooperate with
such RSI Entity's reasonable requests in connection therewith. In its marketing
efforts to its Customers, Alliance shall (i) use commercially reasonable efforts
to endorse and promote the Products that are the subject of any Product
Agreement, and will cooperate with the RSI Entity in co-marketing efforts,
solicitation of Customers, and providing to RSI marketing data (including the
identity of Customers) relevant to the Product in question, and (ii) subject to
clause (i) of this sentence, in the case of the same or substantially similar
Products that are supplied to Alliance by an RSI Entity and any other Third
Party supplier, Alliance shall endorse and promote the RSI Entity Product to the
same extent (or, in Alliance's sole discretion, to a greater extent) as it
endorses and promotes the Product of such Third Party supplier.
(b) Alliance and an RSI Entity shall enter into a mutually
satisfactory Product Agreement for the provision of each Product which such RSI
Entity will provide to Alliance pursuant to this Agreement. Each Product
Agreement shall contain the provisions set forth in Exhibit 1 hereto, as well as
such additional terms and conditions as the parties may negotiate. If, pending
the execution of any such Product Agreement, either such RSI Entity or Alliance
employs any printed form of purchase order or order confirmation with respect to
such Product, unless otherwise agreed by the parties in writing, the printed
terms and conditions thereof will not apply to the purchase and sale of any
Product during the term of this Agreement to the extent that any such term or
condition is in conflict with a provision of this Agreement.
(c) If (i) Alliance and an RSI Entity have agreed in any
Product Agreement that such RSI Entity shall be the exclusive supplier of any
Product (whether pursuant to Section 2(a) or otherwise) or (ii) any Product
provided by an RSI Entity to Alliance accounts for 75% or more of Alliance's
gross revenues from such Product in any trailing six month period, then the
Product Agreement relating to the Product in question (whether the initial
Product Agreement for a Product or, in the event that the test specified in
clause (ii) of this paragraph has been met, in the renewal or new Product
Agreement entered into after such test has been met) shall provide for Most
Favored Nation Terms. In connection with the execution or renewal of any Product
Agreement, the RSI Entities shall keep Alliance apprised of the terms and
conditions pursuant to which such RSI Entities are offering to any Third Party
the Product that is the subject of the Product Agreement and, in connection
therewith, shall promptly respond to Alliance's reasonable inquiries related
thereto.
(d) The RSI Entity in question shall be entitled to supply the
Product in question during the term of the Product Agreement, subject, in each
case, to the termination provisions contained therein. Without limiting the
provisions of Section 4(e) hereof and subject to the right of Alliance to
terminate any Product Agreement in accordance with the terms thereof, nothing
contained in this Agreement shall require any RSI Entity to modify the terms or
conditions of any Product Agreement during the term thereof in the event that
the General Outsourced Product Conditions or the RSI Reserved Outsourced Product
Conditions, as the case may be, shall fail to continue to be satisfied or in the
event that such terms or conditions are no longer Most Favored Nations Terms.
Alliance and RSI acknowledge and agree that for purposes of this Agreement (and
without limiting the provisions of any Product Agreement) the General Outsourced
Product Conditions, the RSI Reserved Outsourced Product Conditions and Most
Favored Nation Terms shall be measured only at the time of each initial
determination as to whether an RSI Entity shall be entitled to supply a Product
to Alliance and at the time of the expiration of any Product Agreement or during
any negotiations with respect to the renewal thereof.
(e) If, at the time of expiration of any Product Agreement or
at the time of negotiations with respect to the renewal thereof, Alliance
determines in its judgment (subject in the case of quality determinations, to
the Reasonably Prudent Business Person Standard) that the General Outsourced
Product Conditions, the RSI Reserved Outsourced Product Conditions, or Most
Favored Nation Terms, as the case may be, are not then met with respect to any
Product, then Alliance shall so notify the applicable RSI Entity and specify in
reasonable detail the basis for such determination, including, if applicable,
identifying a bona fide Third Party supplier and its Product which Alliance can
obtain (and which such Third Party supplier has the capacity and is willing to
deliver the Product in question and is reasonably likely to provide the Product
on the terms offered) on more favorable terms or conditions or with better
quality and a description of such more favorable pricing, other terms and better
quality. The RSI Entity may then propose modifications to its provision of the
Product in a manner that such RSI Entity and Alliance agree would result in the
satisfaction of the General Outsourced Product Conditions, the RSI Reserved
Outsourced Product Conditions, or Most Favored Nation Terms, as the case may be.
