Exhibit 10.5
Execution Copy
TRANSITION SERVICES AGREEMENT (this
“ Agreement ”), dated November 28, 2005,
among Kerr-McGee Corporation, a Delaware corporation (the “
Parent ”), Kerr-McGee Worldwide Corporation, a
Delaware corporation (“ Worldwide ”), and Tronox
Incorporated, a Delaware corporation (the “ Tronox
”).
INTRODUCTION
The Board of Directors of Parent
(the “ Board ”) has determined that it is in the
best interests of Parent and its stockholders to transfer certain
existing businesses of Parent and its subsidiaries to
Tronox.
In order to ensure an orderly
transition of the such businesses to Tronox, as described in the
Master Separation Agreement (as defined below), each party desires
to provide to the other the services described herein for a
transitional period.
The parties hereby agree as
follows:
Section 1.
Definitions
. For
purposes of this Agreement, the following terms shall have the
meanings set forth or as referenced below:
“ Affiliate ” has
the meaning given such term in the Master Separation
Agreement.
“ Closing Date ”
has the meaning given such term in the Master Separation
Agreement.
“ Governmental
Authorities ” has the meaning given such term in the
Master Separation Agreement.
“ Group ” means
either the Parent Group or the Tronox Group, as the context
requires.
“ Information ”
has the meaning given such term in the Master Separation
Agreement.
“ Liabilities
” has the meaning given such term in the Master Separation
Agreement.
“ Master Separation
Agreement ” means the Master Separation Agreement, dated
as of the date hereof, by and among Kerr-McGee Corporation,
Kerr-McGee Worldwide Corporation and Tronox
Incorporated.
“Providing
Party” means, with
respect to any Service, the party providing such
Service.
“ Parent Group ”
has the meaning given such term in the Master Separation
Agreement.
“Receiving
Party” means, with
respect to any Service, the party receiving such
Service.
“Separation” means, with respect to any Service, the
separation, duplication, installation or substitution of the
subject matter of such Service as utilized by the Receiving Party
as of the Closing Date (unless another date is expressly provided
for with respect to a particular Service), such that the Receiving
Party is reasonably able to provide for itself or through
alternative service providers the benefits of such subject matter
in a sustainable manner substantially similar to that provided to,
or on behalf of, the Receiving Party as of the Closing Date (unless
another date is expressly provided for with respect to a particular
Service).
“ Service Costs ”
means, with respect to each Service provided under the terms and
subject to the conditions of this Agreement, an amount equal to the
sum of such of the following items as may apply:
(i)
the fully
burdened labor costs incurred by the Providing Party in respect of
the individual employees of such Providing Party who are engaged in
the provision of such Service without management fee (as applicable
to the individual and/or the Service) for the portion of their work
time engaged in the provision of such Service;
(ii)
the costs charged
to the Providing Party by a third party provider in connection with
such Service;
(iii)
the out-of-pocket
and other expenses (other than expenses included in Transition
Costs and the costs charged under item (i) above) incurred by
the Providing Party in connection with such Service;
(iv)
taxes (other than
Transfer Taxes) as set forth in Section 9(e) incurred by
the Providing Party in connection with such Service;
and
(v)
any costs
expressly included as Service Costs in this Agreement, including
costs as set forth in Section 3.7 of
Exhibit A.
“ Transfer Taxes
” means all recordation, transfer, documentary, excise,
sales, value added, use, stamp, conveyance or other similar taxes,
duties or governmental charges, and all recording or filing fees or
similar costs, imposed or levied by reason of, in connection with
or attributable to the Separation of any Service.
“ Transition Costs
” means the one-time, initial set up, costs and expenses that
are incurred by Parent Group in order to initiate the process of
obtaining the Separation of any Service as contemplated by (and
subject to) the terms and conditions of this Agreement and the
costs of obtaining and, if applicable, modifying any contractual
rights described in Section 6(c) of this Agreement,
including such costs and expenses incurred prior to the date hereof
by the Providing Party in preparation for the provision of the
Services (for the avoidance of doubt, Transition Costs shall not
include any annual or recurring fees,
including without limitation, license fees, or any maintenance
fees, support services fees, subscription fees or other costs
relating to ongoing use).
