Exhibit 10.7
Interim Services Agreement
This Interim Services Agreement, made as of the 30th day of April, 1997
by and among Lockheed Xxxxxx Corporation, a Maryland corporation ("LM"), L-3
Communications Holdings, Inc., a Delaware corporation ("Newco") and L-3
Communications Corporation, a Delaware corporation that is a wholly owned
Subsidiary of Newco ("L-3").
W I T N E S S E T H:
WHEREAS, LM and Newco, together with Xxxxxx Brothers Capital Partners
III, L.P., Xxxxx X. Xxxxx and Xxxxxx X. XxXxxxx, have entered into a
Transaction Agreement (the "Transaction Agreement"); and
WHEREAS, pursuant to Section 2.01(vi) of the Transaction Agreement, LM
has agreed to provide to Newco and Newco has agreed to provide to LM certain
services including the Services described herein; and
WHEREAS, pursuant to Section 15.04 of the Transaction Agreement, Newco
has assigned its rights and obligations under Section 2.01(vi) of the
Transaction Agreement to L-3; and
WHEREAS, the provision of certain other services contemplated by Section
2.01(vi) of the Transaction Agreement are the subjects of various real
property leases, a Transition Services Agreement concerning information and
communication systems services and a MAC/MAR Service Agreement all of even
date herewith between LM or its Affiliates and L-3 or its Affiliates
(collectively, the "Other Agreements").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties contained herein, the parties hereby covenant and agree as
follows:
1. Definitions. Defined terms used in this Interim Services Agreement
shall have the meanings specified in the Transaction Agreement (including all
Exhibits, Schedules and Attachments thereto). In addition, the following
terms shall have the following meanings:
"Other Agreements" has the meaning set forth in the Preamble to this
Interim Services Agreement.
"Provider" means any of LM, L-3, or any of their respective Affiliates
designated on the relevant Schedule as the operating unit which is to provide
a Service to another party pursuant to the terms of this Interim Services
Agreement.
"Recipient" means any of LM, L-3, or any of their respective Affiliates
designated on the relevant Schedule as the operating unit which is to receive
a Service from the Provider pursuant to the terms of this Interim Services
Agreement.
"Schedule" means each Schedule attached hereto.
"Service" means each service (including the provision of limited space
or equipment) described on a Schedule attached hereto to be provided by a
Provider to a Recipient pursuant to the terms of this Interim Services
Agreement excluding any service addressed in any of the Other Agreements or
in the Transaction Agreement including, without limitation, in Sections 7.02
and 8.02 thereof.
2. Services To Be Provided. During the term of this Interim Services
Agreement, each of LM and L-3 shall provide or shall cause each of its
respective Affiliates that is designated as a Provider on a Schedule or a
third party provider that such Provider reasonably believes to be competent
to provide the Services described on such Schedule to the Recipient
designated on such Schedule. The parties acknowledge that the Services to
be provided by L-3 include providing certain services to Loral Space &
Communications, Ltd. relating to its offices at 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx that currently are provided to Loral Space & Communications, Ltd. by
LM.
3. Consideration; Disbursements.
(a) In consideration for the Services provided, the Recipient shall pay
to the Provider amounts determined on a basis consistent with methodologies
used to allocate costs for the provision of such Services prior to the date
hereof. The Provider shall invoice the Recipient for the Services provided
hereunder on a monthly basis and the Recipient shall pay the amount of such
invoice in immediately available funds within 15 days of the date hereof.
(b) In addition to amounts due pursuant to Section 3(a), if the
provision of a Service will result in the Provider's incurring incremental
"systematic costs" (such as the costs of partitioning data bases or
establishing firewalls) which costs would not be reimbursed under Section
3(a), then the Provider shall provide the Recipient with a written
explanation of such costs and the reason that they will be incurred.
