Document:

Exhibit 10.4

 

TRANSITION SERVICES AGREEMENT

 

BY AND BETWEEN

 

SYMMETRY MEDICAL, INC.

 

AND

 

RACECAR SPINCO, INC.

 

Dated as of [                   ], 2014

 

    	 

    	 

    

 

TRANSITION
SERVICES AGREEMENT

 

THIS TRANSITION SERVICES AGREEMENT (this
“Agreement”) is dated as of
[                   ], 2014, by and
between:

 

(A)         Symmetry
Medical Inc. (“Transferor”); and

 

(B)         Racecar
Spinco, Inc. (“SpinCo”).

 

RECITALS

 

WHEREAS, in
connection with the transactions contemplated by the Separation Agreement, dated as of
[                   ], 2014, by and
between the Transferor and SpinCo (the “Separation Agreement”), the Parties contemplate that during the
Term (as defined Section 3.1), each Party will provide certain transitional services as Service Provider to Service
Recipient, in accordance with the terms and conditions set forth herein.

 

NOW, THEREFORE,
in consideration of the foregoing recitals and the mutual representations, warranties, covenants and promises contained herein,
the adequacy and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

 

1.          DEFINITIONS.

 

For purposes of this
Agreement, Transferor will be considered “Service Provider” and SpinCo will be considered “Service Recipient”
with respect to any Services (as defined in this Section 1) provided by Transferor to SpinCo pursuant to the terms of this
Agreement, and SpinCo will be considered “Service Provider” and Transferor will be considered “Service Recipient”
with respect to any Services provided by SpinCo to Transferor pursuant to the terms of this Agreement. Capitalized terms which
are used but not defined herein shall have the meanings ascribed to such terms in the Separation Agreement. For the purpose of
this Agreement, the following capitalized terms shall have the following meanings.

 

“Additional
Services” shall have the meaning set forth in Section 2.5.

 

“Agreement”
shall have the meaning set forth in the Preamble and shall include all Transition Service Schedules whether attached hereto or
added subsequently pursuant to the terms of this Agreement.

 

“Buyer”
shall mean Tecomet, Inc.

 

“Claim”
shall have the meaning set forth in Section 11.3.

 

“Damages”
means losses, liabilities, damages, deficiencies, costs and expenses directly incurred or suffered (and, if applicable, reasonable
attorneys’ fees associated therewith).

 

“Effective
Date” shall mean the Distribution Date, as such term is defined in the Separation Agreement.

 

    	 

    	 

    

 

“Parties”
shall mean the parties to this Agreement.

 

“Provider
Indemnified Party” shall have the meaning set forth in Section 11.1.

 

“Reference
Period” shall mean the twenty-four (24) month period preceding the date of this Agreement.

 

“Separation
Agreement” shall have the meaning set forth in the Recitals.

 

“Services”
shall include all services to be provided by Transferor to SpinCo or by SpinCo to Transferor, as the case may be, as described
on any Transition Service Schedule, including any Additional Services.

 

“Service Provider”
shall have the meaning set forth in this Section 1.

 

“Service Provider
Representative” shall be any individual initially designated by a Service Provider to provide the applicable Service
at any time that such individual is employed by the Service Provider. Either Service Provider may replace a Service Representative,
subject to the Service Recipient’s prior approval (which shall not be unreasonably withheld).

 

“Service Recipient”
shall have the meaning set forth in this Section 1.

 

“Service Term”
shall have the meaning set forth in Section 2.2.

 

“SpinCo”
shall have the meaning set forth in the Preamble.

 

“Term”
shall have the meaning set forth in Section 3.1.

 

“Transferor”
shall have the meaning set forth in the Preamble.

 

“Transition
Manager” shall have the meaning set forth in Section 14.

 

“Transition
Service Schedule” shall have the meaning set forth in Section 2.1.

 

2.          SERVICES.

 

2.1.          Schedules
and Precedence. This Agreement shall govern the provision of transitional Services described in the schedules attached to
and made a part of this Agreement (each individual schedule, a “Transition Service Schedule”).1
Except with regard to the Term, if there is any inconsistency between the terms of any Transition Service Schedule
and the terms of this Agreement, the terms of such Transition Service Schedule shall govern.

 

2.2.          Information.
Each Transition Service Schedule shall set forth, among other things:

 

 

1
The Transition Service Schedule may be updated prior to the Closing upon the mutual agreement of the Parties.

 

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(a)          a
description of the Service to be provided;

 

(b)          the
term during which the Service will be provided (the “Service Term”);

 

(c)          any
locations where Services are to be provided;

 

(d)          any
Service Provider Representatives for such Service and the primary work location of such Service Provider Representatives;

 

(e)          the
maximum percentage of the applicable Service Provider Representative’s working time to be allocated to the Services, based
upon a normal 40-hour work week;

 

(f)          the
charges due to Service Provider, if any, for the Service as described in Section 4.1; and

 

(g)          any
other applicable terms.

 

2.3.          Service
Levels. Each Party shall ensure Services provided by such Party are performed in a manner consistent with the terms and conditions
contained herein and at a quality level that is substantially similar to the reasonable past practices with respect to such Service
as performed internally by Transferor immediately preceding the Effective Date, and in accordance with applicable Law.

 

2.4.          Additional
Resources. Except as provided in a Transition Service Schedule, and except as provided by applicable Law, neither Party, in
providing Services hereunder, shall be obligated to (a) purchase, lease or license any additional equipment or software or (b)
pay any costs related to the transfer or conversion of the Service Recipient’s data to the Service Provider or any alternate
supplier of Services; provided, that if such Party elects to undertake any of the foregoing, the receiving Party shall reimburse
the Supplying Party for all costs and expenses that are actually incurred and reasonably necessary relating thereto, whether or
not set forth in a Transition Service Schedule.

 

2.5.          Additional
Services. During the Term, either Party may at any time or from time to time request in writing that the other Party provide
it with additional services not set out on the Transition Service Schedules because they were omitted therefrom notwithstanding
that such services were provided, during the Reference Period, to the Party making such a request (the “Additional Services”).
As promptly as practicable following receipt of any such written request, the parties shall negotiate in good faith with respect
to: (a) the scope, nature, and standard of performance of such Additional Service(s); (b) the duration for which the Service Provider
shall provide such Additional Service(s), which shall not be longer than the then-current Term of this Agreement; and (c) the fees
for such Additional Service(s) (to the extent the agreed fees in the Transition Service Schedules do not already cover such Additional
Service(s)), which shall be based on the pricing principle and payment terms set out in Section 4, and, as to each of the foregoing,
upon reaching agreement in such negotiation, the Parties shall execute an additional written Transition Service Schedule(s) for
such Additional Service(s), and such Additional Service(s) shall be deemed to be part of this Agreement (and part of the Services)
from and after the date of such amendment. If, following commercially reasonable efforts to obtain any third party consents which
are required to provide an Additional Service, the Service Provider is unable to secure such consents, the Service Provider shall
use commercially reasonable efforts to provide a suitable replacement or workaround for the unavailable service or functionality
that is needed to provide the Additional Service in question. The Parties agree that any dispute with respect to the terms that
will govern an Additional Service shall be resolved in accordance with the dispute resolution procedures set forth in Section
15.5.

 

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2.6.          Change
Order Process. Any change in the scope or duration of any Service described in, or other amendment to, a Transition Service
Schedule must be in writing and signed by both Parties.

 

3.          TERM
AND TERMINATION.

 

3.1.          Term.
This Agreement shall commence on the Effective Date and remain in effect until the last day that any Service Term in any Transition
Service Schedule remains in effect, unless earlier terminated under this Section 3 (the “Term”). With
respect to each Service, such Service shall begin upon the applicable start date set forth in the Transition Services Schedule
(or the Effective Date if no start date is identified) and shall continue until the last day of the Service Term as set forth in
the Transition Service Schedule, unless earlier terminated under this Section 3. This Agreement may be extended by the Parties
in writing, either in whole or with respect to one or more of the Services.

