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EXHIBIT 10.5
TRANSITION SERVICES AGREEMENT
TRANSITION SERVICES AGREEMENT, dated as of November 5, 1999
(this "Agreement"), between Xxxxxx Corporation, a Delaware corporation
("Xxxxxx"), and Xxxxxx Worldwide, Inc., a Delaware corporation ("Xxxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxxx and Xxxxxx have entered into an Agreement and
Plan of Distribution, dated as of October 22, 1999 (the "Distribution
Agreement"), pursuant to which Xxxxxx will transfer certain assets to Xxxxxx and
have Xxxxxx assume certain liabilities of Xxxxxx, and Xxxxxx will transfer
certain assets to Xxxxxx and have Xxxxxx assume certain liabilities of Xxxxxx;
WHEREAS, in connection with the transactions contemplated by
the Distribution Agreement, Xxxxxx and Xxxxxx wish to enter into this Agreement,
Xxxxxx desires to cause Xxxxxx to provide the Services set forth on Schedule A
to Xxxxxx, and Xxxxxx is willing to provide such Services; and
WHEREAS, Xxxxxx desires to cause Xxxxxx to provide the
Services set forth on Schedule B to Xxxxxx, and Lanier is willing to provide
such services;
NOW, THEREFORE, the parties hereto, in consideration of the
premises and the mutual covenants contained herein, agree as follows:
SECTION 1. SPECIFIC DEFINITIONS.
As used in this Agreement, the following terms have the
respective meanings set forth below:
"Applicable Rate" shall mean the rate of interest per annum
announced from time to time by Citibank, N.A. as its prime lending rate plus 4%
per annum.
"Bankruptcy Event" with respect to a party shall mean the
filing of an involuntary petition in bankruptcy or similar proceeding against
such party seeking its reorganization, liquidation or the appointment of a
receiver, trustee or liquidator for it or for all or substantially all of its
assets, whereupon such petition shall not be dismissed within sixty (60) days
after the filing thereof, or if such party shall (i) apply for or consent in
writing to the appointment of a receiver, trustee or liquidator of all or
substantially all of its assets, (ii) file a voluntary petition or admit in
writing its inability to pay its debts as they become due, (iii) make a general
assignment for the benefit of creditors, (iv) file a petition or an answer
seeking reorganization or an arrangement with its creditors or take advantage of
any insolvency law with respect to itself as
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debtor, or (v) file an answer admitting the material allegations of a petition
filed against it in any bankruptcy, reorganization, insolvency proceedings or
any similar proceedings;
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banks in New York City, New York are authorized or
obligated by law or executive order to close.
"Change in Control" of a party shall mean (i) a change in the
composition of the board of directors of such party (other than a change due to
the death or disability of a member of the board of directors) such that at the
end of any period of twelve (12) consecutive months a majority of the persons
constituting such board of directors were not directors at the start of such
period and were not elected by vote of a majority of the directors who were
directors at the start of such period), (ii) the sale or other disposition by
such party of all or substantially all of the assets of such party (other than a
bona fide pledge in connection with a financing), or (iii) a merger,
consolidation or other business combination involving such party, which results
in the stockholders of such party immediately prior to such event owning less
than 50% of the capital stock of the surviving entity;
"Xxxxxx Services" shall mean those transitional services to be
provided by Xxxxxx to Xxxxxx set forth on Schedule A hereto to assist Xxxxxx in
operating Xxxxxx'x business.
"Xxxxxx Services" shall mean those transitional services to be
provided by Xxxxxx to Xxxxxx set forth on Schedule B hereto to assist Xxxxxx in
operating Xxxxxx' business.
"Loss" shall mean any damage, claim, loss, charge, action,
suit, proceeding, deficiency, tax, interest, penalty and reasonable costs and
expenses (including reasonable attorneys' fees).
"Person" shall mean any natural person, corporation, business
trust, limited liability company, joint venture, association, company,
partnership or government, or any agency or political subdivision thereof.
"Services" shall mean, collectively, the Xxxxxx Services and
the Xxxxxx Services.
SECTION 2. SERVICES.
2.1 Services. (a) Xxxxxx shall provide to Xxxxxx each Xxxxxx
Service for the term set forth opposite the description of such Xxxxxx Service
in Schedule A. Additional services may be provided to Xxxxxx by Xxxxxx if such
arrangement is agreed to in writing and executed by Xxxxxx and Xxxxxx.