2
“ Tronox Group ”
has the meaning given such term in the Master Separation
Agreement.
Section 2.
Certain
Transferred Personnel . Parent hereby
acknowledges and agrees that the individuals listed on
Schedule 2 are identified as prospective Tronox
Individuals (as such term is defined in the Employee Benefits
Agreement (as defined in the Master Separation Agreement)) each of
whom may become, if not already, employees of the Tronox Group as
of the Closing Date. Each party agrees that, for a period of
one year after the Closing Date, neither party nor its
respective Affiliates shall recruit, offer employment to, hire or
engage as a consultant any Person who is an employee of the other
party immediately after the Closing Date; provided that the
foregoing provision will not prohibit any general solicitation of
employment not specifically directed toward employees of either
Group or the soliciting or hiring of any individual who terminated
his or her own employment with any member of the other Group or
whose employment was terminated by any member of the other Group
prior to such solicitation or hiring.
Section 3.
Services
.
(a)
Except as
otherwise provided herein, on the terms and subject to the
conditions set forth herein, Parent shall provide, or cause one or
more members of its Group to provide, the Tronox Group with each of
the services listed on Exhibit A and Tronox shall
provide, or cause one or more members of its Group to provide, the
Parent Group with each of the services listed on
Exhibit B (each service listed on Exhibit A
or Exhibit B being a “ Service ”
and, collectively, the “ Services ”), in each
case beginning on the “Start Date” set forth on
Exhibit A or Exhibit B for such Service and
ending on the earlier of (i) the “End Date”
set forth on Exhibit A or Exhibit B for
such Service, (ii) the termination of this Agreement, or
(iii) the termination of such Service pursuant to
Section 11(b) (each such duration, a “ Service
Term ”). For the avoidance of doubt, it is understood
that services included as “Services” may include,
subject to the terms and conditions of this Agreement, the transfer
and installation of certain hardware, software, related licenses
and applications, and other items as set forth on
Exhibit A , Exhibit B or pursuant to the
Master Separation Agreement.
(b)
Subject to the
provisos set forth in this Section 3(b), the Transition Costs
incurred by the Parent Group in connection with Separation of the
Services to be provided to the Tronox Group shall be borne 100% by
the Parent Group and such Transition Costs shall not be included in
the calculation of Service Costs payable by the Tronox Group for
such Services; provided , however, that, with respect
to each line item set forth in Exhibit C , in no event
shall Parent Group have any obligation to incur any Transition
Costs in excess of the specific amount allocated to each such line
item set forth on Exhibit C (with respect to each line
item on Exhibit C , the “ Per Line Maximum
Amount of Transition Costs ”) and in no event in an
aggregate amount in excess of $11 million; provided, further
, that any Transition Costs in excess of the applicable Per Line
Maximum Amount of Transition Costs shall be borne 100% by Tronox
Group. All Transfer Taxes incurred in connection with the
Separation of the Services shall be borne 100% by the Parent Group,
subject to Section 9(e). Such Transition Costs shall not
be included in the calculation of Service Costs payable by the
Tronox Group for such Services.
(c)
It is understood
and agreed amongst the parties that, notwithstanding any provision
to the contrary in this Agreement, the Providing Party shall have
no obligation whatsoever to upgrade systems, invest in product
enhancements or increase staffing, capacity,
3
functionality, reliability
or any other aspect of any Service beyond the level that exists as
of the date hereof with respect to any Service.
(d)
Notwithstanding
anything to the contrary contained herein, during the Term, a
Receiving Party may from time to time request that a Providing
Party provide special services or projects in addition to the
Services, and (subject to the mutual agreement of the parties
hereto) such Providing Party shall make commercially reasonable
efforts to provide such additional services or projects. If
such Providing Party agrees to provide such additional services or
projects, the parties shall negotiate in good faith to establish
the terms (including, without limitation, price) for providing such
additional services or projects and, following agreement on such
terms, Exhibit A or Exhibit B hereof shall be amended, as
applicable, to include such additions.
