TRANSITION SERVICES AGREEMENT

 

EXHIBIT 2.2

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[ EXECUTED COPY ]

 

 

 

                     TRANSITION SERVICES AGREEMENT

 

     This Transition Services Agreement (the "Agreement"), dated as of the

6th day of February, 2004, is entered into by and between CoolSavings,

Inc., a Delaware corporation ("CoolSavings"), and ADS Alliance Data

Systems, Inc., ("ADS") a Delaware corporation.

 

 

                              WITNESSETH:

 

     WHEREAS, ADS is selling its Business and the Purchased Assets related

thereto, as defined in and pursuant to that certain Asset Purchase

Agreement dated as of February 6, 2004 between CoolSavings and ADS ("APA"),

to CoolSavings;

 

     WHEREAS, in order to facilitate an orderly transition of the Business

after the Closing Date (as defined in the APA), the parties desire that ADS

provide CoolSavings with the Services (as defined below) upon the terms and

conditions set forth herein;

 

     WHEREAS, in connection with, and as a condition to, the consummation

of the transactions contemplated by the APA, the parties have agreed to

enter into this Agreement.

 

 

                               AGREEMENT

 

     NOW THEREFORE, in consideration of the foregoing premises, the

consummation of the transactions contemplated by the APA and other good and

valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, the parties hereto agree as follows:

 

 

                               ARTICLE 1

 

                          TRANSITION SERVICES

 

     1.1    SERVICES.   During the term of this Agreement, ADS shall provide

to CoolSavings the services listed on and described on SCHEDULE A attached

hereto (collectively the "Services" and each separately a "Service").   ADS

shall perform such services in a professional, workmanlike manner and

consistent with ADS' customary practices.   In addition, without limiting

the generality of the foregoing, the Services shall be available to

CoolSavings in accordance with applicable industry standards, and ADS'

response times in providing the Services, and the number of resources it

dedicates to each Service, shall be in accordance with applicable industry

standards.   CoolSavings agrees to purchase the Services from ADS on the

terms as set out herein.

 

     1.2    ADDITIONAL SERVICES.   In the event that during the term of this

Agreement CoolSavings needs services in addition to those then listed and

described on SCHEDULE A, the parties shall negotiate in good faith to

determine if ADS can provide such additional services upon mutually agreed

terms and conditions (the "Additional Services"), and if they can so agree,

SCHEDULE A shall be amended by written agreement of the parties hereto to

include such Additional Services and to reflect such terms and conditions

as so agreed.

 

 

 

 

 

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     1.3    EMPLOYEES.   During the term of this Agreement, ADS hereby

agrees to make employees of ADS available to CoolSavings upon CoolSavings'

reasonable requests that such employees assist CoolSavings in (a)

educating, assisting and training CoolSavings employees on all hardware,

software, business processes and any other agreed upon activities necessary

to carry out the Services subsequent to the termination of this Agreement;

(b) providing the on-going operations for the period of this Agreement; and

(c) transitioning facilities and equipment included within the Purchased

Assets to CoolSavings.

 

 

                               ARTICLE 2

 

                         TERM AND TERMINATION

 

     2.1    DURATION.   ADS shall provide all Services hereunder until the

earlier of (i) the expiration or termination of the term of this Agreement,

(ii) the expiration of ADS' right to provide a particular Service under the

applicable existing contract (ADS shall give CoolSavings such prior written

notice as is reasonably practicable under the circumstances of any such

expiration), or (iii) such time as CoolSavings provides written notice to

ADS that it desires to cease receiving any such Service.   If CoolSavings

desires to terminate any Service early, CoolSavings shall give ADS such

prior written notice as is reasonably practicable under the circumstances

of its intent to cease the purchase of such Services(s).

 

     2.2    TERM.   Unless otherwise terminated as set forth below, the

initial term of this Agreement shall commence on the Closing Date and shall

end on the date that is six (6) months after the Closing Date (the "Initial

Term").   In addition, CoolSavings shall have the right to renew this

Agreement for successive periods of one (1) month each (each, a "Renewal

Term") by providing ADS with not less than thirty (30) days written notice

prior to the end of the Initial Term or the applicable Renewal Term.