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(b) Xxxxxx shall provide to Xxxxxx each Xxxxxx Service for
the term set forth opposite the description of such Xxxxxx Service in Schedule
B. Additional services may be provided by Xxxxxx to Xxxxxx if such arrangement
is agreed in writing and executed by Xxxxxx and Xxxxxx.
2.2 Standard of Service. In performing the Services, Xxxxxx
and Xxxxxx shall provide substantially the same level of service and use
substantially the same degree of care as their respective personnel provided and
used in providing such Services prior to the date hereof, subject in each case
to any provisions set forth on Schedule A or Schedule B with respect to each
such Service.
SECTION 3. LICENSES AND PERMITS.
Each party warrants and covenants that all duties and
obligations (including with respect to Xxxxxx, all Xxxxxx Services and with
respect to Xxxxxx, all Xxxxxx Services) to be performed hereunder shall be
performed in compliance with all material applicable federal, state, provincial
and local laws, rules and regulations. Each party shall obtain and maintain all
material permits, approvals and licenses necessary or appropriate to perform its
duties and obligations (including with respect to Xxxxxx, the Xxxxxx Services
and with respect to Xxxxxx, the Xxxxxx Services) hereunder and shall at all
times comply with the terms and conditions of such permits, approvals and
licenses.
SECTION 4. PAYMENT.
4.1 (a) In consideration for the provision of each of the
Xxxxxx Services, Xxxxxx shall pay to Xxxxxx the fee set forth for such Xxxxxx
Service on Schedule A.
(b) In consideration for the provision of each of the
Xxxxxx Services, Xxxxxx shall pay to Xxxxxx the fee set forth for such Xxxxxx
Service on Schedule B.
4.2 (a) In addition to the fees payable in accordance with
Section 4.1(a), Xxxxxx shall reimburse Xxxxxx for all reasonable and necessary
out-of-pocket costs and expenses (including without limitation postage and other
delivery costs, telephone, telecopy and similar expenses) incurred by Xxxxxx
with respect to third parties in connection with the provision of Xxxxxx
Services to Xxxxxx pursuant to the terms of this Agreement or paid by Xxxxxx on
behalf of Xxxxxx.
(b) In addition to the fees payable in accordance with
Section 4.1(b), Xxxxxx shall reimburse Xxxxxx for all reasonable and necessary
out-of-pocket costs and expenses (including without limitation postage and other
delivery costs, telephone, telecopy and similar expenses) incurred by Xxxxxx
with respect to third parties in connection with the provision of
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Xxxxxx Services to Xxxxxx pursuant to the terms of this Agreement or paid by
Xxxxxx on behalf of Xxxxxx.
4.3 (a) Xxxxxx will invoice Xxxxxx in U.S. dollars: (i) as of
the last day of each calendar month for any fees payable by Xxxxxx in accordance
with Section 4.1(a) for Xxxxxx Services listed on Schedule A provided pursuant
to the terms of this Agreement during such month; (ii) as of the last day of
each calendar month for any amounts payable by Xxxxxx in accordance with Section
4.2(a) for any out-of-pocket costs and expenses incurred during the immediately
preceding month to the extent Xxxxxx has received an invoice from such Third
Party; and (iii) as of the last day of each calendar month for any taxes
(excluding income taxes) accrued with respect to the provision of Xxxxxx
Services to Xxxxxx during such month. Xxxxxx shall deliver or cause to be
delivered to Xxxxxx each such invoice within thirty (30) days following the last
day of the calendar month to which such invoice relates. Xxxxxx shall pay each
such invoice received by electronic funds transfer as follows: in the case of
clauses (i) and (ii), within twenty (20) Business Days of the date on which such
invoice was received, and in the case of clause (iii), provided that Xxxxxx
delivers such invoice three (3) Business Days prior to the due date for such tax
payments, not later than one (1) Business Day prior to such due date.
