Execution Copy
OPERATING AGREEMENT
THIS OPERATING AGREEMENT ("Agreement") is made and entered into
effective February 1, 2000 (the "Effective Date"), by Acxiom Corporation
("Acxiom"), a Delaware corporation, and Sedona Corporation ("Sedona"), a
Pennsylvania corporation.
RECITALS
WHEREAS, Acxiom and Sedona entered into a Letter of Intent dated
January 11, 2000 and are negotiating and finalizing the definitive Asset
Purchase and Sale Agreement (the "Asset Purchase Agreement"), pursuant to which
Acxiom has agreed to sell, and Sedona has agreed to purchase substantially all
the assets of Acxiom's business unit located in Minneapolis, Minnesota, which
utilizes the assets in designing and implementing Customer Information
Management Systems (the "Business");
WHEREAS, Sedona has effectively assumed the operations of the Business
as of February 1, 2000;
WHEREAS, during the continued negotiations of the Asset Purchase
Agreement and finalization thereof, Sedona has assumed the responsibilities and
risk of loss for the Business.
NOW THEREFORE, in exchange for the mutual promises, covenants and
Agreements contained herein, the parties hereto, intending to be legally bound,
agree as follows:
1. Delegation and Assumption of Responsibilities. Acxiom hereby
delegates all responsibilities to Sedona to operate the Business, and Sedona
hereby assumes all responsibilities from Acxiom to operate the Business during
the term of this Agreement.
2. Operating Agreement Fee. For all the rights and powers granted to
Sedona under this Agreement and commencing as of the Effective Date, Acxiom
shall share with Sedona ninety-five percent (95%) of any net profit or net loss
of the Business. "Net profit" or "net loss" are defined as net xxxxxxxx less all
costs and expenses incurred in the Business consistent with past practices, for
each month Sedona operates the Business.
Acxiom shall continue to collect all Business accounts receivable and
pay all Business payables during the term of this Agreement. Sedona shall not be
responsible for expenses resulting from problems arising out of existing
software configuration which is being acquired as part of the Asset Purchase
Agreement and referred to as Customer Information Management Systems ("CIMS").
3. Invoicing Procedures. By the 10th of each month, (a) Sedona shall
invoice to Acxiom an amount equal to the gross xxxxxxxx for the previous month
and (b) Acxiom shall invoice Sedona for the expenses incurred in the operating
of the Business for the previous month and further reflect on such invoice the
amount due from Sedona or the amount due to Sedona for the Net Profit or Net
Loss for the same month. The parties agree to share information with one another
as may be reasonably necessary in order to properly prepare each parties'
respective invoice. Furthermore, each party agrees to allow the other party
reasonable access to review and examine accounting records that may be used to
support invoices pursuant to this agreement. Expenses attributed to the Business
shall not include any corporate overhead or other allocations which are not
directly attributable to Business. Acxiom designates Xxxx Xxxxxxxxx, and Sedona
designates Xxxx Xxxxxxxx to coordinate and resolve any issues regarding the
above calculation.
4. Responsibility for Cost and Expenses. During the term of this
Agreement, Sedona will bear responsibility for (i) all operating costs to
maintain the Business; (ii) the cost of leasing any space for the Business;
(iii) all personnel necessary for operation of the business unit and will be
responsible for the salaries, taxes, insurance and related costs for all such
personnel; (iv) property and casualty insurance for the business as hereinafter
provided; (v) maintenance of the facilities and any cost related to the
replacement of any equipment necessary to carry out the intent of this
Agreement; and (iv) all other costs consistent with Acxiom's past operation of
the Business, provided that all costs shall be recorded in accordance with
generally accepted accounting principles ("GAAP"). For purposes hereof, Acxiom
agrees that the costs of the Business shall not include any corporate overhead
or other allocated costs which are not directly attributable to the Business.
5. Sedona's Insurance. At all times while this Agreement remains in
effect, Sedona shall maintain liability insurance with coverage of at least
$1,000,000 per occurrence, workers compensation insurance and commercial general
liability insurance with a combined single limit of $3,000,000 with insurance
companies that have a Best rating of A- or better. Sedona shall deliver
certificates of insurance periodically to Acxiom evidencing that such insurance
remains in effect and such policies shall name Acxiom as an additional insured.
6. Term. The term of this Agreement shall commence on the Effective
Date and continue for a period of four (4) months unless terminated sooner as
provided for herein. Notwithstanding the foregoing, this Agreement shall
terminate upon the earlier of (i) the failure of the parties to execute and
deliver the Asset Purchase Agreement not later than March 20, 2000; (ii) the
closing of the Asset Purchase Agreement; (iii) the termination of the Asset
Purchase Agreement pursuant to the terms of the Asset Purchase Agreement; or(iv)
termination pursuant to Section 10 of this Agreement.
7. Trade Creditors. Sedona and Acxiom shall pay their respective trade
creditors in a timely fashion consistent with good business practices.
