TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT (this "Agreement"), dated as of
February 20, 1998, is by and between Tidewater Inc., a Delaware corporation
("Seller") and TW Acquisition Corporation, a Delaware corporation ("Buyer").
W I T N E S S E T H :
WHEREAS, as of the date hereof, pursuant to the terms of a Stock
Purchase Agreement dated as of December 18, 1997 by and between the parties
hereto, as amended, Buyer purchased on February 20, 1998 (the "Closing Date")
all of the issued and outstanding stock of Tidewater Compression Service, Inc.
("Compression"), a wholly-owned subsidiary of Seller;
WHEREAS, Seller has provided to Compression those services described in
Section 2 hereof (collectively, the "Services") and Buyer desires that Seller
continue to provide such Services on a temporary basis as requested;
WHEREAS, Seller is willing to provide such Services to Buyer upon the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Rights and Duties of Seller.
(a) Upon the terms and subject to the conditions set forth herein,
Seller agrees from and after the date hereof (the "Effective Date") and for the
Term (as defined below) of this Agreement to provide the Services to Buyer.
(b) Seller and Buyer acknowledge and agree that the nature, scope and
quality of the Services shall be as set forth in this Agreement and as has been
provided by Seller or its affiliates to Compression prior to the Closing Date.
Seller agrees that all Services provided pursuant to this Agreement shall be
performed in a professional, diligent and timely manner on the same basis and
with comparable quality and diligence as was provided to Compression prior to
the Closing Date (the "Pre-Closing Services"). Seller acknowledges that it is
familiar with the requirements of Compression as they relate to the Services and
that its performance under this Agreement shall not result in any material
disruption of or change in such operations, except to the extent that the
Pre-Closing Services created such disruptions.
(c) Buyer acknowledges and agrees that Seller may, at its election,
cause one or more of its subsidiaries or third party contractors to perform the
Services. Seller agrees to make available such full or part-time employees or
third party
contractors as will be necessary to fulfill its obligations hereunder, and
Seller agrees to pay all fees in connection with such third party contractors.
(d) Seller agrees that during the Term, it shall cause its subsidiary
doing business in Venezuela to continue to cooperate with Compression with
respect to conducting operations in Venezuela, in particular serving as the
contract party with respect to contracts on behalf of Compression and its
Venezuelan customers and agreeing to enter into new contracts and commitments on
behalf of Compression for existing or new Venezuelan customers, provided that
Compression shall be responsible for any net incremental costs and expenses
incurred by the Venezuelan company in connection with such services.
(e) Seller agrees to consult with Compression (including providing
access to Seller personnel for inquiry purposes) to Compression with respect to
the efforts by Compression to convert its software programs and operating
systems to address "Year 2000" issues.
(f) Seller agrees for a period of up to three months to provide all
necessary support and services with respect to, and to continue coverage under,
all non-U.S. benefit plans under which any employees of Compression or its
subsidiaries participate in as of the Closing Date.
Section 2. Description of Services.
Seller shall provide the following Services during the Term at the
following monthly fees:
FEES:
(1) Computer Data Processing Services................... $7,500.00
(2) Administrative Services, including:
(i) human resources and employee benefit
administration services and payroll
administration............................. $5,000.00
(ii) legal defense administration services,
contract administration services,
insurance claims administration services,
and foreign license support with respect
to Compression's operations in Venezuela.... $5,000.00
Section 3. Administration of Services.
(a) At the direction of Compression, Seller is authorized to
perform each of the Services detailed in Section 2 which are
of a customary, recurring, ordinary course or routine nature
(including the expenditure of funds for the purchase of goods
or services). Without the requirement
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of specific approval of Buyer with respect to individual
tasks, Seller shall not engage in other types of services or
in any Services which are of an extraordinary nature without
obtaining the prior approval of the appropriate officer of
Buyer.
(b) Buyer acknowledges and agrees that the Services shall be
provided only with respect to the business of Compression.
(c) Buyer represents and warrants that the Services will not be
used in violation of any applicable federal, state or local
law or any rules or regulations promulgated thereunder.
(d) Buyer agrees to provide the appropriate department within
Seller with all data, records, files, statements,
invoices, xxxxxxxx and other information (collectively,
"Information") reasonably requested by Seller that is
necessary or advisable to allow Seller to perform the
Services contemplated by this Agreement. It is
understood that all such Information which has been
prepared by or on behalf of Buyer or has been prepared by
or on behalf of Seller in connection with its Services
hereunder shall become and at all times remain the
property of Buyer. In addition, Buyer agrees to provide
the appropriate department heads within Seller reasonable
access, from time to time, to such of its officers as may
be necessary or advisable in order to assist Seller in
performing the Services.
(e) Buyer or its designated representative shall have
reasonable access to all Information generated by or in
the custody of Seller relating to the Services provided
pursuant to this Agreement. In addition, Seller agrees
to provide reasonable access, from time to time, to the
appropriate officers of Buyer as may be necessary or
advisable to assist Buyer in monitoring, verifying, or
reviewing the performance by Seller of the Services.
(f) Each party shall (i) maintain confidential and secret all
confidential information that may be disclosed by the
other party in connection with the provision of the
Services hereunder, (ii) restrict disclosure and use of
such confidential information to those of its employees
who have a need to know such information in order to
comply with its obligations hereunder and (iii) employ
the same standards of care with respect to such
confidential information as it uses to protect its own
confidential information. Such information may not be
used by Seller or any of its affiliates for any purpose
other than with respect to providing Services hereunder.
The obligations of this Section 3(f) shall survive the
expiration and termination of this Agreement for a period
of 5 years.
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Section 4. Compensation.
