TRANSITION SERVICES AGREEMENT DATED [______________], 2005 BETWEEN CLEAR CHANNEL MANAGEMENT SERVICES, L.P. AND CCE SPINCO, INC.
Exhibit 10.1
DATED [______________], 2005
BETWEEN
CLEAR CHANNEL MANAGEMENT SERVICES, L.P.
AND
This TRANSITION SERVICES AGREEMENT, dated to be effective as of [ ], 2005
(this “Agreement”), is made by and between Clear Channel Management Services, L.P., a Texas
limited partnership (“Management Services”), and , Inc., a Delaware
corporation (“Entertainment”). Management Services is indirectly wholly-owned by Clear
Channel Communications, Inc., a Texas corporation (“CCU”), and as of the date hereof,
Entertainment is a wholly-owned subsidiary of CCU. Certain capitalized terms used in this
Agreement are defined in Section 1.1 and the definitions of the other capitalized terms
used in this Agreement are cross-referenced in Section 1.2.
W I T N E S S E T H:
WHEREAS, CCU and Entertainment have entered into a Master Separation and Distribution
Agreement, dated as of [ ], 2005 (the “Master Agreement”), pursuant to
which, among other things, CCU will separate its live entertainment and related businesses and
operations from the other businesses and operations of CCU by contributing, assigning and
transferring such businesses, operations and related assets and liabilities to Entertainment and
its Subsidiaries, as set forth in the Master Agreement;
WHEREAS, after the separation of the live entertainment and related businesses and operations
from CCU by contribution, transfer and assignment to the Entertainment Group, CCU intends to divest
its ownership interest in Entertainment through a distribution of such outstanding shares of
Entertainment common stock to the shareholders of CCU, without any consideration being paid by the
CCU shareholders;
WHEREAS, after such separation and distribution, both Entertainment and CCU desire for
Management Services to provide certain transition administrative and support services to the
Entertainment Group in accordance with the terms and subject to the conditions set forth herein,
and Management Services desires to provide, or cause to be provided by other members of the CCU
Group, such transition services and assistance to the Entertainment Group; and
WHEREAS, because of the parent-subsidiary relationships among CCU, Entertainment and
Management Services, the terms and conditions set forth herein have not resulted from arms length
negotiations between the parties, and accordingly, such terms may be in some respects less
favorable to Entertainment than those it could obtain from unaffiliated third parties;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein
and for other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS
DEFINITIONS
Section 1.1 Certain Defined Terms.
The following capitalized terms used in this Agreement will have the meanings set forth below:
“Information Systems” means computing, telecommunications or other digital operating
or processing systems or environments, including, without limitation, computer programs, data,
databases, computers, computer libraries, communications equipment, networks and systems. When
referenced in connection with Services, Information Systems will mean the Information Systems
accessed and/or used in connection with the Services.
“Intellectual Property” means all of the following, whether protected, created or
arising under the laws of the United States or any other foreign jurisdiction: (i) patents, patent
applications (along with all patents issuing thereon), statutory invention registrations,
divisions, continuations, continuations-in-part, substitute applications of the foregoing and any
extensions, reissues, restorations and reexaminations thereof, and all rights therein provided by
international treaties or conventions; (ii) copyrights, mask work rights, database rights and
design rights, whether or not registered, published or unpublished, and registrations and
applications for registration thereof, and all rights therein whether provided by international
treaties or conventions or otherwise; (iii) trademarks, service marks, trade dress, logos and other
identifiers of source, including all goodwill associated therewith and all common law rights,
registrations and applications for registration thereof, and all rights therein provided by
international treaties or conventions, and all reissues, extensions and renewals of any of the
foregoing; (iv) intellectual property rights arising from or in respect of domain names, domain
name registrations and reservations and URLs; (v) trade secrets; (vi) intellectual property rights
arising from or in respect of Technology; and (vii) all other applications and registrations
related to any of the intellectual property rights set forth in the foregoing clauses (i)
through (vi) above.
“Provider” means Management Services or another member of the CCU Group that is
providing a Service pursuant to this Agreement.
“Recipient” means Entertainment or another member of the Entertainment Group to whom a
Service pursuant to this Agreement is being provided.
“Representative” of a Person means any director, officer, employee, agent, consultant,
accountant, auditor, financing source, attorney, investment banker or other representative of such
Person.
“Service Termination Date” means the effective date of the termination of this
Agreement pursuant to Section 8.1 or such earlier scheduled termination date as may be
specified in Schedules A and B in respect of any specified Service.
“Software” means the object and source code versions of computer programs and any
associated documentation therefor.
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“Tax Matters Agreement” means the Tax Matters Agreement entered into pursuant to the
Master Agreement and in substantially the form of Exhibit B to the Master Agreement.
“Technology” means, collectively, all designs, formulas, algorithms, procedures,
techniques, ideas, know-how, software, programs, models, routines, confidential and proprietary
information, databases, tools, inventions, invention disclosures, creations, improvements, works of
authorship, and all recordings, graphs, drawings, reports, analyses, other writings, and any other
embodiment of the above, in any form, whether or not specifically listed herein.
Section 1.2 Other Terms.
