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EXHIBIT 10.13
This SHARED SERVICES AGREEMENT (including the Schedules and Exhibits
hereto and the Appendices thereto, this "AGREEMENT") is made and entered into as
of February 10th, 2000, by and among Content Media LLC, a Delaware limited
liability company ("CONTENT"), Training Media Operating LLC, a Delaware limited
liability company ("TRAINING") and WBT Operating LLC, a Delaware limited
liability company ("WBT") (Content, Training and WBT are at times referred to
herein individually as a "PARTY" and collectively as the "PARTIES").
R E C I T A L S
WHEREAS, WP Education Holdings LLC, a Delaware limited liability company
and an Affiliate of Content, Training and WBT ("WP EDUCATION"), is a party to
that certain Purchase Agreement by and between itself and ZD Inc., dated as of
November 19, 1999, as amended by that certain amendment dated February 10, 2000
(the "PURCHASE AGREEMENT"), pursuant to which ZD Inc. has agreed to sell, and WP
Education has agreed to purchase, certain assets (the "ASSETS");
WHEREAS, in accordance with the provisions of the Purchase Agreement, WP
Education has assigned its rights to acquire the Business to Content, Training
and WBT and accordingly, the Assets will be divided among Content, Training and
WBT such that (A) Content shall acquire Assets relating to the creation and
development of content relating to technology-based and print training and
information related to information technology and other professional and
business-related matters, (B) Training will acquire Assets relating to the
publication of printed training materials and information with regard to
information technology and other professional and business-related matters and
live, in-person instructor-led classroom training business and live training
business and (C) WBT will acquire Assets relating to the technology-based
training and information with regard to information technology and other
professional and business-related matters of WBT relating to IT Training;
WHEREAS, prior to the Closing, the Business has been organized and
operated as a division of ZD Inc. with certain centralized administrative and
support services; and
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WHEREAS, the Parties have determined in connection with the Asset
Purchase that it is desirable to enter into this Agreement which sets forth the
terms of the continued provision of the Services by Content to Training and WBT.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
SERVICES PROVIDED
SECTION 1.1 SERVICES. During the term of this Agreement and upon the
terms and subject to the conditions set forth herein, Content will provide to
Training and WBT only those administrative and support services listed in
Appendix A, which is attached to and made part of this Agreement (the
"SERVICES").
SECTION 1.2 ADDITIONAL SERVICES. From time to time, Training or WBT may
desire additional services not specifically addressed in Exhibit A. The
provision of any such additional services by Content, and the amount of
compensation therefor, shall, if material, be approved by the members of
Content and the rates for such compensation shall be the rates which allow
Content to recover the direct cost for such services. For purposes of this
Section 1.2, the term "MATERIAL" shall mean an amount expected to be equal to
or in excess of $100,000 any calendar year.
SECTION 1.3 PERSONNEL; EQUIPMENT; COST. In providing the Services,
Content shall not be obligated to (i) maintain the employment of any specific
employee of Content; or (ii) pay any costs related to the transfer or
conversion of Training's or WBT's data to Content or any alternate supplier of
administrative services. Upon the termination of any of the Services, Training
or WBT, as applicable, shall be obligated to return, as soon as practicable,
any equipment or other property of Content relating to the Services which is
owned or leased by Content and is or was in the possession or control of
Training or WBT.
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SECTION 1.4 LEVEL OF SERVICES.
(a) Content shall perform the Services exercising the same degree
of care as it exercises in performing the same or similar services for its own
account, with priority equal to that provided to its own businesses or those of
any of its Affiliates, Subsidiaries or divisions. Nothing in this Agreement
shall require Content to favor Training's or WBT's business over its own
businesses or those of any of its Affiliates, Subsidiaries or divisions.
Content shall not be required to provide extraordinary levels of Services,
special studies, training, or the like.
(b) In addition to being subject to the terms and conditions of
this Agreement for the provision of the Services, the Parties agree that the
Services provided by third parties shall be subject to the terms and conditions
of any agreements between Content and such third parties entered into in the
ordinary course of business.
SECTION 1.5 LIMITATION OF LIABILITY AND WARRANTY.
(a) In the absence of negligence, gross negligence or reckless or
willful misconduct on Content's part, Content shall not be liable for any
claims, liabilities, damages, losses, costs, expenses (including, but not
limited to, settlements, judgments, court costs and reasonable attorneys'
fees), fines and penalties, arising out of any actual or alleged injury, loss
or damage of any nature whatsoever in providing or failing to provide the
Services. Notwithstanding anything to the contrary contained herein, in the
event Content commits an error with respect to, or incorrectly performs or
fails to perform, any Service, upon request, Content shall use reasonable
efforts to correct such error, re-perform or perform such Service; provided,
that, Content shall have no obligation to recreate any lost or destroyed data
to the extent the same cannot be cured by the re-performance of the Service in
question.