 

3.2.          Termination.

 

3.2.1.          Either
Party may terminate this Agreement, either with respect to all or with respect to any one or more of the Services provided to such
Party as Service Recipient hereunder, for any reason or for no reason, at any time upon at least sixty (60) days prior written
notice to the other Party in its capacity as Service Provider, unless the specific Transition Service Schedule provides otherwise;
provided, that (a) any termination will not relieve the terminating Party of any payment obligations for Services provided
to such Party prior to the date such written notice of termination is delivered and (b) any losses, liabilities, costs and expenses
that may arise as a result of such early termination shall be borne by the Service Recipient. Any termination of Services under
this Section 3.2.1 shall have no effect on the obligations of the terminating Party as Service Provider under this Agreement.
Any termination notice delivered pursuant to this Section 3.2.1 shall be irrevocable unless otherwise agreed to by the Service
Provider who receives such notice.

 

3.2.2.          Subject
to the provisions of Section 13 below, either Party may terminate this Agreement in its entirety or with respect to affected
Services if the other Party materially breaches a material provision with regard to those Services and does not cure such breach
(or does not take reasonable steps required under the circumstances to cure such breach going forward) within thirty (30) days
(fifteen (15) days in the event of a payment breach) after receiving notice of the breach.

 

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3.2.3.          Any
provision that by its nature should survive, including but not limited to, the provisions of Section 4, Section 10,
Section 11, Section 12, Section 13 and Section 15, shall survive the termination of this Agreement.

 

4.          PAYMENT
TERMS.

 

4.1.          Charges
for Services. Each Party shall pay the charges, if any, set forth on the applicable Transition Service Schedule for each Service
listed therein as adjusted, from time to time, in accordance with Section 4.3 hereof.

 

4.2.          Expenses.
In addition to the charges described in Section 4.1, each Party, in its capacity as Service Recipient, shall, for each Service
performed, reimburse Service Provider for any reasonable documented out-of-pocket expenses payable to third parties which are incurred
by such Service Provider or its Affiliates in connection with such Service Provider’s provision of the Services.

 

4.3.          Payment
Terms. Each Party shall invoice the other Party monthly for all charges pursuant to this Agreement. Such invoices shall contain
reasonable detail of the Service provided and the charge therefor. Each Party shall pay all undisputed amounts due for Services
provided hereunder within thirty (30) days from receipt of an invoice therefor. Late payments shall bear interest at the lesser
of twelve percent (12%) per annum or the maximum rate allowed by law. Failure to pay undisputed amounts due hereunder pursuant
to the terms of this Agreement shall constitute a material breach of this Agreement, and the non-breaching Party may terminate
this Agreement under Section 3.2 hereof.

 

4.4.          Disputed
Amounts. Except as the Parties may expressly agree in writing, amounts due hereunder shall not be offset by amounts owed under
this Agreement or due under any other agreement. Further, the Parties agree that disputes related to amounts due under this Agreement
or any other agreement shall not serve as grounds to delay undisputed payment obligations under this Agreement. In the event of
any dispute related to amounts due under this Agreement, the Service Recipient shall deliver a written statement to the Service
Provider no later than five (5) days prior to the date payment is due on such disputed amount, which statement shall set forth
all disputed items and provide a reasonably detailed description of each disputed item. Amounts not so disputed shall be deemed
accepted and shall be paid, notwithstanding disputes on other items, in accordance with Section 4.3. The Parties shall seek
to resolve all such disputes expeditiously and in good faith.

 

4.5.          Taxes.
The Service Recipient shall pay all sales or use taxes imposed or assessed as a result of the provision of Services by the Service
Provider in accordance with the invoicing procedures set forth in Section 4.3.

 

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5.          TRANSITION
SERVICE RESPONSIBILITIES.

 

5.1.          Responsibilities
of Service Provider. Subject to Section 2.4, each Party shall maintain sufficient resources to perform its obligations
hereunder. Any specific performance criteria for a specific Service will be set forth in the corresponding Transition Service Schedule.
In addition:

 

(a)          each
Party, in its capacity as Service Provider, shall provide technical assistance and training to Service Recipient personnel to the
extent specified in the relevant Transition Service Schedule; and

 

(b)          each
Party, in its capacity as Service Provider, shall make reasonable efforts to notify Service Recipient of problems with the Service
Recipient’s work environment that might interfere with the provision of Services hereunder.

 

5.2.          Responsibilities
as Service Recipient. Each Party, in its capacity as Service Recipient, shall:

 

(a)          provide
Service Provider (or an Affiliate or other third-party providing Services in accordance with the terms hereof) with access to its
facilities as is reasonably necessary for Service Provider to perform the Services it is obligated to provide hereunder;

 

(b)          provide
Service Provider with information and documentation reasonably necessary for Service Provider to perform the Services it is obligated
to provide hereunder; and

 

(c)          make
available, as reasonably requested by Service Provider, reasonable access to resources and provide reasonably timely responses
to inquiries from the Service Provider regarding the provision of Services in order that Service Provider may perform its obligations
hereunder.

 

5.3.          Mutual
Responsibilities. The Parties will use good faith efforts to cooperate with each other in all matters relating to the provision
and receipt of Services. Such cooperation shall include:

 

(a)          exchanging
information relevant to the provision of Services hereunder;

 

(b)          good
faith efforts to mitigate problems with the work environment interfering with the Services; and

 

(c)          each
Party requiring its personnel to obey any security regulations and other published policies of the other Party while on the other
Party’s premises.

 

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6.          INTELLECTUAL
PROPERTY.

 

6.1.          Existing
Ownership Rights Unaffected. Neither Party will gain, by virtue of this Agreement, any rights of ownership or use of copyrights,
patents, trade secrets, trademarks or any other intellectual property rights owned by the other Party.

 

6.2.          Trademarks.
Neither Party is granted any ownership in or license to the Trademarks of the other Party by virtue of this Agreement.

 

6.3.          Removal
of Marks. The Parties agree that neither will remove any copyright notices, proprietary markings, trademarks or other indicia
of ownership of the other Party from any materials of the other Party.

 

7.          RELATIONSHIP
BETWEEN THE PARTIES. The Parties to this Agreement are and shall remain independent contractors and neither Party is an employee,
agent, partner, franchisee or joint venturer of or with the other. Each Party will be solely responsible for any employment-related
taxes, insurance premiums or other employment benefits respecting its employees. Neither Party shall hold itself out as an agent
of the other and neither Party shall have the authority to bind the other.

 

8.          AFFILIATE
OR THIRD PARTY PERFORMANCE. Each Party may subcontract with one or more Affiliates or, with Service Recipient’s prior written
consent, other third-party service providers to perform all or any portion of such Party’s duties under this Agreement in
its capacity as Service Provider, in each case in accordance with the payment terms set forth in Section 4; provided,
that such Party shall remain responsible for the performance of such Affiliates or other third party service providers.

 

9.          INSURANCE.
Each Party shall maintain, during the Term, such insurance policies issued by reputable insurance providers that such Party deems,
in its sole discretion, is customary with companies in the same or similar businesses operating in the same or similar locations
as such Party. To the extent the provision of a Service hereunder directly results in a material increase in the Service’s
Provider’s premium rate under any existing insurance policy, one-half (1/2) of any such increase attributable to such Service
shall be borne by each of the Service Provider and the Service Recipient.