Section 4.
Standards of
Performance; Level of Services .
(a)
Each Providing
Party, with respect to any Service, shall perform such Service
exercising the same degree of care, at the same general level and
at the same general degree of accuracy and responsiveness, in each
case as it exercises in performing the same or similar services for
its own account, with priority equal to that provided to its own
businesses and members of its Group.
(b)
In no event shall
any party, as Receiving Party with respect to any Service, be
entitled to increase its use of such Service above that level of
use specified in the exhibit related thereto without the prior
written consent of the Providing Party. Notwithstanding
anything to the contrary in this Agreement, the Providing Party
shall not be required to provide the Receiving Party with levels of
such Service above the levels that existed prior to the date hereof
or with the advantage of systems, equipment, facilities, training,
services or improvements procured, obtained or made after the date
hereof.
(c)
Notwithstanding
anything to the contrary contained herein, the Providing Party with
respect to any Service may, but is not required to, make changes
from time to time in the manner in which such Service is provided
if (i) the Providing Party is making similar changes in the
manner in which such Service is provided to it and members of its
own Group, (ii) the Providing Party furnishes to the Receiving
Party substantially the same notice the Providing Party provides to
members of its own Group with respect to such changes, and
(iii) such changes shall not create a substantial risk of a
material disruption of the Receiving Party’s business or of
the Receiving Party’s incurring a material loss or
liability.
(d)
Each Group shall
nominate a representative to act as the primary contact person for
the provision of all of the Services (the “ Service
Coordinators ”). The initial Service Coordinators
shall be Kenneth Crouch for the Parent Group and Mary Mikkelson for
the Tronox Group. Each party shall notify the other party in
writing of any change in the Service Coordinators. The
parties agree that all communications relating to the provision of
the Services shall be directed to the Service
Coordinators.
(e)
In
order to monitor, coordinate and facilitate implementation of the
terms and conditions of this Agreement, the parties shall establish
(i) a “Steering Committee” consisting of at
least one (1) senior manager from each of Parent Group and
Tronox Group and whereby each such Group is equally represented and
(ii) an “Operating Committee”
consisting,
4
as necessary, of
one (1) representative of each of Parent Group and Tronox
Group from each functional area that is the subject of Exhibits
A and B (for such time as Service
Terms within such functional areas are in effect). The
Steering Committee shall provide general oversight of the terms and
conditions of this Agreement and shall work in good faith to
resolve any disputes arising under this Agreement as set forth
under Section 7. The Operating Committee shall be responsible
for the day-to-day operations related to the implementation of the
terms and conditions of this Agreement and the exhibits
hereto. The initial Steering Committee representatives shall
be (i) for the Parent Group, Al Harris, Fran Heartwell and
John M. Rauh and (ii) for Tronox
Group, Tom Adams, Mary Mikkelson and Robert Y. Brown. The
initial Operating Committee representatives shall be (i) for
the Parent Group, Ray Gonzales, Steve Miller and Ron
McCauley and (ii) for Tronox Group,
Mark Meadors, Candace Kahle, Melody Walke, Bill Snider and Cliff
Dolton. The initial Steering Committee and Operating
Committee representatives shall not be changed by either Group on
less than ten (10) days’ prior written notice to the
Service Coordinator of the other Group. The Steering Committee and
Operating Committee representatives shall meet at least monthly (or
more frequently if needed) during the Term of this Agreement;
provided , the members of the Steering Committee and the
Operating Committee ma y participate in meetings of such
committees by means of conference telephone, videoconferencing or
other communications equipment by means of which all persons
participating in the meeting can hear each other. The Steering Committee and Operating Committee
representative for each Group shall stay reasonably apprised of the
activities of the employees, agents and contractors of such Group
who are providing or receiving the Services in order to maximize
efficiency in the provision and receipt of the Services. Actions of
the Steering Committee shall require the approval of Steering
Committee representatives from each of the Parent Group and the
Tronox Group.