Thereafter, the Provider and the Recipient shall in good faith discuss the
matter. If the Recipient agrees in writing to be responsible for such costs,
then such amounts shall be included within the invoices contemplated by
Section 3(a). If the Recipient declines to be responsible for such costs,
then, notwithstanding any other provision of this Agreement, if such Service
cannot be provided in a commercially reasonable manner absent the incurrence
of such costs then the Provider may curtail or limit the Provider's provision
of the related Service; provided, however, that such limitation or
curtailment shall be the minimum reasonably necessary to allow, if possible,
the provision of the related Service in a commercially reasonable manner
absent the incurrence of such costs.
(c) In addition to amounts due pursuant to Section 3(a), if the
provision of a Service results in the Provider's incurring reasonable
incremental out-of-pocket expenses (such as travel expenses, accounting fees
and the fees of outside counsel) other than the costs of retaining third-
party providers to perform Services that ordinarily would be performed by the
Provider, such reasonable incremental out-of-pocket expenses shall be charged
to and paid by the Recipient.
(d) No Provider shall be required to disburse its own funds for or on
behalf of a Recipient. If the provision of a Service requires the Provider
to disburse funds for or on behalf of a Recipient, the Provider may require
the Recipient to advance such funds to the Provider prior to such
disbursement.
4. Provision and Retention of and Access to Information.
(a) Where input or other information has been provided by the Recipient
in the past in connection with a Service, the Recipient shall provide the
Provider with information in the same general format and in accordance with
the same schedule followed previously by the Recipient in furnishing such
information to the Provider.
(b) The Provider will preserve all records supporting the amounts
charged to the Recipient pursuant to Section 3 for a period of five years
following the invoicing of such amounts, or such longer period as may be
required by Applicable Law, and thereafter, not destroy or dispose of such
records without giving notice to the Recipient of such pending disposal and
offering the Recipient the right to obtain and retain such records at its
expense. In the event the Recipient has not obtained such materials within
30 days following the receipt of notice from the Provider, the Provider may
proceed to destroy or dispose of such materials without any liability.
Subject to any disclosure, copying or other limitations imposed by Applicable
Law and to any applicable privileges (including, without limitation, the
attorney-client privilege), the Provider shall (i) at its expense afford the
Recipient and its Representatives reasonable access upon reasonable prior
notice during normal business hours to all such records and (ii) at the
Recipient's expense provide copies of such records as the Recipient may
reasonably request for any proper purpose (including, without limitation, in
connection with any judicial, quasi judicial, administrative, tax, audit or
arbitration proceeding).
5. Performance Standard; Confidentiality.
(a) Nothing in this Interim Services Agreement shall be construed to
require a Provider to provide a Service to a Recipient beyond the scope and
content of such Service provided by the Provider to the Recipient immediately
prior to the date of this Interim Services Agreement. Each Provider will
perform each Service in the same general manner and according to the same
standards that the Service is performed by the Provider for its own
operations or for its Affiliates.
(b) The Provider will handle, and will cause its Affiliates and any
third party provider retained by it to handle, all information disclosed to
it or them by a Recipient which the Recipient informs the Provider that it
considers proprietary and confidential in the same manner as the Provider
handles its own information which it considers proprietary and confidential.
The provisions of this Section 5(b) will not be deemed to prohibit the
disclosure of confidential information concerning the operations or affairs
of the Business by any of the Lockheed Xxxxxx Companies or by L-3, as the
case may be, to the extent reasonably required (i) in connection with audits
or other proceedings by or on behalf of a Governmental Authority or (ii) to
the extent necessary to comply with any Applicable Law. Notwithstanding the
foregoing, the provisions of this Section 5(b) shall not apply to information
that (i) is or becomes publicly available other than as a result of a
disclosure by the Provider, (ii) is or becomes available to the Provider on a
non-confidential basis from a source that, to the Provider's knowledge, is
not prohibited from disclosing such information by a legal, contractual or
fiduciary obligation, or (iii) is or has been independently developed by the
Provider (other than solely for the Recipient or its Affiliates).
6. Force Majeure. Neither party shall be liable for any loss or
damage whatsoever arising out of any delay or failure in the performance of
its obligations pursuant to this Interim Services Agreement which delay or
failure results from events beyond the control of that party including but
not limited to acts of God, acts or regulations of any Governmental
Authority, war, accident, fire, flood, strikes, industrial disputes or
inability to secure goods or materials nor shall any party be entitled to
terminate this Interim Services Agreement in respect of any such delay or
failure resulting from any such event.