 

10.         CONFIDENTIALITY.

 

10.1.          For
a period of two (2) years from the Effective Date, each Party agrees to hold, and to cause its respective Affiliates, directors,
officers, employees, agents, accountants, counsel and other advisors and representatives to hold, in strict confidence, and undertake
all reasonable precautions to safeguard and protect the confidentiality of, all Information concerning the other Party (including
Information included in the assets of the other Party) or any member of such other Party’s Group that is in its possession
after the Effective Date or furnished by the other Party, any other member of such other Party’s Group, or any of their respective
directors, officers, employees, agents, accountants, counsel and other advisors and representatives at any time pursuant to this
Agreement, and shall not use any such Information other than for such purposes as shall be expressly permitted hereunder or thereunder,
except, in each case, to the extent that such Information has been: (a) in the public domain through no fault of such Party,
their respective Group or any of their respective directors, officers, employees, agents, accountants, counsel and other advisors
and representatives; (b) lawfully acquired from other sources, which are not bound by a confidentiality obligation, by such
Party or their respective Group; or (c) independently generated without reference to any proprietary or confidential Information
of the other Party or any member of such other Party’s Group.

 

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10.2.          Each
Party agrees not to release or disclose, or permit to be released or disclosed, any such Information concerning the other Party
to any other Person, except to its directors, officers, employees, agents, accountants, counsel and other advisors and representatives
who need to know such Information and who are informed and advised that the Information is confidential and subject to the obligations
hereunder, except in compliance with Section 10.3. Without limiting the foregoing, when any Information is no longer
needed for the purposes contemplated by this Agreement, the Party in possession, custody or control of such Information shall,
promptly upon the other Party’s request, either (a) destroy all copies of such Information in such Party’s possession,
custody or control (including any that may be stored in any computer, word processor, or similar device, to the extent not commercially
impractical to destroy such copies) including any copies, summaries, analyses, compilations, reports, extracts or other reproductions,
in whole or in part, of such written, electronic or other tangible material or any other materials in written, electronic or other
tangible format based on, reflecting or containing Information prepared by such Party, and at the written request of such other
Party, such destruction shall be confirmed in writing, or (b) return to the requesting Party, at the expense of the requesting
Party, all copies of the Information furnished to such Party by or on behalf of the requesting Party; provided, however,
that the obligation to destroy Information shall not apply to copies of Information made as a matter of routine information technology
backup (although such copies shall remain subject to the confidentiality and use restrictions hereunder); and provided,
further, that regardless of whether any Information is destroyed, the recipient Party may retain a reasonable number of
copies of the other Party’s (or any of its Group’s) Information for use solely in the event a dispute arises hereunder
and only in connection with such dispute, or to the extent required to comply with legal or regulatory requirements.

 

10.3.          Protective
Arrangements. In the event that either Party or any member of such Party’s Group, either (a) determines after consultation
with counsel, in the opinion of such counsel that it is required by Law to disclose any Information of the other Party or its Group
or (b) receives any demand under lawful process or from any Governmental Authority to disclose or provide Information of the
other Party or its Group that is subject to the confidentiality provisions hereof, such Party shall notify the other Party prior
to disclosing or providing such Information and shall cooperate at the expense of the requesting Party (and to the extent legally
permissible) in seeking any reasonable protective arrangements requested by such other Party. Subject to the foregoing, the Party
that received such request may thereafter: (i) furnish only that portion of the Information that is legally required, (ii) give
notice to the other Party of the Information to be disclosed as far in advance as is practical, and (iii) exercise commercially
reasonable efforts to obtain reliable assurance that the confidential nature of such Information shall be maintained.

 

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11.         INDEMNIFICATION.

 

11.1.          Subject
to the limitations set forth in this Section 11, the Service Provider shall indemnify, defend and hold harmless the Service
Recipient and its officers, directors, agents, employees and Affiliates, from and against any and all Damages arising out of, relating
to or resulting from the gross negligence or willful misconduct of the Service Provider (or any Affiliate of the Service Provider
or third-party that provides a Service to the Service Recipient on the Service Provider’s behalf pursuant to Section 8)
in connection with the provision of, or failure to provide, any Services to the Service Recipient.

 

11.2.          Subject
to the limitations set forth in this Section 11, the Service Recipient shall indemnify, defend and hold harmless the Service
Provider and its officers, directors, agents, employees and Affiliates (each, a “Provider Indemnified Party”)
from and against any and all Damages arising out of, relating to or resulting from the Services rendered or to be rendered by or
on behalf of the Service Provider pursuant to this Agreement or the Service Provider’s actions or inactions in connection
with any such Services; provided, that the Service Recipient shall not be responsible for any Damages of such Provider Indemnified
Party to the extent that such Loss is caused by, results from, or arises out of or in connection with a Provider Indemnified Party’s
gross negligence or willful misconduct in connection with any such Services, actions or inactions related thereto.

 

11.3.          The
Service Recipient’s indemnification obligations under Section 11.2 with respect to any third party claim shall be
conditioned upon: (a) the Service Provider providing the Service Recipient with written notice describing such indemnification
claim (“Claim”) in reasonable detail in light of the circumstances then known and then providing the Service
Recipient with further notices to keep it reasonably informed with respect thereto; provided, however, that
failure of the Service Provider to provide such notice or to keep the Service Recipient reasonably informed as provided herein
shall not relieve the Service Recipient of its obligations hereunder except to the extent, if any, that the Service Recipient is
materially prejudiced thereby; (b) the Service Recipient being entitled to participate in such Claim and assume the defense thereof
with counsel reasonably satisfactory to the Service Provider, at the Service Recipient’s sole expense; and (c) the Service
Provider reasonably cooperating with the Service Recipient, at the Service Recipient’s sole cost and expense, in the defense
of any Claim. The Service Recipient will not accept any settlement unless the settlement includes as an unconditional term thereof
the giving by the claimant or the plaintiff of a full and unconditional release of the Service Provider from all liability with
respect to the matters that are subject to such Claim, without the Service Provider’s prior written consent, which consent
shall not be unreasonably withheld, delayed or conditioned. The Service Provider may participate in the defense of any Claim with
counsel reasonably acceptable to the Service Recipient, at the Service Provider’s own expense.

 

11.4.          Each
Party expressly agrees that the provisions of Section 11 shall be the exclusive remedy for all claims of breach or indemnification
pursuant to this Agreement.

 

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11.5.          EXCEPT
AS EXPRESSLY SET OUT IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY OR REPRESENTATION WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING
BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR AGAINST INFRINGEMENT, WITH RESPECT TO
THE PROVISION OR RECEIPT OF SERVICES PURSUANT TO THIS AGREEMENT.

 

12.         LIMITATION
OF LIABILITY, DISCLAIMER OF CONSEQUENTIAL DAMAGES AND CAP ON LIABILITY. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW:
(A) NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY LOST PROFITS, LOSS OF DATA, LOSS OF USE, COST OF COVER, BUSINESS INTERRUPTION
OR OTHER SPECIAL, INCIDENTAL, DIRECT, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY,
ARISING FROM THE PERFORMANCE OF, OR RELATING TO, THIS AGREEMENT REGARDLESS OF WHETHER SUCH PARTY HAS BEEN NOTIFIED OF THE POSSIBILITY
OF, OR THE FORESEEABILITY OF, SUCH DAMAGES EXCEPT TO THE EXTENT A PARTY IS LIABLE TO AN UNAFFILIATED THIRD PARTY WITH RESPECT THERETO;
AND (B) EACH PARTY’S LIABILITY FOR DAMAGES UNDER SECTION 11.1 SHALL NOT EXCEED THE AMOUNT OF THE FEES PAID (OR PAYABLE) BY
SERVICE RECIPIENT TO SERVICE PROVIDER UNDER THE APPLICABLE TRANSITION SERVICES SCHEDULE FROM WHICH SUCH CLAIM ARISES. Nothing
in this Section 12 shall be deemed to eliminate or limit, in any respect, a party’s express obligation in this
Agreement to pay or reimburse, as applicable, for Charges for Services rendered in accordance with this Agreement.

