EXHIBIT 2.1
SERVICES AGREEMENT
Services Agreement made this 28th day of May, 2004 (the "SA") by and
between ePlus Technology, Inc., a Virginia corporation, with a principal place
of business at 000 Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("Buyer") and
Manchester Technologies, Inc., a New York corporation, with a principal place of
business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Seller").
WHEREAS, Buyer and Seller have as of the date hereof entered into an Asset
Purchase and Sale Agreement (the "Agreement") pursuant to which Buyer has
purchased certain identified assets of Seller effective as of the date hereof;
WHEREAS, Buyer and Seller understand and acknowledge that in order to
effect the Agreement, the parties will be required to work together for some
period of time, not to exceed ninety days unless extended in writing by Buyer
for additional 30 day periods as provided herein, to allow the Business, as such
term is defined in the Agreement, of the Seller to be transferred from the
Seller to the Buyer;
WHEREAS, therefore, the parties represent that they will use all
reasonable business means to work together to effectuate the transfer of the
Business by the Seller to the Buyer in an efficient and effective fashion;
WHEREAS, the parties intend that this SA shall set forth the terms and
conditions under which the parties shall work together during and after this
transitional period.
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Appointment.
1.1 Subject to the terms of this SA, Buyer appoints Seller to
provide or procure the provision of the services described in Exhibit A
and in Exhibit C (the Seller's "Services"), attached hereto and
incorporated herein and Buyer agrees to perform services on behalf of
Seller as described in Exhibit D (the "Buyer's Services") attached hereto.
1.2 For so long as either party is obliged to perform the Services under
this SA, such party shall be responsible for ensuring that the Services are
properly provided. The service levels provided by either party shall be no less
than the service levels provided by Seller for its own business immediately
prior to closing. Accordingly Buyer's obligations for "Service Charges" to
Seller shall include reimbursement for all costs and expenses incurred by Seller
to maintain the capacity to provide the services regardless of whether or not
such services are in fact requested so long as Seller has advised Buyer in
writing of (a) Seller's intent not to incur such cost or expense absent the
requirements to maintain service levels hereunder, (b) a description of the
service capacity for which the cost and expense would be incurred, (c) the
amount of the cost or
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expense to be incurred, hereinafter the "Seller's Excusal Request"; and (d) the
Buyer shall have directed Seller to maintain the service capacity. In the event
Buyer shall have failed to respond to Seller's Excusal Request within two (2)
business days or in the event Buyer notifies Seller that Buyer does not require
Seller to maintain the Service capacity, Seller shall thereafter be excused from
providing the services and Buyer shall not be responsible for payments for the
cost of such capacity. Seller shall also be excused from providing any services
required hereunder to the extent Seller's ability to provide such services is
dependent on retaining personnel who terminate their employment with Seller. The
Seller's Excusal Request shall be directed to Xxxxxx Xxxxxx by facsimile notice
to Buyer at 000-000-0000. Annexed hereto as Exhibit "F" and annexed to the Asset
Purchase Agreement as Schedule 3.21(c.2) is a non-exclusive list of individuals
currently employed by Seller in Seller's facilities who would not be retained by
Seller, but for the Seller's obligations to Buyer hereunder and other expenses
that Seller will incur to maintain the requisite capacity to provide Buyer with
services hereunder. Without diminution of the Services Charges identified on
Exhibit A.1, Buyer agrees to pay the "Service Charges" for the transitional
employees identified on Exhibit F, and for the employees identified on Schedule
3.21(c.2) which shall include full reimbursement to Seller for the costs of each
of the itemized expenses from and after the Closing as if the Seller had
provided Buyer with a Seller's Excusal Request regarding such costs, and as if
Buyer had directed Seller to maintain the Service capacity referenced
thereunder.
1.3 The parties agree that they shall cooperate fully with each
other as regards the supply and performance of the Services.
2. Service Charges. Invoicing and Payment.
2.1 In consideration of the provision of the Services, Buyer shall
pay the service charges set forth in Exhibit A (the "Service Charges") to
Seller, provided that payroll charges for personnel listed on Exhibit F
and Schedule 3.21(c.2) shall be limited to Seller's actual costs. Seller
shall pay the service charge set forth in Exhibit D to Buyer provided such
charges shall in no event exceed the actual cost to Buyer of providing the
Services.
