SERVICES AGREEMENT
This Services Agreement (this "Agreement") is made and entered into as
of October 2, 1996 by and between The Alpine Group, Inc, a Delaware corporation
("Alpine"), and Superior TeleCom Inc., a Delaware corporation ("Superior").
RECITALS
A. Superior is a wholly owned subsidiary of Alpine.
B. Alpine and Superior intend to effect an initial public offering
of shares of common stock of Superior (the "Offering").
C. Historically, Alpine has provided to its subsidiaries, including
Superior and its subsidiaries, certain administrative, financial and
other services.
THEREFORE, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
(a) The term "Business Day" shall mean a day on which banks
are not required or permitted to close in New York City or
Atlanta, Georgia.
(b) The term "Effective Time" shall mean the date and time
at which Alpine contributes the shares of common stock of
its Superior Telecommunications Inc. and DNE Systems, Inc.
subsidiaries to Superior.
(c) The term "Services" shall have the meaning set forth in
Section 4 hereof.
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2. ADMINISTRATIVE SERVICES. Alpine shall provide or cause to be
provided to Superior and its subsidiaries the services described in Exhibit A
hereto and, if, when and to the extent requested by Superior, such other
services that Alpine is capable of providing with its then-current personnel and
facilities without unreasonable interference with Alpine's normal business
operations (the "Services"). It is understood that certain of the Services will
be performed by Xxxxx X. Xxxxxxxx, Alpine's Chief Financial Officer or his
successor, who may be Superior's Chief Financial Officer, and by Xxxxxxx X.
Xxxxxxx, Alpine's Executive Vice President-Chief Operating Officer or his
successor, who shall provide advice and assistance regarding operations to
Superior.
3. CHARGES FOR SERVICES.
(a) From the Effective Time through the completion of the
Offering, Superior shall pay to Alpine a fee at the rate of $2,000,000 per year,
pro-rated for partial years, for the Services described on Exhibit A and use of
the New York facility pursuant to this Agreement (such fee reflects on a net
basis the consideration for Alpine's use of the Atlanta Facility). Superior
shall reimburse Alpine for third-party charges incurred by Alpine on Superior's
behalf only in accordance with past practice.
(b) Upon completion of the Offering, and in lieu of the fee
described in Section 3(a) hereof, Superior shall pay to Alpine at the rate of
$925,000 per year, pro-rated for partial years, for the Services described on
Exhibit A and use of the New York Facility pursuant to this Agreement (such fee
reflects on a net basis the consideration for Alpine's use of the Atlanta
Facility). In addition, Superior shall reimburse Alpine for any third-party
charges incurred by Alpine on Superior's behalf.
(c) In the event Superior requests and Alpine agrees to provide
any Services other than those described on Exhibit A, Superior shall pay to
Alpine the actual costs and expenses, including third-party charges, incurred by
Alpine in providing such Services that are separately identifiable, and that
portion of such costs and expenses reasonably attributable to Superior based on
such methodology as Alpine determines to be appropriate (subject to the approval
of Superior, which approval shall not be unreasonably withheld) for all such
costs and expenses that are not separately identifiable.
4. PAYMENTS. (a) Alpine shall submit to Superior by the 5th day of
each month an invoice for the applicable fee, and, if the Offering has been
completed, any third-party charges incurred by Alpine in connection with the
Services
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for the preceding month. Except as provided in Section 4(b) hereof, Superior
shall remit payment in full for all charges invoiced on or before the last day
of the month in which the invoice is received.
(a) In the event of a dispute as to an invoiced amount, Superior
shall promptly pay all undisputed amounts, but shall be entitled to withhold
amounts in dispute. Superior shall promptly notify Alpine of any such dispute.
Each party will provide the other sufficient records and information to resolve
any such dispute and, without limiting the rights and remedies of the parties
thereunder, will negotiate in good faith a resolution thereto.
5. METHOD OF PAYMENT. Transfer of funds pursuant to this Agreement
shall be made in U.S. dollars by wire transfer of immediately available funds to
an account or accounts specified by the party receiving such payment. Whenever
any payment hereunder is required or requested on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and any
such extension of time shall be included in the computation of the payment of
interest.
6. PERFORMANCE OF SERVICES.
(a) DEGREE OF CARE. Alpine shall perform the Services with the
same degree of care, skill and prudence customarily exercised by it in respect
of its own business, operations and affairs.
