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Exhibit
10.7
SERVICES
AGREEMENT
This SERVICES AGREEMENT (this
“Agreement”), dated as of May 8, 2008, is by and
between Unisys Corporation, a Delaware corporation
(“Seller”) and FLO Corporation, a Delaware corporation
(“Buyer”). Seller and Buyer are sometimes hereinafter
referred to individually as a “Party” and collectively
as the “Parties.” This Agreement shall be effective as
of the Closing Date.
WHEREAS, Seller and Buyer
have entered into an Asset Purchase Agreement, dated as of
October 5, 2007 (the “Asset Purchase Agreement”)
for the sale of the assets of the Business to Buyer. Capitalized
terms used but not defined herein have the meaning given to such
terms in the Asset Purchase Agreement.
WHEREAS, Buyer is interested
in purchasing the Services (as defined below) from Seller following
the Closing Date and Seller is interested in providing such
Services to Buyer, in each case, subject to the terms and
conditions in this Agreement.
NOW, THEREFORE, in
consideration of the premises and mutual covenants, agreements and
provisions herein contained, and intending to be legally bound, the
Parties hereto agree as follows:
ARTICLE I
PROVISION OF
SERVICES
Section 1.1.
Definitions As used in this Agreement:
“Service” or
“Services” will mean those services provided by Seller
to Buyer under this Agreement, including without limitation the
services described on Schedule A , which is hereby
incorporated by this reference.
Section 1.2.
Provision of Services . Seller shall provide to Buyer the
Services. Subject to Section 1.9, Seller shall not be
obligated to provide, and Buyer shall not be obligated to purchase
or accept, any services other than the Services. The Services shall
be provided in accordance with and subject to the terms,
limitations and conditions set forth in this Agreement and in
Schedule A . Except to the extent specified herein or
in any of the Related Agreements (as defined in Section 5.9),
Buyer shall be solely responsible, at its own expense, for
obtaining any licenses and government permissions or other
authorizations and any data, software, hardware, networks,
communication lines and systems required to permit Buyer to access
and use the Services.
Section 1.3. General
Standards of Performance and Conduct . Except as specifically
set forth in Schedule A or otherwise agreed by the
Parties in writing, the Services shall be performed by Seller for
Buyer in compliance with all applicable laws, in a manner that is
consistent with the manner in which the Services were performed by
Seller for the Business immediately prior to the Closing Date,
consistent with the level of care with which such
Services
were performed by Seller prior to the
Closing Date and in a workmanlike manner and with professional
diligence and skill. Buyer personnel shall at all times comply with
all policies and regulations then in effect on Seller premises of
which they have written notice, including, but not limited to,
those relating to workplace conduct, security, and entry into and
departure from said premises. In addition, while on Seller
premises, Buyer shall conduct its activities in such a manner as to
seek to avoid any interference with the work or activities of
Seller, or other persons.
Section 1.4. Use of
Services . Except as specifically agreed by the Parties in
writing, Buyer shall not resell or make available the Services to
third parties, and shall only use the Services for substantially
the same purposes and in substantially the same manner as the
Services had been used by Seller for the Business immediately prior
to the Closing Date in connection with the conduct of the Business
in the ordinary course. The foregoing prohibition on reselling and
making the Services available to third parties shall not apply to
Buyer offering the Registered Traveler services to its customers
and registered travelers. Seller shall not be required to provide
the Services other than in connection with Buyer’s conduct of
the Business as the Business was conducted by Seller immediately
prior to the Closing Date.
Section 1.5.
Relationship of Parties . Seller is an independent
contractor and not an agent, partner, employee or joint venturer of
Buyer. Employees or agents of Seller providing Services to Buyer
will not be deemed employees or agents of Buyer. Seller will retain
the exclusive right of control with respect to its employees and
agents.
Section 1.6. Mutual
Cooperation . The Parties shall cooperate with each other in
connection with the performance and receipt of the Services,
including, without limitation, by developing reasonable procedures
with respect to information sharing, transfer of data and similar
matters. Buyer shall make available on a timely basis to Seller all
information and materials reasonably requested by Seller to enable
Seller to provide the Services. Upon prior written notice to Buyer
by Seller, Buyer shall give Seller reasonable access, during
regular business hours and at such other times as are reasonably
required (and in a manner so as not to interfere with the normal
business operations of Buyer), to the premises on which Buyer
conducts business to the extent necessary for Seller to provide the
Services. Seller personnel shall at all times comply with all
policies and regulations then in effect on Buyer’s premises
of which they have written notice, including, but not limited to,
those relating to workplace conduct, security, and entry into and
departure from said premises.
Section 1.7.
Confidentiality . The confidentiality provisions of the
Asset Purchase Agreement and the Mutual Nondisclosure Agreement
dated June 4, 2007 apply to information and data exchanged by
the Parties under or in connection with this Agreement and/or the
Services hereunder.