(b) Xxxxxx will invoice Xxxxxx in U.S. dollars: (i) as of
the last day of each calendar month for any fees payable by Xxxxxx in accordance
with Section 4.1(b) for Xxxxxx Services listed on Schedule B provided pursuant
to the terms of this Agreement during such month; (ii) as of the last day of
each calendar month for any amounts payable by Xxxxxx in accordance with Section
4.2(b) for any out-of-pocket costs and expenses incurred during the immediately
preceding month to the extent Xxxxxx has received an invoice from such Third
Party; and (iii) as of the last day of each calendar month for any taxes
(excluding income taxes) accrued with respect to the provision of Xxxxxx
Services to Xxxxxx during such month. Xxxxxx shall deliver or cause to be
delivered to Xxxxxx each such invoice within thirty (30) days following the last
day of the calendar month to which such invoice relates. Xxxxxx shall pay each
such invoice received by electronic funds transfer: in the case of clauses (i)
and (ii), within twenty (20) Business Days of the date on which such invoice was
received, and in the case of clause (iii), provided that Xxxxxx delivers such
invoice three (3) Business Days prior to the due date for such tax payments, not
later than one (1) Business Day prior to such due date.
4.4 Any amount not paid when due shall be subject to a late
payment fee computed daily at a rate equal to the Applicable Rate. Each party
agrees to pay the other party's reasonable attorneys' fees and other costs
incurred in collection of any amounts owed to such other party hereunder and not
paid when due. Notwithstanding anything to the contrary contained herein, in the
event either party fails to make a payment when due hereunder, and such failure
continues for a period of thirty (30) days following delivery of notice to such
non-paying party of such failure, the other party shall have the right to cease
provision of Services to such non-paying party until such overdue payment (and
any applicable late payment fee accrued with respect thereto) is paid in full.
Such right of the party providing services shall not in any manner limit or
prejudice any of such party's other rights or remedies in the event of the
non-paying
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party's failure to make payments when due hereunder, including without
limitation any rights or remedies pursuant to Section 7.
4.5 In the event of a termination of services pursuant to
Section 7.1, with respect to the calendar month in which such services cease to
be provided, the recipient of such services shall be obligated to pay a pro rata
share of the fee for such service set forth on Schedule A or B, as applicable,
equal to the product of (x) the fee set forth on Schedule A or B, as applicable,
multiplied by (y) a fraction, the numerator of which is the number of days in
the calendar month in which such services cease to be provided preceding and
including the last date on which such services are provided, and the denominator
of which is 30.
SECTION 5. INDEMNIFICATION.
5.1 Indemnification by Principal. (a) Xxxxxx agrees to
indemnify, defend and hold Xxxxxx harmless from and against any Loss to which
Xxxxxx may become subject arising out of, by reason of or otherwise in
connection with the provision hereunder by Xxxxxx of Xxxxxx Services, other than
Losses resulting from Xxxxxx' gross negligence, willful misconduct or material
breach of its obligations pursuant to this Agreement. Notwithstanding any
provision in this Agreement to the contrary, Xxxxxx shall not be liable under
this Section 5.1 for any consequential, special or punitive damages (including
but not limited to lost profits), except to the extent that such consequential,
special or punitive damages relate to a Loss resulting from a Third Party Claim
(as defined below).
(b) Xxxxxx agrees to indemnify, defend and hold Xxxxxx
harmless from and against any Loss to which Xxxxxx may become subject arising
out of, by reason of or otherwise in connection with the provision hereunder by
Xxxxxx of Xxxxxx Services, other than Losses resulting from Xxxxxx'x gross
negligence, willful misconduct or material breach of its obligations pursuant to
this Agreement. Notwithstanding any provision in this Agreement to the contrary,
Xxxxxx shall not be liable under this Section 5.1 for any consequential, special
or punitive damages (including but not limited to lost profits), except to the
extent that such consequential, special or punitive damages relate to a Loss
resulting from a Third Party Claim (as defined below).
5.2 Indemnification by Provider. (a) Xxxxxx agrees to
indemnify, defend and hold Xxxxxx harmless from and against any Loss to which
Lanier may become subject arising out of, reason of or otherwise in connection
with the provision hereunder by Xxxxxx of Xxxxxx Services to Xxxxxx where such
Losses resulted from Xxxxxx' xxxxx negligence, willful misconduct or material
breach of its obligations pursuant to this Agreement.
(b) Xxxxxx agrees to indemnify, defend and hold Xxxxxx
harmless from and against any Loss to which Xxxxxx may become subject arising
out of, by reason of or otherwise in connection with the provision hereunder by
Xxxxxx of Xxxxxx Services to Xxxxxx where such
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Losses resulted from Xxxxxx'x xxxxx negligence, willful misconduct or material
breach of its obligations pursuant to this Agreement.
