Document:

Exhibit
10.15

 

 

SELLER ADMINSTRATIVE SERVICES
AGREEMENT

 

Between

 

TIME WARNER INC.

 

and

 

WMG ACQUISITION CORP.

 

Dated February 29, 2004

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE I

  	
   

  
	
   

  	
   

  
	
  Definitions

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions

  	
   

  
	
  SECTION 1.02.

  	
  Certain Terms

  	
   

  
	
  SECTION 1.03.

  	
  Usage Generally; Interpretation

  	
   

  
	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  
	
  Services

  	
   

  
	
   

  	
   

  
	
  SECTION 2.01.

  	
  Agreement to Provide Services

  	
   

  
	
  SECTION 2.02.

  	
  Change Orders

  	
   

  
	
  SECTION 2.03.

  	
  No Management Authority

  	
   

  
	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
  Compensation

  	
   

  
	
   

  	
   

  
	
  SECTION 3.01.

  	
  Compensation for Services

  	
   

  
	
  SECTION 3.02.

  	
  Adjustments to Cost of Services

  	
   

  
	
  SECTION 3.03.

  	
  Payment Terms

  	
   

  
	
  SECTION 3.04.

  	
  Disclaimer of Warranty

  	
   

  
	
  SECTION 3.05.

  	
  Books and Records

  	
   

  
	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  
	
  Term

  	
   

  
	
   

  	
   

  
	
  SECTION 4.01.

  	
  Commencement

  	
   

  
	
  SECTION 4.02.

  	
  Termination

  	
   

  
	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  
	
  Indemnification; Limitation of Liability

  	
   

  
	
   

  	
   

  
	
  SECTION 5.01.

  	
  Indemnification by Purchaser

  	
   

  
	
  SECTION 5.02.

  	
  Limitation on Liability; Indemnification by
  Seller

  	
   

  
				

 

 

	
  ARTICLE VI

  	
   

  
	
   

  	
   

  
	
  Other
  Covenants

  	
   

  
	
   

  	
   

  
	
  SECTION 6.01.

  	
  Attorney-in-Fact

  	
   

  
	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  	
   

  
	
  Other
  Matters

  	
   

  
	
   

  	
   

  
	
  SECTION 7.01.

  	
  Title to Data

  	
   

  
	
  SECTION 7.02.

  	
  Notices

  	
   

  
	
  SECTION 7.03.

  	
  Amendments; No Waivers

  	
   

  
	
  SECTION 7.04.

  	
  Governing Law

  	
   

  
	
  SECTION 7.05.

  	
  Enforcement

  	
   

  
	
  SECTION 7.06.

  	
  Severability

  	
   

  
	
  SECTION 7.07. 

  	
  Confidentiality

  	
   

  
	
  SECTION 7.08. 

  	
  Counterparts

  	
   

  
	
  SECTION 7.09. 

  	
  Independent Contractors

  	
   

  
	
  SECTION 7.10. 

  	
  Assignment

  	
   

  
	
  SECTION 7.11. 

  	
  WAIVER OF JURY TRIAL

  	
   

  
	
  SECTION 7.12. 

  	
  Entire Agreement

  	
   

  
	
  SECTION 7.13. 

  	
  Captions

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  —

  	
  Services

  	
   

  
				

 

 

SELLER
ADMINISTRATIVE SERVICES AGREEMENT (this “Seller Administrative Services
Agreement”), dated February 29, 2004, between TIME WARNER INC. (“Seller”)
and WMG ACQUISITION CORP. (“Purchaser”).

 

In consideration of the mutual covenants
contained in this Seller Administrative Services Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01.  Definitions. Capitalized terms used
but not defined herein shall have the respective meanings assigned to them in
the Purchase Agreement (as defined herein).

 

SECTION 1.02.
Certain Terms.

 

“Purchase Agreement” means that
Purchase Agreement, dated as of November 24, 2003, between Seller and
Purchaser.

 

“Services” means the services
identified on Exhibit A.

 

“Service Categories” means the
categories of Service Items as identified on Exhibit A or otherwise agreed by
the parties.

 

“Service Items” means the individual
service items included within the various Service Categories identified on Exhibit
A or otherwise agreed by the parties.

 

SECTION 1.03.  Usage Generally; Interpretation.
References in this Seller Administrative Services Agreement to any gender
include references to all genders.  Any
term defined in this Seller Administrative Services Agreement in the singular
form shall have the correlative meaning in the plural form, and any term
defined in this Seller Administrative Services Agreement in the plural form
shall have the correlative meaning in the singular form.  References in this Seller Administrative
Services Agreement to a party or other Person include their respective
successors and permitted assigns.  The words
“include”, “includes” and “including” when used in this Seller Administrative
Services Agreement shall be deemed to be followed by the phrase “without
limitation”.  Unless the context
otherwise requires, references in this Seller Administrative Services Agreement
to Articles, Sections and Exhibits shall be deemed references to Articles and
Sections of, and Exhibits to, this Seller Administrative Services
Agreement.  Unless the context otherwise
requires, the words “hereof”, “hereby” and “herein” and words of similar
meaning when used in this Seller Administrative Services Agreement refer to
this Seller Administrative Services Agreement in its entirety and not

 

 

to any particular Article, Section or
provision of this Seller Administrative Services Agreement.

 

ARTICLE II

 

Services

 

SECTION 2.01.
Agreement to Provide Services. (a) Seller shall provide the Services to
the Acquired Companies and in respect of the Acquired Assets as provided
herein.  Purchaser shall provide input and
assistance to Seller in connection with the performance of the Services as
reasonably requested by Seller, and shall advise Seller as to the desired
manner and nature of the Services to be provided.  Seller shall determine the Seller personnel
who shall perform the Services.  Seller
may, at its option, from time to time delegate any of or all its obligations
under this Seller Administrative Services Agreement to any one or more of its
Affiliates.  In addition, Seller may, as
it deems necessary or desirable, engage the services of other professionals and
consultants in connection with the performance of the Services; provided, that
the Purchaser consents in writing to such engagement, which consent shall not
be unreasonably withheld; and provided further Seller shall remain directly and
fully liable to Purchaser for the performance of its obligations hereunder
notwithstanding the engagement of any such professionals or consultants.  During the term of this Seller Administrative
Services Agreement, Seller shall use its reasonable efforts to make its
corporate resources available as reasonably requested by Purchaser and the
Acquired Companies in connection with the transition and integration of the Acquired
Companies and the Acquired Assets, during normal business hours, provided, that
the provision of such corporate resources does not interfere with the conduct of
business of Seller and does not result in any cost to Seller.