For purposes of this Agreement, the following terms have the meanings set forth in the
sections or agreements indicated.
| Term | Section | |
Affiliate
|
Master Agreement | |
Agreement
|
Preamble | |
Breaching Party
|
Section 8.1(b) | |
CCU
|
Preamble | |
CCU Confidential Information
|
Master Agreement | |
CCU Group
|
Master Agreement | |
CCU Services Manager
|
Section 2.3 | |
Consents
|
Section 4.2 | |
Conversion Costs
|
Section 4.3 | |
Distribution Date
|
Master Agreement | |
Electronic Materials
|
Section 2.2(c) | |
Entertainment
|
Preamble | |
Entertainment Business
|
Master Agreement | |
Entertainment Confidential Information
|
Master Agreement | |
Entertainment Group
|
Master Agreement | |
Entertainment Services Manager
|
Section 2.3 | |
Force Majeure
|
Master Agreement | |
Groups
|
Master Agreement | |
Laws
|
Master Agreement | |
Liabilities
|
Master Agreement | |
Management Services
|
Preamble | |
Master Agreement
|
Recitals | |
Non-Breaching Party
|
Section 8.1(b) | |
Other Costs
|
Section 4.1(a) | |
Person
|
Master Agreement | |
Provider Indemnified Party
|
Section 6.1 | |
Recipient Indemnified Party
|
Section 6.2 | |
Service Charges
|
Section 4.1(a) | |
Services
|
Section 2.1(a) | |
Standard for Services
|
Section 5.1 | |
Substitute Services
|
Section 2.1(a) | |
Taxes
|
Master Agreement |
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ARTICLE II
SERVICES AND TERMS
SERVICES AND TERMS
Section 2.1 Services; Scope.
(a) During the period commencing on the Distribution Date and continuing until the earlier of
the termination of this Agreement or an individual Service pursuant to Section 8.1, subject
to the terms and conditions set forth in this Agreement, Management Services will provide, or will
cause to be provided to the Entertainment Group, finance, information technology, human resources
and legal services and other general services of an administrative and/or advisory nature with
respect to the Entertainment Business, as set forth on Schedules A and B
(collectively, the “Services”), and Entertainment will, and will cause the other members of
the Entertainment Group to, utilize such Services in the conduct of their respective businesses.
The “Services” also will include (1) any Services to be provided by the CCU Group to the
Entertainment Group as agreed pursuant to Section 9.3(a), and (2) any Substitute Service;
provided, however, that (i) the scope of each Service will be substantially the
same as the scope of such service provided by the CCU Group to the Entertainment Group on the last
day prior to the Distribution in the ordinary course; (ii) the use of each Service by the
Entertainment Group will include use by the Entertainment Group’s contractors in substantially the
same manner as used by the contractors of the Entertainment Group prior to the Distribution; and
(iii) nothing in this Agreement will require that any Service be provided other than for use in, or
in connection with the Entertainment Business. Nothing in the preceding sentence or elsewhere in
this Agreement will be deemed to restrict or otherwise limit the volume or quantity of any Service,
provided, that, certain volume or quantity changes with respect to a Service may
require the parties to negotiate in good faith and use their commercially reasonable efforts to
agree upon a price change with respect to such Service. If, for any reason, Management Services is
unable to provide any Service pursuant to the terms of this Agreement, Management Services will
provide to the Entertainment Group a substantially equivalent service (a “Substitute
Service”) at or below the cost for the substituted Service as set forth in Schedules A
and B and otherwise in accordance with the terms of this Agreement, including the Standard
for Services.
(b) The Services will include, and the Service Charges reflect charges for, such maintenance,
support, error correction, training, updates and enhancements normally and customarily provided by
CCU Group members to other CCU Group members that receive such services. If Entertainment requests
that Management Services provide a custom modification in connection with any Service,
Entertainment will be responsible for the cost of such custom modification. The Services will
include all functions, responsibilities, activities and tasks, and the materials, documentation,
resources, rights and licenses to be used, granted or provided by the CCU Group that are not
specifically described in this Agreement as a part of the Services, but are incidental to, and
would normally be considered an inherent part of, or necessary subpart included within, the
Services or are otherwise necessary for the CCU Group to provide, or the Entertainment Group to
receive, the Services.
(c) This Agreement will not assign any rights to Technology or Intellectual Property between
the parties, other than as specifically set forth herein. Any upgrades, updates or other
modifications to Software or other electronic content made available or delivered to the
Entertainment Group pursuant to this Agreement will be deemed to be Intellectual Property of
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the CCU Group and licensed to the Entertainment Group, notwithstanding that such upgrades,
updates or other modifications (i) were not used, held for use or contemplated to be used by the
Entertainment Group as of the Distribution Date, (ii) were not controlled by any member of the CCU
Group as of the Distribution Date, or (iii) may constitute improvements made after the Distribution
Date.
(d) Throughout the term of this Agreement, the Provider and the Recipient of any Service will
cooperate with one another and use their good faith, commercially reasonable efforts to effect the
efficient, timely and seamless provision and receipt of such Service.
(e) Any Software delivered by a Provider hereunder will be delivered, at the election of the
Provider, either (i) with the assistance of the Provider, through electronic transmission or
downloaded by the Recipient from the applicable intranet, or (ii) by installation by the Provider
on the relevant equipment, with retention by the Provider of all tangible media on which such
Software resides. The Provider and the Recipient acknowledge and agree that no tangible medium
containing such Software (including any enhancements, upgrades or updates) will be transferred to
the Recipient at any time for any reason under the terms of this Agreement, and that the Provider
will, at all times, retain possession and control of any such tangible medium used or consumed by
the Provider in the performance of this Agreement. Each party will comply with all reasonable
security measures implemented by the other party in connection with the delivery of Software.
