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Exhibit 10.2
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (this "Agreement") is made as of
September 18, 2000 by and between SPX Corporation, a Delaware corporation
("SPX"), and Inrange Technologies Corporation, a Delaware corporation (the
"Company"). Notwithstanding the execution date hereof, this Agreement shall
become effective upon the date of the closing of the Initial Public Offering (as
defined below).
RECITALS
WHEREAS, the Company is issuing shares of its Class B Common Stock to
the public in an offering registered under the Securities Act of 1933, as
amended;
WHEREAS, SPX has heretofore directly or indirectly provided certain
administrative, financial, management and other services to the Company;
WHEREAS, on the terms and subject to the conditions set forth herein,
the Company desires to retain SPX as an independent contractor to provide,
directly or indirectly, certain of those services to the Company after the
Initial Public Offering; and
WHEREAS, on the terms and subject to the conditions set forth herein,
SPX desires to provide, directly or indirectly, such services to the Company.
ACCORDINGLY, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Agreement, the following
terms will have the following meanings, applicable both to the singular and the
plural forms of the terms described:
"Agreement" has the meaning ascribed thereto in the preamble hereto, as
such agreement may be amended and supplemented from time to time in accordance
with its terms.
"Class A Common Stock" means the Company's Class A Common Stock, $.01
par value per share.
"Class B Common Stock" means the Company's Class B Common Stock, $.01
par
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value per share.
"Initial Public Offering" means the initial public offering by the
Company of shares of the Class B Common Stock as contemplated by a registration
statement on Form S-1, as supplemented and amended from time to time.
"Outsourced Service" has the meaning ascribed thereto in Section 2.03.
"Person" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization, government (and
any department or agency thereof) or other entity.
"Service Charges" has the meaning ascribed thereto in Section 3.01(c).
"Services" has the meaning ascribed thereto in Section 2.01.
"SPX Entities" means SPX and its Subsidiaries and "SPX Entity" shall
mean any of the SPX Entities.
"Subsidiary" means, as to any Person, any corporation, association,
partnership, joint venture or other business entity of which more than 50% of
the voting capital stock or other voting ownership interests is owned or
controlled directly or indirectly by such Person or by one or more of the
Subsidiaries of such Person or by a combination thereof; provided, however, that
any reference in this Agreement to a Subsidiary or Subsidiaries of SPX shall not
include the Company.
Section 1.02. Internal References. Unless the context indicates
otherwise, references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement and references
to the parties shall mean the parties to this Agreement.
ARTICLE II
PURCHASE AND SALE OF SERVICES
Section 2.01. Purchase And Sale Of Services. On the terms and subject
to the conditions set forth in this Agreement and in consideration of the
Service Charges described below, SPX agrees to provide to the Company, and the
Company agrees to purchase from SPX, the services described in Schedule I (the
"Services"). At its option, SPX may cause any Service it is required to provide
hereunder to be provided by any SPX Entity. Unless otherwise specifically agreed
by SPX and the Company, the Services to be provided by SPX hereunder shall be
substantially similar in scope, quality and nature to those provided to the
Company prior to the Initial Public Offering and shall be performed
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by the same personnel or other personnel who perform the same or similar
services; provided, however, that the selection of personnel to perform the
Services shall be at the sole discretion of SPX; and provided, further, that,
except as expressly provided in this Agreement, SPX shall not be required to
materially increase the volume, scope or quality of the Services provided to the
Company beyond that which has been provided to the Company prior to the Initial
Public Offering.
Section 2.02. Additional Services. In addition to the Services to be
provided by SPX pursuant to Section 2.01, if requested by the Company, and to
the extent that SPX and the Company may mutually agree in writing, SPX shall
provide additional services (including services not provided by SPX to the
Company prior to the Initial Public Offering) to the Company. The scope of any
such services, as well as the term, costs and other terms and conditions
applicable to such services, shall be as mutually agreed by SPX and the Company.
Nothing herein shall create any obligation on the part of SPX to provide any
additional services.
Section 2.03. Services Performed By Third Parties. At its option, SPX
may cause any Service it is required to provide hereunder to be provided by any
third party that is providing, or may from time to time provide, the same or
similar services for any SPX Entity (an "Outsourced Service"). SPX will not be
responsible for the performance of any Services it causes to be so provided as
long as SPX reasonably selects the provider of such Services. SPX will assign
its rights to enforce any claims against such provider to the Company or enforce
such claims itself.