 

(b) Unless otherwise agreed by the parties,
the Services shall be:

 

(i) performed by Seller in a reasonably 
prompt and professional manner that is substantially the same manner in
which Seller currently provides similar services for the Acquired Companies or
in respect of the Acquired Assets, as the case may be; and

 

(ii) used by the Acquired Companies or the entities holding the
Acquired Assets, as the case may be, for substantially the same purpose and in
substantially the same manner as the Acquired Companies and the entities
holding the Acquired Assets currently use similar such services.

 

(c) Notwithstanding anything herein to the
contrary, this Seller Administrative Services Agreement is not intended to
amend, replace or otherwise affect in any manner any existing contractual
relationships between Seller and its Subsidiaries, on the one hand, and Purchaser
and the Acquired Companies, on the other hand.

 

SECTION 2.02.
Change Orders. (a) Service Additions.  Exhibit A may be amended at any time by the mutual
written agreement of the parties to add additional Services.

 

2

 

(b)  Service
Deletions.  Upon prior written notice
(a “Service Deletion Notice”) delivered to Seller not less than the
requisite number of days prior to termination as specified in Exhibit A,
Purchaser may:

 

(i)             terminate
this Seller Administrative Services Agreement with respect to any Service
Category; or

 

(ii)          terminate
this Seller Administrative Services Agreement with respect to any individual
Service Item included in the Services, so long as the other remaining Service Items
in the relevant Service Category can thereafter still be practicably provided
by Seller pursuant to this Seller Administrative Services Agreement.  If Seller reasonably determines that it
cannot thereafter practicably provide the other Service Items in the relevant
Service Category, then Seller shall so notify Purchaser within 30 days after
Seller’s receipt of the relevant Service Deletion Notice and such termination
with respect to such Service Item shall not take effect.

 

(c) Termination by Seller.  Except as otherwise provided in Exhibit A,
upon not less than 180 days’ prior written notice to Purchaser, Seller may
terminate this Seller Administrative Services Agreement with respect to any Service
Category included in the Services if Seller and its Affiliates cease to provide
such Service Category to Seller’s Subsidiaries, divisions and business
units.  Notwithstanding the foregoing
provision, Services under Human Resources and Benefits and Treasury as
described on Exhibit A shall not be terminated until the respective Default
Termination Date.

 

(d) Return of Books and Records.  Upon the request of Purchaser after the
termination of a Service with respect to which Seller holds books, records or
files, including current and archived copies of computer files, (i) owned by
Purchaser or its Affiliates and used by Seller in connection with the provision
of a Service to the Acquired Companies or in respect of the Acquired Assets, or
(ii) created by Seller and in Seller’s possession as a function of and relating
to provision of Services to the Acquired Companies or in respect of the
Acquired Assets, such books and records shall be returned to Purchaser. The
Acquired Companies shall be entitled to retain and use any such materials.  Seller shall return all such books, records
or files as soon as reasonably practicable. 
Purchaser shall bear Seller’s costs and expenses associated with the
return of such documents.  At its
expense, Seller may make a copy of such books, records or files for its legal
files.

 

SECTION 2.03.  No Management Authority.  Notwithstanding any other provision hereof,
Seller shall not be authorized by, and shall have no responsibility under, this
Seller Administrative Services Agreement to manage the affairs of the Acquired
Companies.

 

3

 

ARTICLE III

 

Compensation

 

SECTION 3.01.
Compensation for Services.  As
compensation for Services rendered pursuant to this Seller Administrative Services
Agreement, Purchaser shall pay to Seller an amount equal to the Cost of Services
as specified in Exhibit A for each Service Category.

 

SECTION 3.02.
Adjustments to Cost of Services. 
(a)  Adjustments Due to Service
Additions or Deletions.  If at any
time the parties mutually agree to add any Service Categories or Service Items
to the Services to be provided to the Acquired Companies or in respect of the Acquired
Assets hereunder, then concurrently with the addition of such Service Item or Service
Category, as the case may be, the parties shall work in good faith to agree
upon the then-current Cost of Services as appropriate to reflect such
addition.  If at any time this Seller
Administrative Services Agreement is terminated with respect to any Service
Item in accordance with Section 2.02, then not less than 30 days prior to
such termination, Seller and Purchaser shall work in good faith to mutually
agree upon an appropriate decrease, if any, to the then-current Cost of
Services.

 

(b)  Adjustments
Due to Variances in Usage of Services. 
If, at any time, usage of any Service Category varies materially from
the projected patterns of usage employed by the parties to determine the
then-applicable Cost of Services with respect to such Service Category, then
either Purchaser or Seller, by written notice (a “Cost Adjustment Request”)
to the other, may trigger a review of the then-applicable Cost of Services
attributable to such Service Category. 
Within 45 days after any Cost 
Adjustment Request, Seller and Purchaser shall agree upon an appropriate
adjustment, if any, to the Cost of Services applicable to such Service Category
so that such Cost of Services shall more appropriately reflect the actual
direct cost to Seller of providing Services within such Service Category at
then-current usage rates.

 

SECTION 3.03.  Payment Terms. (a) Seller shall bill
Purchaser at the end of each month for an amount equal to the sum of the Cost
of Services for that month.  Purchaser
shall pay such amount in full within 45 days after receipt of invoice.  Each invoice shall set forth in reasonable
detail the calculation of the charges and amounts upon which the sum of the
Cost of Services is comprised, broken down by the Cost of Services for each
Service during the month to which such invoice relates.  Other remedies for non-payment
notwithstanding, if any payment is not received by Seller on or before the date
such amount is due, then a late payment interest charge, calculated at a 6% per
annum rate, on the past amount due shall become immediately due and payable in
addition to the amount owed under this Seller Administrative Services
Agreement.  If at any time this Seller
Administrative Services Agreement is terminated with respect to any Service
Item in accordance with Section 2.02, then not more than 45 days after
such termination, Seller shall return to Purchaser any amounts prepaid by
Purchaser to Seller in respect of the days in the month during which the effectiveness
of the termination occurred which fall after such termination.

