Exhibit 2.7
-----------
SERVICES AGREEMENT
BY AND AMONG
CABLETRON SYSTEMS, INC.
AND
APRISMA MANAGEMENT TECHNOLOGIES, INC.
SERVICES AGREEMENT
This Services Agreement is effective as of August 28, 2000 (the "Effective
---------
Date"), by and among Cabletron Systems, Inc., a Delaware corporation ("CSI") and
---- ---
Aprisma Management Technologies, Inc., a Delaware corporation ("Aprisma").
-------
WHEREAS CSI currently owns all of the issued and outstanding capital stock
of Aprisma;
WHEREAS the parties determined that it would be appropriate and desirable,
in accordance with the Transformation Agreement and the Asset Contribution
Agreement for CSI to contribute and transfer to Aprisma, and for Aprisma to
receive and assume, directly or indirectly, certain assets and liabilities held
by CSI and its affiliates and associated with the Aprisma Business and to
consummate the other transactions contemplated thereby (the "Transformation");
--------------
WHEREAS, in connection with the Transformation, CSI announced that it
planned to conduct an initial public offering for Aprisma followed by a
distribution of the remaining shares of Aprisma to CSI's stockholders, although
CSI is not obligated to complete any such transactions and will only implement
any such transactions if the Board of Directors of CSI continues to believe that
it is in the best interests of CSI, CSI's stockholders and Aprisma; and
WHEREAS CSI has been providing certain services to Aprisma or its
predecessor division since March 1, 2000 consistent with the provisions
described in this Agreement, and CSI and Aprisma now wish, by executing this
Agreement, to formalize the terms and conditions under which CSI will continue
to provide services to Aprisma at least until Aprisma ceases to be a majority
owned subsidiary of CSI.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
herein made, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
For the purpose of this Agreement, the following capitalized terms shall have
the following meanings:
1.1. ADDITIONAL SERVICE(S). "Additional Service(s)" shall have the meaning set
---------------------
forth in Section 3.5.
1.2. AGREEMENT. "Agreement" shall have the meaning set forth in Article 2.
---------
1.3. ANCILLARY AGREEMENT(S). "Ancillary Agreement(s)" shall have the meaning
----------------------
set forth in the Transformation Agreement.
1.4. APRISMA. "Aprisma" shall have the meaning set forth in the Preamble.
-------
1.5. APRISMA BUSINESS. "Aprisma Business" shall have the meaning set forth in
----------------
the Transformation Agreement.
1.6. ASSET CONTRIBUTION AGREEMENT. "Asset Contribution Agreement" shall mean
----------------------------
the Asset Contribution Agreement, dated as of June 3, 2000, between CSI
and Aprisma.
1.7. ASSIGNMENT. "Assignment" shall have the meaning set forth in Section 13.5.
----------
1.8. BASIC SERVICE(S). "Basic Service(s)" shall be the Services designated as
----------------
such in the Service Schedule.
1.9. CSI. "CSI" shall have the meaning set forth in the Preamble.
---
1.10. DISPUTE. "Dispute" shall have the meaning set forth in Section 12.1.
-------
1
1.11. EFFECTIVE DATE. "Effective Date" shall have the meaning set forth in the
--------------
Preamble.
1.12. ENTERASYS. "Enterasys" shall mean Enterasys Networks, Inc., a Delaware
---------
corporation.
1.13. EXPIRATION DATE. "Expiration Date" shall have the meaning set forth in
---------------
Section 6.1.
1.14. FORCE MAJEURE. "Force Majeure" shall mean any act of God, any accident,
-------------
explosion, fire, storm, earthquake, flood, or any other circumstance or
event beyond the reasonable control of the party relying upon such
circumstance or event.
1.15. GNTS. "GNTS" shall mean GlobalNetwork Technology Services, Inc., a
----
Delaware corporation.
1.16. IMPRACTICABILITY. "Impracticability" shall have the meaning set forth in
----------------
Section 3.3.
1.17. IMPRACTICABLE. "Impracticable" shall have the meaning set forth in
-------------
Section 3.3.