2.2 The Service Charges shall be invoiced weekly in arrears
beginning on June 7, 2004. Each party shall pay the Service Charges
promptly upon receipt of the other party's invoice and not later than 2
business days. Whenever the accrued Service Charge exceeds $50,000.00
payment shall be made by wire transfer sent not later than the close of
business on the business day next succeeding the date of invoicing.
3. Supervision.
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3.1 Seller and Buyer shall each nominate at least one (but not more
than two) individuals with responsibility and requisite expertise of the
relevant Services to monitor the delivery and performance of the Services.
3.2 The individuals appointed under Section 3.1 shall act as the
primary points of contact between the parties and all communications in
relation to the relevant Services shall be made through them.
3.3 At the Buyer's request prior to the effective dates of
applicable subleases and/or assignments, the Seller shall make available
reasonable office space and associated services for any of Buyer's
personnel who are visiting or are a resident at Seller's Hauppauge, New
York City, Boca Raton, Baltimore, Maryland and Pittsford, New York
locations during the period this SA is in effect and the terms of use of
such facilities shall be in accordance with Exhibit B hereof. Subsequent
to effective dates of applicable subleases and/or assignments, the Buyer
shall make available reasonable office space and associated services for
any of Seller's personnel who are visiting or are a resident at Buyer's
Hauppauge, New York City, Boca Raton, Baltimore, Maryland and Pittsford,
New York locations during the period this SA is in effect and the terms of
use of such facilities shall be in accordance with Exhibit B hereof.
3.4 At any time each of Seller's representative and Buyer's
representative may request a meeting to monitor and review the
arrangements relating to the Services and associated operational issues.
4. Information.
4.1 Each party shall make available to the other party for the term
of this SA such information and facilities as it owns or controls as may
reasonably be required by Buyer to receive the Services.
5. Term and Termination.
5.1 As to the Seller's services to be rendered, this SA shall terminate
ninety (90) days from the date hereof, subject to the 30 day extension periods
by the Buyer, in its sole discretion, by written notice. Each extension shall be
for 30 days or as otherwise agreed and the total number of extensions shall not
exceed four unless by mutual written consent. Buyer shall deliver such extension
notice to Seller not less than twenty (20) days prior to the end of the initial
90 day term and each 30 day renewal term. This SA can be renewed in whole or in
part in Buyer's sole discretion during the term or any renewal term of this SA;
the obligation of Seller to provide services for the services renewed shall not
be diminished (for example, Buyer may move out of one leased space but renew the
other). As to the Buyer's services, this Agreement shall be for a term of one
year ending May 31, 2005.
5.2 This SA may be terminated by either party if the other party
commits a material breach of its obligations hereunder which, in the case
of a breach capable of
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being remedied, is not remedied within fifteen (15) days of receipt of a
written request to cure. The breaching party shall indemnify and hold the
non breaching party harmless from and against the failure to perform the
services required to be performed hereunder by such party and the non
breaching party shall be excused from providing services from and after
termination.
5.3 On termination of this SA either in whole or in part:
5.3.1 Buyer and Seller shall, within fourteen (14) days (or
any shorter period which the parties may agree) from and including
the relevant date of termination of this SA return all property
belonging to the other which has come into their respective
possession or under their control as a result of the entering into,
or the performance of, the relevant Service under this SA; and
5.3.2 all outstanding Service Charges shall remain due and
payable by Buyer to Seller in accordance with the terms of this SA.
5.4 Sections 2, 5, 6.5, 7 through 11 shall survive termination or
expiration of this SA.
