Exhibit 10.7
Exhibit F
TRANSITION SERVICES
AGREEMENT
This Transition Services Agreement
(this “ Agreement ”), dated as of
[ ], 2006,
is by and between Apolo Mecanica e Estruturas S.A., a corporation (
sociedade anônima/stock corporation ), organized under
the laws of the Federative Republic of Brazil, with head offices in
the city of Rio de Janeiro, State of Rio de Janeiro, at Av.
Chrisótomo Pimentel de Oliveira, No. 2651, Pavuna, CEP
21650-000, duly enrolled with the CNPJ under No.
33.017.088/0001-03, herein represented by its undersigned legal
representatives, duly authorized as they solely declare (the
“ Company ”) and Apolo Tubos e Equipamentos
S.A., a corporation ( sociedadeanônima/stock
corporation ), organized under the laws of the Federative
Republic of Brazil, with head offices in the city of Rio de
Janeiro, State of Rio de Janeiro, at Av. Chrisótomo Pimentel
de Oliveira, No. 2651, Pavuna, CEP 21650-000, duly enrolled with
the CNPJ under No. 33.017.088/0001-03, herein represented by its
undersigned legal representatives, duly authorized as they solely
declare (“ Tubos ”).
RECITALS
WHEREAS, the Company, Tubos, Lone
Star Brazil Holdings 2 Ltda. (“ LSB 2 ”), Lone
Star Technologies, Inc., GPC Participacoes S.A., and Cirrus
Participacoes Ltda have entered into that certain Contribution
Agreement, dated as of
[ ],
2006 (with all addenda thereto, the “ Contribution
Agreement ”), pursuant to which LSB 2 has agreed to
contribute the LSB 2 Investment to the Company in exchange for 50%
of the outstanding Common Shares of the Company;
WHEREAS, the Company desires to
obtain from Tubos, on the terms and conditions set forth herein,
certain services in connection with its operation of the business
of the Company for the time periods set forth herein, and Tubos is
willing to provide to the Company, on the terms and conditions set
forth herein, such services; and
WHEREAS, capitalized terms used
herein and not otherwise defined shall have the meanings ascribed
to such terms in the Contribution Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of
the foregoing and the mutual covenants and agreements set forth
herein, Tubos and the Company hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section
1.1
Definitions
. As used
in this Agreement and the Schedules attached hereto the following
terms will have the following meanings, applicable both to the
singular and the plural forms of the terms described:
“ Agreement ” has
the meaning ascribed thereto in the preamble hereto, as such
agreement may be amended and supplemented from time to time in
accordance with its terms.
“ Company ” has
the meaning ascribed thereto in the preamble hereto (and any
reference to the “Company” in the Schedules attached
hereto shall include any subsidiaries of the Company).
“ Company Indemnified
Person ” has the meaning ascribed thereto in Section
3.2 .
“ Company Losses
” has the meaning ascribed thereto in Section 3.2
.
“ Confidential
Information ” shall mean non-public information about the
disclosing party’s or any of its Affiliates’ businesses
or activities that is proprietary and confidential, which shall
include, without limitation, all business, financial, technical and
other information of the disclosing party or its Affiliates that is
marked or designated “confidential” or
“proprietary” or that by its nature or the
circumstances surrounding its disclosure should reasonably be
regarded as confidential or proprietary. Confidential
Information includes not only written or other tangible
information, but also information transferred orally, visually,
electronically or by any other means. Confidential
Information shall not include information that (i) is in or
enters the public domain without breach of this Agreement,
(ii) the receiving party lawfully receives from a third party
without restriction on disclosure and, to the receiving
party’s knowledge, without breach of a nondisclosure
obligation, or (iii) is independently developed by the receiving
party.
“ Contribution
Agreement ” has the meaning ascribed thereto in the
recitals to this Agreement.
“ Dispute ” has
the meaning ascribed thereto in Section 5.7 .
“ Event of Force
Majeure ” has the meaning ascribed thereto in Section
2.5 .
“ ICC Rules ” has
the meaning ascribed thereto in Section 5.7 .
“ LSB 2 ” has the
meaning ascribed thereto in the preamble hereto.
“ Services ” has
the meaning ascribed thereto in Section 2.1 .
“ Term ” has the
meaning ascribed thereto in Section 4.1 .
“ Tubos ” has the
meaning ascribed thereto in the preamble hereto.
“ Tubos Entities
” means Tubos and its subsidiaries and Affiliates providing
Services hereunder and “Tubos Entity” shall mean any of
the Tubos Entities.
“ Tubos Indemnified
Person ” has the meaning ascribed thereto in Section
3.1 .
“ Tubos Losses ”
has the meaning ascribed thereto in Section 3.1 .
“ Outsourced Service
” has the meaning ascribed thereto in Section 2.3
.
“ Vendor Contract
” has the meaning ascribed thereto in Section 3.1
.
