Exhibit 10.2


 


Execution
Version


 


 


TRANSITIONAL SERVICES AGREEMENT


 


This Transitional Services Agreement (“TSA”), made as of the 17th
day of September 2004, (“Effective Date”) is by and between DYNAMIC
MATERIALS CORPORATION, a Delaware corporation (“Seller”), and
Aerojet-General Corporation (“Buyer”).


 


WITNESSETH


 


WHEREAS,
Seller and Buyer have entered into an Agreement, dated as of September 17,
2004 (the “Agreement”)
and certain Ancillary Agreements related to the Business, and the Business uses
certain services provided by Seller;


 


WHEREAS, Article 6.4
of the Agreement provides that Seller and Buyer shall execute and deliver the
TSA; and


 


WHEREAS,
Buyer desires to obtain the use of certain services for the purpose of enabling
Buyer to manage an orderly transition in its operation of the Business.


 


NOW, THEREFORE,
in consideration of the mutual covenants and agreements contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:


 


1.                                      DEFINITIONS


 


1.1                               “Transitional
Services” shall include the services set forth in Schedule 1.1 to be
performed by Seller for Buyer.


 


Capitalized terms not
expressly defined in this TSA shall have the meanings ascribed to them in the
Agreement.


 


2.                                      PROVISION
OF SERVICES


 


2.1                               Subject
to Article 7 hereof, Seller shall provide, or cause to be provided, to
Buyer such Transitional Services as are requested by Buyer for a period of up
to 180 days after the Closing Date (the “Term”). 
It is understood by the parties that the quantity of services to be
provided under this Section 2.1 shall be substantially
consistent with Seller’s recent historical practice.  Notwithstanding the foregoing, Seller shall use reasonable
commercial efforts to maintain sufficient resources to perform Transitional
Services in accordance with the terms of this TSA.


 


2.2                               The
parties shall use reasonable commercial efforts to cooperate with each other in
all matters relating to the provision and receipt of Transitional
Services.  Such cooperation shall
include exchanging information, providing electronic access to data systems
used in connection with Transitional Services, and obtaining all consents,
licenses, sublicenses or approvals necessary or desirable to permit each party
to perform its obligations hereunder. 
The costs of obtaining such consents, licenses, sublicenses or approvals
shall be borne by Buyer.


 


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3.                                      PRICING,
BILLING AND PAYMENT


 


3.1                               All
Transitional Services shall be provided by Seller and paid for by Buyer at
Seller’s cost without profit in accordance with the same allocation formula(s)
and allocation base(s) used by Seller immediately prior to the Closing Date.


 


3.2                               Charges
for Transitional Services shall be billed monthly by Seller and shall be
payable by Buyer on the 30th day of the month following the month in
which such services are rendered.


 


3.3                               As
needed from time to time during the period during which Transitional Services
are provided, and upon termination of the provision of any Transitional
Service, Seller will provide Buyer, upon request, with a copy of all records
(in any format, electronic or otherwise) related to the provision of
Transitional Services under this TSA, including, but not limited to, billing
and other Business-related records. 
Seller may retain archival copies of such records.


 


4.                                      WARRANTY,
LIABILITY AND INDEMNITY


 


4.1                               Seller
shall provide Transitional Services to Buyer in a manner substantially
consistent with the manner they have heretofore been provided to the Business
while it was operated by Seller.  Seller
makes no other representations or warranties, express or implied, with respect
to the Transition Services to be provided to Buyer hereunder.  Except as otherwise provided herein, Seller
expressly disclaims any warranties of merchantability, quality, quantity,
suitability or fitness for any particular purpose with respect to the services
to be provided to Buyer hereunder.


 


4.2                               NOTWITHSTANDING
ANYTHING CONTAINED IN THIS TSA TO THE CONTRARY, IN NO EVENT SHALL EITHER PARTY
BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS OR LOST REVENUES) OF THE OTHER
PARTY, ITS SUCCESSORS, ASSIGNS OR THEIR RESPECTIVE AFFILIATES, AS A RESULT OF
OR ARISING FROM THIS TSA, REGARDLESS OF WHETHER SUCH LIABILITY ARISES IN TORT,
CONTRACT, BREACH OF WARRANTY, INDEMNIFICATION OR OTHERWISE.


 


4.3                               Seller’s
maximum liability to Buyer for breach of this TSA or otherwise with respect to
Transitional Services is a refund of the price paid by Buyer for the particular
service


 


4.4                               Each
party agrees to indemnify and hold the other party harmless from any damages,
loss, cost or liability (including legal fees and expenses and the cost of
enforcing this indemnity) arising out of or resulting from a third-party claim
regarding the first party’s performance, purported performance or
nonperformance of this TSA.


 


5.                                      FORCE
MAJEURE


 


5.1                               Neither
party  shall
be responsible for failure or delay of any Transitional Service, nor be
responsible for failure or delay in receiving such service, if caused by an act
of God or


 


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public enemy, war, government acts, regulations or orders, fire, flood,
embargo, quarantine, epidemic, labor stoppages or other disruptions, accident,
unusually severe weather or other cause similar or dissimilar, beyond the
control of the defaulting party.