Section 5.
Resources
. In
connection with the Services, the Receiving Party shall make
reasonably available for consultation with the Providing Party
those retained employees and consultants or other service providers
of the Receiving Party reasonably necessary for the effective
provision of such Services.
Section 6.
Third
Parties .
(a)
The Providing
Party with respect to a particular Service shall make reasonably
available such personnel, facilities, equipment, systems and
management as are required to provide such Service. Subject
to Section 4, the Providing Party shall have the right to
designate which such resources it shall assign to perform such
Service and shall have the right to remove and replace any such
resources at any time or designate any other members of its Group
or a third party provider to perform such Service; provided,
however, that (i) the Providing Party shall use
commercially reasonable efforts to prevent the disruption to the
Receiving Party in the transition of the Service to different
resources or another provider and (ii) with respect to
Services that are not currently outsourced by a Providing Party to
a third party, any substitution of a third party provider in
connection with the provision of such Service shall be subject to
the approval of the Steering Committee. Notwithstanding the
foregoing, each Providing Party shall remain solely responsible, in
accordance with the terms of this Agreement, for the performance of
any Service it is required to provide hereunder.
(b)
With respect to
Services that are currently outsourced by Parent Group to third
parties, Parent Group shall reasonably assist the Tronox Group in
seeking to cause such third parties to provide such Services to the
Tronox Group. In the event Parent Group is not
able
5
to secure the agreement of
any third parties to provide Services to the Tronox Group, Parent
Group shall reasonably assist the Tronox Group in seeking to obtain
substantially similar services
from another source on substantially
similar terms and conditions as those currently being
provided.
(c)
If, and to the
extent, required, the Tronox Group, on the one hand, and the Parent
Group, on the other hand, shall cooperate in good faith in seeking
to obtain any required transfer or assignment agreements or any
other agreements necessary to transfer contractual rights of the
Parent Group, that existed immediately prior to the Closing Date,
to receive services or license software, to the extent
(i) such agreements or rights are necessary for the provision
of Services to the Tronox Group and (ii) such rights were
utilized by the Tronox Group prior to the Closing Date . Such agreements shall be in the name or for
the benefit of the applicable member, or members, of the Tronox
Group. The cooperation required hereunder shall be included
in the Service to which it is related. For the avoidance of
doubt, the parties agree and acknowledge that a Providing Party
shall not be liable under this Agreement for any annual or
recurring fees, including without limitation license fees, or any
maintenance fees, support services fees, subscription fees or other
costs relating to ongoing use by a Receiving Party stemming from a
transfer to such Receiving Party pursuant to a Service
hereunder.
(d)
A Providing Party
shall not enter into any agreement or contract with any third party
to provide any Services hereunder pursuant to which the Receiving
Party would remain obligated to such third party upon the
conclusion of this Agreement without such Receiving Party’s
prior written consent, such consent not to be unreasonably
withheld, delayed or conditioned.
(e)
Without prejudice
to the obligations of the Parent Group under
Section 3(b) and Exhibit C of this Agreement, the
Receiving Party shall be solely responsible for acquiring or
otherwise obtaining all assets and rights for third party services
not otherwise obtained as a result of the expenditure of such
Transition Costs, including without limitation, hardware, software,
information systems and other materials and third party services,
reasonably necessary in connection with the Separation of any
Service as contemplated by this Agreement.
Section 7.
Good Faith
Cooperation; Dispute Resolution .
(a)
The parties shall
cooperate in good faith in all matters relating to the provision
and receipt of the Services. Such cooperation shall include
exchanging information, providing access to personnel, equipment,
office space, electronic systems and other property, performing
true-ups and adjustments and obtaining all consents, licenses,
sublicenses or approvals necessary to permit each party to perform
its obligations hereunder.
