Exhibit 10.12
TRANSITION SERVICES AGREEMENT
This Transition Services Agreement dated as of December 31, 1996
(collectively with the Exhibits hereto, the "Agreement") between PRIMEX
TECHNOLOGIES, INC., a Virginia corporation ("Primex"), and XXXX CORPORATION, a
Virginia corporation ("Olin").
W I T N E S S E T H
WHEREAS, Olin and Primex have entered into a Distribution Agreement dated
as of December 30, 1996 ("Distribution Agreement");
WHEREAS, pursuant to the Distribution Agreement, Olin has agreed to
transfer certain assets and business entities constituting the Primex Business
(as defined in the Distribution Agreement) as provided in the Distribution
Agreement;
WHEREAS, prior to the Effective Time (as defined in the Distribution
Agreement) the Primex Business has received various support services from, and
provided various support services to, Olin and its subsidiaries; and
WHEREAS, following Distribution contemplated by the Distribution Agreement,
Olin and Primex desire that for a period of transition and for purposes of
continuity Olin continue to provide certain services to Primex and that Primex
continue to provide certain services to Olin and its subsidiaries, all in a
manner and amount historically provided prior to the Effective Time (as defined
in the Distribution Agreement) and on terms and conditions as set forth in this
Agreement.
NOW THEREFORE, in consideration of the mutual covenants and premises
contained herein, Olin and Primex agree as follows:
1. DEFINITIONS. (a) The following terms have the meanings hereinafter
assigned to them:
"Arbitration Rules" - See Section 9.
"Confidential Information" - See Section 3.
"Customer" means (i) with respect to Olin Services, Primex and (ii) with
respect to Primex Services, Olin and its subsidiaries.
"Employee Benefits Information" - See Section 3.
"MAB" - See Section 9.
"Olin Services" means each service listed on Exhibit A hereto.
"Primex Services" means each service listed on Exhibit B hereto.
"Provider" means (i) with respect to Olin Services, Olin and (ii) with
respect to Primex Services, Primex.
"Representative" - See Section 9.
"Services" means the Olin Services and Primex Services, as the case may be.
"Service Charge" - See Section 4 hereof.
"Service Description" means the description of each individual Service
respectively provided in Exhibits A and B.
"Standard of Care" - See Section 2(a) hereof.
(b) Any capitalized term utilized but not defined herein shall have the
meaning assigned to it in the Distribution Agreement.
2. SERVICES. (a) Subject to the terms of this Agreement, (1) Olin will
provide to Primex the Olin Services in the manner, to the same location and to
the extent provided by Olin (and not by an outside contractor) to the Primex
Business during the one-year period immediately preceding the date of this
Agreement and (2) Primex shall provide to Olin and its subsidiaries the Primex
Services in the manner and to the extent that provided by the Primex Business
(and not by an outside contractor) during the one-year period immediately
preceding the date of this Agreement. In providing the Services, the Provider
shall employ the same standards of care and diligence employed in providing
services of the same type for itself and its affiliates ("Standard of Care").
Exhibits A and B made an integral part of this Agreement will identify the
Services to be provided by the parties hereto and subject to the mutual
agreement of the parties, will be subject to amendment as the parties identify
after the Effective Time any additional Services omitted from the Exhibits.
(b) No Provider employee shall be considered a Customer employee for any
purpose, and the Provider shall provide the Services as an independent
contractor.
(c) The Customer shall, in a timely manner, take all such actions as may
be reasonably necessary or desirable in order to enable or assist the Provider
to provide the Services, including, but not limited to, providing necessary
information and specific written authorizations and consents, and the Provider
shall be relieved of its obligations hereunder to the extent that the Customer's
failure to take any such action renders performance by the Provider unlawful or
impracticable.
3. CONFIDENTIALITY.
(a) CONFIDENTIALITY OBLIGATION: Each of the Parties agrees to keep
confidential and neither disclose to others nor use except as permitted herein
any "Confidential Information" or any "Employee Benefits Information" received
from the other Party pursuant to this Agreement.