 

13.         FORCE
MAJEURE. Each Party will be excused for any failure or delay in performing any of its obligations under this Agreement,
other than the obligations of Service Recipient to make payments to Service Provider for Services already rendered, if such failure
or delay is caused by any act of God, any accident, explosion, fire, act of terrorism, storm, earthquake, flood or any similar
circumstance or event.

 

14.         TRANSITION
MANAGERS. In order to facilitate the general intent and the terms of this Agreement, Transferor and SpinCo have designated the
individual opposite such Party below as transition manager (each, a “Transition Manager”) to coordinate and
manage the Services hereunder and to serve as the principal contact in connection with the Services:

 

For Transferor:
Michelle Jeffrey

 

For SpinCo: Fred
Hite

 

The Transition Managers
will meet as they determine to be necessary and desirable. The responsibilities of such Transition Managers include coordination
of the Services, ensuring the execution of the tasks set forth in the Transition Service Schedules and resolving any conflicts
to the best of their abilities prior to escalation of any conflicts within their respective organizations.

 

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15.         MISCELLANEOUS.

 

15.1.          Entire
Agreement; Assignment; Successors.

 

15.1.1.          This
Agreement, the Separation Agreement and the other Ancillary Agreements and the Schedules hereto and thereto contain the entire
agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions,
writings, understandings, commitments and conversations with respect to such subject matter. There are no agreements or understandings
between the Parties other than those set forth or referred to herein or therein.

 

15.1.2.          
The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be
enforceable by (and against) the Parties and their respective successors and permitted transferees and assigns. Notwithstanding
the foregoing, this Agreement shall not be assignable, in whole or in part, by any Party without the prior written consent of the
other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be null
and void.

 

15.1.3.          Notwithstanding
anything to the contrary contained in this Agreement, the Transferor may collaterally assign its rights and remedies under this
Agreement to any of its financing sources (including the Financing Sources (as defined in the Merger Agreement)) without the consent
of any other party.

 

15.2.          Severability.
If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision
to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain
in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance
of the transactions contemplated hereby or thereby, as the case may be, is not affected in any manner adverse to any Party. Upon
such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision
to affect the original intent of the Parties.

 

15.3.          Notices.
All notices, requests, claims, demands or other communications under this Agreement will be in writing and will be given (and will
be deemed to have been duly given): (a) when delivered, if delivered in person; (b) when sent by email; provided, that receipt
of the email is confirmed in writing (including by email); (c) three (3) Business Days after sending, if sent by registered or
certified mail (postage prepaid, return receipt requested); and (d) one (1) Business Day after sending, if sent by overnight courier,
in each case to the respective Parties at the following addresses:

 

If to
the Transferor, to:

 

3034 Owen Dr.

Antioch, Tennessee 37013

Warsaw, IN 46582

Attention: Chief Commercial Officer OEM Solutions

Email: tom.sullivan@symmetrymedical.com

            david.milne@symmetrymedical.com

 

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with a
copy (if prior to the Distribution Date), which shall not constitute notice, to:

 

Ropes & Gray LLP

1211 Avenue of the Americas

New York, NY 10036

Attention: James T. Lidbury

Email: James.Lidbury@ropesgray.com

with a copy (if after the Distribution Date), which shall not constitute notice, to:

 

Weil, Gotshal & Manges LLP

201 Redwood Shores Parkway

Redwood Shores, CA 94065

Attention: Craig Adas

Email: craig.adas@weil.com

 

If to
SpinCo, to:

 

3034 Owen Dr.

Antioch, TN 37013

Attn: Chief Executive Officer

CC: General Counsel

 

with a
copy, which shall not constitute notice, to:

 

Ropes & Gray LLP

1211 Avenue of the Americas

New York, NY 10036

Attention: James T. Lidbury

Email: James.Lidbury@ropesgray.com

 

Either
Party may, by notice to the other Party, change the address to which such notices are to be given by delivery of notice in accordance
with this Section 15.3.

 

15.4.          Governing
Law. This Agreement shall be governed by and construed and interpreted in accordance with the Laws of the State of Delaware,
irrespective of the choice of laws principles of the State of Delaware as to all matters, including matters of validity, construction,
effect, enforceability, performance and remedies.

 

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15.5.          Jurisdiction;
Waiver of Jury Trial. Transferor and SpinCo recognize that disputes as to certain matters may from time to time arise during
the effectiveness of this Agreement which relate to either Party’s rights and obligations hereunder. It is the objective
of the Parties to establish procedures to facilitate the resolution of certain disputes arising under this Agreement in an expedient
manner by mutual cooperation and without resort to litigation. To accomplish this objective, the Parties agree to follow the procedures
set forth in Article IX of the Separation Agreement if and when a dispute arises under this Agreement. SUBJECT
TO ARTICLE IX OF THE SEPARATION AGREEMENT, EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY COURT PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF AND
PERMITTED UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, AS APPLICABLE,
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 15.5.

 

15.6.          Interpretation;
Article and Section References. The article, section and paragraph headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement. When a reference is made in this Agreement
to a Schedule, Article or Section, such reference shall be to Schedule, Article or Section of this Agreement, unless
otherwise indicated. The headings for this Agreement are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,”
“herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such term. Any statute defined or referred to herein or in any agreement or instrument
that is referred to herein means such statute as from time to time amended, modified or supplemented, including (in the case of
statutes) by succession of comparable successor statutes. References to a Person are also to its permitted successors and assigns.

 

15.7.          No
Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of each Party hereto and its
successors and permitted assigns and, except as expressly provided herein in Section 11 with respect to indemnified parties,
nothing in this Agreement is intended to or shall confer upon any other Person any legal or equitable rights, benefits or remedies
of any nature whatsoever under or by reason of this Agreement.

 

15.8.          Counterparts;
Electronic Signature. This Agreement may be executed and delivered (including by facsimile transmission) in two or more counterparts,
and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an
original but all of which taken together shall constitute one and the same agreement.

 

15.9.          Amendment
and Modification. This Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.

 

    	-13-

    	 

    

 

15.10.         Waivers.
No failure or delay of a Party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or
any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and
remedies of the Parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have
hereunder. Any agreement on the part of any Party to any such waiver shall be valid only if set forth in a written instrument executed
and delivered by such Party.

 

15.11.         No
Presumption Against Drafting Party. The Parties agree that they have been represented by counsel during the negotiation and
execution of this Agreement and, therefore, waive the application of any Law or rule of construction providing that ambiguities
in an agreement or other document will be construed against the Party drafting such agreement or document.

 

    	-14-

    	 

    

 

IN WITNESS WHEREOF,
each of the Parties has caused this Agreement to be duly executed on its behalf as of the day and year first above written.