(b)
In the event of a
dispute under this Agreement, either Group may give notice to the
other Group requesting that the Steering Committee in good faith
try to resolve (but without any obligation to resolve) such
dispute. Not later than 10 days after said notice, each Group
shall submit to the other Group a written statement setting forth
such Group’s description of the dispute and of the respective
positions of the Groups on such dispute and such Group’s
recommended resolution and the reasons why such Group feels its
recommended resolution is fair and equitable in light of the terms
and spirit of this Agreement. Such statements represent part
of a good-faith effort to resolve a dispute and as such, no
statements prepared by a Group
6
pursuant to this
Section 7 may be introduced as evidence or used as an
admission against interest in any arbitral or judicial resolution
of such dispute.
(c)
If the dispute
continues unresolved for a period of five days (or such longer
period as the Steering Committee may otherwise agree upon) after
the simultaneous exchange of such written statements, then the
Steering Committee shall promptly commence good-faith negotiations
to resolve such dispute but without any obligation to resolve
it. The initial negotiating meeting may be conducted by
teleconference.
(d)
Not later than
seven days after the commencement of good-faith negotiations under
Section 7(c) above: (i) if the Steering
Committee renders an agreed resolution on the matter in dispute,
then both Groups shall be bound thereby; and (ii) if the
Steering Committee does not render an agreed resolution, then the
dispute shall be submitted for resolution pursuant to
Section 7(e).
(e)
Disputes arising
under this Agreement and not resolved by the Steering Committee
within seven days under clause (i) of
Section 7(d) shall be submitted in writing to an
appropriate executive officer of each party. The executive
officers shall attempt to resolve any dispute submitted to them for
resolution in accordance with this Section 7(e) through
consultation and negotiation, within 30 days after such submittal
(or such longer period as may be mutually agreed by the
parties). The executive officers may request the assistance
of an independent mediator if they believe that such a mediator
would be of assistance to the efficient resolution of the
dispute.
(f)
Subject to
Section 11(c), during the course of resolution of any dispute,
the rights and obligations of the parties under this Agreement,
including with respect to the subject matter of such dispute, shall
continue.
(g)
If the parties
fail to resolve any dispute pursuant to this Section 7, then
the provisions of Section 18 shall apply.
Section 8.
Exceptions to
Providing Party’s Obligation to Perform
.
(a)
The Providing
Party with respect to any Service shall not be required to provide
such Service to the extent the performance of such Service would
require the Providing Party to violate any applicable Law or would
result in the breach of any software license or other Contract with
a Person not a member of the Providing Party’s Group.
If the Providing Party with respect to any Service reasonably
determines that it is unable to provide such Service in accordance
with the terms hereof, the parties shall cooperate to determine the
best alternative approach. Until such alternative approach is
found or the problem is otherwise resolved to the satisfaction of
the parties, the Providing Party shall use commercially reasonable
efforts to continue to provide such Service. To the extent the
parties agree upon an alternative approach that requires payment of
amounts above and beyond what the Receiving Party is required to
pay under this Agreement for such Service, such excess amounts
shall be borne by the Receiving Party, or as otherwise agreed by
the parties.
