Document:

exv10w21

Exhibit 10.21

DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT

     This Director and Officer Indemnification Agreement, dated as of                     , 200___ (this
“Agreement”), is made by and between GenCorp Inc., an Ohio corporation (the “Company”), and
                                         (the “Indemnitee”), a director and/or officer of the Company.

RECITALS

          A. The Indemnitee is currently serving as a director and/or officer of the Company, and the
Company desires that the Indemnitee continue serving in such capacity. The Indemnitee is willing,
subject to certain conditions, including the execution and performance of this Agreement by the
Company, to continue serving in such capacity.

          B. In addition to the indemnification to which the Indemnitee is entitled under the Amended
Code of Regulations of the Company (the “Regulations”), the Company has obtained, at its sole
expense, insurance protecting the Company and its officers and directors, including the Indemnitee,
against certain losses arising out of any threatened, pending or completed action, suit, or
proceeding to which such persons may be made or are threatened to be made parties.

          NOW, THEREFORE, in order to induce the Indemnitee to serve or continue to serve in his current
capacity, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Indemnitee agree as follows:

     1. CONTINUED SERVICE

          The Indemnitee shall serve or continue to serve as a director and/or officer of the Company so
long as he is duly elected in accordance with the Regulations or until he resigns in writing or is
removed from office in accordance with applicable law.

     2. INITIAL INDEMNITY

          (a) The Company shall indemnify the Indemnitee if or when he is a party or is threatened to be
made a party to any threatened, pending or completed action, suit, proceeding or claim, whether
civil, criminal, administrative or investigative (other than an action by or in the right of the
Company), by reason of the fact that he is or was a director and/or officer of the Company or is or
was serving at the request of the Company as a director, trustee, officer, employee, member,
manager or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited
liability company, or a partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or omitted in any such capacity, against any and all

 

 

costs, charges, expenses (including fees and expenses of attorneys or others; all such costs,
charges and expenses being herein jointly referred to as “Expenses”), judgments, fines and amounts
paid in settlement actually incurred by the Indemnitee in connection therewith, including any
appeal of or from any judgment or decision, (i) in the case of an Indemnitee that is a director of
the Company, unless it is proved by clear and convincing evidence in a court of competent
jurisdiction that the Indemnitee’s action or failure to act involved an act or omission undertaken
with deliberate intent to cause injury to the Company or undertaken with reckless disregard for the
best interests of the Company and (ii) in the case of an Indemnitee that is an officer of the
Company but not a director of the Company, if the Indemnitee acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of the Company. In
addition, with respect to any criminal action or proceeding, indemnification hereunder shall be
made only if the Indemnitee had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, proceeding or claim by judgment, order, settlement or conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption
that the Indemnitee did not satisfy the foregoing applicable standard of conduct.

          (b) The Company shall indemnify the Indemnitee if or when he is a party or is threatened to be
made a party, to any threatened, pending or completed action, suit, proceeding or claim by or in
the right of the Company to procure a judgment in its favor, by reason of the fact that the
Indemnitee is or was a director and/or officer of the Company or is or was serving at the request
of the Company as a director, trustee, officer, employee, member, manager or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have
been taken or omitted in any such capacity, against any and all Expenses, judgments, fines and
amounts paid in settlement actually incurred by the Indemnitee in connection therewith, including
any appeal of or from any judgment or decision, (i) in the case of an Indemnitee that is a director
of the Company, unless it is proved by clear and convincing evidence in a court of competent
jurisdiction that the Indemnitee’s action or failure to act involved an act or omission undertaken
with deliberate intent to cause injury to the Company or undertaken with reckless disregard for the
best interests of the Company and (ii) in the case of an Indemnitee that is an officer of the
Company but not a director of the Company, if the Indemnitee acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of the Company.
Notwithstanding the foregoing provisions of this Section 2(b), no indemnification pursuant to this
Section 2(b) shall be made (A) in the case of an Indemnitee that is an officer but not a director
of the Company, in respect of any claim, issue or matter as to which the Indemnitee is adjudged to
be liable for negligence or misconduct in the performance of his duty to the Company unless, and
only to the extent that, the court of common pleas or other court in which such action, suit,
proceeding or claim was brought determines, notwithstanding any adjudication of liability, that in
view of all the circumstances of the case the Indemnitee is fairly and reasonably entitled to
indemnity for such Expenses, judgments, fines and amounts paid in settlement as such court of
common pleas or other court shall deem proper, or (B) in the case of an Indemnitee that is a
director of the Company, in respect of any action, suit, proceeding or claim in which

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the only liability asserted against the Indemnitee is pursuant to Section 1701.95 of the Ohio
Revised Code (the “ORC”).

          (c) Any indemnification under Section 2(a) or 2(b) hereof (unless ordered by the court in
which such action, suit, proceeding or claim was brought) shall be made by the Company only upon a
determination relating to the specific case that indemnification of the Indemnitee is proper in the
circumstances because he has met the applicable standard of conduct set forth in Section 2(a) or
2(b) hereof. Prior to a Change in Control (as defined in Section 5 hereof), such determination
shall be made (i) by the Board of Directors of the Company (the “Board”) by a majority vote or
consent of a quorum consisting of directors who were not and are not parties to or threatened with
such action, suit, proceeding or claim (“Disinterested Directors”) or (ii) if such a quorum of
Disinterested Directors is not available or if a majority of such quorum so directs, by Independent
Counsel in a written opinion to the Board (with a copy to the Indemnitee; provided,
however, that if the Indemnitee is no longer serving as a director of the Company or as an
officer of the Company at the time that such action, suit, proceeding or claim is initiated, then
such determination shall be made by Independent Counsel in a written opinion to the Board (with a
copy to the Indemnitee), unless the Indemnitee shall have elected in writing to have such
determination made by a majority vote or consent of a quorum of Disinterested Directors, in which
case such determination shall be made by such quorum of Disinterested Directors. Following a
Change in Control, such determination shall be made by Independent Counsel in a written opinion to
the Board (with a copy to Indemnitee), unless the Indemnitee shall have elected in writing to have
such determination made by a majority vote or consent of a quorum consisting of Disinterested
Directors, in which case such determination shall be made by such quorum of Disinterested
Directors. For purposes of this Agreement, the term “Independent Counsel” means nationally
recognized legal counsel designated for such purpose by the Indemnitee and reasonably acceptable to
a majority of the Continuing Directors (as defined in Section 5 hereof), even if less than a
quorum, which shall not be an attorney, or a firm having associated with it an attorney, who has
been retained by or who has performed services for (x) the Company, (y) any person who may be
indemnified in such action, suit, proceeding or claim, or (z) any holder of 5% or more of the
shares of any class of voting stock of the Company.

          (d) To the extent that the Indemnitee has been successful on the merits or otherwise,
including the dismissal of an action without prejudice, in defense of any action, suit, proceeding
or claim referred to in Section 2(a) or 2(b) hereof, or in defense of any claim, issue or matter
therein, he shall be indemnified against Expenses actually incurred by him in connection therewith.

          (e) Expenses actually incurred by the Indemnitee in defending any action, suit, proceeding or
claim referred to in Section 2(a) or 2(b) hereof, or in defense of any claim, issue or matter
therein, shall be paid by the Company as they are incurred in advance of the final disposition of
such action, suit, proceeding or claim under the procedure set forth in Section 4(b) hereof.

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          (f) For purposes of this Agreement, references to “other enterprises” shall include employee
benefit plans; references to “fines” shall include any excise taxes assessed on the Indemnitee with
respect to any employee benefit plan; references to “serving at the request of the Company” shall
include any service as a director, officer, employee, member, manager or agent of the Company which
imposes duties on, or involves services by, the Indemnitee with respect to an employee benefit
plan, its participants or beneficiaries; references to the masculine shall include the feminine;
references to the singular shall include the plural and vice versa; and the word including is used
by way of illustration only and not by way of limitation.

          (g) No amendment to the Amended Articles of Incorporation of the Company (the “Articles”) or
the Regulations may deny, diminish or encumber the Indemnitee’s rights to indemnity pursuant to the
Regulations, the ORC or any other applicable law as applied to any act or failure to act occurring
in whole or in part prior to the date (the “Effective Date”) upon which the amendment was approved
by the shareholders of the Company. In the event that the Company shall purport to adopt any
amendment to its Articles or Regulations or take any other action the effect of which is to deny,
diminish or encumber the Indemnitee’s rights to indemnity pursuant to the Articles, the
Regulations, the ORC or any such other law, such amendment shall apply only to acts or failures to
act occurring entirely after the Effective Date thereof.

     3. ADDITIONAL INDEMNIFICATION

          (a) Pursuant to Section 1701.13(E)(6) of the ORC, without limiting any right which the
Indemnitee may have pursuant to Section 2 hereof or any other provision of this Agreement or the
Articles, the Regulations, the ORC, any policy of insurance or otherwise, but subject to any
limitation on the maximum permissible indemnity which may exist under applicable law at the time of
any request for indemnity hereunder and subject to the following provisions of this Section 3, the
Company shall indemnify the Indemnitee against any amount which he is or becomes obligated to pay
relating to or arising out of any claim made against him because of any act, failure to act or
neglect or breach of duty, including any actual or alleged error, misstatement or misleading
statement, that he commits, suffers, permits or acquiesces in while acting in his capacity as a
director of the Company. The payments which the Company is obligated to make pursuant to this
Section 3 shall include any and all Expenses, judgments, fines and amounts paid in settlement,
actually incurred by the Indemnitee in connection therewith including any appeal of or from any
judgment or decision; provided, however, that the Company shall not be obligated
under this Section 3 to make any payment in connection with any claim against the Indemnitee:

     (i) to the extent of any fine or similar governmental imposition which the
Company is prohibited by applicable law from paying (as determined by final order of
a court of competent jurisdiction); or

     (ii) to the extent based upon or attributable to the Indemnitee having actually
realized a personal profit to which he was not legally entitled, including profit
(A) from the purchase and sale by the Indemnitee

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of equity securities of the Company which are recoverable by the Company
pursuant to Section 16(b) of the Securities Exchange Act of 1934 and (B) arising
from transactions in publicly traded securities of the Company which were effected
by the Indemnitee in violation of Section 10(b) of the Securities Exchange Act of
1934 or Rule 10b-5 promulgated thereunder.

          (b) A determination as to whether the Indemnitee shall be entitled to indemnification under
this Section 3 shall be made in accordance with Section 4(a) hereof. Expenses incurred by the
Indemnitee in defending any claim to which this Section 3 applies shall be paid by the Company as
they are actually and reasonably incurred in advance of the final disposition of such claim under
the procedure set forth in Section 4(b) hereof.

