Exhibit 10.2
ADMINISTRATIVE SERVICES AGREEMENT
by and between
TRUE NORTH COMMUNICATIONS INC.
and
TN TECHNOLOGIES HOLDING INC.
TABLE OF CONTENTS
PAGE
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ARTICLE I - DEFINITIONS....................................................... 1
1.1 ACCOUNTING SERVICES................................................. 1
1.2 AGENCY SERVICES..................................................... 1
1.3 ADDITIONAL SERVICES................................................. 1
1.4 CORPORATE SUPPORT SERVICES.......................................... 2
1.5 CONSULTING SERVICES................................................. 2
1.6 EMPLOYEE BENEFITS AND ADMINISTRATION SERVICES....................... 2
1.7 EXPIRATION DATE..................................................... 2
1.8 HUMAN RESOURCES AND PAYROLL SERVICES................................ 2
1.9 IMPRACTICABLE....................................................... 2
1.10 INITIAL SERVICES.................................................... 2
1.11 MEDIA SERVICES...................................................... 2
1.12 PROVIDING COMPANY................................................... 2
1.13 RECEIVING COMPANY................................................... 2
1.14 REPRESENTATIVE...................................................... 2
1.15 SERVICE............................................................. 2
1.16 STUDIO SERVICES..................................................... 2
1.17 TERMINATION DATE.................................................... 2
1.18 REFERRAL SERVICES................................................... 2
1.19 VOICE AND DATA NETWORKS............................................. 2
1.20 VOICE AND DATA NETWORKS SERVICES.................................... 2
ARTICLE II - SERVICES......................................................... 3
2.1 SERVICES............................................................ 3
2.2 TERM................................................................ 4
2.3 CHARGES AND PAYMENT................................................. 5
2.4 GENERAL OBLIGATIONS; STANDARD OF CARE............................... 6
2.5 CERTAIN LIMITATIONS................................................. 6
2.6 CONFIDENTIALITY..................................................... 7
2.7 TERMINATION......................................................... 8
2.8 DISCLAIMER OF WARRANTIES, LIMITATION OF LIABILITY OR
LIABILITIES AND INDEMNIFICATION................................... 8
2.9 REPRESENTATIVE...................................................... 9
2.11 BINDING ARBITRATION................................................. 9
2.12 INJUNCTIVE RELIEF...................................................10
ARTICLE III - MISCELLANEOUS...................................................10
3.1 TAXES...............................................................10
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3.2 LAWS AND GOVERNMENTAL REGULATIONS...................................10
3.3 RELATIONSHIP OF PARTIES.............................................11
3.4 INCORPORATION OF PROVISIONS OF THE ACQUISITION AGREEMENT............11
3.5 EXPENSES............................................................11
3.6 REFERENCES..........................................................11
3.7 MODIFICATION AND AMENDMENT..........................................11
3.8 INCONSISTENCY.......................................................12
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ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT, dated as of December 31, 1996 (the
"Effective Date"), is by and between True North Communications Inc., a Delaware
corporation ("TNC"), and TN Technologies Holding Inc., a Delaware corporation
("TNT"). Capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to them in the Acquisition Agreement (as defined
below).
WHEREAS, the Board of Directors of TNC has determined that it is in the
best interests of TNC and its stockholders to transfer and assign to TNT
substantially all of the assets and properties of TNC's existing businesses
relating to digital interactive services (the "Transferred Business") in
exchange for the assumption of certain liabilities and obligations of TNC
relating to the Transferred Business by TNT and the issuance of 2,291,686 shares
of Class B Common Stock, par value $.001 per share, of TNT (the "TN Technologies
Shares") to TNC;
WHEREAS, to effectuate the foregoing, TNC and TNT have entered into an
Amended and Restated Acquisition Agreement, along with certain other parties,
dated as of December 31, 1996 (the "Acquisition Agreement"), which provides,
among other things, subject to the terms and conditions thereof, for the
Acquisition of the Transferred Business, the issuance of the TN Technologies
Holding Shares and the execution and delivery of certain other agreements in
order to facilitate and provide for the foregoing; and
WHEREAS, to ensure an orderly transition under the Acquisition Agreement it
will be necessary for one or both of the parties to provide to the other party
the Services described herein for a transitional period.
NOW, THEREFORE, in consideration of the premises and for other good and
valid consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
For the purpose of this Agreement the following terms shall have the
following meanings:
1.1 ACCOUNTING SERVICES shall have the meaning set forth in Subsection
2.1(a)(i).