(b) DEFINITIONS: For purposes of this Agreement, "Confidential
Information" shall mean any and all information disclosed to the receiving Party
by a disclosing Party pursuant to this Agreement, in any form such as, but not
limited to, visual, oral, written, graphic, electronic or model form, including
but not limited to know-how and trade secrets, whether of a business or a
technical nature, whether patented or not and whether in the laboratory, pilot
plant or commercial plant stage (including drawings, operating conditions,
specifications, safety instructions, environmental recommendations, emergency
instructions, etc.) owned or controlled by a Party. "Employee Benefits
Information" shall mean information relating to the administration of Primex's
and Olin's employee benefit programs as provided in Exhibits attached hereto,
including but not limited to information and/or data submitted for reimbursement
of, or in support of, any benefits claim (including but not limited to health,
counseling, medical, dental, or disability claims).
(c) LIMITS ON DISCLOSURE: The receiving Party shall treat all
Confidential Information in the same manner and with the same degree of care as
it uses with respect to its own Confidential Information of like nature and
shall disclose Confidential Information of the other Party only to its employees
who have a need to know it, provided that such employees are bound to respect
all secrecy obligations provided for in this Agreement. The receiving Party
shall treat all Employee Benefits Information with highest standard of care
reasonable for such information, and shall disclose Employee Benefit Information
of the other Party only to its employees who have a strict need to know it,
provided that such employees are bound to respect all secrecy obligations
provided for in this Agreement.
(d) EXCEPTIONS: The obligation set forth in Section 3(a) above shall not
apply with respect to any Confidential Information which:
(i) PUBLIC KNOWLEDGE: Is generally available to the public or
subsequently becomes generally available to the public through no breach by the
receiving Party of secrecy obligations under this Agreement or prior agreements
between the Parties concerning the Confidential Information; or
(ii) PRIOR POSSESSION: The receiving Party can establish by competent
evidence was in its possession at the time of disclosure and was not acquired in
confidence directly or indirectly, from the disclosing Party; or
(iii) RECEIVED FROM THIRD PARTY: Is received from a third party
who is legally free to disclose such Confidential Information and who did not
receive such Confidential Information in confidence from the disclosing Party;
or
(iv) APPROVED FOR DISCLOSURE: Is approved in writing for release by
the disclosing Party; or
(v) SUCCESSOR IN INTEREST: Is disclosed to any permitted assignee of
the Agreement, provided that such assignee agrees to be bound by the provisions
of the Agreement; or
(vi) INDEPENDENTLY DEVELOPED: Is independently developed by the
receiving Party without reference to the Confidential Information received from
the disclosing Party.
(e) PERMITTED DISCLOSURES: The provisions of Section 3(a)
notwithstanding, in exercising the rights granted under this Agreement, either
Party may disclose Confidential Information to others for purpose of
sublicensing (as permitted hereunder), design, engineering, construction or
operation of facilities permitted hereunder using Confidential Information; or
obtaining or giving consulting services under a license agreement permitted
hereunder, provided that any third party, to which such Confidential Information
is disclosed shall have first entered into a written secrecy and non-use
obligation at least as stringent as that imposed on the Parties pursuant to this
Agreement.
(f) SUBPOENA OR DEMAND: The provisions of Section 3(a) notwithstanding, a
Party may disclose Confidential Information and/or Employee Benefits Information
pursuant to a subpoena or demand for production of documents in connection with
any suit or arbitration proceeding, any administrative procedure or before a
governmental or administrative agency or instrumentality thereof or any
legislative hearing or other similar proceeding, provided that the receiving
Party shall promptly notify the disclosing Party of the subpoena or demand and
provided further that in such instances, the Parties use their reasonable best
efforts to maintain the confidential nature of the Confidential Information by
protective order or other means.
(g) GOVERNMENT AUDIT: The provisions of Section 3(a) notwithstanding, a
Party may disclose Confidential Information (other than information which is not
required by U.S. Government regulation to be made available to U.S. Government
auditors (E.G., internal audit reports)) to U.S. Government auditors upon
request during the performance of a governmental audit or review of any U.S.
Government contract of such other party in the normal course of the audit
function and according to standard practices; provided prompt notice of the
disclosure of such information shall be given to the party from which the
information was obtained.