5.3 Third Party Claims. If a claim or demand is made against
Xxxxxx or Xxxxxx (each, an "Indemnitee") by any Person who is not a party to
this Agreement (a "Third Party Claim") as to which such Indemnitee is entitled
to indemnification pursuant to this Agreement, such Indemnitee shall notify the
party which is or may be required pursuant to Section 5.1 or Section 5.2 hereof
to make such indemnification (the "Indemnifying Party") in writing, and in
reasonable detail, of the Third Party Claim promptly (and in any event within 15
Business Days) after receipt by such Indemnitee of written notice of the Third
Party Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually prejudiced as a result of such
failure (except that the Indemnifying Party shall not be liable for any expenses
incurred during the period in which the Indemnitee failed to give such notice).
Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly
(and in any event within ten Business Days) after the Indemnitee's receipt
thereof, copies of all notices and documents (including court papers) received
by the Indemnitee relating to the Third Party Claim.
If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses and acknowledges in writing its obligation to indemnify the
Indemnitee therefor, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided that such counsel is not reasonably objected to by
the Indemnitee. Should the Indemnifying Party so elect to assume the defense of
a Third Party Claim, the Indemnifying Party shall, within 30 days (or sooner if
the nature of the Third Party Claim so requires), notify the Indemnitee of its
intent to do so, and the Indemnifying Party shall thereafter not be liable to
the Indemnitee for legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense thereof; provided, that such
Indemnitee shall have the right to employ counsel to represent such Indemnitee
if, in such Indemnitee's reasonable judgment, a conflict of interest between
such Indemnitee and such Indemnifying Party exists in respect of such claim
which would make representation of both such parties by one counsel
inappropriate, and in such event the fees and expenses of such separate counsel
shall be paid by such Indemnifying Party. If the Indemnifying Party assumes such
defense, the Indemnitee shall have the right to participate in the defense
thereof and to employ counsel, subject to the proviso of the preceding sentence,
at its own expense, separate from the counsel employed by the Indemnifying
Party, it being understood that the Indemnifying Party shall control such
defense. The Indemnifying Party shall be liable for the fees and expenses of
counsel employed by the Indemnitee for any period during which the Indemnifying
Party has failed to assume the defense thereof (other than during the period
prior to the time the Indemnitee shall have given notice of the Third Party
Claim as provided above). If the Indemnifying Party so elects to assume the
defense of any Third Party Claim, all of the Indemnitees shall cooperate with
the Indemnifying Party in the defense or prosecution thereof, including by
providing or causing to be provided agreements, documents, books, records, files
and witnesses as soon as
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reasonably practicable after receiving any request therefor from or on behalf of
the Indemnifying Party.
If the Indemnifying Party acknowledges in writing
responsibility under this Section 5 for a Third Party Claim, then in no event
will the Indemnitee admit any liability with respect to, or settle, compromise
or discharge, any Third Party Claim without the Indemnifying Party's prior
written consent; provided, however, that the Indemnitee shall have the right to
settle, compromise or discharge such Third Party Claim without the consent of
the Indemnifying Party if the Indemnitee releases the Indemnifying Party from
its indemnification obligation hereunder with respect to such Third Party Claim
and such settlement, compromise or discharge would not otherwise adversely
affect the Indemnifying Party. If the Indemnifying Party acknowledges in writing
liability for a Third Party Claim, the Indemnitee will agree to any settlement,
compromise or discharge of a Third Party Claim that the Indemnifying Party may
recommend and that by its terms obligates the Indemnifying Party to pay the full
amount of the liability in connection with such Third Party Claim and releases
the Indemnitee completely in connection with such Third Party Claim and that
would not otherwise adversely affect the Indemnitee. If an Indemnifying Party
elects not to assume the defense of a Third Party Claim, or fails to notify an
Indemnitee of its election to do so as provided herein, such Indemnitee may
compromise, settle or defend such Third Party Claim.