     4. CERTAIN PROCEDURES RELATING TO INDEMNIFICATION

          (a) For purposes of pursuing his rights to indemnification under Section 3 hereof, the
Indemnitee shall (i) submit to the Board a sworn statement of request for indemnification
substantially in the form of Exhibit 1 attached hereto and made a part hereof (the “Indemnification
Statement”) averring that he is entitled to indemnification hereunder and (ii) present to the
Company evidence in reasonable detail of all amounts for which indemnification is requested.
Submission of an Indemnification Statement to the Board shall create a presumption that the
Indemnitee is entitled to indemnification hereunder, and the Company shall, within 30 calendar days
after submission of the Indemnification Statement, make the payments requested in the
Indemnification Statement to or for the benefit of the Indemnitee, unless (A) within such
30-calendar-day period by the vote or consent of a majority of the Continuing Directors, even if
less than a quorum, shall determine that the Indemnitee is not entitled to indemnification under
Section 3 hereof, (B) such vote shall be based upon clear and convincing evidence sufficient to
rebut the foregoing presumption, and (C) the Company shall notify the Indemnitee within such period
of such vote, which notice shall disclose with particularity the evidence upon which the vote is
based. The foregoing notice shall be sworn to by each Continuing Director who participated in the
vote and voted to deny indemnification. The provisions of this Section 4(a) are intended to be
procedural only and shall not affect the right of Indemnitee to indemnification under Section 3
hereof so long as Indemnitee follows the prescribed procedure, and any determination by a majority
of the Continuing Directors that the Indemnitee is not entitled to indemnification and any failure
to make the payments requested in the Indemnification Statement shall be subject to de novo
judicial review by any court of competent jurisdiction.

          (b) For purposes of obtaining payments of Expenses in advance of final disposition pursuant to
Section 2(e) hereof or the last sentence of Section 3(b) hereof, the Indemnitee shall submit to the
Company a sworn request for advancement of Expenses substantially in the form of Exhibit 2 attached
hereto and made a part hereof (the “Undertaking”), averring that he has incurred or in good faith
expects to incur actual Expenses in defending an action, suit, proceeding or claim referred to in
Section 2(a) or 2(b) hereof or any claim referred to in Section 3 hereof, or pursuant to

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Section 10 hereof. Unless determined in a final order of a court of competent jurisdiction to
be prohibited from payment at the time of the Indemnitee’s act or omission at issue, or unless the
only liability asserted against the Indemnitee in the subject action, suit, proceeding or claim is
pursuant to ORC Section 1701.95, the Indemnitee shall be eligible to execute Part A of the
Undertaking by which he undertakes to: (i) (A) in the case of an Indemnitee that is a director of
the Company, repay such amount if it is proved by clear and convincing evidence in a court of
competent jurisdiction that the Indemnitee’s action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury to the Company or undertaken with reckless
disregard for the best interests of the Company and (B) in the case of an Indemnitee that is an
officer of the Company but not a director of the Company, (1) repay such amount if (x) with respect
to any action, suit, proceeding or claim (other than an action by or in the right of the Company)
brought against the Indemnitee by reason of the fact that the Indemnitee is or was an officer of
the Company for which the Indemnitee has received advancement of Expenses, it is determined that
the Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Company or (y) with respect to any action, suit,
proceeding or claim brought against the Indemnitee by or in the right of the Company for which the
Indemnitee has received advancement of Expenses, the Indemnitee is adjudged to be liable for
negligence or for misconduct in the performance of his duty to the Company and the court has not
determined that Indemnitee is entitled to indemnification and (ii) reasonably cooperate, at the
Company’s sole cost and expense, with the Company concerning the action, suit, proceeding or claim.
In all cases, the Indemnitee shall be eligible to execute Part B of the Undertaking by which he
undertakes to repay such amount if it ultimately is determined by a final order of a court of
competent jurisdiction that he is not entitled to be indemnified by the Company under this
Agreement or otherwise. In the event that the Indemnitee is eligible to and does execute both Part
A and Part B of the Undertaking, the Expenses which are paid by the Company pursuant thereto shall
be required to be repaid by the Indemnitee only if he is required to do so under the terms of both
Part A and Part B of the Undertaking. Upon receipt of the Undertaking, the Company shall
thereafter promptly pay such Expenses of the Indemnitee as are noticed to the Company in reasonable
detail arising out of the matter described in the Undertaking. No security shall be required in
connection with any Undertaking.

     5. LIMITATION ON INDEMNITY

          Notwithstanding anything contained herein to the contrary, (a) the Company shall not be
required hereby to indemnify the Indemnitee with respect to any action, suit, proceeding or claim
that was initiated by the Indemnitee prior to a Change in Control, unless the initiation by the
Indemnitee of such action, suit, proceeding or claim shall have been approved in advance by the
vote or consent of the Continuing Directors and (b) the Company shall not be required hereby to
indemnify the Indemnitee with respect to any action, suit, proceeding or claim that was initiated
by the Indemnitee following a Change in Control unless the initiation by the Indemnitee of such
action, suit, proceeding or claim was (i) to enforce any rights to indemnification arising
hereunder but relates to any action, suit, proceeding or claim initiated by or on behalf of the

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Company or any third party prior to a Change in Control, (ii) authorized by an agreement other
than this Agreement entered into prior to a Change in Control to which the Company is a party
whether heretofore or hereafter entered, or (iii) otherwise ordered by the court in which the suit
was brought. For purposes of this Agreement, the term “Continuing Director” means a director whose
election or nomination for election to the Board was approved by a majority of the members of the
Board in office at the time of such election or nomination (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as a nominee for
director, without objection to such nomination); provided, however, that an individual shall not be
a Continuing Director if such individual’s election or appointment to the Board occurs as a result
of an actual or threatened election contest (as described in Rule 14a-12(c) of the Securities
Exchange Act) with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the Board. For purposes
of this Agreement, the term “Change in Control” means the earliest to occur of the following:

     (a) any “person” or “group” of related persons (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act) is or becomes the beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act), directly or indirectly,
of more than 50% of the total voting power of the outstanding capital stock of the Company
that is entitled generally to vote in the election of directors of the Company;

     (b) the first day on which a majority of the members of the Board are not Continuing
Directors;

     (c) the sale, lease, transfer, conveyance or other disposition, in one or a series of
related transactions, of all or substantially all of the assets of the Company and its
subsidiaries taken as a whole to any “person” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act); or

     (d) the adoption by the stockholders of the Company of a plan or proposal for the
liquidation or dissolution of the Company.

     6. SUBROGATION; DUPLICATION OF PAYMENTS

          (a) In the event of payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring suit to enforce
such rights; provided, however, that such subrogation shall be subject to the
Company executing an instrument in writing satisfactory to the Indemnitee in his discretion under
which the Company agrees to fully indemnify, defend and hold harmless the Indemnitee from any
Expense or other liability that may arise therein or therefrom.

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          (b) The Company shall not be liable under this Agreement to make any payment in connection
with any claim made against Indemnitee to the extent Indemnitee has actually received payment
(under any insurance policy, the Regulations or otherwise) of the amounts otherwise payable
hereunder without any reservation of rights or other claim for potential disgorgement thereof, as
determined by the Indemnitee in good faith.

     7. DEFENSE OF CLAIMS

          The Company shall be entitled to participate in the defense of any threatened or pending
action, suit, proceeding or claim in respect of which the Indemnitee requests indemnification
hereunder or to assume the defense thereof, with counsel reasonably satisfactory to the Indemnitee;
provided that if the Indemnitee believes, after consultation with counsel selected by the
Indemnitee, that (a) the use of counsel chosen by the Company to represent the Indemnitee would
present such counsel with an actual or potential conflict, (b) the named parties in any such
action, suit, proceeding or claim (including any impleaded parties) include both the Company and
the Indemnitee and the Indemnitee shall conclude that there may be one or more legal defenses
available to him that are different from or in addition to those available to the Company, (c) any
such representation by such counsel would be precluded under the applicable standards of
professional conduct then prevailing or (d) any such representation could be reasonably expected to
increase Indemnitee’s risk of liability, then the Indemnitee shall be entitled to retain separate
counsel (but not more than one law firm plus, if applicable, local counsel in respect of any
particular action, suit, proceeding or claim) at the Company’s expense. The Company shall not,
without the prior written consent of the Indemnitee, effect any settlement of any threatened or
pending action, suit, proceeding or claim to which the Indemnitee is, or could have been, a party
unless such settlement solely involves the payment of money and includes a complete and
unconditional release of the Indemnitee from all liability on any claims that are the subject
matter of such action, suit, proceeding or claim. The Indemnitee shall not unreasonably withhold
its consent to any proposed settlement; provided that the Indemnitee may withhold consent
to any settlement that does not provide a complete and unconditional release of the Indemnitee.

     8. LIABILITY INSURANCE

          For the duration of the Indemnitee’s service as a director and/or officer of the Company, and
thereafter for so long as the Indemnitee shall be subject to any pending or possible action, suit,
proceeding or claim of the type described in Section 2 hereof or any pending or possible claim of
the type described in Section 3 hereof, the Company shall cause to be maintained in effect policies
of directors’ and officers’ liability insurance providing coverage for directors and/or officers of
the Company that is at least substantially comparable in scope and amount to that provided by the
Company’s current policies of directors’ and officers’ liability insurance. The Company shall
provide the Indemnitee with a copy of all directors’ and officers’ liability insurance
applications, binders, policies, declarations, endorsements and other related materials, and shall
provide the Indemnitee with a reasonable opportunity to review and comment

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on the same. Without limiting the generality or effect of the two immediately preceding
sentences, the Company shall not discontinue or significantly reduce the scope or amount of
coverage from one policy period to the next (a) without the prior approval thereof by the vote or
consent of a majority of the Continuing Directors, even if less than a quorum or (b) if at the time
that any such discontinuation or significant reduction in the scope or amount of coverage is
proposed there are no Continuing Directors, without the prior written consent of the Indemnitee.
In all policies of directors’ and officers’ liability insurance obtained by the Company, the
Indemnitee shall be named as an insured in such a manner as to provide the Indemnitee the same
rights and benefits, subject to the same limitations, as are accorded to the Company’s directors
and officers most favorably insured by such policy.

     9. SHAREHOLDER RATIFICATION

          The Company may, at its option, propose at any future meeting of shareholders of the Company
that this Agreement be ratified by the shareholders of the Company; provided,
however, that the Indemnitee’s rights hereunder shall be fully enforceable in accordance
with the terms hereof whether or not such ratification is sought or obtained.

     10. FEES AND EXPENSES OF ENFORCEMENT

          It is the intent of the Company that the Indemnitee not be required to incur the expenses
associated with the enforcement of his rights under this Agreement by litigation or other legal
action because the cost and expense thereof would substantially detract from the benefits intended
to be extended to the Indemnitee hereunder. Accordingly, if it should appear to the Indemnitee
that the Company has failed to comply with any of its obligations under this Agreement or in the
event that the Company or any other person initiates any litigation or other legal action to
declare this Agreement void or unenforceable or to deny to, or to recover from, the Indemnitee the
benefits intended to be provided to the Indemnitee hereunder, the Company irrevocably authorizes
the Indemnitee from time to time to retain counsel of his choice, at the expense of the Company as
hereafter provided, to represent the Indemnitee in connection with the initiation and prosecution
by the Indemnitee of any litigation or other legal action to enforce his rights under this
Agreement or in connection with the defense by the Indemnitee of any litigation or other legal
action initiated by the Company or any other person to declare this Agreement void or unenforceable
or to deny to, or to recover from, the Indemnitee the benefits intended to be provided to the
Indemnitee hereunder. Regardless of the outcome thereof, the Company shall pay and be solely
responsible for any and all costs, charges, and expenses, including fees and expenses of attorneys
and others, reasonably incurred by the Indemnitee in connection with any litigation or other legal
action referred to in the immediately preceding sentence of this Section 10. In addition, the
Company shall pay and be solely responsible for the fees and expenses of any Independent Counsel.

