EXHIBIT 2.2
-----------
[ EXECUTED COPY ]
TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (the "Agreement"), dated as of the
6th day of February, 2004, is entered into by and between CoolSavings,
Inc., a Delaware corporation ("CoolSavings"), and ADS Alliance Data
Systems, Inc., ("ADS") a Delaware corporation.
WITNESSETH:
WHEREAS, ADS is selling its Business and the Purchased Assets related
thereto, as defined in and pursuant to that certain Asset Purchase
Agreement dated as of February 6, 2004 between CoolSavings and ADS ("APA"),
to CoolSavings;
WHEREAS, in order to facilitate an orderly transition of the Business
after the Closing Date (as defined in the APA), the parties desire that ADS
provide CoolSavings with the Services (as defined below) upon the terms and
conditions set forth herein;
WHEREAS, in connection with, and as a condition to, the consummation
of the transactions contemplated by the APA, the parties have agreed to
enter into this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises, the
consummation of the transactions contemplated by the APA and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
TRANSITION SERVICES
1.1 SERVICES. During the term of this Agreement, ADS shall provide
to CoolSavings the services listed on and described on SCHEDULE A attached
hereto (collectively the "Services" and each separately a "Service"). ADS
shall perform such services in a professional, workmanlike manner and
consistent with ADS' customary practices. In addition, without limiting
the generality of the foregoing, the Services shall be available to
CoolSavings in accordance with applicable industry standards, and ADS'
response times in providing the Services, and the number of resources it
dedicates to each Service, shall be in accordance with applicable industry
standards. CoolSavings agrees to purchase the Services from ADS on the
terms as set out herein.
1.2 ADDITIONAL SERVICES. In the event that during the term of this
Agreement CoolSavings needs services in addition to those then listed and
described on SCHEDULE A, the parties shall negotiate in good faith to
determine if ADS can provide such additional services upon mutually agreed
terms and conditions (the "Additional Services"), and if they can so agree,
SCHEDULE A shall be amended by written agreement of the parties hereto to
include such Additional Services and to reflect such terms and conditions
as so agreed.
1
1.3 EMPLOYEES. During the term of this Agreement, ADS hereby
agrees to make employees of ADS available to CoolSavings upon CoolSavings'
reasonable requests that such employees assist CoolSavings in (a)
educating, assisting and training CoolSavings employees on all hardware,
software, business processes and any other agreed upon activities necessary
to carry out the Services subsequent to the termination of this Agreement;
(b) providing the on-going operations for the period of this Agreement; and
(c) transitioning facilities and equipment included within the Purchased
Assets to CoolSavings.
ARTICLE 2
TERM AND TERMINATION
2.1 DURATION. ADS shall provide all Services hereunder until the
earlier of (i) the expiration or termination of the term of this Agreement,
(ii) the expiration of ADS' right to provide a particular Service under the
applicable existing contract (ADS shall give CoolSavings such prior written
notice as is reasonably practicable under the circumstances of any such
expiration), or (iii) such time as CoolSavings provides written notice to
ADS that it desires to cease receiving any such Service. If CoolSavings
desires to terminate any Service early, CoolSavings shall give ADS such
prior written notice as is reasonably practicable under the circumstances
of its intent to cease the purchase of such Services(s).
2.2 TERM. Unless otherwise terminated as set forth below, the
initial term of this Agreement shall commence on the Closing Date and shall
end on the date that is six (6) months after the Closing Date (the "Initial
Term"). In addition, CoolSavings shall have the right to renew this
Agreement for successive periods of one (1) month each (each, a "Renewal
Term") by providing ADS with not less than thirty (30) days written notice
prior to the end of the Initial Term or the applicable Renewal Term.
2.3 TERMINATION FOR BREACH. This Agreement may be terminated by
either party for cause immediately by written notice if the other party
materially breaches any material provision of this Agreement and fails to
cure such breach within thirty (30) days after receipt of written notice
describing the breach.
2.4 TERMINATION BY COOLSAVINGS FOR CONVENIENCE. CoolSavings may
terminate this Agreement for convenience at any time on fifteen (15) days
prior written notice to ADS.
ARTICLE 3
FEES AND EXPENSES
3.1 FEE FOR SERVICES. In consideration of the Services rendered to
CoolSavings pursuant to Section 1.1 hereof, CoolSavings shall pay ADS for
such Services an amount equal to (a) Ninety-Three Thousand Dollars
($93,000) for the Initial Term (the "Initial Term Fee"), and (b) Forty
Thousand Dollars ($40,000) for each Renewal Term, if any (each, a "Renewal
Term Fee").