 

4

 

(b) If Purchaser has any objection to the
amount of the invoice, it shall have the right to inspect Seller’s records with
respect thereto.  Following such
inspection, the parties shall endeavor in good faith to resolve any
disagreement with respect to charges and costs hereunder.  Thereafter, Purchaser will be entitled to a
prompt refund of any amounts paid in excess of the amounts required hereunder,
and Seller shall promptly pay any deficiency amounts (with interest at 6% per
annum) found to be due as a result of such inspection.

 

SECTION 3.04.  Disclaimer of Warranty. EXCEPT AS
EXPRESSLY SET FORTH IN THIS SELLER ADMINISTRATIVE SERVICES AGREEMENT, THE
SERVICES TO BE PURCHASED UNDER THIS SELLER ADMINISTRATIVE SERVICES AGREEMENT
ARE FURNISHED WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTY OF MERCHANTABILITY  OR FITNEES
FOR ANY PARTICULAR PURPOSE.  SELLER DOES
NOT MAKE ANY WARRANTY THAT ANY SERVICE COMPLIES WITH ANY LAW, DOMESTIC OR
FOREIGN.

 

SECTION 3.05.
Books and Records.  Seller shall
maintain complete and accurate books of account as necessary to support its
calculations of the Cost of Services and shall make such books available to Purchaser,
upon reasonable notice, during normal business hours; provided, however,
that to the extent Seller’s books contain information relating to any other
aspect of Seller’s business, Seller and Purchaser shall negotiate a procedure
to provide Purchaser the necessary access while preserving the confidentiality
of such other records.  In performing the
Services, Seller shall be entitled to assume that all books and records
provided by Purchaser or the Acquired Companies are true and accurate.

 

ARTICLE IV

 

Term

 

SECTION 4.01.  Commencement.  This Seller Administrative Services Agreement
is effective as of the Closing Date and shall remain in effect with respect to
a particular Service until the Default Termination date as specified in Exhibit
A unless and until terminated in accordance with Section 4.02.

 

SECTION 4.02.  Termination.  This Seller Administrative Services Agreement
may be terminated as follows:

 

(a) By Purchaser.  With respect to any Service Category, at any
time upon prior written notice to Seller as provided in Exhibit A.

 

(b) By Either Party.  If either party materially breaches any of
its obligations under this Seller Administrative Services Agreement, the
non-breaching party may terminate this Seller Administrative Services
Agreement, including the provision of Services pursuant hereto, effective at
any time upon not less than 30 days written notice of termination to the
breaching party, provided said breaching party does not cure such

 

5

 

default within 30 days after receiving written notice thereof from the
non-breaching party.

 

In the event of any termination of this Seller Administrative Services
Agreement, each party shall remain liable for all obligations of such party
accrued hereunder prior to the date of such termination, including all
obligations of Purchaser to pay any amounts due to Seller hereunder.

 

ARTICLE V

 

Indemnification;
Limitation of Liability

 

SECTION 5.01.  Indemnification by Purchaser.  Purchaser shall indemnify and hold harmless
Seller, its Affiliates, partners, officers, employees, agents and permitted
assigns (each, a “Seller Party” and, together, the “Seller Parties”)
from and against any and all losses, liabilities, claims, litigation, damages,
penalties, actions, demands or expenses, including the reasonable fees and
expenses of counsel (collectively, “Losses”) incurred by Seller and
arising out of, in connection with or by reason of this Seller Administrative
Services Agreement or any Services provided by Seller hereunder, except to the
extent such Losses arise out of Seller’s material breach under this Seller
Administrative Services Agreement or Seller’s gross negligence or willful
misconduct.

 

SECTION 5.02.
Limitation on Liability; Indemnification by Seller. (a) No Seller Party
shall be liable (whether such liability is direct or indirect, in contract or
tort or otherwise) to Purchaser or any of its Affiliates, partners, officers
employees, agents, auditors or permitted assigns, for any Losses arising out
of, related to, or in connection with the Services or this Seller
Administrative Services Agreement, except to the extent that such Losses arise
out of Seller’s material breach under this Seller  Administrative Services Agreement or Seller’s
gross negligence or willful misconduct.

 

(b) Seller shall indemnify and hold harmless
Purchaser, its Affiliates, partners, officers, employees, agents and permitted
assigns (each an “Purchaser Party”) from and against any and all Losses
incurred by such Purchaser Party and arising out of, in connection with or by
reason of this Seller Administrative Services Agreement or any Services
provided by Seller hereunder, which arise out of Seller’s material breach of
this Seller Administrative Services Agreement or Seller’s gross negligence or
willful misconduct.

 

(c) IN NO EVENT SHALL ANY SELLER PARTY BE
LIABLE WHETHER IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY)
OR OTHERWISE TO ANY PURCHASER PARTY FOR ANY CONSEQUENTIAL DAMAGES (INCLUDING
LOSS OF PROFITS) AS A RESULT OF ANY BREACH, PERFORMANCE OR NON-PERFORMANCE BY
ANY SELLER PARTY OF THIS SELLER ADMINISTRATIVE SERVICES AGREEMENT.

 

6

 

(d) The provisions of this Article V
shall survive indefinitely, notwithstanding any termination of all or any
portion of this Seller Administrative Services Agreement.

 

ARTICLE VI

 

Other Covenants

 

SECTION 6.01.
Attorney-in-Fact.  On a case-by-case
basis, Purchaser shall execute documents necessary to appoint Seller as its
attorney-in-fact for the sole purpose of executing any and all documents and
instruments reasonably required to be executed in connection with the performance
by Seller of any Service under this Seller Administrative Services Agreement.

 

ARTICLE VII

 

Other Matters

 

SECTION 7.01.
Title to Data.  Purchaser
acknowledges that it will acquire no right, title or interest (including any
license rights or rights of use) in any firmware or software, and the licenses
therefor that are owned by Seller or its Affiliates, by reason of their
provision of the Services provided hereunder. 
Seller agrees that all records, data, files, input materials and other
information received or computed that relate to Purchaser or its Affiliates are
the property of Purchaser or its Affiliates, respectively.

