EXHIBIT 10.28
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT, dated as of July 21, 1998, (this
"Agreement"), is made by and between THE ADVISORY BOARD COMPANY, a Maryland
corporation ("ABC") and THE CORPORATE EXECUTIVE BOARD COMPANY (formerly known as
The Corporate Advisory Board Company), a Delaware corporation ("CEB").
WHEREAS, ABC and CEB are parties to a Management Services Agreement, dated
October 31, 1997 (the "Original Agreement");
WHEREAS, ABC and CEB desire to amend and restate the Original Agreement,
among other things, to extend the term of the Original Agreement through October
31, 1998;
WHEREAS, the parties hereto desire to amend, modify and restate the
Original Agreement in accordance with the foregoing; and
WHEREAS, the parties hereto amend and restate the following recitals:
RECITALS
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A. ABC and CEB have entered into a Distribution Agreement dated as of
October 31, 1997 (the "Distribution Agreement"), providing for the contribution
by ABC of the Transferred Business to CEB.
B. Following the Contribution, subject to the conditions set forth in the
Distribution Agreement, all issued and outstanding shares of capital stock of
CEB were distributed to the Sole Stockholder.
C. During the Transition Period, ABC desires to provide, and CEB desires
to receive, certain administrative and other corporate services from ABC, as
hereinafter specifically provided (collectively, the "Administrative Services"
and, individually, a "Administrative Service"), and the parties desire to set
forth herein the basis on which the Administrative Services shall be provided to
CEB.
The parties agree as follows:
1. Definitions. Unless the context otherwise requires, capitalized
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terms not otherwise defined herein shall have the respective meanings given to
them in the Distribution Agreement.
2. Administrative Services. The specific Administrative Services to be
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provided by ABC to CEB are comprised of the services more particularly set forth
in Attachment 1 hereto. Subject to the terms of this Agreement, upon the
written request setting forth additional or amended Administrative Services to
be provided to CEB made by an Executive Vice President of CEB or a person
designated to act on his behalf in an instrument executed by such CEB Executive
Vice President and delivered to ABC, ABC shall provide each of such additional
or amended Administrative Services with respect to the Transferred Business in
the manner and to
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the same general extent as such Administrative Services have been provided by
ABC in connection with the Transferred Business before the Contribution.
3. Term. Except with respect to Section 12, the term of this Agreement
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shall be two (2) years commencing on October 31, 1997 (the "Term"). Services
shall be provided only as specified in Attachment 1 hereto, unless otherwise
agreed to by the parties. In addition, CEB shall have the right to terminate an
Administrative Service or the Administrative Services upon sixty (60) days prior
written notice to ABC. Termination of one or more Administrative Services by CEB
shall not affect the obligation of ABC to furnish all other Administrative
Services for the remainder of the Term.
4. Cost. Unless otherwise expressly agreed in writing by a duly
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authorized officer of ABC and CEB, the Administrative Services shall be provided
to CEB in consideration for payment to ABC of the administrative fees set forth
in Attachment 1.
5. Delegation. ABC may retain the services of such third parties,
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either by oral or written contract, as ABC may, from time to time, deem
necessary or appropriate to facilitate the expeditious discharge of ABC's
responsibilities hereunder.
6. Independence. All employees and representatives of ABC providing
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Administrative Services to CEB will be deemed for purposes of all compensation
and employee benefits to be employees or representatives of ABC and not
employees or representatives of CEB. In performing such Administrative
Services, such employees or representatives will be under the direction, control
and supervision of ABC (and not CEB) and ABC will have the sole right to
exercise all authority with respect to the employment (including termination of
employment), assignment and compensation of such employees and representatives.
ABC shall be solely responsible for the payment of all payroll and withholding
taxes relating to its employees for services provided to CEB during the Term.