4. COMPENSATION. In consideration of the provision of the Services, the
Customer shall, for each Service performed, pay Provider the monthly base fee
plus additional charges set forth in Exhibit A or B (such monthly fee and
additional charges being collectively, the "Service Charge" for such Service)[,
provided that the monthly base fee which is part of the Service Charge will be
prorated for the number of days remaining in the calendar month in which the
Effective Time occurs]. The monthly base fee of the Service Charge for any month
will be paid in advance on the last business day of the preceding month except
that the first monthly fee paid hereunder shall be paid immediately following
the Effective Time. Except as otherwise set forth herein, the Provider will
invoice the Customer for any additional costs incurred by the Provider for the
benefit of the Customer which are to be paid pursuant to Exhibit A or B hereto,
and such invoices will be payable within 30 days of receipt.
5. GOVERNMENT CONTRACTS. In the event that the Services to be performed
involve contracts the Customer may have as a Government prime contractor or
subcontractor, the provisions of such contracts required by any applicable
federal acquisition regulation, including but not limited to, the Xxxxx-Xxxxxx
Public Contracts Act, Fair Labor Standards Act, Officials Not to Benefit,
Covenant Against Contingent Fees, Nondiscrimination in Employment, Military
Security Requirements, Office of Federal Procurement Policy Act and Examination
of Records, shall be binding on Provider to the extent necessary to enable the
Customer to meet its legal and contractual commitments.
If the Services to be performed by Provider include the receiving,
handling, or developing of any Government classified material or data, Provider
agrees that it and any and all persons or entities in its employ or control
shall comply with all applicable security regulations and requirements. Each
Provider agrees to immediately submit a confidential report to Customer
whenever, for any cause, it has reason to believe that there is an active danger
of espionage or sabotage affecting any work under such Government contracts.
Each Provider represents and warrants that it is familiar with the laws,
rules, orders, and regulations applicable to the performance of government
procurement contracts with federal agencies including, but not limited to, the
Department of Defense, the Department of Energy, and the National Aeronautics
and Space Administration; that each will abide by all such laws, rules, orders
and regulations; that it, and each of its employees performing Services
hereunder, is eligible to act as a consultant to a U.S. Government defense
contractor under all applicable federal laws and regulations regarding post-
government employment; and that it will provide any and all certifications,
representations, reports, records or any other document required to be submitted
by suppliers under federal contracts.
6. LIMITATION OF LIABILITY: INDEMNITY. (a) A Provider shall have no
liability to the Customer or any third party in connection with the provision of
the Services except to the extent such Services were provided in breach of the
Provider's Standard of Care and, in such a case, only to the extent of the
following:
(i) a dollar amount limited to the amount of insurance proceeds paid
to Provider therefor from a third party insurance company, and
(ii) at the option of the Customer, Provider shall either:
(x) perform again the particular Service performed in breach of
the Standard of Care at no cost to Customer, or
(y) give the Customer a refund of the portion of the monthly base
fee attributable to the cost of performance of the Service provided in breach of
the Standard of Care.
In no event shall the Provider be liable in connection with its provision of the
Services for any indirect, special or consequential damages, including any fines
or penalties payable by the Customer to any government agency, or for any loss
of profits or other economic damages.
(b) The Customer hereby agrees to indemnify and hold the Provider and its
officers, directors, agents and employees harmless from and against any and all
liabilities, losses, damages, expenses, fines and penalties of any kind,
including reasonable attorneys' fees and disbursements incurred by the Provider
either:
(i) as the result of any claim made against the Provider by any third
party arising out of the Provider's provision of the Services (except to the
extent, and only to the extent, of Provider's liability to Customer for the
respective Service as provided in Paragraph 6(a), above); and/or
(ii) arising out of the Customer's negligence or malfeasance in
connection with its use of the Services.
7. INSURANCE. The Provider shall procure and maintain fire, public
liability, fidelity, property and other types of insurance, which are reasonably
necessary to protect itself and the Customer and consistent with past practice
(which may include self-insurance). All such policies of insurance with third
party insurers shall name Customer as an additional insured party to the extent
possible.
8. FORCE MAJEURE. Neither the Customer nor the Provider shall be liable
for any delays in its performance hereunder caused by events beyond its
reasonable control including, without limitation: acts of God, acts of
government, fire, equipment breakdown, strikes or other similar labor disputes
(settlement of which shall be in the sole discretion of the employer), or the
inability to acquire materials or third-party services. Upon the occurrence of
any event which is expected to or does cause a delay in performance hereunder,
the person or party whose performance is or may be delayed shall give prompt
written notice thereof to the Customer or Provider, as the case may be.