(a) Seller shall be compensated for the performance of the
Services as follows:
(i) Buyer shall reimburse Seller for the actual cost of
any goods or third party services purchased, leased
or otherwise procured by Seller for the direct
benefit of Compression permitted to be undertaken by
third parties in accordance with this Agreement
("Direct Costs"); and
(ii) Buyer shall pay to Seller per month a fee equal to
the aggregate per Service fee described in Section 2,
which fee shall not be prorated for any partial month
for which Services are provided during the Term.
(b) Seller will invoice Buyer by the 15th day of each month for the
Services provided during the preceding month. All amounts shown on each invoice
shall be due and payable on the last day of the month of such invoice.
(c) In the event of a dispute as to the propriety of invoiced amounts,
Buyer shall pay all undisputed amounts but shall be entitled to withhold payment
of any amount in dispute and shall promptly notify Seller in writing of the
basis of the dispute and the amount disputed. Seller shall provide Buyer with
the records and supporting data with respect to the disputed amounts and the
parties agree to attempt in good faith to resolve any such dispute failing
which, the dispute shall be submitted to an independent accounting firm, which
shall have the sole and exclusive authority to arbitrate the dispute, and whose
decision shall be conclusive and binding upon the parties.
(d) Any amounts owed by either party hereunder to the other party that
remain unpaid on the due date therefor shall bear interest at a rate equal to
the lesser of (i) 1% above such party's actual cost of funds or (ii) the highest
rate permitted by applicable law.
Section 5. Term of Agreement; Termination.
This Agreement shall commence on the Effective Date and shall continue
for a period of 180 days from such date (the "Term") unless earlier terminated
by either party by giving 10 days prior written notice. Buyer may terminate the
provision of any Service described in Section 2 and thereby relieve itself of
any obligation to pay the related fee by giving 5 days prior written notice to
Seller; provided that Buyer shall pay to Seller the entire monthly fee related
to such terminated Service due to Seller for the month in which such Service is
terminated, and that such Service may not be requested by Buyer following
termination thereof.
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Section 6. Limitation of Liability.
(a) Neither Seller nor Buyer shall be liable for any loss or damage or
any nonperformance, partial or whole, under this Agreement, caused by any
strike, labor troubles, riot, act of a public enemy, insurrection, act of God,
or any law, rule or regulation promulgated by any governmental body or agency.
(b) Buyer shall reimburse, indemnify and hold harmless Seller and its
successors, assigns, affiliates, directors, officers, employees and agents from
and against any and all judgments, losses, damages, liabilities, demands,
actions, suits, taxes, charges, costs, claims, expenses and disbursements
(including legal fees and expenses) of any kind and nature whatsoever that may
at any time be imposed on, incurred by or asserted against Seller (including any
claims against Seller for indemnification by any such person) or any such person
(whether or not indemnified by Seller or any other person) in connection with
any suit or proceeding, whether judicial or administrative, relating to or
arising out of any acts or omissions performed or omitted by Seller or any such
person in connection with or arising out of the performance of the Services
unless such act or omission by Seller or such person constituted bad faith,
willful misfeasance, gross negligence, recklessness or a willful, material
breach of this Agreement.
Section 7. Relationship of Parties.
Nothing contained in this Agreement (a) shall constitute Seller and
Buyer as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (b) shall be construed to
impose any liability as such on either of them, (c) shall be deemed to confer on
either of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the other, except as described herein, or
(d) shall be deemed to, or in fact, create any benefit for, or impose any
obligation on the parties in favor of, any person not party to this Agreement.
Seller shall at all times during the term hereof act as an independent
contractor, and none of Seller's employees, subcontractors, agents or
representatives shall be considered employees of Buyer as a result of this
Agreement.
Section 8. Miscellaneous.
(a) This Agreement constitutes the entire agreement between the parties
hereto with respect to the matters set forth in this Agreement. This Agreement
shall not be amended, modified or supplemented except by an instrument in
writing executed by each of the parties hereto.
(b) Each of the parties hereto shall use its best efforts to take or
cause to be taken, to the extent necessary, all actions necessary, proper or
advisable to consummate the transactions contemplated by this Agreement.
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(c) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery, certified or registered mail, return
receipt requested or telecopy transmission with confirmation of receipt to the
address of each of the parties set forth opposite the signature of such party on
the signature page hereof. All notices and communications shall be deemed given
upon receipt thereof.
(d) This agreement shall be governed by and construed in accordance
with the internal laws of the State of New York. Each party hereto consents to
the exclusive jurisdiction of the state courts of and federal courts located in
the city of Wilmington in State of Delaware for the enforcement of the
obligations evidenced by this Agreement and any dispute arising out of this
Agreement, and expressly waives any defense based upon venue of forum non
conveniens.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(f) The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(g) In the event that any provision of this Agreement shall be
determined to be invalid or unenforceable, in whole or in part, it is the
parties intention that such determination shall not be held to affect the
validity or enforceability of any other provision of this Agreement, which
provisions shall otherwise remain in full force and effect.
(h) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns. This Agreement
shall not be assignable by any party hereto without the prior written consent of
the other party.
* * * * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Address for Notices: TIDEWATER INC.
Tidewater Place By: /s/ Xxx X. Xxxxxxx
0000 Xxxxx Xxxxxx, Xxxxx 0000 -------------------------
Xxx Xxxxxxx, Xxxxxxxxx 00000 Xxx X. Xxxxxxx
Executive Vice President
and
Chief Financial Officer
Address for Notices: TW ACQUISITION CORPORATION
c/o Xxxxxx Xxxxxx, Inc. By: /s/ Xxxxx Xxxxxx
000 Xxxx 00xx Xxxxxx -------------------------
Xxx Xxxx, Xxx Xxxx 00000 Xxxxx Xxxxxx
Chief Financial Officer
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