Section 2.04. Impracticability And Force Majeure. SPX shall not be
required to provide any Service to the extent the performance of such Service
becomes impracticable as a result of a cause or causes outside the control of
SPX or to the extent the provision of such Service would require SPX to violate
any applicable laws, rules or regulations or become subject to any additional
rules or regulations. SPX shall have no obligation to perform or cause the
Services to be performed if its failure to do so is caused by or results from
any act of God, governmental action, natural disaster, strike, failure of
essential equipment or any other cause or circumstance beyond the control of SPX
or, if applicable, third party providers of services to SPX (an "Event of Force
Majeure"). SPX will notify the Company of any Event of Force Majeure affecting
its Services to the Company. SPX agrees that following any Event of Force
Majeure and until such Services are restored, the Company shall have no
obligation to pay for the Services affected thereby. SPX agrees to use its
commercially reasonable best efforts to restore such Services following any
Event of Force Majeure.
ARTICLE III
SERVICE CHARGES
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Section 3.01. Service Charges.
(a) The charge for each Service provided to the Company
hereunder directly by SPX or any SPX Entity shall be equal to all fully
loaded costs incurred by SPX or any SPX Entity in providing such
Service, as allocated by SPX to other subsidiaries of SPX. Such costs
shall include, but are not limited to, an allocation, as reasonably
determined by SPX in good faith, of overhead costs, personnel costs
(e.g., compensation and fringe benefits ), travel, office costs, and
incentive compensation costs associated with functions performing such
Services consistent with SPX's fully loaded cost accounting practices.
(b) The charge for each Outsourced Service provided to the
Company hereunder shall be equal to all costs incurred by SPX or any
SPX Entity in providing such Outsourced Service, including, without
limitation, any third-party costs and expenses incurred by SPX or any
SPX Entity on behalf of the Company. If SPX incurs third-party costs or
expenses on behalf of the Company as well as any SPX Entity, SPX will
allocate any such costs or expenses in good faith between the Company
and the various SPX Entities on behalf of which such costs or expenses
were incurred as SPX shall determine in the exercise of its reasonable
judgment. SPX shall make copies of such books and records available to
the Company upon request and with reasonable notice.
(c) The parties intend that the Service charges referred to in
paragraphs (a) and (b) above (collectively, the "Service Charges") will
allow SPX and any SPX Entity to recover the fully allocated costs of
providing the Services and Outsourced Services hereunder plus all
out-of-pocket, third-party costs, charges and expenses, but without any
profit to SPX or any SPX Entity.
Section 3.02. Invoicing And Settlement Of Costs.
(a) SPX shall invoice the Company for all Service Charges for
each calendar month within thirty (30) days following the end of such
month, provided that any failure by SPX to provide an invoice within
such time period shall not relieve the Company of its obligation to pay
an invoice received after such date. All invoices shall reflect in
reasonable detail a description of the Service performed.
(b) Subject to Section 3.02(c) below, the Company shall pay
within thirty (30) days following its receipt of any invoice from SPX
pursuant to paragraph (a), without set-off, all amounts invoiced by SPX
during the preceding calendar month. If the Company fails to pay any
monthly payment within thirty (30) days following its receipt of any
invoice from SPX pursuant to paragraph (a), the Company shall
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pay, in addition to the amount indicated in such invoice, interest on
such amount at the greater of (x) the prime interest rate as published
in the Wall Street Journal plus 1% per annum or (y) the highest rate of
interest SPX is paying under its largest financing arrangement in
effect at such time, in each case compounded monthly for the period
such amount remains unpaid.
(c) In the event of a dispute as to the propriety of the
amount invoiced, the Company shall pay all undisputed amounts, but
shall be entitled to withhold payment of any amount in dispute (and
shall not be obligated to pay interest on the amount so withheld) and
shall endeavor to notify SPX within ten (10) business days from receipt
of any disputed invoice of the disputed amount and the reasons each
such charge is disputed by the Company, provided that the failure to so
notify SPX within such time period shall not prevent the Company from
disputing such invoice. SPX shall provide to the Company, or shall
cause its Subsidiaries to so provide, records relating to the disputed
amount so as to enable the parties to resolve the dispute. The parties
shall use reasonable efforts to resolve any such dispute promptly.