7. Impracticability. ABC shall not be required to provide any
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Administrative Service to the extent the performance or the provision of such
Administrative Service becomes impracticable as a result of a cause or causes
outside of the reasonable control of ABC, or to the extent the performance of
such Administrative Service would require ABC to violate applicable laws, rules
or regulations or result in the breach of any license, permit or applicable
contract.
8. Additional Resources. In providing the Administrative Services, ABC
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shall not be obligated to: (i) hire any additional employees, (ii) maintain the
employment of any specific employee, or (iii) purchase, lease or license any
additional equipment or software.
9. Force Majeure. The obligations of ABC under this Agreement are
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subject to conditions of force majeure, including an act of God, strike or
walkout or other labor dispute, act of a public enemy, war, revolution, riot,
fire, storm, flood, earthquake, embargo and any other cause which is not
reasonably within the control of the party affected thereby.
10. Nondisclosure. In the event that, during the Term and in connection
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with a party's performance of its obligations hereunder, either party shall
receive information concerning the other party hereto which the receiving party
knows, or has reason to believe, is confidential or proprietary to the party to
whom such information relates, the party receiving such information
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shall take all reasonable steps to (a) protect and hold such information in
confidence and prevent its disclosure to third parties unless such third parties
are under a duty of confidentiality to the party to which such information
relates; and (b) restrict its use to those purposes consented to in writing by
the party to whom such information relates; provided, however, that the party
receiving such information shall not be required to protect or hold in
confidence any information or data which (i) is or becomes available to the
public without the fault of the receiving party, (ii) is independently developed
by the receiving party, (iii) is disclosed to the receiving party by a third
party known to the receiving party not to be under any duty of confidentiality
to the party to whom such information relates with respect to such information
or (iv) except as may otherwise be required by law. This Section 10 shall not
limit the obligation of the parties under the Distribution Agreement to provide
access to records after the date hereof.
11. Limitation on Liability. ABC's liability to CEB in connection with
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this Agreement and the Administrative Services to be provided by ABC shall be
limited to actual damages arising from ABC's gross negligence or willful
misconduct in the performance of its duties and responsibilities hereunder;
provided, however, that, in no event shall ABC be liable for any incidental or
consequential damages.
12. Indemnity.
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(a) ABC agrees to defend, indemnify and hold CEB and its officers,
directors, employees and agents harmless from and against all liabilities,
losses, claims, damages and expenses of any nature, including reasonable
attorneys' fees, that are reasonably incurred by CEB arising out of the
performance of the Administrative Services hereunder, except where such
liability, loss, claim, damage or expense shall have been caused by CEB's gross
negligence or willful misconduct in the performance of its duties and
responsibilities hereunder.
(b) CEB agrees to defend, indemnify and hold ABC and its officers,
directors, employees and agents harmless from and against all liabilities,
losses, claims, damages and expenses of any nature, including reasonable
attorneys' fees, that are reasonably incurred by ABC arising out of the
performance of the Administrative Services hereunder, except where such
liability, loss, claim, damage or expense shall have been caused by ABC's gross
negligence or willful misconduct in the performance of its duties and
responsibilities hereunder.
13. Mutual Cooperation. ABC and CEB will provide each other with
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information and assistance reasonably necessary to investigate, defend or
prosecute any claims, suits, charges, including but not limited to equal
employment opportunity, workers compensation, insurance and similar claims
brought by or against ABC or CEB relating to either of their businesses. This
provision shall survive termination of this Agreement.
14. Third Party Rights. Nothing in this Agreement, express or implied, is
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intended to confer upon any person (including, without limitation, employees),
other than the parties hereto and their respective successors and assigns, any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
15. Relationship of Parties. Nothing in this Agreement shall be deemed or
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construed by the parties or any third party as creating the relationship of
principal and agent, partnership or
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joint venture between the parties, it being understood and agreed that no
provision contained herein, and no act of the parties, shall be deemed to create
any relationship between the parties other than the relationship of independent
contractor nor be deemed to vest any rights, interest or claims in any third
parties.
