EXHIBIT 10.3
TRANSITION SERVICES AGREEMENT
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This TRANSITION SERVICES AGREEMENT (together with all schedules
hereto, this "Agreement") is entered into as of May 31, 2001 between FMC
Corporation, a Delaware corporation ("Parent"), and FMC Technologies, Inc., a
Delaware corporation ("Technologies").
RECITALS:
WHEREAS, the Board of Directors of Parent has determined that it is in
the best interests of Parent and its shareholders to separate Parent's existing
businesses into two (2) independent businesses;
WHEREAS, in order to effectuate the foregoing, Parent and Technologies
have entered into a Separation and Distribution Agreement, dated as of the date
hereof (as amended and supplemented from time to time, the "Separation and
Distribution Agreement") which provides, among other things, subject to the
terms and conditions thereof, for the separation of the Technologies Assets and
Technologies Liabilities, the IPO, the Distribution and the execution and
delivery of certain other agreements in order to facilitate and provide for the
foregoing; and
WHEREAS, prior to the Contribution, Parent performed various services
for its affiliates, including, those businesses and entities comprising the
Technologies Group (collectively, the "Services"), and after the Contribution
the resources to perform those services, and the need for those services, will
be divided between Parent and Technologies;
WHEREAS, in order to ensure an orderly transition under the Separation
and Distribution Agreement it will be necessary for the Parties to continue to
provide to the other party the Services for a transitional period.
NOW, THEREFORE, in consideration of the premises and for other good
and valid consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
SECTION 1
DEFINITIONS
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For the purpose of this Agreement, the following terms shall have the
definitions hereinafter specified:
"Business" means, with respect to Technologies, the Technologies
Businesses, and, with respect to Parent, the Parent Business.
"Corporate Staff Departments" means Air Transportation, Bonus,
Communications, Controllers, Corporate Development, Corporate Marketing,
Employee Service Center, International Regions (Asia-Pacific, Europe and Latin
America), Ethics, Executive, Government Affairs, Human Resources, Information
Technology, Investor Relations, Law, Restricted Stock, Tax and Treasury.
"Party" means either Parent or Technologies. "Parties" means Parent
and Technologies, together.
"Provider" mean the Party providing Services hereunder to the other
Party to this Agreement.
"Recipient" means the party receiving the Services hereunder provided
by the other Party to this Agreement.
Except as otherwise defined in this Agreement, all capitalized terms shall have
the meanings assigned to them in the Separation and Distribution Agreement.
SECTION 2
AGREEMENT TO SELL AND BUY
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2.1 Costs of Providing Services.
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(a) The Provider shall provide (or shall cause its Affiliates to
provide) the Services that the Recipient receives as at the Assumption Time.
(b) In exchange for Services provided each of them, Technologies and
Parent shall (subject to the terms of the Separation and Distribution Agreement)
each pay one-half (1/2) of externally reported expenses of the Corporate Staff
Departments (which expenses shall not include expenses based on allocation
procedures used by the parties as at the Assumption Time), and Parent shall pay
all of externally reported expenses for the Environmental Department. For
purposes of this Agreement, externally reported expenses shall include direct
and incremental costs incurred by the Chemical operations of Parent to replicate
in Philadelphia all or a portion of the Corporate Staff Departments.
(c) In addition to the foregoing, Parent and Technologies shall each
be charged for expenses of, or receive credits for, Corporate Staff Departments
and the Environmental Department based upon allocation procedures to detail both
internal charges and external segment allocations that are in place on or before
the Contribution.
2.2 Access. The Recipient shall make available on a timely basis to
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the Provider all information and materials reasonably requested by the Provider
to enable it to provide Services. During regular business hours and at such
other times as are reasonably requested, the Recipient shall give the Provider
reasonable access to its premises for the purposes of providing the Services.
2.3 Books and Records. The Provider shall keep books and records of
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the Services provided and supporting documentation of all costs incurred in
providing such Services. The Provider shall make such books and records
available to the Recipient for inspection and audit by mutually acceptable
independent auditors at the Recipient's cost upon reasonable notice during
normal business hours.