If the parties still do not agree as to whether the General Outsourced Product
Conditions, the RSI Reserved Outsourced Product Conditions, or Most Favored
Nation Terms, as the case may be, are satisfied with respect to the Product,
then the provisions of Section 3 hereof shall be utilized to resolve such
Dispute.
5. Non-Competition.
(a) Alliance shall not, and shall cause its Controlled
Affiliates not to, directly or indirectly, (i) engage in the business of, or act
as a manager, managing member, general partner, director, officer, employee of
or consultant to any Person directly or indirectly engaged in the business of,
offering any RSI Reserved Outsourced Product other than through an RSI Entity
or, solely to the extent permitted pursuant to Section 2(a) hereof, a Third
Party, or (ii) knowingly own or control any voting securities or other
securities convertible into voting securities, interest in any Person that
offers any RSI Reserved Outsourced Product. Notwithstanding the foregoing,
Alliance and its Affiliates shall be permitted to make an investment in any
Person that offers any RSI Reserved Outsourced Product provided that within 9
months after the consummation of the investment, such Person ceases to offer any
RSI Reserved Outsourced Products. If such Person ceases to offer such RSI
Reserved Outsourced Products through the divestiture of any business lines,
Alliance shall use, and shall cause each of its Controlled Affiliates to use,
its reasonable good faith efforts to cause such Person to offer RSI the first
opportunity to acquire such business lines. The prohibitions set forth in this
Section 5(a) shall not apply to any existing or future investments made by
Xxxxxx, Xxxxxxx Strategic Partners Fund, L.P., Strategic Associates, L.P.,
Xxxxxx, Xxxxxxx & Company, LLC, Northwood Ventures LLC, Northwood Capital
Partners LLC, Paribas, any investment entity that is an Affiliate of any such
Persons, or to any other Non-Controlled Affiliate of Alliance. RSI shall be
entitled to injunctive relief as a remedy for any breach of the provisions of
this Section 5(a). Such remedy shall not be deemed to be the exclusive remedy in
the event of any such breach, but shall be in addition to all other remedies
that may be available to RSI at law or in equity.
(b) RSI shall not, and shall (x) cause each of its Controlled
Affiliates and (y) use reasonable good faith efforts to cause the Reckson
Affiliates, not to, directly or indirectly, (i) "Compete" with Alliance, or act
as a manager, managing member, general partner, director, officer, consultant
to, or as an employee of, any Person that directly or indirectly Competes with
Alliance, or (ii) knowingly own or control any voting securities or other
securities convertible into voting securities in any Person that Competes with
Alliance. A Person shall be deemed to "Compete" with Alliance, for purposes of
this Section 5(b), if a business conducted by such Person is materially
competitive with the Alliance Business. In determining whether a business
conducted by a Person is materially competitive with the Alliance Business, the
factors to be considered shall include, without limitation, the respective
customer base and distribution channels of such Person and the Alliance Business
with respect to the specific Products which compete with each other.
Notwithstanding the foregoing, a Person shall not be deemed to Compete with
Alliance if it offers for sale one or more Products which are part of the
Alliance Business so long as the provision of any such Products taken in the
aggregate are not materially competitive with the Alliance Business.
Notwithstanding the foregoing, each of RSI, its Affiliates and the
Reckson Affiliates shall be permitted to make an investment in any Person whose
business Competes with Alliance, provided that within 9 months after the
consummation of such investment, such Person ceases to engage in the business
which Competes with Alliance provided, that if there is a Dispute with respect
to whether an investment Competes, then any required divestiture shall not be
required until nine (9) months after the date of final determination of such
Dispute adverse to RSI or any RSI Entity. If such Person ceases to engage in the
business which Competes with Alliance through the divestiture of the competing
business lines (including any divestiture following a final determination
described below), RSI shall (i) use and cause each of its Controlled Affiliates
to use and (ii) use reasonable good faith efforts to cause the Reckson
Affiliates to use, its reasonable good faith efforts to cause such Person to
offer Alliance the first opportunity to acquire such business lines which it is
divesting.
