Exhibit 2.2
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INFORMATION TECHNOLOGY SERVICES AGREEMENT
by and among
PRIMARK CORPORATION
TASC, INC.
and
XXXXXX INDUSTRIES, INC.
Dated as of __________, 1997
INFORMATION TECHNOLOGY SERVICES AGREEMENT
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INFORMATION TECHNOLOGY SERVICES AGREEMENT dated _____, 1997 (the "IT
Services Agreement") by and among Primark Corporation, a Michigan corporation
("Primark"), TASC, Inc., a Massachusetts corporation ("TASC") and Xxxxxx
Industries, Inc., a Delaware corporation ("Buyer").
WHEREAS, Primark and Buyer have entered into a Stock Purchase Agreement
dated as of __________ ___, 1997 (the "Stock Purchase Agreement"), pursuant to
which Buyer will purchase, among other things, all of the outstanding capital
stock of TASC, a wholly-owned indirect subsidiary of Primark (the "Stock
Purchase"); and
WHEREAS, prior to the Closing of the Stock Purchase, TASC has been
providing certain information technology services (the "IT Services") to Primark
and its subsidiaries ("Primark" as hereinafter used in this IT Services
Agreement, means Primark, its direct and indirect subsidiaries, as listed on
Attachment A and Primark Decision Economics, Inc., a Massachusetts corporation
in which Primark owns a minority interest); and
WHEREAS, both Primark and Buyer desire that TASC continue to supply IT
Services on a level of effort basis to Primark subsequent to the Closing of the
Stock Purchase; and
WHEREAS, this IT Services Agreement shall commence immediately upon the
closing of the Stock Purchase, unless said closing does not take place by April
30, 1998, in which event this IT Services Agreement shall be null and void;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
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PROVISION OF SERVICES
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Section 1.1 Sale of IT Services. The IT Services defined in Section
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1.3 will be supplied by TASC to Primark on a timely basis either as indicated in
Section 1.2 or as requested by Primark from time to time, as the case may be.
Primark will reimburse TASC for the cost of the IT Services in accordance with
ARTICLE II.
Section 1.2 Information Technology Representative. TASC will
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designate an Information Technology Representative ("ITR"), who shall be a
senior employee of TASC with the principal responsibility for the planning,
oversight and review of TASC's own information technology research and
development, plans and capabilities. The ITR will be the principal point of
contact between Primark and TASC regarding matters under this IT Services
Agreement.
Section 1.3 Definition of IT Services. The IT Services to be
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provided by TASC to Primark are as follows:
(a) The ITR will chair or serve as a member of the Primark
Financial Information Team - Information Technology Committee ("FIT-IT"), as
designated by Primark. The members of the FIT-IT will be designated by Primark.
When serving as Chairman, the ITR will hold monthly meetings of the FIT-IT,
either in person, teleconference or videoconference, establish the agenda,
issue minutes and pursue necessary action items resulting therefrom. When
serving as a member, but not as Chairman, the ITR will participate in monthly
meetings of the FIT-IT and pursue such necessary action items resulting
therefrom as may be relevant to the obligations of TASC herewith.
(b) The ITR, together with such members of his/her staff as
the ITR considers appropriate, will have regular and on-going contact with
FIT-IT members, visit the facilities of Primark and visit designated customer
locations for the purpose of advising Primark on information technology issues
(including, but not limited to, Year 2000 and Euro issues) related to computers,
communications, networks, software, databases and similar information technology
capabilities used in Primark's internal operations or in the delivery of
products and services to Primark's customers. Such advice may be given orally,
but will thereafter be confirmed in written presentations, memoranda and/or
reports.
(c) The ITR will serve as an advisor to the Primark Financial
Industry Team ("FIT") and attend monthly and special meetings of the FIT, as
requested by the FIT Chairman, for the purpose of providing information
technology advice on Primark's plans, programs and product developments
projects. The ITR will make presentations on information technology to the FIT
from time to time as the ITR considers appropriate and as requested by the FIT
Chairman and, when serving as Chairman of the FIT-IT, make monthly reports on
the activities of the FIT-IT to the FIT, TASC and Primark management.