 

SECTION 7.02.  Notices. All notices, request and
other communications to any party hereunder shall be in writing (including
facsimile transmission) and shall be given,

 

	
  if to Seller, to:

  
	
   

  
	
  Time Warner Inc,

  
	
  75 Rockefeller Plaza

  
	
  New York, NY 10019

  
	
  Fax: (212) 258-3172

  
	
  Attn: General Counsel

  
	
   

  
	
  with copies to:

  
	
   

  
	
  Cravath, Swaine & Moore LLP

  
	
  825 Eighth Avenue

  
	
  New York, New York 10019

  
	
  Fax: (212) 474-3700

  
	
  Attn: Richard Hall, Esq.

  
	
   

  
	
  if to Purchaser, to:

  

 

7

 

	
  WMG Acquisition Corp.

  
	
  In care of Thomas H. Lee Partners, L.P.

  
	
  75 State Street

  
	
  Boston, Massachusetts 02109

  
	
  Fax: (617) 227-3514

  
	
  Attn: Scott Sperling

  
	
   

  
	
  with copies to:

  
	
   

  
	
  Simpson Thacher & Bartlett LLP

  
	
  425 Lexington Avenue

  
	
  New York, New York 10017

  
	
  Fax: (212) 455-2502

  
	
  Attn: John Finley, Esq.

  
	
  Brian Stadler, Esq.

  

 

 

or such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the other parties hereto.  All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5 p.m. in the place of receipt and such day is a
business day, in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding business day in the place of receipt.

 

SECTION 7.03.  Amendments; No Waivers. (a) Any
provision of this Seller Administrative Services Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed,
in the case of an amendment, by each party to this Seller Administrative
Services Agreement or, in the case of a waiver, by each party against whom the
waiver is to be effective.

 

(b) No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

 

SECTION 7.04.
Governing Law.  This Seller
Administrative Services Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws
thereof; provided, however, that the laws of the respective
jurisdictions of incorporation of each of the parties hereto shall govern the
relative rights, obligations, powers, duties and other internal affairs of such
party and its board of directors.

 

SECTION 7.05.
Enforcement. (a) Each party hereby consents to the exclusive
jurisdiction of the United States Federal courts located in the State of New
York with respect to disputes arising out of this Seller Administrative
Services Agreement.

 

8

 

(b) Other than as specified in Article V,
there are not any intended third-party beneficiaries of any provision of this Seller
Administrative Services Agreement.

 

SECTION 7.06.
Severability.  If any term,
provision, covenant, restriction or other condition of this Seller
Administrative Services Agreement is held by a court of competent jurisdiction
or other authority to be invalid, illegal or incapable of being enforced by any
rule or law, or public policy, all other terms, provisions, covenants,
restrictions and conditions of this Seller Administrative Services Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to either party. 
Upon such a determination, the parties shall negotiate in good faith to
modify this Seller Administrative Services Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner
to the end that transactions contemplated hereby are consummated to the extent
possible.

 

SECTION 7.07.
Confidentiality.  Except as
otherwise required under applicable law, each party agrees that it and its
respective Affiliates will maintain as confidential, and not use, any and all
information provided by either party to the other or otherwise obtained by such
party in connection with or as a result of this Seller Administrative Services
Agreement.  Nothing contained in this Section shall
limit or affect in any way obligations of the parties to maintain the
confidentiality of information pursuant to the Purchase Agreement.  Notwithstanding anything herein to the
contrary, each party to this Seller Administrative Services Agreement (and any
employee, representative or other agent of such party) may disclose to any and
all persons, without limitation of any kind, the U.S. federal income tax
treatment and the U.S. federal income tax structure of the transactions
contemplated by this Seller Administrative Services Agreement and all materials
of any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure. However, no such party shall
disclose any information relating to such tax treatment or tax structure to the
extent nondisclosure is reasonably necessary in order to comply with applicable
securities laws.

 

SECTION 7.08.
Counterparts. This Seller Administrative Services Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties.

 

SECTION 7.09.
Independent Contractors.  No
agency, partnership or joint venture is established by this Seller
Administrative Services Agreement. 
Neither party shall enter into, incur liabilities or hold itself out to
third parties as having the authority to enter into and incur any contractual
obligations, expenses, or liabilities on behalf of the other party.

 

SECTION 7.10. Assignment.  Other than as provided in Section 2.01,
neither this Seller Administrative Services Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part, by
operation of law or otherwise by either party without the prior written consent
of the other party.

 

9

 

Notwithstanding the foregoing,
Purchaser may assign all or a portion of its rights hereunder to one or more of
its Subsidiaries, provided that no such assignment shall relieve Purchaser of
any obligations hereunder.  Any purported
assignment without such consent shall be void. 
Subject to the preceding sentences, this Seller Administrative Services
Agreement shall be binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.

 

SECTION 7.11.
WAIVER OF JURY TRIAL.  EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS SELLER ADMINISTRATIVE
SERVICES AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 7.12.  Entire Agreement.  This Seller Administrative Services Agreement
and the Purchase Agreement constitute the entire agreement between the parties
with respect to the subject matter of this Seller Administrative Services
Agreement and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this Seller
Administrative Services Agreement.

 

SECTION 7.13.  Captions.  The captions herein are included for
convenience of reference only and shall be ignored as in the construction or
interpretation hereof.

 

10

 

IN WITNESS WHEREOF, the parties have caused
this Seller Administrative Services Agreement to be duly executed as of the day
and year first written above.

 

 

	
   

  	
  TIME WARNER INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Douglas S. Phillips

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Douglas S. Phillips

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WMG ACQUISITION CORP.,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
						

 

11

 

IN WITNESS WHEREOF, the parties have caused
this Seller Administrative Services Agreement to be duly executed as of the day
and year first written above.