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SECTION 3
SERVICES; PAYMENT; INDEPENDENT CONTRACTOR
3.1 Services to be Provided. (a) Unless otherwise agreed in writing by
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the Parties, the Services shall be performed by the Provider for the Recipient
at a quality level and in a manner that are in substantially the same as the
quality level and manner in which such Services were generally performed prior
to the date of this Agreement. It is intended that the Services be consistent
with those Services provided in the ordinary course by Parent and its Affiliates
or Technologies and its Affiliates, as the case may be, prior to the date
hereof.
(b) Nothing contained herein shall constitute or be deemed to
constitute a partnership, joint venture or agency relationship between the
Provider and the Recipient. The Provider shall not have any right or authority,
and shall not attempt to enter into any contract, commitment, or agreement or
incur any debt or liability, of any nature, in the name of the Recipient. The
Provider shall act under this Agreement solely as independent contractor and not
as an agent of the Recipient. Nothing contained herein shall constitute or be
deemed to constitute an employment relationship between the Recipient and the
employees of the Provider engaged in the providing of Services. The Provider
shall be solely responsible for the payment of compensation and benefits to its
employees and any payments or withholdings to governmental agencies relating to
its employees, and the Provider shall make all staffing decisions and direct the
performance of the Services. Recipient further acknowledges and agrees that, to
the extent applicable, Provider will not become a fiduciary of any employee
benefit plan of Recipient by reason of providing the Services, respectively,
that relate to the administration of benefit plans made available to employees
of the Business.
(c) The Provider shall have the right to shut down temporarily for
maintenance purposes the operation of the facilities providing any Service
whenever, in its reasonable discretion, such action is necessary; provided that
the Provider shall use reasonable best efforts to schedule maintenance in
consultation with the Recipient so as not to unreasonably interfere with the
Recipient's business. If maintenance is non-scheduled, the Recipient shall be
notified that maintenance is required. The Provider shall give the Recipient as
much advance notice of any such shutdown as is reasonably practicable. Where
feasible, this notice shall be given in writing. Where written notice is not
feasible, oral notice shall be given and promptly confirmed in writing. The
Provider shall be relieved of its obligations to provide Services during the
period that its facilities are so shut down but shall use reasonable best
efforts to minimize each period of shutdown for such purpose and to schedule
such shutdown so as not to inconvenience or disrupt the operations of the
Recipient. In the event of a shutdown of the facilities that provide Services,
the Provider shall furnish to the Recipient the same level and priority of
Services that the Provider's own business units receive during the shutdown or
curtailment.
3.2 Payment. Statements will be rendered each month by the Provider to
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the Recipient for Services delivered during the immediately preceding month.
Each such statement shall set forth in reasonable detail a description of such
Services and the amounts charged therefor and shall be payable net thirty (30)
days after the date thereof. Statements shall be in U.S. dollars, and with
respect to Services provided outside the United States, shall be based on
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the exchange rate for the applicable country published in The Financial Times on
the date of the invoice. Statements not paid within such 30-day period shall be
subject to late charges for each month or portion thereof the statement is
overdue, at a rate of interest per month equal to the 30 day LIBOR rate plus 100
basis points.
3.3 Priorities. In providing Services, the Provider shall accord the
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Recipient substantially the same priority, quality and level of Services that it
affords its own operations and Affiliates.
3.4 Disclaimer of Warranty. EXCEPT AS EXPRESSLY SET FORTH IN SECTION
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6.2 OF THIS AGREEMENT, ANY SERVICES AND GOODS TO BE PURCHASED UNDER THIS
AGREEMENT ARE FURNISHED "AS IS, WHERE IS," WITH ALL FAULTS AND WITHOUT WARRANTY
OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE. THE PROVIDER DOES NOT MAKE ANY WARRANTY THAT
ANY SERVICE COMPLIES WITH ANY LAW, DOMESTIC OR FOREIGN.
3.5 Taxes. All payments by the Recipient to the Provider for Services
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under this Agreement shall be increased by the Recipient to cover any applicable
sales tax, value-added tax, goods and services tax or similar tax ("Taxes") (but
excluding any tax based upon the net income of the Provider) payable with
respect to the provision by the Provider of Services, and the Provider shall be
responsible for paying any such Taxes to the appropriate Governmental Authority.