(d) The ITR will participate in the annual review of
Primark's Five-Year Plan and Annual Budget, together with quarterly updates
thereto, providing advice on information technology matters affecting such plans
and budgets.
(e) The ITR, with the assistance and participation of the
members of the FIT-IT, will prepare an annual Information Technology Plan ("IT
Plan") for Primark, in such form and detail
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as the ITR and FIT Chairman shall mutually determine; covering information
technology issues and projects relevant to both the Five-Year Plan and Annual
Budget described in Paragraph (d) of this Section 1.3. The IT Plan will be
prepared on the same cycle as Primark's Five-Year Plan and Annual Budget.
(f) The ITR will, as requested from time to time, provide
special briefings to Primark senior management and the Primark Board of
Directors.
(g) TASC, through the ITR and/or members of the ITR's staff,
will have responsibility for the design and operation of the Primark
Telecommunications Network ("PTN"), including network architecture, procurement
and operation, to the extent mutually agreed upon between TASC and Primark. This
will involve assisting Primark in determining the nature and extent of
telecommunications requirements, designing networks and related capabilities
that will, as a goal, enable Primark to provide high quality state-of-the-art
telecommunications services at the lowest cost internally and to its customers,
drafting requests for proposals, assisting in procurement negotiations and
actual operation of portions of Primark's telecommunications networks. All
contracts for telecommunications services will be executed by Primark and
payments for services will be made directly by Primark.
(h) The ITR, and/or members of the technical staff of TASC,
will participate in special Primark projects from time to time as requested by
Primark and agreed by TASC. Such projects may include performing due diligence
on acquisition candidates, evaluating new product development proposals,
resolving information technology problems for Primark customers and similar
projects, provided that in case of an actual, perceived or potential conflict of
interest, TASC may decline participation in such projects.
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(i) Primark may request TASC to undertake information
technology projects on Primark's behalf, or to participate as team members in
such information technology projects undertaken by Primark. Such projects could
include, but are not limited to, information technology surveys and assessments,
research and development on new technology capabilities and the planning,
development and/or testing of new Primark information products and internal
information technology capabilities, provided that in case of an actual,
perceived or potential conflict of interest, TASC may decline participation in
such projects.
ARTICLE II
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PAYMENTS FOR SERVICES
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Section 2.1 Annual Retainer. For the services described in Section
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1.3 (a), (b), (c), (d), (e) and (f), Primark will pay TASC an annual retainer of
$100,000, paid quarterly in advance commencing on the first day of the month
immediately following the Closing of the Stock Purchase. The annual retainer
shall compensate TASC for the availability of the ITR not to exceed 480 hours
---
per year and for the availability of members of his/her staff not to exceed 240
---
hours per year. Efforts of the ITR or members of his/her staff in excess of the
hours stipulated above shall be paid by Primark at a rate or rates agreed upon
by the parties. Primark will also make incentive payments of up to $8,500 at the
end of each quarter during the term of this IT Services Agreement and an
additional amount up to $45,000 at the end of each twelve month period following
the execution of this IT Services Agreement, with such payments to be determined
in the sole discretion of Primark reflecting Primark's judgment on the quality
of the IT Services received. Primark will also reimburse TASC for out-of-pocket
expenses, such as travel and reproduction expenses, at cost, including
applicable overhead, monthly in arrears. The quarterly retainer and out-of-
pocket expenses
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will be paid within thirty (30) days after the receipt of invoices by Primark
from TASC. Monthly out-of-pocket expenses may not exceed $5,000 in any month
without prior approval by Primark.
Section 2.2 Telecommunications Services. For the telecommunications
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services described in Section 1.3 (g), Primark will reimburse TASC at hourly
rates mutually agreed in advance. Out-of-pocket costs, including any external
vendor charges, will be reimbursed at cost, including such overhead as may be
required to be charged by applicable government regulation. A part of the IT
Plan described in Section 1.3 (e) will include a Telecommunications Cost Annex,
estimating the telecommunications costs for Primark's Five-Year Plan and Annual
Budget. Upon Primark's approval of the telecommunications cost estimate for the
Annual Budget, TASC may begin incurring such costs. The telecommunications cost
estimate for the Annual Budget will be updated quarterly. Any expenditure by
TASC on Primark's behalf in excess of 5% above the approved telecommunications
cost estimate will require prior approval by Primark. Payments for
telecommunications services will be made monthly in arrears, within thirty (30)
days of receipt of invoices.