 

	
   

  	
  TIME WARNER INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WMG ACQUISITION CORP.,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Scott Sperling

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Scott Sperling

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
						

 

 

Exhibit A - Services

 

	
  Service Category:

  	
   

  	
  Accounting

  
	
   

  	
   

  	
   

  
	
  Default Termination:
  

  	
   

  	
  December 31, 2004

  
	
   

  	
   

  	
   

  
	
  Termination Notice by Purchaser:
  

  	
   

  	
  30 days

  
	
   

  	
   

  	
   

  
	
  Service Items:

  	
   

  	
  Audit services performed to assist
  Purchaser with its audits of the Acquired Companies.

  
	
   

  	
   

  	
   

  
	
  Cost of Services:

  	
   

  	
  For internal accounting work, costs of services
  represent an allocation of employee compensation (including benefits) and
  other out-of-pocket costs directly attributable to the provision of such
  internal accounting work, based on actual time spent on projects performed to
  assist Purchaser.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  External audit fees to the extent
  attributable to Purchaser-related projects will be passed through to
  Purchaser at Seller’s cost or paid directly by Purchaser.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If Seller’s normal practice prior to
  Closing was to value costs of Accounting services in order to make
  intra-company allocations for those services for purposes of Seller’s
  financial statements, then cost calculations will be conducted in accordance
  with that past practice to the extent reasonably possible.

  

 

1

 

	
  Service Category: 

  	
   

  	
  Taxes

  
	
   

  	
   

  	
   

  
	
  Default Termination:
  

  	
   

  	
  December 31, 2004.

  
	
   

  	
   

  	
   

  
	
  Termination Notice by Purchaser:
  

  	
   

  	
  30 days

  
	
   

  	
   

  	
   

  
	
  Service Items:

  	
   

  	
  In each case, to the extent currently
  provided by Seller with respect to the Acquired Companies:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1) Income tax planning and consulting.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2) Preparing and filing tax returns,
  including coordination of external service providers.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3) Responding to and defending Purchaser
  in all audit requests.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (4) Providing tax accounting services,
  including coordination of external service providers.

  
	
   

  	
   

  	
   

  
	
  Cost of Services:

  	
   

  	
  For services performed internally at
  Seller, cost of services will be based on an allocation of compensation
  (including benefits) and all other out-of-pocket costs directly attributable
  to the provision of such internal tax work, based on actual time spent on
  Purchaser-related projects.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  External fees and out-of-pocket expenses to
  the extent attributable to Purchaser-related projects relating to tax
  accounting, compliance and other areas, including tax accounting fees and
  return preparation fees, will be passed through to Purchaser at Seller’s cost
  or paid directly by Purchaser.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  External fees and out-of-pocket expenses to
  the extent attributable to Purchaser-related projects related to tax audits
  will be reimbursed by Purchaser.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If Seller’s normal practice prior to
  Closing was to value costs of Tax services in order to make intra-company
  allocations for those services for purposes of Seller’s financial statements,
  then cost calculations will be conducted in accordance with that past
  practice to the extent reasonably possible.

  

 

2

 

	
  Service Category: 

  	
   

  	
  Human Resources and Benefits

  
	
   

  	
   

  	
   

  
	
  Default Termination:
  

  	
   

  	
  December 31, 2004

  
	
   

  	
   

  	
   

  
	
  Termination Notice by Purchaser:
  

  	
   

  	
  3 months

  
	
   

  	
   

  	
   

  
	
  Service Items:

  	
   

  	
  Maintain and administer benefits plans
  existing at the Closing or any benefits plans substantially similar to those
  existing at the Closing, in which employees of Purchaser are eligible to
  participate, in accordance with Article V of the Purchase Agreement.
  Seller shall not be required, directly or indirectly, to advance its own
  funds in connection with the funding of any 401K plans.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If requested by Purchaser, Seller will
  cooperate and assist Purchaser on Purchaser’s conversion to its own benefits
  plans (to the extent applicable).

  
	
   

  	
   

  	
   

  
	
  Cost of Services:

  	
   

  	
  Reasonable direct costs, including (i)
  staff costs, (ii) operational costs associated with the administration of
  human resources, compensation and employee benefit programs, and (iii) the
  reasonable fees for external consultants. For services performed internally
  at Seller, staff costs will be based on an allocation of reasonable
  compensation (including benefits) and reasonable out-of-pocket costs, in each
  case directly attributable to the provision of such internal services, based
  on actual time spent on Purchaser-related projects.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  External fees and out-of-pocket expenses,
  customary and consistent with Seller’s past experience, and to the extent
  attributable to Purchaser-related projects relating to human resources and
  benefits services will be passed through to Purchaser at Seller’s cost, or
  paid directly by Purchaser.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If Seller’s normal practice prior to
  Closing was to value costs of Human Resources and Benefits services in order
  to make intra-company allocations for those services for purposes of Seller’s
  financial statements, then cost calculations will be conducted in accordance
  with that past practice to the extent reasonably possible.

  
	
   

  	
   

  	
   

  
	
  Relationship to Purchase Agreement:

  	
   

  	
  Nothing contained herein is intended to
  amend or supersede the provisions of Article V of the Purchase
  Agreement.

  

 

3

 

	
  Service Category: 

  	
   

  	
  Information Technology

  
	
   

  	
   

  	
   

  
	
  Default Termination:

  	
   

  	
  April 15, 2004 for the telephone (PBX)
  services specified below; December 31, 2004 for all other information
  technology services

  
	
   

  	
   

  	
   

  
	
  Termination Notice by Purchaser:
  

  	
   

  	
  30 days for telephone (PBX) services; 6 months
  for shared global network services and managed services.

  
	
   

  	
   

  	
   

  
	
  Service Items:

  	
   

  	
  Seller services will consist of:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1) maintenance services relating to
  existing telephone (PBX) systems at 75 Rockefeller Plaza and 1290 Avenue of
  the Americas;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2) management of the existing shared
  global network for Purchaser, including Internet services (domestic and
  International) and Extranet services (for third-party business-to-business
  network services); and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3) managed services, hosting and disaster
  recovery for systems currently under management at AOL sites including
  servers, storage devices and network gear.

