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EXHIBIT 10.2
FORM OF SERVICES AGREEMENT
This SERVICES AGREEMENT ("Agreement") is entered into as of __________,
1999 (the "Effective Date") by and between XXXXXX CORPORATION, a Delaware
corporation ("Xxxxxx"), and XXX.XXX CORPORATION, a Nevada corporation
("XXX.XXX").
R E C I T A L S:
A. Prior to execution of this Agreement, XXX.XXX was a wholly-owned
subsidiary of Xxxxxx.
X. Xxxxxx and XXX.XXX have commenced on this date a Rights Offering
and, as a result of the Rights Offering or a separate dividend by Xxxxxx of
XXX.XXX common stock, XXX.XXX expects to become a publicly traded company, with
Xxxxxx as its majority stockholder. The Rights Offering and Stock Distribution
are more fully described in a registration statement on Form S-1 (Registration
No. ) filed with the Securities and Exchange Commission (the "Rights Offering").
C. During the period when XXX.XXX was a wholly owned subsidiary of
Xxxxxx, XXX.XXX relied on Xxxxxx for the provision of certain administrative
services and, effective upon the closing of the Rights Offering, Xxxxxx'x 21
employees of its Word and Charged webzines will become employees of XXX.XXX.
D. The parties have agreed that following the Rights Offering and, if
made, the Stock Distribution, Xxxxxx will continue to provide certain management
and administrative services to XXX.XXX and XXX.XXX will provide certain
technical, creative and webzine administrative services to Xxxxxx so that it may
continue to operate Word and Charged.
E. Subject to the terms and conditions set forth in this Agreement,
Xxxxxx desires to sublease to XXX.XXX a portion of the office space leased by
Xxxxxx at 000 Xxxxxxxx Xxxxxx, xxxxx 000, Xxxxxxxxx, Xxx Xxxx 00000 (the
"Lease").
NOW, THEREFORE, for and in consideration of the mutual agreements
contained herein, the parties hereby agree as follows:
1. SERVICES. During the term of this Agreement, Xxxxxx will provide the
services described on Exhibit A to XXX.XXX and XXX.XXX will provide the services
described on Exhibit B and may, in its sole discretion, provide such other
services as Xxxxxx or XXX.XXX may request from each other from time to time (all
such services referred to herein as the "Services").
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2. FEES AND EXPENSES.
(a) The requesting party (the "Requesting Party") will pay to
the other party fees ("Fees") for the Services provided by said party
("Performing Party") equal to such Performing Party's cost of providing such
Services, as reasonably determined by the Performing Party. Such Fees will
include an allocation of the Performing Parties general and administrative
overhead expense relating to such Services. The Performing Party may, but shall
not be obligated to, determine such cost using the same methods employed by the
Performing Party to allocate costs to the Requesting Party for such Services
prior to the Rights Offering.
(b) The Requesting Party will reimburse the Performing Party
for expenses any reasonable and necessary out-of-pocket expenses incurred in
connection with the provision of the Services, including any taxes or other
governmental impositions attributable to the provision of the Services (other
than income or other similar taxes assessed on the Fees), but not including any
general or administrative overhead expense of Requesting Party. Requesting Party
will not have any obligation to advance funds on behalf of Performing Party.
(c) Performing Party will invoice Requesting Party for the
Fees and expenses due hereunder at the intervals determined by Performing Party
from time to time. All invoices will be due and payable within thirty (30)
calendar days after the date of the invoice.
3. INFORMATION AND RECORDS.
(a) The Parties will make available to each other on a timely
basis all information which is reasonably necessary for the parties to provide
the Services to each other.
(b) The parties will maintain records with respect to the
Services which are substantially similar to those maintained with respect to
similar Services provided for its own account, and will provide those records to
each other upon termination of this Agreement.
4. LIABILITY.
(a) The parties make no express or implied warranties to each
other with respect to the Services.
(b) The Performing Party will be liable to the Requesting
Party for any Loss (hereinafter defined) suffered as a result of acts or
omissions of the Performing Party or any shareholder, director, officer or
employee of said party or any attorney, accountant, representative or agent
retained by the Performing Party ("Associates") in connection with the Services
provided only if and to the extent that (i) the acts or omissions constitute
gross negligence or willful misconduct or (ii) the acts or omissions would be
covered by Xxxxxx'x insurance coverage under crime, fidelity or fiduciary
insurance (if any). In any event, except to the extent covered by the Performing
Party's crime, fidelity or fiduciary insurance, (i) any
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claim for damages from the Performing Party in connection with a Service
provided will be limited to the amount of Fees charged with respect to the
Service, and (ii) Performing Party will not be liable to Requesting Party for
any incidental or consequential damages, lost profits or opportunities, or
exemplary or punitive damages.