Section 2.2 Support Services.
During the term of this Agreement, Management Services will provide, or will cause to be
provided, the following support, which support will be in addition to the Services described in
Schedules A and B, at charges to be mutually agreed to by the CCU Services Manager
and the Entertainment Services Manager, plus out-of-pocket costs and expenses incurred in
connection with such support services:
(a) Management Services will provide, or will cause to be provided, current and reasonably
available historical data related to the Services as reasonably required by Entertainment in a
manner and within a time period as mutually agreed by the parties;
(b) Management Services will make the Services reasonably available to the Entertainment Group
employees and contractors whose assistance, expertise or presence is necessary to assist the
Entertainment Group’s transition team in establishing a fully functioning stand-alone environment
for the Entertainment Business prior to the Service Termination Date; and
(c) with respect to any Software or other electronic content (“Electronic Materials”)
licensed to any member of the Entertainment Group and used to provide a Service, Management
Services will make available or deliver to the appropriate member of the Entertainment Group a copy
of such Software or Electronic Materials that are in existence and current as of the Service
Termination Date for such Service, including any upgrades, updates and other modifications made to
such Software and Electronic Materials since the Distribution Date. Any upgrades, updates or other
modifications to Software and Electronic Materials made available or delivered
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to the Entertainment Group pursuant to this Section 2.2(c) will be deemed to be
Intellectual Property of the CCU Group and licensed to the Entertainment Group, notwithstanding
that such upgrades, updates or other modifications (i) were not used, held for use or contemplated
to be used by the Entertainment Group as of the Distribution Date, (ii) were not controlled by any
member of the CCU Group as of the Distribution Date, or (iii) may constitute improvements made
after the Distribution Date.
Section 2.3 Services Managers.
Management Services will designate a dedicated services account manager (the “CCU Services
Manager”) who will be directly responsible for coordinating and managing the delivery of the
Services and will have authority to act on the CCU Group’s behalf with respect to the Services.
Entertainment will designate a dedicated services account manager (the “Entertainment Services
Manager”) who will be directly responsible for coordinating and managing the receipt of the
Services by the Entertainment Group and will have authority to act on the Entertainment Group’s
behalf with respect to the Services. The CCU Services Manager and the Entertainment Services
Manager will work together to address the parties’ relationship and issues under this Agreement.
Section 2.4 Performance and Receipt of Services.
Each of Management Services and Entertainment will, and will cause its respective Groups to,
comply with the following provisions with respect to the Services:
(a) Each Provider and Recipient will at all times comply with its own then in-force security
guidelines and policies applicable to the performance, access and/or use of the Services and
Information Systems.
(b) Each Provider and Recipient will take commercially reasonable measures to ensure that no
computer viruses or similar items are coded or introduced into the Services or Information Systems.
If a computer virus is found to have been introduced into the Services or Information Systems, the
parties hereto will use their commercially reasonable efforts to cooperate and to diligently work
together to eliminate the effects of such computer virus.
(c) Each Provider and Recipient will exercise reasonable care in providing and receiving the
Services to (i) prevent access to the Services or Information Systems by unauthorized Persons, and
(ii) not damage, disrupt or interrupt the Services or Information Systems.
Section 2.5 WARRANTIES.
THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, THERE ARE NO
EXPRESS WARRANTIES OR GUARANTIES, AND THERE ARE NO IMPLIED WARRANTIES OR GUARANTIES, INCLUDING, BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE AND FITNESS FOR A PARTICULAR
PURPOSE.
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ARTICLE III
ADDITIONAL AGREEMENTS
ADDITIONAL AGREEMENTS
Section 3.1 Leases.
(a) Management Services and Entertainment agree that each lease or sublease listed on
Schedule C, pursuant to which any member of the Entertainment Group leases or subleases
real property from any member of the CCU Group, will remain in full force and effect pursuant to
its terms unless otherwise agreed to in writing by the parties.
(b) Management Services and Entertainment agree that each lease or sublease listed on
Schedule D, pursuant to which any member of the CCU Group leases or subleases real property
from any member of the Entertainment Group, will remain in full force and effect pursuant to its
terms unless otherwise agreed to in writing by the parties.
Section 3.2 Computer-Based Resources.
(a) Management Services and Entertainment agree that after the Distribution Date, the
Entertainment Group will not have access to all or any part of the Information Systems of the CCU
Group, except to the extent necessary for the Entertainment Group to receive the Services (subject
to the Entertainment Group complying with all reasonable security measures implemented by the CCU
Group as deemed necessary by the CCU Group to protect its Information Systems; provided,
that, the Entertainment Group has had a commercially reasonable period of time in which to
comply with such security measures).
(b) Management Services and Entertainment agree that after the Distribution Date, the CCU
Group will not have access to all or any part of the Information Systems of the Entertainment
Group, except to the extent necessary for the CCU Group to perform the Services (subject to the CCU
Group complying with all reasonable security measures implemented by the Entertainment Group as
deemed necessary by the Entertainment Group to protect its Information Systems; provided,
that, the CCU Group has had a commercially reasonable period of time in which to comply
with such security measures).