2
“ Vendor Services
” shall mean any Services that are third party,
vendor/out-sourced services.
Section
1.2
Internal
References . References to
Articles, Sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement and references
to the parties shall mean the parties to this
Agreement.
ARTICLE II.
PURCHASE AND SALE OF SERVICES
Section
2.1
Provision of
Services .
(a)
On the terms and
subject to the conditions of this Agreement and in consideration of
the LSB 2 Investment, LSB 2’s entering into of the
Contribution Agreement and the service charge described in
Schedule I, Tubos agrees to provide or cause to be provided to
the Company and its subsidiaries, during the Term of this
Agreement, the services necessary for the continuity of the
business of the Company, including but not limited to the services
described in Schedule I , in a commercially reasonable
manner and level of service and, where applicable, in a manner and
relative level of service consistent in all material respects with
that provided by Tubos or its subsidiaries to the Facility and the
Company prior to the date of this Agreement (the “
Services ”). No other consideration will be due
to Tubos other than the consideration set forth
hereinabove.
(b)
At its option,
Tubos may cause any Service it is required to provide hereunder to
be provided by any other Tubos Entity.
Section
2.2
Additional
Services . In addition to the
Services to be provided by Tubos pursuant to Section 2.1 ,
if requested by the Company, and to the extent that Tubos and the
Company mutually agree in writing, Tubos shall provide additional
services to the Company. The scope and term of any such
services and the other terms and conditions applicable to such
services, shall be as mutually agreed by Tubos and the Company.
Nothing herein shall create any obligation on the part of
Tubos to provide any additional services.
Section
2.3
Services
Performed by Third Parties . At its option, Tubos
may cause any Service it is required to provide hereunder to be
provided by any third party that is providing, or may from time to
time provide, the same or similar services for Tubos (an “
Outsourced Service ”). Tubos shall remain
responsible, in accordance with the terms of this Agreement, for
the performance of any Service it causes to be provided pursuant to
this Section 2.3 .
Section
2.4
Vendor
Services . Tubos and the Company
shall cooperate and use their commercially reasonable efforts to
seek the continuation of the provision to the Company and its
subsidiaries of the Vendor Services, including, but not limited to,
using commercially reasonable efforts to obtain all necessary
consents; provided, however , that in no event shall Tubos
or any of its subsidiaries or Affiliates (other than the Company
and its subsidiaries) be obligated to incur any cost or expenses,
pay any sums, waive any right or agree not to enforce any
obligation owed to it in order to continue such Vendor
Services. Tubos shall promptly notify the Company if any
Person that provides a Vendor Service notifies Tubos that it
intends to terminate or otherwise cease to provide Vendor Services
to, or for the benefit of, the Company or
3
Tubos.
Unless Tubos has contracted with a third party for the provision of
Vendor Services to the Company and/or its subsidiaries following
the date of this Agreement, nothing herein shall prevent the
Company or its subsidiaries from independently obtaining any
services from third party vendor service providers and, so long as
such services are paid for and arranged independently by the
Company or its subsidiaries, such services will not constitute
Services hereunder.
Section
2.5
Force
Majeure . The Tubos Entities
shall not be required to provide any Service to the extent the
performance of such Service becomes impracticable as a result of a
cause or causes outside the reasonable control of the Tubos
Entities or to the extent the provision of such Service
would require the Tubos Entities to
violate any applicable Law. The Tubos Entities shall have no
obligation to perform or cause the Services to be performed if its
failure to do so is caused by or results from any act of God,
governmental action, natural disaster, strike, failure of essential
equipment or any other cause or circumstance beyond the control of
the Tubos Entities or, if applicable, third-party providers of
services to the Tubos Entities, and such failure to perform
continues for more than three (3) consecutive days (each, an
“ Event of Force Majeure ”). Tubos will
notify the Company, promptly upon becoming aware thereof, of any
Event of Force Majeure affecting the provision of Services by the
Tubos Entities to the Company. Tubos agrees that following
any Event of Force Majeure, Tubos will use its commercially
reasonable efforts to restore such Services as soon as reasonably
practicable.
ARTICLE III.
INDEMNIFICATION
Section
3.1
Indemnification by the
Company . The Company shall
indemnify and hold harmless each Tubos Entity and their respective
parent entities, directors, officers, agents and employees (each, a
“ Tubos Indemnified Person ”) from and against
any claims, damages, losses, obligations, liabilities, costs and
expenses (including, without limitation, reasonable
attorneys’ fees), net of any insurance coverage received by
such Tubos Indemnified Person (collectively, “ Tubos
Losses ”), suffered by such Tubos Indemnified Person and
arising out of or in connection with (i) Services rendered or to be
rendered by any Tubos Indemnified Person pursuant to this Agreement
or the transactions contemplated hereby except to the extent that
such Tubos Losses are the result of the gross negligence or willful
misconduct of any employee, off