(d) Notwithstanding the foregoing, any invoice or payment not
disputed in writing by either party within thirty (30) days of such
invoice or payment, as the case may be, shall be considered final and
no longer subject to adjustment.
ARTICLE IV
STANDARDS OF CARE; LIMITATION OF LIABILITY
Section 4.01. Standards Of Care. SPX shall provide or cause each SPX
Entity providing services to provide each of the Services to the Company with
similar care as it exercises in the conduct of its own activities.
Section 4.02. Sole Remedy; No Warranties. No SPX Entity shall be liable
to the Company for any claims, damages or expenses whatsoever relating to the
Services provided pursuant to this Agreement, except for such entity's willful
misconduct or gross negligence, and, in the case of such willful misconduct or
gross negligence, the sole and exclusive remedy of the Company shall be to
require reperformance of the Services or to terminate this Agreement as to one
or more Services as provided in Section 5.01(c). The parties expressly agree
that no warranty shall be implied under this Agreement, whether warranties of
utility or fitness for any particular purpose or of merchantability or of any
other type and that no warranties of any sort are made herein.
ARTICLE V
TERM AND TERMINATION
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Section 5.01. Term.
(a) This Agreement shall commence on the date of the closing
of the Initial Public Offering, and shall automatically terminate on
the date that SPX owns shares of common stock of the Company
representing less than 50% of the aggregate amount of the outstanding
shares of Class A Common Stock and Class B Common Stock, such
termination to be effective upon the date that is the later of (1) the
end of the fiscal year in which such event occurs and (2) six months
from the date such event occurs.
(b) The Company may terminate this Agreement with respect to
any one or more of the Services effective upon that date that is the
later of (1) the end of the fiscal year in which the notice of
termination is given and (2) six months from the date notice of
termination is given.
(c) Either party may terminate this Agreement with respect to
any one or more of the Services if (i) the other party shall have
failed to perform any of its material obligations under this Agreement
relating to any such Service or Services, (ii) the aggrieved party has
notified the other party in writing of such failure, and (iii) such
failure shall have continued for a period of 30 days after receipt by
the other party of notice of such failure.
Section 5.02. Effect Of Termination. Other than as required by law,
upon the termination of any Service pursuant to Section 5.01, SPX will have no
further obligation to provide the terminated Service (or any Service, in the
case of termination of this Agreement) and the Company will have no obligation
to pay any fees relating to such Service or make any other payments hereunder;
provided that notwithstanding such termination, (i) the Company shall remain
liable to SPX for fees owed and payable in respect of any Service provided prior
to the effective date of the termination and (ii) the provisions of Articles
III, IV, V and VI shall survive any such termination.
ARTICLE VI
MISCELLANEOUS
Section 6.01. The Company as Sole Beneficiary. The Company acknowledges
that the Services shall be provided only with respect to the business of the
Company and its Subsidiaries as currently operated and as currently projected to
be operated or as mutually agreed by the parties hereto. The Company represents
and agrees that the Company will use the Services only in accordance with all
applicable federal, state and local laws and regulations, and in accordance with
past practices. SPX reserves the right to take all actions, including
termination of any particular Service, that SPX reasonably believes to be
necessary to assure compliance with applicable laws and regulations and
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such actions will not constitute a breach of this Agreement. SPX will notify the
Company promptly of any decision to terminate such Services and the reasons for
any such termination of such Services.
Section 6.02. Entire Agreement. This Agreement (including the Schedule
constituting a part of this Agreement) and any other writing signed by the
parties that specifically references this Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter hereof. This
Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 6.03. Information. Subject to applicable law and privileges,
each party hereto covenants and agrees to provide the other party with all
information regarding itself and transactions under this Agreement that the
other party reasonably believes are required to perform its obligations under
this Agreement and to comply with all applicable federal, state, county and
local laws, ordinances, regulations and codes, including, but not limited to,
securities laws and regulations.