9. DISPUTES. In the event of any disputes arising out of or in
connection with the execution, interpretation, performance or nonperformance of
this Agreement, Provider and Customer shall use the following procedure prior to
either party pursuant other available legal remedies:
Upon signing of this Agreement, each party will designate one
representative ("Representative") for the purpose of resolving disputes which
may arise from time to time. A party may change its Representative to act
hereunder at any time upon notice to the other. Upon a dispute arising, either
or both Representatives may request in writing a conference with the other. If
so requested, the conference shall occur within ten (10) days of the initial
written request and shall be held via telephone or at a mutually agreed upon
location, at the option of the Representatives. The purpose and scope of the
conference shall be limited to issues related to resolving the dispute. At the
conference, each Representative shall use their reasonable best efforts to
attempt to resolve the dispute. If the dispute has not been settled within
thirty (30) days of the first meeting of the Representatives, the parties shall
establish a Management Appeal Board ("MAB") within ten (10) days of receipt of a
request by either party to set up a MAB. The MAB shall consist of two (2)
members of each respective party's management. Olin shall appoint two members
to represent Olin, and Primex shall appoint two members to represent Primex.
The sole purpose of MAB shall be to resolve any dispute over which the
Representatives failed to resolve. The MAB members shall be persons other than
the Representatives. The MAB shall meet at Olin's headquarters or other place
mutually agreed upon and confer to resolve the dispute by good faith
negotiations, which may include presentations by the Representative or others.
In the event the parties are unable to resolve their disputes after
availing themselves of the processes set forth above for a period of ninety (90)
days, such disputes shall be solely and finally settled by a board of three (3)
arbitrators in accordance with the Commercial Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association ("AAA"). The party
electing arbitration shall notify the other party in writing in accordance with
the Arbitration Rules, and such notice shall be accompanied by the name of the
arbitrator selected by the party serving the notice. The second arbitrator
shall be chosen by the other party, and a neutral arbitrator shall be chosen by
the two arbitrators so selected. If a party fails to select an arbitrator or to
advise the other party of its selection within thirty (30) days after receipt by
such a party of the notice of the intent to arbitrate, the second arbitrator
shall be selected by the AAA. If the third arbitrator shall not have been
selected within thirty (30) days after the selection of the second arbitrator,
the appointment shall be made by the AAA. All such proceedings shall be
conducted in East Alton, Illinois or another mutually agreed upon location. The
arbitrator shall make detailed findings of fact and law in writing in support of
the decision of the arbitrator panel, but shall not be empowered to award
reimbursement of attorneys' fees and other costs of arbitration to the
prevailing party. The provisions of this Section 9 shall not be deemed to
preclude any party hereto from seeking preliminary injunctive relief to protect
or enforce its rights hereunder, or to prohibit any court from making
preliminary findings of fact in connection with granting or denying such
preliminary injunctive relief, or to preclude any party hereto from seeking
permanent injunctive or other equitable relief after and in accordance with the
decision of the arbitrator panel. Whether any claim or controversy is
arbitrable or litigable shall be determined solely by the arbitrator panel
pursuant to the provisions of this Section 9. Any monetary award of the
arbitrators panel shall include interest from the date of any breach or any
violation of this Agreement. The arbitrators shall fix an appropriate rate of
interest from the date of the breach or other violation to the date when the
award is paid in full. The parties agree that the decision of the arbitrators
shall be final and conclusive and that judgment on the arbitration award may be
entered in any court having jurisdiction over the parties or their assets.
It is expressly agreed that the failure of the parties to resolve a dispute
on any issue to be resolved hereunder shall not relieve either party from any
obligation set forth in this Agreement. In addition, the parties expressly
state their mutual determination that the failure to resolve any such disputes
shall not hinder or delay the providing of the Services, and that,
notwithstanding the pendency of any such dispute, neither party will be excused
of its obligations hereunder to cooperate with the other to effectuate the
purposes of this Agreement.
10. BOOKS AND RECORDS. The Provider shall, upon reasonable notice and
during normal business hours, allow the Customer's financial personnel
reasonable access to its books, records and other information necessary to
confirm the calculation of the compensation and reimbursement due the Provider
hereunder.