1.2 AGENCY SERVICES shall have the meaning set forth in Subsection
2.1(a)(vii).
1.3 ADDITIONAL SERVICES shall have the meaning set forth in Subsection
2.1(c).
1.4 CORPORATE SUPPORT SERVICES shall have the meaning set forth in
Subsection 2.1(a)(v).
1.5 CONSULTING SERVICES shall have the meaning set forth in Subsection
2.1(a)(ii).
1.6 EMPLOYEE BENEFITS AND ADMINISTRATION SERVICES shall have the meaning
set forth in Subsection 2.1(a)(iv).
1.7 EXPIRATION DATE shall have the meaning set forth in Section 2.2.
1.8 HUMAN RESOURCES AND PAYROLL SERVICES shall have the meaning set forth
in Subsection 2.1(a)(viii).
1.9 IMPRACTICABLE (and words of similar import) shall have the meaning
set forth in Subsection 2.5(a).
1.10 INITIAL SERVICES shall have the meaning set forth in Subsection
2.1(a).
1.11 MEDIA SERVICES shall have the meaning set forth in Subsection
2.1(a)(vi).
1.12 PROVIDING COMPANY shall mean, with respect to any particular
Services, the entity or entities identified on the applicable Exhibit as the
party to provide such Services.
1.13 RECEIVING COMPANY shall mean, with respect to any particular
Services, the entity or entities identified on the applicable Exhibit as the
party to receive such Services.
1.14 REPRESENTATIVE of any party shall mean a managerial level employee
appointed by such party to have the responsibilities and authority set forth in
Section 2.9.
1.15 SERVICES shall have the meaning set forth in Subsection 2.1(c).
1.16 STUDIO SERVICES shall have the meaning set forth in Subsection
2.1(a)(iii).
1.17 TERMINATION DATE shall have the meaning set forth in Section 2.2.
1.18 REFERRAL SERVICES shall have the meaning set forth in Subsection
2.1(a)(x).
1.19 VOICE AND DATA NETWORKS shall mean the software, hardware and
circuits necessary to deliver voice and data messages as identified in Exhibit I
hereto.
1.20 VOICE AND DATA NETWORKS SERVICES shall have the meaning set forth
in Subsection 2.1(a)(ix).
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ARTICLE II
SERVICES
2.1 SERVICES.
(a) INITIAL SERVICES. Except as otherwise provided herein, for the
term determined pursuant to Section 2.2 hereof, Providing Company shall provide
or cause to be provided to Receiving Company, in each case as identified in the
Exhibits attached hereto or subsequently agreed to prior to the Closing Date in
accordance with the procedures set fort herein, the following "Initial
Services":
(i) ACCOUNTING SERVICES described in Exhibit A attached
hereto;
(ii) CONSULTING SERVICES described in Exhibit B attached
hereto;
(iii) STUDIO SERVICES described in Exhibit C attached hereto;
(iv) EMPLOYEE BENEFITS AND ADMINISTRATION SERVICES described in
Exhibit D attached hereto;
(v) CORPORATE SUPPORT SERVICES described in Exhibit E attached
hereto;
(vi) MEDIA SERVICES described in Exhibit F attached hereto;
(vii) AGENCY SERVICES described in Exhibit G attached hereto;
(viii) HUMAN RESOURCES AND PAYROLL SERVICES described in Exhibit
H attached hereto;
(ix) VOICE AND DATA NETWORK SERVICES described in Exhibit I
attached hereto; and
(x) REFERRAL SERVICES described in Exhibit J attached hereto.
(b) FINAL EXHIBITS. The parties have made good faith efforts as of
the date hereof to identify each Initial Service and complete the content of
each Exhibit pertaining to the Initial Services. To the extent an Exhibit has
not been prepared for an Initial Service or an Exhibit is otherwise incomplete
as of the date hereof, the parties shall use good faith efforts to prepare or
complete Exhibits by the Closing Date. Any services reflected on any such
additional or amended Exhibit shall be deemed an "Initial Service" as if set
forth on such Exhibit as of the date hereof.
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(c) ADDITIONAL SERVICES. From time to time after the Closing Date,
the parties may identify additional services that one or both of the parties
will provide to the other party in accordance with the terms of this Agreement
(the "Additional Services" and, together with the Initial Services, the
"Services"). The parties shall create an Exhibit for each Additional Service
setting forth the identities of the Providing Company and the Receiving Company,
a description of the Service, the time period during which the Service will be
provided, the charge, if any, for the Service and any other terms applicable
thereto and obtain the approval of each party's Representative (set forth on in
Schedule 1 attached hereto). Any such Exhibit shall be agreed upon by the
parties prior to the performance of such Services.