Section 3.3 Access.
Entertainment will allow the CCU Group and its Representatives reasonable access to the
facilities of the Entertainment Group necessary for the performance of the Services and to enable
the CCU Group to fulfill its obligations under this Agreement.
ARTICLE IV
COSTS AND DISBURSEMENTS; PAYMENTS
COSTS AND DISBURSEMENTS; PAYMENTS
Section 4.1 Service Charges.
(a) Schedules A and B set forth with respect to each Service a description of
the charges for such Service or the basis for the determination thereof (the “Service
Charges”). Further, in connection with performance of the Services, the Provider will make
payments for the benefit of, and on behalf of, the Recipient and will incur out-of-pocket costs and
expenses
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(collectively, the “Other Costs”), which will be reimbursed to the Provider by the
Recipient; provided, that, any Other Costs will only be payable by the Recipient if
it receives from the Provider reasonably detailed data and other documentation sufficient to
support the calculation of amounts due to the Provider as a result of such Other Costs.
(b) The Provider will deliver an invoice to the Recipient on a monthly basis (or at such other
frequency as is set forth in the applicable Schedule A or B) in arrears for the
Service Charges and any Other Costs. The Recipient will pay the amount of such invoice to the
Provider in U.S. dollars within 30 days of the date of such invoice, provided,
that, to the extent consistent with past practice with respect to Services rendered outside
the United States, payments may be made in local currency. If the Recipient fails to pay such
amount (excluding any amount contested in good faith) by such date, the Recipient will be obligated
to pay to the Provider, in addition to the amount due, interest on such amount at the lesser of (i)
the three month London Interbank Offered Rate (LIBOR) plus 100 basis points or (ii) the maximum
rate of interest allowed by applicable law, from the date the payment was due through the date of
payment. As soon as practicable after receipt by the Provider of any reasonable written request by
the Recipient, the Provider will provide the Recipient with reasonably detailed data and
documentation sufficient to support the calculation of any amount due to the Provider under this
Agreement for the purpose of verifying the accuracy of such calculation. If, after reviewing such
data and documentation, the Recipient disputes the Provider’s calculation of any amount due to the
Provider, then the dispute will be resolved pursuant to Section 7.2.
Section 4.2 Consents.
Management Services and Entertainment acknowledge and agree that certain Software and other
licenses, consents, approvals, notices, registrations, recordings, filings and other actions
(collectively, “Consents”) may be required by Management Services, Entertainment or members
of their respective Groups in connection with the provision of the Services. With respect to each
Service, the Recipient will, after consultation with the Provider, either directly pay the
out-of-pocket expenses incurred to obtain, perform or otherwise satisfy each such Consent or after
any such Consent is obtained, performed or otherwise satisfied, reimburse the Provider for all
actual, out-of-pocket costs incurred by the Provider and related to such Consent. Prior to payment
of, or reimbursement for, such out-of-pocket expenses, the Provider will provide the Recipient with
an invoice accompanied by reasonably detailed data and documentation sufficient to evidence the
out-of-pocket expenses for which the Provider is seeking payment or reimbursement. Upon receipt of
such invoice and data and documentation, the Recipient will either pay the amount of such invoice
directly in accordance with its general payment terms with vendors or reimburse the Provider for
its payment of the invoice within 30 days of the date of its receipt of such invoice. If the
Recipient disputes the invoiced amount, then the parties will work together to resolve such
dispute. If the parties are unable to resolve such dispute, the dispute will be resolved pursuant
to Section 7.2. Management Services and Entertainment acknowledge and agree that no prior
approval of the Recipient will be required for the Provider to seek any reimbursement pursuant to
this Section 4.2.
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Section 4.3 Conversion Costs.
Management Services and Entertainment acknowledge and agree that in connection with the
implementation, provision, receipt and transition of the Services, there will be certain
nonrecurring, out-of-pocket conversion costs incurred by Management Services, Entertainment and
their respective Groups (“Conversion Costs”). With respect to each Service, the Recipient
of the Service will either reimburse the Provider as incurred for all actual, out-of-pocket
Conversion Costs incurred by the Provider and related to such Service or, after consultation with
the Provider, pay such Conversion Costs directly on an as-incurred basis, in either case regardless
of whether the Recipient replaces such Service with the same application, system, vendor or other
means of effecting the Service. Prior to payment of, or reimbursement for, such actual
out-of-pocket Conversion Costs, the Provider will provide the Recipient with an invoice accompanied
by reasonably detailed data and documentation sufficient to evidence the out-of-pocket expenses for
which the Provider is seeking payment or reimbursement. Upon receipt of such invoice and data and
documentation, the Recipient will either pay the amount of such invoice directly in accordance with
its general payment terms with vendors or reimburse the Provider for its payment of the invoice
within 30 days of the date of its receipt of such invoice. If the Recipient disputes the invoiced
amount, then the dispute will be resolved pursuant to Section 7.2. Management Services and
Entertainment acknowledge and agree that no prior approval will be required from the Recipient for
the Provider to seek any reimbursement for Conversion Costs pursuant to this Section 4.3.
ARTICLE V
STANDARD FOR SERVICE; COMPLIANCE WITH LAWS
STANDARD FOR SERVICE; COMPLIANCE WITH LAWS
Section 5.1 Standard for Service.
