Exhibit 10.6
SERVICES AGREEMENT
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This SERVICES AGREEMENT (this "AGREEMENT") is made this 15th day of
February, 1998 by and between COLLEGIS, INC., a Delaware corporation (the
"COMPANY"), and THE COLLEGIS RESEARCH INSTITUTE, a North Carolina not-for-profit
corporation (the "INSTITUTE").
W I T N E S S E T H:
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WHEREAS, the Company is engaged in the business of providing services
related to computing and information technology throughout the United States
including, without limitation, the development, use and application of Internet
technologies and resources in the area of higher education;
WHEREAS, the Institute is a not-for-profit corporation engaged in
research and development activities in connection with the innovation, use and
application of distributed learning technologies and resources; and
WHEREAS, the Company wishes to provide to the Institute, and the
Institute wishes to obtain from the Company, certain outsourcing, management,
administrative and financial services in accordance with the terms and
conditions set forth herein.
NOW THEREFORE, in consideration of the mutual premises and agreements
contained herein, and for other consideration the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. MANAGEMENT SERVICES.
(a) The Company and the Institute hereby agree that during the period
beginning on the date hereof and continuing throughout the term of this
Agreement, the Company and/or its
affiliates shall provide to the Institute outsourcing, management, financial
and administrative services including, without limitation, the following:
(i) professional services enabling the Institute to perform
work for third parties for which it has contracted pursuant to grants or
otherwise;
(ii) supervision and management of financial information
services (i.e., general ledger, payroll, accounts receivable, accounts
payable and fixed assets reports) and internal auditing, tax reporting,
financial management and treasury services; and
(iii) accounting and legal services.
The services to be provided pursuant to this SECTION 1(a) are hereinafter
sometimes referred to individually as a "SERVICE" and, collectively, as the
"SERVICES". So as to ensure that the Company will be able to perform the
Services to be performed pursuant to subsection (i) above and that the Institute
will be able to pay for such Services pursuant to SECTION 2 below, the Institute
agrees to consult with the Company prior to the acceptance of any assignment of
work or any grant from any third party.
(b) The Company agrees that any Service provided to the Institute
hereunder shall be reasonably necessary to the Institute in the conduct of its
business.
(c) Any Service hereunder shall be provided to the Institute by
the Company and/or its affiliates or such consultants, subcontractors or agents
as may be selected from time to time by the Company in its discretion. The
Company shall serve as liaison on behalf of the Institute with outside advisors
such as legal counsel, tax and accounting advisors, investment advisors and
banks.
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(d) Services shall not be provided by the Company pursuant to
SECTION 1(a)(i) unless such Services shall have been specifically authorized in
writing by the President of the Institute or his duly authorized representative.
Section 2. FEES; PAYMENT.
(a) In consideration for the Company's provision of the Services
hereunder, the Institute agrees to reimburse the Company for its costs incurred
in providing the Services. The amount of such costs to be reimbursed shall be
equal to the sum of the amounts described in the following clauses (i), (ii) and
(iii):
(i) the portion of the total direct costs of the Company
(E.G. gross compensation, payroll taxes and retirement, health and other
benefits) which are attributable to provision of the Services to the
Institute by employees of the Company (including officers, directors and
any other personnel); PLUS
(ii) all out-of-pocket costs incurred by the Company in
connection with providing the Services to the Institute; PLUS
(iii) the portion of the indirect costs of the Company
attributable to the Company's provision of Services to the Institute,
calculated in accordance with industry standards for the reimbursement of
such costs and in a manner mutually agreed to by the Company and the
Institute.
For purposes of clause (i) above, the portion so attributable during
each applicable period shall be determined by the ratio of (a) the amount of
hours during the period which an employee of the Company spent providing
Services to the Institute to (B) the total amount of hours worked in such period
by such employee.