3.6 Use of Services. The Provider shall be required to provide Services
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only to the Recipient and its Affiliates for substantially the same purpose and
in substantially the same manner as the Businesses of the Recipients and its
Affiliates used such Services immediately prior to the Assumption Time.
Recipient shall not, and shall not permit its employees, agents or Affiliates
to, resell any Services to any Person whatsoever or permit the use of the
Services by any Person other than in connection with the conduct of their
respective Businesses in the ordinary course by either Party and their
Affiliates or in the ordinary course.
SECTION 4
TERM OF PARTICULAR SERVICES
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4.1 Term and Termination. The provision of Services shall commence on
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the date hereof and, with respect to each Service, shall terminate on the
Distribution Date.
4.2 Return of Records. If Provider holds books, records or files
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(including, without limitation, current and archived copies of computer files)
owned by the Recipient and used by the Provider in connection with the provision
of a Service to the Recipient, upon the termination of any such service the
Provider will return all of such books, records or files as soon as reasonably
practicable, but not later than thirty (30) days after such termination. Subject
to the provisions of Section 8.10 hereof, the Provider may make duplicates of
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such books, records or files for its legal files at its own costs.
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4.3 Year End Closing. Each party agrees to support the other party's
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year end closing activities, including the reporting of year end data.
SECTION 5
FORCE MAJEURE
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The Provider shall not be liable for any interruption of Service,
delay or failure to perform under this Agreement when such interruption, delay
or failure results from causes beyond its control, including, without
limitation, any strikes, lock-outs or other labor difficulties, acts of any
government, riot, insurrection or other hostilities, embargo, fuel or energy
shortage, fire, flood, acts of God, wrecks or transportation delays, or
inability to obtain necessary labor, materials or utilities (each a "Force
Majeure Event"). In any such event, the Provider's obligations hereunder shall
be postponed for such time as its performance is suspended or delayed as a
result thereof. The Provider will promptly notify the Recipient in writing upon
learning of the occurrence of any Force Majeure Event, and the Provider will use
reasonable best efforts to resume its performance. Notwithstanding the
foregoing, if the Provider can reasonably provide Services from any other
Affiliates of the Provider (after taking into account the capacity of such other
Affiliates to provide such Services and the requirements of the Provider and its
Affiliates) at a cost not in excess of that provided for pursuant to this
Agreement, the Provider shall not be relieved of its obligations to supply
Services hereunder. In the event of a Force Majeure Event, the Provider will
provide Services to the Recipient at the same level it provides such Services to
its own business units or Affiliates.
SECTION 6
LIABILITIES
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6.1 Consequential and Other Damages. Notwithstanding any provision in
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this Agreement to the contrary, neither the Provider nor the Recipient shall be
liable, whether in contract, in tort (including negligence and strict
liability), or otherwise, for any special, indirect, incidental or consequential
damages whatsoever, which in any way arise out of, relate to, or are a
consequence of, its performance or nonperformance hereunder, or the provision of
or failure to provide or receive any Service hereunder, including but not
limited to, loss of profits, business interruptions and claims of customers.
6.2 Release and Indemnity. The Recipient hereby releases the Provider,
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its Affiliates and their respective employees, agents, officers and directors
("Provider Indemnitees"), and the Recipient agrees to indemnify and hold
harmless the Provider Indemnitees, from any and all claims, demands, complaints,
liabilities, losses, damages, including reasonable costs and attorneys fees,
resulting from or caused by the negligence of the Recipient or its employees or
agents, to the extent arising from or relating to the use by the Recipient of
any Service or product
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provided hereunder to the Recipient and not arising from the breach of this
Agreement by the Provider or the gross negligence, willful misconduct or fraud
of the Provider.
SECTION 7
TERMINATION
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7.1 Termination. This Agreement shall terminate on the Distribution
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Date.
7.2 Sums Due. In the event of a termination or cancellation of this
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Agreement, the Provider shall be entitled to all outstanding amounts due from
the Recipient pro-rated to the date of termination or cancellation.