(b) CERTAIN LIMITATIONS. Each party acknowledges that the
Services shall be provided only with respect to the businesses of Superior and
its subsidiaries as such businesses exist as of the Effective Time or as
otherwise mutually agreed by the parties. Alpine will not be obligated to
provide Services for the benefit of entities other than Superior and its
subsidiaries. Superior shall use the Services only in accordance with all
applicable federal, state and local laws and regulations.
(c) CERTAIN INFORMATION. Superior shall provide, and shall
cause each of its subsidiaries to provide, in a manner consistent with the
practices employed by the parties prior to the Effective Time, any information
needed by Alpine from Superior or such subsidiary, as the case may be, to
perform the Services pursuant hereto. If the failure to provide such
information renders the performance of any requested Services impossible or
unreasonably difficult, Alpine may, upon reasonable notice to Superior, refuse
to provide such Services.
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7. SPACE SHARING
(a) USE BY ALPINE. Alpine shall permit Superior to use a portion
of its corporate headquarters in New York (the "New York Facility") for the
purposes permitted under lease agreement (the "New York Lease") pursuant to
which Alpine leases the New York Facility, subject to the terms and conditions
set forth in this Agreement.
(b) USE BY SUPERIOR. Superior shall permit Alpine to use a
portion of its principal offices in Atlanta (the "Atlanta Facility") for the
purposes permitted under the lease agreement (the "Atlanta Lease") pursuant to
which Superior leases the Atlanta Facility, subject to the terms and conditions
set forth in this Agreement.
(c) COMPLIANCE WITH LEASES. Alpine has provided Superior with a
copy of the New York Lease and Superior acknowledges receipt thereof. Superior
hereby agrees not to take any action or fail to take any action in connection
with its use of a portion of the New York Facility a result of which would be
Alpine's violation of any of the terms and conditions of the New York Lease, the
provisions of which are hereby incorporated by reference. Superior agrees to
comply with the terms and provisions of the New York Lease with respect to its
use of a portion of the New York Facility. Superior acknowledges and agrees
that Alpine has the right to modify or otherwise amend the New York Lease
without the consent of Superior. Alpine will provide Superior with a copy of
any such amendment. Superior has provided Alpine with copies of the Atlanta
Lease and Alpine acknowledges receipt thereof. Alpine hereby agrees not to take
any action or fail to take any action in connection with its use of the Atlanta
Facility a result of which would be Superior's violation of any of the terms and
conditions of the Atlanta Lease with respect to its use of the Atlanta Facility.
Alpine acknowledges and agrees that Superior has the right to modify or
otherwise amend the Atlanta Lease without the consent of Alpine. Superior will
provide Alpine with a copy of any such amendment.
(d) RELOCATION. Superior acknowledges that Alpine may relocate
its corporate headquarters. The parties hereto acknowledge and agree that,
effective as of such relocation, all references in this Agreement to the New
York Lease and the New York Facility shall mean the lease agreement and the
office space, respectively, associated with Alpine's corporate headquarters
following such relocation.
8. LIMITATIONS ON LIABILITY AND INDEMNIFICATION.
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(a) LIMITATIONS ON LIABILITY. Neither party shall have any
liability under this Agreement (including any liability for its own negligence)
for damages, losses or expenses suffered by the other party or its subsidiaries
as a result of the performance or non-performance of such party's obligations
hereunder, unless such damages, losses or expenses are caused by or arise out of
the willful misconduct or gross negligence of such party or a breach by such
party of any of the express provisions hereof. In no event shall either party
have any liability to the other party for indirect, incidental or consequential
damages that such other party or its subsidiaries or any third party may incur
or experience on account of the performance or non-performance of such party's
obligations hereunder.
(b) INDEMNIFICATION. Subject to the limitations on liability
set forth in the last sentence of Section 8(a) hereof, each party shall
indemnify, defend and hold harmless the other party and its directors,
employees, agents and representatives from and against all claims, liabilities,
damages, losses and expenses (including reasonable attorneys fees and expenses)
caused by or arising out of the willful misconduct or gross negligence of such
indemnifying party in the performance or non-performance of its obligations
hereunder or the breach by such indemnifying party of any of the express
provisions hereof.
(c) SURVIVAL. The provisions of this Section 8 shall survive
any termination of this Agreement.
9. TERM OF AGREEMENT. This Agreement shall become effective at the
Effective Time and shall automatically terminate on April 30, 1998.