 


6.                                      PROPRIETARY
INFORMATION AND RIGHTS


 


6.1                               Each
party acknowledges that the other possesses and will continue to possess,
information that has been created, discovered or developed by them and/or in
which property rights have been assigned or otherwise conveyed to them, which
information has commercial value and is not in the public domain.  The proprietary information of each party
will be and remain the sole property of such party and its assigns.  Each party shall use the same degree of care
that it normally uses to protect its own proprietary information to prevent the
disclosure to third parties of proprietary or confidential information of the
other party, regardless of whether the information is designated as
confidential or proprietary.  Neither
party shall make any use of the other party’s confidential or proprietary
information except as contemplated or required by the terms of this TSA.  Notwithstanding the foregoing, this
Article shall not apply to an information that a party can demonstrate:
(a) was, at the time of disclosure to it, in the public domain through no fault
of such party; (b) was received after disclosure to it from a third party who
had a lawful right to disclose such information to it; or (c) was independently
developed by the receiving party.


 


7.                                      TERM
AND TERMINATION


 


7.1.                              The term of this TSA
shall commence as of the Effective Date hereof and shall continue for 180 days.


 


7.2                                 Upon 30 days’ written
notice, either party may terminate this TSA with respect to any Transitional
Service, or at its option, suspend performance of its obligations with respect
thereto, in either case in the event of the failure of Buyer to pay any invoice
within 45 days of the receipt of such invoice or upon any other material breach
by Buyer of this TSA with respect to such service, unless Buyer is disputing
the invoice in good faith or Buyer shall have paid the invoice or cured such
breach within the 30-day notice period.


 


7.3                                 Any one or more of the
Transitional Services may be terminated (a) upon mutual agreement of Buyer and
Seller or (b) at Buyer’s option upon 30 days’ advance notice to Seller.  Buyer will pay Seller the fees and costs of
any terminated Transitional Service up until the effective date of termination.


 


7.4                                 Notwithstanding
anything to the contrary contained herein, this TSA may be terminated, in whole
or in part, at any time:


 


(i)                                     by
the mutual consent of Buyer and Seller;


 


(ii)                                  by Buyer in the
event of any material breach or default by Seller of any of Seller’s
obligations under this Agreement and the failure of Seller to cure, or to take
substantial steps towards the curing of, such breach or default


 


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within thirty (30) days after receipt of written notice from Buyer
requesting such breach or default to be cured.


 


7.5                                 Following any
termination of this TSA, each party shall cooperate in good faith with the
other to transfer and/or retain all records, prepare and file tax returns and
take all other actions necessary to provide Seller and Buyer and their
respective successors and assigns with sufficient information in the form requested
by Seller or Buyer, or their respective successors and assigns, as the case may
be, to make alternative service arrangements substantially consistent with
those contemplated by this TSA.


 


8.                                      NO
IMPLIED ASSIGNMENTS OR LICENSES


 


8.1                               Nothing
in this TSA is to be construed as an assignment or grant of any right, title or
interest in any trademark, copyright, design or trade dress, patent right or
other intellectual or industrial property right.


 


9.                                      RELATIONSHIP
OF PARTIES


 


9.1                               The
parties are independent contractors under this TSA.  Except as expressly set forth herein, neither party has the
authority to, and each party agrees that it shall not, directly or indirectly
contract any obligations of any kind in the name of or chargeable against the
other party without such party’s prior written consent.  No partnership, joint venture, alliance,
fiduciary or any relationship other than that of independent contractors is
created hereby, expressly or by implication.


 


9.2                               All
employees and representatives of Seller or its Affiliates providing Services to
Buyer under this Agreement shall be deemed for purposes of all compensation and
employee benefits to be employees or representatives solely of Seller or its
Affiliates and not to be employees or representatives of Buyer or its
Affiliates.  In performing their
respective duties hereunder, all such employees and representatives of Seller
or its Affiliates shall be under the direction, control and supervision of
Seller or its Affiliates (and not of Buyer or its Affiliates) and Seller or its
Affiliates, as the case may be, shall have the sole right to exercise all
authority with respect to the employment (including termination of employment),
assignment and compensation of such employees and representatives. Seller shall
have sole responsibility for compliance with all laws relating to the
employer/employee relationship between Seller and its employees providing the
Services, including, but not limited to, federal, state and/or local laws on
hours of labor, wages, worker’s compensation, unemployment compensation,
insurance and social security benefits.


 


10.                               ASSIGNMENT
AND DELEGATION; COMPLIANCE WITH LAWS


 


10.1                        Neither
party to this TSA may assign any of its rights or obligations under this TSA
without the prior written consent of the other party hereto.