7.3 Effect of Termination. Sections 2.3, 3.2, 3.5, 4.2, 4.3, 6.1, 6.2,
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7.2, 8.10 and this Section 7.3 shall survive any termination of this Agreement.
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SECTION 8
MISCELLANEOUS
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8.1 Notice. Unless otherwise provided in this Agreement, all notices
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and other communications required or permitted hereunder will be given or made
in accordance with Section 11.4 of the Separation and Distribution Agreement.
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8.2 Headings. The headings contained in this Agreement are for purposes
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of convenience only and shall not affect the meaning or interpretation of this
Agreement.
8.3 Entire Agreement. This Agreement constitutes the entire agreement
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and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
8.4 Counterparts. This Agreement may be executed in counterparts, each
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of which shall be deemed an original and all of which shall together constitute
one and the same instrument.
8.5 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
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ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
8.6 Binding Effect. This Agreement shall be binding upon and inure to
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the benefit of the parties hereto and their respective successors and permitted
assigns.
8.7 Assignment and Delegation. This Agreement shall not be assignable
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by either Party without the prior written consent of the other. No assignment
hereunder shall in any way affect the Parties' obligations or liabilities under
this Agreement. The Provider may delegate performance of all or any part of its
obligations under this Agreement to: (a) any Affiliate of the Provider; or (b)
third parties to the extent such third parties are routinely used to provide
such
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Services to other Affiliates or operations of the Provider; provided, that, the
Provider remains liable for such obligations. Any purported assignment in
violation of this Section 8.7 shall be null and void.
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8.8 No Third Party Beneficiaries. Except as set forth in Section 6.2,
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nothing in this Agreement shall confer any rights upon any Person other than the
Recipient and Provider and each such party's respective successors and permitted
assigns.
8.9 Amendment. Waivers. etc. No amendment, modification or discharge of
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this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by both Parties. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the Party granting such waiver
in any other respect or at any other time.
8.10 Title to Data: Confidentiality.
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(a) Each Party, on behalf of itself and its employees,
officers, directors, agents and representatives, agrees to keep
confidential all records and other information, received in connection
with the provision or receipt of Services hereunder, of the other Party
which is designated as confidential. Specifically, each Party agrees
that it will, during the term of this Agreement and thereafter (except
where required by law or court order or administrative agency order or
subpoena): (i) retain all such information of the other Party in
confidence; (ii) not disclose any such information of the other Party
for any purposes other than performing its obligations under this
Agreement; (iv) use its reasonable best efforts to limit access to the
other Party's information to those employees who have a need to know
the information for the business purposes of this Agreement, and
maintain reasonable arrangements to protect confidentiality with such
employees and any third parties having access to such information in
the same manner that such Party maintains its own confidential
information; and (v) insure that all tangible objects and copies
thereof in the Party's possession or under its control containing or
imparting any such information of the other Party shall be returned to
the other Party at any time upon the other Party's request or upon
termination of this Agreement. Each Party shall bear all costs and
expenses associated with the return to it of such tangible objects and
copies thereof. If a Party reasonably believes it is required by law to
disclose any of the confidential information of the other Party, such
Party will notify the other Party promptly and to the extent
practicable, prior to disclosing the information so that the other
Party may seek a protective order or other appropriate remedy.
(b) Subject to the provisions of the Separation and
Distribution Agreement, the Recipient acknowledges that it will acquire
no right, title or interest (including any license rights or rights of
use) in any software, and the licenses therefor which are owned by the
Provider, solely by reason of the Provider's provision of the Services
provided hereunder.
(c) The Provider agrees that all records, data, files, input
materials and other information received or computed for the benefit of
the Recipient and which relate to the
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conduct of the Business are the sole property of the Recipient.
8.11 Conflict with Separation and Distribution Agreement. To the extent
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that this Agreement conflicts with the Separation and Distribution Agreement,
the provisions of the Separation and Distribution Agreement shall govern.
IN WITNESS WHEREOF, the Parties have executed this Transition
Agreement as of the date first written above.
FMC CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Executive Vice President
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FMC TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: Vice President
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