(b) In no event shall Content be liable for any damages caused by
Training's or WBT's failure to perform their responsibilities hereunder.
Content will not be liable for any act or omission of any other entity (other
than due to a default by Content in any agreement between Content and such
other entity) furnishing any Service.
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(c) No Consequential Damages. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN OR AT LAW OR IN EQUITY, IN NO EVENT SHALL CONTENT BE
LIABLE FOR PUNITIVE OR SPECIAL DAMAGES ARISING FROM OR RELATING TO ANY CLAIM
MADE UNDER THIS AGREEMENT OR REGARDING THE PROVISION OF OR THE FAILURE TO
PROVIDE THE SERVICES, EVEN IF CONTENT HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES EXCEPT FOR LIABILITY TO WORKERS OR PROPERTY LOCATED AT THE
PREMISES.
SECTION 1.6 NO OBLIGATION TO CONTINUE TO USE SERVICES. Training and WBT
shall have no obligation to continue to use any of the Services and may delete
any Service from the Services that Content is providing by giving Content at
least thirty (30) days prior written notice of their desire to delete any or
all Services; provided, that the deletion of any Service can only be effective
on the last day of the calendar month in which such thirtieth day falls.
SECTION 1.7 CONTENT ACCESS. To the extent reasonably required for Content
personnel to perform the Services, Training and WBT shall provide Content
personnel with access to their equipment, office space, plants,
telecommunications and computer equipment and systems, and any other areas and
equipment during normal business hours and upon reasonable prior notice, except
in event of emergencies.
ARTICLE II
PAYMENT FOR SERVICES
SECTION 2.1 CONSIDERATION.
(a) In consideration for the Services, each of Training and WBT
shall pay to Content fees calculated in accordance with Appendix A with respect
to the Services set forth therein. To the extent additional services are
provided by Content, the applicable Parties may amend Appendix A to reflect the
fees to be paid in connection therewith, provided that if Appendix A is not so
amended, the fees shall be presumed to be an amount equal to the total cost to
Content of providing such service to both itself and to Training or WBT, as
applicable, multiplied by a
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fraction, the numerator of which is the revenue recognized in the most recent
fiscal quarter by Training or WBT, as the case may be, and the denominator of
which is the aggregate revenue recognized by Content, Training and WBT during
such fiscal quarter.
(b) In addition to the payments described in Section 2.1(a),
Training or WBT, as applicable, shall reimburse to Content an amount equal to
all of the costs, if any, required by any third party incurred by Content to
obtain consents from such third parties to permit Content to provide any
Service hereunder. Such costs and expenditures will be billed by Content in the
invoice(s) described in Paragraph 2.3 below.
SECTION 2.2 TAXES. Any taxes (other than Content's income and gross
receipts taxes) assessed on the provision of the Services after the date of
this Agreement shall be paid by the Party receiving such Services.
SECTION 2.3 INVOICES. At the end of each fiscal quarter, each of Content
and its affiliates or subsidiaries providing Services will submit one invoice
to each of Training and WBT (i) for all Services provided to each of Training
and WBT, and (ii) itemizing those costs and expenditures described in Section
2.1(b) incurred by each of Training and WBT during such fiscal quarter. Such
invoices shall be issued no later than the fifteenth day following the end of
each fiscal quarter. Each invoice shall include a summary list of the
previously agreed upon Services for which there are fixed dollar fees, together
with documentation supporting each of the invoiced amounts that are not covered
by the fixed fee agreements. All invoices shall be sent to each of Training and
WBT at the following address or to such other address as each of Training and
WBT shall have specified by notice in writing to Content:
000 Xxxxx Xxxx Xxxx.
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Controller
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SECTION 2.4 PAYMENT OF INVOICES. Payment shall be received by Content
within thirty (30) days from the date of the invoice. Remittances will be sent
to:
Content Media LLC
000 Xxxxx Xxxx Xxxx.
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Controller
ARTICLE III
CONFIDENTIALITY
SECTION 3.1 OBLIGATION.
(a) Without the prior written consent of the other Party, each
Party shall hold in confidence and not disclose to any third party (i) any
confidential information received by it from the other Party during the
provision of the Services, including, without limitation, information which is
not related to the Services; and (ii) with regard to Training and WBT, the
specific terms, conditions and information contained in this Agreement and any
attachment hereto.