Notwithstanding the foregoing, the Indemnifying Party shall
not be entitled to assume the defense of any Third Party Claim (and shall be
liable for the fees and expenses of counsel incurred by the Indemnitee in
defending such Third Party Claim) if the Third Party Claim seeks an order,
injunction or other equitable relief or relief for other than money damages
against the Indemnitee which the Indemnitee reasonably determines, after
conferring with its counsel, cannot be separated from any related claim for
money damages. If such equitable relief or other relief portion of the Third
Party Claim can be so separated from that for money damages, the Indemnifying
Party shall be entitled to assume the defense of the portion relating to money
damages.
(b) In the event of payment by an Indemnifying Party
to any Indemnitee in connection with any Third-Party Claim, such Indemnifying
Party shall be subrogated to and shall stand in the place of such Indemnitee as
to any events or circumstances in respect of which such Indemnitee may have any
right or claim relating to such Third-Party Claim against any claimant or
plaintiff asserting such Third-Party Claim. Such Indemnitee shall cooperate with
such Indemnifying Party in a reasonable manner, and at the cost and expense of
such Indemnifying Party, in prosecuting any subrogated right or claim.
(c) The remedies provided in this Section 5 shall be
cumulative and shall not preclude assertion by any Indemnitee of any other
rights or the seeking of any and all other remedies against any Indemnifying
Party.
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5.4 Indemnification Payments. (a) Indemnification required by
this Section 5 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
any Loss is incurred. If the Indemnifying Party fails to make an indemnification
payment required by this Section 5 within 30 days after receipt of a xxxx
therefore or notice that a loss, liability, claim, damage or expense has been
incurred, the Indemnifying Party shall also be required to pay interest on the
amount of such indemnification payment, from the date of receipt of the xxxx or
notice of the Loss to, but not including the date of payment, at the Applicable
Rate.
(b) The amount of any claim by an Indemnitee under this
Agreement shall be reduced to reflect any actual tax savings received by any
Indemnitee that result from the Indemnifiable Losses that gave rise to such
indemnity.
5.5 Survival. The parties' obligations under this Section 5
shall survive the termination of this Agreement.
SECTION 6. CONFIDENTIALITY.
Each party shall keep confidential the Schedules to this
Agreement and all information received from the other party regarding the
Services, including, without limitation, any information received with respect
to products of Xxxxxx or Xxxxxx, and to use such information only for the
purposes set forth in this Agreement unless otherwise agreed to in writing by
the party from which such information was received. The covenants in this
Section 6 shall survive any termination of this Agreement for a period of three
(3) years from the date such termination becomes effective.
SECTION 7. TERM.
7.1 Duration. (a) Subject to Sections 5.5, 6, 7.2, 7.3 and
7.4, the term of this Agreement shall commence on the date hereof and shall
continue in full force and effect with respect to each Service until the earlier
of (i) the first anniversary of the Distribution Date or (ii) the termination of
such Service in accordance with Section 7.1(b).
(b) Each party acknowledges that the purpose of this
Agreement is for Xxxxxx to provide the Xxxxxx Services to Xxxxxx on an interim
basis until Xxxxxx can perform the Xxxxxx Services for itself, and for Xxxxxx to
provide the Xxxxxx Services to Xxxxxx on an interim basis until Xxxxxx can
perform the Xxxxxx Services for itself. Accordingly, each of Xxxxxx and Xxxxxx
shall use its commercially reasonable efforts to make or obtain such approvals,
permits and licenses and implement such systems, as shall be necessary for it to
provide the appropriate services for itself as promptly as practicable. As
Xxxxxx becomes self-sufficient or engages other sources to provide any Xxxxxx
Service, Lanier shall be entitled to release Xxxxxx from providing
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any or all of the Xxxxxx Services hereunder by delivering a written notice
thereof to Xxxxxx at least twenty (20) Business Days prior to the effective date
of release of such Xxxxxx Service(s). At the end of such twenty (20) Business
Day period (or such shorter period as may be agreed by the parties), Xxxxxx
shall discontinue the provision of the Xxxxxx Services specified in such notice
and any such Xxxxxx Services shall be excluded from this Agreement, and Schedule
A shall be deemed to be amended accordingly. As Xxxxxx becomes self-sufficient
or engages other sources to provide any Xxxxxx Service, Xxxxxx shall be entitled
to release Xxxxxx from providing any or all of the Xxxxxx Services hereunder by
delivering a written notice thereof to Xxxxxx at least twenty (20) Business
Days. At the end of such twenty (20) Business Day period (or such shorter period
as may be agreed by the parties), Xxxxxx shall discontinue the provision of the
Xxxxxx Services specified in such notice and any such Xxxxxx Services shall be
excluded from this Agreement, and Schedule B shall be deemed to be amended
accordingly.