1.18. INTERCOMPANY ACCOUNT. "Intercompany Account" shall mean the intercompany
--------------------
account created for Aprisma pursuant to the Asset Contribution Agreement,
which shall be managed by CSI pursuant to this Agreement.
1.19. NEWCO. "Newco" shall mean each of Aprisma, Enterasys, GNTS, and
-----
Riverstone.
1.20. RIVERSTONE. "Riverstone" shall mean Riverstone Networks, Inc., a Delaware
----------
corporation.
1.21. SERVICE(S). "Service(s)" shall have the meaning set forth in Section 3.1.
----------
1.22. SERVICE SCHEDULE. "Service Schedule" shall have the meaning set forth in
----------------
Article 2.
1.23. SUBCONTRACTOR. "Subcontractor" shall mean any individual, partnership,
-------------
corporation, firm, association, unincorporated organization, joint
venture, trust or other entity engaged by CSI to perform services
hereunder on behalf of CSI.
1.24. TRANSFORMATION. "Transformation" shall have the meaning set forth in the
--------------
Recitals.
1.25. TRANSFORMATION AGREEMENT. "Transformation Agreement" shall mean the
------------------------
Transformation Agreement, dated as of June 3, 2000, by and among CSI and
the Newcos.
ARTICLE 2
SERVICE SCHEDULE
2.1. This Agreement will govern individual services to be provided by CSI to
Aprisma, the details of which are set forth in the Service Schedule
attached to this Agreement, as amended from time to time by the parties
hereto (the "Service Schedule"). Obligations under this Agreement
----------------
regarding a particular Service shall be effective upon the addition of
such Service to the Service Schedule, subject to the effectiveness of
this Agreement. This Agreement together with the Service Schedule shall
be defined as the "Agreement."
----------
ARTICLE 3
SERVICES
3.1. SERVICES GENERALLY. Except as otherwise provided herein, for the term
determined pursuant to Article 6 hereof, CSI shall provide to Aprisma the
service(s) described in the Service Schedule attached hereto (the
"Services").
--------
3.2. SERVICE BOUNDARIES. Except as provided in the Service Schedule: (i) CSI
shall be required to provide a Service to Aprisma only to the extent and
only at the locations such Services were being provided by CSI to Aprisma
immediately prior to the Effective Date; and (ii) each Service
2
will be available to Aprisma only for purposes of conducting the business
of Aprisma substantially in the manner it was conducted prior to the
Effective Date.
3.3. IMPRACTICABILITY. CSI shall not be required to provide any Service to the
extent the performance of such Service becomes impracticable
("Impracticable") as a result of a cause or causes outside the reasonable
-------------
control of CSI (including Force Majeure), or to the extent the
performance of such Services would require CSI to violate any applicable
laws, rules or regulations or would result in the breach of any software
license or other applicable contract. The inability of CSI to perform a
Service because such performance is Impracticable shall be referred to
herein as "Impracticability."
----------------
3.4. ADDITIONAL RESOURCES. Except as provided in the Service Schedule, in
providing the Services, CSI shall not be obligated to: (i) hire, lease or
contract for any additional employees; (ii) maintain the employment of
any specific employee; or (iii) purchase, lease or license any additional
equipment or software.
3.5. ADDITIONAL SERVICES. From time to time during the term of this Agreement,
Aprisma may request that CSI provide additional services to it in
accordance with the terms of this Agreement (the "Additional Services").
-------------------
In such event, CSI and Aprisma shall amend the Service Schedule to
provide for the addition of such Additional Services pursuant to Article
2.
ARTICLE 4
COMPENSATION
4.1. CHARGES FOR SERVICES. Aprisma shall pay CSI the charges, if any, set
forth on the Service Schedule as adjusted, from time to time, in
accordance with the processes and procedures established under Section
4.3 and Section 4.4 hereof. If CSI reasonably determines that the actual
charge for a Service is likely to exceed materially, as determined in
good faith by CSI in its sole discretion, the charge set forth on the
Service Schedule for a particular Service, it shall provide Aprisma with
notice of the anticipated excess and such additional supporting
documentation as Aprisma may reasonably request. Thereupon, unless it
shall be agreed among the parties hereto following good faith discussion
that a different charge is appropriate, the increased charge shall for
all purposes be treated as the charge owed in respect of the Service
pursuant to the Service Schedule, and the Service Schedule shall be
amended accordingly. No change to a charge for a particular Service shall
justify CSI in not providing, or Aprisma in not paying for, such Service
or any other Service under this Agreement.
