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Exhibit 10.3
FORM OF
TRANSITIONAL SERVICES AGREEMENT
TRANSITIONAL SERVICES AGREEMENT (this "Agreement"), dated as of
____________, 1998, is between American Banknote Corporation ("Parent"), a
Delaware corporation, and American Bank Note Holographics, Inc. ("ABNH"), a
Delaware corporation.
WHEREAS, Parent, a public company whose common shares are traded on
the New York Stock Exchange, directly owns 100% of the issued and outstanding
shares of common stock of ABNH;
WHEREAS, the Board of Directors of Parent has determined that it is
appropriate and desirable for Parent to sell for its account by means of an
initial public offering by ABNH all of the shares of ABNH common stock owned by
Parent (the "IPO");
WHEREAS, Parent and ABNH are parties to a Separation Agreement,
dated as of [ ], 1998 (the "Separation Agreement"), which sets forth certain
agreements between the parties in connection with the Separation (as defined in
the Separation Agreement); and
WHEREAS, Parent and ABNH have determined that it is necessary and
desirable to make certain agreements regarding services to be provided by Parent
to ABNH for a specified period following the closing of the IPO;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties hereto agree as follows:
1. Capitalized terms used and not otherwise defined herein will have the
respective meanings set forth in the Separation Agreement.
2. For a term commencing on the Closing Date and continuing for a period
of one year thereafter (the "Agreement Term"), Parent will provide to ABNH the
services described on Exhibit A hereto, and such other services, if any, as may
be agreed to in writing by the parties (the "Services").
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3. The fees for the performance of the Services will be equal to Parent's
cost thereof (which shall include both direct out-of-pocket expenses incurred in
the performance of the Services and a pro rata allocation of the compensation of
Parent's personnel performing such Services). Payment for the Services will be
made on a monthly basis, due promptly upon receipt of any invoice from Parent
setting forth the amounts due. Notwithstanding the foregoing, any third-party
fees and expenses incurred in connection with the performance of the Services
will not be the responsibility of Parent, but will be submitted to ABNH and paid
directly by it.
4. (a) Following any termination of this Agreement upon the expiration of
the Agreement Term or otherwise, ABNH shall be liable under Section 3 above with
respect to any Services performed during the Agreement Term, and shall continue
to be liable indefinitely under Section 5 below.
(b) This Agreement shall automatically be terminated in the event that the
Separation Agreement is terminated and the IPO abandoned prior to the Closing
Date. In the event of such termination, neither party shall have any liability
of any kind to the other party pursuant to this Agreement (provided that nothing
in this Section 4(b) shall affect any obligation either party may have other
than pursuant to this Agreement, in respect of normal intercompany charges or
otherwise).
5. ABNH shall indemnify, defend and hold harmless Parent, each person that
is an affiliate of Parent at any time following the Closing Date, and each of
their respective directors, officers employees and agents, and each of the
heirs, executors, successors and assigns of any of the foregoing (collectively,
the "Parent Indemnitees"), from, against and in respect of (and shall on demand
advance to the indemnified party funds in respect of), any and all claims,
losses, demands, actions, suits, expenses (including reasonable attorneys'
fees), damages, obligations and liabilities ("Liabilities") of the Parent
Indemnitees relating to, arising out of or resulting from this Agreement or the
Services to be performed hereunder; provided that the foregoing indemnification
shall not apply to the extent of any Liabilities found to result solely from the
gross negligence or willful misconduct by such Parent Indemnitee, as established
in a final, non-appealable judgment of a court of competent jurisdiction. The
terms of this Section 5 shall survive indefinitely following the expiration of
the Agreement Term.
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6. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the principles of conflicts
of laws thereof. This Agreement may not be modified or amended except by an
agreement in writing signed by the parties hereto. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns. This Agreement may not be
assigned by either party without the written consent of the other party. This
Agreement, and the Separation Agreement and the other agreements and documents
referred to in the Separation Agreement, constitute the entire agreement between
the parties with respect to the subject matter hereof and shall supersede all
previous negotiations, commitments and writings with respect to such subject
matter. All notices and other communications hereunder shall be in writing and
shall be delivered by hand or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for either party as such party may specify by like notice to the other
party) and shall be deemed given on the date on which such notice is actually
received:
If to Parent, to: Secretary
American Banknote Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
If to ABNH, to: Secretary
American Bank Note
Holographics, Inc.
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be duly executed by its duly authorized officer as of the day and year first
above written.
AMERICAN BANKNOTE CORPORATION
By:_______________________________
Name:
Title:
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AMERICAN BANK NOTE HOLOGRAPHICS, INC.
By:_______________________________
Name:
Title:
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EXHIBIT A
SERVICES TO BE PROVIDED
1. Tax planning and compliance.
2. Financial reporting (not including any SEC reporting or other reports to
or filings with any third party).
3. Risk management.
4. Human resources.
5. Legal and related services.
6. Miscellaneous general and administrative services reasonably requested
from time to time within the scope of the services customarily provided to
ABNH by Parent immediately prior to the Closing of the IPO.
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