Exhibit 10.2
Execution Version
TRANSITIONAL SERVICES AGREEMENT
This Transitional Services Agreement ("TSA"), made as of the 17thday of
September 2004, ("Effective Date") is by and between DYNAMIC MATERIALS
CORPORATION, a Delaware corporation ("Seller"), and Aerojet-General Corporation
("Buyer").
WITNESSETH
WHEREAS,Seller and Buyer have entered into an Agreement, dated as of
September 17, 2004 (the "Agreement") and certain Ancillary Agreements related to
the Business, and the Business uses certain services provided by Seller;
WHEREAS, Article 6.4 of the Agreement provides that Seller and Buyer shall
execute and deliver the TSA; and
WHEREAS,Buyer desires to obtain the use of certain services for the purpose of
enabling Buyer to manage an orderly transition in its operation of the Business.
NOW, THEREFORE,in consideration of the mutual covenants and agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS
1.1 "Transitional Services" shall include the
services set forth in Schedule 1.1 to be performed by Seller for Buyer.
Capitalized terms not expressly defined in this TSA shall have the meanings
ascribed to them in the Agreement.
2. PROVISION OF SERVICES
2.1 Subject to Article 7 hereof, Seller shall
provide, or cause to be provided, to Buyer such Transitional Services as are
requested by Buyer for a period of up to 180 days after the Closing Date (the
"Term"). It is understood by the parties that the quantity of services to be
provided under this Section 2.1 shall be substantially consistent with Seller's
recent historical practice. Notwithstanding the foregoing, Seller shall use
reasonable commercial efforts to maintain sufficient resources to perform
Transitional Services in accordance with the terms of this TSA.
2.2 The parties shall use reasonable commercial
efforts to cooperate with each other in all matters relating to the provision
and receipt of Transitional Services. Such cooperation shall include exchanging
information, providing electronic access to data systems used in connection with
Transitional Services, and obtaining all consents, licenses, sublicenses or
approvals necessary or desirable to permit each party to perform its obligations
hereunder. The costs of obtaining such consents, licenses, sublicenses or
approvals shall be borne by Buyer.
1
3. PRICING, BILLING AND PAYMENT
3.1 All Transitional Services shall be provided by
Seller and paid for by Buyer at Seller's cost without profit in accordance with
the same allocation formula(s) and allocation base(s) used by Seller immediately
prior to the Closing Date.
3.2 Charges for Transitional Services shall be
billed monthly by Seller and shall be payable by Buyer on the 30th day of the
month following the month in which such services are rendered.
3.3 As needed from time to time during the period
during which Transitional Services are provided, and upon termination of the
provision of any Transitional Service, Seller will provide Buyer, upon request,
with a copy of all records (in any format, electronic or otherwise) related to
the provision of Transitional Services under this TSA, including, but not
limited to, billing and other Business-related records. Seller may retain
archival copies of such records.
4. WARRANTY, LIABILITY AND INDEMNITY
4.1 Seller shall provide Transitional Services to
Buyer in a manner substantially consistent with the manner they have heretofore
been provided to the Business while it was operated by Seller. Seller makes no
other representations or warranties, express or implied, with respect to the
Transition Services to be provided to Buyer hereunder. Except as otherwise
provided herein, Seller expressly disclaims any warranties of merchantability,
quality, quantity, suitability or fitness for any particular purpose with
respect to the services to be provided to Buyer hereunder.
4.2 NOTWITHSTANDING ANYTHING CONTAINED IN THIS TSA
TO THE CONTRARY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INCIDENTAL,
INDIRECT, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS OR LOST REVENUES) OF THE OTHER PARTY, ITS SUCCESSORS, ASSIGNS OR THEIR
RESPECTIVE AFFILIATES, AS A RESULT OF OR ARISING FROM THIS TSA, REGARDLESS OF
WHETHER SUCH LIABILITY ARISES IN TORT, CONTRACT, BREACH OF WARRANTY,
INDEMNIFICATION OR OTHERWISE.
4.3 Seller's maximum liability to Buyer for breach
of this TSA or otherwise with respect to Transitional Services is a refund of
the price paid by Buyer for the particular service
4.4 Each party agrees to indemnify and hold the
other party harmless from any damages, loss, cost or liability (including legal
fees and expenses and the cost of enforcing this indemnity) arising out of or
resulting from a third-party claim regarding the first party's performance,
purported performance or nonperformance of this TSA.