6. Power of Attorney; Trust
6.1 Mail addressed to Seller shall be opened in the presence of a
representative of Seller and Buyer. Buyer and Seller will immediately
reconcile all payments received with their records and the Agreement to
determine which party is entitled to the funds. If any check reflects
funds in part due to both parties, Seller shall deposit the check and
proceed under ss.6.2 hereof after the parties have completed the
reconciliation process; and
6.2 Trust. Seller agrees to act as Trustee for Buyer and keep in
Trust monies received by it which are due to Buyer. Seller agrees to
forward such monies by check, or if greater than $25,000 by wire transfer,
to an account designated by Buyer within two business days of the
availability of the funds. Buyer agrees to act as Trustee for Seller and
keep in Trust monies received by it which are due to Seller. Buyer agrees
to forward such monies by check, or if greater than $25,000 by wire
transfer, to an account designated by Seller within two business days of
the availability of funds.
6.3 In addition to the obligations set forth in Section 8.6 of the
Purchase Agreement, Seller and Buyer undertake to keep confidential the
Confidential Information (as defined in Section 6.4) both during and after
the termination of this SA except where (and to the extent only that): the
Confidential Information was already lawfully known, or became lawfully
known independently of the performance of the Services; the Confidential
Information is in, or comes into, the public domain other than due to
wrongful use or disclosure by Buyer or Seller; or the disclosure is
required by law or regulation.
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6.4 Confidential Information means all information (whether written
or oral) concerning the business and affairs of the Buyer or Seller which
is obtained or received as a result of the discussions leading up to, the
entering into or the performance of this SA.
6.5 Buyer and Seller shall notify the other immediately if either
becomes aware of a breach of this Section by any person to whom
Confidential Information has been divulged and shall give the other party
all reasonable assistance in connection with any proceedings against such
person.
7. Trade names.
The Seller hereby grants the Buyer, a royalty fully pre-paid,
non-transferable and non-exclusive right and license to use, without right of
sub-license, in the United State, the trade name "Manchester Technologies" and
"Coastal Business Systems" to conduct and operate the Business after the Closing
as conducted as of the Closing. Such right and license shall have a term of
twelve (12) months, and shall be restricted to use of such trade name on
invoices and correspondence with customers who were customers of Seller on or
prior to the Closing Date. Without the prior written consent of the Seller, the
Buyer may not (i) change or modify the Names or create any design variation of
the Names, (ii) join any word, symbol, name, xxxx or logo with the Names so as
to form a composite trade name or xxxx, or (iii) use any other trademark or
trade name that is confusingly similar to the Names, and (iv) may not execute
any agreement that creates a liability to the Seller. The Buyer shall use the
Names in accordance with such quality standards as may be established by the
Seller and communicated to the Buyer from time to time, it being understood that
the quality standards maintained by the Seller prior to the Closing shall be
acceptable to the Seller. In the event the Seller notifies the Buyer of the
failure by the Buyer to maintain appropriate quality standards with respect to
its uses of the Names, the Buyer shall use diligent efforts to cure the cause of
such failure or, if unable to cure it, discontinue such used of the Names within
fifteen (15) days of such notice. Upon expiration or termination of such right,
Buyer shall cease all use of the Names and destroy all copies of stationery,
signage, invoices, receipts, forms, packaging, advertising and promotional
materials, and products bearing the Names in their possession or under their
control. Terms not defined in this Section 7 shall have the meaning ascribed to
them in the Agreement.
8. Miscellaneous.
8.1 No waiver, amendment or termination shall be effective unless in
writing signed by the party to be charged. No waiver in one instance shall
constitute a waiver in any other. All notices shall be in writing and
delivered in hand or sent by registered or
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certified mail, return receipt requested, or by overnight Federal Express
at the addresses set forth above to the attention of the persons signing
this SA below.
8.2 This SA shall be governed under the laws of the State of New
York without regard to application of conflict of laws principles and
exclusively enforceable in the State and/or Federal Courts of Virginia and
New York.
8.3 This SA constitutes the entire agreement of the parties with
respect to its subject matter and supersedes all prior oral and written
communications, proposals and agreements in such regard. This SA may be
executed simultaneously in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and
the same instrument.
8.4 Headings are for convenience and are not admissible as to
construction.