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     11. MERGER OR CONSOLIDATION

          In the event that the Company shall be a constituent corporation in a consolidation, merger,
or other reorganization, the Company, if it shall not be the surviving, resulting, or acquiring
corporation therein, shall require as a condition thereto that the surviving, resulting, or
acquiring corporation agree to assume all of the obligations of the Company hereunder and to
indemnify the Indemnitee to the full extent provided herein. Whether or not the Company is the
resulting, surviving, or acquiring corporation in any such transaction, the Indemnitee shall stand
in the same position under this Agreement with respect to the resulting, surviving, or acquiring
corporation as he would have with respect to the Company if its separate existence had continued.

     12. SEVERABILITY

          (a) The rights to indemnification provided by this Agreement shall not be exclusive of any
other rights of indemnification to which the Indemnitee may be entitled under the Articles, the
Regulations, the ORC or any other statute, any insurance policy, other agreement or vote of
shareholders or directors or otherwise, as to any actions or failures to act by the Indemnitee, and
shall continue after he has ceased to be a director, officer, employee or agent of the Company or
other entity for which his service gives rise to a right hereunder, and shall inure to the benefit
of his heirs, executors and administrators. For the avoidance of doubt, limitations on
indemnification under any such other agreement or right will not affect the parties’ relative
rights hereunder.

          (b) Except as provided in Section 12(a) hereof, the rights to indemnification provided by this
Agreement are personal to Indemnitee and are non-transferable by Indemnitee, and no party other
than the Indemnitee is entitled to indemnification under this Agreement.

          (c) If any provision of this Agreement or the application of any provision hereof to any
person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this
Agreement and the application of such provision to other persons or circumstances shall not be
affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.

     13. SECURITY

          To ensure that the Company’s obligations pursuant to this Agreement can be enforced by
Indemnitee, the Company may, at its option, establish a trust pursuant to which the Company’s
obligations pursuant to this Agreement and other similar agreements can be funded.

     14. NOTICES

          All notices and other communications hereunder shall be in writing and shall be personally
delivered or sent by recognized overnight courier service (a) if to the

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Company, to the then-current principal executive offices of the Company (Attention: General
Counsel) or (b) if to the Indemnitee, to the last known address of Indemnitee as reflected in the
Company’s records. Either party may change its address for the delivery of notices or other
communications hereunder by providing notice to the other party as provided in this Section 14.
All notices shall be effective upon actual delivery by the methods specified in this Section 14.

     15. GOVERNING LAW

          This Agreement shall be governed by and construed in accordance with the laws of the State of
Ohio, without giving effect to the principles of conflict of laws thereof.

     16. MODIFICATION

          This Agreement and the rights and duties of the Indemnitee and the Company hereunder may be
modified only by an instrument in writing signed by both parties hereto.

     17. COUNTERPARTS

          This Agreement may be executed in any number of counterparts and each of such counterparts
will for all purposes be deemed to be an original, and all counterparts together will constitute
but one and the same instrument.

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          IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
above written.

	 	 	 	 	 
	 	GENCORP INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	 	 	 
	 	[Signature of Indemnitee]

 	 

 

 

	 	 	 	 	 

Exhibit 1

INDEMNIFICATION STATEMENT

	 	 	 	 	 	 	 
	STATE OF
                                        

	 	 	)	 	 	 
	 

	 	 	)	 	 	SS
	COUNTY OF
                                      

	 	 	)	 	 	 

          
I,                                    , being first duly sworn, do depose and say as follows:

          1. This Indemnification Statement is submitted pursuant to the Indemnification Agreement,
dated _______ ___, 20___, between GenCorp, Inc., an Ohio corporation (the “Company”), and the
undersigned.

          2. I am requesting indemnification against costs, charges, expenses (which may include fees
and expenses of attorneys and/or others), judgments, fines and amounts paid in settlement
(collectively, “Liabilities”), which have been actually and reasonably incurred by me in connection
with a claim referred to in Section 3 of the aforesaid Indemnification Agreement.

          3. With respect to all matters related to any such claim, I am entitled to be indemnified as
herein contemplated pursuant to the aforesaid Indemnification Agreement.

          4. Without limiting any other rights which I have or may have, I am requesting indemnification
against Liabilities which have or may arise out of

           

 .

	 	 	 
	 
	 	 
	 

	 	 
	 

	 	[Signature of Indemnitee]

          Subscribed and sworn to before me, a Notary Public in and for said County and State, this
___day of ______, 20__.

	 	 	 
	 
	 	 
	 

	 	 
	[Seal]
	 	 

     My commission expires the _____ day of __________, 20__ .

 

 

Exhibit 2

UNDERTAKING

	 	 	 	 	 	 	 
	STATE OF
                                        

	 	 	)	 	 	 
	 

	 	 	)	 	 	SS
	COUNTY OF
                                      

	 	 	)	 	 	 

          I,                                         , being first duly sworn, do depose and say as follows:

          1. This Undertaking is submitted pursuant to the Indemnification Agreement, dated
_______ ___, 20___, between GenCorp, Inc., an Ohio corporation (the “Company”) and the
undersigned.

          2. I am requesting payment of costs, charges and expenses which I have reasonably incurred or
will reasonably incur in defending an action, suit, proceeding or claim, referred to in Section
2(a) or 2(b) or any claim referred to in Section 3, or pursuant to Section 10, of the aforesaid
Indemnification Agreement.

          3. The costs, charges, and expenses for which payment is requested are, in general, all
expenses related to

           

           

 

          4.
 Part A1

          If the Indemnitee is going to be both a director and officer, then use both of the following
paragraphs.

          [Use only this paragraph if the Indemnitee is only a director of the Company] With respect to
any claim for indemnification related to my position as a Director for which I received an
advancement of Expenses, I hereby undertake to (a) repay all amounts paid pursuant hereto if it is
proved by clear and convincing evidence

 

			
	1	 	The Indemnitee shall not be eligible to execute Part A of this
Undertaking if, at the time of the Indemnitee’s act or omission at issue, the
Amended Articles of Incorporation or the Amended Code of Regulations of the
Company prohibit such advances by specific reference to the Ohio Revised Code
(the “ORC”) Section 1701.13(E)(5)(a), or if the only liability asserted against
the Indemnitee is in an action, suit, proceeding or claim on the Company’s
behalf pursuant to ORC Section 1701.95. In the event that the Indemnitee is
eligible to and does execute both Part A and Part B hereof, the costs, charges
and expenses which are paid by the Company pursuant hereto shall be required to
be repaid by the Indemnitee only if he is required to do so under the terms of
both Part A and Part B hereof.

 

 

in a court of competent jurisdiction that my action or failure to act which is the subject of
the matter described herein involved an act or omission undertaken with deliberate intent to cause
injury to the Company or undertaken with reckless disregard for the best interests of the Company
and (b) reasonably cooperate, at the Company’s sole cost and expense, with the Company concerning
the action, suit, proceeding or claim.

          [Use only this paragraph if the Indemnitee is only an officer of the Company but not a
director of the Company] With respect to any claim for indemnification related to my position as
an officer for which I received an advancement of Expenses, I hereby undertake to (a) repay all
amounts paid pursuant hereto (i) with respect to any action, suit, proceeding (other than an action
by or in the right of the Company) brought against me by reason of the fact that I am or was an
officer of the Company for which I received advancement of Expenses, it is determined that I did
not act in good faith and in a manner which I reasonably believed to be in or not opposed to the
best interests of the Company or (ii) with respect to any action, suit, proceeding or claim brought
against me by or in the right of the Company for which I received advancement of Expenses, I am
adjudged to be liable for negligence or for misconduct in the performance of my duty to the Company
and the court has not determined that I am entitled to indemnification and (b) reasonably
cooperate, at the Company’s sole cost and expense, with the Company concerning the action, suit,
proceeding or claim.

	 	 	 
	 
	 	 
	 

	 	 
	 

	 	[Signature of Indemnitee]

          4. Part B

          I hereby undertake to repay all amounts paid pursuant hereto if it ultimately is determined
that I am not entitled to be indemnified by the Company under the aforesaid Indemnification
Agreement or otherwise.

	 	 	 
	 
	 	 
	 

	 	 
	 

	 	[Signature of Indemnitee]

          Subscribed and sworn to before me, a Notary Public in and for said County and State, this
____ day of ___________ , 20__.

	 	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	[Seal]
	 	 

     My commission expires the ____ day of ___________ , 20__.

-2-exv10w52

Exhibit 10.52

SETTLEMENT AGREEMENT

          This Agreement is entered into effective this 29th day of November, 1992, by and between
the United States of America (“the United States”) and Aerojet-General Corporation (“Aerojet”).

     WHEREAS:

     1.1 In 1951, Aerojet established a facility located in Sacramento County, California for the
purpose of developing, testing and building rocket systems for the United States (“Aerojet Plant”).
Since its inception, this facility has been devoted primarily to the performance of contracts for
the United States.

     1.2 Beginning in 1951, Aerojet has entered into numerous contracts with the United States and
prime contractors and subcontractors to the United States for the development, production,
and refurbishment of rockets at the Aerojet Plant. The principal contracting entities for the
United States have been the Departments of the Air Force, Navy, and Army, and the National
Aeronautics and Space Administration. Examples of the contract programs performed at the Aerojet
Plant during the period 1951-1979 are Gemini, Apollo, Delta, Titan, Polaris, Minuteman, Hawk,
Genie, Tartar, Standard Missile and Harpoon.

 

 

     1.3 The United States, principally through the Air Force and Navy, has owned substantial
facilities at the Aerojet Plant since it was established in 1951. The Air Force owns Air Force
Plant 70, comprised of approximately 52 acres of land and two principal buildings containing
375,000 square feet of floor space. One building is devoted to offices and the other to
industrial uses. Air Force Plant 70 was originally constructed in the late 1950’s in support of the
Titan program and was subsequently used for many of the Air Force ICBM programs, as well as a
variety of smaller programs. Since its construction, Aerojet has occupied and used portions of Air
Force Plant 70 pursuant to Air Force facilities contracts, with the exception of one twelve-year
period (1970-82), when it was operated solely by McClellan Air Force Base as a storage annex.
During periods of Aerojet occupancy and use, the United States also occupied and used a portion of
Air Force Plant 70.

     1.4 (a) The Navy also owns a substantial number of facilities at the Aerojet Plant.
These facilities were initially constructed in support of the Polaris Program in the 1950’s and
1960’s, and since then have been used on a variety of government programs. The Navy-owned
facilities include: (a) nearly 300 buildings ranging in size from 67,000 sq. ft. industrial
facilities to 100 sq. ft. safety shelters; (b) appurtenances to those buildings and other
structures, such as roads, fences, cleaning pads, test stands, storage tanks, drainage ditches and
waste basins; and (c) approximately 1,100 items of plant equipment.

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          (b) The Navy facilities are situated on approximately 3,565 acres of land at the Aerojet
Plant that are owned by Aerojet and were purported to be leased to the Navy under a series of
renewable land leases commencing in 1956. From the 1960’s until the present, Aerojet’s use and
operation of the Navy-owned facilities have been governed by a series of facilities management
contracts entered into by Aerojet and the Navy.