16. Successor and Assigns. This Agreement shall inure to the benefit of
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and be binding upon the respective successors and assigns of the parties hereto,
provided that this Agreement may not be assigned by either of the parties hereto
without the prior written consent of the other.
17. Notices. All notices and other communications required or permitted
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to be given under this Agreement shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed, postage prepaid or by certified
or registered mail, and addressed to the applicable party at the respective
addresses set forth in the Distribution Agreement (or at such other address for
a party as shall be specified by a like notice).
18. Governing Law. The validity, enforceability and performance of this
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Agreement shall be governed by and construed in accordance with the laws of the
State of Maryland (excluding its choice of law rules).
19. Entire Agreement. The parties intend that the terms of this
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Agreement, including the attached schedules, shall be the final expression of
their agreement with respect to the subject matter hereof and may not be
contradicted by evidence of any prior or contemporaneous agreement. The parties
further intend that this Agreement shall constitute the complete and exclusive
statement of its terms and that no extrinsic evidence whatsoever may be
introduced in any judicial, administrative or other legal proceedings involving
this Agreement.
20. Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
21. Headings. The headings used in this Agreement are inserted for
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convenience of reference only and shall not affect the meaning or interpretation
of any provision of this Agreement.
22. Amendments and Waivers. This Agreement may not be amended except
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upon the written consent of all of the parties. By an instrument in writing, any
party may waive compliance by any other party with any term or provision of this
Agreement that such other party was or is obligated to comply with or perform,
provided, however, that such waiver shall not operate as a waiver of, or
estoppel with respect to, any other or subsequent failure. No failure to
exercise and no delay in exercising any right, remedy, or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, or power hereunder preclude any other or further exercise thereof
or the exercise of any other right remedy, or power provided herein or by law or
in equity. The waiver by any party of the time for performance of any act or
condition hereunder does not constitute a waiver of the act or condition itself.
23. Expenses. Whether or not the transactions contemplated in this
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Agreement are consummated, unless specifically provided otherwise in this
Agreement (including all Schedules
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hereto), each party shall bear and pay all expenses
incurred by it or on its behalf in connection with the preparation of this
Agreement and consummation of the transactions described herein.
24. Severability. If any provision of this Agreement, or the application
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thereof to any person, place or circumstance, shall be held by a court of
competent jurisdiction to be void, invalid or unenforceable, the remainder of
this Agreement and such provisions as applied to other persons, places or
circumstances shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
THE ADVISORY BOARD COMPANY,
a Maryland corporation
By:
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Its:
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THE CORPORATE EXECUTIVE BOARD COMPANY,
a Delaware
corporation
By:
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Its:
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ATTACHMENT 1
ADMINISTRATIVE SERVICES AND FEES
Internal Services ASA (revised)
Pricing Fee (annual unless otherwise noted)
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Service
Information Systems
Help Desk $528 per FTE
Network Support $420 per FTE
Operating System Rental $14,500 per month
Web Sites $600 per month maintenance plus direct
development costs
Finance
Accounts Payable 0.3% of invoice totals
T & E Processing 0.64% of amount processed
Accounts Receivable 0.14% of revenue
Payroll $67 per FTE
General Accounting $14,000 per month
Career Management
Syndicated Recruiting $10,800 per hire plus all direct expenses
Custom Recruiting $15,000 per month retainer plus $2,200/hire and
direct signing bonuses
Education $900 per FTE
Human Resources $288 per FTE
Administration
General Services
Order Fulfillment percentage of usage on non-direct costs plus
all direct costs
New Product Development all direct costs
Facilities $624 per FTE (includes mailroom)
IRC $360 per FTE plus all direct costs
Reception $576 per FTE
Telephone Services $180 per FTE
Telephone Network $8,000 per month
Meeting Planner $3,567 fixed charge/meeting plus $1,196 travel
per away mtg. plus $14.48 per attendee plus
XBS (copy services) additional $1,305 for an additional mtg. mgr.
$0.049 per copy
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