8.5 This SA shall bind upon and inure to the benefit of the parties
and their respective successors, assigns, heirs and legal representatives;
provided no party may assign this SA or delegate any obligations hereunder
without the prior written consent of the other party except that Buyer may
assign its rights and obligations to any affiliated entity established by
Buyer in order to effect the within transactions.
IN WITNESS WHEREOF, the parties by their duly authorized representatives
have executed this SA as of the date set forth above.
MANCHESTER TECHNOLOGIES, INC.
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
ePlus Technology, Inc.
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
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Exhibit A to Services Agreement
Description of Services and Charges
A. Transition Team
1. Seller shall provide a transition team to assist with each of the items
identified below.
2. The transition team shall provide the services identified herein for the
term of the SA.
3. The transition team shall provide assistance to Buyer in detailing and
implementing a transition plan mutually agreed by the parties.
B. Customer Notification
1. Seller shall assist Buyer in outlining a customer communication campaign
and plan.
2. Seller shall assist Buyer in preparing documentation to support customer
communication.
3. Seller's executive officers shall assist Buyer in the customer
notification process. Such notification shall include face to face
meetings with customers provided such meetings are scheduled on reasonable
notice and such officer is available.
C. Personnel Transition
1. Seller shall provide Buyer with necessary HR documentation as mutually
agreed by the parties.
2. Seller shall transition its payroll data to Buyer.
D. Customer Transition
1. Seller shall provide all customer records including contracts and rebate
information maintained by the Seller to Buyer.
2. Seller shall use commercially reasonable efforts to assist Buyer in
furnishing all relevant documentation to Buyer that is relevant to
customer transition.
E. Purchasing/Product Management Services
1. Seller shall assist in the transition of sales out reporting
requirements/vendor funding and administration through a mutually
agreeable date.
2. Seller shall assist in transferring any customer consignment inventory to
Buyer's facility or Buyer's distributors facility as of a mutually
agreeable date.
3. Seller shall assist in the transition of customer rebate contracts. Seller
shall use commercially reasonable efforts to add Buyer to such rebate
contracts.
4. Seller shall assist in transitioning any existing agent-type contract with
manufacturers whereby Seller is earning a commission on transactions to
Seller's customers.
F. Receivables/Collections
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1. Seller shall identify and report all pre-acquisition receivables to be
held by Seller (customer, vendor, rebates, accrued MDF, etc.).
2. Seller shall perform collections and retain records for orders shipped
prior to a mutually agreed date.
3. Seller shall invoice, collect and retain funds for its own account for any
professional services completed prior to closing.
4. Seller shall cooperate with Buyer in any collection activity against
customers purchased by Buyer.
5. In the event Seller wishes to institute collection or legal proceedings
against any customer who either is or may be a customer of Buyer as a
result of the Agreement, Seller shall first notify Buyer and provide Buyer
with an opportunity to resolve Seller's complaint. Seller has the right to
institute collection or legal proceedings two weeks after such notice.
G. Equipment and Facilities
1. Seller shall provide an updated inventory list to reflect changes of
inventory from and after the inventory reflected on Schedule 1.6 of the
Purchase Agreement to the actual effective date of the Closing.
2. Seller shall use reasonable commercial efforts to assign leasing contracts
on equipment in sales branches that Buyer consents to assume.
3. Seller shall provide, at no cost to Buyer, the following facilities at 00
Xxxxxx Xxxx. for 90 days after closing:
a. segregated, secured warehouse facilities
b. configuration/technical room
H. Charges
Seller shall charge Buyer for items set forth on Exhibit A.1.
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Exhibit A.1
Buyer will reimburse Seller for all (100%) of the costs of transition team
employees identified on Exhibit F and for any cost equal to a pro-rata
portion of the Seller's other personnel for time and materials for all
transition services required herein, including systems development,
provided by Seller staff, at base salary plus payroll expenses, social
security/disability, xxxxxxx'x compensation, state disability and
unemployment insurance plus 10%. This charge shall include all employee
benefits, office supplies, etc. and the prorated costs of all such other
employees providing services to Buyer hereunder. See Exhibit F as to
transition employees. The Seller shall submit anticipated charges for
pre-approval by Buyer if such charges exceed $500 per charge or $2,500 per
month in the aggregate.