7. Dispute Resolution. In the event of any dispute between a Provider
and a Recipient with respect to the provision of any Service pursuant to this
Interim Service Agreement, the individuals designated as the "Individual
Responsible" for each party on the Schedule relating to such Schedule will
use commercially reasonable efforts to resolve such dispute promptly. If
such individuals are unable to resolve such dispute promptly, the dispute
will be submitted to a member of senior management of each party. Such
members of senior management will meet in person or by telephone conference
at least once in the ten (10) day period following the submission of the
dispute to them and will use commercially reasonable efforts to resolve such
dispute promptly. If such members of senior management are unable to resolve
such dispute within thirty (30) days of the submission of the dispute to
them, the parties may exercise any rights or remedies available to them in
the Transaction Documents.
8. Limited Liability. Each Provider and its Affiliates shall not be
liable whether in negligence, breach of contract or otherwise for any loss,
damage or expense suffered or incurred by a Recipient or a related person or
entity arising out of or in connection with the rendering of a Service or any
failure to provide a Service except to the extent that such loss, damage or
expense is caused by the willful misconduct or gross negligence of the
Provider or any of its Affiliates. In no event shall any Provider or its
Affiliates be liable for special, indirect, punitive, incidental or
consequential losses, damages or expenses, including, without limitation,
loss of profits.
9. Indemnification. The Recipient of each Service shall indemnify and
hold harmless the Provider of such Service in accordance with Article XIII of
the Transaction Agreement in respect of any Damages incurred or suffered by
the Provider arising out of the provision of or failure to provide such
Service unless the Provider shall have been finally determined by a court of
competent jurisdiction to have been guilty of willful misconduct or gross
negligence with respect thereto.
10. Term, Termination and Effect of Termination.
(a) This Interim Services Agreement shall become effective on the date
hereof and, unless sooner terminated pursuant to the terms hereof, shall
continue in effect until:
(i) in the case of each Service as to which the Communications
Systems Business Unit is the Recipient, the date that is [one year] from the
date hereof unless such term is extended for up to an additional six (6)
months by the Communications Systems Business Unit giving written notice to
the Provider of a Service of its election to extend the term of this Interim
Services Agreement with respect to such Service (and all related Services)
not less than sixty (60) days prior to the expiration of the initial one year
term;
(ii) in the case of Services to be provided to LM in support of
the Internal Revenue Service's audit of the tax returns of Loral Corporation,
the date upon which such audit is completed;
(iii) in the case of Services to be provided by either party to
the other with respect to the preparation and submission to the U.S.
Government of indirect rates and negotiations with the U.S. Government with
respect to such submissions, until the date such negotiations are concluded;
and
(iv) in all other cases, December 31, 1997.
(b) Each Recipient of a Service will use its reasonable commercial
efforts to obtain or develop alternative sources for such Service to
eliminate its dependency upon the Provider for such Service (and all related
Services) as soon as practicable and, thereupon, to terminate such Service
(and all related Services) pursuant to this Section 10(b). The Recipient of
any Service may terminate any Service (provided that related Services may not
be terminated in part) prior to the expiration of the term thereof by
providing to the Provider thereof written notice of termination not less than
sixty (60) days before the date of such earlier termination and the provision
of such Service shall terminate at the end of the period of notice.
(c) The Provider of any Service may terminate any Service (provided
that related Services may not be terminated in part) prior to the expiration
of the term thereof if the Provider discontinues the provision of such
Service to its own operations by providing to the Recipient thereof not less
than sixty (60) days prior written notice of termination and the provision of
such Service shall terminate at the end of the period of notice.