5. FORCE MAJEURE
5.1 Neither party shall be responsible for failure
or delay of any Transitional Service, nor be responsible for failure or delay in
receiving such service, if caused by an act of God or
2
public enemy, war, government acts, regulations or orders, fire, flood, embargo,
quarantine, epidemic, labor stoppages or other disruptions, accident, unusually
severe weather or other cause similar or dissimilar, beyond the control of the
defaulting party.
6. PROPRIETARY INFORMATION AND RIGHTS
6.1 Each party acknowledges that the other
possesses and will continue to possess, information that has been created,
discovered or developed by them and/or in which property rights have been
assigned or otherwise conveyed to them, which information has commercial value
and is not in the public domain. The proprietary information of each party will
be and remain the sole property of such party and its assigns. Each party shall
use the same degree of care that it normally uses to protect its own proprietary
information to prevent the disclosure to third parties of proprietary or
confidential information of the other party, regardless of whether the
information is designated as confidential or proprietary. Neither party shall
make any use of the other party's confidential or proprietary information except
as contemplated or required by the terms of this TSA. Notwithstanding the
foregoing, this Article shall not apply to an information that a party can
demonstrate: (a) was, at the time of disclosure to it, in the public domain
through no fault of such party; (b) was received after disclosure to it from a
third party who had a lawful right to disclose such information to it; or (c)
was independently developed by the receiving party.
7. TERM AND TERMINATION
7.1. The term of this TSA shall commence as of the
Effective Date hereof and shall continue for 180 days.
7.2 Upon 30 days' written notice, either party
may terminate this TSA with respect to any Transitional Service, or at its
option, suspend performance of its obligations with respect thereto, in either
case in the event of the failure of Buyer to pay any invoice within 45 days of
the receipt of such invoice or upon any other material breach by Buyer of this
TSA with respect to such service, unless Buyer is disputing the invoice in good
faith or Buyer shall have paid the invoice or cured such breach within the
30-day notice period.
7.3 Any one or more of the Transitional Services
may be terminated (a) upon mutual agreement of Buyer and Seller or (b) at
Buyer's option upon 30 days' advance notice to Seller. Buyer will pay Seller
the fees and costs of any terminated Transitional Service up until the effective
date of termination.
7.4 Notwithstanding anything to the contrary
contained herein, this TSA may be terminated, in whole or in part, at any time:
(i) by the mutual consent of Buyer and
Seller;
(ii) by Buyer in the event of any material
breach or default by Seller of any of Seller's obligations under this Agreement
and the failure of Seller to cure, or to take substantial steps towards the
curing of, such breach or default
3
within thirty (30) days after receipt of written notice from Buyer requesting
such breach or default to be cured.
7.5 Following any termination of this TSA, each
party shall cooperate in good faith with the other to transfer and/or retain all
records, prepare and file tax returns and take all other actions necessary to
provide Seller and Buyer and their respective successors and assigns with
sufficient information in the form requested by Seller or Buyer, or their
respective successors and assigns, as the case may be, to make alternative
service arrangements substantially consistent with those contemplated by this
TSA.
8. NO IMPLIED ASSIGNMENTS OR LICENSES
8.1 Nothing in this TSA is to be construed as an
assignment or grant of any right, title or interest in any trademark, copyright,
design or trade dress, patent right or other intellectual or industrial property
right.
9. RELATIONSHIP OF PARTIES
9.1 The parties are independent contractors under
this TSA. Except as expressly set forth herein, neither party has the authority
to, and each party agrees that it shall not, directly or indirectly contract any
obligations of any kind in the name of or chargeable against the other party
without such party's prior written consent. No partnership, joint venture,
alliance, fiduciary or any relationship other than that of independent
contractors is created hereby, expressly or by implication.
9.2 All employees and representatives of Seller or
its Affiliates providing Services to Buyer under this Agreement shall be deemed
for purposes of all compensation and employee benefits to be employees or
representatives solely of Seller or its Affiliates and not to be employees or
representatives of Buyer or its Affiliates. In performing their respective
duties hereunder, all such employees and representatives of Seller or its
Affiliates shall be under the direction, control and supervision of Seller or
its Affiliates (and not of Buyer or its Affiliates) and Seller or its
Affiliates, as the case may be, shall have the sole right to exercise all
authority with respect to the employment (including termination of employment),
assignment and compensation of such employees and representatives. Seller shall
have sole responsibility for compliance with all laws relating to the
employer/employee relationship between Seller and its employees providing the
Services, including, but not limited to, federal, state and/or local laws on
hours of labor, wages, worker's compensation, unemployment compensation,
insurance and social security benefits.