Buyer will reimburse Seller for expenses approved by Buyer that Seller
incurs on behalf of Buyer, including but not limited to, the following
items by office location:
Boca
Salaries of applicable employees identified on Schedule 3.21(c) including
commissions of employees, fringe Benefits - including but not limited to,
payroll taxes, employee benefits, SUTA, FUTA, Xxxxxxx'x Comp., etc.
Telephone and data communications- include, but not limited to, equipment cost,
line costs, cell phones, blackberrys, etc.
Rent, including any and all charges that would be incurred by Buyer as the
Tenant by assignment pursuant to the Lease assigned subject to Landlords
consent, as if the Landlord had consented to the assignment, but not
limited to real estate taxes, HVAC maintenance, etc.
Utilities
Office Expenses - including, but not limited to, postage, cleaning service,
alarm, water, misc. supplies and security
Conference and Meetings - including food SeminarsError! Bookmark not defined.
Advertising and Promotional items
Auto Expenses - including, but not limited to, car allowances
Salesmen Expenses
Travel and Entertainment
Consulting and Professional Fees
Insurance Costs - including, but not limited to, workmens comp, umbrella,
auto, etc.
Repairs and maintenance.
160 Xxxx and 50 Marcus
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Salaries of transition employees identified on Schedule F hereto, and their
applicable fringe Benefits - including but not limited to, payroll taxes,
SUTA, FUTA, Workmans Comp, etc.
Salesmen expenses - including, but not limited to, auto expenses, car
allowances, etc.
Conferences, conventions, shows, and meetings
Employee Benefits - including, but not limited to, medical expenses, etc.
Telephone & data communications - including, but not limited to, equipment cost,
line costs, cell phones, blackberrys, etc.
Rent which shall include all charges due from Seller to Landlord pursuant to the
lease for 00 Xxxxxx Xxxxxx provided such obligation shall be prorated
according to the time and percentage of the premises used to provide
services to Buyer, and as to Xxxx Avenue, such expenses without
duplication shall be inclusive of all charges due under the sublease for
said premises at 000 Xxxx Xxxxxx.
Utilities - including, but not limited to, water, electric, backup generator,
etc.
Consulting fees - including but not limited to, IT consultants, etc.
Contract Work - including but not limited to, IT consultants, computer repairs
and maintenance, etc.
Building Repairs and maintenance
Advertising
Legal
Travel and Entertainment
Seminars
Office Expenses - including, but not limited to supplies, coffee, water, paper,
small equipment, landscaping, snow removal, etc.
Insurance Costs - including, but not limited to, workmens comp, umbrella,
auto, etc.
Postage
Sundry taxes - including but not limited to, Real Estate taxes, New York City,
Occupancy Tax, Use Tax, etc.
Miscellaneous Expenses - including but not limited to, dues and subscriptions,
bids, employee parties, security, alarm, etc.
Warehouse Expenses - including but not limited to, bubble wrap, pallets, boxes,
etc.
Sales Commissions - including but not limited to, sales commissions, licenses
and fees, etc.
Repairs and Maintenance
Notwithstanding anything to the contrary, Seller shall be responsible for all
costs associated with:
a) maintaining and securing its inventory, shipping, configuration, and
all other services related to its ownership of the inventory and
open work orders through June 11, 2004.
b) billing, collecting, and managing its retained accounts receivable.
c) Maintaining the AS400 and related infrastructure, personnel and
software
Seller agrees to provide continuation of benefits for the Buyer's employees
hired on June 1, 2004 on Schedule 3.21(c) from the closing date though
June 30, 2004, and Buyer agrees reimburse Seller.
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Maryland
Salaries, of applicable employees identified on Schedules 3.21(c) 3.21(c.2), and
related ringe Benefits - including but not limited to, payroll taxes,
employee benefits, SUTA, FUTA, Workmans comp, etc.
Telephone & data communications- including, but not limited to, equipment cost,
line costs, cell phones, blackberrys, etc.