(b)
Notwithstanding
anything to the contrary contained herein,
7
(i)
if the Receiving
Party (A) elects to decommission, replace, modify or change
its information technology or communications systems or any other
aspect of its business relationship relating to a Service in a
manner that prevents the Providing Party from providing such
Service as required hereunder (in the understanding that the
Receiving Party shall provide the Providing Party with five
(5) Business Days prior notice of any such election), or
(B) fails to acquire the hardware, software, information
systems or other materials or third party services reasonably
necessary for the Separation of any Service pursuant to
Section 6(e) of this Agreement and such failure prevents
the Providing Party from providing such Service as required
hereunder, then, in each case, the Providing Party shall have no
liability whatsoever with respect to the effectiveness or quality
of such Service and, following five (5) Business Days prior
written notice to the Receiving Party, shall be excused from the
performance of such Service;
(ii)
if the Tronox
Group is unable, despite the reasonable assistance of the Parent
Group in accordance with Section 6(b) of this Agreement
and the good faith cooperation of the Parent Group in accordance
with Section 7(a) of this Agreement, to secure the
agreement of third parties with whom Parent Group has outsourced
certain Services to provide such Services to the Tronox Group, the
Parent Group shall have no liability whatsoever with respect to the
effectiveness or quality of any Service that is prevented,
hindered, or delayed thereby and, following five (5) Business
Days prior written notice to the Receiving Party, shall be excused
from the performance of such Service; and
(iii)
if the Tronox
Group is unable, despite the good faith cooperation of the Parent
Group in accordance with Sections 6(c) and 7(a) of this
Agreement, to obtain any required transfer or assignment agreements
or any other agreements necessary to transfer contractual rights of
the Parent Group, that existed immediately prior to the Closing
Date, the Parent Group shall have no liability whatsoever with
respect to the effectiveness or quality of any Service that is
prevented, hindered, or delayed thereby and, following five
(5) Business Days prior written notice to the Receiving Party,
shall be excused from the performance of such Service;
and
(iv)
the Parent Group
may suspend performance and the Tronox Group’s access to
information technology or communications systems used by the Parent
Group if, in the Parent Group’s reasonable judgment, the
integrity, security or performance of such systems, or any data
stored thereon, is being or is likely to be jeopardized by the
activities of any member of the Tronox Group, its employees,
agents, representatives or contractors.
Section 9.
Payment and
Audit Rights .
(a)
Generally
. In
consideration of each Service provided hereunder, during the Term
of this Agreement, the Receiving Party shall pay the Providing
Party, on a monthly basis, an amount equal to the Service Costs
attributable to the Services provided by the Providing Party during
the prior month period. Upon a material reduction in the
Services to be provided to the Receiving Party by the Providing
Party (through Separation), such payment amounts shall be
commensurately reduced. With respect to any particular
Service, if any, requiring additional payment by the Receiving
Party, the Receiving Party shall pay the Providing Party in
accordance with the specifications set forth on the exhibit
describing such Service. To the extent that
during
8
the Term of this Agreement
the parties mutually agree to modify, amend, delete or add to the
Services, the parties shall cooperate to determine in good faith an
equitable adjustment to the amounts paid by the Receiving Party to
the Providing Party.
(b)
Invoices
. With
respect to the Services actually provided, the Providing Party
shall invoice the Receiving Party on a monthly basis for all
amounts due the Providing Party hereunder with respect to such
Services. For the avoidance of doubt, it is hereby understood that,
unless mutually agreed in writing amongst the parties hereto,
amounts due hereunder shall consist solely of Service Costs. Such
invoices shall be accompanied by a reasonable accounting of all
invoiced amounts, all third party invoices and receipts related to
such invoiced amounts and such other supporting documentation as
may be reasonably requested by the Receiving Party.
(c)
Payment
. Each
party shall pay the other party for any properly invoiced amounts
within 30 days of receipt of the invoice and other information
required by Section 9(b); provided, however, that if
such paying party shall have a bona fide dispute with the amount
invoiced, then such paying party shall pay only the undisputed
amount at such time and the parties shall seek to resolve such
dispute in accordance with Section 7 of this Agreement. All
payments hereunder shall be made by deposit of United States
Dollars in the requisite amount to such bank account as the party
receiving such payment may from time to time designate by notice to
the paying party. Late payments of undisputed amounts shall
bear interest at the published one-month LIBOR Rate plus 2% per
annum.