3.2 PAYMENT. CoolSavings shall pay the Initial Term Fee
contemporaneously with the closing of the transactions contemplated by the
APA. CoolSavings shall pay any Renewal Term Fee, if any, on the second
business day of the applicable Renewal Term.
2
ARTICLE 4
FORCE MAJEURE; INDEMNIFICATION
4.1 FORCE MAJEURE. Neither party shall be liable for, or be
considered to be in breach of or default under this Agreement on account
of, any delay or failure to perform as required by this Agreement as a
result of any sabotage, war, general utility outage, fire, explosion,
earthquake, storm, flood or other similar casualty beyond the reasonable
control of such party; provided that such party uses its best efforts to
promptly overcome or mitigate the delay or failure to perform. Any party
whose performance is delayed or prevented by any cause or condition within
the purview of this paragraph shall promptly notify the other party
thereof, the anticipated duration of the delay or prevention, and the steps
being taken to overcome or mitigate the delay or failure to perform.
4.2 INDEMNIFICATION.
(a) CoolSavings agrees to hold harmless, indemnify and defend ADS,
and its Affiliates and any of their respective directors, officers,
employees and agents, from and against any and all liabilities, penalties,
demands, claims, actions and causes of action, suits, obligations,
encumbrances, losses, damages, costs and expenses including, but not
limited to, reasonable attorney's fees and expenses (all of the foregoing,
collectively, "Losses") to which ADS and any of its Affiliates, and any of
their respective directors, officers, employees or agents, may be
subjected, arising out of or attributable, directly or indirectly, to any
claims for bodily injury or death or damage to tangible property which are
caused by the acts or omissions of CoolSavings' employees or agents in
connection with their use of ADS' facilities hereunder.
(b) ADS shall hold harmless, indemnify and defend CoolSavings, and
its Affiliates and any of their respective directors, officers, employees
and agents, from and against any and all Losses to which CoolSavings and
any of its Affiliates, and any of their respective directors, officers,
agents or employees, may be subjected, arising out of or attributable,
directly or indirectly, to (i) ADS' failure to provide the Services in
accordance with the terms hereof, (ii) any claim that ADS' performance of
the Services infringes upon any intellectual property or personal right of
any third party, any claim for bodily injury or death or damage to
tangible property caused by the acts or omissions of ADS' employees or
agents in connection with their performance of the Services hereunder.
4.3 DISCLAIMER OF WARRANTY. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, ADS HEREBY EXPRESSLY 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.
4.4 LIMITATION OF LIABILITY. The aggregate liability of ADS to
CoolSavings, for damages and payments made pursuant to Section 4.2(a) shall
be limited to $150,000. The aggregate liability of CoolSavings, for damages
and payments made pursuant to Section 4.2(b) shall be limited to $150,000.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 ADS AUTHORITY. This Agreement has been duly executed and
delivered by ADS and constitutes a valid and legal obligation of ADS,
enforceable against it in accordance with its terms.
5.2 COOLSAVINGS AUTHORITY. This Agreement has been duly executed
and delivered by CoolSavings and constitutes a valid and legal obligation
of CoolSavings, enforceable against it in accordance with its terms.
3
ARTICLE 6
CONFIDENTIALITY AND OWNERSHIP
6.1 CONFIDENTIALITY OBLIGATION. Each party agrees to abide by the
terms of the confidentiality obligations of Section 4.03(c) of the APA,
which are incorporated herein by reference, with respect to any
"Information" (as defined in the APA) disclosed by one party to the other
in connection with the performance of their respective obligations
hereunder. Such provisions shall be applicable for a period of two (2)
years.
6.2 OWNERSHIP. Each party and their respective licensors and third
party information and content providers retain all right, title and
interest in and to all of the information, content, data, designs,
materials and all copyrights, patent rights, trademark rights and other
proprietary rights thereto provided by it to the other party pursuant to
this Agreement. Except as expressly provided herein, or pursuant to the
APA, no other right or license with respect to any copyrights, patent
rights, trademark rights or other proprietary rights is granted under this
Agreement. (For the avoidance of doubt, ADS acknowledges and agrees that
(i) ADS has delivered the Purchased Assets to CoolSavings in accordance
with the terms of the APA and that certain Xxxx of Sale and Assignment and
Assumption Agreement executed and delivered in connection therewith, (ii)
as of the date hereof CoolSavings is the sole owner of all right, title and
interest in and to the Purchased Assets, and (iii) nothing in this
Section 6.2 shall limit or be deemed a limitation on CoolSavings' right to
use the Purchased Assets (including, without limitation, any and all
Information included therein) from and after the date hereof in connection
with the operation of its business.) All rights not expressly granted
hereunder by a party are expressly reserved to such party and its licensors
and information and content providers.