     1.5   Aerojet used various chemicals in the performance of contracts at the Aerojet Plant. In
1979, certain of those chemicals were found present in groundwater and soils beneath and in
groundwater in the immediate vicinity of the Aerojet Plant. Subsequently, private parties and state
and federal regulatory agencies made demands and claims and brought actions against Aerojet
respecting alleged historical discharges of chemicals to soils and groundwater.

     1.6   Under authority of the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C., §§ 9602 et seq.) (hereinafter “CERCLA”) and comparable state statutes, the
regulatory agencies sought that Aerojet undertake and Aerojet did undertake investigative,
remedial, and other actions to respond to the findings of chemicals at the Aerojet Plant. Later,
Aerojet and the agencies negotiated and agreed to a Partial Consent Decree, entered in a
consolidated action in U. S. District Court. This Partial Consent Decree provides, inter
alia, that Aerojet will

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perform certain interim remedial and water supply monitoring actions at the Aerojet Plant, and
will conduct a Remedial Investigation/Feasibility Study. Aerojet has filed a counterclaim against
the United States in that action, asserting in part that the United States is responsible for
some or all response costs incurred and to be incurred by Aerojet, including costs of compliance
with this Decree.

     1.7 Aerojet has tendered the defense of private and regulatory agency claims and actions
brought against it to its general liability insurers. The insurers failed to defend and disputed
coverage. Aerojet and the insurers are in litigation respecting the insurers’ obligations to
defend and indemnify Aerojet under the terms of its insurance policies.

     1.8 Aerojet has incurred and will continue to incur costs in addressing the demands, claims and
actions by private parties and the regulatory agencies, and in investigating and conducting clean-up
activities at the Aerojet Plant. When it first began to incur such costs, Aerojet sought to
include them as allowable costs within its indirect cost pool for allocation to its contracts with
the United States and to its subcontracts under prime contracts with the United States. The
Administrative Contracting Officer (“ACO”) disallowed such costs, but agreed that Aerojet could
reserve the issue of their allowability in each affected contract. In 1986, Aerojet submitted a
claim for the disallowed costs under the Contract Disputes Act, which the ACO denied in a Final
Decision

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dated February 9, 1987. Aerojet then filed a notice of appeal and complaint with the Armed
Services Board of Contract Appeals, ASBCA No. 34033, which was answered by the United States.
Extensive discovery was conducted thereafter. The claim amount was periodically updated as
additional costs were incurred by Aerojet.

     1.9 Under an agreement executed November 30, 1989, and amended February 26, 1990 (the
“Stage A Settlement Agreement”), Aerojet and the United States settled recovery of certain costs
incurred by Aerojet through June 1989 (“Stage A Expenditures”). ASBCA No. 34033 was dismissed
pursuant to that settlement.

     1.10 On December 14, 1989, Aerojet filed a claim under the
Contract Disputes Act seeking to include in its indirect cost pool
the costs which it has incurred and will continue to incur after
June 1989 relative to alleged historical discharges. The ACO
denied that claim in a Final Decision dated January 31, 1990.
Aerojet then filed a notice of appeal and complaint with the Armed
Services Board of Contract Appeals, ASBCA No. 40309, which was
answered by the United States.

     1.11 Aerojet Insurers have asserted a right to an offset or a reduction of their
obligations to pay or reimburse Aerojet for Stage A Expenditures which the United States has
recognized pursuant to the Stage A Settlement Agreement. Aerojet and the United States deny that
any such right exists. This issue has not yet been finally adjudicated or otherwise resolved.

- 5 -

 

     1.12 The United States has asserted that its obligation, if any, to allow the costs in the
pricing of Aerojet’s government contracts is secondary to the obligation of Aerojet’s insurers to
pay and indemnify Aerojet under its general liability policies. In entering into this Agreement
and the Stage A Settlement Agreement, the parties recognize that: (1) Aerojet’s insurers have
failed to pay all the costs in issue and are disputing their obligation to defend and indemnify
Aerojet under the policies; and (2) Aerojet is entitled to include the costs in its indirect rates
only to the extent that such costs are not paid by Aerojet’s insurers.

     NOW THEREFORE, the United States and Aerojet, seeking to avoid protracted litigation, do
hereby compromise and settle claims and disputes between them respecting Site Restoration Costs, as
defined in Section 2.10, including without limitation Aerojet’s claim on appeal in ASBCA No. 40309,
all in accordance with the terms of this Agreement and all Exhibits to this Agreement.

2. DEFINITIONS

     2.1 Aerojet Insurer means each liability insurer, whether providing
primary or excess insurance, and the California Insurance Guarantee Association, against which
Aerojet has made claim for recovery of Site Restoration Costs and which is or was a party to the
suit now captioned Aerojet-General Corporation et al. vs.

- 6 -

 

Transport Indemnity Insurance Company et al. (San Mateo Superior Court No. 26245).

     2.2 Aerojet Site means that land for which Aerojet has responsibilities under
subsection 5(A) (1) of the Partial Consent Decree.

     2.3 Allowable Site Restoration Costs means that percentage of Site Restoration Costs
(as defined in Section 2.10) incurred after November 28, 1992 which, pursuant to Section 3.3, the
United States recognizes as allowable costs within Aerojet’s indirect cost pool(s) allocable to
Aerojet’s Government Contracts.

     2.4 Date of Execution of this Agreement means the date of the last required signature
of this Agreement by an authorized representative of Aerojet or the United States, as provided in
Section 11.12 below.

     2.5 Government Contract or Contract with the United States means any contract, or
any modification to any contract between Aerojet and any contracting department, agency or entity
of the United States, including any contract or subcontract, or any modification to any
subcontract between Aerojet and any entity which is a party to a prime contract, or to a
subcontract under a prime contract with any contracting department, agency, or entity of the
United States.

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     2.6 Partial Consent Decree means that decree entered on June 23, 1989, including
all modifications thereof, whether entered before or after this Agreement, in the consolidated
actions United States et al. vs. Aerojet General Corp. et al., (E.D. Cal. CIVS-86-0063-EJG, CIVS-86-0064-EJG).

     2.7 Recovery from a Third Party means payment to Aerojet after the effective date of
this Agreement by an Aerojet Insurer or any person or entity other than the United States, its
agencies, departments, officers and employees, pursuant to a judgment, settlement, or otherwise
for:

	 	(a)	 	Site Restoration Costs;
	 
	 	(b)	 	interest in respect of or attributable to Site Restoration
Costs; or
	 
	 	(c)	 	punitive damages in any action for the recovery of
Site Restoration Costs;

irrespective of whether such payment is made subject to a condition or a purported reservation of
rights; provided that Recovery from a Third Party does not include payments which are included in
the “amount of Stage A recovery”, as defined in the Stage A Settlement Agreement.

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     2.8 Remedial  Action means any removal or remedial action under CERCLA or any
like requirement under any federal or state statute or regulation, including all associated
investigation and operation and maintenance, undertaken at the Aerojet Site.

     2.9 Settlement Credit Account means the account that Aerojet established pursuant to
Section I.B.2 of the Stage A Settlement Agreement, which Aerojet maintains on its books.

     2.10 Site Restoration Costs (a) means such of the following described costs and any
other costs which Aerojet has incurred or will incur in addressing demands, claims and actions
brought by private parties and state and federal regulatory agencies relative to actual or alleged
releases or threatened releases of chemicals to soils or groundwater at the Aerojet Site as a
result of actual or alleged discharge or disposal activities prior to 1980, irrespective of whether
the cost is attributable to any Government-owned facility that is the subject of the Aerojet offer
set forth in Exhibit A to this Agreement:

               (i) costs of Remedial Action;

               (ii) costs of compliance with the Partial Consent Decree;

               (iii) costs of defense of the consolidated actions captioned United States et al.
vs. Aerojet General Corp. et al.

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(E.D. Cal. CIVS-86-0063-EJG, CIVS-86-0064-EJG), and of the
consolidated actions captioned People ex rel. Van de Camp et
al. (Sacramento Superior
Court No. 286073), including costs of prosecution of the mandate proceedings consolidated
therewith;

               (iv) costs of defending and responding to demands, claims and actions
brought by local, state
and federal regulatory agencies which, though reserved from or otherwise outside the coverage of
the Partial Consent Decree, are within the subject matter of the actions identified in subsection
2.10(a)(iii) above; and

               (v) costs of defending and responding to demands, claims and actions
brought by private
parties.

          (b) Site Restoration Costs do not include the following:

               (i) charges questioned by the United States pursuant to Section 11.1 which are finally
disallowed;

               (ii) expenses that are considered Allowable Contemporary Costs as that term is used in
Aerojet’s CAS disclosure
statement in effect at the time such costs are incurred;

               (iii) Stage A Expenditures as defined in Section 2.11;

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               (iv) legal expenses which Aerojet has incurred or will incur after November 1988
respecting claims and litigation with Aerojet Insurers, which expenses are recognized by the
United States as a fully allowable element of Aerojet’s G&A pool, pursuant to a separate agreement
previously executed by the parties; and

               (v) costs of Remedial Action which Aerojet has incurred or will incur in connection with
perchlorate, except that costs of the Remedial Investigation/Feasibility Study under the Partial
Consent Decree and similar investigatory and related costs, such as oversight costs, as to
perchlorate are included in Site Restoration Costs.

               (vi) those costs of defending and resolving, by judgment or settlement, an action brought by
a private (non-governmental) party for alleged personal injury or property damage, that are
directly attributable to a final, unappealable determination by a court that Aerojet “managerial
personnel” (as defined in FAR 52.245-5 [Jan. 1986]) engaged in willful misconduct or lack of good
faith in connection with actual or alleged discharge or disposal activities at the Aerojet Site
prior to 1980; and

               (vii) fines, penalties and punitive damages imposed upon Aerojet by a court or administrative
agency in a final, unappealable determination relating to actual or alleged discharge or disposal
activities at the Aerojet Site prior to 1980.

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     2.11 Stage A Expenditures means all Site Restoration Costs which Aerojet incurred
through June 1989 and were the subject of the Stage A Settlement Agreement.

     2.12 Stage A Settlement Agreement means the parties’ settlement agreement in
ASBCA No. 34033, executed on November 30, 1989 and amended on February 26, 1990.

3. SETTLEMENT OF SITE RESTORATION COSTS

     3.1 The parties recognize that: (1) Aerojet Insurers have
failed to pay all Stage A Expenditures and Site Restoration Costs, and are disputing their
obligation to defend and indemnify Aerojet under its general liability policies; and (2) Aerojet
is entitled to recognition of Stage A Expenditures and Site Restoration Costs in the pricing of
its Government Contracts only to the extent that such costs are not paid by Aerojet Insurers.
Accordingly, in order to assure that there is no double recovery of costs by Aerojet, and to
effectuate the intent of this Agreement and the Stage A Settlement Agreement, the parties agree
that:

          (a) the agreement of the United States to allow and pay costs is in advance of potential
recovery from Aerojet’s insurers; and

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          (b) implementing FAR 31.201-5 (“Credits”), the United States is entitled to a credit
from any insurance recovery for such costs, in accordance with the terms of this Agreement and
the Stage A Settlement Agreement as amended.