(b) Each Party agrees that it shall only use the information
received by it from the other Party in connection with the provision or receipt
of the Services, and for no other purpose whatsoever.
(c) For the purposes of this Agreement, confidential information
shall not include information:
(i) which is or becomes part of the public domain other than
through breach of this Agreement or through the fault of the
receiving Party;
(ii) which is or becomes available to the receiving Party from a
source other than the disclosing Party, which source has no
obligation of confidentiality to the disclosing Party in
respect thereof;
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(iii) which is required to be disclosed by law or governmental
order; or
(iv) the disclosure of which is mutually agreed to by the Parties.
SECTION 3.2 EFFECTIVENESS. The foregoing obligation of confidentiality
shall be in effect during the term of this Agreement and any extensions thereof
and for a period of ten (10) years after the termination or expiration of this
Agreement.
SECTION 3.3 DUE CARE AND INADVERTENT DISCLOSURE. With respect to any
confidential information, each Party agrees as follows:
(a) it shall use the same degree of care in safeguarding said
information as it uses to safeguard its own information which must be held in
confidence; and
(b) upon the discovery of any inadvertent disclosure or
unauthorized use of said information, or upon obtaining notice of such a
disclosure or use from the other Party, it shall take all necessary actions to
prevent any further inadvertent disclosure or unauthorized use, and, subject to
the provisions of Section 1.6 and Article V, such other Party shall be entitled
to pursue any other remedy which may be available to it.
ARTICLE IV
TERM, TERMINATION AND EFFECTIVENESS
SECTION 4.1 TERM.
(a) The term of this Agreement is for an initial period of ten
(10) years commencing on the date hereof (the "COMMENCEMENT DATE") and ending
on the ten year anniversary of the date hereof; provided, however, that
Training and WBT shall each have the right to terminate this Agreement at any
time on one (1) year's prior written notice to Content; provided, further, that
this Agreement may terminate under Section 4.2, Section 6.7 or Section 6.11
prior to the end of such period.
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(b) Anything herein to the contrary notwithstanding, this
Agreement shall not become effective in accordance with Section 4.1(a) until
the occurrence of the Closing (as defined in the Purchase Agreement). The
occurrence of such Closing is referred to herein as the "EFFECTIVE TIME". It is
expressly acknowledged that this Agreement and all of the agreements contained
herein shall be null and void for all purposes if such Closing shall not occur.
SECTION 4.2 TERMINATION.
(a) If any Party (hereafter called the "DEFAULTING PARTY") shall
fail to perform or default in the performance of any of its obligations under
this Agreement (other than as described in Section 4.2(b)), the other Party
(hereinafter called the "NON-DEFAULTING PARTY") shall give written notice to
the Defaulting Party specifying the nature of such failure or default and
stating that the Non-Defaulting Party intends to terminate this Agreement if
such failure or default is not cured within 90 days of such written notice.
During such 90 day period, the relevant parties shall promptly meet and shall
negotiate in good faith to resolve the nature of the alleged default. If any
failure or default so specified is not cured within such 90 day or other period
agreed to, the Non-Defaulting Party may elect to immediately terminate this
Agreement. Such termination shall be effective upon giving a written notice of
termination from the Non-Defaulting Party to the Defaulting Party and shall be
without prejudice to any other remedy which may be available to the Non-
Defaulting Party against the Defaulting Party.
(b) Content may immediately terminate this Agreement with respect
to Training or WBT, respectively, upon ten (10) days' written notice if
Training or WBT fails to make any payment hereunder within sixty (60) days of
the due date thereof. Any such termination shall not relieve Training or WBT,
as applicable, of its obligation to make such payment; provided, however, that
if the failure to make a payment relates to a dispute made in good faith, the
relevant parties shall have a period of 30 days to attempt to resolve such
dispute.
(c) Either of Content or Training may immediately terminate their
respective rights and obligations to each other under this Agreement by sending
a written notice to the other upon the occurrence of any of the following
events:
(i) the other Party enters into proceedings in bankruptcy or
insolvency;
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(ii) the other Party shall make an assignment for the benefit of
creditors;
(iii) a petition shall be filed against the other Party under a
bankruptcy law, a corporate reorganization law, or any other
law for relief of debtors (or similar law in purpose or
effect); or
(iv) the other Party enters into liquidation or dissolution
proceedings.