Section 6.04. Confidentiality. Each of SPX and the Company agree to
keep confidential and not disclose, and shall cause their respective
subsidiaries and affiliates to keep confidential and not disclose, to any party
or use for any purpose (other than the performance of this Agreement), any
proprietary or other confidential information of the other party which is
received pursuant to this Agreement ("Confidential Information"); provided,
however, that the parties acknowledge that the Company will file a form of this
Agreement as an exhibit to the registration statement relating to the Initial
Public Offering. For purposes of this Agreement, Confidential Information of a
party does not include, and a party and a party's Subsidiaries and affiliates
will have no obligations under this provision with respect to, any information
of the other party or any Subsidiary or affiliate of the other party (the other
party and Subsidiaries and affiliates of the other party being referred to as
the "receiving party") which:
(i) is already known to the receiving party from a source other than
the disclosing party as evidenced by competent proof thereof;
(ii) is or becomes publicly known through no wrongful act of the
receiving party (in which event the receiving party's obligations under this
Agreement in respect thereto shall terminate on the date such information enters
the public domain);
(iii) is rightfully received by the receiving party from a third party
without violation of any obligations of confidentiality owed by the third party
to the disclosing party;
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(iv) is disclosed by the disclosing party to a third party without
restrictions on the third party's right to use or disclose such information;
(v) is independently developed by employees or consultants of the
receiving party without use of or reference to the disclosing party's
Confidential Information; or
(vi) is approved for release by written authorization of the disclosing
party.
Section 6.05. Protective Arrangements. In the event that any party
hereto (or any of its Subsidiaries) either determines on the advice of its
counsel that it is required to disclose any information pursuant to applicable
law (including requirements of the Securities and Exchange Commission) or
receives any demand under lawful process or from any governmental department,
commission, board, bureau, agency or official to disclose or provide information
of any other party hereto (or any of its Subsidiaries) that is subject to the
confidentiality provisions hereof, such party shall notify the other party prior
to disclosing or providing such information and shall cooperate at the expense
of the requesting party in seeking any reasonable protective arrangements
requested by such other party. Subject to the foregoing, the party that received
such request may thereafter disclose or provide information to the extent
required by such law (including requirements of the Securities and Exchange
Commission) (as so advised by counsel) or by lawful process or such governmental
department, commission, board, bureau, agency or official.
Section 6.06. Notices. Any notice, instruction, direction or demand
under the terms of this Agreement required to be in writing will be duly given
upon delivery, if delivered by hand, facsimile transmission, intercompany mail,
or mail, to the following addresses:
If to SPX:
SPX Corporation
000 Xxxxxxx Xxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxx 00000
Attn:Xxxxxxxxxxx X. Xxxxxxx, Esq.
If to the Company:
Inrange Technologies Corporation
00000 Xxxxxxxxx Xxxxx
Xx. Xxxxxx, Xxx Xxxxxx 00000
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Attn:Xxxxxxx X. Xxxx, Esq.
or to such other addresses or telecopy numbers as may be specified by
like notice to the other parties.
Section 6.07. Governing Law. This Agreement shall be construed in
accordance with and governed by the substantive internal laws of the State of
Delaware.
Section 6.08. Severability. If any provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall not render
the entire Agreement invalid. Rather, the Agreement shall be construed as if not
containing the particular invalid or unenforceable provision, and the rights and
obligations of each party shall be construed and enforced accordingly.
Section 6.09. Amendment. This Agreement may only be amended by a
written agreement executed by both parties hereto.
Section 6.10. Counterparts. This Agreement may be executed in separate
counterparts.
Section 6.11. Arbitration. Any controversy or claim arising hereunder
that cannot be resolved by the parties themselves, shall be settled by
arbitration in Muskegon, Michigan or such other location as the parties may
mutually agree, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. Any award rendered thereon shall be in writing
and shall be final and binding on the parties and judgment may be entered
thereon in any court of competent jurisdiction. Each party shall bear its own
costs and expenses in connection with the arbitration and the costs and expenses
of the arbitrators shall be borne as determined by the arbitrator.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers or agents as of the day and year
first written above.
SPX CORPORATION
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
__________________________
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President and
General Counsel
INRANGE TECHNOLOGIES
CORPORATION
By: /s/ Xxxxxxx X. Xxxx
_______________________
Name: Xxxxxxx X. Xxxx
Title: Vice President and
General Counsel
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