EXHIBIT 10.20
DATA CENTER SERVICES AGREEMENT
AGREEMENT dated as of November 6, 1996, among Xxxxxx Micro
Inc., a Delaware corporation ("MICRO"), Xxxxxx Book Company ("BOOK"), a
division of Xxxxxx Industries Inc., a Tennessee corporation, and Xxxxxx
Entertainment Inc., a Tennessee corporation ("ENTERTAINMENT").
In consideration of the mutual agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:
ARTICLE 1
PERFORMANCE OF SERVICES
SECTION 1.1. PROVISION OF SERVICES. On the terms and subject
to the conditions of this Agreement, during the term of this Agreement
Micro agrees to provide to Book, Entertainment and their respective
Subsidiaries, or procure the provision to each of Book, Entertainment and
their respective Subsidiaries of, and each of Book and Entertainment (on
behalf of itself and its Subsidiaries) agrees to purchase from Micro, the
services performed at the Xxxxxx Micro Data Center in La Vergne, Tennessee
and described on the Schedules attached hereto (the "SERVICES"). Unless
otherwise specifically agreed by the parties, the Services to be provided
or procured by Micro hereunder shall be substantially similar in scope,
quality and nature to those provided to, or procured on behalf of, Book,
Entertainment and their respective Subsidiaries prior to the date hereof.
SECTION 1.2. SERVICE FEES; EXPENSES. (a) The Schedules
hereto indicate, with respect to each Service listed thereon, the method by
which fees (the "SERVICE FEES") to be charged to Book or Entertainment, as
the case
may be, for such Service will be determined. Each of Book and Entertainment
agrees to pay to Micro in the manner set forth in Section 1.3 the Service Fees
applicable to each of the Services provided by Micro to Book (and its
Subsidiaries) and Entertainment (and its Subsidiaries), respectively, pursuant
to the terms hereof.
(b) In addition to any other amounts payable to Micro
hereunder, each of Book and Entertainment shall reimburse Micro in the
manner set forth in
(c) In addition to any other amounts payable to Micro
hereunder, each of Book and Entertainment shall reimburse Micro in the
manner set forth in Section 1.3 for all out-of-pocket expenses (including
without limitation travel expenses, professional fees, printing and
postage) incurred by Micro in connection with the performance of Services
pursuant to this Agreement, to the extent that such expenses have not
already been taken into account in determining the Service Fees applicable
to such Services.
(c) In addition to any other amounts payable to Micro
hereunder, each of Book and Entertainment shall reimburse Micro in the
manner set forth in Section 1.3 for any taxes, excises, imposts, duties,
levies, withholdings or other similar charges (excepting any charges for
taxes due on Micro's income) that Micro and its Subsidiaries may be
required to pay on account of Book (and its Subsidiaries) and Entertainment
(and its Subsidiaries), respectively, in connection with the performance of
Services or with respect to payments made by Book or Entertainment for such
Services pursuant to this Agreement.
SECTION 1.3. INVOICING AND SETTLEMENT OF COSTS. (a) Micro
will deliver an invoice to each of Book and Entertainment on a monthly
basis (not later than the fifth day of each accounting month) for (i)
Service Fees in respect of Services provided during the prior accounting
month to Book (and its Subsidiaries) and Entertainment (and its
Subsidiaries), respectively, and (ii) other amounts owing to Micro pursuant
to Section 1.2. Each such invoice shall (A) provide sufficient detail to
identify each Service, the fee therefor and the method of calculating such
fee, (B) identify all third party costs included in the invoice to the
extent specifically billed and (C) include such other data as may be
reasonably requested by Book or Entertainment. In addition, Book and
Entertainment shall have the right to examine any and all books and records
as they reasonably request in order to confirm and verify the calculation
of the amount of any payment pursuant to this Section and Micro shall
cooperate in any reasonable manner in such examination as Book or
Entertainment shall request.
(b) Payment (including payment of any amounts disputed pursuant to
Section 1.3(c)) of each invoice shall
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be due from Book and Entertainment on the day (or the next business day, if
such day is not a business day) that is the later of (i) the third day
prior to the end of the accounting month in which such invoice was received
and (ii) the tenth day after the receipt of such invoice (each, a "PAYMENT
DATE"), by wire transfer of immediately available funds payable to the
order of Micro. If either Book or Entertainment fails to make any payment
within 30 days of the relevant Payment Date, the party that has failed to
make such payment shall be obligated to pay, in addition to the amount due
on such Payment Date, interest on such amount at the prime, or best rate
announced by Nationsbank of Texas, N.A. per annum compounded annually from
the relevant Payment Date through the date of payment.
(c) In the event that Book or Entertainment disputes any
charges invoiced by Micro pursuant to this Agreement, Book or Entertainment
shall deliver a written statement describing the dispute to Micro within 15
days following receipt of the disputed invoice. The statement shall
provide a sufficiently detailed description of the disputed items. The
parties hereto shall use their best efforts to resolve any such disputes.