(d) Either of Content or WBT may immediately terminate their
respective rights and obligations to each other under this Agreement by sending
a written notice to the other upon the occurrence of any of the following
events:
(i) the other Party enters into proceedings in bankruptcy or
insolvency;
(ii) the other Party shall make an assignment for the benefit of
creditors;
(iii) a petition shall be filed against the other Party under a
bankruptcy law, a corporate reorganization law, or any other
law for relief of debtors (or similar law in purpose or
effect); or
(iv) the other Party enters into liquidation or dissolution
proceedings.
SECTION 4.3 SURVIVAL OF CERTAIN OBLIGATIONS. Without prejudice to the
survival of the other agreements of the Parties, the following obligations
shall survive the termination of this Agreement: (x) for the period set forth
therein, the obligations of each Party under Articles III, IV and V, and (y)
Content's right to receive the compensation for the Services provided, and
reimbursement of the costs and expenditures described in Section 2.1 incurred,
prior to the effective date of termination.
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ARTICLE V
INDEMNITIES
SECTION 5.1 INDEMNITY BY TRAINING. Training shall defend, hold harmless,
and indemnify Content, and its affiliates, officers, directors, shareholders,
employees, contractors, agents, and representatives, from and against any and
all claims, demands, actions, liabilities, damages, losses, fines, penalties
and reasonable costs, and expenses (including reasonable attorneys' fees) of
any kind whatsoever (collectively, "LOSSES") actually or allegedly arising or
resulting from the business of Training.
SECTION 5.2 INDEMNITY BY WBT. WBT shall defend, hold harmless, and
indemnify Content, and its affiliates, officers, directors, shareholders,
employees, contractors, agents, and representatives, from and against any and
all claims, demands, actions, liabilities, damages, losses, fines, penalties,
costs, and expenses (including all attorneys' fees) of any kind whatsoever
(collectively, "LOSSES") actually or allegedly arising or resulting from the
business of WBT.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 AMENDMENTS. This Agreement shall not be amended or modified
except in writing signed by the Parties provided that Appendix A may be amended
or modified by Content and Training or WBT, as applicable.
SECTION 6.2 SUCCESSORS AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns. Content shall not assign its obligations to
Training or WBT under this Agreement or any rights with respect thereto without
the prior written consent of Training or WBT, as applicable, which may not be
withheld unreasonably. Neither Training nor WBT shall assign its obligations to
Content under this Agreement or any rights with respect thereto without the
prior written consent of Content, which may not be withheld unreasonably.
Notwithstanding the foregoing, the parties may collaterally assign their rights
hereunder to their respec-
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tive senior lenders.
SECTION 6.3 MERGER. All understandings, representations, warranties and
agreements, if any, heretofore existing between the Parties regarding the
Services are merged into this Agreement, including the Schedules, Exhibits and
Appendices attached hereto, which fully and completely express the agreement of
the Parties with respect to the subject matter hereof. The Parties have entered
into this Agreement after adequate investigation with neither Party relying
upon any statement or representation not contained in this Agreement, or the
Schedules, Exhibits and Appendices attached hereto.
SECTION 6.4 NOTICES. All notices, consents, requests, approvals, and
other communications provided for or required herein, and all legal process in
regard thereto, must be in writing and shall be deemed validly given, made or
served, (a) when delivered personally or sent by telecopy to the facsimile
number indicated below with a required confirmation copy sent in accordance
with subparagraph (c) below; or (b) on the next business day after delivery to
a nationally-recognized express delivery service with instructions and payment
for overnight delivery; or (c) on the third day after deposited in any
depository regularly maintained by the United States postal service, postage
prepaid, certified or registered mail, return receipt requested, addressed to
the following addresses or to such other address as the Party to be notified
shall have specified to the other Party in accordance with this paragraph:
IF TO CONTENT:
Content Media LLC
000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Controller
IF TO TRAINING:
Training Media Operating LLC
000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Controller
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IF TO WBT:
WBT Operating LLC
000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Controller
SECTION 6.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without
reference to principles of conflicts or choice of laws, or any other law that
would make the laws of any jurisdiction other than the State of Delaware
applicable hereto.
SECTION 6.6 HEADINGS. The various headings used in this Agreement are for
convenience only and are not to be used in interpreting the text of the
Articles or Sections in which they appear or to which they relate. All
references to "Article," "Articles," "Section" and "Sections" refer to the
corresponding Article, Articles, Section and Sections of this Agreement unless
specifically noted otherwise.