 


10.2                        Each
party will, with respect to its obligations and performance hereunder, comply
with all applicable requirements of federal, state and local laws, rules and
regulations, including without limitation import and export control,
environmental and occupational


 


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safety requirements. Buyer shall be responsible for (a) compliance with
all laws and governmental regulations affecting its business and (b) any use
Buyer may make of the Transitional Services to assist it in complying with such
laws and governmental regulations. 
While Seller shall not have any responsibility for Buyer’s compliance
with the laws and regulations referred to above, Seller agrees to use
reasonable commercial efforts to provide the Services in a manner that complies
with applicable laws and regulations.


 


11.                               NOTICES


 


11.1                        All
notices or other communications hereunder shall be deemed to have been duly
given and made if in writing and (a) if served by personal delivery upon the
party for whom it is intended, on the day so delivered; (b) if mailed by
registered or certified mail, return receipt requested, on the third business
day following such mailing; or (c) if deposited for delivery by a reputable courier
service, on the business day following deposit with such courier to the person
at the address set forth below, or such other address as may be designated in
writing hereafter, in the same manner, by such person:


 


	
  To Seller:

  	
  President

  
	
   

  	
  Dynamic Materials Corporation

  
	
   

  	
  5405 Spine Road

  
	
   

  	
  Boulder, CO 80301

  
	
   

  	
  Attention:  Yvon Cariou

  
	
   

  	
  Fax Number (303) 604-1897

  
	
   

  	
   

  
	
  With a copy to:

  	
  Chief Financial Officer

  
	
   

  	
  Dynamic Materials Corporation

  
	
   

  	
  5405 Spine Road

  
	
   

  	
  Boulder, CO 80301

  
	
   

  	
  Attention:  Richard Santa

  
	
   

  	
  Fax Number (303) 604-1897

  
	
   

  	
   

  
	
  To Buyer:

  	
  Aerojet General Corporation

  
	
   

  	
  P. O. Box 1036

  
	
   

  	
  Camden, AR 71711-1036

  
	
   

  	
  Attention: Robert Shenton

  
	
   

  	
  Vice President, Operations

  
	
   

  	
  Fax Number: (870) 574-3528

  
	
   

  	
   

  
	
  With a copy to:

  	
  Aerojet General Corporation

  
	
   

  	
  P. O. Box 13222

  
	
   

  	
  Sacramento, CA 95813-6000

  
	
   

  	
  Attention: Brian E. Sweeney

  
	
   

  	
  Vice President, Legal and Contracts

  
	
   

  	
  Fax Number: (916) 351-8610

  



 


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12.                               ENTIRE
AGREEMENT


 


12.1                        This
TSA, including the Schedules, together with the Agreement and Ancillary
Agreements, contains the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters.


 


13.                               PARTIES
IN INTEREST


 


13.1                        This TSA
shall inure to the benefit of and be binding upon the parties and their
respective successors and permitted assigns. 
Nothing in this TSA, express or implied, is intended to confer upon any
Person other than Seller or Buyer or their respective successors or permitted
assigns any rights or remedies under or by reason of this TSA.


 


14.                               GOVERNING
LAW


 


14.1                        This TSA
shall be governed by, and construed in accordance with, the laws of the State
of California without regard to conflicts of laws doctrines.  Any legal action, suit or proceeding arising
out of or relating to this TSA or the transactions contemplated hereby shall be
instituted in a Federal or state court sitting in northern California, which
shall be the exclusive jurisdiction and venue of said legal proceeding and each
Party hereto waives any objection that such Party may now or hereafter have to
the laying of venue of any such action, suit or proceeding, and irrevocably
submits to the jurisdiction of any such court in any such action suit or
proceeding.


 


15.                               AMENDMENT;
WAIVER


 


15.1                        Any
provision of this TSA may be amended or waived if, and only if, such amendment
or waiver is in writing and signed, in the case of an amendment, by Seller and
Buyer, or in the case of a waiver, by the party against whom the waiver is to
be effective.  No failure or delay by
any party exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other further exercise thereof or the exercise of any other right, power or
privilege.


 


16.                               SURVIVAL


 


16.1                        The
provisions of Sections 4, 6, and 7.5 shall survive the termination or
expiration of this TSA unless otherwise agreed to in writing by both parties.


 


SIGNATURES APPEAR ON THE NEXT PAGE


 


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IN WITNESS WHEREOF,
the parties hereto have caused this TSA to be executed and delivered by their
duly authorized representatives as of the date first above written.


 


	
   

  	
  DYNAMIC MATERIALS CORPORATION,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AEROJET-GENERAL CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


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SCHEDULE 1.1


 


TRANSITIONAL SERVICES


 


 


•                  Maintain
existing local and long-distance telephone service, including maintenance of
DMC-owned switch (Definity 11 with two cabinets), desktop equipment and
Definity Audix voice mail.


 


•                  Maintain
existing data lines between Spin Forge’s El Segundo, CA site and DMC’s data
center in Boulder, CO that provide Spin Forge employees with access to e-mail
services, the Internet and the Visual Manufacturing ERP System in use at Spin
Forge.


 


•                  Provide
technical user support for e-mail, Internet, Visual Manufacturing and Microsoft
Office applications and related database management services.


 


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