     3.2 As to all Site Restoration Costs incurred through November 28, 1992:

          (a) Except for those contracts referenced in subsection 3.2(c), Aerojet hereby releases its
right to seek an increase in the prices of Aerojet Government Contracts pursuant to the clauses
reserving such right to Aerojet in respect of such Site Restoration Costs.

          (b) (1) The United States hereby releases all rights, title and interest in all funds
credited to the Settlement Credit Account through November 28, 1992.

               (2) Aerojet shall not be required to make a
downward adjustment in the prices of subcontract Nos. GD5-161526 and GD6-161528 for such Site
Restoration Costs allocable to those subcontracts, and the United States hereby releases all
rights to seek such an adjustment in the prime contracts relating to those subcontracts.

          (c) The United States will recognize $2,767, 000 of such Site Restoration Costs as indirect
costs in the closeout of

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contract F04704-88-C-0025 (Peacekeeper), and the United States will recognize $691,000 of
such Site Restoration Costs as indirect costs in the termination settlement of contract
F04704-87-C-0050 (SICBM). The parties acknowledge that the amounts set forth in this subsection
3.2 (c) are based on Aerojet having incurred $28,872,000 in Site Restoration Costs through November
28, 1992. If, following Government audit, it is finally determined either by agreement of the
parties, or absent such agreement, by dispute resolution under Section 10, that Aerojet has not
incurred at least $28,872,000 in Site Restoration Costs through November 28, 1992 due to costs
questioned by the United States pursuant to Section 11.1, Aerojet shall pay to the United States
65% of the amount by which Site Restoration Costs incurred through November 28, 1992, fall below
$28,872,000.

     3.3 Subject to Section 11.1 below, the United States will recognize (as Allowable Site
Restoration Costs) 65% of all Site Restoration Costs incurred and to be incurred after November 28, 1992 as allowable and recoverable costs within Aerojet’s indirect cost pool(s) allocable to
Government Contracts, including without limitation those contracts referenced in Section 3.2 above.

     3.4 In order to implement Section 3.3 as to Government Contracts entered into before the Date
of Execution of this Agreement and whose performance has occurred or will occur, in whole or in
part, after November 28, 1992:

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          (a) Aerojet will provide to the Divisional Administrative Contracting Officer
(DACO) a listing of all such Government Contracts which contain a clause reserving the right to
make adjustments with respect to Site Restoration Costs. This listing will include: the
contracting agency, contract number, the principal contact at and address of the agency, the
elements of cost and price to be adjusted, and the amounts of such adjustments, determined as
follows:

               (1) As to each listed fixed-price and fixed-price incentive fee contract which is subject
to upward adjustment, Aerojet and the United States will increase the price by the amount of
Allowable Site Restoration Costs projected to be allocated to that contract after November 28,
1992, as of the Date of Execution of this Agreement;

               (2) As to Subcontracts GD5-161526 and GD6-161528 with Martin-Marietta Corporation, Aerojet
will provide a credit calculated at 35% of the difference between (a) Site Restoration Costs
included in the price of said subcontracts and (b) payments to Aerojet on such subcontracts that
were applied to fund in part the Stage A Agreement and subsection 3.2(b)(2) of this Agreement.
Aerojet will also provide credits in accordance with provisions of certain classified contracts.

               (3) As to each listed cost-reimbursement contract providing for an upward adjustment,
Aerojet and the United States

- 15 -

 

will increase the estimated cost and price by the Allowable Site Restoration Costs
projected to be allocated to that contract after November 28, 1992, as of the Date of Execution of
this Agreement.

          (b) Aerojet and the United States will promptly negotiate in good faith to reach agreement on
the adjustments to elements of price (including, where applicable, target cost, target price and
ceiling) for those Government Contracts described in subsection 3.4(a) above, but no adjustment to
profit will be made. It is the parties’ intent to minimize the number of contracts to be modified
by offsetting credits against upward adjustments, and making a net adjustment through modification
of one or a few contracts. If the parties are unable to reach agreement on the net adjustments,
Aerojet will submit a claim, certified under the Contract Disputes Act of 1978, for the
adjustment or adjustments it believes are appropriate to comply with this Agreement. Any resulting
dispute will be resolved under Section 10, Disputes.

          (c) As to each such cost-reimbursement contract which does not contain a clause reserving
the right to make an adjustment with respect to Site Restoration Costs, Aerojet will bill
Allowable Site Restoration Costs allocable to each such contract.

          (d) Aerojet will bill Allowable Site Restoration Costs allocated to the contracts specified
in subsections 3.4(a) and (c)
above in accordance with the terms of those contracts.

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     3.5 In order to implement Section 3.3 above as to all Government Contracts entered into on or
after the Date of Execution of this Agreement:

          (a) Aerojet will include and the United States will accept Allowable Site Restoration Costs in
forward pricing rates for all Government Contracts entered into on or after the Date of Execution
of this Agreement.

          (b) Aerojet will bill such costs in accordance with the terms and conditions of each such
Government Contract.

          (c) Allowable Site Restoration Costs will be excluded in establishing the negotiated profit
percentage or amount on all such Government Contracts. In all cost-disclosure pricing proposals,
Aerojet will demonstrate that no profit is being proposed on Allowable Site Restoration Costs.

4 . CREDITS FOR RECOVERIES FROM INSURERS AND OTHER THIRD PARTIES

     4.1 (a) If the expenses incurred by Aerojet in pursuing a
Recovery from a Third Party have been allowed for allocation to Aerojet’s Government Contracts,
Aerojet will record 65% of any such Recovery from a Third Party on its books as a credit to reduce
Allowable Site Restoration Costs in the Aerojet fiscal year when such recovery is received, as
provided in this Section 4.1, and Sections 4.2 and 4.3 below. Aerojet will apply this credit to
its

- 17 -

 

indirect cost pool(s) before allocation of Site Restoration Costs to Government Contracts.

          (b) To the extent the credit described in subsection 4.1(a) exceeds Allowable Site
Restoration Costs allocated to Government Contracts in a single Aerojet fiscal year, Aerojet will
carry forward the remaining balance of the credit, together with interest as provided in subsection
(c) below, as a reduction of Allowable Site Restoration Costs in subsequent year(s) until the
credit is fully depleted.

          (c) Aerojet will include in the credits made pursuant
to this Section simple interest at the applicable interest rate(s) specified by the Contract
Disputes Act (42 U.S.C. § 611) from the date on which any Recovery from a Third Party is received
by Aerojet until the credit is fully depleted.

     4.2 If Aerojet Insurers obtain an offset or a reduction of their obligations to Aerojet on the
basis or by virtue of this Agreement, or any provision herein, Aerojet’s credit obligations
pursuant to Section 4.1 above for payments made by an Aerojet Insurer shall be reduced by 35% of
the amount of any such offset or reduction.

     4.3 If Aerojet is required to repay any funds that were (1) paid to Aerojet subject to a
condition or a purported reservation of rights and (2) credited to the Settlement Credit Account or

- 18 -

 

credited as a Recovery from a Third Party pursuant to subsection 4.1(a), then the amount of any
such repayment will be added to and considered as Allowable Site Restoration Costs in the Aerojet
fiscal year in which such repayment is made.

5. CREDITS TO FIXED-PRICE CONTRACTS

          As set forth in paragraphs (a) through (d) below, each sole-source fixed-price
Government Contract priced in excess of $10 million entered into after the Date of Execution of
this Agreement (or adjusted pursuant to subsection 3.4(a)(1)) will be subject to a price reduction
if a Recovery from a Third Party in excess of $5 million is received during the period of
performance of such a Government Contract.

          (a) At the conclusion of contract performance, the total of Allowable Site Restoration Costs
allocated to the contract in excess of credits allocated to the contract as determined pursuant to
sections 4.1 through 4.3 above (“Total Allocated Cost”), will be compared to the total Site
Restoration Costs included within the contract price (“Total Negotiated Cost”).

          (b) The contract price will be reduced by the amount by which the Total Negotiated Cost is
greater than the Total Allocated Cost, provided that the price reduction shall not exceed the total
credit to Allowable Site Restoration Costs on the contract

- 19 -

 

attributable to such Recovery from a Third Party, as determined pursuant to Sections 4.1
through 4.3 above.

          (c) In no event shall there be an increase to the contract price under this Section 5.

          (d) As to each sole-source fixed-price Aerojet
subcontract priced in excess of $10 million entered into after the Date of Execution of this
Agreement (or adjusted pursuant to subsection 3.4(a)(1)), Aerojet agrees to use its best efforts
to include a clause requiring the prime contractor to provide the Government the full benefit of
the price reduction to be made by Aerojet on each such subcontract pursuant to this Section 5,
plus all applicable prime contractor mark-ups. If such a clause is not included in any such
Aerojet subcontract, the United States may require Aerojet to pay directly to the United States
the price reduction made on each such subcontract pursuant to this Section 5.

6. OPTION TO TERMINATE

          (a) Each party reserves the option to terminate application of this Agreement as to any Site
Restoration Costs incurred following the certification or other formal determination by the
cognizant environmental enforcement agency(ies) that all Remedial Action has been completed and no
further Remedial Action is required. Either party may exercise this option by issuing

- 20 -

 

written notice to the other party no earlier than 60 days following such certification or
formal determination. The effective date of such exercise of option shall be the ninetieth day
following issuance of the written notice.

          (b) An exercise of option under this Section 6 shall not affect the application of this
Agreement as to any Site Restoration Costs incurred before the effective date of the exercise of
the option.

7. COVENANTS, RELEASES, RESERVATIONS OF RIGHTS AND DISMISSAL OF APPEAL

     7.1 Subject to the provisions of Section 3 above and this Section 7, as to Site
Restoration Costs which Aerojet has incurred or will incur after July 1, 1989 until the effective
date of exercise of the option under Section 6:

          (a) Aerojet agrees for itself, its successors, assigns, subrogees, representatives, and any
other person or entity claiming through or under it, to remise, release and forever discharge the
United States, its agencies, officers, employees, instrumentalities, administrators and all
representatives thereof from any claim, counterclaim or cross-claim that Aerojet asserted or could
have asserted in the appeal in ASBCA No. 40309 and in the consolidated actions captioned
United States et al. vs. Aerojet General Corp. et al., (E.D. Cal. CIVS-86-0063-EJG,
CIVS-86-0064-EJG), or on any other basis; and

- 21 -

 

          (b) Aerojet agrees for itself, its successors, assigns,
subrogees, representatives, and any other person or entity claiming
through or under it, to remise, release and forever discharge
Aerojet’s prime contractors on Contracts with the United States
from any and all claims, causes of action and demands of any kind
whatsoever under or on the basis of Aerojet’s subcontracts with
such prime contractors.

          (c) Nothing in this Section 7.1 shall impair any Aerojet
right or defense in response to any demand or action of the United States pursuant to any
environmental law or regulation. All such rights and defenses are hereby reserved, including but
not limited to any right or defense based upon section 106(b)(2) of CERCLA (42 U.S.C.A. § 9606(b)(2)) or under any other provision of law.