4.2. PAYMENT TERMS.
(a) INVOICES. CSI shall periodically provide invoices to Aprisma
detailing all charges for Services provided to Aprisma pursuant to
this Agreement.
(b) PAYMENT. While CSI is managing Aprisma's Intercompany Account, the
charges set forth in invoices shall be posted by CSI to the
Intercompany Account of Aprisma. If CSI is no longer managing
Aprisma's Intercompany Account, or if the Intercompany Account has
no balance, any invoice received by Aprisma shall be payable no
later than forty-five (45) days after receipt. Late payments shall
bear interest at the lesser of twelve percent (12%) per annum and
the maximum rate allowed by law.
4.3. CORRECTION; TRUE-UPS; ACCOUNTING. The parties shall jointly develop a
process and procedure for conducting internal audits and making
adjustments to charges as a result of the movement of employees and
functions between parties, the discovery of errors or omissions in
charges, as well as a true-up of amounts owed. In no event shall such
processes and procedures extend beyond two (2) years after completion of
a Service.
3
4.4. PRICING ADJUSTMENTS. In the event of a tax audit adjustment relating to
the pricing of any Services provided pursuant to this Agreement in which
it is determined by a taxing authority of competent jurisdiction that any
charges did not result in an arm's-length payment, then the parties,
including any CSI Subcontractor providing Services hereunder, may agree
to make corresponding adjustments to the charges in question for such
period to the extent necessary to achieve arm's-length pricing. Any
adjustment made pursuant to this Section 4.4 at any time during the term
of this Agreement or after termination of this Agreement and shall be
reflected in the parties' records, and the resulting underpayment or
overpayment shall create, respectively, an obligation to be paid in the
manner specified in Section 4.2, or shall create a credit against amounts
owed under this Agreement.
ARTICLE 5
GENERAL OBLIGATIONS; STANDARD OF CARE
5.1. PERFORMANCE BY CSI. Subject to Section 3.4 and any other terms and
conditions of this Agreement, CSI shall maintain sufficient resources to
perform its obligations hereunder. CSI shall use reasonable efforts to
provide Services in accordance with the policies, procedures and
practices in effect before the Effective Date and shall exercise the same
care and skill as it exercises in performing similar services for itself.
5.2. DISCLAIMER OF WARRANTIES. CSI MAKES NO WARRANTIES WITH RESPECT TO THE
SERVICES PROVIDED BY IT HEREUNDER.
5.3. PERFORMANCE BY APRISMA. Aprisma shall use reasonable efforts, in
connection with receiving Services, to follow the policies, procedures
and practices in effect before the Effective Date including the provision
of information and documentation sufficient for CSI to perform the
Services as they were performed before the Effective Date and the making
available, as reasonably requested by CSI, of sufficient resources and
timely decisions, approvals and acceptances in order that CSI may
accomplish its obligations hereunder in a timely manner.
5.4. TRANSITIONAL NATURE OF SERVICES; CHANGES. The parties acknowledge the
transitional nature of the Services and that CSI may make changes from
time to time in the manner of performing the Services if CSI furnishes to
Aprisma reasonable notice regarding such changes.
5.5. RESPONSIBILITY FOR ERRORS; DELAYS. CSI's sole responsibility to Aprisma:
(a) for errors or omissions in Services, shall be to furnish correct
information, payment and/or adjustment in the Services, at no
additional cost or expense to Aprisma; provided, Aprisma must
--------
promptly advise CSI of any such error or omission of which it
becomes aware after having used reasonable efforts to detect any
such errors or omissions in accordance with the standard of care set
forth in Section 5.3; and
(b) for failure to deliver any Service because of Impracticability,
shall be to use reasonable efforts, subject to Section 3.4, to make
the Services available and/or to resume performing the Services as
promptly as reasonably practicable.