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(b) During the term of this Agreement, within ten (10) days after
each month, the Company shall prepare and submit to the Institute a statement
requesting payment for the Services performed in the preceding month calculated
in accordance with SECTION 2(a) hereof. Each statement furnished to the
Institute hereunder shall be paid in full within ten (10) days of the date of
such statement. All payments of such statements shall be sent to the Company at
the address set forth in SECTION 9 hereof (or to such other address as the
Company may specify from time to time by written notice to the Institute).
Section 3. THIRD PARTY EXPENSES. It is understood that the consideration
to be paid by the Institute to the Company pursuant to SECTION 2 hereof for
Services performed hereunder shall be in addition to, and not in lieu of,
consideration for costs and expenses incurred by the Company on the Institute's
behalf (other than the out-of-pocket expenses billed to the Institute by the
Company pursuant to SECTION 2(a) hereof) for Services rendered to the Institute
by third parties including, but not limited to, legal, accounting and insurance
expenses. The Institute shall pay any compensation (including employee benefit
costs and any related out-of-pocket expenses) to officers and other employees of
the Institute who provide substantially full-time services to the Institute,
notwithstanding that said officers and other employees may simultaneously be
officers or employees of the Company or its affiliates.
Section 4. INTELLECTUAL PROPERTY RIGHTS.
(a) All right, title and interest in Intellectual Property (as
hereafter defined) made, created, conceived or developed by the Institute in the
operation of its business shall vest exclusively in the Institute. The
Institute hereby grants and agrees to grant to the Company a perpetual,
royalty-free, worldwide non-exclusive right to and license in its Intellectual
Property and to use such Intellectual Property in the conduct of the Company's
business, including, without limitation, in
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connection with the Company's provision of outsourcing and other services to
unrelated third parties, and to make reproductions of and any and all
modifications to such Intellectual Property as are necessary for use in the
conduct of the Company's business. For purposes of this Agreement,
"Intellectual Property" shall mean any and all patents, inventions, models,
processes, tools, formulas, designs, know-how trademarks, tradenames,
servicemarks, copyrighted works and trade secrets (including applications and
licenses therefor), whether now or hereafter existing. Intellectual property
developed by the Company or employees of the Company for use in the conduct
of the Company's business shall not be deemed to be "Intellectual Property"
for purposes of this Agreement.
(b) Unless specifically authorized in writing by the Company, the
Institute will not license Intellectual Property to any third party for use in a
for-profit enterprise. Unless such authorization has been earlier obtained, any
license of Intellectual Property must contain a prohibition of such a use and
any sublicensing of Intellectual Property to for-profit entities or for
for-profit uses.
(c) Nothing contained herein is intended to limit or prohibit the
publication and dissemination of Intellectual Property or the licensing of
Intellectual Property to non-profit institutions (for non-profit use) or for
other non-profit uses.
(d) During the term of this Agreement, the Institute hereby grants
to the Company a royalty free, non-exclusive right to use in any and all media
and without territorial limitation the name "The COLLEGIS Research Institute"
and consents to the Institute being identified in marketing, fundraising and
promotional materials as a not-for-profit research institute supported by the
Company.
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Section 5. FINANCIAL STATEMENTS AND FUNDING.
(a) Beginning with the calendar year ending December 31, 1998,
the Institute shall prepare and deliver to the Company within ninety (90) days
after the end of each such calendar year (i) an audited balance sheet, a
statement of support and revenues, expenses, changes in net assets and statement
of cash flows for such year (the "YEAR-END FINANCIAL STATEMENTS") and
(ii) calculations setting forth the Net Loss (as defined below), if any, for
such calendar year (the "NET LOSS CALCULATION"). The Year-End Financial
Statement and the Net Loss Calculation shall be prepared in accordance with
generally accepted accounting principles consistently applied.
