MANAGEMENT FEE ALLOCATION CONTRACT
CONTRACT NO. N059-000
I. RECITALS
The contracting parties are Vivid Learning Systems, Inc., a Washington
corporation located at 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx
00000 (hereinafter "Vivid"), and Nuvotec USA, Inc., a Delaware corporation
located at 000 Xxx Xxxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (hereinafter
"Contractor").
This contract is made for the procurement of management and administrative
services needed in connection with the management and operation of Vivid.
The contract is a management fee allocation contract.
WHEREAS, Xxxxx is positioning itself for outside investment; and
WHEREAS, Contractor has been providing management and administrative
services to Vivid since its inception; and
WHEREAS, Contractor possesses unique capabilities, relationships, and
applicable expertise; and
WHEREAS, the parties agreed that Nuvotec would perform these management
and administrative services with full cost recovery;
NOW, THEREFORE, the parties hereto agree as follows:
II. AGREEMENTS
1. Contract Date: The contract effective date shall be October 1, 2004.
2. Completion Date: All work shall continue through October 1, 2005.
This contract shall have two (2) two (2) year options to extend.
Further, this contract may be extended by mutual written agreement
of the parties. The Statement of Work and the related support
activities shall be reviewed quarterly to assure Xxxxx is receiving
the appropriate level of support and Nuvotec is being appropriately
compensated. Any material change in the scope or actual hours spent
in providing the services delineated in the Statement of Work can
cause the monthly management fee allocation to increase or decrease
accordingly. A material change in the scope is defined as impacting
the management fee by ten percent (10%).
3. Monthly Management Fee Allocation: The monthly management fee
allocation shall be equal to six percent (6%) of revenue. This
allocation is consistent with the allocation charged to all other
Contractor subsidiaries.
4. Expenses: Other direct costs including travel expenses must be
approved in writing in advance by Xxxxx and will be invoiced at cost
plus the application of a five percent (5%) general and
administrative expense.
5. Invoices: Invoices will not be required. The monthly management fee
allocation will be paid via draws and pay-downs on the line of
credit.
6. Contract Contents: In addition to this Schedule, the contract
consists of:
o Statement of Work, dated October 2004, Attachment No. 1
o General Provisions, dated October 2004, Attachment No. 2
7. Contract Modifications: This contract contains the entire
understanding between the parties and there are no understandings or
representations not set forth or incorporated by reference herein.
No communication, written or oral, by other than the Vivid Chief
Executive Officer (CEO) shall be effective to modify or otherwise
affect the provisions of this contract.
8. Waiver: The waiver of any breach of any term, covenant, or condition
herein contained shall not be deemed a waiver of such term,
covenant, or condition for any subsequent breach of the same.
9. Merger: This contract contains all of the agreements,
representations, and understandings of the parties hereto and
supercedes and replaces all previous understandings, commitments, or
agreements, oral or written, related to the subject matter of this
contract.
10. Severability: If any party, term, or provision of this contract
shall be held void, illegal, unenforceable, or in conflict with any
law of a federal, state, or local government having jurisdiction
over this contract, the validity of the remaining portions of
provisions shall not be affected thereby.
III. SIGNATURES
VIVID LEARNING SYSTEMS, INC. NUVOTEC USA, INC.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxxxxx
------------------------------- -----------------------------
Name: Xxxxx X. Xxxxx Name: Xxxx X. Xxxxxxxxxx
Title: President & CEO Title: Contracts Manager
Date: October 1, 2004 Date: October 1, 2004
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VIVID CONTRACT NO. N059-000
ATTACHMENT NO. 1
STATEMENT OF WORK
MANAGEMENT & ADMINISTRATIVE SUPPORT
OCTOBER 2004
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Contractor shall provide selected management and administrative support to Vivid
associated with the management and operation of Vivid.
Support related to the monthly management fee allocation will include services
of the Chairman of the Board, the Chief Financial Officer, and General Counsel.
Support to these individuals for these services will also be provided from
legal/contracts staff, finance staff, and executive management.
The monthly management fee allocation also includes central rent expenses and
other overhead expenses not specifically paid for directly by Xxxxx.