5.6. GOOD FAITH COOPERATION; CONSENTS. The parties will use good faith efforts
to cooperate with each other in all matters relating to the provision and
receipt of Services. Such cooperation shall include exchanging
information, performing true-ups and adjustments, and obtaining all third
party consents, licenses, sublicenses or approvals necessary to permit
each party to perform its obligations hereunder (including by way of
example, not by way of limitation, rights to use third party software
needed for the performance of Services). The costs of obtaining such
third party consents, licenses, sublicenses or approvals in connection
with the performance of Services for Aprisma shall be borne by Aprisma.
Each party will maintain, in accordance with its standard document
retention procedures, documentation supporting the information relevant
to the charges contained in the Service Schedule and cooperate with each
other party in making such
4
information available as needed in the event of a tax audit, whether in
the United States or any other country.
5.7. ALTERNATIVES. If CSI reasonably believes that it is unable to provide any
Service because of a failure to obtain necessary consents, licenses,
sublicenses or approvals pursuant to Section 5.6 or because of
Impracticability, the parties shall cooperate to determine the best
alternative approach. Until such alternative approach is found or the
problem otherwise resolved to the satisfaction of the parties, CSI shall
use reasonable efforts, subject to Section 3.3 and Section 3.4, to
continue providing the Service.
ARTICLE 6
TERM AND TERMINATION
6.1. TERM. The term of this Agreement shall commence on the Effective Date and
shall remain in effect until two (2) years after the Effective Date (the
"Expiration Date"), unless earlier terminated under this Article 6. The
----------------
term of this Agreement may be extended by CSI and Aprisma in writing
either in whole or with respect to one or more of the Services. The
parties shall be deemed to have extended this Agreement with respect to a
specific Service if the Service Schedule specifies a completion date
beyond the aforementioned Expiration Date for such Service. The parties
may agree on an expiration date respecting a specific Service earlier
than the Expiration Date by specifying such date on the Service Schedule.
Each Service shall be provided up to and including the date set forth in
the applicable Service Schedule, subject to earlier termination as
provided herein.
6.2. TERMINATION.
(a) Aprisma may terminate this Agreement, either with respect to all or
with respect to any one or more of the Services provided to Aprisma
hereunder, for any reason or for no reason, at any time upon giving
prior written notice to CSI at least a full fiscal quarter prior to
such termination, provided that (i) Aprisma must indemnify CSI in
--------
full against any costs imposed by third parties as a result of such
termination; and (ii) Aprisma shall not have the right to terminate
a Basic Service before Aprisma ceases to be a majority owned
subsidiary of CSI.
(b) CSI may terminate this Agreement, either with respect to all or with
respect to any one or more of the Services provided to Aprisma
hereunder, for any reason or for no reason, at any time upon giving
prior written notice to Aprisma at least sixty (60) days prior to
such termination.
(c) Notwithstanding the foregoing, either CSI or Aprisma may terminate
this Agreement with respect to a specific Service if the other party
materially breaches a material provision with regard to that
particular Service and does not cure such breach (or does not take
reasonable steps required under the circumstances to cure such
breach going forward) within sixty (60) days after being given
notice of the breach.
6.3. SURVIVAL. The obligations of the parties under this Agreement shall
survive termination thereof to the extent necessary to carry out the
purposes of this Agreement, including without limitation payment
obligations under Article 4 and indemnification obligations under Article
10. Notwithstanding the foregoing, in the event of any termination with
respect to one or more, but less than all Services, this Agreement shall
continue in full force and effect with respect to all Services not
terminated hereby.
6.4. POST-TERMINATION SERVICES. Following a termination of this Agreement with
respect to a particular Service, corporate administrative services of the
kind provided under the Service Schedule may continue to be provided to
Aprisma on an as-requested basis by Aprisma or as required in the event
it is not practicable for Aprisma to provide such services or Aprisma is
otherwise unable to identify another source to provide such services (as
would be the case with
5
administration of employee benefit plans and insurance programs sponsored
by CSI and in which Aprisma's employees participate). In the event such
services are provided by CSI to Aprisma, Aprisma shall be charged by CSI
a fee equal to the market rate for comparable services charged by third-
party vendors. CSI shall periodically provide invoices to Aprisma
detailing any such charges. If, at such time, CSI is still managing an
Intercompany Account for Aprisma, the charges set forth in invoices shall
be posted by CSI to the Intercompany Account of Aprisma. If CSI is no
longer managing Aprisma's Intercompany Account, any invoice received by
Aprisma shall be payable no later than thirty (30) days after receipt.
