TRANSITION SERVICES AGREEMENT
This is a Transition Services Agreement (the "TSA"), by and among U.S.
INDUSTRIES, INC., a Delaware corporation ("USI"), and LCA Group Inc., a Delaware
corporation ("LCA").
WHEREAS, pursuant to the Distribution and Indemnification Agreement
between USI and LCA, dated as of January ___, 2001 (the "Spin-off Agreement"),
and in connection therewith, USI and LCA have agreed that staff employed by USI
on the date prior to the date hereof, the majority of whom will be employed by
LCA effective on the Spin-off, will provide LCA and USI with certain transition
services, for a limited period, as set forth herein; and
WHEREAS, capitalized terms used herein, unless otherwise defined
herein, shall have the meaning assigned to each in the Spin-off Agreement.
NOW, THEREFORE, in consideration of the payments to be made by USI as
provided herein and other valuable consideration, including the Spin-off
Agreement, and in consideration of the mutual covenants herein contained, the
parties intending to be legally bound do hereby agree as follows:
(1) Services. LCA shall provide, or shall cause to be provided, services to
USI and USI, to the extent applicable, to provide certain services to
LCA, described on Exhibit A (collectively, the "Services") upon the
terms and conditions set forth in Exhibit A attached hereto. All such
Services to be provided by LCA to USI, or USI to LCA, shall be provided
substantially as now being provided at comparable quality, levels of
performance and standards of care consistent with that provided by
USI's staff immediately preceding the date hereof.
(2) Cost. The cost for Services to be provided by each party pursuant to
the TSA shall be compensated at fair market value, and shall be
categorized as Out-of-Pocket Expenses and One-Time Expenses, as defined
below. All other costs associated with the TSA, including compensation
paid to its employees, shall be borne by each respective party to the
TSA.
(a) Definitions:
(i) Out-of-Pocket Expenses ("OOP") shall mean expenses incurred in
the ordinary course of business in accordance with past
practices.
(ii) One-Time Expenses ("OTE") shall mean a non-recurring expense
(x) of less than $5,000 associated with Services, or (y) over
$5,000 which has been pre-approved by the entity (USI or LCA)
which will be obligated to pay such OTE.
(b) Payments: LCA shall invoice USI, or vice-versa, for any OOP and/or
OTE. Amounts due pursuant to invoices regarding OOP and OTE shall be
payable within thirty (30) days after receipt of the invoice(s).
(3) Termination. The term of the Services provided hereunder shall commence
on the Spin-off Date pursuant to the Spin-off Agreement and continue
for a period of up to twelve (12) months following the Spin-off Date.
However, USI may terminate its obligation under this TSA upon thirty
(30) days prior written notice to LCA at any time after March 1, 2001.
Notwithstanding the foregoing, if (i) either party fails to perform any
material provision of the Agreement and the failure to perform is not
corrected within fifteen (15) days after the other party gives written
notice of such default or (ii) USI fails to make any payment required
under the TSA at the time it is due and such failure is not corrected
within five (5) days after written notice of such failure, then the
non-defaulting party may terminate the TSA effective at the end of such
five-day notice period.
(4) Standard of Conduct; Limitation of Liability.
(a) Except as otherwise provided herein, neither party shall have
liability with respect to its furnishing or receiving any of the
Services to be provided or received pursuant to the TSA except on
account of willful misconduct or gross negligence. Except as
otherwise provided herein, each party to provide the Services is
not making any representation or warranty as to the quality,
suitability or adequacy of the Services for any purpose or use.
In providing the Services, LCA shall not be obligated to (i) hire
any additional employees, (ii) maintain the employment of any
specific employee, or (iii) purchase, lease or license any
additional equipment or other assets on behalf of USI.
(b) It is understood and agreed that either party shall not be
obligated to perform or cause to be performed any Services in a
volume or quantity which substantially exceeds the historical
volumes or quantities of such services performed prior to the
Spinoff. USI or LCA will not be required to perform or cause to
be performed any of the Services for the benefit of any third
party or any other entity, except with respect to third parties
which are, or will be, outsourcing vendors providing services to
LCA or USI pursuant to the TSA.
(c) LCA's liability to, and remedy of, USI for breach of the TSA shall
be the lesser of (i) USI's incremental out-of-pocket cost of
performing such Services itself or (ii) USI's incremental out-of-
pocket cost of obtaining such service from a third party; provided,
that USI shall exercise all reasonable efforts under the
circumstances to minimize the cost of any such alternative to such
Services by selecting a cost-effective alternative which provides
the functional equivalent of the Services replaced.