ARTICLE 7
MISCELLANEOUS
7.1 NOTICES. All notices hereunder shall be in writing and shall
be deemed given if delivered personally or mailed by registered or
certified mail (return receipt requested), postage prepaid, to the parties
at their respective addresses set forth in the APA (or at such other
address for a party as shall be specified by like notice).
7.2 ENTIRE AGREEMENT. This Agreement together with each schedule
referred and attached hereto, along with the APA, constitute the entire and
only understanding and agreement between the parties relating to the
Services, and supercedes all proposals, oral or written, all negotiations,
conversations, or discussions between the parties hereto, with respect to
the subject matter hereof. This Agreement shall not be deemed to provide
any third parties with any claim, right of action, remedy or other right.
7.3 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard
to the conflict of law principles thereof.
7.4 ENFORCEMENT. The parties hereto acknowledge and agree that
damages alone will be an insufficient remedy for a breach or violation of
the provisions of this Agreement and that each party shall be entitled as a
matter of right, without limitation of any other remedy available to it for
breach or violation of the provisions of this Agreement, to equitable
relief (including specific performance) in any court of competent
jurisdiction, it being intended that all rights and remedies of the parties
under this Agreement are cumulative and non-exclusive of any other right or
remedy.
4
7.5 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in anyway the meaning or
interpretation of this Agreement or any of the provisions hereof.
7.6 ASSIGNMENT. This Agreement may not be assigned by either party
without the prior written consent of the other party, which may not be
unreasonably withheld; provided, notwithstanding the foregoing, CoolSavings
may assign this Agreement to any Affiliate of CoolSavings or in connection
with the sale by CoolSavings of all or substantially all of the Business
and/or the Purchased Assets without the prior written consent of ADS.
7.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and
inure to the benefit of the parties and their respective successors,
including any successor by reason of the merger or consolidation of any
party, and permitted assigns.
7.8 NO RELATIONSHIP. The relationship of the parties to this
Agreement is that of independent contracting parties. This Agreement is
not intended to establish any employment relationship or partnership
between the parties hereto, including their affiliates, subsidiaries,
employees, officers, directors or agents. In no event shall either party's
personnel be deemed to be employees of the other party.
7.9 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provision of this Agreement. If any provision of this Agreement
is so broad as to be unenforceable, such provision shall be interpreted to
be only so broad as is enforceable.
7.10 CONFLICTS. In case of conflict between the terms and
conditions of this Agreement and any schedule or exhibit hereto, the terms
and conditions of such exhibit or schedule shall control and govern as it
relates to the Services to which those terms and conditions apply.
* * * * *
5
IN WITNESS WHEREOF, the undersigned have executed this Transition
Services Agreement as of the date first written above.
COOLSAVINGS, INC.
By: /s/ Xxxxxxx Xxxx
Xxxxxxx Xxxx
President & CEO
ADS ALLIANCE DATA SYSTEMS, INC.
By: /s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Executive Vice President
6
Schedule A
Services
The following Services shall be provided by ADS under this Agreement.
The Services will be broken down into the following areas:
. Help Desk Support - Provides single point of contact into ITS
and case management
. Internet Application Services (IESS) - Supports Upons consumer
site and administration site
. Distributed System Support (Unix) - Supports Sun hardware,
Solaris operating system, tape back up system, and SAN storage
array
. Distributed Database Support - Supports Oracle database
environment
. Network Support - Supports all network related hardware and
telecom connections both within the Chicago office and within
the ADS Dallas DMZ as they exist at the effective date of this
Agreement.
. Desk Top/Security/File Server Support - Provides support for
all standard ADS desktop applications, office automation
software such as Email, and maintenance of Chicago based file
server for no more than thirteen (13) people.
SCOPE
The scope of the Services will include:
. Daily support activities - These are activities that are
requested two weeks in advance by CoolSavings and scheduled by
IT. (i.e. Database copies, Content Moves)
. Emergency Support - This is the support of critical outages on
a 24/7 basis. This would include anything that can be defined
as having a detrimental impact on the Upons consumer web site.
ADS shall promptly notify CoolSavings of the failure of any
hardware or software used by ADS exclusively in connection with
its performance of such Services; if after receipt of such
notice CoolSavings requests that ADS repair or replace such
failed hardware or software, CoolSavings shall reimburse ADS
for all reasonable expenses incurred in connection with such
repair/replacement.
. Transition Services - These are all the activities required to
successfully transition the CoolSavings platform. This
typically includes two months of planning, two weeks execution,
and one month of follow-up access to legacy CoolSavings
platform.
The Services shall be described as follows:
(a) HELP DESK SUPPORT
CoolSavings will be able to continue to use the help desk as
the first line for getting support when system emergencies
occur. This service will be available on a 24/7 basis for the
term, and ADS shall respond to CoolSavings depending on the
level of the problem in the same manner ADS has supported that
office in the past.