Except as otherwise provided in this Agreement (including in Schedules A and
B), Management Services agrees that the Provider will perform the Services such that the
nature, quality, standard of care and the service levels at which such Services are performed are
no less than the nature, quality, standard of care and service levels at which the substantially
same services were provided to the members of the Entertainment Group by or on behalf of the
Provider on the last day prior to the Distribution Date in the ordinary course (the “Standard
for Services”).
Section 5.2 Compliance with Laws.
Each of Management Services and Entertainment will be responsible for its, and its respective
Group’s, compliance with any and all Laws applicable to its performance under this Agreement;
provided, however, that each of Management Services and Entertainment will, subject
to reimbursement of out-of-pocket expenses by the requesting party, use commercially reasonable
efforts to cooperate and provide the other party with all reasonably requested assistance
(including, without limitation, the execution of documents and the provision of relevant
information) to ensure compliance with all applicable Laws in connection with any regulatory
action, requirement, inquiry or examination related to this Agreement or the Services.
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ARTICLE VI
INDEMNIFICATION; LIMITATION ON LIABILITY
INDEMNIFICATION; LIMITATION ON LIABILITY
Section 6.1 Limited Liability of a Provider.
Notwithstanding the provisions of Section 5.1, none of Management Services, any other
member of the CCU Group, their respective Affiliates or any of their respective directors, officers
or employees, or any of the heirs, executors, successors or assigns of any of the foregoing (each,
a “Provider Indemnified Party”), will have any liability in contract, tort or otherwise,
including for any such party’s ordinary or contributory negligence, to the Recipient or its
Affiliates or Representatives for or in connection with (i) any Services rendered or to be rendered
by any Provider Indemnified Party pursuant to this Agreement, (ii) the transactions contemplated by
this Agreement, or (iii) any Provider Indemnified Party’s actions or inactions in connection with
any such Services or transactions; provided, however, that such limitation on
liability will not extend to or otherwise limit any Liabilities that have resulted directly from
such Provider Indemnified Party’s (a) gross negligence or willful misconduct, (b) improper use or
disclosure of information of, or regarding, a customer or potential customer of a Recipient
Indemnified Party, or (c) violation of applicable Law.
Section 6.2 Indemnification by Each Provider.
Management Services will, and will cause each Provider to, indemnify, defend and hold harmless
each relevant Recipient and each of its Subsidiaries and each of their respective directors,
officers and employees, and each of the heirs, executors, successors and assigns of any of the
foregoing (each, a “Recipient Indemnified Party”), from and against any and all Liabilities
of the Recipient Indemnified Parties relating to, arising out of, or resulting from (a) the gross
negligence or willful misconduct of a Provider Indemnified Party in connection with such Provider
Indemnified Party’s provision of the Services, (b) the improper use or improper disclosure of
information of, or regarding, a customer or potential customer of a Recipient Indemnified Party in
connection with the transactions contemplated by this Agreement or such Provider Indemnified
Party’s provision of the Services, or (c) any violation of applicable Law by a Provider Indemnified
Party in connection with the transactions contemplated by this Agreement or such Provider
Indemnified Party’s provision of the Services; provided, that, the aggregate
liability of the CCU Group as Providers pursuant to this Article VI will in no event exceed
an amount equal to the aggregate payments made by the Recipients to the Providers for Services
pursuant to this Agreement for the 12 month period preceding the date of such event giving rise to
indemnification hereunder.
Section 6.3 Indemnification by Each Recipient.
Entertainment will, and will cause each member of the Entertainment Group to, indemnify,
defend and hold harmless each relevant Provider Indemnified Party from and against any and all
Liabilities of the Provider Indemnified Parties relating to, arising out of, or resulting from the
provision of the Services by any Provider or any of its Affiliates, except for (a) any Liabilities
that result from a Provider Indemnified Party’s gross negligence in connection with the provision
of the Services, or (b) any Liabilities that result from a Provider Indemnified Party’s material
breach of this Agreement.
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Section 6.4 Indemnification Matters; Exclusivity.
The indemnification provisions set forth in Sections 6.5 through 6.7 of the Master Agreement
are hereby incorporated into, and made a part of, this Article VI and as otherwise
applicable to this Agreement. The provisions of this Article VI will constitute the sole
and exclusive remedy for Liabilities arising under this Agreement.
Section 6.5 Limitation on Liability.
Notwithstanding any other provision contained in this Agreement, Entertainment and Management
Services agree on their behalf, and on behalf of their respective Groups, that no member of the CCU
Group on the one hand, and no member of the Entertainment Group, on the other hand, will be liable
to any member of the other Group, whether based on contract, tort (including negligence), warranty
or any other legal or equitable grounds, for any special, indirect, punitive, incidental or
consequential losses, damages or expenses of the other Group, including, without limitation, loss
of data, loss of profits, interest or revenue, or use or interruption of business, arising from any
claim relating to breach of this Agreement or otherwise relating to any of the Services provided
hereunder. For clarification purposes only, the parties hereto agree that the limitation on
liability contained in this Section 6.5 will not apply to (a) damages awarded to a third
party pursuant to a third party claim for which a Provider is required to indemnify, defend and
hold harmless any Recipient Indemnified Party under Section 6.2; and (b) damages awarded to
a third party pursuant to a third party claim for which a Recipient is required to indemnify,
defend and hold harmless any Provider Indemnified Party under Section 6.3.