The obligations of Aprisma set forth in this Section 6.4 shall survive
the termination of this Agreement.
ARTICLE 7
RELATIONSHIP BETWEEN THE PARTIES
7.1. INDEPENDENT CONTRACTORS. The relationship between the parties established
under this Agreement is that of independent contractors and no party is
an employee, agent, partner, or joint venturer of or with another. CSI
will be solely responsible for any employment-related taxes, insurance
premiums or other employment benefits respecting its personnel's
performance of Services under this Agreement. Aprisma agrees to grant CSI
personnel access to sites, systems and information (subject to the
provisions of confidentiality in Article 9 below) as necessary for CSI to
perform its obligations hereunder.
7.2. APRISMA DIRECTORS AND OFFICERS. Nothing contained herein will be
construed to relieve the directors or officers of Aprisma from the
performance of their respective duties or to limit the exercise of their
powers in accordance with the By-laws of Aprisma or in accordance with
any applicable statute or regulation.
ARTICLE 8
SUBCONTRACTORS
CSI may cause one or more Newcos, or may engage other Subcontractors, to perform
all or any portion of CSI's duties under this Agreement, provided that any such
--------
Subcontractor agrees in writing to be bound by confidentiality obligations at
least as protective as the terms of Article 9 regarding confidentiality below,
and provided further that CSI remains responsible for the performance of any
-------- -------
such Subcontractor. Any reference in this Agreement to performance of Services
by CSI (including but not limited to the general obligations set forth in
Article 3, standards of care relating to performance set forth in Article 5, and
limitations on liability and indemnification by Aprisma set forth in Article 10)
shall incorporate performance of Services by Subcontractors on behalf of CSI.
ARTICLE 9
CONFIDENTIALITY
Each party to this Agreement agrees to hold, and to use all commercially
reasonable efforts to cause its employees, representatives and agents to hold,
in confidence all confidential or proprietary information regarding any other
party, its operations and business obtained through the provision of the
Services in accordance with the confidentiality provisions set forth in the
Transformation Agreement.
ARTICLE 10
LIABILITY AND INDEMNIFICATION
10.1. CSI shall not be liable to Aprisma for direct, consequential or
incidental damages, including, without limitation, loss of profits or
damage to or loss of use of any property arising out of or relating to
the provision of the Services pursuant to this Agreement, except to the
extent of CSI's willful misconduct or gross negligence.
10.2. Aprisma hereby agrees to indemnify and hold CSI (and its directors,
officers, employees and representatives) harmless from and against any
and all claims, losses, damages, costs, expenses, causes of action or
judgments of any kind or character (including those arising from, related
to or
6
caused directly or indirectly, by the sole, joint, concurrent or
comparative negligence of such indemnified parties) including any
interest, penalty, reasonable attorneys' fees, investigation expenses
with respect to asserted claims (whether or not resulting in any
liability) and other costs and expenses incurred in connection therewith
or the defense thereof, attributable to or arising out of any claims by,
or liabilities or obligations to, any third party arising out of
(including another Newco), in connection with or resulting from the
Services or other activities performed by CSI hereunder for Aprisma,
except to the extent resulting from the gross negligence or willful
misconduct of CSI or Subcontractors engaged by CSI (which shall not be
deemed to exist if such action is taken at Aprisma's direction).
ARTICLE 11
FORCE MAJEURE
Each party will be excused for any failure or delay in performing any of its
obligations under this Agreement, other than the obligations of Aprisma to make
payments to CSI pursuant to Article 4 hereof for services rendered, if such
failure or delay is caused by Force Majeure.
ARTICLE 12
DISPUTE RESOLUTION
12.1. DISPUTES. If a dispute, controversy or claim ("Dispute") arises between
-------
CSI and Aprisma relating to the interpretation or performance of this
Agreement, or the grounds for termination hereof, such Dispute shall be
resolved according to the dispute resolution mechanism set forth in the
Transformation Agreement.