 

	TRANSFEROR	 
	 	 
	Symmetry Medical Inc. 	 
	 	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

    	 

    	 

    

 

	SPINCO	 
	 	 
	Racecar Spinco Inc.	 
	 	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 

  

    	 

    	 

    

 

 

Transition Service Schedule

 

	Function	 	Service

    Provider	 	Service

    Recipient	 	Service Description	 	Service Term

    (Consecutive) 	 	Service

    Provider

    Representative

    and Location	 	Service

    Provider Time

    Commitment	 	Fee 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	HUMAN RESOURCES	 	Transferor	 	SpinCo	 	Consultation on general HR matters and assistance in transition or resolution of employees,
    benefits, compensation, employee programs, or other related issues as needed.	 	3 months	 	At discretion of Service Provider	 	No more than 10 hours per week	 	Employee time at hourly rates set forth in Schedule B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	HUMAN RESOURCES	 	SpinCo	 	Transferor	 	Consultation on general HR matters and assistance in transition or resolution of employees,
    benefits, compensation, employee programs, or other related issues as needed.	 	3 months	 	SpinCo HR and Legal, Fort Wayne Office (“FWO”)/ Nashville, TN (“Nashville”)	 	No more than 10 hours per week	 	Employee time at hourly rates set forth in Schedule B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	HUMAN RESOURCES	 	Transferor	 	SpinCo	 	In the event that any benefit programs currently in-force at Transferor are maintained during
    an interim period, Transferor will:

    o Maintain access for SpinCo to benefit vendor enrollment/maintenance sites for the duration of the interim period;

    o Provide reporting specific to the employees of SpinCo;

    o Assist in the closing of any claims which become or remain in dispute either prior to close or during the interim period;

    o Notify carriers (Anthem, Infinisource, Conexis, One America, Old National) on behalf of SpinCo of changes in enrollment;

    o Provide billing statements which separate the obligations of SpinCo from those of Transferor;

    o Execute any Agreements with vendors which are required to advance the interim status of SpinCo.	 	3 months	 	At discretion of Service Provider	 	No more than 10 hours per week	 	Benefits at actual costs. Employee time at hourly rates set forth in Schedule B

 

    	 

    	 

    

 

	HUMAN RESOURCES	 	Transferor	 	SpinCo	 	Transferor to provide payroll/employment information which allows SpinCo
    to verify employment, job or compensation data for all employees who transferred to a Transferor facility from a SpinCo facility,
    as requested.  This information may also be requested to satisfy questions posed by auditors or inspectors.	 	3 months	 	At discretion of Service Provider	 	No more than 10 hours per week	 	Employee time at hourly rates set forth in Schedule B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	HUMAN RESOURCES	 	Transferor	 	SpinCo	 	Transferor to provide information pertaining to bonus/equity plans, bonus/equity participants
    or bonus/equity calculations/payments when such plans were in-force prior to the closing as requested.  	 	3 months	 	At discretion of Service Provider	 	No more than 10  hours per week	 	Employee time at hourly rates set forth in Schedule B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	HUMAN RESOURCES	 	Transferor	 	SpinCo	 	Transferor to provide historical information specific to SpinCo when requested as it relates
    to:

    o Affirmative Action

    o EEO-1

    o Veterans Reporting

    o 401(k) Testing

    o Benefit Enrollment/utilization (when data is bundled under a Transferor contract)	 	3 months	 	At discretion of Service Provider	 	No more than 10 hours per week	 	Employee time at hourly rates set forth in Schedule B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	FINANCE	 	SpinCo	 	Transferor	 	Consultation on or assistance with financial consolidation, period close, or other related
    issues as needed.	 	3 months	 	SpinCo Accounting FWO/Nashville	 	No more than 10 hours per week	 	Employee time at hourly rates set forth in Schedule B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	FINANCE	 	SpinCo	 	Transferor	 	Consultation on general Tax matters and assistance with transition, or other related issues
    as needed.	 	3 months	 	SpinCo Accounting FWO/Nashville	 	No more than 10 hours per week	 	Employee time at hourly rates set forth in Schedule B

 

    	 

    	 

    

 

	R&D	 	Transferor	 	SpinCo	 	Engineering support associated with the winding down of the Bookwalter
    Universal Arm including support in converting files from Unigraphics to SolidWorks.	 	2 weeks	 	Guillaume Kerboul,  Cheltenham UK	 	No more than 4 hours per week	 	Employee time at hourly rates for Non-Management Employeesset forth in
    Schedule B)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	R&D	 	Transferor	 	SpinCo	 	Engineering support associated with the winding down of the SHARP Rongeur dual-bite handle
    and line extensions, including support in converting files from UG to SolidWorks.	 	1 month	 	Guillaume Kerboul,  Cheltenham UK	 	No more than 14 hours per week	 	Employee time at hourly rates for Non-Management Employeesset forth in Schedule B 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	R&D	 	Transferor	 	SpinCo	 	Engineering support with modifications to Arthroscopy instruments / Design History file addendums
    as well as provide support to address customer complaints, modify CAD files, or provide technical support.	 	1 year	 	Leo Gowin and Lou Marini, New Bedford	 	No more than 5 hours per week	 	Employee time at hourly rates for Non-Management Employees set forth in Schedule B

 

    	 

    	 

    

 

	R&D	 	Transferor	 	SpinCo	 	Modifications to PolyVAc Surgical Instrument
    Delivery System Design History Files required to address product complaints, modify CAD files, or provide technical support.	 	1 year	 	George Hannefin, Manchester NH	 	No more than 5 hours per week	 	Employee time at hourly rates for Non-Management
    Employees set forth in Schedule B 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	R&D	 	SpinCo	 	Transferor	 	Modifications to Design History Files for the Ultra Sterilization Containers required to
    address product complaints, modify CAD files, or provide technical support .	 	1 year	 	SpinCo R&D, Nashville 	 	No more than  5 hours per week 	 	Employee time at hourly rates set forth in Schedule B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	R&D	 	SpinCo	 	Transferor	 	Modifications to Design History Files for the QuadLock Sterilization Containers to address
    product complaints, modify CAD files, or provide technical support	 	1 year	 	SpinCo R&D, Nashville 	 	No more than 5 hours per week 	 	Employee time at hourly rates set forth in Schedule B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	IT	 	SpinCo	 	Transferor	 	VPN access to electronic records including but not limited to: 1) financial records created
    or pertaining to the period prior to the Separation; 2) documents of any type, including but not limited to those made with
    Microsoft Office software, that were created by, edited by or reviewed by any Transferor Employee prior to the Separation;
    3) any records of SpinCo which pertain in any way to any lawsuit, governmental or quasi-governmental investigation or inquiry
    or any disclosure Transferor is required to make pursuant to a valid court or governmental order or requirement; 4)  data
    for HQ cost centers.	 	6 months	 	SpinCo IT, Nashville	 	Not Applicable	 	No fee for data access

 

    	 

    	 

    

 

	IT	 	Transferor	 	SpinCo	 	VPN access to electronic records including but
    not limited to: 1) financial records created or pertaining to the period prior to the Separation; 2) documents of any type,
    including but not limited to those made with Microsoft Office software, that were created by, edited by or reviewed by any
    SpinCo Employee during his/her employment with Transferor or any subsidiary or affiliate; 3) any records of Transferor division
    which pertain in any way to any lawsuit, governmental or quasi-governmental investigation or inquiry or any disclosure SpinCo
    is required to make pursuant to a valid court or governmental order or requirement; 4)  data for HQ cost centers.	 	6 months	 	Tranferor IT, multiple locations	 	Not Applicable	 	No fee for data access
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	IT	 	Transferor	 	SpinCo	 	Email forwarding from the Exchange Server located in Warsaw of symmetrymedical.com email
    addresses to corresponding symmetrysurgical.com email addresses for all SpinCo employees that were formerly Transferor employees..  	 	1 year	 	Not Applicable	 	No more than 25 employees	 	No fee for service
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	IT	 	Transferor	 	SpinCo	 	Phones forwarded from the Shoretel phone system in Manchester of current Symmetry Medical
    phone numbers to corresponding phone numbers in the phone system in Nashville for all  SpinCo employees that were
    formerly Transferor employees.  	 	1 year	 	Not Applicable	 	No more than 25 employees	 	No fee for service

 

    	 

    	 

    

 