(d) USI shall be obligated to return to LCA, and vice-versa, as soon as
is reasonably practicable, any equipment or other property of the
other party relating to the Services which is in its control or
possession and which is not an asset to be retained by such party
pursuant to the Spin-off Agreement or the ancillary agreements
thereto.
(e) Each party to the TSA shall be solely liable and responsible for
all actions of its employees pursuant to, and in accordance with
providing Services under the TSA. Subject to Section (4)(c) and
notwithstanding anything other to the contrary herein, in no event
shall either party have any liability to (i) the other for special
or consequential damages under or (ii) any third party.
(5) Confidentiality. Any and all information which is exchanged by the
parties in connection with the TSA, whether of a technical or business
nature, shall be considered confidential. The parties agree that such
confidential information shall be treated in accordance with the terms
and provisions of the Spin-off Agreement.
(6) Force Majeure. A party shall not be liable for a failure or delay in
the performance of any of its obligations under the TSA or such failure
or delay as the result of fire, flood, or other natural disaster, act
of God, war, embargo, riot or the intervention of any governmental
authority, provided that the party failing in or delaying its
performance immediately notifies the other party in writing of its
inability to perform and states the reason for such inability. In the
event that a party is delayed in the provision or delivery of any
Services hereunder for the reasons identified in this Section 6,
provision of such Services shall take place as soon thereafter as is
feasible.
(7) Counterparts. The TSA may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all of
which together shall constitute one in the same TSA.
(8) Entire Agreement. The TSA is intended to be a complete and integrated
agreement with respect to the subject matter hereof, superseding all
prior agreements and understandings with respect thereto and my not be
amended or modified except by an instrument in writing signed by the
parties hereto.
(9) Assignment; Binding Agreement. Neither party may assign or delegate the
TSA or the rights and obligations created hereunder without the prior
written consent of the other; provided, however, that either party may,
without the consent of the other, assign its rights in the TSA as
collateral security to its senior lenders, in which event notice shall
be given to the other party. Any purported assignment without a
required consent shall be void and constitute a breach of the TSA.
Subject to the foregoing, all of the terms and provisions of the TSA
shall be binding upon and inure to the benefit of and be enforceable by
the respective successors of the parties hereto.
(10) No Waiver. No failure or delay on the part of either party in the
exercise of any power, right or privilege arising hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
of any power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege.
(11) Severability. If any provision of the TSA is for any reason found to be
ineffective, unenforceable or illegal, such condition shall not affect
the validity or enforceability of any of the remaining portions hereof;
provided, further that the parties shall negotiate in good faith to
replace any
ineffective, unenforceable or illegal provision with an effective
replacement as soon as practical.
(12) No Joint Venture. Nothing contained herein or in the pursuance of the
TSA shall constitute the parties as entering into a joint venture or
partnership or shall it constitute either party the agent for the other
for any purpose or in any sense whatsoever.
(13) Choice of Law. The TSA shall be construed in accordance with and
governed by the laws of the State of Delaware, without reference to the
conflict of laws provisions thereof.
(14) Headings. The headings and subheadings contained herein are for
information purposes only and shall have no effect upon the intended
purpose or interpretation of the provisions of the TSA.
(15) Notices. All notices, requests, demand and other communications which
are required or may be given under the TSA shall be in writing and
shall be deemed to have been duly given when received if personally
delivered; when confirmation of transmission is received, if
transmitted by facsimile, electronic or digital transmission methods
provided confirmation of receipt is obtained promptly after completion
of transmission; the day after it is sent, if sent for next day
delivery to a domestic address by recognized overnight delivery
services (e.g., Federal Express); and upon receipt, if sent by
certified or registered mail, return receipt requested. In each case,
notice shall be sent to
If to USI, addressed to:
U.S. Industries, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
Senior Vice President - Administration
If to LCA:
LCA Group Inc.
000 Xxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
Senior Vice President, General Counsel
and Secretary
or to such other place and with such other copies as such party may
designate as to itself by written notice to others.
(16) Disputes. Resolution of any and all disputes arising from or in
connection with the TSA, whether based on contract, tort, statute or
otherwise, including but not limited to, disputes in connection with
claims by third parties, shall be resolved as set forth in Article V
of the Spin-Off Agreement.
IN WITNESS WHEREOF, the parties hereto have caused the TSA to be
executed by their respective officers as of the date first written above.
LCA GROUP INC.
By:
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Xxxxxx X. Xxxxx
Senior Vice President,
General Counsel & Secretary
U.S. INDUSTRIES, INC.
By:
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Xxxxxxx X. Xxxxxx
Senior Vice President