Section 2.3 Other Services. For the services described in Sections
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1.3 (h) and (i), relating to special projects, upon request by Primark, TASC
will submit a proposal covering the scope of work, milestones, schedule,
deliverables, personnel assigned and costs. TASC may commence work on special
projects upon receipt of approval from Primark. Primark will reimburse TASC for
these other services, at hourly rates mutually agreed by the parties. Out-of-
pocket costs will be reimbursed based on costs incurred, including applicable
overhead. Payments for other services will be made monthly in arrears, within
thirty (30) days of receipt of invoices.
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Section 2.4 Overhead. For the purposes of this Article II, overhead
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means the overhead and general and administrative expenses (G&A) charges on
cost-based contracts performed for the U.S. Government during similar time
periods, calculated and applied in the same manner.
ARTICLE III
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TERMINATIONS
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Section 3.1 Normal Termination Date. This IT Services Agreement
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terminates three years from the date of the Closing (as defined in the Stock
Purchase Agreement). However, notwithstanding anything herein to the contrary,
the telecommunications services described in Section 1.3 (g) hereof may be
terminated separately at any time upon ninety (90) calendar days advance notice
to TASC.
Section 3.2 Special Termination. After the first anniversary of
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this IT Services Agreement, Primark may terminate this Service Agreement at any
time upon ninety (90) calendar days advance notice to TASC.
ARTICLE IV
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INTELLECTUAL PROPERTY RIGHTS
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Section 4.1 Work to be Performed and IT Services to be Rendered.
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(a) For purposes of this IT Services Agreement "Work Product"
shall mean all data, documentation, software and information, in whatever form,
first produced or created by TASC in the performance of the work or the
rendition of services under this IT Services Agreement and
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delivered to Primark as a deliverable hereunder including all proprietary rights
therein including rights of patent, copyright, trademark, mask work and trade
secret ("Intellectual Property Rights").
(b) During the term of this IT Services Agreement TASC shall
render the services set forth in Section 1.3 above. All services to be rendered
hereunder shall be under the general supervision of a designated Primark
representative (the "Primark Representative").
(c) All services to be rendered and deliverables to be
delivered hereunder shall be deemed accepted by the Primark Representative if
not rejected within forty five (45) calendar days of submission to Primark. If
the Primark Representative rejects the services and or deliverables required
hereunder, Primark shall provide reasonably detailed information about the
rejection and TASC shall promptly correct such services and/or deliverables and
resubmit same to Primark for acceptance in accordance with the provisions of
this paragraph (c).
(d) The services to be rendered hereunder shall be performed
by TASC, but such services may be subcontracted or otherwise performed by third
parties on behalf of TASC without the prior consent of Primark if, and only if,
such subcontracting is a customary practice of TASC.
Section 4.2 Ownership of Work Product. (a) TASC acknowledges and
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agrees that Primark is to be the exclusive owner of the Work Product, including
all Intellectual Property Rights therein, whether such Work Product is tangible
or intangible and including works-in-progress, and whether such Work Product is
created or reduced to practice by TASC alone or jointly with Primark's employees
or agents. Without limiting the generality of the foregoing, all copyrightable
works included in the Work Product shall be considered "works for hire" of
Primark, and TASC expressly waives any right of attribution, droit morale or
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similar rights therein.
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(b) In the event that title to any or all of the Work Product may
not, by operation of law, vest in Primark or is found not to be a "work for
hire" within the meaning of the Copyright Act, then TASC hereby conveys and
irrevocably assigns to Primark, without further consideration, all its right,
title and interest in all Work Product and all copies thereof, in whatever
medium fixed or embodied, and in all written records, graphics, diagrams, notes,
or reports relating thereto in TASC's possession or under its control.
(c) TASC hereby represents, warrants, and covenants that any
contributions of its own employees or subcontractors (to the extent Intellectual
Property Rights are transferred by subcontractors) to the Work Product,
including but not limited to, contributions of the FIT and his or her staff, are
and shall be "works for hire" of TASC or shall be otherwise owned solely and
exclusively by TASC upon delivery to Primark.