(d)
Audit
Rights . With respect to a
particular Service, the Receiving Party shall have the right to
audit the financial and other records of the Providing Party and
any member of the Providing Party’s Group related to the
provision of such Service, the systems and undertakings (including
testing protocols) used to provide such Service and the incurrence
of Transition Costs; provided , however , that such
right to audit shall exist only for so long as such financial or
other records are retained by the Providing Party under its records
retention policies or practices; provided, further, that
such financial and other records shall be retained for a minimum of
two years after the termination of this Agreement. If any
such audit reveals any excess amounts paid by the Receiving Party,
the Providing Party shall, promptly after receipt of the results of
such audit, (a) pay to the Receiving Party any such excess
amounts, with interest from the date of payment due at the
published one-month LIBOR Rate plus 2% per annum, and (b) if
such excess amounts represent more than 2% of the total amount
actually owed under this Agreement with respect to such Service,
reimburse the Receiving Party for the reasonable out-of-pocket cost
of such audit.
(e)
Taxes . Any taxes (other than
Transfer Taxes) assessed on the provision of any Service hereunder
shall be included in the Service Costs of such
Services.
Section 10.
Confidentiality
.
(a)
With respect to
any Service, the Receiving Party with respect thereto agrees that
(i) all software, hardware or data store, procedures and
materials provided to such Receiving Party by or on behalf of the
Providing Party in connection with such Service are solely for the
use of the Receiving Party and members of its Group solely for
purposes of using such Services during the Term (provided that
benefits received by third parties in the ordinary course of
business conducted with a Receiving Party shall not be subject to
this Section 10 ); (ii) title to
9
any software, hardware or
data store or any other intellectual property or proprietary right
of any kind used in performing such Service shall, as between such
Receiving Party and the Providing Party, remain in the Providing
Party; (iii) such Receiving Party shall not copy, modify,
reverse engineer, decompile, distribute or in any way alter or make
derivative works of any software, hardware or data store used in
performing such Service without the Providing Party’s prior
written consent, and (iv) such Receiving Party shall comply
with any and all usage guidelines pertaining to any Service and
provided by or on behalf of a Providing Party, including without
limitation, any and all usage guidelines pertaining to software,
data, or other intellectual property or proprietary rights.
Notwithstanding the foregoing, (x) the hardware and software
licenses set forth in Schedules 2.2(j), 2.2(k) and 2.2(l) shall not
be subject to this Section 10(a) (and the Tronox Group
shall be solely responsible for complying with all terms and
conditions applicable to such hardware and software licenses) and
(y) any software, hardware, data store, procedures or materials
purchased for the Receiving Party pursuant to
Section 3(b) of this Agreement in connection with the
Separation of a Service or the independent functionality of the
Receiving Party, and any assets acquired or purchased by a
Receiving Party for its own account, shall not be subject to this
Section 10(a).
(b)
Each party shall
use the other party’s data solely to exercise its rights or
perform its obligations, as applicable, under this Agreement.
No party shall sell, assign, lease, disseminate or otherwise
dispose of any of the other party’s data received or accessed
as a consequence of the receipt or performance of Services pursuant
to this Agreement. No party shall possess or assert any
property interest in, or any lien, security interest or other right
against or to, any of the other party’s data, and each party
shall afford to the other party’s data the same level of
security that is afforded to its own data. Nothing in this
Agreement or in the performance or use of the Services hereunder
shall be deemed to transfer, assign or otherwise convey any rights,
title or interests in or to any intellectual property or
proprietary rights of one party to the other party ; provided,
however , each party shall grant to the other party a
non-exclusive, limited purpose, non-transferable, non-assignable,
non-sublicenseable license to any intellectual property set forth
in Schedule 2.2(m) of Exhibit A and any software
interfaces owned exclusively and developed in-house by the
Providing Party and used to provide Services hereunder
(collectively, the “ Licensed Intellectual Property
”), to the extent such intellectual property license is
necessary, in the case of a Receiving Party, to utilize the
Services in accordance with this Agreement, and in the case of a
Providing Party, such license is necessary to perform its
obligations under this Agreement, which license shall terminate on
the earlier of the date (x) the party granting such license shall
no longer have the right to license such Licensed Intellectual
Property as contemplated herein, and (y) the recipient of such
license ceases to use such Licensed Intellectual Property in
connection with the Services described in this Agreement in the
manner expressly contemplated and described in this Agreement. Each
party expressly reserves all rights, title and interests in and to
its intellectual property that are not licensed in accordance with
this Agreement. Each party shall not possess or assert
any interest in or any lien or security interest or other right
against or to any of the other party’s intellectual property
beyond any licenses granted pursuant to this Agreement.