As used herein, "Loss" means any and all claims, liabilities,
obligations, losses, deficiencies and damages or judgments of any kind or nature
whatsoever arising from, asserted against, or associated with the furnishing or
failure to furnish the Services, regardless of by whom asserted and regardless
of whether or not any such loss is known or unknown, fixed or contingent or
asserted or unasserted, incurred by Performing Party in connection with the
provision of the Services.
5. INDEMNITY. Except as provided in Section 4(b), the Requesting Party
will indemnify the Performing Party and its Associates and hold Performing Party
and its Associates harmless from any and all Losses arising from, asserted
against or associated with the provision of Services by Performing Party to
Requesting Party.
6. AUTHORITY.
(a) In providing the Services, Performing Party may take such
actions, make such decisions and exercise such judgment on behalf of Requesting
Party as Performing Party has taken, made or exercised in providing the same or
similar services on behalf of Requesting Party prior to the closing of Rights
Offering and, if made, the Stock Distribution.
(b) Prior to taking action on behalf of Requesting Party,
Performing Party will use reasonable efforts to consult with appropriate
officers or employees of Requesting Party (i) in those circumstances under which
Performing Party would have consulted officers or employees of Requesting Party
prior to the Rights Offering, and (ii) in any other circumstances required under
such reasonable rules and procedures as Performing Party may adopt, from time to
time, after prior consultation with Requesting Party.
7. SUBLEASE.
(a) Commencing on and as of the Effective Date and continuing
on a month to month basis thereafter, Xxxxxx shall sublease to XXX.XXX a portion
of the real estate leased by Xxxxxx at 000 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxx Xxxx 00000 (the "Meridian Centre Space") The portions of the
Meridian Centre Space subject to the sublease may, depending, on the occupancy
requirements of Xxxxxx, fluctuate from time to time during the term of the
sublease. On not less than a quarterly basis commencing with the first full
calendar quarter beginning after the Effective Date, Xxxxxx and XXX.XXX shall
determine in good faith the portion of the Meridian Centre Space then occupied
by XXX.XXX (the "XXX.XXX Occupied Space") for purposes of the payment
obligations of XXX.XXX set forth below.
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(b) The monthly rent payable by XXX.XXX under the sublease
shall be equal to Xxxxxx'x monthly base rental payment for leasing the XXX.XXX
Occupied Space then occupied by XXX.XXX (as determined by Xxxxxx and XXX.XXX as
required under Section 7 above). In addition to the foregoing, XXX.XXX shall pay
to Xxxxxx, on a monthly basis after invoice from Xxxxxx (I) their proportionate
share, based on the then current XXX.XXX Occupied Space, of the monthly out-of
pocket cost to Xxxxxx for all utilities, taxes and maintenance, cleaning,
security and repair fees paid by Xxxxxx with respect to the Meridian Centre
Space, (ii) their proportionate share, based on usage, of the monthly
out-of-pocket cost to Xxxxxx for all capital equipment located at or on the
Meridian Centre Space (such as photocopy and facsimile equipment and leased
appliances), provided, however, that all telephones (including cellular
telephones), personal computers and printers used by XXX.XXX and owned or leased
by Xxxxxx shall be paid for by XXX.XXX based on actual out-of-pocket cost to
Xxxxxx for the provision of each such item to XXX.XXX.
(c) The Lease will continue on a month to month basis until
terminated by Xxxxxx or XXX.XXX on at least ninety (90) days prior written
notice to the other party.
8. FORCE MAJEURE. The Performing Party will not be liable to the
Requesting Party for any failure to comply with this Agreement caused, directly
or indirectly, by of (a) a fire, flood, explosion, riot, rebellion, revolution,
labor trouble (whether or not due to the fault of such Party), requirements or
acts of any government authority or agency or subdivision thereof, loss of
source of supplies or other inability to obtain materials or suppliers, or (b)
any other cause, whether similar or dissimilar to the foregoing, beyond the
reasonable control of the parties hereto.
9. TERM. The parties' obligation to provide Services (and, in the case
of Xxxxxx, the XXX.XXX Occupied Space) hereunder, shall continue until either
party gives one hundred twenty (120) days advance written notice or upon written
notice from a party if one of the parties materially breaches this Agreement and
fails to cure such breach within thirty (30) days after receiving written notice
thereof. One party may terminate another party's obligation to provide it with
services and, in the case of XXX.XXX with the Occupied Space, still be obligated
to provide the other party with Services until the other party also terminates
the other party's obligation to provide Services (and space if applicable). Any
outstanding Fees and expenses as well as a Requesting Party's obligation to
indemnify the Performing Party shall survive the termination of this Agreement
indefinitely.