VIVID CONTRACT NO. N059-000
ATTACHMENT NO. 2
GENERAL PROVISIONS
OCTOBER 2004
Independent Contractor:
Contractor represents, warrants, and agrees that Contractor shall act at all
times as an independent contractor under this contract and shall undertake to
perform all acts, including the payment of any applicable tax and acquisition of
any required licenses or permits, necessary to allow Contractor to perform this
contract as an independent contractor. Contractor shall at no time be considered
or hold itself out as employees of Xxxxx.
Confidential Information:
The parties acknowledge that in the course of performance of this contract
certain confidential, proprietary, and/or business sensitive information may be
exchanged. Each party agrees to keep all such information in strictest
confidence and shall not disclose such without the written consent of the party
to whom said information belongs. The level of care to be given said information
is the same that the party would afford its own such information. If a separate
confidentiality agreement is executed between the parties, it shall take
precedence over this clause.
Assignment:
Neither this contract nor any rights under this contract may be assigned or
otherwise transferred by either party, in whole or in part, whether voluntary or
by operation of law, without the prior written consent of the other party, which
consent will not be unreasonably withheld. Notwithstanding the foregoing, either
party may assign this contract to a successor to all or substantially all of its
assets related to this contract by merger, sale, or otherwise. Subject to the
foregoing, this contract will be binding upon and will inure to the benefit of
the parties and their respective successors and assigns.
Termination:
The parties reserve the right to terminate this contract upon a sixty (60) day
written notice by mutual agreement or in the event either party is in default of
their contractual obligations, having failed to cure a material breach after ten
(10) days written notice to cure.
Force Majeure:
Neither party shall be liable to the other in any way for failure to perform any
provision of this contract (with the exception of the payment of monetary
obligations) if such failure is caused by any law, rule, or regulation, act of
God, or any cause beyond the control of the party in default.
Governing Law/Jurisdiction:
This contract shall be governed by the laws of the State of Washington without
giving effect to any choice of law or conflicts of law provision or rule that
would cause the application of the domestic substantive laws of any other
jurisdiction.
Disputes and Claims:
Any dispute or claim related to this contract, which the parties cannot settle
by mutual agreement, may be resolved through an appropriate Alternate Dispute
Resolution (ADR) or legal proceedings. Pending resolution of any dispute or
claim, the parties shall proceed diligently with the performance of this
contract. In the event the parties are unable to reach resolution by mutual
agreement, then the parties shall pursue resolution via an ADR process such as
mediation. In the event ADR fails to bring resolution, the parties shall pursue
resolution via a court of competent jurisdiction under the laws of the State of
Washington.
Indemnification:
Each party shall indemnify and save harmless the other for, from and against all
actions, liabilities, losses, damages, claims and demands whatsoever, including
costs, expenses and attorney's fees resulting from or claimed to have resulted
from any intentional or negligent acts or omissions of the indemnitor or its
employees or agents engaged in the work under this contract at the time of the
event or occurrence upon which such actions, claims or demands are based. Where
both parties, or their respective employees or agents, participated in the
liability causing event, each party shall contribute to the common liability a
pro rata share based upon its relative degree of fault.
Limitation of Liability:
IN NO EVENT SHALL CONTRACTOR'S LIABILITY ARISING OUT OF THIS CONTRACT EXCEED THE
TOTAL AMOUNT OF FEES PAID OR PAYABLE HEREUNDER. IN NO EVENT WILL CONTRACTOR BE
LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, OR PUNITIVE DAMAGES
WHATSOEVER (INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, LOSS OF
USE, BUSINESS INTERRUPTION, LOSS OF DATA OR OTHER PECUNIARY LOSS), IN CONNECTION
WITH THIS CONTRACT, WHETHER BASED UPON CONTRACT, TORT, OR ANY OTHER LEGAL
THEORY, INCLUDING NEGLIGENCE, EVEN IF THERE HAS BEEN ADVISE OF THE POSSIBILITY
OF SUCH DAMAGES. THIS LIMITATION SHALL APPLY NOT WITHSTANDING ANY FAILURE OF THE
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN.