Section 6.6 Liability for Payment Obligations.
Nothing in this Article VI will be deemed to eliminate or limit, in any respect, any
member of the CCU Group’s or any member of the Entertainment Group’s express obligation in this
Agreement to pay or reimburse, as applicable, for (a) Service Charges; (b) Other Costs; (c) amounts
payable or reimbursable with respect to any custom modification provided pursuant to Section
2.1(b); (d) any amounts payable or reimbursable pursuant to the terms of the leases referred to
in Section 3.1; (e) any amounts payable or reimbursable in respect of Consents pursuant to
Section 4.2; (f) amounts payable or reimbursable in respect of Conversion Costs pursuant to
Section 4.3; (g) amounts payable or reimbursable pursuant to Section 5.2 with
respect to compliance with Laws; (h) amounts payable or reimbursable pursuant to Section
9.3(b) with respect to books and records; and (i) amounts payable or reimbursable pursuant to
Section 9.6 with respect to Taxes.
ARTICLE VII
DISPUTE RESOLUTION
DISPUTE RESOLUTION
Section 7.1 Applicable Law.
This Agreement will be governed by, and construed and interpreted in accordance with, the laws
of the State of Texas, without giving effect to any conflicts of law rule or principle that might
require the application of the laws of another jurisdiction.
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Section 7.2 Dispute Resolution.
To the extent not resolved through discussions between the CCU Services Manager and the
Entertainment Services Manager, any dispute, controversy or claim arising out of, or relating to,
this Agreement will be resolved in accordance with Article VIII of the Master Agreement, which
dispute resolution provisions are hereby incorporated into, and made a part of, this Section
7.2.
ARTICLE VIII
TERMINATION
TERMINATION
Section 8.1 Termination.
(a) This Agreement will terminate on the first date on which neither Management Services nor
any other member of the CCU Group has any further obligations to provide any Services pursuant to
this Agreement; provided, however, this Agreement may be terminated earlier in accordance
with any of the following:
(i) upon mutual written agreement of Management Services and Entertainment;
(ii) by either Entertainment or Management Services, upon written notice to the other party,
if such other party receiving notice has become insolvent or made an assignment for the benefit of
creditors, or was placed in receivorship, reorganization, liquidation or bankruptcy;
(iii) by Management Services, upon written notice to Entertainment, if, for any reason, the
ownership or control of Entertainment or any of Entertainment’s operations, becomes vested in, or
is made subject to the control or direction of, any direct competitor of CCU; or
(iv) by Entertainment, upon written notice to Management Services, if for any reason, the
ownership or control of CCU or any of CCU’s operations becomes vested in, or is made subject to the
control or direction of, any direct competitor of Entertainment.
(b) The applicable scheduled termination dates for specific Services are set forth in
Schedule A and B, and Entertainment may not terminate any such individual Service,
in whole or in part, prior to the applicable scheduled termination date except (i) with the prior
written consent of Management Services or (ii) with respect to Services described on Schedule
A only, by providing Management Services with prior written notice specifying the effective
date of termination (A) at least 120 days prior to the effective date of termination with respect
to “Payroll Tax Management” and “Corporate Tax” Services, each as described on Schedule A,
and (B) at least 90 days prior to the effective date of termination of any other Service described
on Schedule A. Notwithstanding the foregoing, either Entertainment or Management Services
(the “Non-Breaching Party”) may terminate this Agreement with respect to any individual
Service, in whole but not in part, at any time upon prior written notice by the Non-Breaching Party
to the other party (the “Breaching Party”) if the Breaching Party (including any member of
its respective Group) has failed to perform any of its material obligations under this Agreement
relating to such particular Service, and such failure will have continued without cure for a period
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of 60 days after receipt by the Breaching Party of a written notice of such failure from the
Non-Breaching Party seeking to terminate such Service; provided, however, that no
Service may be so terminated until the parties have completed the dispute resolution process set
forth in Section 7.2 with respect to such Service. Management Services and Entertainment
may otherwise from time to time mutually agree to terminate any individual Service, in whole but
not in part, provided, that, any such agreement to terminate a Service will comply
with Section 9.10 and include all terms and conditions applicable to termination of the
Service to be terminated. Any such termination of an individual Service will not in any way affect
the obligations of the party terminating such Service to continue to receive all other Services not
so terminated and to continue to provide Services as required by this Agreement.
(c) In addition to and not in limitation of the rights and obligations set forth in
Sections 2.1(d) and 2.2(b), upon the request of the Recipient of a Service, the
Provider of such Service will cooperate with the Recipient and use its good faith, commercially
reasonable efforts to assist the transition of such Service to the Recipient (or Affiliate of the
Recipient or such third-party vendor designated by the Recipient) by the Service Termination Date
for such Service.
Section 8.2 Effect of Termination.
Upon termination or expiration of any Service pursuant to this Agreement, the relevant
Provider will have no further obligation to provide the terminated Service, and the relevant
Recipient will have no obligation to pay any future Service Charges or Other Costs relating to any
such Service (other than for or in respect of Services provided in accordance with the terms of
this Agreement and received by such Recipient prior to such termination). Upon termination of this
Agreement in accordance with its terms, no Provider will have any further obligation to provide any
Service, and no Recipient will have any obligation to pay any Service Charges or Other Costs
relating to any Service or make any other payments under this Agreement (other than for or in
respect of Services received by such Recipient prior to such termination).