  
	
   

  	
   

  	
   

  
	
  Cost of Services:

  	
   

  	
  For telephone (PBX) services, the entire
  cost of those services including (i) stuff cost (including the benefits
  provided to the staff) and (ii) operational costs associated with the provision
  of telephone services.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For the management of a shared global
  network for Purchaser, the costs will reflect the actual direct cost to
  Seller (including, without limitation, Seller’s staff costs, including
  benefits payable to staff), the cost of technical support services, and the
  allocable cost of shared global network services (based on current shared use
  allocation).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For the managed services, disaster recovery
  and support of systems supporting HRIS, DOC, decision Support, Royalty and
  other applications for Purchaser, the costs will reflect the actual direct
  cost to Seller (including, without limitation, Seller’s staff costs,
  including benefits payable to staff), the cost of technical support services,
  and the allocable cost of managed services (based on current shared use
  allocation).

  

 

4

 

	
   

  	
   

  	
  Each of the above costs will be passed
  through to Purchaser at Seller’s cost or paid directly by Purchaser.

  

 

5

 

	
  Leases:

  	
   

  	
  Lease agreements will be treated as
  follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
  Leases for SUN servers supporting Royalty
  as well as HRIS, DOC, decision Support and other applications will be
  continued by Seller until December 31st 2004 with a
  termination option upon a 30 days notice carrying the remaining cost of the
  lease.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  Lease for EMC storage occupied by various
  data sources will be continued by Seller until December 31st
  2004 with a termination option upon a 30 days notice carrying the remaining
  cost of the lease.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The cost for the continuations set forth
  above will be passed through to Purchaser at Seller’s cost or paid directly
  by Purchaser.

  
	
   

  	
   

  	
   

  
	
  Licenses:

  	
   

  	
  Until June 30, 2005, for all
  nontransferable licenses used by Purchaser, Seller will continue to support,
  enable and renew the licenses for Purchaser to the extent that Seller is
  permitted by the terms of such licenses to provide such services. Purchaser
  shall not be entitled to sublicense such licenses to any third party.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The agreements include the continuation of
  fees-free usage based on “all you can eat” enterprise agreements, when
  applicable and as is used currently.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Purchaser will notify the Seller 30
  days ahead of termination of usage of any given license.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Licenses/contractual rates include but are
  not limited to the following:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •

  	
  ATT

  
	
   

  	
   

  	
  •

  	
  PeopleSoft

  
	
   

  	
   

  	
  •

  	
  MCI

  
	
   

  	
   

  	
  •

  	
  Verizon

  
	
   

  	
   

  	
  •

  	
  TW Telcom

  
	
   

  	
   

  	
  •

  	
  AOL Personal Accounts

  
	
   

  	
   

  	
  •

  	
  Sun (SunOne)

  
	
   

  	
   

  	
  •

  	
  Oracle

  
	
   

  	
   

  	
  •

  	
  Veritas

  
	
   

  	
   

  	
  •

  	
  Embarcadero

  
	
   

  	
   

  	
  •

  	
  Verasign

  
	
   

  	
   

  	
  •

  	
  Cisco

  
					

 

6

 

	
   

  	
   

  	
  •

  	
  Trend Micro

  
	
   

  	
   

  	
  •

  	
  Hyperion

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The direct costs for the continuation of
  support of the licenses/contractual rates, as applicable, set forth above
  will be passed through to Purchaser at Seller’s cost or paid directly by
  Purchaser.

  

 

7

 

	
  Service Category: 

  	
   

  	
  Legal

  
	
   

  	
   

  	
   

  
	
  Default Termination:
  

  	
   

  	
  December 31, 2004, except that the
  Default Termination date for corporate administrative matters in the United
  Kingdom shall be June 1, 2004.

  
	
   

  	
   

  	
   

  
	
  Termination Notice by Purchaser:

  	
   

  	
  30 days

  
	
   

  	
   

  	
   

  
	
  Service Items:

  	
   

  	
  Work performed by Seller’s in-house
  attorneys at the request of Purchaser in connection with general intellectual
  property matters, legislation and regulatory matters, anti-trust matters,
  litigation matters, corporate administrative and financial matters (including
  corporate administrative matters in the United Kingdom, including with
  respect to the entity WMG Acquisition (UK) Limited), copyrights, patents and
  trade marks (excluding human resources and employment law and tax).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Legal work performed by outside counsel
  related to the business of Purchaser, including litigation, and billed to
  Seller.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Seller shall not be required to provide
  legal services to Purchaser or the Acquired Companies if to do so would give
  rise to a legal conflict, as determined by the parties in their reasonable
  discretion.

  
	
   

  	
   

  	
   

  
	
  Cost of Services:

  	
   

  	
  For internal legal work, costs of services
  represent an allocation of lawyer compensation (including benefits) and other
  out of pocket costs directly attributable to the provision of such internal
  legal work, based on actual time spent on Purchaser-related projects.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For outside legal work, costs of services
  represent amounts billed.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If Seller’s normal practice prior to
  Closing was to value costs of Legal services in order to make intra-company
  allocations for those services for purposes of Seller’s financial statements,
  then cost calculations will be conducted in accordance with that past
  practice to the extent reasonably possible.

  

 

8

 

	
  Service Category: 

  	
   

  	
  Treasury

  
	
   

  	
   

  	
   

  
	
  Default Termination:
  

  	
   

  	
  June 30, 2004; provided, however, that
  if Purchaser requests an extension of the Default Termination date, Seller
  shall consider such request in good faith.

  
	
   

  	
   

  	
   

  
	
  Termination Notice by Purchaser:

  	
   

  	
  30 days

  
	
   

  	
   

  	
   

  
	
  Service Items:

  	
   

  	
  Provision of services relating to
  international cash management and currency management, and advisory services
  relating to domestic cash management. Seller shall not be required, directly
  or indirectly, to advance its own funds to Purchaser.

  
	
   

  	
   

  	
   

  
	
  Cost of Services:

  	
   

  	
  $30,000 per month. If treasury services are
  provided for a portion of a month, the cost of services will be pro rated for
  the number of days in the month for which such services are provided.

  

 

9

 

	
  Service Category:

  	
   

  	
  Payroll Services in the United Kingdom and
  France

  
	
   

  	
   

  	
   

  
	
  Default Termination:

  	
   

  	
  June 30, 2004

  
	
   

  	
   

  	
   

  
	
  Termination Notice by Purchaser:

  	
   

  	
  30 days

  
	
   

  	
   

  	
   

  
	
  Service Items:

  	
   

  	
  Seller will assist Purchaser with the
  provision of payroll services for employees of the Acquired Companies in the
  United Kingdom and France, in a manner consistent with the payroll services
  provided for such employees prior to Closing. Seller shall not be required,
  directly or indirectly, to advance its own funds in connection with the
  payroll services.