Nothing in this Section 5(b) shall limit the right of any of RSI,
its Affiliates or the Reckson Affiliates to (i) offer any RSI Reserved
Outsourced Product, or (ii) own not more than 4.9% of the outstanding shares of
a corporation or other entity whose shares or other equity or debt interests are
listed on any United States national or regional securities exchange or reported
by NASDAQ or any successor thereto. The prohibitions set forth in this Section
5(b) shall not apply to a Person if such Person is both a Non-Controlled
Affiliate of RSI and is not a Reckson Affiliate. In the event of a final
determination by a court of competent jurisdiction that any of RSI, its
Controlled Affiliates or the Reckson Affiliates has breached the covenants in
this Section 5(b), then in addition to Alliance's right to recover the profits
(taking into account the consideration set forth in the last sentence of this
paragraph) to RSI and its Affiliates derived from the operations of the business
or investment that has been determined to Compete with Alliance for the period
commencing on the notification of a Dispute with respect to such business or
investment pursuant to Section 3(c) hereof and ending on the earlier to occur of
(i) the date of divestiture of the business line that Competes with Alliance or
(ii) the date of termination of this Agreement pursuant to this Section 5 (which
right to recover such profits (taking into account the consideration set forth
in the last sentence of this paragraph) shall be Alliance's sole and exclusive
remedy at law and in equity for such breach other than Alliance's right to
terminate this Agreement pursuant to this Section 5(b) and other than Alliance's
rights under the Stockholders' Agreement, dated as of _______, 1998, by and
among Alliance and certain of its Securityholders), this Agreement shall
automatically terminate on the 30th day following the final determination that
there has been a breach of this Section 5(b), provided, however, that this
Agreement shall not terminate if, during such 30-day period, RSI at its option,
delivers written notice to Alliance that the business line which Competes with
Alliance will be divested, and such divestiture is actually completed within
nine months after the date of such final determination. If a breach of the
covenant contained in this Section 5(b) arises out of an investment in an entity
that is not a wholly owned subsidiary of RSI or its Affiliates (an "Acquired
Competing Party"), then, for purposes of the immediately preceding sentence, the
profits referred to therein shall include only those profits that RSI or its
Affiliates (other than the Acquired Competing Party and its Controlled
Affiliates) shall have received and the portion of the profits of the Acquired
Competing Party as to which RSI or its Affiliates (other than the Acquired
Competing Party and its Controlled Affiliates) would be entitled by virtue of
their proportionate ownership in the Acquired Competing Party (whether or not
such profits have been distributed to RSI or its Affiliates).
It is acknowledged and agreed that no provision of this Section 5(b)
shall require RSI, its Controlled Affiliates or any RSI Entity to divest or
refrain from conducting any investment or business (a "Pre-Existing Business")
which it acquired or developed prior to the time that, as a result of
developments of or modifications to the Alliance Business, such Pre-Existing
Business taken as a whole Competes with Alliance. However, the restrictions set
forth in Section 5(b) shall apply to such Pre-Existing Business if, as a result
of developments of or modifications to such Pre-Existing Business, such
Pre-Existing Business taken as a whole then Competes with Alliance.
6. Term. Subject to earlier termination as provided in Section 7
hereof, the term of this Agreement shall commence on the date of this Agreement
and shall continue for a period of five (5) years thereafter. This Agreement
shall automatically be extended for an additional five (5) year term if, upon
expiration of the initial term referred to in the immediately preceding
sentence, RSI and its Controlled Affiliates "beneficially own" (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act), in the aggregate, at
least 15% of the Adjusted Fully Diluted Capitalization. Except as may be
provided in any Product Agreement, any termination of this Agreement shall not
affect any Product Agreement then in effect, including, without limitation, any
provisions contained in such Product Agreement that may be incorporated by
reference from this Agreement.