A-1
(b) INTERNET APPLICATION SERVICES (IESS)
Currently, the following applications are supported by ADS'
IESS team:
. Weblogic 6.1 (2 instance)
. Resin (2 Instances)
. MS-Internet Information Server (4 Instances)
. Weblogic/IIS API Connector
. Web Application Automated Monitoring
During the term ADS will continue to support these applications
including patches, upgrades, and configuration support, and ADS
shall assist with connectivity providing CoolSavings a
15MB/second connection. CoolSavings will be responsible for
providing the patches and upgrades at CoolSavings' cost.
Additionally, ADS will provide 24/7 support for emergencies
involving these applications.
IESS will provide content migration services from the
development environment to the production environment at a
scheduled time set by ADS. Currently, these moves are
available on Mondays, Tuesdays, and Thursdays with two weeks
advance notice.
During platform migration, CoolSavings will receive assistance
from IESS to transition content and configuration. ADS will
make available a hosted a location within the Dallas DMZ for
ftping out to the new hosting provider. In addition, ADS shall
assist CoolSavings, for term of this Agreement, in moving the
virtual private network (VPN) to CoolSavings' Chicago offices.
(c) DISTRIBUTED SYSTEM SUPPORT (UNIX)
The distributed system group will support the hardware and
software of the following servers:
. UXPurchaserAP1 - Production Application Server
. UXPurchaserUT1 - Production Utility/Batch Server
. UXPurchaserDB1 - Production Database Server
. UXPurchaserAP2 - Development Application Server
. UXPurchaserUT2 - Development Utility/Batch Server
. UXPurchaserDB2 - Development Database Server
. SAN Storage Array
ADS will host, maintain and provide the support of the above
listed servers in the area of patches, upgrades, hardware
maintenance, and data backups. CoolSavings will be responsible
for providing the patches and upgrades at CoolSavings' cost.
ADS will continue to provide the agent monitoring of the CPU,
Memory, and Disk Usage on all production servers. These
services will be available 24/7 for emergencies that are
related to the UNIX environment.
ADS shall coordinate with CoolSavings to determine appropriate
timing for any planned upgrades or maintenance to the above
listed servers, and ADS shall provide CoolSavings with not less
A-2
than 24 hours written notice of any planned maintenance to the
ADS facilities that may affect such servers. If any emergency
maintenance to such servers is required, ADS may undertake such
emergency maintenance at any time for as short a period of time
as is necessary and shall notify CoolSavings as soon as is
practicable under the circumstances.
(d) DISTRIBUTED DATABASE SUPPORT
The distributed database support team will support the
following Oracle instances:
. XXXXXX@XXXxxxxxxxxXX0.XXXXXXX.XXX - Production Database
. XXXXXXX@XXXxxxxxxxxXX0.XXXXXXX.XXX - Development Database
. XXxxxxxxxxXX@XXXxxxxxxxxXX0.XXXXXXX.XXX - Production Data
warehouse
ADS will continue to support the above listed databases in the
area of patches, upgrades, instance creation, instance copies,
trouble shooting, and data backups. ADS shall maintain
commercially reasonable data security systems to prevent
unauthorized access to such databases. In addition, ADS shall
prepare "backup" copies of the databases on a daily basis and
shall provide off-site storage of such backup copies of the
databases. CoolSavings will be responsible for providing the
patches and upgrades at CoolSavings' cost. ADS will provide
24/7 support for emergencies involving these applications.
(e) NETWORK SUPPORT
The CoolSavings network can be divided into two distinct
components:
. Office Network - Includes all routers, switches,
firewalls, and telecom that provide intranet and internet
connectivity to Chicago based employees and Chicago based
hardware.
. Application Network - Includes all routers, switches,
firewalls and telecom that provide network connectivity
to the Upons web applications housed within the raised
floor in Dallas.
ADS will provide support for both of these networks.
(f) DESK TOP/SECURITY/FILE SERVER SUPPORT
ADS will provide support for all standard ADS desktop
applications, office automation software such as Email, and
maintenance of Chicago based file server. ADS shall provide
email support and access for a period of forty-five (45) days
after the effective date of this Agreement, and shall then
provide email forwarding in accordance with the terms of the
third paragraph of this paragraph (f).
Until the time at which CoolSavings reimages the desktops and
replaces the File Server, ADS will provide support from the
Buffalo Grove desktop support, Email Support Service out of
Dallas and Windows Security support out of Columbus.
ADS will provide email forwarding consistent with the needs of
the agreed upon migration process. The period of the
forwarding window will start the day that CoolSavings makes
email accounts available to the CoolSavings employees and will
end not more than sixty (60) days after such day.
A-3