10. NOTICES. All notices, demands, requests, or other communications
which may be or are required to be given, served, or sent by a party pursuant to
this Agreement will be in writing and will be (a) personally delivered, (b)
mailed by first class, registered or certified mail, return receipt requested,
postage prepaid, (c) sent by an internationally recognized express delivery
service or (d) transmitted by facsimile, address as follows:
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if to Xxxxxx:
Xxxxxx Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx, President and Chief
Executive Officer
if to XXX.XXX:
XXX.XXX Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx XxXxxxx, Vice President Finance
Each party may designate by notice in writing a new address or
facsimile number to which any notice may be given, served or sent. Each notice
will be deemed sufficiently given, served, sent or received when it is delivered
to the addressee, with an affidavit of personal delivery, the return receipt,
the delivery receipt or when delivery is refused by the addressee. Each notice
or other communication sent by facsimile will be deemed sufficiently given only
if a copy of the notice or communication is immediately sent by one of the
methods specified in (a), (b) or (c) above.
11. MISCELLANEOUS.
(a) This Agreement sets forth the entire agreement of the
parties with respect to the Services and supersedes all previous agreements,
understandings or negotiations with respect to the Services.
(b) The rights and obligations set forth in this Agreement may
be amended, modified or supplemented only by a writing signed by each party.
(c) A party may waive a right under this Agreement only by a
written waiver signed by the party. No failure to exercise or delay in
exercising a right under this Agreement will constitute a waiver of that right.
(d) If any provision of this Agreement is found invalid,
illegal or unenforceable, the provision will be ineffective only to the extent
of the invalidity, illegality or unenforceability, and the other provisions of
this Agreement will remain in full force and effect.
(e) A party may not assign its rights, and a party may not
delegate its obligations, under this Agreement unless it first obtains the
written consent of the other party, provided, however, that Xxxxxx may assign
its rights and delegate its obligations to any wholly-owned subsidiary of Xxxxxx
without XXX.XXX's consent. Any party, in its discretion, may withhold consent to
any such assignment or delegation.
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(f) Except as permitted under Subsection (e), this Agreement
will not inure to the benefit of any Person other than the Parties.
(g) This Agreement will be governed by and construed and
enforced in accordance with the internal laws of the State of New York.
(h) This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on their behalf as of the date first above written.
XXXXXX CORPORATION
By: ________________________________
Name:
Title:
XXX.XXX CORPORATION
By: ________________________________
Name:
Title:
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EXHIBIT A
XXXXXX CORP. AS PERFORMING PARTY
DESCRIPTION OF SERVICES
A. Accounting:
1. Maintain a general ledger.
2. Furnish general bank account checks and reconcile general bank
account.
3. Process vendor invoices and employee expense reports approved
by XXX.XXX for payment.
4. Input accounts receivable in accordance with instructions from
XXX.XXX personnel; post cash receipts; provide A/R aging as
requested (not more often than once per week).
5. Maintain fixed asset records
(acquisition-disposal-depreciation schedules).
6. Provide project profit and cost accounting schedules.
7. Provide quarterly financial information for use by XXX.XXX
personnel in preparing quarterly financial statements; bonus
calculations; trial balances; and financial statements.
8. Responsible for all SEC quarterly reporting requirements.
9. Coordinating all required audits and reviews for financial
reporting.
10. Coordinating and creating all press releases and corporate
communications.
11. General administrative support necessary to fulfill the
XXX.XXX requirements as a publicly held company.
B. Payroll:
1. Maintain employee data base and input payroll information into
the payroll database.
2. Distribute payroll checks.
3. Administer state and federal income tax withholdings.
C. Tax:
1. Prepare and file all state and federal income and sale/use tax
returns with a due date during the Term.
D. Benefits:
1. Coordinate participation of XXX.XXX employees in Xxxxxx
Corp.'s health and medical insurance program.
2. Coordinate participation of XXX.XXX employees in Xxxxxx Corp's
401(k) Defined Contribution Benefit Plan.
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EXHIBIT B
XXX.XXX as Performing Party
DESCRIPTION OF SERVICES
All technical, creative and administrative services necessary for
Xxxxxx to operate its Word and Charged webzines in substantially the same
fashion as such webzines were operated prior to the date hereof.
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