     7.2 The United States, its agencies, officers, employees, instrumentalities, administrators
and all representatives thereof agree to remise, release and forever discharge Aerojet, its parent
corporations, subsidiaries, affiliates, past or present officers, directors, employees, and all
representatives thereof, including without limitation its successors, assigns, subrogees,
representatives, and anyone claiming through or under it, from any and all claims, causes of action
and demands of any kind whatsoever to recover:

          (a) Site Restoration Costs;

- 22 -

 

          (b) Recovery from a Third Party, except in accordance
with the provisions of Sections 4 and 5; and

          (c) the amount of any claim which any Aerojet Insurer
or other third party asserts against the United States in respect
of Site Restoration Costs.

     7.3 Within 90 days after the Date of Execution of this
Agreement, the parties shall:

          (a) cause the dismissal of the appeal in ASBCA No. 40309;
and

          (b) seek that the Court in the consolidated actions
captioned United States et al. vs. Aerojet General Corp. et al.,
(E.D. Cal. CIVS-86-0063-EJG, CIVS-86-0064-EJG), enter the
Stipulation and Order in the form specified in Exhibit B to this
Agreement for a stay of proceedings with respect to Aerojet’s
counterclaim against the United States in that action. If the
State of California does not agree to stipulate to such a
Stipulation and Order, Aerojet and the United States will seek
entry of the Order by noticed motion to the Court.

     7.4 Nothing in this Agreement shall be
construed to release
claims or otherwise settle any costs other than Site Restoration
Costs incurred prior to the effective date of exercise of the

- 23 -

 

option under Section 6. The parties expressly reserve all rights, claims and defenses as to
any costs other than Site Restoration Costs. Without limitation of the foregoing, nothing in this
Agreement shall restrict the right of either Aerojet or the United States to lift the stay of
proceedings relative to Aerojet’s counterclaim in the consolidated actions captioned United
States et al. vs. Aerojet General Corp. et al., (E.D. Cal. CIVS-86-0063-EJG, CIVS-86-0064-EJG),
in accordance with the Stipulation and Order specified in Exhibit B to this Agreement.

     7.5 The releases provided by Aerojet in Section 7.1 above are conditioned upon the United
States fulfilling its obligations under Section 3 of this Settlement Agreement. If a court or
board of contract appeals decides (the “Court or Board Decision”) that the United States need not
fulfill, or is precluded from, fulfilling
its obligations under Section 3 to recognize what are determined to be Allowable Site
Restoration Costs under this Agreement, then:

          (a) other provisions hereof notwithstanding, the
releases provided by Aerojet herein will no longer be applicable;

          (b) Aerojet shall be entitled to pursue all claims of
whatever kind against the United States for recovery or recognition
of Site Restoration Costs governed (directly or by reason of resjudicata or collateral
estoppel) by the Court or Board Decision;
as follows:

- 24 -

 

               (i) before filing any such claim and pending issuance of the Court or Board Decision,
Aerojet will request that the United States enter into an agreement tolling all statutes of
limitation applicable to Aerojet’s claims for a period of not to exceed two years.

               (ii) Aerojet may bring an action in any forum to seek recovery or recognition of such Site
Restoration Costs if the United States fails to enter into such an agreement within 90 days
of the Aerojet request or, if such an agreement is obtained, any time after the agreement expires.

          (c) Aerojet’s releases shall remain in effect with respect to those Site Restoration Costs
as to which the United States has recognized Allowable Site Restoration Costs in accordance with
Section 3 of this Agreement.

     7.6 Except as provided in Sections 7.1 and 7.2, nothing in
this Agreement shall constitute or be construed as a release or a
covenant not to sue as to any claim or cause of action against any
person or entity not a signatory to this Agreement.

     7.7 Nothing in this Agreement shall constitute or be
construed as a release or a covenant not to sue as to any matter
not expressly addressed by Sections 7.1 and 7.2 of this Agreement.

- 25 -

 

     7.8 Except to the extent the reservations of claims and assertions set forth in paragraph 22
of the Partial Consent Decree are superseded by the terms of this Section 7, nothing in this
Agreement shall in any way limit the rights and obligations of the parties with respect to the
Partial Consent Decree. In the event of any inconsistency between the terms and conditions of this
Agreement and the terms of the Partial Consent Decree, the terms of the Partial Consent Decree
shall prevail over the terms of this Agreement.

     7.9 As to rights not released by this Agreement: the transfer of the property pursuant to the
Government’s acceptance of the offer described in Section 9 of this Agreement shall not alter or
modify the parties’ respective rights, liabilities and responsibilities regarding environmental
cleanup or compliance with environmental laws, statutes, ordinances, and regulations with respect
to actions that occurred prior to the effective date of the property transfer. In this regard,
without limitation, the purchase of the property shall not be deemed to alter or affect, and may
not be used by either party as a basis for asserting or denying, a party’s liability under CERCLA
or any analogous state law or common law for discharges of hazardous substances occurring before
the date the property is transferred.

- 26 -

 

8. REPORTS

     8.1 Until the first fiscal year following the effective date of an exercise of
the option under Section 6, Aerojet will include the following information in its Forward Pricing
Rate Proposal submitted annually to the United States:

          (a) the total Site Restoration Costs incurred in all
preceding fiscal years;

          (b) an accounting of the Site Restoration Costs incurred
during the preceding fiscal year, including: (i) the amount of any
Recovery from a Third Party obtained during the fiscal year; (ii)
the proration of amounts applied as credits under the Stage A
Settlement Agreement and under Section 4 of this Agreement;
(iii) the amount of credits applied pursuant to Section 4, if any;
(iv) the net amount of Site Restoration Costs included in Aerojet’s
indirect cost pool(s) during the fiscal year; and (v) the amount
of Aerojet’s applicable base for allocation of Site Restoration
Costs in the fiscal year;

          (c) the amount of any price reductions made pursuant to
Section 5;

          (d) a projection and description of the Site Restoration Costs estimated to be
incurred during the current fiscal year,

- 27 -

 

separately identified so as to permit a separate agreement on Site Restoration Costs, if
appropriate; and

          (e) a separate projection and description of contemporary costs (as defined in Aerojet’s CAS
Disclosure Statement) to be incurred during the current fiscal year.

     8.2 Aerojet will provide to the CACO and DACO two copies of each quarterly progress report
prepared by Aerojet pursuant to the Partial Consent Decree. At the request of the Administrative
Contracting Officer, Aerojet will provide briefings at reasonable intervals on the progress of the
work undertaken to implement the Partial Consent Decree and a final consent decree, if one is
entered by the court.

9. TRANSFER OF GOVERNMENT–OWNED PROPERTY

          (a) Aerojet hereby offers to purchase certain property, facilities, and equipment
presently owned by the United States and situated at the Aerojet Site, as described in and in
accordance with the terms set forth in Exhibit A attached hereto, which is
hereby incorporated as if fully set forth in this Agreement. Aeronautical Systems Center,
Wright-Patterson Air Force Base, and the U.S. General Services Administration are the authorized
government authorities for any property, facilities and equipment transfer.

- 28 -

 

          (b) This Agreement, and each section of this Agreement, shall remain in full force and effect
regardless of whether the Government accepts Aerojet’s offer or whether the parties are able to
reach agreement on the transfer of any such property, facilities and equipment.

10. DISPUTES

          Either party may enforce this Agreement under any available remedy, including without
limitation remedies under the Contracts Disputes Act of 1978, 41 U.S.C. §§ 601 et seq. and the
“Tucker Act”, 28 U.S.C. § 1491, through action before the Armed Services Board of Contract Appeals
or the courts, in the event of a failure by the other party to fulfill its obligations. This
Section 10 shall apply to any dispute between Aerojet and the United States involving the
interpretation of this Agreement, including without limitation, whether specific costs incurred by
Aerojet constitute Site Restoration Costs under Section 2.10 above.

11. OTHER PROVISIONS

     11.1 The United States reserves the right to question on the following grounds any
particular charge or portion of a charge to costs made allowable by this Agreement:

- 29 -

 

          (a) the charge is unallowable for reasons unrelated to
its character as an environmental cost (e.g., a charge for
unallowable entertainment expense under FAR 31.205-14); or

          (b) the charge is unallowable because it is believed to
be unreasonable in amount for the services or supplies provided.

     11.2 Except as otherwise specifically provided in this Agreement, this Agreement shall take
precedence over any contracts or other agreements between Aerojet and the United States regarding
the United States’ obligations to Aerojet relative to Site Restoration Costs; provided, however,
that nothing in this Agreement
shall preclude Aerojet from recovering Site Restoration Costs which are determined to be
recoverable as direct costs under the termination or close-out settlements of Contract Nos.
F04704-87-C-0050 and F04704-88-C-0025, respectively. Aerojet will remove all costs so recovered
from its indirect cost pool allocable to Government Contracts.

     11.3 The parties have entered into this Agreement for the purpose of compromising and
settling all claims and disputes between them with respect to Site Restoration Costs, and intend
that this Settlement Agreement will apply to Site Restoration Costs allocated to existing and
future Government Contracts.

          (a) Aerojet and the United States agree that nothing in this Agreement is inconsistent with
the current provisions of FAR

- 30 -

 

Part 31. Except to the extent that it is beyond the authority of the United States to commit
itself under this Agreement, this Settlement Agreement is intended to be implemented and enforced
irrespective of any future changes in statute or regulation. In this regard, Aerojet and the
United States each recognize and expressly assume the risk that a change in the statutes or
regulations could support a treatment of Site Restoration Costs that is different from that
required by this Agreement.

          (b) In an action to enforce this Agreement, the following issues shall be deemed to have been
resolved, irrespective of any change in statute or regulation:

               (1) the reasonableness of past conduct giving rise
to Site Restoration Costs, including whether such conduct complied with applicable laws,
regulations, permits, orders and any other legal requirements or whether such conduct was without
fault, negligent, reckless, intentional, wilful, or otherwise culpable;

               (2) the extent to which performance of Government Contracts contributed to the conditions
giving rise to Site Restoration Costs; and

               (3) Aerojet’s diligence in responding to the environmental conditions and pursuing available
sources for the recovery of Site Restoration costs.

-31-

 

Provided, that nothing in this Section 11.3(b) shall be construed as resolving such issues in
any action other than an action to enforce the provisions of this Settlement Agreement.

     11.4 Aerojet will expense Site Restoration Costs and will not be required to capitalize and
depreciate such costs for government contract accounting purposes, as long as such treatment is
consistent with generally accepted accounting principles (“GAAP”) and applicable Cost Accounting
Standards in effect at the time the costs are incurred.

     11.5 In the event that manufacturing and test operations at Aerojet’s Sacramento Site are
permanently transferred to another Aerojet location, Allowable Site Restoration Costs shall be
allocated to the most appropriate indirect cost pool at the site where the work is transferred. In
the event that manufacturing and test operations at Aerojet’s Sacramento Site are substantially
discontinued, Allowable Site Restoration Costs shall be treated as residual corporate home office
costs allocable throughout Aerojet- General Corporation to all corporate segments. Aerojet shall
notify the DACO and CACO of any change in allocation described in this subsection 11.5, prior to
making such change. Any disagreement as to whether the change comes within the terms of this
subsection 11.5 shall be resolved under Section 10, Disputes. Nothing in this Section 11.5 shall
preclude Aerojet from proposing a different accounting treatment for Allowable Site Restoration

-32-

 

Costs consistent with Aerojet’s accounting practices in effect at the time of any such proposal.