Rent - including any and all charges that would be incurred by Buyer as the
Tenant pursuant to the sublease for the premises in Columbia, Maryland
granted to Buyer by Seller subject to the Lessor's consent, as if the
Lessor had consented to the sublease, but not limited to, HVAC
maintenance, etc.
Real Estate Taxes
Utilities
Office Expenses - including, but not limited to, postage, cleaning service,
alarm, water, temps, misc. supplies and security, want ads
Conference and Meeting - including food
Seminars
Advertising and Promotional items
Auto Expenses - including, but not limited to, car allowances
Travel and Entertainment
Consulting and Professional Fees
Dues and Subscriptions
Equipment Rental - including, but not limited to, copier, coffee machine and
postage meter
Building Repairs and Maintenance
Insurance Costs - including, but not limited to, workmens comp., umbrella,
auto, etc.
Repairs and maintenance
New York City
Salaries, of applicable employees identified on Schedules 3.21(c) 3.21(c.2), and
related ringe Benefits - including but not limited to, payroll taxes,
employee benefits, SUTA, FUTA, Workmans comp, etc.
Fringe Benefits - including but not limited to, payroll taxes, employee
benefits, SUTA, FUTA, Workmans Comp, etc.
Telephone & data communications- including, but not limited to, equipment cost,
line costs, cell phones, blackberrys, etc.
Rent - including any and all charges that would be incurred by Buyer as the
Tenant pursuant to the sublease for the premises in New York City, granted
to Buyer by Seller subject to the Lessor's consent, as if the Lessor had
consented to the sublease, but not limited to, HVAC maintenance, etc.
Real Estate Taxes
Utilities
Office Expenses - including, but not limited to, postage, cleaning service,
alarm, water, temps, misc. supplies and security
Conference and Meeting - including food
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Seminars
Advertising and Promotional items
Auto Expenses - including, but not limited to, car allowances
Salesmen Expenses
Travel and Entertainment
Consulting and Professional Fees
Dues and Subscriptions
Equipment Rental - including, but not limited to, copier, coffee machine and
postage meter
Insurance Costs - including, but not limited to, workmens comp, umbrella,
auto, etc.
Repairs and maintenance.
Pittsford
Salaries of applicable employees identified on Schedules 3.21(c) and3.21(c.2),
and related fringe Benefits - including, but not limited to, payroll
taxes, employee benefits, SUTA, FUTA, Workmans comp, etc.
Telephone & data communications- including, but not limited to, equipment cost,
line costs, cell phones, blackberrys, etc.
Rent - including any and all charges that would be incurred by Buyer as the
Tenant by assignment pursuant to the Lease assigned subject to Landlords
consent, as if the Landlord had consented to the assignment, but not
limited to real estate taxes, HVAC maintenance, etc.
Utilities
Office Expenses - including, but not limited to, postage, cleaning service,
alarm, water, temps, misc. supplies and security
Conference and Meeting - including food
Seminars
Advertising and Promotional items
Auto Expenses - including, but not limited to, car allowances
Travel and Entertainment
Consulting and Professional Fees
Dues and Subscriptions
Insurance Costs - Including, but not limited to, workmens comp, umbrella, auto,
etc.
Repairs and maintenance.
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Exhibit B to the Services Agreement
Terms of Use of the Facilities
Buyer shall obtain, at Buyer's expense, and keep in effect during the term
of this SA, (a) commercial general liability insurance (including personal
injury and contractual liability) with a liability limit of no less than
US$5,000,000, and (b) workers' compensation, disability and unemployment
insurance sufficient to meet statutory requirements. Certificates of insurance
evidencing such coverage shall be furnished promptly upon the request of Seller
at any time during the term of the SA. Buyer understands and acknowledges that
Seller shall not be required in any manner to insure Buyer's assets and
employees and Buyer shall obtain any and all such insurance as Buyer reasonably
deems necessary. Seller to be named as an "Additional Insured" in all of the
foregoing policies.
Buyer shall comply promptly with all rules and regulations of Seller as
issued from time to time by Seller.