8. Operation of Business. Sedona shall have full authority and power
over the operation of the Business during the term of this Agreement, including
but not limited to hiring and firing employees, hiring and firing sales
associates and all other aspects of the Business. At all times during the term,
all personnel shall be subject to the supervision and the direction of Sedona's
manager or supervisors. Sedona shall comply with all laws, regulations and the
like in discharging its operational authority hereunder, and it shall notify
Acxiom of any material adverse changes to the Business or any other material
events relating thereto which may happen during the Term of this Agreement.
9. Events of Default. The following shall, after expiration of the
applicable cure periods, constitute events of default under this Agreement:
(a) Failure for Sedona to run the Business consistent with past
practices;
(b) Failure for Sedona to reimburse Acxiom for any undisputed loss
pursuant to Paragraph 2; or
(c) Any other material breach of the spirit and intent or warrants
of this Agreement.
10. Cure Periods. An Event of Default shall not be deemed to have
occurred until fifteen (15) days (or in the event of payment default, five (5)
days) after the non-defaulting party has provided the defaulting party with
written notice specifying the event or events that if not cured would constitute
an Event of Default and specifying the actions necessary to cure within such
period. This period shall be extended for a reasonable period of time if the
defaulting party is acting in good faith to cure and such delays are not
materially adverse to the non-defaulting party.
11. Termination. In the event of an occurrence of an Event of Default,
the non-defaulting party may terminate this Agreement provided that such party
is not then also in default. Upon termination, Sedona's operational rights
granted hereunder should terminate and full control of the Business shall revert
to Acxiom. Within twenty (20) days of any termination, Acxiom shall prepare and
deliver a final accounting of all activity hereunder and invoices resulting
therefrom shall be immediately paid.
12. Indemnification Rights. Each party will indemnify and hold harmless
the other party, and the directors, officers, partners, employees, agents and
affiliates of such other party from and against any and all liability, including
without limitation reasonable attorney's fees arising out of or incident to (i)
any breach by such party of a representation, warranty or covenant made herein;
and (ii) the conduct of such party, its employees, contractors and agents
(including negligence) in performing its obligations hereunder. Without limiting
the generality of the foregoing, each party will indemnify and hold harmless the
other party, and the directors, officers, partners, employees, agents and
affiliates of such other party, from and against all liability arising out of
its actions under this Agreement except to the extent that such liability or
loss arises under the general operations and is accounted for pursuant to
hereof. The parties indemnification obligations hereunder shall survive any
termination or expiration of this Agreement for a period of one (1) year.
13. Representations. Both Acxiom and Sedona hereby represent that
they are legally qualified, empowered, and authorized to execute this Agreement
and carry out the activities contemplated hereby.
14. Public Announcement. Neither party shall make any further public
announcements without first having obtained written approval of the other party.
15. Miscellaneous.
(a) Assignment. This agreement and the rights, obligations and
duties of the Acxiom shall not be assignable or otherwise transferable unless
agreed to in writing by both parties.
(b) Modification. No term or provision contained herein may be
modified, amended or waived except by written agreement signed by the party to
be bound thereby.
(c) Binding Effect and Benefit. This agreement shall inure to
the benefit of, and shall be binding upon, the parties hereto, and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns.
(d) Headings and Captions. Subject headings and captions are
included for convenience purposes only and shall not affect the interpretation
of this agreement.
(e) Notice. All notices, requests, demands and other
communications permitted or required hereunder shall be in writing, and either
(i) delivered in person, (ii) sent by express mail or other overnight delivery
service providing receipt of delivery, (iii) mailed by certified or registered
mail, postage prepaid, return receipt requested or (iv) sent by facsimile
transmission as follows:
If to the Seller, addressed or delivered in person to:
Acxiom Corporation
#0 Xxxxxxxxxxx Xxx
Xxxxxx Xxxx, XX 00000
Attn: General Counsel
Telecopy No.: (000) 000-0000
With copy to:
Friday Xxxxxxxx & Xxxxx
000 X. Xxxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
If to Buyer, addressed or delivered in person to:
Sedona Corporation
000 Xxxxx Xxxxx Xx.
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, President & CEO
Telecopy No.: (000) 000-0000
With copy to:
Xxxx Xxxxxxxxxx, Esq.
000 Xxxxxxxxx 0xx Xxx.
Xxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
or to such other address as either party may designate by notice in the manner
provided above.
Any such notice or communication, if properly given or made by prepaid,
registered or certified mail or by recorded express delivery, shall be deemed to
have been made when actually received, but not later than three (3) business
days after the same was posted or given to such express delivery service, and if
made properly facsimile transmission such notice or communication shall be
deemed to have been made at the time of dispatch and receipt of proof of
transmission.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
ACXIOM CORPORATION
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Xxxx X. Xxxxxxxxx, Finance and Accounting Leader,
Financial Services Division
SEDONA CORPORATION
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Xxxxx Xxxxxx, President & CEO