 

     2.3    TERMINATION FOR BREACH.   This Agreement may be terminated by

either party for cause immediately by written notice if the other party

materially breaches any material provision of this Agreement and fails to

cure such breach within thirty (30) days after receipt of written notice

describing the breach.

 

     2.4    TERMINATION BY COOLSAVINGS FOR CONVENIENCE.   CoolSavings may

terminate this Agreement for convenience at any time on fifteen (15) days

prior written notice to ADS.

 

 

                               ARTICLE 3

 

                           FEES AND EXPENSES

 

     3.1    FEE FOR SERVICES.   In consideration of the Services rendered to

CoolSavings pursuant to Section 1.1 hereof, CoolSavings shall pay ADS for

such Services an amount equal to (a) Ninety-Three Thousand Dollars

($93,000) for the Initial Term (the "Initial Term Fee"), and (b) Forty

Thousand Dollars ($40,000) for each Renewal Term, if any (each, a "Renewal

Term Fee").

 

     3.2    PAYMENT.   CoolSavings shall pay the Initial Term Fee

contemporaneously with the closing of the transactions contemplated by the

APA.   CoolSavings shall pay any Renewal Term Fee, if any, on the second

business day of the applicable Renewal Term.

 

 

 

 

 

 

 

 

 

 

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                               ARTICLE 4

 

                    FORCE MAJEURE; INDEMNIFICATION

 

     4.1    FORCE MAJEURE.   Neither party shall be liable for, or be

considered to be in breach of or default under this Agreement on account

of, any delay or failure to perform as required by this Agreement as a

result of any sabotage, war, general utility outage, fire, explosion,

earthquake, storm, flood or other similar casualty beyond the reasonable

control of such party; provided that such party uses its best efforts to

promptly overcome or mitigate the delay or failure to perform.   Any party

whose performance is delayed or prevented by any cause or condition within

the purview of this paragraph shall promptly notify the other party

thereof, the anticipated duration of the delay or prevention, and the steps

being taken to overcome or mitigate the delay or failure to perform.

 

     4.2    INDEMNIFICATION.

 

     (a)    CoolSavings agrees to hold harmless, indemnify and defend ADS,

and its Affiliates and any of their respective directors, officers,

employees and agents, from and against any and all liabilities, penalties,

demands, claims, actions and causes of action, suits, obligations,

encumbrances, losses, damages, costs and expenses including, but not

limited to, reasonable attorney's fees and expenses (all of the foregoing,

collectively, "Losses") to which ADS and any of its Affiliates, and any of

their respective directors, officers, employees or agents, may be

subjected, arising out of or attributable, directly or indirectly, to any

claims for bodily injury or death or damage to tangible property which are

caused by the acts or omissions of CoolSavings' employees or agents in

connection with their use of ADS' facilities hereunder.

 

     (b)    ADS shall hold harmless, indemnify and defend CoolSavings, and

its Affiliates and any of their respective directors, officers, employees

and agents, from and against any and all Losses to which CoolSavings and

any of its Affiliates, and any of their respective directors, officers,

agents or employees, may be subjected, arising out of or attributable,

directly or indirectly, to (i) ADS' failure to provide the Services in

accordance with the terms hereof, (ii) any claim that ADS' performance of

the Services infringes upon any intellectual property or personal right of

any third party,   any claim for bodily injury or death or damage to

tangible property caused by the acts or omissions of ADS' employees or

agents in connection with their performance of the Services hereunder.

 

     4.3    DISCLAIMER OF WARRANTY.   EXCEPT AS EXPRESSLY PROVIDED IN THIS

AGREEMENT, ADS HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR

IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF

MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE

SERVICES.

 

     4.4    LIMITATION OF LIABILITY. The aggregate liability of ADS to

CoolSavings, for damages and payments made pursuant to Section 4.2(a) shall

be limited to $150,000. The aggregate liability of CoolSavings, for damages

and payments made pursuant to Section 4.2(b) shall be limited to $150,000.

 

 

                               ARTICLE 5

 

                     REPRESENTATIONS AND WARRANTIES

 

     5.1    ADS AUTHORITY.   This Agreement has been duly executed and

delivered by ADS and constitutes a valid and legal obligation of ADS,

enforceable against it in accordance with its terms.

 

     5.2    COOLSAVINGS AUTHORITY.   This Agreement has been duly executed

and delivered by CoolSavings and constitutes a valid and legal obligation

of Cool