     11.6 This Agreement resolves disputed claims. Neither this Agreement nor its terms
constitutes any admission of liability, an admission of fact or evidence of such, or an admission
of violation of any law or regulation.

     11.7 The parties designate the following persons to whom all reports and notices provided
pursuant to this Agreement will be sent:

	 	 	 
	For Aerojet

	 	For the United States
	 
	 	 
	William L. Berry, Jr.

	 	Emil Bagneschi
	Senior Counsel

	 	Corporate Administrative
	Aerojet-General Corporation

	 	Contracting Officer (CACO)
	1940 Alabama Avenue

	 	DCMAO — San Francisco
	P. O. Box 3530

	 	1265 Borregas
	Rancho Cordova, CA 95741-3530

	 	Sunnyvale, CA 94089
	 
	 	 
	 

	 	Algird C. Radavice
	 

	 	Divisional Administrative
	 

	 	Contracting Officer (DACO)
	 

	 	DCMO Sacramento
	 

	 	P. O. Box 15846
	 

	 	Sacramento, CA 95852-1846

Each party may substitute another individual for its representative(s) designated above by
providing written notice to the other party.

     11.8 This Agreement, and each of its terms and conditions, shall apply to and be binding upon
(a) Aerojet-General Corporation, its successors, assigns, subrogees, representatives, and any
other

-33-

 

person or entity claiming through or under it; and (b) the United States, its agencies, officers,
employees, instrumentalities, administrators and all representatives thereof.

     11.9 This Agreement, or any portion of this Agreement, may be amended, deleted or terminated
only by a written agreement executed by both of the undersigned representatives of Aerojet and the
United States, or his or her successors, respectively.

     11.10 This agreement constitutes the entire agreement between Aerojet and the United States
and supersedes any prior or contemporaneous agreement concerning the subject matter of this
Agreement. The parties anticipate the creation of summary documents and administrative guides to
assist the parties in implementing the Agreement. Such summaries and guides do not constitute
part of this Agreement.

     11.11 The headings used in this Agreement are intended solely for convenience and shall not
determine or alter the rights and obligations of the parties to this Agreement.

     11.12 Each undersigned representative certifies that he or she is fully authorized to enter
into and execute this Agreement, and to legally bind the party represented.

-34-

 

	 	 	 
	For United States of America

	 	For Aerojet-General Corporation
	 
	 	 
	/s/ Donald P. Springer

	 	/s/ Roger I. Ramseier
	 

	 	 
	 
	 	 
	Name: Donald P. Springer

	 	Name: Roger I. Ramseier
	 
	 	 
	Title: Corp. Admin. Contr. Officer

	 	Title: President
	 
	 	 
	Date: 21 September 1993

	 	Date: Sept 13, 1993
	 
	 	 
	Approved as to form

	 	Approved as to form
	 
	 	 
	/s/
Samuel R. Hilker

	 	/s/ Allan J. Joseph
	 

	 	 
	 
	 	 
	Counsel for the United States

	 	Counsel for Aerojet-General Corp.
	 
	 	 
	Date: 16 Sept 1993

	 	Date: September 13, 1993

-35-

 

EXHIBIT A

 

 

EXHIBIT “A”

OFFER TO PURCHASE REAL ESTATE,

IMPROVEMENTS AND RELATED PERSONAL PROPERTY AND

ACCEPTANCE

          This Offer to Purchase Real Estate, Improvements and Related Personal Property and
Acceptance (“Offer”) is made and entered into by Aerojet-General Corporation, an Ohio corporation
(“Buyer”) to the United States of America, acting by and through the Administrator of General
Services (“Seller”) regarding the Property, as defined below.

ARTICLE 1

OFFER AND ACCEPTANCE

          1.1 Offer to Purchase. Upon the Date of Execution of that certain Settlement
Agreement between the United States of America and Buyer settling Buyer’s Site Restoration Costs
claims at its Sacramento plant (the “Settlement Agreement”), Buyer offers to purchase the Property,
as hereinafter defined, subject to the terms and conditions of this Offer (the “Offer Date”).

          1.2 Acceptance of Offer. At any time within two (2) years of the Date of Execution of
the Settlement Agreement, Seller may accept the Offer, and during such two (2) years the Offer
shall remain firm and continuing, and shall not be revoked by Buyer. Seller shall accept said
offer by execution of the Acceptance attached to this Offer and delivery of one original executed
Acceptance to the Escrow Holder, as hereinafter defined, and upon such acceptance this Offer shall
constitute the binding agreement of Buyer and Seller.

ARTICLE 2

PURCHASE AND SALE

          2.1 Property. The “Property”, as hereinafter used, is comprised of:

               (a) Land. All of that land, approximately fifty-two (52) acres in size, which is subject to
Air Force Facility Contract F04701-75-C-0067 (the “Land”).

               (b) Buildings and Improvements.
All buildings
and improvements owned by the United States Air Force on the Land, and controlled as real property
subject to Air Force Facility Contract F04701-75-C-0067; and all buildings and improvements owned
by the United States Navy, and controlled as real property subject to Navy Facility Contract
N00030-91-E-0094 (the “Buildings and Improvements”).

1

 

               (c) Personal Property. All Industrial Plant Equipment (IPE) and Other Plant
Equipment (OPE) owned by the United States Navy subject to Navy Facility Contract N00030-91-E-0094
(the “Personal Property”).

               Further Description of Property. Prior to closing, the Parties shall jointly
determine the exact description of the Land, and an exact identification of the Buildings and
Improvements and Personal Property.

          2.2 Purchase Price. The total purpose price
(“Purchase Price”) for the Property is Two Million Five Hundred Thousand Dollars ($2,500,000.00),
and shall be payable in accordance with this Section 2.2.

               (a) Buyer’s Deposit. Within three (3) business
days of the date the Settlement Agreement is executed by both parties thereto, Buyer shall
open the Escrow (as defined herein) by depositing with Escrow Holder (being Placer Title Insurance
Company, or any other title company chosen by Buyer after notice to Seller) a copy of this Offer
and Buyer shall deposit with Escrow Holder the sum of Two Hundred Fifty Thousand Dollars
($250,000.00) (“Buyer’s Deposit”) in cash, wire transfer of funds, certified or bank cashier’s
check, or irrevocable letter of credit in the amount of Buyer’s Deposit. Escrow Holder shall
invest Buyer’s Deposit in an interest bearing account selected by Buyer. Buyer’s Deposit, together
with all interest accrued thereon as of the date of the Opening of Escrow, shall be applied towards
the payment of the Purchase Price, or refunded to Buyer as set forth in GSA Form 2041 “General
Terms Applicable to Negotiated Sales”, attached hereto as Attachment 1 and incorporated herein (the
“General Terms”), or paid to and retained by Seller as set forth in the General Terms.

               (b) Balance. At least twenty-four (24) hours prior to the Closing Date (as defined
herein), Buyer shall deposit with Escrow Holder a sum equal to the Purchase Price, less the sum of
(i) Buyer’s Deposit plus (ii) the accrued interest thereon, in cash, wire transfer of funds,
certified or bank cashier’s check.

ARTICLE 3

COVENANTS

          3.1 Covenants of Seller.

               (a) Further Transfers. During the period from
the effective date of the Settlement Agreement through the Close of Escrow, unless Buyer shall have
given its prior written consent thereto, Seller shall not transfer, convey, encumber, lease or
assign any right, title or interest in or to all or any portion of the Property.

2

 

               (b) Close of Escrow. At the Close of Escrow, as hereinafter defined, Seller
shall:

                    (1) convey the Real Property to Buyer,
subject to all easements, conditions, and restrictions of record on the Closing Date, as
hereinafter defined, by a fully executed and notarized quitclaim deed (the “Quitclaim Deed”);

                    (2) convey the Plant Equipment to Buyer by a fully executed and notarized bill of sale (the
“Bill of Sale”);

                    (3) terminate any right, title, and interest
the United States Navy may claim or have in any real property Buyer owns in Sacramento County by
fully executed and notarized termination agreements and/or quitclaim deeds; and

                    (4) execute and deliver such other documents
or instruments as may be reasonably required by Buyer at least three (3) business days prior to the
Closing Date to effect the closing of the transactions contemplated in this Offer.

          3.2 Covenant of Buyer.

               (a) Defense Capabilities . Buyer agrees to
maintain the existing capabilities of the Property for defense production for a period of five (5)
years from the Closing Date, and Buyer agrees that its use of the Property will not jeopardize the
existing capabilities of the Property for such defense production; provided, however, Buyer may
demolish, remove, dispose, modify, or alter any portion of the Property not essential to
foreseeable defense production needs.

               (b) Close of Escrow. At the Close of Escrow, as hereinafter defined, Buyer shall:

                    (1) deliver the Buyer’s Deposit plus the
accrued interest thereon and the balance of the Purchase Price to Seller including the Buyer’s
Deposit, to Seller in cash, wire transfer of funds, certified or bank cashier’s check; and

                    (2) execute and deliver such other documents
or instruments as may be reasonably required by Seller at least three (3) business days prior to
the Closing Date to effect the closing of the transactions contemplated in this Offer.

ARTICLE 4

CONDITIONS

          4.1 Both Parties Conditions to Closing. The Closing shall not take place, and
the Property shall not be purchased and sold, until and unless the following conditions have been
satisfied on or prior to the Closing Date:

3

 

               (a) Cost Agreement. Buyer and its cognizant
Department of Defense Administrative Contracting Officer shall have agreed that the costs Buyer
incurs in maintaining, repairing, restoring, demolishing, disposing or otherwise attending to the
Property after the Closing Date shall be considered allowable for allocation to Buyer’s government
contracts, notwithstanding any restrictions on the allowability of idle facilities and idle
capacity costs, but otherwise subject to the right of Seller to question and audit costs pursuant
to law and regulations.

               (b) Termination of Navy Interests. Seller shall have delivered fully executed
termination agreements and/or quitclaim deeds effectively terminating any right, title, and
interest the United States Navy may claim or have in any real property Buyer owns in Sacramento
County.

               (c) Defense Capabilities. Seller shall have
corrected prior to the Closing Date, after notice from Buyer, any deficiencies or defects to title
or otherwise that could impair the ability of Buyer to comply with its covenant to maintain the
defense capabilities of the Property as set forth in Section 5.2.

ARTICLE 5

ESCROW INSTRUCTIONS

          5.1 Close of Escrow: Closing Date. The “Close of Escrow” shall mean the closing
of the purchase and sale of the Property pursuant to this Offer, as evidenced by the recording of
the Quitclaim Deed in the Official Records of the County Recorder of Sacramento County, California.
The Close of Escrow shall take place on the date thirty (30) days from the date Seller executes
and delivers a signed copy of the Acceptance attached to this Offer to the Escrow Holder (“Closing
Date”).

          5.2 Conditions to the Close of Escrow. The Close or Escrow shall not take place
unless and until Delivery of Sums and Documents. Both parties have deposited with Escrow
Holder all sums and documents required by this Offer.

          5.3 Delivery. Notwithstanding Buyer’s possession of the Property through any facility
contracts referenced in Section 2.1, for purposes of the General Terms, possession of the Property
shall be deemed to be delivered to Buyer at the Close of Escrow.