12.2. CONTINUITY OF SERVICE AND PERFORMANCE. Unless otherwise agreed in
writing, during the resolution of any Dispute pursuant to the provisions
of this Article 12 and the Transformation Agreement, the parties will
continue to provide service and honor all other commitments under this
Agreement and each Ancillary Agreement with respect to all matters not
subject to such Dispute.
ARTICLE 13
MISCELLANEOUS
13.1. ENTIRE AGREEMENT. This Agreement, the Transformation Agreement and the
other Ancillary Agreements and the Exhibits and Schedules referenced or
attached hereto and thereto constitute the entire agreement between the
parties with respect to the subject matter hereof and thereof and shall
supersede all prior written and oral and all contemporaneous oral
agreements and understandings with respect to the subject matter hereof
and thereof.
13.2. GOVERNING LAW. This Agreement shall be construed in accordance with and
all Disputes hereunder shall be governed by the laws of the State of New
Hampshire, excluding its conflict of law rules. The courts of the State
of New Hampshire or of the United States District Court for the state of
New Hampshire shall have venue over all Disputes between the parties that
are permitted to be brought in a court of law pursuant to Article 12
above.
13.3. DESCRIPTIVE HEADINGS. The headings contained in this Agreement, in any
Exhibit or Schedule hereto and in the table of contents to this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Any capitalized term used in
any Exhibit or Schedule but not otherwise defined therein, shall have the
meaning assigned to such term in this Agreement. When a reference is made
in this Agreement to an Article or a Section, Exhibit or Schedule, such
reference shall be to an Article or Section of, or an Exhibit or Schedule
to, this Agreement unless otherwise indicated.
13.4. NOTICES. Notices, offers, requests, or other communications required or
permitted to be given by the parties pursuant to the terms of this
Agreement shall be given in writing to the respective parties to the
following addresses:
7
If to CSI: Cabletron Systems, Inc.
00 Xxxxxxxxxx Xxx
Xxxxxxxx 00
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx and Chief Financial Officer
Telecopier No.: 000-000-0000
with a copy to: Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Fine
Telecopier No.: 000-000-0000
If to Aprisma: Aprisma Management Systems, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: President
Telecopier No.: 000-000-0000
with a copy to: Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Fine
Telecopier No.: 000-000-0000
or to such other address as the party to whom notice is given may have
previously furnished to the others in writing as provided herein. Any
notice involving non-performance, termination, or renewal shall be sent
by hand delivery, recognized overnight courier or, within the United
States, may also be sent via certified mail, return receipt requested.
All other notices may also be sent by fax, confirmed by first class mail.
All notices shall be deemed to have been given and received on the
earlier of actual delivery or three (3) days from the date of postmark.
13.5. NONASSIGNABILITY.
(a) Except as specifically permitted under Article 8 above, CSI may not,
directly or indirectly assign, transfer or delegate its duties under
this Agreement, in whole or in part, whether by operation of law or
otherwise (an "Assignment"), without the prior written consent of
----------
Aprisma, and any attempted Assignment without such prior written
consent shall be voidable at the sole option of Aprisma.
(b) Aprisma may not effect an Assignment without the prior written
Consent of CSI, and any attempted Assignment without such prior
written consent shall be voidable at the sole option of CSI.
(c) Notwithstanding the foregoing, CSI (or its permitted successive
assignees or transferees hereunder) may assign or transfer this
Agreement as a whole without consent to an entity that succeeds to
all or substantially all of its business or assets.
(d) Without limiting the foregoing, this Agreement will be binding upon
and inure to the benefit of the parties and their permitted
successors and assigns.
13.6. SEVERABILITY. If any term or other provision of this Agreement is
determined by a court, administrative agency or arbitrator to be invalid,
illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated is not affected in any
manner materially adverse to any party. Upon such
8
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the fullest extent
possible.
13.7. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any agreement herein, nor shall any single
or partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
13.8. AMENDMENT. Subject to Section 10 of the Transformation Agreement, no
change or amendment will be made to this Agreement except by an
instrument in writing signed on behalf of each of the parties to the
Agreement.