(d) SERVICES PERFORMED BY OTHERS. At its option, Providing Company
may cause any Service it is required to provide hereunder to be provided by any
other person that is providing, or may from time to time provide, the same or
similar services for the Providing Company or its subsidiaries or business
units. The Providing Company shall remain responsible, in accordance with the
terms of this Agreement, for performance of any Services it causes to be so
provided and Receiving Party shall not be liable to any other person that is
providing any Services pursuant hereto for charges relating to the performance
of such Services, unless Providing Party assigns its right to payment for such
Services to such other person pursuant to Section 2.3(c) hereof.
(e) SERVICES NOT INCLUDED. Initial Services shall not include:
(i) Legal;
(ii) Corporate Secretarial Services;
(iii) Corporate Development Advice;
(iv) Investor Relations;
(v) Public Relations; and
(vi) Governmental Affairs.
2.2 TERM. The term of this Agreement shall commence on the Effective Date
and shall remain in effect through one year from the Effective Date ("Expiration
Date"), unless terminated on an earlier date under Section 2.7 ("Termination
Date"). This Agreement may be extended by the parties in writing either in whole
or with respect to one or more of the Services, provided, however, that such
extension shall only apply to the Service for which the Agreement was extended.
The parties shall be deemed to have extended this Agreement with respect to a
specific Service if the Exhibit for such Service specifies a completion date
beyond the aforementioned Expiration Date. The parties may agree on an earlier
expiration date for a specific Service by specifying such date on the Exhibit
for that Service. Services shall be provided up to and including the date set
forth in the applicable Exhibit, subject to earlier termination as provided
herein.
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2.3 CHARGES AND PAYMENT.
(a) CHARGES FOR INITIAL SERVICES. Receiving Company shall pay
Providing Company the charges, if any, set forth on the Exhibit for each of the
Services listed therein as adjusted, from time to time, by TNC as budgeted or
estimated costs are reconciled to actual incurred costs. Wherever practical,
charges shall be based on actual incurred costs, not budgeted or estimated. The
parties also intend for charges to be easy to administer and justify and,
therefore, they hereby acknowledge it may be counterproductive to try to recover
every cost, charge or expense, particularly those that are insignificant or de
minimis. The parties shall use good faith efforts to discuss any situation in
which the actual charge for a Service is reasonably expected to exceed the
estimated charge, if any, set forth on an Exhibit for a particular Service,
provided, however, that the incurrence of charges in excess of any such estimate
shall not justify stopping the provision of, or payment for, Services under this
Agreement.
(b) CHARGES FOR ADDITIONAL SERVICES. Receiving Company shall pay
Providing Company the charges, if any, set forth on each Exhibit hereafter
created for each of the Additional Services listed therein.
(c) PAYMENT TERMS. Providing Company shall xxxx Receiving Company
monthly for all charges pursuant to this Agreement. Such bills shall be
accompanied by reasonable documentation or other reasonable explanation
supporting such charges. Receiving Company shall pay Providing Company for all
Services provided hereunder within thirty (30) days after receipt of an invoice
therefor.
(d) PRICING ADJUSTMENTS. In the event of a tax audit adjustment
relating to the pricing of any or all Services provided pursuant to this
Agreement in which it is determined by a taxing authority that any of the
charges, individually or in combination, did not result in an arm's-length
payment, as determined under applicable law or, in the absence thereof,
internationally accepted arm's-length standards, then the parties, including a
Providing Company subcontractor providing or receiving Services hereunder, shall
agree to make corresponding adjustments to the charges in question for such
period to the extent necessary to achieve arm's-length pricing. Any adjustment
made pursuant to this Subsection 2.3(e) shall be reflected in the parties'
official books and records, and the resulting overpayment or underpayment shall
create an obligation to be paid in the manner specified in Subsection 2.3(c).
2.4 GENERAL OBLIGATIONS; STANDARD OF CARE.
(a) TRANSITIONAL NATURE OF SERVICES; CHANGES. The parties acknowledge
the transitional nature of the Services and that Providing Company may make
changes from time to time in the manner of performing the Services if Providing
Company is making similar changes in performing similar services for itself and
if Providing Company furnishes to Receiving Company at least 30 days prior
written notice.