10. ASSIGNMENT AND DELEGATION; COMPLIANCE WITH
LAWS
10.1 Neither party to this TSA may assign any of its
rights or obligations under this TSA without the prior written consent of the
other party hereto.
10.2 Each party will, with respect to its obligations and
performance hereunder, comply with all applicable requirements of federal, state
and local laws, rules and regulations, including without limitation import and
export control, environmental and occupational
4
safety requirements. Buyer shall be responsible for (a) compliance with all laws
and governmental regulations affecting its business and (b) any use Buyer may
make of the Transitional Services to assist it in complying with such laws and
governmental regulations. While Seller shall not have any responsibility for
Buyer's compliance with the laws and regulations referred to above, Seller
agrees to use reasonable commercial efforts to provide the Services in a manner
that complies with applicable laws and regulations.
11. NOTICES
11.1 All notices or other communications hereunder shall
be deemed to have been duly given and made if in writing and (a) if served by
personal delivery upon the party for whom it is intended, on the day so
delivered; (b) if mailed by registered or certified mail, return receipt
requested, on the third business day following such mailing; or (c) if deposited
for delivery by a reputable courier service, on the business day following
deposit with such courier to the person at the address set forth below, or such
other address as may be designated in writing hereafter, in the same manner, by
such person:
To Seller: President
Dynamic Materials Corporation
5405 Spine Road
Boulder, CO 80301
Attention: Yvon Cariou
Fax Number (303) 604-1897
With a copy to: Chief Financial Officer
Dynamic Materials Corporation
5405 Spine Road
Boulder, CO 80301
Attention: Richard Santa
Fax Number (303) 604-1897
To Buyer: Aerojet General Corporation
P. O. Box 1036
Camden, AR 71711-1036
Attention: Robert Shenton
Vice President, Operations
Fax Number: (870) 574-3528
With a copy to: Aerojet General Corporation
P. O. Box 13222
Sacramento, CA 95813-6000
Attention: Brian E. Sweeney
Vice President, Legal and Contracts
Fax Number: (916) 351-8610
5
12. ENTIRE AGREEMENT
12.1 This TSA, including the Schedules, together with the
Agreement and Ancillary Agreements, contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters.
13. PARTIES IN INTEREST
13.1 This TSA shall inure to the benefit of and be
binding upon the parties and their respective successors and permitted assigns.
Nothing in this TSA, express or implied, is intended to confer upon any Person
other than Seller or Buyer or their respective successors or permitted assigns
any rights or remedies under or by reason of this TSA.
14. GOVERNING LAW
14.1 This TSA shall be governed by, and construed in
accordance with, the laws of the State of California without regard to conflicts
of laws doctrines. Any legal action, suit or proceeding arising out of or
relating to this TSA or the transactions contemplated hereby shall be instituted
in a Federal or state court sitting in northern California, which shall be the
exclusive jurisdiction and venue of said legal proceeding and each Party hereto
waives any objection that such Party may now or hereafter have to the laying of
venue of any such action, suit or proceeding, and irrevocably submits to the
jurisdiction of any such court in any such action suit or proceeding.
15. AMENDMENT; WAIVER
15.1 Any provision of this TSA may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by Seller and Buyer, or in the case of a waiver, by the party
against whom the waiver is to be effective. No failure or delay by any party
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other
further exercise thereof or the exercise of any other right, power or privilege.
16. SURVIVAL
16.1 The provisions of Sections 4, 6, and 7.5 shall
survive the termination or expiration of this TSA unless otherwise agreed to in
writing by both parties.
SIGNATURES APPEAR ON THE NEXT PAGE
6
IN WITNESS WHEREOF,the parties hereto have caused this TSA to be executed and
delivered by their duly authorized representatives as of the date first above
written.
DYNAMIC MATERIALS CORPORATION,
By:
Name:
Title:
AEROJET-GENERAL CORPORATION
By:
Name:
Title:
7
SCHEDULE 1.1
TRANSITIONAL SERVICES
• Maintain existing local and long-distance telephone service,
including maintenance of DMC-owned switch (Definity 11 with two cabinets),
desktop equipment and Definity Audix voice mail.
• Maintain existing data lines between Spin Forge's El Segundo,
CA site and DMC's data center in Boulder, CO that provide Spin Forge employees
with access to e-mail services, the Internet and the Visual Manufacturing ERP
System in use at Spin Forge.
• Provide technical user support for e-mail, Internet, Visual
Manufacturing and Microsoft Office applications and related database management
services.
8