11. TERM AND TERMINATION. The term of this Agreement shall commence as of
the date hereof and shall continue until Services are no longer provided
hereunder. Each Service shall terminate on the earliest of (i) the last day of
the third full calendar month following receipt by the Provider of written
notice from the Customer to terminate the Service, or (ii) the last day of the
term for such Service as specified in the respective Service Description.
12. NON-WAIVER. The Customer's or the Provider's waiver of any breach or
failure to enforce any of the terms or conditions of this Agreement at any time
shall not in any way affect, limit or waive such person's right thereafter to
enforce strict compliance with every term and condition hereof.
13. ASSIGNMENT. Neither this Agreement nor any right or obligation
hereunder is assignable or transferable by either party (in whole or part)
without the prior written consent of the other party and any such purported
assignment without such consent shall be void, except that either party shall
have the right to assign this Agreement and its rights and obligations
hereunder, without obtaining the prior written consent of the other party, to
any entity with which the assigning party merges or transfers a substantial part
of its assets or businesses to which this Agreement relates provided that such
assignee or transferee accepts such assignment or transfer and the rights and
obligations hereunder in writing. Nothing in this Agreement, express or
implied, is intended to confer any rights or remedies under this Agreement on
any person or entity other than Primex or Olin and their respective successors
and permitted assigns.
14. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without giving effect to its
conflict of laws provisions.
15. CAPTIONS. The titles contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
16. AMENDMENT. This Agreement may be modified or amended only pursuant to
a written agreement executed on behalf of each of Olin and Primex. No
modification or addition to this Agreement shall be effected by the
acknowledgment or acceptance by either party of any purchase order, invoice,
acknowledgment, release or other forms submitted by the other party containing
other or different terms or conditions.
17. NOTICES. All notices, consents, termination notices, and other
communications to be given hereunder, other than routine immaterial
communications, shall be by telex or electronic facsimile, confirmed in writing
as hereinafter provided, or in writing which shall be valid and sufficient only
if delivered by hand or dispatched by registered or certified mail, return
receipt requested, postage prepaid, addressed to the other party at its address
as set forth below, or to such other address as has theretofore been designated
by the other party by notice given in accordance with this Section.
If to Xxxx
XXXX CORPORATION
000 Xxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: Corporation Secretary
Telecopier: (000) 000-0000
If to Primex
PRIMEX TECHNOLOGIES, INC.
00000 Xxxxx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Secretary
Telecopier: (813) 578- 8795
18. ENTIRE AGREEMENT. This Agreement (including the exhibits and
schedules referred to herein) constitutes the entire agreement with respect to
the subject matter hereof between the parties hereto and supersedes all prior
agreements and understandings, oral and written, between the parties hereto,
with respect to the subject matter hereof.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which together shall constitute one and the same instrument.
20. SEVERABILITY. If any provision of this Agreement or the application
of any such provision to any person or circumstances shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof.
21. EXCLUSIVE BENEFIT. This Agreement is made for the exclusive benefit
of Olin and Primex, and not for the benefit of any third party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
XXXX CORPORATION
By /s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Title: Vice President, General
Counsel and Secretary
PRIMEX TECHNOLOGIES, INC.
By /s/ Xxxxxx X. Pain
------------------
Xxxxxx X. Pain
Title: Vice President
EXHIBIT A
---------
EXHIBIT A
OLIN SERVICES TO PRIMEX
NAME OF SERVICE: Treasury Services
OLIN DEPARTMENT
PROVIDING SERVICE: Funds Management
LOCATION OF PROVIDER: Norwalk, CT
PRIMEX DEPARTMENT
RECEIVING SERVICE: Cash Management
LOCATION OF RECEIVER: St. Petersburg
DESCRIPTION: Provide consulting to Primex Treasury on an as-
needed basis, including cash management and
related systems. See attached list of treasury
service estimates.
TERM: Ends no later than 12/31/97
MONTHLY BASE FEE: $1,050
ADDITIONAL CHARGES: $100/hour for services; out-of-pocket bank fees
for cash management and for services as charged.
NOTE: Treasury Services include the collection by Olin
of Primex receipts and the funding by Olin of
Primex disbursements. Charges for average cash
balances owing to Primex from Olin will be
calculated based on Olin's average investment rate
for the period. Charges for average cash deficits
owing to Olin from Primex will be calculated based
on Primex's average borrowing rate for the period.
Balances may not exceed $5 million and will be
settled at least bimonthly.