With respect to the warehouse facility, Seller shall be a gratuitous
bailee for the Buyer and all risk of loss with regard to then goods shall remain
with the Buyer. Seller shall have no liability with respect to the goods, except
for intentional acts. Seller's intentional acts shall not include unauthorized
acts of Seller's employees or agents.
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EXHIBIT C
1. Notwithstanding anything in Exhibit A, Seller will provide services under
this Exhibit C at Buyer's request.
2. Until the date of landlord consent at any of Seller's leased facilities which
are to be assigned or subleased to Buyer under the Ancillary Documents to the
Agreement (which the parties understand currently to be the premises at 000 0xx
Xxxxxx, Xxx Xxxx Xxxx; Boca Raton, Florida; Pittsford, New York; and Columbia,
Maryland) Seller will continue to operate the Business for the benefit of Buyer
so as to allow Buyer to receive all of the bargained for benefits under the
Agreement. During such period, Seller shall continue to employ the employees on
Schedules 3.21(c) until the Buyer otherwise directs.
3. Seller will continue to employ all employees designated by Buyer until such
time as Buyer, using its absolute best efforts, can transfer such employees to
Buyer's Health Insurance plan. The objective of this section is to assure that
no employee who Buyer wishes to hire has a gap in health insurance coverage.
4. Seller shall invoice Buyer for all actual costs incurred in performing
services under this Exhibit C. Buyer shall pay all invoices as set forth in
ss.2.2 of this Services Agreement.
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Exhibit D to Services Agreement
Description of Services and Charges
A. Transition Team
1. Buyer shall provide a transition team to assist with each of the items
identified below.
2. The transition team shall provide the services identified herein for the
term of the SA.
3. The transition team shall provide assistance to Seller in detailing and
implementing a transition plan mutually agreed by the parties.
B. Purchasing/Product Management Services
1. Buyer shall assist in the transition of sales out reporting
requirements/vendor funding and administration through a mutually
agreeable date.
2. Buyer shall assist in the transition of customer rebate contracts.
3. Buyer shall assist in customer surveys as required by manufacturers or
suppliers whereby Seller is earning a commission rebate, on transactions
to Seller's customers.
C. Returns Processing
1. Buyer shall assume all returns liabilities for returns initiated as of a
mutually agreeable date. Seller is responsible for the costs, if any,
associated with all Seller authorized returns for sales made and delivered
on Seller owned purchase orders. Seller shall have the right to refuse the
return authorization. Seller shall give Buyer ten (10) days notice before
refusing a customer request for authorization.
D. Receivables/Collections
1. Buyer shall cooperate with Seller's efforts to collect upon all
pre-acquisition receivables to be held by Seller (customer, vendor,
rebates, accrued MDF, etc.).
E. Equipment and Facilities
1. Buyer will provide Seller with use of all necessary vehicles and
equipment, including the vehicles transferred by Seller to Buyer; a) at no
charge to aid in Seller's relocation; b) at no charge to relocate or ship
Buyer's Inventory, including Inventory transferred by Seller to Buyer; and
c) at Buyer's cost to relocate or ship Seller's Inventory
F. Subcontract
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Buyer agrees to perform for Seller such services as Seller is obliged to
perform for customers under Seller-owned customer purchase orders,
closed or open, excepting therefrom contracts scheduled on Schedule
2.5.2 of which Buyer has assumed performance. Buyer shall charge
Seller for time and materials for all transition services required
herein, including systems development, provided by Seller staff, at
cost equal to a pro-rata portion of the personnel's base salary plus
payroll expenses, social security/disability, xxxxxxx'x
compensation, state disability and unemployment insurance plus 10%.
This charge shall include all employee benefits, office supplies,
etc. Buyer shall charge Seller the prorated or proportionate costs
for Buyer's facilities and equipment in connection with providing
such services.
G. Additional Services
Seller shall pay Buyer $46,891.53 per month for 10 months commencing July 1,
2004, without setoff, counterclaim, or abatement, in return for Buyer fulfilling
Seller's service obligations under contracts with the University of Maryland and
its affiliates including the University of Maryland Health System, MEC Services
contracts, and other service contracts.
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Exhibit E to the Services Agreement Leased Equipment
Leased Equipment
NONE
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