(d) In the case of any employee benefit administration Service to be
provided by LM or its Affiliates to L-3 or its Affiliates with respect to an
employee benefit plan or arrangement of L-3 or its Affiliates (each a
"Duplicate Plan") that is modeled on an Employee Plan or Benefit Arrangement
of a Lockheed Xxxxxx Company (each a "Model Plan"), the Provider may
terminate any such employee benefit administration Service if, after the date
hereof, (i) the Duplicate Plan is amended and the Model Plan is not so
amended or (ii) the Model Plan is amended and the Duplicate Plan is not
simultaneously so amended, provided that LM has given L-3 at least [sixty
(60)] days prior written notice of the amendment or proposed amendment of the
Model Plan and, in either case, the effect is to increase the burden on the
Provider in continuing to provide the Service.
(e) This Interim Services Agreement may be terminated in whole or in
part (provided that related Services may not be terminated in part) as
follows:
(i) by either party if the other party is in material breach of any
provision of this Interim Services Agreement, provided that the party seeking
to terminate this Interim Services Agreement for breach shall notify the
other party of such breach and provide such other party with thirty (30) days
to cure such breach;
(ii) by either party if its provision or receipt of any such
Service is prohibited by Law or subjects it to increased regulation by any
Governmental Authority;
(iii) by the Provider if it is required to obtain any license or
permit not otherwise required of the Provider; or
(iv) by the Provider if the Recipient ceases to be an Affiliate of
LM or L-3.
(f) Other than the parties' rights and obligations under Sections 4(b)
and 5(b) hereof which will survive any termination of this Interim Services
Agreement, whether in whole or in part, (i) neither the Provider nor the
Recipient of any terminated Service shall have any rights or obligations
hereunder with respect to any terminated Service after the effective date of
such termination and (ii) no party shall have any rights or obligations
hereunder after the termination of this Interim Services Agreement with
respect to post-termination periods.
11. No Agency. Nothing in this Interim Services Agreement shall be
deemed in any way or for any purpose to constitute either party an agent of
the other party in the conduct of such party's business.
12. Sole Agreement. This Interim Services Agreement, including the
Schedules attached hereto, represents the sole agreement of the parties with
respect to the Services, and no waiver, alteration, or modification of any
provision hereof shall be effective unless in writing and signed by
authorized representatives of both LM and L-3. No provision in the Schedules
shall be of any force and effect to the extent that it is inconsistent with
the express terms of this Interim Services Agreement.
13. Notices.
(a) Any notice, request, instruction or other communication by a
party concerning the administration of a Services to be provided under this
Interim Services Agreement shall be directed to the individual designated on
the applicable Schedule as the "Individual Responsible" with respect to the
other party.
(b) Any notice required or permitted to be given under this
Interim Services Agreement (other than notices specified in Section 13(a))
shall be in writing and shall be deemed to be given upon delivery in person
or upon being deposited in the mail, postage prepaid, for mailing by
certified or registered mail or upon being deposited with an overnight
courier, charges prepaid, as follows:
If to LM: Lockheed Xxxxxx Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy (000) 000-0000
with a copy to:
Lockheed Xxxxxx Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Xx.
Telecopy (000) 000-0000
if to Newco or L-3:
L-3 Communications Holdings, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. XxXxxxx
Telecopy: (000) 000-0000
with copies to:
L-3 Communications Holdings, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
The place for notice may be changed by notice sent in accordance with this
Section 13.
14. Successors and Assigns. This Interim Services Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that this Interim Services
Agreement may not be assigned in whole or in part (except in the case of an
assignment to an Affiliate of LM or L-3 that remains an Affiliate of such
party for the remainder of the term hereof) without the prior written consent
of the other party hereto.
15. Third Party Beneficiaries. No provision of this Interim Services
Agreement shall create any third party beneficiary rights in any Person.
16. Governing Law. This Interim Services Agreement shall be construed
in accordance with and governed by the law of the State of New York.
17. Counterparts; Effectiveness. This Interim Services Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Interim Services Agreement shall be effective as of
April 30, 1997.
IN WITNESS WHEREOF, the parties hereto have executed this Interim
Services Agreement on the dates indicated below but as of the day and year
first above written.
LOCKHEED XXXXXX CORPORATION
Date:
BY:__________________________(SEAL)
L-3 COMMUNICATIONS HOLDINGS, INC.
Date:
BY:__________________________(SEAL)
L-3 COMMUNICATIONS CORPORATION
Date:
BY:__________________________(SEAL)