7.2 Early Termination by Xxxxxx. Xxxxxx may terminate this
Agreement by giving written notice to Xxxxxx under the following circumstances:
(a) if Xxxxxx shall default in the performance of any of
its material obligations under, or breach any of its warranties set forth in,
this Agreement, and such default or breach shall continue and not be remedied
for a period of five (5) Business Days with respect to any payment obligations
hereunder (including without limitation any payment obligations pursuant to
Section 4) or a period of thirty (30) days with respect to any other obligations
hereunder, after Xxxxxx has given written notice to Xxxxxx specifying such
default or breach and requiring it to be remedied;
(b) if a Bankruptcy Event has occurred with respect to
Xxxxxx;
(c) upon the occurrence of a Change in Control of Xxxxxx;
or
(d) if Xxxxxx should assign or subcontract, or
attempt to assign or subcontract, any interest in all or any part of this
Agreement without the prior written consent of Xxxxxx, except as set forth in
Section 11.2.
7.3 Early Termination by Xxxxxx. Xxxxxx may terminate this
Agreement by giving written notice to Xxxxxx under the following circumstances:
(a) if Xxxxxx shall default in the performance of any of
its material obligations under, or breach any of its warranties set forth in,
this Agreement and such default or breach shall continue and not be remedied for
a period of thirty (30) days after Xxxxxx has given written notice to Xxxxxx
specifying such default or breach and requiring it to be remedied;
(b) if a Bankruptcy Event has occurred with respect to
Xxxxxx;
(c) upon the occurrence of a Change in Control of Xxxxxx;
or
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(d) if Xxxxxx should assign or subcontract, or attempt to
assign or subcontract, any interest in all or any part of this Agreement without
prior written consent of Xxxxxx, except as set forth in Section 11.2.
7.4 Suspension Due to Force Majeure. In the event the
performance by any Lanier or Xxxxxx of their respective duties or obligations
hereunder is interrupted or interfered with by reason of any cause beyond its
reasonable control including, but not limited to, fire, storm, flood,
earthquake, explosion, war, strike or labor disruption, rebellion, insurrection,
quarantine, act of God, boycott, embargo, shortage or unavailability of
supplies, riot, or governmental law, regulation or edict (collectively, the
"Force Majeure Events"), the party affected by such Force Majeure Event shall
not be deemed to be in default of this Agreement by reason of its nonperformance
due to such Force Majeure Event, but shall give notice to the other party of the
Force Majeure Event.
7.5 Consequences on Termination. In the event this Agreement
expires or is terminated in accordance with this Section 7, then (a) all
Services to be provided will promptly cease, (b) each of Xxxxxx and Xxxxxx shall
promptly return all confidential information received from the other party in
connection with this Agreement (including the return of all information received
with respect to the Services or products of Xxxxxx or Xxxxxx, as the case may
be), without retaining a copy thereof, and (c) each of Xxxxxx and Xxxxxx shall
honor all credits and make any accrued and unpaid payment to the other party as
required pursuant to the terms of this Agreement, and no rights already accrued
hereunder shall be affected.
SECTION 8. RECORDS. Each of the parties shall create and
maintain full and accurate books in connection with the provision of the
Services, and all other records relevant to this Agreement, and upon reasonable
notice from the other party shall make available for inspection and copy by such
other party's agents such records during reasonable business hours.
SECTION 9. DISPUTE RESOLUTION.
9.1 Negotiation. In the event of a controversy, dispute or
claim arising out of, in connection with, or in relation to the interpretation,
performance, nonperformance, validity or breach of this Agreement or otherwise
arising out of, or in any way related to this Agreement or the transactions
contemplated hereby, including, without limitation, any claim based on contract,
tort, statute or constitution (but excluding any controversy, dispute or claim
arising out of any agreement relating to the use or lease of real property if
any Third Party is a party to such controversy, dispute or claim) (collectively,
"Agreement Disputes"), the management of the parties shall negotiate in good
faith for a reasonable period of time to settle such Agreement Dispute, provided
such reasonable period shall not, unless otherwise agreed by the parties in
writing, exceed 30 days from the time the parties began such negotiations;
provided, further, that
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in the event of any mediation or arbitration in accordance with Sections 9.2 and
9.3 hereof, the parties shall not assert the defenses of statute of limitations
and laches arising for the period beginning after the date the parties began
negotiations hereunder, and any contractual time period or deadline under this
Agreement or any Ancillary Agreement to which such Agreement Dispute relates
shall not be deemed to have passed until such Agreement Dispute has been
resolved.