          5.4 Escrow Holder’s General Provisions. Escrow Holder is hereby instructed to attach
as Attachment 2 to this Offer a copy of Escrow Holder’s standard printed escrow instructions,
which are hereby incorporated into this Offer in their entirety. In the event of any inconsistency
between this Offer and such standard printed escrow instructions this Offer shall govern the
rights and obligations of Seller and Buyer.

4

 

ARTICLE 6

MISCELLANEOUS

          6.1 Title Insurance. Buyer may (i) order from Placer Title Insurance Company, or
such other title insurance company as Buyer may select (“Title Company”) a preliminary title report
(“Report”) covering the Land and all buildings and improvements thereon pursuant to which Title
Company shall commit, upon payment of its usual and customary premium therefor, to issue its ALTA
Extended Coverage Owner’s Title Insurance Policy (“ALTA Policy”) covering the Property, with
liability in an amount to be determined by Buyer, insuring title to the Real Property as vested in
Buyer; (ii) order an ALTA survey (“ALTA Survey”) covering the Real Property prepared by a licensed
surveyor or civil engineer in sufficient detail to provide for the ALTA Policy certified to Buyer
and the Title Company in form satisfactory to Buyer.

          6.2 GSA Form 2041. GSA Form 2041 entitled “General
Terms Applicable to Negotiated Sales” is attached hereto as Attachment 1, and incorporated herein.
In the event of any inconsistency between this Offer and said General Terms Applicable to
Negotiated Sales this Offer shall govern the rights and obligations of Seller and Buyer.

          6.3 Non-Discrimination Covenant. The “Non- Discrimination Covenant” is attached
hereto as Attachment 3, and incorporated herein.

          6.4 Notices. Any and all notices required or
permitted to be given hereunder shall be in writing and shall be personally delivered or
mailed by certified or registered mail, return receipt requested, postage prepaid, to the
respective parties at the addresses set opposite the parties signatures below. Either party may
change its address by a notice given to the other party in the manner set forth above. Any notice
given personally shall be deemed to have been given upon service and any notice given by certified
or registered mail shall be deemed to have been given on the third (3rd) day after such notice is
mailed.

          6.5 No Merger. All covenants and other obligations contained in this Offer shall
survive recordation and delivery of the Quitclaim Deed.

5

 

          IN WITNESS WHEREOF, the parties have executed this Offer as of the dates set opposite their
signatures below.

Authority to Purchase.

	 	 	 	 	 	 	 	 	 	 	 
	By

	 	 	 	 	 	Date	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 

CERTIFICATE OF CORPORATE BUYER

          I,                                         , certify that I am
                                         of the                     , the
Company named as Buyer herein; that                      who
signed this Offer to Purchase on behalf of the                      is                      of said Company; that said Offer to
Purchase was duly signed for and on behalf of said Company by authority of its governing body and
is within the scope of its Company powers.

          -

6

 

ACCEPTANCE — UNITED STATES

     The Offer to Purchase as set forth above is accepted
this ___day of                     , 1993.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	UNITED STATES OF AMERICA
	 

	 	 	 	 	 	ACTING BY AND THROUGH THE
	 

	 	 	 	 	 	ADMINISTRATOR OF GENERAL
	 

	 	 	 	 	 	SERVICES
	 
	 	 	 	 	 	 
	Date
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Commissioner
	 

	 	 	 	 	 	Federal Property Resources
	 

	 	 	 	 	 	Service

7

 

NON-DISCRIMINATION COVENANT

(To be included in instrument of conveyance)

The Grantee covenants for itself, its heirs, successors, and assigns and every successor in
interest to the property hereby conveyed, or any part thereof, that the said Grantee and such
heirs, successors, and assigns shall not discriminate upon the basis of race, color, religion, sex,
or national origin in the use, occupancy, sale, or lease of the property, or in their employment
practices conducted thereon. This covenant shall not apply, however, to the lease or rental of a
room or rooms within a family dwelling unit; nor shall it apply with respect to religion to
premises used primarily for religious purposes. The United States of America shall be decaed a
beneficiary of this covenant without regard to whether it remains the owner of any land or interest
therein in the locality of the property hereby conveyed and shall have the sole right to enforce
this covenant in any court of competant jurisdiction.

 

 

EXHIBIT B

 

 

LAWRENCE A. HOBEL

California State Bar #73364

HELLER, EHRMAN, WHITE & MCAULIFFE

333 Bush Street

San Francisco, California 94104-2878

Telephone: (415) 772-6348

Attorneys for Defendants and Counterclaimants

AEROJET-GENERAL CORPORATION AND

CORDOVA CHEMICAL COMPANY

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

	 	 	 	 	 	 	 
	UNITED STATES OF AMERICA,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Plaintiff,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	     v.

	 	 	)	 	 	NO. CIV-S-86-0063-EJG
	 

	 	 	)	 	 	NO. CIV-S-86-0064-EJG
	AEROJET-GENERAL CORPORATION

	 	 	)	 	 	 
	and CORDOVA CHEMICAL COMPANY,

	 	 	)	 	 	CONSOLIDATED
	 

	 	 	)	 	 	 
	Defendants,
 

	 	 	)	 	 	 
	 

	 	 	)	 	 	STIPULATION AND ORDER RE
	 

	 	 	)	 	 	PROSECUTION OF COUNTERCLAIM
	PEOPLE OF THE STATE OF CALIFORNIA,
	 	 	)	 	 	OF AEROJET GENERAL
	 

	 	 	)	 	 	CORPORATION AND CORDOVA
	Plaintiff,

	 	 	)	 	 	CHEMICAL COMPANY AGAINST
	 

	 	 	)	 	 	THE UNITED STATES OF
	     v.

	 	 	)	 	 	AMERICA
	 

	 	 	)	 	 	 
	AEROJET-GENERAL CORPORATION and

	 	 	)	 	 	 
	CORDOVA CHEMICAL COMPANY,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Defendants.
 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	AEROJET-GENERAL CORPORATION, and

	 	 	)	 	 	 
	CORDOVA CHEMICAL COMPANY,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Counterclaimants,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	     v.

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	UNITED STATES OF AMERICA,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Counter-Defendant.
 

	 	 	)	 	 	 

STIPULATION AND ORDER RE

PROSECUTION OF COUNTERCLAIM

 

 

     Whereas, on September 25, 1990, Defendants Aerojet-General Corporation (“Aerojet”) and
Cordova Chemical Company (collectively, the “Defendants”) filed the Counterclaim of Aerojet General
Corporation and Cordova Chemical Company Against the United States of America and Demand For Jury
Trial (the “Counterclaim”) against Plaintiff United States of America (“United States”) in these
consolidated actions.

     Whereas, by Stipulation and Order dated September 25, 1990, the prosecution of the
Counterclaim was stayed, subject to certain exceptions, during the pendency of settlement
discussions between the United States Air Force and Aerojet in the matter entitled Appeal of
Aerojet-General Corporation Under Contract No. F04704-88-C-0025, Armed Services Board of
Contract Appeals Case No. 40309 (“ASBCA No. 40309”).

     Whereas, the United States Air Force and Aerojet have entered into a settlement agreement in
ASBCA No. 40309 (the “ASBCA Settlement Agreement”), which releases certain rights of the parties
that might otherwise be asserted in this action, but also reserves to the parties certain rights
that are the subject of this action.

     Whereas, as a condition of the ASBCA Settlement Agreement, the parties must seek an order of
the Court in these consolidated actions, in accordance with terms and conditions of this
stipulation, as to the prosecution of claims that are not resolved by the ASBCA Settlement
Agreement; and

     Whereas, to effectuate the terms and conditions of the ASBCA Settlement Agreement and for good
cause shown, the

STIPULATION AND ORDER RE

PROSECUTION OF COUNTERCLAIM

-2-

 

parties hereby stipulate to entry by the Court of the following order:

     1. All further proceedings with respect to the
Counterclaim as to matters not released by the parties in the
ASBCA Settlement Agreement and within the subject matter of the
Counterclaim shall be stayed, but the stay shall be lifted upon
written notice by the United States or by one of the Defendants
to the Court and to all parties that actions or claims have been
undertaken against Defendants, or either of them, with respect to
such matters.

     2. Defendants’ Counterclaim and Counterdefendants’
defenses to such Counterclaim shall not be subject to involuntary
dismissal based on any alleged failure to prosecute during the
pendency of this stay; and no party shall assert that the failure
to give notice when the right to give notice first arises shall
be deemed a failure to prosecute, regardless how long after the
event giving rise to the right to give notice under Paragraph 1 a
party actually gives said notice.

STIPULATION AND ORDER RE

PROSECUTION OF COUNTERCLAIM

-3-

 

     3. If and when the stay is lifted, the United States shall have sixty (60) days to file
an Answer or other responsive pleading to the Counterclaim.

FOR PLAINTIFF UNITED STATES OF AMERICA

	 	 	 	 	 	 	 
	DATED:                     , 1992	 	[NAME]	 	 
	 	 	Assistant Attorney General	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME]	 	 
	 	 	United States Department of justice	 	 
	 	 	Environmental Defense Section	 	 
	 	 	Environmental and Natural Resources Division	 	 
	 	 	P.O. Box 23986	 	 
	 	 	Washington, D.C. 20026-3986	 	 
	 
	 	 	 	 	 	 
	 	 	     [NAME]                    , United States	 	 
	 	 	Attorney for the Eastern District	 	 
	 	 	of California	 	 
	 	 	3305 Federal Building	 	 
	 	 	650 Capitol Mall	 	 
	 	 	Sacramento, California 95814	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	United States Department of Justice	 	 
	 	 	Environmental Defense Section	 	 
	 	 	Environmental and Natural Resources Division	 	 
	 	 	P.O. Box 23986	 	 
	 	 	Washington, D.C. 20026-3986	 	 

FOR PLAINTIFF THE STATE OF CALIFORNIA

	 	 	 	 	 	 	 
	DATED:                     , 1992	 	DANIEL E. LUNGREN	 	 
	 	 	Attorney General of the State of	 	 
	 	 	California	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

EDNA WALZ
	 	 
	 

	 	 	 	Deputy Attorney General	 	 
	 

	 	 	 	Department of Justice of the	 	 
	 

	 	 	 	     State of California	 	 
	 

	 	 	 	1515 “K” Street	 	 
	 

	 	 	 	Sacramento, California 95814	 	 

STIPULATION AND ORDER RE

PROSECUTION OF COUNTERCLAIM

-4-

 

FOR DEFENDANTS AND COUNTERCLAIMANTS AEROJET-GENERAL CORPORATION AND CORDOVA CHEMICAL COMPANY

	 	 	 	 	 	 	 
	DATED:                     , 1992

	 	By:	 	 	 	 
	 

	 	 	 	 

LAWRENCE A. HOBEL
	 	 
	 

	 	 	 	HELLER, EHRMAN, WHITE & McAuliffe	 	 
	 

	 	 	 	333 Bush Street	 	 
	 

	 	 	 	San Francisco, CA 94104-2878	 	 

IT IS SO ORDERED:

DATED:                      1992

	 	 	 	 	 
	 

	 	 

JUDGE OF THE UNITED STATES DISTRICT COURT
	 	 

STIPULATION AND ORDER RE

PROSECUTION OF COUNTERCLAIM

-5-

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