7. Termination. This Agreement may be terminated at any time:
(a) by the mutual written consent of Alliance and RSI;
(b) by Alliance, pursuant to Section 5(b);
(c) by Alliance, in the event that RSI and its Controlled
Affiliates fail to continue to "beneficially own," in the aggregate, at least
15% of the Adjusted Fully Diluted Capitalization; or
(d) by Alliance, in the event that any of (w) CarrAmerica, (x)
HQ Omni, or (y) Regus, so long as any of such Persons named in clauses (w), (x)
or (y) are then engaged in the executive suite business, or (z) any other Person
which owns or operates 50 or more executive office suite centers as its primary
business (any of the foregoing persons, a "Disqualified Transferee") acquires
Control of RSI (provided that for this purpose no presumption of Control shall
arise solely from ownership of any specific percentage of equity securities of
RSI); unless prior to or substantially contemporaneously with such acquisition,
beneficial ownership of the equity securities of Alliance held by RSI shall have
been transferred to a Person that is (1) Controlled by the executive officers of
RSI immediately prior to such acquisition and (2) not an Affiliate of RSI or the
Disqualified Transferee following such acquisition.
8. Effect on Subsidiaries of Alliance. As used herein, the term
"Alliance" shall mean Alliance and each of its Subsidiaries. Alliance shall
cause each of such Subsidiaries, as applicable under the circumstances, to abide
by the provisions contained in this Agreement as if such Subsidiary were a party
hereto.
9. Notices. All notices, requests, demands, acceptances and other
communications which are required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given (a) when delivered
personally, or (b) when sent by fax if sent on a business day prior to 5:00 P.M.
local time at the place of receipt, or on the following business day if sent
after 5:00 P.M. or on a non-business day, or (c) on the day following delivery
to a courier service if sent by next day delivery via a recognized international
courier service, or (d) five (5) days after the date when mailed by registered
or certified mail, return receipt requested, postage prepaid. All such notices,
requests, demands, acceptances and other communications shall be addressed to
the parties as follows, or at such other address as shall be specified by like
notice:
If to RSI, to:
Reckson Service Industries, Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx and
Xxxxx Xxxxxxx, Esq.
Fax: 000-000-0000
with a copy to:
Xxxxxxx, Xxxxxxxxx LLP
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq. and
Xxxxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
If to Alliance to:
ALLIANCE National Incorporated
00 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, President
Fax: 000-000-0000
with a copy to:
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
10. Waivers. Either party hereto may, at its option, by written
notice to the other, (a) extend the time for the performance of any of the
obligations or other actions of the other, (b) waive compliance with any of the
terms, conditions or covenants required to be complied with by the other
hereunder; and (c) waive or modify performance of any of the obligations of the
other hereunder. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
11. Entire Agreement. This Agreement (together with any Product
Agreement with respect to a specific Product) constitutes the entire agreement
between the parties with respect to the subject matter hereof. No provision
hereof may be amended or modified except in writing, executed by all parties
hereto against which enforcement of such modification or amendment is sought.
12. Binding Effect; Benefits. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective permitted
successors and assigns. Except as set forth in the following provisions of this
Section 12, nothing in this Agreement, express or implied, is intended to confer
on any person other than the parties hereto and the other RSI Entities or their
respective permitted successors and assigns, any rights, remedies, obligations
or liabilities. Subject to the terms and conditions of this Agreement, OnSite
shall be the exclusive supplier with respect to the provision to Alliance of
Internet Services and Telecommunications Services, provided that such services
shall be provided pursuant to a Product Agreement mutually acceptable to
Alliance and OnSite. Alliance and OnSite hereby agree to use their good faith
efforts to negotiate, execute and deliver Product Agreements with respect to
Internet Services and Telecommunications Services within 90 days after the date
of this Agreement. The parties expressly acknowledge their intent that OnSite be
a third party beneficiary of this Agreement.
13. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated by any party
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party; provided, however, that RSI may assign its rights
and interest hereunder without the prior written consent of Alliance to any
Subsidiary or, if applicable, to any parent company of RSI, or to a Person
which, by reason of merger, consolidation, sale of stock or sale of assets,
succeeds to substantially all of the business of RSI. No such assignment shall
relieve RSI of any of its obligations hereunder.
14. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
15. Governing Law. The interpretation and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without regard to such State's conflicts of laws principles.
16. Jurisdiction. SUBJECT TO THE AGREEMENT OF THE PARTIES TO
ARBITRATE AS SET FORTH IN SECTION 3 HEREOF, EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY AGREES THAT THE ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING,
WITHOUT LIMITATION, ANY ACTION TO ENFORCE THE AWARD PURSUANT TO AN ARBITRATION
AS PROVIDED BY SECTION 3 HEREOF) MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH
COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE
AND ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM. EACH PARTY HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN
SECTION 9, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.
17. Confidentiality. (a) All Confidential Information furnished by a
party to the other party pursuant hereto shall be treated as the sole property
of the furnishing party and each party receiving information shall promptly
return (and in any event no later than 10 business days after any request) to
the furnishing party all of such written information and all documents, notes,
summaries or other materials containing, reflecting or referring to, or derived
from, such information. Each party receiving Confidential Information shall keep
confidential all such information, and shall not directly or indirectly use such
information for any competitive or other commercial purpose, other than as
specifically contemplated by this Agreement.
(b) The obligation to keep Confidential information as such
shall not apply to (i) any information which (A) was already in the receiving
party's possession on a non-confidential basis prior to the disclosure thereof
by the furnishing party; (B) was then generally known to the public other than
as a result of disclosure by the receiving party in violation of the provisions
hereof; or (C) was disclosed to the receiving party by a third party not bound
by any obligation of confidentiality or (ii) disclosures made as required by
law. If the receiving party is requested or required (by oral question or
request for information or documents in legal proceedings, interrogatories,
subpoena, civil investigative demand or similar process) to disclose any
information concerning the receiving party, the receiving party will promptly
notify the furnishing party of such request or requirement so that the
furnishing party may seek an appropriate protective order and/or waive the
receiving party's compliance with the provisions or this Agreement. It is
further agreed that, if in the absence of a protective order or the receipt of a
waiver hereunder the receiving party is nonetheless, in the opinion of its
counsel, compelled to disclose information concerning the furnishing party to
any tribunal or governmental body or agency or else stand liable for contempt or
suffer other censure or penalty, the receiving party may disclose such
information to such tribunal or governmental body or agency to the extent
necessary to comply with such order as advised by counsel without liability
hereunder.
(c) Without limiting the foregoing, no receiving party shall
disclose any Confidential Information other than to senior officers of such
party who need to know such information. In the event any furnishing party is
required to provide any Confidential Information, such party will be deemed to
have satisfied its obligations by making such information available at its
principal executive offices during reasonable business hours. No receiving party
shall make any copies of any Confidential Information without the furnishing
party's written consent, which consent shall not be unreasonably withheld or
delayed.
(d) Each receiving party understands and agrees that the
furnishing party will suffer immediate, irreparable harm in the event such
receiving party fails to comply with any of its obligations of confidentiality
under this Agreement, that monetary damages will be inadequate to compensate the
furnishing party for such breach and that such furnishing party shall be
entitled to specific performance as a remedy for any such breach. Such remedy
shall not be deemed to be the exclusive remedy in the event of breach of this
Agreement by any receiving party, but shall be in addition to all other remedies
available to the furnishing party at law or in equity.
18. Headings. Headings of the Sections in this Agreement are for
reference purposes only and shall not be deemed to have any substantive effect.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall be deemed to be one and the same instrument.
20. Facsimile Signatures. This Agreement may be signed by facsimile
copy and shall be valid and binding upon delivery of a signed copy by facsimile.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the day and year first above written.
ALLIANCE NATIONAL INCORPORATED
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
RECKSON SERVICE INDUSTRIES, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: President and Chief Executive
Officer
[SIGNATURE PAGE TO INTERCOMPANY AGREEMENT]
EXHIBIT 1 TO
INTERCOMPANY AGREEMENT
Form of Product Agreement