  
	
   

  	
   

  	
   

  
	
  Cost of Services:

  	
   

  	
  For services performed internally by
  Seller, the cost of services will be an allocation of employee compensation
  (including benefits) and other out-of-pocket costs attributable to the
  provision of such internal payroll services, based on the actual time spent
  on Purchaser-related projects.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For services conducted by third parties,
  the cost of services will be the fees and out-of-pocket expenses billed by
  any such third parties. Such third party fees and expenses will be passed
  through to Purchaser at Seller’s cost or paid directly by Purchaser.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If Seller’s normal practice prior to
  Closing was to value costs of Payroll Services in order to make intra-company
  allocations for those services for purposes of Seller’s financial statements,
  the cost calculations will be conducted in accordance with that past practice
  to the extent reasonably possible.

  

 

10

 

	
  Service Category: 

  	
   

  	
  Travel Services

  
	
   

  	
   

  	
   

  
	
  Default Termination:
  

  	
   

  	
  December 31, 2004; thereafter renewing
  automatically on an annual basis unless terminated by either party on 60 days’
  written notice to the other party.

  
	
   

  	
   

  	
   

  
	
  Termination Notice (prior to

  	
   

  	
  60 days.

  
	
  December 31, 2004) by Purchaser:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Service Items:

  	
   

  	
  The service items shall consist of: (i)
  account management oversight by the Director of Travel, whose
  responsibilities include management of the WorldTravel BTI onsite operation,
  vendor contract negotiations, vendor mandate compliance and management of the
  operating budget, (ii) the services of the Corporate Hotel Program
  Administrator, whose responsibilities include contract negotiations and
  management of the global hotel program, and (iii) rental of space to travel
  agents dedicated to the Acquired Companies in the Seller’s facilities
  (collectively, the “Shared Travel Management Services”); provided, however,
  that the Shared Travel Management Services will be consistent with, and only
  to the extent of, the past practices of Seller prior to the date of this
  Agreement with respect to the provision of such Shared Travel Management
  Services to the Acquired Companies, and shall not include any services to be
  provided by WorldTravel BTI to the Acquired Companies, or any associated
  obligations, costs and expenses of such services to be provided by
  WorldTravel BTI, pursuant to the agreement between the Acquired Companies and
  WorldTravel BTI with respect to the provision of certain travel services (the
  “Acquired Companies/WorldTravel Agreement”).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Seller will use reasonable efforts to include
  the Acquired Companies in Seller’s volume discount programs with third party
  providers of travel services. In the event that Seller is advised by any such
  third party provider that it will not be able to include the Acquired
  Companies in any volume discount program, Seller shall promptly inform
  Purchaser of that fact.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Purchaser acknowledges and agrees that the
  Acquired Companies are party to the Acquired

  

 

1

 

	
   

  	
   

  	
  Companies/WorldTravel Agreement, and Seller
  is not responsible in any manner for any of the services, obligations, costs
  or expenses covered by the Acquired Companies/WorldTravel Agreement.

  
	
   

  	
   

  	
   

  
	
  Cost of Services:

  	
   

  	
  $16,000 per month, for the period ending December 31,
  2004. In the event that Seller provides travel services after December 31,
  2004, the cost of those services shall be negotiated in good faith by the
  parties.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If travel services are provided for a
  portion of a month, the cost of services will be pro rated for the number of
  days in the month for which such services are provided.

  

 

2

 

	
  Service Category: 

  	
   

  	
  Real Estate Management

  
	
   

  	
   

  	
   

  
	
  Default Termination:
  

  	
   

  	
  December 31, 2004, or, if earlier, the
  effective date of termination of the Lease Harbor General License Agreement
  between Seller and Lease Harbor LLC (“Lease Harbor”) dated April 1, 2002
  and related Services Order Form Agreement (the “License Agreement”).

  
	
   

  	
   

  	
   

  
	
  Termination Notice by Purchaser:

  	
   

  	
  30 days

  
	
   

  	
   

  	
   

  
	
  Service Item:

  	
   

  	
  Purchaser shall be permitted to continue to
  have access to and to use the Lease Harbor real estate management system
  licensed under the License Agreement in the manner in which the Acquired
  Companies currently use such system, subject to the following:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1) Purchaser acknowledges and agrees that
  the Acquired Companies constitute an “end-user” under the License Agreement
  and that Purchaser and the Acquired Companies are bound by, and shall comply
  with, the representations and warranties and all terms and conditions of the
  License Agreement as if Purchaser were a signatory to the License Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2) Purchaser shall take no action
  prohibited under the License Agreement which would constitute a breach or
  violation of such Agreement, including, without limitation, the
  confidentiality provisions set forth therein, and Purchaser agrees that no
  third party shall be granted or allowed access to the Lease Harbor service
  without agreeing, in writing, to keep all data and information contained
  therein confidential as set forth in the License Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3) Purchaser acknowledges that disclosure
  or use of data and information from the Lease Harbor service in violation of
  the License Agreement could cause irreparable harm to Lease Harbor and Seller
  for which monetary damages may be difficult to ascertain or an inadequate
  remedy. Purchaser therefore agrees that Seller will have the right, in
  addition to its other rights and remedies, to seek and 

  

 

3

 

	
   

  	
   

  	
  obtain injunctive relief for any violation
  of its obligations hereunder.

  
	
   

  	
   

  	
   

  
	
  Cost of Services:

  	
   

  	
  The cost for Purchaser’s continued usage of
  the Lease Harbor system shall be at the same rate paid by Seller under the
  License Agreement and shall be directly paid by Purchaser as invoiced by
  Lease Harbor.

  

 

4

 

	
  Service Category: 

  	
   

  	
  Messenger Services

  
	
   

  	
   

  	
   

  
	
  Default Termination:
  

  	
   

  	
  April 14, 2004

  
	
   

  	
   

  	
   

  
	
  Termination Notice by Purchaser:
  

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
   

  
	
  Service Item:

  	
   

  	
  Purchaser shall be permitted to continue to
  have access to and to use the messenger services at 75 Rockefeller Plaza,
  consistent with the manner in which the Acquired Companies currently use such
  services.