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(b) RESPONSIBILITY FOR ERRORS; DELAYS. Providing Company's sole
responsibility to Receiving Company:
(i) for errors or omissions in Services, shall be to furnish
correct information, payment and/or adjustment in the Services, at no additional
cost or expense to Receiving Company; provided, Receiving Company must promptly
advise Providing Company of any such error or omission of which it becomes aware
after having used reasonable efforts to detect any such errors or omissions.
(ii) for failure to deliver any Service because of
Impracticability, shall be to use reasonable efforts, subject to Subsection
2.5(b), to make the Services available and/or to resume performing the Services
as promptly as reasonably practicable;
(c) GOOD FAITH COOPERATION; CONSENTS. The parties will use good faith
efforts to cooperate with each other in all matters relating to the provision
and receipt of Services. Such cooperation shall include exchanging information,
performing adjustments to costs of Services and obtaining all necessary consents
or approvals. The parties will maintain documentation supporting the information
contained in the Exhibits and cooperate with each other in making such
information available as needed in the event of a tax audit, whether in the
United States or any other country.
(d) ALTERNATIVES. If Providing Company reasonably believes it is
unable to provide any Service because of a failure to obtain necessary consents
or approvals pursuant to Subsection 2.4(c) or because of Impracticability, the
parties shall cooperate to determine the best alternative approach. Until such
alternative approach is found or the problem otherwise resolved to the
satisfaction of the parties, the Providing Party shall use reasonable efforts,
subject to Section 2.5(a) and Section 2.5(b), to continue providing the Service.
To the extent an agreed upon alternative approach requires payment above and
beyond that which is included in the Providing Company's charge for the Service
in question, the parties shall share equally in making any such payment unless
they otherwise agree in writing.
2.5 CERTAIN LIMITATIONS.
(a) IMPRACTICABILITY. Providing Company shall not be required to
provide any Service to the extent the performance of such Service becomes
"Impracticable" as a result of a cause or causes outside the reasonable control
of Providing Company including unfeasible technological requirements, or to the
extent the performance of such Services would require Providing Company to
violate any applicable laws, rules or regulations or would result in the breach
of any software license or other applicable contract.
(b) ADDITIONAL RESOURCES. Except as provided in an Exhibit for a
specific Service, in providing the Services, Providing Company shall not be
obligated to: (i) hire any additional employees; (ii) maintain the employment of
any specific employee; (iii) purchase, lease or
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license any additional equipment or software; or (iv) pay any costs related to
the transfer or conversion of Receiving Company's data to Receiving Company or
any alternate supplier of Services.
(c) NO SALE, TRANSFER, ASSIGNMENT. Receiving Company may not sell,
transfer, assign or otherwise use the Services provided hereunder, in whole or
in part, for the benefit of any person other than Receiving Company except for
Voice and Data Networks Services, which Receiving Company and its clients may
use.
II.6 CONFIDENTIALITY.
(a) INFORMATION SUBJECT TO OTHER OBLIGATIONS. Providing Company and
Receiving Company agree that all information regarding the Services, including
but not limited to, price, costs, methods of operation, and software, shall be
maintained in confidence and shall be subject to Article X of the Acquisition
Agreement, relating to preservation and exchange of information and protection
of confidential information.
(b) ALL INFORMATION CONFIDENTIAL. Any information used to perform or
receive the Services provided hereunder is confidential and proprietary to the
party or third party providing such information. The party who receives such
information shall treat such information and all related procedures and
documentation as confidential and proprietary to the party or third party
vendors providing such information.
(c) INTERNAL USE; TITLE, COPIES, RETURN. Receiving Company agrees
that:
(i) all Voice and Data Networks, procedures and related
materials provided to Receiving Company are for Receiving Company's internal use
and use of Receiving Company's clients;
(ii) title to all Voice and Data Networks used in performing the
Services provided hereunder shall remain in Providing Company or its third party
vendors;
(iii) Upon the termination of any of the Services, Receiving
Company shall return to Providing Company, as soon as practicable, all equipment
or other property of Providing Company relating to the Services which is owned
or leased by it and is or was in Receiving Company's possession or control.
II.7 TERMINATION. TNT may terminate this Agreement either with respect to
all, or with respect to any one or more, of the Services provided hereunder at
any time from time to time, for any reason or no reason, by giving written
notice to TNC at least ninety (90) days prior to the date of such termination.
TNC may terminate this Agreement with respect to all, or with respect to any one
or more, of the Services provided hereunder at any time from time to time
beginning, with
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respect to any such Service, the later of (i) one year from the Effective Date;
or (ii) the Expiration Date of such Service, for any reason or no reason, by
giving written notice to TNT at least one hundred eighty (180) days prior to the
date of such termination. In the event of any termination with respect to one or
more, but less than all, Services, this Agreement shall continue in full force
and effect with respect to any Services not terminated hereby.