Amounts not so disputed shall be deemed accepted. Disputed amounts
resolved in favor of Book or Entertainment (together with interest on such
amounts at the prime, or best rate announced by Nationsbank of Texas, N.A.
per annum compounded annually from the date such disputed amounts were paid
to Micro to the next relevant Payment Date) shall be credited against
payments owing by Book and Entertainment, respectively, to Micro on the
next relevant Payment Date.
(d) Unless otherwise specified on the Schedules hereto, in the
event that the actual utilization of a Service is less than the period
specified on such Schedules with respect to such Service, then the Service
Fees for such Service shall be prorated on the basis of actual utilization
of such Service; provided that the monthly charges shall not be prorated on
any period of time less than one day, the per diem charge shall not be
prorated on any period of time less than one-half day, and the hourly
charges shall not be prorated on any period of time less than one hour.
SECTION 1.4. TERM. The term of this Agreement shall
commence on the date hereof and shall end on July 31, 1999, unless earlier
terminated pursuant to the terms hereof. The provisions of Section 1.2
(with respect to amounts accrued prior to such termination) shall survive
any termination of this Agreement.
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SECTION 1.5. LIMITED WARRANTY. Micro will provide the
Services hereunder in good faith, with the care and diligence that it
exercises in the performance of such services for its divisions and
Subsidiaries. Each of Book and Entertainment hereby acknowledges that
Micro does not regularly provide to third parties services such as the
Services as part of its business and that, except as set forth in Section
1.1 or in this Section 1.5, Micro does not otherwise warrant or assume any
responsibility for its Services. The warranty stated above is in lieu of
and exclusive of all other representations and warranties of any kind
whatsoever. EXCEPT AS STATED ABOVE, THERE ARE NO WARRANTIES RELATING TO
THE SERVICES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
SECTION 1.6. PERFORMANCE REMEDY. In the event that Micro
fails to provide a Service hereunder, or the quality of a Service is not in
accordance with Section 1.1 or Section 1.5, Book or Entertainment may give
Micro prompt written notice thereof. Micro will then have thirty days to
cure the defective Service. If after such period Micro has failed to cure
the defective Service, Book or Entertainment, as the case may be, may seek
an alternative provider for such Service and Micro shall discontinue
performing such Service at the written request of Book or Entertainment,
respectively. Neither Book nor Entertainment shall be liable to Micro for
any Service performed by Micro after Micro has been given written notice of
termination of such Service pursuant to this Section 1.6, except for any
out-of-pocket costs incurred by Micro in connection with the cessation of
such Services or the transfer of such Services back to Book, Entertainment
or their respective designees. Except as otherwise expressly provided in
Article 2, the provisions of this Section 1.6 will provide the exclusive
remedy for any misrepresentation, breach of warranty, covenant or other
agreement or other claim arising out of this Agreement or the Services to
be performed hereunder.
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ARTICLE 2
INDEMNIFICATION
SECTION 2.1. LIMITATION OF LIABILITY. Book and Entertainment
agree that none of Micro, any of its Subsidiaries or any of their
respective directors, officers, agents and employees (each, an "MICRO
INDEMNIFIED PERSON") shall have any liability, whether direct or indirect,
in contract, tort or otherwise, to Book or Entertainment arising out of or
attributable to the performance or nonperformance of Services pursuant to
this Agreement.
SECTION 2.2. INDEMNIFICATION. (a) Book agrees to and does
hereby indemnify and hold each Micro Indemnified Person harmless from and
against any and all damage, loss, liability and expense (including without
limitation reasonable expenses of investigation and reasonable attorneys'
fees and expenses in connection with any action, claim, suit or proceeding,
including any expenses incurred in connection with the enforcement of the
rights of such Micro Indemnified Person pursuant to this Agreement) to
which such Micro Indemnified Person may be subjected as a result of a claim
made by a third party arising out of or attributable, directly or
indirectly, (i) to the performance or nonperformance for Book of any
Services or (ii) otherwise in connection with this Agreement.
(b) Entertainment agrees to and does hereby indemnify and hold
each Micro Indemnified Person harmless from and against any and all damage,
loss, liability and expense (including without limitation reasonable
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, claim, suit or proceeding, including any
expenses incurred in connection with the enforcement of the rights of such
Micro Indemnified Person pursuant to this Agreement) to which such Micro
Indemnified Person may be subjected as a result of a claim made by a third
party arising out of or attributable, directly or indirectly, (i) to the
performance or nonperformance for Entertainment of any Services or (ii)
otherwise in connection with this Agreement.
(c) The parties agree to follow the procedures set forth in
Section 5.3(a) and 5.3(b) of the Reorganization Agreement dated as of
September 4, 1996 among the parties hereto with respect to any claim for
indemnification made pursuant to this Section 2.2.