9
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in duplicate originals by its duly authorized representatives.
CABLETRON SYSTEMS, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Title: President, Chairman & CEO
APRISMA MANAGEMENT
TECHNOLOGIES, INC.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------------
Title: President
10
SERVICE SCHEDULE (This Schedule may be amended from time to time by the parties
hereto for the addition of Additional Services)
All Services start on the Effective Date of the Services Agreement, to which
this Service Schedule is attached, and end two (2) years after the Effective
date, unless otherwise indicated below. Basic Services shall not be terminable
by Aprisma before Aprisma ceases to be a majority owned subsidiary of CSI.
------------------------------------------------------------------------------------------------------------------------------------
Fixed Cost
----------
Service Basic Start End Per Cost Per Quarter (if fixed) or
------- ----- ----- --- --- ------------------------------
Category Service Description Service? Date Date Quarter? Cost Methodology for Charges
-------- ------------------- -------- ---- ---- -------- ----------------------------
------------------------------------------------------------------------------------------------------------------------------------
1. HUMAN Insurance Coverage and Participation in HR X See Annex A
------------------------------------------ -------
RESOURCES Plans and Programs
------------------
. Liability, property, casualty, and other normal
business insurance coverage.
. Participation by Company employees in product,
worker safety and environmental programs.
Participation by Company employees in the
following employee benefit plans maintained by
CSI: (i) medical insurance; (ii) dental
insurance; (iii) short and long-term disability
insurance; (iv) life insurance; (v) flexible
spending; and (vi) 401(k) plan (the "Plans").
-----
--------------------------------------------------------------------------------------------------------------------
Employee Relations X 29,363
------------------
. Consultation on human resource issues, including
but not limited to compensation, performance
reviews, employee development and training.
--------------------------------------------------------------------------------------------------------------------
11
------------------------------------------------------------------------------------------------------------------------------------
Compensation and Benefits Administration X X 59,128
----------------------------------------
. Arranging for insurance coverage and other HR
programs.
. Administrative services, including without
limitation filing of all governmental reports,
with respect to Company employee participation
in the Plans, filing of all required reports
under ERISA for Plans sponsored by CSI.
. Assistance to Company in initial procurement of
separate health and welfare plans provision of
training and support as requested to facilitate
successful implementation.
---------------------------------------------------------------------------------------------------------------------
Recruitment X 34,454
-----------
---------------------------------------------------------------------------------------------------------------------
Payroll Administration X 20,821
----------------------
------------------------------------------------------------------------------------------------------------------------------------
2. CORPORATE X 82,698
AFFAIRS. Legal. In regard to all legal matters, CSI may
-----
consult and retain outside lawyers to assist CSI
as determined in its sole judgment.
. Employment. Labor, human resources.
. Corporate. General corporate governance,
government affairs, bankruptcy, securities,
supervision of outside counsel.
. Litigation. Contract disputes, commercial
litigation, bankruptcy collections, etc.
. Contract Negotiation.
. Trademarks and Patents.
---------------------------------------------------------------------------------------------------------------------
12
------------------------------------------------------------------------------------------------------------------------------------
Internal Communications X 5,160
-----------------------
------------------------------------------------------------------------------------------------------------------------------------
3. FINANCE. Transaction Processing X X 80,441
----------------------
. Invoicing, collections, accounts payable.
. Maintenance of service contracts.
. Support international organization, legal
structure, foreign currencies, statutory
requirements and reimbursement.
. Create and support centralized procurement and
payables in a manner consistent with corporate
services.
. Provide general accounting support, including
invoicing for intercompany transactions.
. Support business requirements for internal cost
distributions and allocations as required.
. Travel administration.
---------------------------------------------------------------------------------------------------------------------
Tax-Related Services X X 48,264
--------------------
. Preparation of Federal tax returns, preparation
of state and local tax returns (including income
tax returns), filing of state sales and other
state tax returns.
. Preparation of financial statement disclosures
and calculation of tax provisions for financial
statement purposes.
. Tax research and planning and the conduct of
Federal, state and local tax audits.
---------------------------------------------------------------------------------------------------------------------
13
------------------------------------------------------------------------------------------------------------------------------------
Financial Reporting X X 80,441
-------------------
. Support and maintain SAP general ledger and
related master data for both finance and HR
data.