(d) Except as otherwise agreed, to the extent that the delivery of
Services by TASC involves the use of any pre-existing (as of the effective date
of this IT Services Agreement) Intellectual Property Rights which are owned or
controlled by TASC or TASC's subsidiaries (other than WSI), Primark is hereby
granted a non-exclusive, perpetual, royalty-free, fully-paid up, worldwide right
and license, with the right to sublicense or transfer the license for such
Intellectual Property Rights to subsidiaries that remain Primark subsidiaries;
provided, however, that Primark may use said Intellectual Property Rights solely
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for its own use and that of its subsidiaries and may not sublicense or transfer
such license to any third party including a parent or affiliate (other than a
subsidiary). The license hereby granted to Primark shall survive the termination
of this IT Services Agreement for whatever reason.
ARTICLE V
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CONFIDENTIALITY
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TASC shall not disclose, or use for the benefit of other than Primark,
any and all written or tangible information marked "confidential," "proprietary"
or with a similar legend disclosed to TASC as a result of this IT Services
Agreement; provided, however, that TASC shall have no obligation hereunder for
that portion of such information which is (i) disclosed by Primark to others
without any restriction on use and disclosure, or (ii) approved for release by
written consent of Primark, or (iii) available to the general public by lawful
means, or (iv) if independently developed by or for TASC or rightfully received
by TASC from a third party, unless any of such information was provided to TASC
as a result of Primark's ownership of TASC.
ARTICLE VI
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EMPLOYMENT PROVISIONS
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The parties acknowledge and agree that: (i) in furnishing the
Services to Primark hereunder, TASC and its Affiliates are functioning as an
independent contractor to Primark; and (ii) except as otherwise provided herein,
TASC and any Affiliate are solely responsible for the payment of salary,
employee benefits and all other compensation due to TASC and Affiliate personnel
for rendering services, and for all applicable federal, state and local tax
withholding with respect to compensation and benefits payable to them under this
IT Services Agreement or otherwise; and (iii) TASC or any Affiliate personnel
shall not participate in or be eligible to participate in any compensation or
benefit plan or perquisite of Primark.
ARTICLE VIII
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MISCELLANEOUS PROVISIONS
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Section 8.1 Definition. The term "Affiliate" as used in this IT
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Services Agreement shall mean a person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, a specified person.
Section 8.2 Amendment and Modification. This IT Services Agreement
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may be amended, modified or supplemented at any time by the parties hereto,
pursuant to an instrument in writing signed by all parties.
Section 8.3 Entire Agreement; Assignment. This IT Services Agreement
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(a) constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof and (b) shall not be assigned, by operation of law
or otherwise, by a party hereto, without the prior written consent of the other
parties.
Section 8.4 Severability. The invalidity or unenforceability of any
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term or provision of this IT Services Agreement in any situation or jurisdiction
shall not affect the validity or enforceability of the other terms or provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction and the remaining terms and
provisions shall remain in full force and effect, unless doing so would result
in an interpretation of this IT Services Agreement which is manifestly unjust.
Section 8.5 Notices. Unless otherwise provided herein, all notices
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and other communications hereunder shall be in writing and may be given by any
of the following methods: (a) personal delivery; (b) facsimile transmission; (c)
registered or certified mail, postage prepaid, return receipt requested; or (d)
overnight delivery service. Such notices and communications shall be sent to the
appropriate party at its address or facsimile number given below or at such
other address or facsimile number for such party as shall be specified by notice
given hereunder (and shall
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be deemed given upon receipt by such party or upon actual delivery to the
appropriate address or, in case of a facsimile transmission, upon transmission
thereof by the sender and issuance by the transmitting machine of a confirmation
slip that the number of pages constituting the notice have been transmitted
without error. In the case of notices sent by facsimile transmission, the sender
shall contemporaneously mail a copy of the notice to the addressee at the
address provided for above, provided however, that such mailing shall in no way
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alter the time at which the facsimile notice is deemed received):
if to Primark, to
Primark Corporation
0000 Xxxxxx Xxxxxx
Xxxxx 0000X
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Chairman,
President and Chief Executive Officer
with a copy to
Primark Corporation
0000 Xxxxxx Xxxxxx
Xxxxx 0000X
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Executive Vice President, General
Counsel and Secretary
if to TASC, to
TASC, Inc.