9.2 Mediation. If after such reasonable period such management
are unable to settle such Agreement Dispute (and in any event, unless otherwise
agreed in writing by the parties, after 60 days have elapsed from the time the
parties began such negotiations) and the Agreement Dispute involves a
controversy, dispute or claim of less than $500,000, such Agreement Dispute
shall be determined, at the request of any party, by binding mediation conducted
in the City of Orlando, Florida or at another location which the parties
mutually select, before a retired judge sitting on the panel of Judicial
Arbitration & Mediation Services, Inc. The mediation process shall continue as
the exclusive method of resolving the Agreement Dispute (other than negotiation
between the parties) until the earlier of the Agreement Dispute being resolved
and the mediator finding in good faith that all settlement possibilities have
been exhausted and that the matter is not resolvable through mediation. If the
mediator makes such a finding, at the request of any party, the Agreement
Dispute shall then be determined by binding arbitration in accordance with
Section 9.3 hereof.
9.3 Arbitration. If after such reasonable period such
management are unable to settle such Agreement Dispute (and in any event, unless
otherwise agreed in writing by the parties, after 60 days have elapsed from the
time the parties began such negotiations) and the Agreement Dispute involves a
controversy, dispute or claim of $500,000 or more, such Agreement Dispute shall
be determined, at the request of any party, by binding arbitration conducted in
the City of Orlando, Florida or at another location which the parties mutually
select, before and in accordance with the then-existing International
Arbitration Rules of the American Arbitration Association (the "Rules"). In any
dispute between the parties hereto, the numbers of arbitrators shall be three.
Any judgment or award rendered by the arbitrator shall be final, binding and
nonappealable (except upon grounds specified in 9 U.S.C. Section 10(a) as in
effect on the date hereof). If the parties are unable to agree on an arbitrator
or arbitrators, the arbitrator or arbitrators shall be selected in accordance
with the Rules. Any controversy concerning whether an Agreement Dispute is an
arbitrable Agreement Dispute, whether arbitration has been waived, whether an
assignee of this Agreement is bound to arbitrate, or as to the interpretation of
enforceability of this Section 9 shall be determined by the arbitrator or
arbitrators. In resolving any dispute, the parties intend that the arbitrator or
arbitrators apply the substantive laws of the State of New York, without regard
to the choice of law principles thereof. The parties intend that the provisions
to arbitrate set forth herein be valid, enforceable and irrevocable. The parties
agree to comply with any award made in any such arbitration proceedings that has
become final in accordance with the Rules and agree to enforcement of or entry
of judgment upon such award, by any court of competent jurisdiction, including
(a) the state courts of the State of Florida, located in the City of Orlando, or
(b) the United States District Court for the Middle District of Florida, in
accordance with Section 11.4 hereof. The arbitrator or arbitrators shall be
entitled, if
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appropriate, to award any remedy in such proceedings, including, without
limitation, monetary damages, specific performance and all other forms of legal
and equitable relief; provided, however, the arbitrator or arbitrators shall not
be entitled to award punitive damages. Without limiting the provisions of the
Rules, unless otherwise agreed in writing by or among the parties or permitted
by this Agreement, the undersigned shall keep confidential all matters relating
to the arbitration or the award, provided such matters may be disclosed (i) to
the extent reasonably necessary in any proceeding brought to enforce the award
or for entry of a judgment upon the award and (ii) to the extent otherwise
required by Law. Nothing contained herein is intended to or shall be construed
to prevent any party, in accordance with Article 22(3) of the Rules or
otherwise, from applying to any court of competent jurisdiction for interim
measures or other provisional relief in connection with the subject matter of
any Agreement Disputes.
9.4 Continuity of Service and Performance. Unless otherwise
agreed in writing, the parties will continue to provide service and honor all
other commitments under this Agreement and each Ancillary Agreement during the
course of dispute resolution pursuant to the provisions of this Section 9 with
respect to all matters not subject to such dispute, controversy or claim.