10. CONFIDENTIALITY. Each party will hold in trust and maintain
confidential and, except as required by law, not disclose to others without the
prior written approval of the other party, any information received by it from
the other party or developed or otherwise obtained by it in connection with the
performance of its obligations hereunder (the "Information"). Within 90 days
after the date of termination of this Agreement, each party will return to the
other party, or, with the written consent of the other party, destroy all
documents, data and other materials of whatever nature relating to the
businesses of the other and its subsidiaries that it obtained in connection with
the performance of its obligations hereunder, provided that the parties may
retain any Information to the extent reasonably needed to comply with applicable
tax, accounting or financial reporting requirements or to resolve any legal
issues identified at the time of termination. The provisions of this Section 10
shall survive any termination of this Agreement.
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11. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the parties hereto and their respective successors and permitted assigns
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned by either
party hereto to any other person except that either party may assign this
Agreement to any of its affiliates.
(b) NO THIRD-PARTY BENEFICIARIES. Except for the persons
entitled to indemnification pursuant to Section 9(b) hereof, each of whom is an
intended third-party beneficiary hereunder, nothing expressed or implied in this
Agreement shall be construed to give any person or entity other than the parties
hereto any legal or equitable rights hereunder.
(c) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof.
(d) AMENDMENT. This Agreement may not be amended except by an
instrument signed by the parties hereto.
(e) WAIVERS. Either party hereto may (i) extend the time for
the performance of any of the obligations or other act of the other party or
(ii) waive compliance with any of the agreements contained herein. No waiver of
any term shall be construed as a waiver of the same term, or a waiver of any
other term, of this Agreement. The failure of any party to assert any of its
rights hereunder will not constitute a waiver of any such rights.
(f) SEVERABILITY. If any provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, such provision shall be deemed severable and all other provisions of
this Agreement shall nevertheless remain in full force and effect.
(g) HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
(h) NOTICES. All notices given in connection with this
Agreement shall be in writing. Service of such notices shall be deemed complete
(i) if
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hand delivered, on the date of delivery, (ii) if my mail, on the fourth business
day following the day of deposit in the United States mail, by certified or
registered mail, first-class postage prepaid, or (iii) if sent by FedEx or
equivalent courier service, on the next business day. Such notices shall be
addressed to the parties at the following addresses or at such other address for
a party as shall be specified by like notice (except that notices of change of
address shall be effective upon receipt):
If to Alpine: The Alpine Group
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman
Telecopy No.: (000) 000-0000
If to Superior: Superior TeleCom Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
(i) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York, without giving
effect to the principles of conflict of laws of such State.
(j) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute but on and the same instrument.
IN WITNESS WHEREOF, Alpine and Superior have caused this Agreement to
be executed on the date first above written.
THE ALPINE GROUP, INC.
By: /s/ Bragi X. Xxxxx
Executive Vice President
SUPERIOR TELECOM INC.
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By: /s/ Xxxxxxx X. Xxxxxxxxx
Secretary
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EXHIBIT A
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SERVICES
FINANCIAL SERVICES
- Preparation of all SEC reports including Forms 10-K and 10-Q and Proxy
statements
- Prepare separate financial statements on behalf of Superior TeleCom
subsidiaries
- Perform accounting and financial research on an as requested basis
- Maintain a corporate ledger
- Prepare consolidated monthly reports to be distributed to management and
the Board of Directors
- Prepare consolidated financial forecasts and budgets
- Perform all government compliance with respect to Superior TeleCom
- Prepare all consolidated and separate state and federal tax returns and
quarterly payments
- Perform all tax planning (in conjunction with the external auditors)
- Coordinate all tax examinations performed by the I.R.S.
INTERNAL AND EXTERNAL AUDIT AND ACCOUNTING SERVICES
- Conduct all liaison with external auditors
- Conduct all liaison with the audit committee of the Board of Directors
- Coordinate all special projects with the external auditors
- Review internal accounting and administrative controls
- Review operational and financial management
CORPORATE FINANCE AND STRATEGIC PLANNING
- Advice and assist once in preparation of business plans and budgets
- Advice and assist with respect to strategic planning, including evaluating
acquisition opportunities
- Advice and assistance regarding banking matter (including compliance)
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LEGAL
- Substantially all legal work, other than litigation handled by outside
counsel; but including commercial consulting, anti-trust, pension,
acquisition, employment matters, environmental, claims, real estate, etc.
TREASURY
- Centralized cash management
- Bank reconciliations
- Forecasting of cash requirements
- Letters of credit
- Money movements
GROUP INSURANCE
- Design, implement and communicate the property/casualty insurance coverage
- Analysis of plans and costs
- Management reporting
OTHER MANDATED SERVICES
- Investor relations
- Stock option and grant administration
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