Section 8.3 Survival.
Each of Section 3.1 (Leases), Section 3.2 (Computer-Based Resources),
Article IV (Costs and Disbursements), Article VI (Indemnification; Limitation on
Liability), Article VII (Dispute Resolution), Section 8.2 (Effect of Termination),
this Section 8.3 (Survival), and Article IX (General Provisions) will survive the
expiration or other termination of this Agreement and remain in full force and effect.
Section 8.4 Force Majeure.
No party hereto (or any member of its Group or any other Person acting on its behalf) will
have any liability or responsibility for failure to fulfill any obligation (other than a payment
obligation) under this Agreement so long as and to the extent to which the fulfillment of such
obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force
Majeure. A party claiming the benefit of this provision will, as soon as reasonably practicable
after the occurrence of any such event: (a) notify the other party of the nature and
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extent of any such Force Majeure condition, and (b) use commercially reasonable efforts to
remove any such causes and resume performance under this Agreement as soon as feasible.
ARTICLE IX
GENERAL PROVISIONS
GENERAL PROVISIONS
Section 9.1 Independent Contractors.
In providing Services hereunder, the Provider will act solely as independent contractor and
nothing in this Agreement will constitute or be construed to be or create a partnership, joint
venture, or principal/agent relationship between the Provider, on the one hand, and the Recipient,
on the other. All Persons employed by the Provider in the performance of its obligations under
this Agreement will be the sole responsibility of the Provider.
Section 9.2 Subcontractors.
Any Provider may hire or engage one or more subcontractors to perform any or all of its
Services; provided, that, Management Services will in all cases remain responsible
for all its obligations under this Agreement, including, without limitation, with respect to the
scope of the Services, the Standard for Services and the content of the Services provided to the
Recipient. Under no circumstances will any Recipient be responsible for making any payments
directly to any subcontractor engaged by a Provider.
Section 9.3 Additional Services; Books and Records.
(a) If, during the term of this Agreement, a party hereto identifies a need for additional or
other transition services to be provided by or on behalf of Management Services, the parties hereto
agree to negotiate in good faith to provide such requested services (provided that such services
are of a type generally provided by the CCU Group at such time) and the applicable service fees,
payment procedures, and other rights and obligations with respect thereto. To the extent
practicable, such additional or other services will be provided on terms substantially similar to
those applicable to Services of similar types and otherwise on terms consistent with those
contained in this Agreement.
(b) All books, records and data maintained by a Provider for a Recipient with respect to the
provision of a Service will be the exclusive property of such Recipient. The Recipient, at its
sole cost and expense, will have the right to inspect, and make copies of, any such books, records
and data during regular business hours upon reasonable advance notice to the Provider. At the sole
cost and expense of the Provider, upon termination of the provision of any Service, the relevant
books, records and data relating to such terminated Service will be delivered by the Provider to
the Recipient in a mutually agreed upon format to the address of Entertainment set forth in
Section 9.5 or any other mutually agreed upon location; provided, however,
that the Provider will be entitled to retain one copy of all such books, records and data relating
to such terminated Service for archival purposes and for purposes of responding to any dispute that
may arise with respect thereto.
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Section 9.4 Confidential Information.
Entertainment agrees to, and will cause the other members of the Entertainment Group to,
maintain and safeguard all the CCU Confidential Information pursuant to Section 7.2 of the Master
Agreement and Management Services agrees to, and will cause the other members of the CCU Group to,
maintain and safeguard all Entertainment Confidential Information pursuant to Section 7.2 of the
Master Agreement, and each party hereto agrees that Section 7.2 of the Master Agreement is hereby
incorporated by reference into, and made a part of, this Agreement.
Section 9.5 Notices.
All notices, requests, claims, demands and other communications under this Agreement will be
in writing and will be given or made (and will be deemed to have been duly given or made upon
receipt) by delivery in person, by overnight courier service, by facsimile with receipt confirmed
(followed by delivery of an original via overnight courier service) or by registered or certified
mail (postage prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as will be specified in a notice given in
accordance with this Section 9.5):
If to any member of the CCU Group:
| Clear Channel Management Services, LP | ||||||
| Attention: | ||||||
| Facsimile: | ||||||
If to any member of the Entertainment Group:
| ,Inc. | |||||||
| Attention: | |||||||
| Facsimile: | |||||||
Section 9.6 Taxes.
Except as otherwise specifically provided for in the Tax Matters Agreement:
(a) Each party will be responsible for any personal property Taxes on property it owns or
leases, for franchise and privilege Taxes on its business, and for Taxes based on its net income or
gross receipts.
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(b) Each Recipient may report and (as appropriate) pay any sales, use, excise, value-added,
services, consumption, and other Taxes directly if the Recipient provides the applicable Provider
with a direct pay or exemption certificate.
(c) A Provider will promptly notify the applicable Recipient of, and coordinate with the
Recipient the response to and settlement of, any claim for Taxes asserted by applicable taxing
authorities for which the Recipient is alleged to be financially responsible hereunder.