(b) Within thirty (30) days after the Year-End Financial
Statement and the Net Loss Calculation are delivered to the Company, the
Company shall deliver to the Institute either (i) a written acknowledgment
accepting the Year-End Financial Statement and the Net Loss Calculation or
(ii) a written report setting forth in reasonable detail any proposed
adjustments to the Year-End Financial Statement and the Net Loss Calculation
(the "ADJUSTMENT REPORT"). If the Company fails to respond to the Institute
within such 30-day period, it shall be deemed to have accepted and agreed to
the Year-End Financial Statement and the Net Loss Calculation as originally
delivered. During such 30-day period, the Institute shall provide any
records, reports, invoices or other material to the Company which the Company
may reasonably request in connection with its preparation of the Adjustment
Report.
(c) In the event that the Company and the Institute fail to agree
on any of the Company's proposed adjustments set forth in the Adjustment Report
within fifteen (15) days after the Institute receives the Adjustment Report, the
Company and the Institute agree that a mutually acceptable independent auditor
of nationally recognized standing (the "INDEPENDENT AUDITOR") shall, within the
45-day period immediately following such 15-day period, make the final
determination
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of the Net Loss Calculation. The Institute and the Company shall each
provide the Independent Auditor with their respective determinations of the
Net Loss Calculation and the Independent Auditor shall select either the
Institute's or the Company's determination in establishing the final Net Loss
Calculation. The decision of the Independent Auditor shall be final and
binding on the Company and the Institute. The fees, costs and expenses of
the Independent Auditors shall be paid by the non-prevailing party.
(d) In the event the Institute incurs a Net Loss in any calendar
year (or partial calendar year, if applicable) during the term of this
Agreement, the Company hereby covenants and agrees that it shall make a
contribution to the Institute in the aggregate amount of such Net Loss in
accordance with the provisions set forth in this SECTION 5. For purposes of
this Agreement, "Net Loss" shall mean, for any period, the reduction in net
assets of the Institute, if any, calculated on an accrual basis, and adjusted
to exclude (i) any loss from investments, (ii) any compensation or payments
to any officers, directors or affiliates of the Institute not authorized by
the Board of Directors of the Institute and (iii) any loss, expense or other
liability attributable to any research or other activity not authorized by
the Board of Directors of the Institute.
(e) Amounts payable by the Company to the Institute, if any, under
this SECTION 5 shall be paid by wire transfer of immediately available federal
funds to an account designated by the Institute in writing. At the option of
the Company, the Company may offset any amounts due and owing to the Institute
from the Company pursuant to this SECTION 5 against amounts due and owing to the
Company from the Institute pursuant to SECTION 2 hereof.
Section 6. BOARD OF DIRECTORS AND EXECUTIVE OFFICERS. During the term of
this Agreement, the Institute shall consult with, and seek the advice of, the
Company with respect to the selection and compensation of its Board of Directors
and executive officers.
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Section 7. TERM. This Agreement shall initially consist of a term
beginning on the date hereof and ending February 15, 2008, and shall
thereafter be automatically extended for additional one (1) year terms unless
either party hereto provides written notice of its desire to terminate this
Agreement to the other party not less than sixty (60) days prior to the
expiration of the applicable term. The termination of this Agreement shall
not otherwise affect the Institute's obligations under SECTIONS 2, 3, 4(a)
and 8 hereof.
Section 8. LIMITATION OF LIABILITY; INDEMNIFICATION.
(a) The Company and its affiliates shall not be liable to the
Institute or affiliates thereof for any cost, damage, expense or loss
including, without limitation, any special, indirect, consequential or
punitive damages, arising out of (i) the Company's and/or its affiliates'
failure to perform any Services for the Institute hereunder or the
misperformance of any such Service, or (ii) the Institute's or such
affiliates' reliance on any advice or data the Company or its affiliates may
provide to the Institute pursuant to this Agreement.