	REAL ESTATE	 	SpinCo	 	Transferor	 	Rental of the offices in the Fort Wayne location of SpinCo (the “Office”)
    which are currently occupied by employees who will remain with Transferor after the Separation.  Unless prohibited
    by the Lease Agreement for the Office or otherwise, this service shall terminate in conjunction with the termination or expiration
    of SpinCo’s Lease Agreement for the Office, which may be effectuated on no less than sixty (60) days’ notice by
    SpinCo.  SpinCo may modify the office space or reallocate offices among Transferor employees and SpinCo employees
    at its sole discretion for the purpose of ensuring compliance with any law, regulation, or other obligation. 	 	6 months	 	SpinCo, FWO	 	Office space for no more than 5 employees	 	$1,750 per month
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	INSURANCE	 	Transferor	 	SpinCo	 	Consultation and coordination on historical Insurance matters and claims, including but not
    limited to reasonable access to witnesses, records, documents, opinions of third parties retained for investigation or other
    related purposes, or premises and other assistance which is reasonably necessary or helpful in prosecuting or defending any
    such insurance claim, defense or matter.	 	3 months	 	At discretion of Service Provider	 	No more than 10 hours per week	 	Employee time at hourly rates set forth in Schedule B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	INSURANCE	 	SpinCo	 	Transferor	 	Consultation and coordination on historical Insurance matters and claims, including but not
    limited to reasonable access to witnesses, records, documents, opinions of third parties retained for investigation or other
    related purposes, or premises and other assistance which is reasonably necessary or helpful in prosecuting or defending any
    such insurance claim, defense, or matter.	 	3 months	 	SpinCo Legal and Accounting, FWO/Nashville	 	No more than 10 hours per week	 	Employee time at hourly rates set forth in Schedule B

 

    	 

    	 

    

 

Employee Hourly Rate Schedule (Schedule
B)

 

	Employee	 	Hourly Rate	 
	CEO	 	$	500 per hour	 
	CFO	 	$	400 per hour	 
	GC	 	$	300 per hour	 
	CAO	 	$	200 per hour	 
	Other Management	 	$	100 per hour	 
	Non-Management Employees	 	$	60 per hourFPO 2014.9.30 EX-10.1

May 7, 2014

Mr. Robert Milkovich
5125 Westpath Way
Bethesda, MD 20816

Dear Robert:

On behalf of First Potomac Realty Trust, I am pleased to offer you the position of Executive Vice President and Chief Operating Officer subject to your election by the Board of Trustees.  In your role as Chief Operating Officer, you will be a voting member of the Company’s Senior Management Investment Committee.  We view your addition as an important step in our continued growth and development, and are excited at the prospect of you joining our team.

Start Date:        May 27, 2014 or a mutually agreed upon date.

Compensation:
		
	•
	$350,000/year (paid in bi-weekly pay periods per the Company’s regular pay practices).  Your base compensation will be reviewed again in March, 2015. 

		
	•
	Participation in the EVP short-term incentive plan with an annual target award of 80% of your base salary.  Actual incentives will be based on corporate performance achievement, departmental performance and individual performance based on mutually agreed upon goals that will be established within 90 days of your Start Date, along with other factors deemed relevant by the Compensation Committee of the Board of Trustees, and will be awarded at the discretion of the Compensation Committee.   The EVP short-term incentive plan does not constitute a promise of payment.

		
	•
	Participation in the EVP long-term incentive plan with an annual target award of $550,000 in restricted share grants.  Per the plan, annual long-term incentive awards will be broken into two parts, each of which will be made in the first quarter of the following fiscal year (i) 40% of the award will be fixed based on the aggregate target amount of the award; and (ii) the balance of the award will be determined based on performance metrics set annually by the Compensation Committee, in its sole discretion. For the 2014 plan year, the number of restricted shares to be granted pursuant to the performance component of the annual award will be determined based on achievement of the following performance metrics for the two year period ending December 31, 2014.

	
					
	Performance Metrics

	Award 
Weighting

	Threshold

	Target

	Stretch

	Relative Annualized Shareholder Return vs. RMS
	50%
	-300 bps
	0bps
	+300 bps

	Absolute Annualized Shareholder Return
	50%
	7.00%
	10.00%
	13.00%

	 
	 
	 
	 
	 

	Percent of Performance Portion of Award Earned
	 
	50%
	100%
	150%

 
If the performance level is between two of these identified levels of performance (i.e., between threshold and target or between target and stretch), the actual amount of the award that is earned will be “interpolated” using the two identified levels of performance. If performance falls below the threshold requirements, no award will be earned under this portion of the LTI Program.
Once awarded (upon achieving the performance metrics, if applicable), the long-term incentive award will be made in the form of restricted shares that vest annually in equal installments over a three-year period. 
The number of shares awarded will be determined by dividing the dollar amount of the award by the closing price of our common shares on the New York Stock Exchange on the date of the grant.  

Benefits:  
		
	•
	Health, dental and life insurance coverage after completing two consecutive months of employment under the Company’s standard benefits program.     

		
	•
	Payment of COBRA coverage for two months until eligible for FPO plan. 

		
	•
	401(k) plan participation and Company match after completing one consecutive year of employment. 

		
	•
	Four weeks accrued annual vacation, six days annual sick leave and two personal days in accordance with Company policy. 

You will receive additional information with regard to the benefit programs upon your arrival.   
 
		
	Sign On:
	$150,000 cash payment; and 

Restricted Stock with an issue value of $200,000 will be granted on your Start Date, which will vest annually in equal installments, on each anniversary of your Start Date, over a three-year period. 

		
	Separation:
	It is understood that you will be employed “at-will,” which means that either you or First Potomac Realty Trust, with or without cause or notice, may terminate your employment at any time.  

Under certain circumstances, you will be eligible for severance benefits.  The specific terms and conditions of the severance benefits for which you will be eligible are as set forth on Exhibit A hereto.  Any entitlement to severance benefits is expressly contingent on you executing a general release (in a form provided by the Company) of any and all claims you might have arising from your employment and termination of employment.

Please acknowledge your acceptance of your employment by signing and returning this letter to my attention.  This offer will expire three business days from the date of this letter.  Please retain a copy for your records.  

Also, by signing below, you represent and warrant that you are free to enter into an employment relationship with us without breaching any other agreement or contract to which you are or may be bound, including any existing or previous employment agreement or non-competition agreement.  Further, your employment is contingent on references and a satisfactory background investigation, for which you are expected to sign an authorization.  You will be contacted for any additional information or concerns with the investigation.  In addition, you will be expected to sign a non-competition, confidentiality and non-solicitation agreement, a copy of which has been provided to you.

We look forward to you joining our team.  Please contact me if you have any questions.

	
			
	 
	 
	Sincerely,

	 
	 
	 

	 
	 
	/s/Fadwa Hasan

	 
	 
	 

	 
	 
	 

	 
	 
	Fadwa Hasan

	 
	 
	Director, Human Resources

	 
	 
	 

	Accepted and Agreed to by:
	 
	 

	 
	 
	 

	/s/Robert Milkovich
	 
	5/7/2014

	Robert Milkovich
	 
	Date

Exhibit A

STATEMENT OF 
SEVERANCE BENEFITS

SECTION 1. DEFINITIONS
In addition to the terms defined elsewhere in this Statement of Severance Benefits of First Potomac Realty Trust (the “Company”), the following terms as used herein shall have the following meanings when used with initial Capital letters:
1.1     “Compensation Committee”.  Means the Compensation Committee duly appointed from time to time by the Board of Trustees of the Company.
1.2    “Cause”.  When used with respect to termination of employment shall mean:
		
	(i)
	indictment or conviction of or a plea of guilty or nolo contendere by the Senior Level Executive  for the commission of a felony; or

		
	(ii)
	commission by the Senior Level Executive of one or more acts involving fraud or moral turpitude; or

		
	(iii)
	misappropriation by the Senior Level Executive of any assets of the Company; or

		
	(iv)
	misconduct by the Senior Level Executive which is materially injurious to the Company and/or its employees, officers and Trustees; or