II.8 DISCLAIMER OF WARRANTIES, LIMITATION OF LIABILITY OR LIABILITIES AND
INDEMNIFICATION.
(a) DISCLAIMER OF WARRANTIES. PROVIDING COMPANY DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT
TO THE SERVICES. PROVIDING COMPANY MAKES NO REPRESENTATIONS OR WARRANTIES AS TO
THE QUALITY, SUITABILITY OR ADEQUACY OF THE SERVICES FOR ANY PURPOSE OR USE.
(b) LIMITATION OF LIABILITY OR LIABILITIES; INDEMNIFICATION OF
RECEIVING COMPANY. Providing Company shall have no liability or liabilities to
Receiving Company with respect to its furnishing any of the Services hereunder
except for liability or liabilities arising out of the gross negligence or
willful misconduct of Providing Company. Providing Company will indemnify,
defend and hold harmless Receiving Company in respect of all liability or
liabilities related to, arising from, asserted against or associated with such
gross negligence or willful misconduct. Except as provided in the preceding
sentence, in no event shall Providing Company have any liability or liabilities
for any incidental, indirect special or consequential damages, whether or not
caused by or resulting from negligence or breach of obligations hereunder and
whether or not informed of the possibility of the existence of such damages.
(c) LIMITATION OF LIABILITY OR LIABILITIES; INDEMNIFICATION OF
PROVIDING COMPANY. Receiving Company shall indemnify and hold harmless the
Providing Company in respect of all liability or liabilities related to, arising
from, asserted against or associated with Providing Company's furnishing the
Services provided for in this Agreement, other than liability or liabilities
arising out of the gross negligence or willful misconduct of Providing Company.
The provisions of this indemnity shall apply only to losses which relate
directly to the provision of Services. In no event shall Receiving Company have
any liability or liabilities for any incidental, indirect, special or
consequential damages, whether or not caused by or resulting from negligence or
breach of obligations hereunder and whether or not informed of the possibility
of the existence of such damages.
(d) SUBROGATION OF RIGHTS VIS-A-VIS THIRD PARTY CONTRACTORS. In the
event any liability or liabilities arise from the performance of Services
hereunder by a third party contractor, the Receiving Company shall be subrogated
to such rights, if any, as the Providing Company may have against such third
party contractor with respect to the Services provided by such third party
contractor to or on behalf of the Receiving Company.
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II.9 REPRESENTATIVE. The parties shall each appoint a Representative to
facilitate communications and performance under this Agreement. Each party may
treat an act of a Representative of the other party as being authorized by such
other party without inquiring behind such act or ascertaining whether such
Representative had authority to so act. The initial Representatives are named on
Schedule 1. Each party shall have the right at any time and from time to time to
replace its Representative by giving notice in writing to the other party
setting forth the name of (i) the Representative to be replaced and (ii) the
replacement, and certifying that the replacement Representative is authorized to
act for the party giving the notice in all matters relating to this Agreement.
Each Representative is hereby authorized by the party he or she represents to
approve the establishment of new, or modifications to existing, Exhibits for
Initial Services before or after the Closing Date and the addition of new
Exhibits for Additional Services after the Closing Date.
II.10 DISPUTE RESOLUTION. In the event a dispute arises over the terms of
this agreement in an amount over $50,000 (a "Dispute"), the Representatives of
each party shall make a good faith effort to resolve the Dispute within fifteen
(15) days. If the Representatives cannot resolve the Dispute, the Chief
Financial Officers of each party shall make a good faith effort to resolve the
Dispute within fifteen (15) days. If the Chief Financial Officers of each party
cannot resolve the Dispute, then the Chief Executive Officers of each party
shall make a good faith effort to resolve the Dispute within fifteen (15) days.
If the Chief Executive Officers cannot resolve the Dispute, then the parties
hereby agree to settle such Dispute in arbitration pursuant to the terms set
forth in Section 2.11.
II.11 BINDING ARBITRATION.
(a) Except as set forth in Section 2.10 and 2.12, (a) any dispute,
controversy or claim arising in connection with this Agreement shall be settled
by binding arbitration if so requested by any party hereto pursuant to paragraph
(b) below. The arbitration shall be conducted by three arbitrators, who shall be
appointed pursuant to the rules of the American Arbitration Association (the
"AAA"). The arbitration shall be held in Chicago, Illinois and shall be
conducted in accordance with the commercial arbitration rules of the AAA, except
that the rules set forth in this Section 2.11 shall govern such arbitration to
the extent they conflict with the rules of the AAA.