(b) The Institute shall indemnify the Company and each of its
affiliates, officers, directors, employees, consultants and subcontractors,
and any person or entity controlling the Company, its affiliates, or any such
consultant or subcontractor and shall hold the Company and each of its
affiliates and each such officer, director, employee, consultant,
subcontractor and controlling person or entity, harmless against any damage,
loss, cost or expense (including, without limitation, accountants' and
attorneys' fees) which the Company, its affiliates, or any such officer,
director, employee, consultant, subcontractor or controlling person or entity
may sustain or incur by reason of any claim, demand, suit or recovery by any
person or entity arising in connection with this Agreement or out of the
Company's, its affiliates', or any consultant's or subcontractor's,
performance of the Company's obligations under this Agreement, PROVIDED,
HOWEVER, that the
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Institute shall have no obligation to so indemnify in the event such damage,
loss, cost or expense is the result of a claimant's willful and intentional
misconduct.
Section 9. NOTICES. All notices or other communications required by or
specifically provided for in this Agreement shall be in writing and shall be
deemed to have been given (a) when delivered in person, (b) when sent by
telecopier, when transmitted and the appropriate telephonic confirmation
received if transmitted on a business day and during normal business hours of
the recipient, and otherwise on the next business day following transmission,
(c) if given by certified or registered mail, three (3) days after having
been deposited in the U.S. mails, or (d) if given by electronic mail, when
received, or courier or other means, when delivered, and in any case
addressed to the party for which it is intended at that party's address as
set forth below, or at such other address as the addressee shall have
designated by notice hereunder to the other party.
If to the Company:
COLLEGIS, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Facsimile: 407/660-2471
E-Mail: xxxxxx@xxxxxxxx.xxx
If to the Institute:
The COLLEGIS Research Institute
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
E-Mail: xxxxxxx@xxxxxxxx.xxx
Section 10. AMENDMENT; ASSIGNMENT; BINDING EFFECTS. This Agreement may
be amended or modified only by a written instrument signed by the parties
hereto. No party shall assign or transfer this Agreement, in whole or in
part, or any of such party's rights or obligations hereunder,
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to any other person or entity without the prior written consent of the other
parties except that the Company may transfer or assign all of its rights and
obligations hereunder to any affiliate thereof or any entity directly or
indirectly succeeding to the Company by merger, consolidation or
reorganization. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted assigns.
Section 11. WAIVER; SEVERABILITY. The failure of a party to insist in
any instance upon the strict and punctual performance of any provision of
this Agreement shall not constitute a continuing waiver of such provision.
No party shall be deemed to have waived any right, power, or privilege under
this Agreement or any provisions hereof unless such waiver shall have been in
writing and duly executed by the party to be charged with such waiver, and
such waiver shall be a waiver only with respect to the specific instance
involved and shall in no way impair the rights of the waiving party or the
obligations of any other party in any other respect or at any other time. If
any provisions of this Agreement shall be waived, or be invalid, illegal or
unenforceable, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain binding and in full force and effect.
Section 12. RELATIONSHIP OF THE PARTIES. In all matters relating to
this Agreement, each party hereto shall be solely responsible for the acts of
its employees, and employees of one party shall not be considered employees
of the other party. Except as otherwise provided herein, no party shall have
any right, power or authority to create any obligation, express or implied,
on behalf of any other party.
Section 13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida without giving
effect to the conflict of laws rules thereof.
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Section 14. CHANGE IN TAX STATUS OR CHANGE IN LAW. If for U.S. federal
income tax purposes the status of the Institute changes or there is a change
in law that changes the tax treatment of the Institute, the parties agree to
make all necessary changes to this Agreement (including, but not limited to,
terminating this Agreement) to ensure that the Institute and its directors,
officers, and other employees are not subject to any taxes or penalties under
the Internal Revenue Code of 1986, as amended, by reason of the Institute
being a party to this Agreement.
Section 15. ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, either oral
or written, with respect thereto.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Services
Agreement on the date first above written.
COLLEGIS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Title: EVP/CFO
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THE COLLEGIS RESEARCH INSTITUTE
By: /s/ Xxxxxxx X. Xxxxxx
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Title: President
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