(d) Each Recipient will be entitled to receive and to retain any refund of Taxes paid to a
Provider related to the provision of Services pursuant to this Agreement. In the event a Provider
receives a refund of any such Taxes paid by a Recipient to the Provider, the Provider will promptly
pay, or cause the payment of, such refund to the Recipient.
(e) Each of the parties hereto agrees that if reasonably requested by the other party, it will
cooperate with such other party to enable the accurate determination of such other party’s Tax
liability and assist such other party in minimizing its Tax liability to the extent legally
permissible. The Provider’s invoices will separately state the amounts of any Taxes the Provider
is proposing to collect from the Recipient.
Section 9.7 Severability.
If any term or other provision of this Agreement is invalid, illegal or incapable of being
enforced under any Law or as a matter of public policy, all other conditions and provisions of this
Agreement will nevertheless remain in full force and effect. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original intent of the parties
hereto as closely as possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement be consummated as originally contemplated to the greatest extent
possible.
Section 9.8 Entire Agreement.
Except as otherwise expressly provided in this Agreement, this Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter of this Agreement and
supersedes all prior agreements and undertakings, both written and oral, between or on behalf of
the parties hereto with respect to the subject matter of this Agreement. The Schedules and
Recitals to this Agreement are hereby incorporated by reference into and made part of this
Agreement for all purposes.
Section 9.9 Assignment; No Third-Party Beneficiaries.
This Agreement will not be assigned by any party hereto without the prior written consent of
the other party hereto; provided, however, Management Services may assign this
Agreement in connection with a merger, consolidation, reorganization, sale of all or substantially
all of its assets or similar transaction within the CCU Group whether or not Management Services is
the surviving entity. Except as provided in Article VI with respect to Provider
Indemnified Parties and Recipient Indemnified Parties, this Agreement is for the sole benefit of
the parties to this Agreement, the members of their respective Groups and their permitted
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successors and assigns and nothing in this Agreement, express or implied, is intended to or
will confer upon any other Person any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement. Entertainment will cause each member of the
Entertainment Group receiving Services hereunder as a Recipient to abide by the terms and
conditions of this Agreement, and Management Services will cause each member of the CCU Group
providing Services hereunder as a Provider to abide by the terms and conditions of this Agreement
Section 9.10 Amendment.
No provision of this Agreement may be amended or modified except by a written instrument
signed by all the parties to such agreement. No waiver by any party of any provision hereof will
be effective unless explicitly set forth in writing and executed by the party so waiving. The
waiver by either party hereto of a breach of any provision of this Agreement will not operate or be
construed as a waiver of any other subsequent breach.
Section 9.11 Rules of Construction.
(a) Interpretation of this Agreement will be governed by the following rules of construction:
(i) words in the singular will be held to include the plural and vice versa and words of one gender
will be held to include the other gender as the context requires, (ii) references to the terms
Article, Section, paragraph, and Schedule are references to the Articles, Sections, paragraphs, and
Schedules to this Agreement unless otherwise specified, (iii) the word “including” and words of
similar import will mean “including, without limitation,” (iv) provisions will apply, when
appropriate, to successive events and transactions, (v) the headings contained herein are for
reference purposes only and will not affect in any way the meaning or interpretation of this
Agreement, (vi) the recitals are and (vii) this Agreement will be construed without regard to any
presumption or rule requiring construction or interpretation against the party drafting or causing
any instrument to be drafted.
(b) Unless specifically stated in the Master Agreement that a particular provision of the
Master Agreement should be given effect in lieu of a conflicting provision in this Agreement, to
the extent that any provision contained in this Agreement conflicts with, or cannot logically be
read in accordance with, any provision of the Master Agreement, the provision contained in this
Agreement will prevail.
(c) Unless specifically stated in Schedules A and B, to the extent that any
provision contained in this Agreement conflicts with, or cannot logically be read in accordance
with, any provision set forth in Schedules A and B, the provision contained in such
Schedule A or B will prevail.
Section 9.12 Counterparts.
This Agreement may be executed in one or more counterparts, and by the different parties to
each such agreement in separate counterparts, each of which when executed will be deemed to be an
original but all of which taken together will constitute one and the same agreement. Delivery of
an executed counterpart of a signature page to this Agreement by
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facsimile or electronic mail will be as effective as delivery of a manually executed
counterpart of any such Agreement.
Section 9.13 No Right to Set-Off.
Entertainment will, and will cause each other Recipient to, pay the full amount of costs and
disbursements, including Other Costs, incurred under this Agreement, and will not set-off,
counterclaim or otherwise withhold any other amount owed to a Provider on account of any obligation
owed by a Provider to the Recipient.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Transition Services Agreement to be executed
to be effective on the date first written above by their respective duly authorized officers.
| CLEAR CHANNEL MANAGEMENT SERVICES, LP | |||||||
| By: | |||||||
| its General Partner | |||||||
| By: | |||||||
| Name: | |||||||
| Title: | |||||||
| |
, INC. | ||||||
| By: | |||||||
| Name: | |||||||
| Title: | |||||||
S-1
SCHEDULES
Schedule A
|
Short Term Service Periods (under 12 months) Services | |
Schedule B
|
Long Term Service Periods (over 12 months) Services | |
Schedule C
|
Leased Facilities (CCU Group as Lessor) | |
Schedule D
|
Leased Facilities (Entertainment Group as Lessor) |