(b) Upon written notice by a party to the other parties of a request
for arbitration hereunder, the parties shall use their commercially reasonable
efforts to cause the arbitration to be conducted in an expeditious manner. All
other procedural matters shall be within the discretion of the arbitrators. In
the event a party fails to comply with the procedures in any arbitration in a
manner deemed material by the arbitrators, the arbitrators shall fix a
reasonable period of time for compliance and, if the party does not comply
within said period, a remedy deemed just by the arbitrators, including an award
of default, may be imposed.
(c) The determination of the arbitrators shall be final and binding
on the parties.
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Judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction. The parties shall each be responsible for their own
expenses in connection with such arbitration, including, without limitation,
counsel fees and fees of experts; provided, however, that the parties shall
share equally in the expense of the arbitrators and of the AAA.
(d) Notwithstanding anything contained herein to the contrary, the
arbitrators shall not be limited as to the form of relief or remedy provided
pursuant to this Section 2.11.
II.12 INJUNCTIVE RELIEF. The parties hereto acknowledge that should they
breach any of their respective obligations under Section 2.6 such other parties
hereto may suffer irreparable injury for which money damages may be inadequate,
and therefore consent to the enforcement of such obligations by means of
temporary or permanent injunction of any court having jurisdiction thereof, and
each party hereto shall be entitled to assert any claim it may have for damages
resulting from breach of such obligations in addition to seeking injunctive
relief.
ARTICLE III
MISCELLANEOUS
III.1 TAXES. Receiving Company shall bear all taxes, duties and other
similar charges (and any related interest and penalties), imposed as a result of
its receipt of Services under this Agreement, including any tax which Receiving
Company is required to withhold or deduct from payments to Providing Company,
except (a) any tax allowable as a credit against the U.S. Federal income tax of
the Providing Company, and (b) any net income tax imposed upon Providing Company
by the country of its incorporation or any governmental entity within its
country of incorporation. To assist Providing Company in obtaining the credit
identified in Subsection (b) of this Section 3.1, Receiving Company shall
furnish Providing Company with such evidence as may be required by the relevant
taxing authorities to establish that any such tax has been paid.
III.2 LAWS AND GOVERNMENTAL REGULATIONS. Receiving Company shall be
responsible for (i) compliance with all laws and governmental regulations
affecting its business and (ii) any use Receiving Company may make of the
Services to assist it in complying with such laws and governmental regulations.
While Providing Company shall not have any responsibility for Receiving
Company's compliance with the laws and regulations referred to above, Providing
Company agrees to use reasonable efforts, subject to Subsection 2.5(b), to cause
the Services to be designed in such manner that such Services shall be able to
assist Receiving Company in complying with applicable legal and regulatory
responsibilities. The Providing Company's charge, if any, for such Service may
reflect its efforts under this Section 3.2. In no event, however, shall
Receiving Company rely solely on its use of the Services in complying with any
laws and governmental regulations.
III.3 RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be deemed or
construed by the parties or any third party as creating the relationship of
principal and agent,
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partnership or 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.
III.4 INCORPORATION OF PROVISIONS OF THE ACQUISITION AGREEMENT.
The following provisions of the Acquisition Agreement are hereby
incorporated herein by reference, and unless otherwise expressly specified
herein, such provisions shall apply as if they are fully set forth herein
(references in paragraphs (a) through (b) below to "Section" shall mean Sections
of the Acquisition Agreement, and except as expressly set forth below,
references in the material incorporated herein by reference shall be references
to the Acquisition Agreement):
(a) Article X, relating to preservation and exchange of information
and protection of proprietary information; and
(b) Article XV, general provisions.
III.5 EXPENSES. Except as expressly set forth herein (including in the
Exhibits hereto) or in the Acquisition Agreement or another related agreement,
whether or not the IPO or the Acquisition is consummated, all legal and other
costs and expenses incurred in connection with this Agreement will be paid by
TNC in the case of costs or expenses incurred by TNC, or TNT in the case of
costs or expenses incurred by TNT.