. Provide both legal and management structures.
. Information services support, including account
maintenance and reporting support, access to
on-line intranet reporting tools.
. Preparation of Securities and Exchange
Commission filings for CSI, including without
limitation registration statements, Forms 10-K,
10-Q and 8-K, assistance in the preparation of
Proxies and Proxy Statements and the
solicitation of Proxies, and assistance in the
preparation of the Annual and Quarterly Reports
to Stockholders.
. Preparation of financial statements.
----------------------------------------------------------------------------------------------------------------------
Treasury Services X X 52,286
-----------------
. Management of Intercompany Accounts.
. Assistance in establishing a comprehensive bank
account structure and accompanying services.
. Risk management.
. Stock plan administration.
. Investor relations.
----------------------------------------------------------------------------------------------------------------------
14
------------------------------------------------------------------------------------------------------------------------------------
4. INFORMATION . Management planning and support. X 167,393
------------------------------------------------------------------------------------------------------------------
TECHNOLOGY
. Enterprise applications and operations. X 337,947
------------------------------------------------------------------------------------------------------------------
. Network. X 39,367
------------------------------------------------------------------------------------------------------------------
. Telecom. X 105,883
------------------------------------------------------------------------------------------------------------------
. E-Business. X 89,537
------------------------------------------------------------------------------------------------------------------
. File servers. X 147,925
------------------------------------------------------------------------------------------------------------------
. NT servers/ Desktop. X 86,703
------------------------------------------------------------------------------------------------------------------
5. REAL ESTATE Occupancy Costs See Annex A
--------------- -------
AND
FACILITIES . The right to occupy certain office space, the
SERVICES. right to use the common areas in the facilities in
which such office space is located, including
without limitation, circulation corridors,
stairwells, lobbies and restrooms and external
common areas, sidewalks, and parking areas and
cafeteria facilities.
------------------------------------------------------------------------------------------------------------------
15
------------------------------------------------------------------------------------------------------------------
Building Services X 70,431
-----------------
. Reception.
. Space planning.
. Security.
. Maintenance group (building and grounds
maintenance, janitorial services).
. Cafeteria services
. Mail / Copy Center
------------------------------------------------------------------------------------------------------------------------------------
16
Annex A
-------
Human Resources: Insurance Coverage and Participation in HR Plans and Programs
--------------- -------------------------------------------------------------
The charges for insurance coverage and participation by the Company employees in
product, worker safety and environmental programs and in benefit plans
maintained by CSI shall be calculated on a quarterly basis as follows:
The charges for any insurance coverage, or participation in benefit plans and
programs shall be equal to (i) the costs incurred by CSI for such coverage,
plans and programs (excluding costs related to benefits administration),
multiplied by (ii) a fraction that is equal to (A) the salaries, in the
-------------
aggregate, of all participating employees of the Company divided by (B) the
----------
salaries, in the aggregate, of all participating employees of CSI and its
affiliates (including the Company), each as of the beginning of the relevant
quarterly period, provided, however, that CSI shall have the right to allocate
-------- -------
certain costs directly to individual employees of the Company where CSI, in its
sole discretion, deems it appropriate.
Real Estate and Facilities Services: Occupancy Costs
----------------------------------------------------
The charges relating to facilities that are either owned or leased by CSI and
occupied in whole or in part by the Company shall be calculated on a quarterly
basis as follows:
For any facility owned by CSI, the charges shall be equal to (i) any costs
associated with such facility, determined in accordance with GAAP, including
without limitation building financing payments, depreciation charges, and
utility charges, but excluding costs relating to "building services," as set
forth separately in Schedule I to the Services Agreement, multiplied by (ii) the
---------- -------------
percentage of such facility that is occupied by the Company, as reasonably
determined by CSI in its sole discretion.
For any facility rented by CSI, the charges shall be equal to (i) (A) the rent
paid by CSI for such facility plus (B) the cost of utilities for such facility
----
multiplied by (ii) the percentage of such facility that is occupied by the
-------------
Company, as reasonably determined by CSI in its sole discretion.
17