Section 1.8.
Governance . Each Party shall appoint a “Contact
Person” in relation to each of the Services in Schedule
A and shall notify the other Party in writing of such
appointed Contact Persons. The Contact Persons shall be
knowledgeable about the relevant Services and this Agreement and
will be responsible for the ongoing management of the relevant
Services. Any dispute, disagreement or other matter concerning the
Services shall be first referred to the relevant Contact Persons.
If the Contact Persons cannot resolve such dispute, disagreement or
matter within five (5) business days from the date when it was
first referred to them for resolution, such dispute, disagreement
or matter shall be escalated to the Transition Services Managers
for the Parties. The Transition Services Managers are:
For the Seller: Bryan
Ichikawa
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For the Buyer: Diana
Manfriedi
Each Party may substitute its Contact
Persons and/or the Transition Services Manager by giving the other
Party prior written notice.
Section 1.9. Change
Orders . The Parties acknowledge that this Agreement may not
describe in detail the precise nature of each of the Services to be
provided hereunder. The Parties further acknowledge that there may
be additional services to be provided by Seller to Buyer under the
Related Agreements. To the extent that questions arise as to
matters relating to the Services which are not covered in this
Agreement, the Parties agree to be guided by the past reasonable
practices of the Seller and its Business prior to the Closing Date.
Any change in the Services to be provided, Schedule A
or other requirements thereof, must be agreed upon by the Parties
in advance of its implementation and, if the Parties so agree to a
change, the Parties shall execute a written change order describing
the change. If any such change would affect Seller’s actual
costs of providing such Services, the Parties shall negotiate in
good faith an adjustment to the fees provided in Schedule
A , which adjustment shall be embodied in the change
order.
ARTICLE II
FEES;
PAYMENTS
Section 2.1. Fees and
Expenses . Buyer will pay Seller the fees as shall be mutually
agreed to by the parties for the Services provided hereunder
(except that Seller shall not invoice Buyer for and Buyer shall not
be obligated to pay for the Services described under the heading
“Delivery of Transferred Assets” in Schedule
A ). Prices for Services shall not exceed Federal Eagle IT
Services pricing guidelines in effect at the time the Service is
ordered, as set forth in Schedule B hereto. Each
invoice submitted by Seller shall set forth in reasonable detail
the calculation of the charges and costs upon which the amount to
be reimbursed is based. SUBJECT TO THE TERMS IN THIS AGREEMENT,
BUYER SHALL PAY TO SELLER A MINIMUM OF THREE MILLION FIVE HUNDRED
THOUSAND DOLLARS ($3,500,000) FOR SERVICES PERFORMED PURSUANT TO
THIS AGREEMENT, AND FOR ANY SYSTEM COMPLIANCE TESTING (AS DESCRIBED
ON SCHEDULE A) SERVICES PERFORMED PURSUANT TO THE INTERIM LICENSE,
OVER THE FOUR YEAR PERIOD FOLLOWING THE CLOSING DATE (THE
“MINIMUM GUARANTEE”), WITH TWO MILLION DOLLARS
($2,000,000) TO BE PAID OVER THE FIRST TWO YEARS AFTER THE CLOSING
DATE. If, on the two year anniversary of the Closing Date, Buyer
has failed to purchase from Seller at least $2,000,000 of Services,
then Seller will invoice Buyer for the difference between
$2,000,000 and the amount of services purchased during such period.
In addition, if, on the four year anniversary of the Closing Date,
Buyer has failed to purchase from Seller at least $3,500,000 of
services (which shall be deemed to include any deficiency payment
invoiced by Seller after the second anniversary of the Closing Date
as described in the preceding sentence), then Seller will invoice
Buyer for the difference between $3,500,000 and the amounts paid or
payable to Seller during such four year period.
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Section 2.2.
Payment . Any payments of undisputed amounts due under this
Agreement shall be due within 30 days of Buyer’s receipt of
an invoice. Any payments of undisputed amounts not made when due
will be subject to late charges of 1.5% for each month or portion
thereof that such payment is overdue, or the highest rate allowed
by law, whichever is less. If Buyer disputes an invoiced amount,
Buyer will pay the undisputed amount and will provide written
notice to Seller of the reason Buyer is disputing the invoiced
amount. Upon receipt of such notice, the Parties will work together
in good faith to resolve the dispute.
Section 2.3.
Taxes . In addition to the fees and other amounts payable by
Buyer to Seller under this Agreement, Buyer will pay any applicable
taxes or assessments, including without limitation any sales, use
or excise taxes, that may be levied or assessed by any government
or other taxing authority in connection with the provision by
Seller of the Services, or any receipts therefor, other than
federal, state or local income taxes (including both regular and
alternative minimum taxes) or other federal, state or local taxes
based upon Seller’s taxable income, alternative taxable
income or net inco
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