SECTION 2.3. OWNERSHIP OF WORK PRODUCT. (a) Except for the
data provided by Book or Entertainment to
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Micro and the reports produced by Micro for Book or Entertainment pursuant
to this Agreement, all proprietary tools and methodologies and all written
material including programs, tapes, listing and other programming
documentation which were preexisting or originated and prepared by Micro
pursuant to this Agreement shall belong to Micro except as otherwise agreed
by the parties in a separate written agreement signed by each party.
(b) No license under any trade secrets, copyrights, or other
rights is granted by this Agreement or any disclosure hereunder.
(c) Book and Entertainment shall have reasonable access to all
data, records, files, statements, records, invoices, xxxxxxxx, and other
information generated by or in custody of Micro relating to the Services
provided pursuant to this Agreement. Unless otherwise specified by Book or
Entertainment or required by law, Micro shall maintain all such business
records pertaining to the Services and will retain the records pertaining
to each Service for a period of twelve months after the cessation of such
Service. At the request of Book or Entertainment, Micro shall provide
copies of records pertaining to the Services.
ARTICLE 3
GENERAL PROVISIONS
SECTION 3.1. PARTIES. Nothing in this Agreement, express or
implied, is intended to confer upon any person not a party any rights and
remedies hereunder.
SECTION 3.2. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of Tennessee,
without regard to its conflict of laws provisions.
SECTION 3.3. HEADINGS. The Section and other headings
contained in this Agreement are for reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.
SECTION 3.4. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement among the parties in respect of the subject matter
contained herein and neither this Agreement nor any term or provision
hereof may be amended or waived except by an instrument in writing signed,
in the case of an amendment, by each party and, in the case
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of a waiver, by the party against whom the waiver is to be effective.
SECTION 3.5. ASSIGNMENTS. This Agreement shall not be
assignable by any party without the written consent of the other parties
hereto. No assignment of any right or benefit hereunder shall relieve any
obligation of the assignor hereunder without the written consent of the
other parties.
SECTION 3.6. NOTICES. Any notice, request, instruction or
other document to be given hereunder by any party hereto to another party
hereto shall be in writing (including telecopier or similar writing) and
shall be given to such party at its address set forth on the signature
pages hereof, or to such other address as the party to whom notice is to be
given may provide in a written notice to the party giving such notice, a
copy of which written notice shall be on file with the Secretary of Micro.
Each such notice, request or other communication shall be effective (i) if
given by telecopy, when such telecopy is transmitted to the telecopy number
specified on the signature pages hereof and the appropriate confirmation is
received, (ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid addressed as
aforesaid or (iii) if given by any other means, when delivered at the
address specified in this Section 3.6.
SECTION 3.7. DEFINITIONS. Terms used but not defined herein
shall have the meanings set forth in the Reorganization Agreement dated as
of September 4, 1996 among the parties hereto.
SECTION 3.8. SEVERABILITY. The invalidity or unenforceability
of any provisions of this Agreement in any jurisdiction shall not affect
the validity, legality or enforceability of the remainder of this Agreement
in such jurisdiction or the validity, legality or enforceability of this
Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder
shall be enforceable to the fullest extent permitted by law.
SECTION 3.9. INDEPENDENT CONTRACTORS. The parties hereto are
independent contractors. Nothing in this Agreement is intended or shall be
deemed to constitute a partnership, agency, franchise or joint venture
relationship among the parties. No party shall incur any debts or make any
commitments for the others, except to the extent, if at all, specifically
provided herein.
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SECTION 3.10. REMEDIES. The parties hereby acknowledge and
agree that in the event of any breach of this Agreement, the parties would
be irreparably harmed and could not be made whole by monetary damages.
Each party hereto agrees (i) not to assert by way of defense or otherwise
that a remedy at law would be adequate, and (ii) in addition to any other
remedy to which the parties may be entitled, that the remedy of specific
performance of this Agreement is appropriate in any action in court.
SECTION 3.11. CONSENT TO JURISDICTION. Each party hereto
irrevocably submits to the non-exclusive jurisdiction of any Tennessee
State Court or United States Federal Court sitting in the Middle District
of Tennessee over any suit, action or proceeding arising out of or relating
to this Agreement. Each party hereto waives any right it may have to
assert the doctrine of forum non conveniens or to object to venue to the
extent any proceeding is brought in accordance with this Section 3.11.
Nothing in this paragraph shall affect or limit any right to serve process
in any manner permitted by law, to bring proceedings in the courts of any
jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
SECTION 3.12. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which shall be an original with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
XXXXXX MICRO INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
0000 Xxxx Xxxxx Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Telecopy: (000) 000-0000
XXXXXX BOOK COMPANY, A
DIVISION OF XXXXXX INDUSTRIES
INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Co-President
One Belle Xxxxx Place
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
XXXXXX ENTERTAINMENT INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman & President
Xxx Xxxxxx Xxxxxxxxx
Xx Xxxxxx, XX 00000
Telecopy: (000) 000-0000
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