III.6 REFERENCES. All reference to Sections, Articles, Exhibits or
Schedules c ontained herein mean Sections, Articles, Exhibits or Schedules of or
to this Agreement, as the case may be, unless otherwise stated. When a reference
is made in this Agreement to a "party"or "parties", such reference shall be to a
party or parties to this Agreement unless otherwise indicated. Whenever the
words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". The use of the
singular herein shall be deemed to be or include the plural (and vice versa)
whenever appropriate. The use of the words "hereof", herein", "hereunder", and
words of similar import shall refer to this entire Agreement, and not to any
particular article, section, Subsection, clause, paragraph or other subdivision
of this Agreement, unless the context clearly indicates otherwise. The word "or"
shall not be exclusive; "may not" is prohibitive and not permissive .
III.7 MODIFICATION AND AMENDMENT. Except for modifications to Exhibits,
which may be made by Representatives pursuant to Section 2.9 hereof, this
Agreement may not be modified or amended, or any provision waived, except in
writing signed by both parties.
III.8 INCONSISTENCY. In the event of any inconsistency between the terms of
this Agreement and any of the Exhibits hereto, the terms of this Agreement,
other than charges and Expiration Dates of Services, shall control.
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IN WITNESS WHEREOF, the parties have executed this Administrative Services
Agreement as of the date first above written.
TRUE NORTH COMMUNICATIONS INC.
By:
---------------------------------
Name:
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Title:
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TN TECHNOLOGIES HOLDING INC.
By:
---------------------------------
Name:
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Title:
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EXHIBIT A
ACCOUNTING SERVICES
1. Providing Company: TNC
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2. Receiving Company: TNT
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3. Description of Service:
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. Consolidation Accounting
. SEC Reporting
. Tax Return Preparation and Planning
. Internal Audit
. General Ledger Accounting
4. Charges for Services:
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Fees for Consolidation Accounting, SEC Reporting and Tax Return Preparation
and Planning shall be salaries, benefits and overhead and shall not exceed
$50,000 per year.
Fees for Internal Audit, will be based on an allocation of salaries,
benefits (not to exceed 20% of salaries) and overhead (at 89% of salaries).
In addition, fees shall include reimbursement of out-of-pocket costs.
Salaries will be allocated based on time expended by TNC personnel on TNT
matters.
During the period that TNC performs the General Ledger Accounting function
for a TNT business unit or subsidiary, the following items will be
allocated based on a ratio of the salaries of TNT employees in the unit or
subsidiary accounted for to total salaries of all TNT/TNC employees in
units accounted for: Computer Maintenance, MIS Depreciation, and Agency
Accounting Department Costs (excluding payroll department). TNC shall be
obligated to perform General Ledger Accounting services for TNT business
units or subsidiaries that had received such Services prior to the
Effective Date.
EXHIBIT B
CONSULTING SERVICES
1. Providing Company: TNC
-----------------
2. Receiving Company: TNT
-----------------
3. Description of Service:
----------------------
. Creative
. Account Service
4. Charges for Services:
--------------------
Fees and provision for the foregoing Services must be approved in advance
and will be based on an allocation of salaries, benefits (not to exceed 20%
of salaries), out-of-pocket costs and overhead (as determined by the
internal cost allocation system of the office housing the provider of the
Service). Salaries will be allocated based on time expended by TNC
personnel on TNT matters.
EXHIBIT C
STUDIO SERVICES
1. Providing Company: TNC
-----------------
2. Receiving Company: TNT
-----------------
3. Description of Service:
----------------------
. Inhouse Audio/Visual Services
4. Charges for Services:
--------------------
Fees and provision for services must be approved in advance and will be
based on posted hourly rates and out-of-pocket costs.
EXHIBIT D
EMPLOYEE BENEFITS AND ADMINISTRATION SERVICES
1. Providing Company: TNC
-----------------
2. Receiving Company: TNT
-----------------
3. Description of Service:
----------------------
. Employee Benefits
TNC shall provide to all employees of TNT located in the United States
the employee benefits listed on Exhibit D-1 attached hereto on the same
terms and conditions as TNC provides such benefits to its employees;
provided, however, TNC shall not provide (i) any such benefits except
dental benefits to employees of Cf2GS; or (ii) any such benefits to
Modern Media employees.
. Employee Benefits Administration and Executive Compensation & Benefit
Plan Design
4. Charges for Services:
--------------------
The cost of the foregoing employee benefits, when purchased by TNC on behalf
of TNT, will be charged or rebated on the basis charged or rebated to TNC.
The cost and provision of any additional benefits to be provided by TNC
shall be approved by the parties in advance. Fees for Employee Benefits
Administration and Executive Compensation & Benefit Plan Design will be
based on an allocation of the cost of the TNC Corporate Human Resources
department across all United States users, based on salary.