		
	(v)
	fraud or willful misconduct by the Senior Level Executive that caused or otherwise contributed to the requirement for an accounting restatement of the Company’s financial statements due to noncompliance with any financial 

reporting requirement (other than a restatement due to a change in accounting rules).
1.3     “Change in Control”  Shall mean the occurrence of any of the following events:    
(i)     Any “person” (as such term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided that a Change in Control shall not be deemed to occur as a result of the death of a shareholder, and a Change in Control shall not be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of another real estate investment trust and in which the shareholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the transaction, shares entitling such shareholders to more than 50% of all votes to which all shareholders of the parent real estate investment trust would be entitled in the election of trustees (without consideration of the rights of any class of stock to elect trustees by a separate class vote);
(ii)     The consummation of (i) a merger or consolidation of the Company with another real estate investment trust where the shareholders of the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling such shareholders to more than 50% of all votes to which all shareholders of the surviving real estate investment trust would be entitled in the election of trustees (without consideration of the rights of any class of stock to elect trustees by a separate class vote), or where the members of the Board, immediately prior to 

the merger or consolidation, would not, immediately after the merger or consolidation, constitute a majority of the board of trustees of the surviving real estate investment trust, (ii) a sale or other disposition of all or substantially all of the assets of the Company, or (iii) a liquidation or dissolution of the Company; or
(iii)    After the effective date that the Senior Level Executive commences his employment with the Company, trustees are elected such that a majority of the members of the Board shall have been members of the Board for less than two years, unless the election or nomination for election of each new trustee who was not a trustee at the beginning of such two-year period was approved by a vote of at least two-thirds of the trustees then still in office who were trustees at the beginning of such period.
Notwithstanding the foregoing, to the extent that (i) any payment under this Statement of Severance Benefits is payable solely upon or following the occurrence of a Change in Control and (ii) such payment is treated as “deferred compensation” for purposes of Code Section 409A, a Change in Control shall mean a “change in the ownership of the Company,” a “change in the effective control of the Company,” or a “change in the ownership of a substantial portion of the assets of the Company” as such terms are defined in Section 1.409A-3(i)(5) of the Treasury Regulations.
1.4     “Code” means the Internal Revenue Code of 1986, as amended from time to time, together with rules, regulations, and interpretations thereunder.  Reference to particular sections of the Code shall include any successor provisions.
1.5     “Disability” means the disability of the Senior Level Executive with “disability” having the same meaning as “disabled” under Code Section 409A(a)(2)(C) and the Treasury Regulations promulgated thereunder and the Senior Level Executive being determined to be 

either totally disabled by the Social Security Administration, or disabled in accordance with a disability insurance program of the Company as determined by the insurance provider or plan administrator in accordance with Code Section 409A(a)(2)(C) and the Treasury Regulations promulgated thereunder.
1.6     “Good Reason” means the occurrence of any of the following events or conditions, which the Senior Level Executive notifies the Company of within ninety (90) days of the initial occurrence of such event, unless the Senior Level Executive has expressly consented in writing thereto (with explicit reference to this definition) or unless the event is cured by the Company within thirty (30) days after receipt of notice hereof given by Senior Level Executive (the “Cure Period”).
		
	(i)
	any material reduction in Senior Level Executive’s base salary;

		
	(ii)
	any relocation of the Company’s headquarters or Senior Level Executive’s primary employment location from the Washington, DC metropolitan area or more than 50 miles from the Company’s current headquarters in Bethesda, Maryland; or

		
	(iii)
	any material reduction of Senior Level Executive’s duties from those identified at the commencement of Senior Level Executive’s employment with the Company.

For the avoidance of doubt, a Senior Level Executive must terminate employment with the Company within thirty (30) days following the expiration of the Cure Period in order for such termination to be considered due to “Good Reason.”  
1.7     “Retirement” means the voluntary resignation with at least 60 days’ notice at or after the age of 58.

1.8     “Securities Act” means the Securities Act of 1933, as amended.
1.9    “Senior Level Executive” shall mean Mr. Robert Milkovich.
1.10    “Separation from Service” shall mean the Senior Level Executive’s cessation of services to the Company and/or its subsidiaries or affiliates.  For purposes of this Severance Policy, the Senior Level Executive is treated as continuing in employment with the Company while the Senior Level Executive is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months, or if longer, so long as the Senior Level Executive retains a right to reemployment with the Company under an applicable statute or by contract.  A leave of absence shall constitute a bona fide leave of absence only if there is a reasonable expectation the Senior Level Executive will return to perform services for the Company following such leave.  If the period of leave exceeds six (6) months and the Senior Level Executive does not retain a right to reemployment under an applicable statute or by contract, the Senior Level Executive will be deemed to have a Separation from Service on the first date immediately following such six (6) month period.  Notwithstanding the foregoing, if (i) a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months and (ii) such impairment causes the Senior Level Executive to be unable to perform the duties of his position of employment or any substantially similar position of employment, then a twenty-nine (29) month period of absence shall be substituted for the six (6) month period described above.  For purposes of this Severance Policy, the Senior Level Executive shall be deemed to have experienced a Separation from Service on any date the Senior Level Executive’s level of bona fide services performed for the Company decreases to a level equal to twenty percent (20%) or less of the average level of services rendered by the Senior 

Level Executive during the thirty-six (36) month period ending on such date or the full period of services rendered by the Senior Level Executive for the Company if the Senior Level Executive has been providing services to the Company for less than thirty-six (36) months as of such date.  Whether a Separation from Service has occurred will be determined in accordance with Treasury Regulation 1.409A-1(h), or any successor thereto.  For the avoidance of doubt, for purposes of any provision of this Severance Policy, references to a “separation,” “termination,” “termination of employment” or like terms shall mean “Separation from Service.”
1.12 “Vest”, “Vested”, or “Vesting” has the meaning set forth in the Senior Level Executive’s stock option agreement or award, Equity Compensation Plan or similar agreement, or instrument, if applicable.
1.13 “Construction.  Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of this Statement of Severance Benefits.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise. 

SECTION 2.  SEVERANCE PAY UPON TERMINATION OF EMPLOYMENT
2.1    Voluntary Termination.  In the event of a Voluntary Termination, which shall be a termination for any reason other than Cause, Change in Control, Good Reason, Retirement, Disability, or Death (“Voluntary Termination”), by the Senior Level Executive the Senior Level Executive shall not be entitled to any severance pay or other benefits provided hereunder.  Additionally, all unvested stock options and shares shall be forfeited upon such Voluntary Termination.  The Senior Level Executive shall have one (1) year from his termination date to 

exercise all vested stock options (subject to the ten (10) year expiration from the date of issue or other exercise limitations regarding the applicable award).
2.2    Termination Due To Retirement.  In the event that Senior Level Executive’s employment terminates due to Retirement, the Senior Level Executive shall not be entitled to any severance pay or other benefits provided hereunder upon such Retirement under this Severance Policy.  The Senior Level Executive shall have one (1) year from his retirement date to exercise all vested stock options (subject to the ten (10) year expiration from the date of issue or other exercise limitations regarding the applicable award).  The Senior Level Executive shall receive accelerated vesting of his outstanding unvested non-performance shares and options in the event of a termination due to Retirement as follows:
a.    after age 58 but before age 62, 50% acceleration of unvested non-performance shares and options;
b.    after age 62 but before age 65, 75% acceleration of unvested non-performance shares and options;
c.    after age 65, 100% acceleration of unvested non-performance shares and options.
In the case of (a) or (b) above the specific shares to be vested out of the pool of the Senior Level Executive’s unvested shares will be at the Company’s discretion. 
2.3    Termination Due To Accidental Or Natural Death.  In the event that Senior Level Executive’s employment is terminated due to Senior Level Executive’s death, his estate shall receive base salary through the end of the month in which the death occurs.  The Senior Level Executive (through his beneficiary) shall receive accelerated vesting of his unvested non-performance shares and options, and shall have one (1) year from his date of death to exercise 