9.5 Other Remedies. Nothing in this Section 9 shall limit the
right that any party may otherwise have to seek to obtain (a) preliminary
injunctive relief in order to preserve the status quo pending the resolution of
a dispute or (b) temporary or permanent injunctive relief from any breach of any
provisions of this Agreement.
SECTION 10. NOTICES.
Notices. All notices and other communications hereunder
shall be in writing, shall reference this Agreement and shall be hand delivered
or mailed by registered or certified mail (return receipt requested) or sent by
any means of electronic message transmission with delivery confirmed (by voice
or otherwise) to the parties at the following addresses (or at such other
addresses for a party as shall be specified by like notice) and will be deemed
given on the date on which such notice is received:
To Xxxxxx:
Xxxxxx Corporation
0000 Xxxx XXXX Xxxx.
Xxxxxxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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With a copy to:
Xxxxxx Corporation
0000 Xxxx XXXX Xxxx.
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Xxxxxx:
Xxxxxx Worldwide, Inc.
0000 Xxxxxxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 11. MISCELLANEOUS.
11.1 Waivers, Modifications, Amendments. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by Xxxxxx, on the one hand,
and Xxxxxx, on the other hand, or in the case of a waiver, by the party against
whom the waiver is to be effective. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and in addition to
other or further remedies provided by law or equity.
11.2 Assignments. Neither Xxxxxx nor Xxxxxx may, directly or
indirectly, assign or subcontract, or attempt to assign or subcontract, any of
its rights or obligations hereunder, in whole or in part, by operation of law or
otherwise, except with the prior written consent of the other party; it being
understood that such consent shall not be unreasonably withheld if Xxxxxx or
Xxxxxx assigns the Agreement to one of its Affiliates with the financial and
other resources and expertise to perform all of the obligations of such party
hereunder. Any attempted assignment or delegation not in compliance with the
forgoing shall be null and void and of no effect.
11.3 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
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11.4 Consent to Jurisdiction. Without limiting the provisions
of Section 9 hereof, each of the parties irrevocably submits to the exclusive
jurisdiction of (a) the state courts of the State of Florida, located in the
City of Orlando, and (b) the United States District Court for the Middle
District of Florida, for the purposes of any suit, action or other proceeding
arising out of this Agreement or any transaction contemplated hereby. Each of
the parties agrees to commence any action, suit or proceeding relating hereto
either in the United States District Court for the Middle District of Florida or
if such suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the state courts of the State of Florida, located in
the City of Orlando. Each of the parties further agrees that service of any
process, summons, notice or document by U.S. registered mail to such party's
respective address set forth above shall be effective service of process for any
action, suit or proceeding in Florida with respect to any matters to which it
has submitted to jurisdiction in this Section 11.4. Each of the parties
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (i) the state courts of the State of Florida, located in
the City of Orlando, or (ii) the United States District Court for the Middle
District of Florida, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
11.5 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person,
corporation, partnership or other entity or any circumstance, is invalid and
unenforceable, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
persons, corporations, partnerships or other entities or circumstances shall not
be affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any jurisdiction.
11.6 Headings. The heading references herein are for
convenience purposes only, do not constitute a part of this Agreement and shall
not be deemed to limit or affect any of the provisions hereof.
11.7 Entire Agreement. This Agreement (including all Schedules
hereto) contains the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters.
11.8 Binding Effect. This Agreement shall be binding upon the
parties hereto and their respective successors and permitted assigns, if any,
and except as provided herein, shall
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inure to the benefit of the parties hereto and their respective successors and
permitted assigns, if any.
11.9 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same Agreement.
11.10 No Agency or Partnership. Nothing in this Agreement will
create, or will be deemed to create, a partnership or the relationship of
principal and agent or of employer and employee between the parties.
11.11 Provisions Unaffected. Nothing contained in this
Agreement shall affect the rights and obligations of Xxxxxx and Xxxxxx pursuant
to the Distribution Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered on behalf of the parties as of the date first herein above written.
XXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President - Treasurer
XXXXXX WORLDWIDE, INC.
By: /s/ Xxxxx X. XxxXxxxxx
Name: Xxxxx X. XxxXxxxxx
Title: Executive Vice President and
Chief Financial Officer
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