EXHIBIT E
CORPORATE SUPPORT SERVICES
1. Providing Company: TNC
-----------------
2. Receiving Company: TNT
-----------------
3. Description of Service:
----------------------
. Insurance (inclusive of director and offices insurance)
. Travel Services
. Media Research
. Special Order Office Supplies (distinguished from stock items)
4. Charges for Services:
--------------------
The cost and provision for these services shall be approved in advance by
the parties.
The cost of the foregoing items, when purchased by TNC on behalf of TNT,
will be charged or rebated on the basis charged or rebated to TNC.
If TNT is included in TNC's insurance policies, TNT shall be changed on a
pro rata basis.
6. Additional Resources:
--------------------
EXHIBIT F
MEDIA SERVICES
1. Providing Company: TNC
-----------------
2. Receiving Company: TNT
-----------------
3. Description of Service:
----------------------
. Media Buying
4. Charges for Services:
--------------------
Fees will be based on standard rates for certain classes of clients
multiplied by xxxxxxxx.
EXHIBIT G
AGENCY SERVICES
1. Providing Company: TNC
-----------------
2. Receiving Company: TNT
-----------------
3. Description of Service:
----------------------
. Agency Paper, Supplies & Printing
. Agency Office Supplies
. Agency Equipment Rental/Lease
. Agency Insurance
. Agency Office Service Salaries
. Phones and local phone calls
. Voicemail
4. Expiration Date of Service:
--------------------------
Agency Services provided at an office location leased under a Space Sharing
Agreement between TNC and TNT dated the Effective Date and listed below,
shall expire, with respect to such location, on the date the related lease
terminates pursuant to the respective Space Sharing Agreement.
Office Space Locations: TN Technologies Holding - New York, Chicago, San
Francisco, Hong Kong, London;
Northern Lights Interactive - Toronto
Relationship Technology Group - New York, Chicago
R/GA Interactive - New York
5. Charges for Services:
--------------------
During the period that TNT employees are housed in an office location
leased under a Space Sharing Agreement, TNT will be charged an allocation
of the accounting cost to TNC based on a ratio of the salaries of TNT
employees housed in the facility to total salaries of all TNT/TNC employees
housed in the facility. Notwithstanding the foregoing, to the extent that
telephone charges can be specifically identified, such costs associated
with TNT personnel will be charged directly to TNT.
EXHIBIT H
HUMAN RESOURCES AND PAYROLL SERVICES
1. Providing Company: TNC
-----------------
2. Receiving Company: TNT
-----------------
3. Description of Service:
----------------------
. Payroll Services
4. Charges for Services:
--------------------
During the period that TNC performs the payroll function for a TNT unit,
Agency Human Resources and Payroll Department salaries will be allocated
based on a ratio of the salaries of TNT employees whose payroll is
administered to total salaries of all TNT/TNC employees whose payroll is
administered. In addition, fees shall include reimbursement of out-of-
pocket costs such as payroll processing company charges.
EXHIBIT I
VOICE AND DATA NETWORKS SERVICES
1. Providing Company: TNC
-----------------
2. Receiving Company: TNT
-----------------
3. Description of Service:
----------------------
. Voice and Data Networks shall mean the software, hardware and circuits
necessary to deliver voice and data messages and internal corporate
network.
4. Charges for Services:
--------------------
TNC will continue to administer the voice and data networks and will charge
TNT for usage.
Annual Charge =
Total Annual Cost to TNC * TNT and TNT Client Workstations Attached
----------------------------------------
Total Workstations Attached
EXHIBIT J
REFERRAL SERVICES
1. Providing Company: TNC/TNT
-----------------
2. Receiving Company: TNT/TNT
-----------------
3. Description of Service:
----------------------
Referral Services: TNC personnel will participate in selling TNT services
to TNC clients. TNT personnel will participate in selling TNC services to
the TNT clients.
4. Charges for Services:
--------------------
The Receiving Company will pay the Providing Company a referral fee equal
to 1.5% of revenues from projects that such Providing Party's personnel
participate in selling. Revenues are defined as xxxxxxxx less cost of
xxxxxxxx (third party production costs).
Neither entity will xxxx the other for personnel costs incurred in the
sales process, unless approved in advance.
SCHEDULE 1
REPRESENTATIVES
Representative of TNC: Xxxx Xxxxxx, Treasurer
True North Communications Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Representative of TNT: Xxxxxxx Xxxxxxx, Chief Financial Officer
TN Technologies Holding Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