  
	
   

  	
   

  	
   

  
	
  Cost of Services:

  	
   

  	
  For services performed internally by
  Seller, the cost of services will be an allocation of employee compensation
  (including benefits) and other out-of-pocket costs attributable to the
  provision of such internal payroll services, based on the actual time spent
  on Purchaser-related projects.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For services conducted by third parties,
  the cost of services will be the fees and out-of-pocket expenses billed by
  any such third parties. Such third party fees and expenses will be passed
  through to Purchaser at Seller’s cost or paid directly by Purchaser.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If Seller’s normal practice prior to
  Closing was to value costs of Payroll Services in order to make intra-company
  allocations for those services for purposes of Seller’s financial statements,
  then cost calculations will be conducted in accordance with that past
  practice to the extent reasonable possible.

  

 

5Exhibit
10.16

 

 

 

 

AMENDMENT NO. 1, dated as
of July 1, 2004 (this "Amendment"), to the Seller
Administrative Services Agreement, dated February 29, 2004, between TIME WARNER
INC. ("Seller") and WMG ACQUISITION CORP. ("Purchaser")
(the "Seller Services Agreement").

 

WHEREAS, Seller and Purchaser wish to amend the Seller
Services Agreement upon the terms and in accordance with the conditions set
forth in this Amendment.

 

Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in the Seller Services Agreement.

 

NOW, THEREFORE, in consideration of the mutual
covenants contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties hereby agree as follows:

 

SECTION 1. Amendment. Exhibit A of the
Seller Services Agreement is hereby amended to add, to the end of that exhibit,
the terms of Schedule 1 hereto.

 

SECTION 2. Seller Services Agreement. Except as
specifically amended hereby, the Seller Services Agreement shall continue in
full force and effect in accordance with the provisions thereof as in existence
on the date hereof. This Amendment shall become effective as of the date
hereof. On and after the date hereof, any reference to the Seller Services Agreement
shall mean the Seller Services Agreement as amended hereby.

 

SECTION 3. Governing Law. This Seller Agreement
shall be governed by, and constructed in accordance with, the laws of the State
of New York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof; provided, however,
that the laws of the respective jurisdictions of incorporation of each of the
parties hereto shall govern the relative rights, obligations, powers, duties
and other internal affairs of such party and its board of directors.

 

SECTION 4. Enforcement. Each party hereby
consents to the exclusive jurisdiction of the United States Federal courts located
in the State of New York with respect to disputes arising out of this Agreement.

 

SECTION 5. Severability. If any term,
provision, covenant, restriction or other condition of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, illegal
or incapable of being enforced by any rule or law, or public policy, all other
terms, provisions, covenants, restrictions and conditions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to either party. Upon such a determination, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are consummated to the
extent possible. 

 

 

 

SECTION 6. Counterparts. This Agreement may be executed
in one of more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.

 

SECTION 7. Independent Contractors. No agency,
partnership or joint venture is established by this Agreement. Neither party
shall enter into any agreements, incur liabilities or hold itself out to third
parties as having the authority to enter into and incur any contractual
obligations, expenses, or liabilities on behalf of the other party.

 

SECTION 8. Assignment. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned, in
whole or in part, by operation of law or otherwise by either party without the
prior written consent of the other party. Subject to the preceding sentences,
this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.

 

SECTION 9. WAIVER OF JURY TRIAL. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 10. Entire Agreement. This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior understandings, both oral and
written, between the parties with respect to the subject matter hereof. 

 

SECTION 11. Captions. The captions herein are
included for convenience of reference only and shall be ignored as in the
construction of interpretation hereof.

 

 

2

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed  as of the day and year first
written above.

 

	
   

  	
  TIME WARNER INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ James W. Barge

  
	
   

  	
   

  	
   

  	
  Name: James W. Barge

  
	
   

  	
   

  	
   

  	
  Title: Senior Vice President & Controller

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WMG ACQUISITION CORP.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Paul Robinson

  
	
   

  	
   

  	
   

  	
  Name: Paul Robinson

  
	
   

  	
   

  	
   

  	
  Title: SVP, Deputy General Counsel

  

 

 

 

3

 

 

Schedule 1

 

	
  Service Category:

  	
   

  	
  DX Online Services

  
	
   

  	
   

  	
   

  
	
  Default Termination:

  	
   

  	
  December 31, 2004, provided that the term will be
  automatically renewed after that date on a monthly basis. After December 31,
  2004, either party may terminate by providing 30 days prior written notice to
  the other party.

  
	
   

  	
   

  	
   

  
	
  Termination Notice (prior to December 31, 2004) by
  Purchaser:

  	
   

  	
  30 days, provided that either Purchaser or Seller
  may terminate the DX Online Services earlier if it provides 30 days prior
  written notice to the other party.

  
	
   

  	
   

  	
   

  
	
  Service Items:

  	
   

  	
  Seller shall provide DX Online Services to
  Purchaser, consistent with past practice. DX Online is a web-based solution
  designed and developed by Time Warner Corporate Transportation &
  Logistics to manage small package shipping from major Time Warner administrative
  facilities. DX Online enables the user to communicate shipment requirements,
  maintain shared and personal address books, ship to mailing lists and track
  shipments to destination. DX Online also enable the user to manage vendor
  account numbers and individual user charge codes, thereby simplifying the
  process of distributing shipment costs to departments. DX Services include
  maintenance by Purchaser of the DX Online site (including enhancements and
  fixes as they are made for Time Warner locations), use of the DX Admin Help
  Line and e-mail address for customer service issues and technical support
  services provided by the DX Online Manager. DX Services do not include
  services (or maintenance) peripheral to DX Online, such as Pitney Bowes
  software, hardware, package processing equipment, small package vendor rates
  or mail center access to the Internet.

  
	
   

  	
   

  	
   

  
	
  Cost of Services:

  	
   

  	
  $5,500 per month. In the event that DX Online
  Services are provided for a portion of a month, the cost of services will be
  pro rated for the number of days in the month for which such services are
  provided.

  

 

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]