SECTION 6.7 SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law. If any portion of this Agreement is declared invalid for
any reason in any jurisdiction, such declaration shall have no effect upon the
remaining portions of this Agreement, which shall continue in full force and
effect as if this Agreement had been executed with the invalid portions thereof
deleted; provided, that the entirety of this Agreement shall continue in full
force and effect in all other jurisdictions. Notwithstanding the foregoing, if
the portion of this Agreement which is declared invalid has the effect of
reducing the compensation due hereunder or preventing the reimbursement of the
costs and expenditures described in Paragraph 2.01(b) above, Content, at its
sole discretion, may terminate this Agreement by providing thirty (30) days
written notice to Training and WBT.
SECTION 6.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
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SECTION 6.9 RIGHTS OF THE PARTIES. Nothing expressed or implied in this
Agreement is intended or will be construed to confer upon or give any person or
entity, other than the Parties and their respective subsidiaries and
affiliates, any rights or remedies under or by reason of this Agreement or any
transaction contemplated thereby.
SECTION 6.10 RESERVATION OF RIGHTS. Either Party's waiver of any of its
remedies afforded hereunder or at law is without prejudice and shall not
operate to waive any other remedies which that Party shall have available to
it, nor shall such waiver operate to waive the Party's rights to any remedies
due to a future breach, whether of a similar or different nature.
SECTION 6.11 FORCE MAJEURE. Any failure or omission by a Party in the
performance of any obligation under this Agreement shall not be deemed a breach
of this Agreement or create any liability, if the same arises from any cause or
causes beyond the control of such Party, including, but not limited to, the
following, which, for purposes of this Agreement shall be regarded as beyond
the control of each of the Parties hereto: acts of God, fire, storm, flood,
earthquake, governmental regulation or direction, acts of the public enemy,
war, rebellion, insurrection riot, invasion, strike or lockout; provided,
however, that such Party shall resume the performance whenever such causes are
removed. Notwithstanding the foregoing, if such Party cannot perform under this
Agreement for a period of sixty (60) days due to such cause or causes, either
Party may terminate this Agreement by providing written notice to the other
Party.
SECTION 6.12 RELATIONSHIP OF THE PARTIES. It is expressly understood and
agreed that in rendering the Services hereunder, Content is acting as an
independent contractor and that this Agreement does not constitute either Party
as an employee, agent or other representative of the other Party for any
purpose whatsoever. No Party has the right or authority to enter into any
contract, warranty, guarantee or other undertaking in the name or for the
account of any other Party, or to assume or create any obligation or liability
of any kind, express or implied, on behalf of any other Party, or to bind any
other Party in any manner whatsoever, or to hold itself out as having any
right, power or authority to create any such obligation or liability on behalf
of the other or to bind any other Party in any manner whatsoever (except as to
any actions taken by any Party at the express written request and direction of
any other Party).
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SECTION 6.13 CONFLICT. In case of conflict between the terms and
conditions of this Agreement and any Appendix, the terms and conditions of such
Appendix shall control and govern as it relates to the Service to which those
terms and conditions apply.
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IN WITNESS WHEREOF, the parties hereto have caused this Shared Services
Agreement to be executed the day and year first above written.
CONTENT MEDIA LLC
By: [SIG]
---------------------------------
Name:
Title:
TRAINING MEDIA OPERATING LLC
By: [SIG]
---------------------------------
Name:
Title:
WBT OPERATING LLC
By: [SIG]
---------------------------------
Name:
Title:
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APPENDIX A
1. Human Resources
- Content will provide payroll processing services and other human
resource services such as advice and assistance with respect to
compensation, employee benefits and regulatory compliance.
- Training and WBT will reimburse Content for the cost of providing such
services pro rata based on the number of full time equivalent
employees of each entity as set forth below:
Cost x [FTE's of Training or WBT/aggregate FTE's of
Content, Training and WBT]
2. Financial and Accounting
- Content will provide financial and accounting services including
journal entry coding and input, maintenance of ledger system,
maintenance of bank accounts, preparation of financial statements,
maintenance of internal accounting and administrative controls.
- Training and WBT will reimburse Content for the cost of providing such
services pro rata based on the amount of revenue recognized by each
entity as set forth below:
Cost x [revenue recognized by Training or WBT/aggregate
revenue recognized by Content, Training and WBT]
3. Systems
- Content will maintain and provide Training and WBT access to a wide-
area network, database management system, telephone system and other
appropriate information systems.
- Content will maintain and sublicense to Training and WBT business
software programs, including word processing and email programs.
- Training and WBT will reimburse Content for the cost of providing such
services pro rata based on the number of full time equivalent
employees of each entity as set forth below:
Cost x [FTE's of Training or WBT/aggregate FTE's of Content,
Training and WBT]
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