his vested options (subject to the 10 year expiration from date of issue or other exercise limitations regarding the applicable award).  Senior Level Executive’s eligible beneficiaries shall also be entitled to receive an additional lump sum death benefit payment of $15,000 payable within 60 days of the Senior Level Executive’s death.  
2.4    Termination and/or the Inability to Perform Material Duties Due To Disability.  In the event of a termination and/or the inability to perform material and essential duties due to Disability, in accordance with the Company policy, the Senior Level Executive shall be eligible to receive salary replacement through the Company’s Long Term Disability program, subject to eligibility requirements by the insurance carrier or administrator of such program and in accordance with Code Section 409A, to the extent applicable.  The Senior Level Executive shall be eligible to receive accelerated vesting of his unvested non-performance shares and options, and shall have one (1) year from the date of his disability to exercise his vested options (subject to the 10 year expiration date from date of issue or other exercise limitations regarding the applicable award).  Senior Level Executive’s eligible beneficiaries shall also be entitled to receive an additional lump sum disability benefit payment of $15,000 payable within 60 days of the Senior Level Executive’s Disability.  
2.5    Termination For Cause.  In the event of a Termination for Cause, the Senior Level Executive shall not be entitled to any severance pay or other benefits provided hereunder.  The Senior Level Executive’s unvested shares and options shall be forfeited upon such termination and the right to exercise vested options shall terminate upon the termination for Cause.
2.6    Termination Without Cause.  In the event of a termination without Cause, Senior Level Executive shall be entitled to receive (i) a lump sum payment equal to 1x the Senior Level Executive’s highest annual base salary and the average annual bonus earned by him in the prior 

three (3) year period (or the period of Senior Level Executive’s employment, if less than three (3) years) and (ii) an additional lump sum payment equal to $15,000.  Such payments shall be made on the 30th day following the Senior Level Executive’s Separation from Service (the “Severance Commencement Date”).  Additionally, Senior Level Executive’s outstanding unvested non-performance shares and options shall be accelerated.  The Senior Level Executive shall have one (1) year from the date of his termination to exercise all vested stock options (subject to the ten (10) year expiration from the date of issue or other exercise limitations regarding the applicable award).    Lastly, in the event of termination without Cause, Senior Level Executive shall be eligible for reasonable outplacement assistance for a period of up to one (1) year as determined by the Company in its sole discretion.
2.7    Termination for Good Reason by Senior Level Executive.  In the event Senior Level Executive resigns for Good Reason, he shall be entitled to receive (i) a lump sum payment of 1x the Senior Level Executive’s highest annual base salary and an amount equal to the average annual bonus earned by him in the prior three (3) year period (or the period of Senior Level Executive’s employment, if less than three (3) years) and (ii) an additional lump sum payment equal to $15,000.  Such payments shall be made on the Severance Commencement Date.   The Senior Level Executive’s outstanding unvested non-performance shares and options shall be accelerated, and the Senior Level Executive shall have one (1) year from his termination date to exercise all vested stock options (subject to the ten (10) year expiration from the date of issue or other exercise limitations regarding the applicable award). 
2.8    Termination Following a Change in Control.  For certain terminations following a Change in Control, in order to receive enhanced severance, a double trigger shall apply such that the first trigger being that a Change in Control shall have occurred and the second trigger 

being that the Senior Level Executive’s employment must be terminated by the Company without Cause or the Senior Level Executive must terminate employment due to Good Reason upon or within 12 months of the closing date of the Change in Control itself (the “Change in Control Severance Period”), must both occur for the Senior Level Executive to be eligible for any enhanced severance under this Severance Policy.
In the event the Senior Level Executive’s employment is terminated by the Company without Cause or the Senior Level Executive terminates employment due to Good Reason during the Change in Control Severance Period, the Senior Level Executive shall be entitled to receive (i) a lump sum payment of 2x the Senior Level Executive’s highest annual base salary and an amount equivalent to 2x the average annual bonus earned by him in the prior three (3) year period (or the period of Senior Level Executive’s employment, if less than three (3) years) and (ii) an additional lump sum payment equal to $22,500.  Such payments shall be made on the Severance Commencement Date.  The Senior Level Executive’s outstanding unvested non-performance shares and options shall be accelerated.  The Senior Level Executive shall have one (1) year from his termination date to exercise all vested stock options (subject to the ten (10) year expiration from the date of issue or other exercise limitations regarding the applicable award).  Lastly, in the event a termination without Cause or due to Good Reason occurs during the Change in Control Severance Period, the Senior Level Executive shall be eligible for reasonable outplacement assistance for a period of up to one (1) year as determined by the Company in its sole discretion.
In the event that an excise tax is imposed by the Code as a result of severance payment received from a termination due to a Change in Control, the Company shall not gross up such 

payments to the Senior Level Executive for the amount of the excise tax nor any other amount of income and other taxes due as a result of any gross up payment.

SECTION 3.  NO RIGHT TO CONTINUED EMPLOYMENT
Nothing contained herein shall confer upon the Senior Level Executive any right to continue in the employ of the Company or shall interfere with or restrict in any way the rights of the Company, which are reserved, to discharge Senior Level Executive at any time for any reason whatsoever, with or without cause.

SECTION 4.  AMERICAN JOBS CREATION ACT
The severance benefits described herein are  intended to be exempt from or comply with the provisions of Section 409A of the Code, as enacted by the American Jobs Creation Act of 2004, as well as any regulations or other guidance issued by the Secretary of Treasury and the Internal Revenue Service (“Section 409A”) and, to the extent such section or regulations apply, the provisions hereof shall be construed and administered accordingly.  It is intended that (i) each payment or installment of payments provided hereunder is a separate “payment” for purposes of Section 409A and (ii) that the payments satisfy, to the greatest extent possible, the exemptions from the application of  Section 409A including those exceptions provided under Treasury Regulations 1.409A-1(b)(4) (regarding short-term deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two year exception), and 1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay).  Notwithstanding anything to the contrary herein , if the Company determines (i) that on the date of a Senior Level Executive’s Separation from 

Service or at such other time that the Company determines to be relevant, the Senior Level Executive is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to the Senior Level Executive pursuant to this Severance Policy are or may become subject to the additional tax under Code Section 409A(a)(1)(B) or any other taxes or penalties imposed under Section 409A (“Section 409A Taxes”) if provided at the time otherwise required hereunder, then such payments shall be delayed until the date that is six (6) months after the date of the Senior Level Executive’s Separation from Service with the Company, or if earlier, the Senior Level Executive’s death.  Any payments delayed pursuant to this Section 4 shall be made in a lump sum on the first day of the seventh month following the Senior Level Executive’s Separation from Service or, if earlier, the Senior Level Executive’s death.
Notwithstanding any other provision hereof to the contrary, in no event shall any payment hereunder that constitutes “deferred compensation” for purposes of Section 409A and the Treasury Regulations promulgated thereunder be subject to offset (excluding any forfeiture of severance hereunder) by any other amount unless otherwise permitted by Section 409A.

SECTION 5.  RELEASE AND WAIVER OF CLAIMS
In order to receive any severance hereunder, or to continue to receive such severance, the Senior Level Executive must execute and submit to the Company a signed, enforceable release and waiver (the “Release”) of all claims arising out of Senior Level Executive’s 

employment or termination of employment (other than compensation earned and accrued through the date of termination of employment), and any applicable revocation period shall have expired prior to the Severance Commencement Date.  Said Release shall be in a form acceptable to the Company and the Senior Level Executive, and such Release shall be provided to the Senior Level Executive within three (3) business days of the date of the Senior Level Executive’s Separation from Service.

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