00 Xxxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (617)
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Attention:
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if to Xxxxxx Industries, Inc., to
Xxxxxx Industries, Inc.
00000 Xxxxxxx Xxxx.
Xxxxxxxx Xxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxx
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with a copy to
Xxxxxx Industries, Inc.
00000 Xxxxxxx Xxxx.
Xxxxxxxx Xxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Senior VP and
General Counsel
Section 8.6 Governing Law; Arbitration. This IT Services Agreement
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shall be governed by, enforced under and construed in accordance with the laws
of the Commonwealth of Massachusetts, without giving effect to any choice or
conflict of law provision or rule thereof. In the event any dispute or
difference of any kind whatsoever shall arise between the parties in connection
with or arising out of the validity or invalidity, construction, execution,
meaning, operation or effect of this IT Services Agreement or breach thereof,
the parties shall seek to resolve the same amicably through good faith
negotiation. Failing resolution by such means the same shall be finally settled
by binding arbitration in Boston, Massachusetts, under the Commercial
Arbitration Rules of the American Arbitration Association governed by the
substantive law of the Commonwealth of Massachusetts. The arbitration shall be
before a panel of three arbitrators unless the parties agree in writing to
arbitration before a single arbitrator. The prevailing party in any arbitration
proceedings hereunder as determined by the arbitrator or in any legal
proceedings or actions arising from or in connection with this IT Services
Agreement shall be entitled to recover reasonable attorneys' fees and costs.
Pending resolution of such dispute, TASC agrees to proceed diligently with the
performance of this IT Services Agreement, unless otherwise directed by Primark.
Section 8.7 Descriptive Headings. The descriptive headings herein are
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inserted for convenience of reference only and shall in no way be construed to
define, limit, describe, explain,
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modify, amplify or add to the interpretation, construction or meaning of any
provision of, or scope or intent of, this IT Services Agreement nor in any way
affect this IT Services Agreement.
Section 8.8 Counterparts. This IT Services Agreement may be executed
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in counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument.
Section 8.9 Interpretation. In the event an ambiguity or question of
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intent or interpretation arises, this IT Services Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this IT Services Agreement.
Section 8.10 No Third Party Beneficiaries. This IT Services Agreement
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is solely for the benefit of Primark and its successors and permitted assigns,
with respect to the obligations of TASC and Buyer under this IT Services
Agreement, and for the benefit of Buyer and TASC, and their successors and
permitted assigns, with respect to the obligations of Primark under this IT
Services Agreement, and this IT Services Agreement shall not be deemed to confer
upon or give to any other third party any remedy, claim of liability or
reimbursement, cause of action or other right.
Section 8.11 No Waivers. Except as otherwise expressly provided
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herein, no failure to exercise, delay in exercising, or single or partial
exercise of any right, power or remedy by any party, and no course of dealing
between the parties, shall constitute a waiver of any such right, power or
remedy. No waiver by a party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence. No waiver shall be valid unless in
writing and signed by the party against whom such waiver is sought to be
enforced.
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Section 8.12 No Solicitation/No Hire. During the period of performance
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of this IT Services Agreement, and for two (2) years thereafter, neither party
hereto shall, without the prior written consent of the other party, hire,
solicit for hire or knowingly allow its employees to hire or solicit for hire
any of those employees of the other party or its affiliates who are associated
with the performance of this IT Services Agreement.
Section 8.13 Warranties/Disclaimer. BUYER AND TASC ARE FURNISHING NO
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WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. BUYER AND
TASC SHALL NOT BE LIABLE FOR LOSS FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OR FOR
INJURY TO THIRD PARTIES.
IN WITNESS WHEREOF, each of the undersigned has caused this IT Services
Agreement to be duly signed as of the date first above written.
PRIMARK CORPORATION
By:
---------------------------------
Name:
Title:
TASC, INC.
By:
---------------------------------
Name:
Title:
XXXXXX INDUSTRIES, INC.
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By:
---------------------------------
Name:
Title:
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