Notwithstanding any other provision of this Agreement, each party
shall be free to use for itself and for others, in any manner, the
general knowledge, skill or experience acquired by that party in
the course of the performance of this Agreement, including using
that knowledge for any present or future customer or other business
partner.
10
(c)
The parties
hereto acknowledge that, pursuant to the mutual provision of
Services or as a result of the transfer of certain business
operations and assets (including information technology, software
and hardware) contemplated by the Master Separation Agreement, each
Group shall possess or have access (intentionally or inadvertently)
to information that belongs to the other Group or has commercial
value in that other Group’s business, and is not in the
public domain, including information relating to its customers,
suppliers, finances, operations, facilities and markets (
“Confidential Information” ). Neither
Group shall disclose, use, sell, assign, lease or otherwise dispose
of the other Group’s Confidential Information, except as
otherwise expressly permitted by this Agreement or the Master
Separation Agreement. A Providing Party hereunder shall not, and
shall use its commercially reasonable efforts to ensure that
Providing Party’s employees, contractors and other agents do
not use the Services to access any of a Receiving Party’s
Confidential Information that is outside the scope of the Service
provided. Nothing in this Section 10(c) shall be
construed as obligating any party hereto to disclose its
Confidential Information to any other party, or as granting to or
conferring on another party, expressly or by implication, any
rights or license to its Confidential Information, provided that
the parties acknowledge that, in order to perform the Services, a
Providing Party shall have custody of and usage of certain of a
respective Receiving Party’s Confidential Information and
each party hereby grants to each other party acting as a Providing
Party to it the right to do so in accordance with this
Agreement.
(d)
Notwithstanding
Section 10(c), Information is not Confidential Information to
the extent that: (i) the Information is or becomes publicly
available through no fault of the party which received the
Information from the other party, (ii) the same Information is
rightfully in the possession of a party prior to receipt of that
Information from another party; provided, however that
Tronox Group Information or data that is in the Parent
Group’s possession prior to the Closing Date and is otherwise
Confidential Information of the Tronox Group shall be Confidential
Information, (iii) the same Information is independently
developed (without the use of another party’s Confidential
Information) by the party which received that information from such
other party, or (iv) the same Information becomes available to
a party on a non-confidential basis from a source other than
another party hereto, which source, to the knowledge of the
disclosing party, is not prohibited from disclosing that
information by a legal, contractual or fiduciary obligations to the
party about whom such Information pertains.
(e)
Notwithstanding
Section 10(c), a party hereto shall not have violated the
terms of this Section 10 for disclosing Confidential
Information:
(i)
to third parties
performing services required under this Agreement where (A)
use of that Confidential Information by that third party is
authorized under this Agreement; or (B) disclosure is
reasonably necessary or typically occurs in the natural course of
the third party’s duties; provided , in each case,
that the third party has executed a written confidentiality
agreement under which the third party is obligated to maintain the
confidentiality of the Confidential Information in a manner
substantially equivalent to this Agreement;
(ii)
in order to
comply with any applicable Laws, provided that as soon as
practicable and legally permitted the disclosing party shall notify
the party whose Confidential Information was or is to be disclosed
of the disclosure or possible disclosure under this subsection;
or
11
(iii)
to the disclosing
party’s independent auditors under an obligation of
confidentiality.
Section 11.
Term .
(a)
The term of this
Agreement (the “Term” ) shall commence on the
date hereof, and, unless earlier terminated in accordance with
Section 11(b), shall continue until the first anniversary of
the Closing Date. This agreement may only be extended by
written agreement of the parties as evidenced by the signature of
authorized representatives of such parties.
(b)
Notwithstanding
the foregoing, the commencement dates and, if sooner than the first
anniversary of the Closing Date, the termination dates of any
Service shall be as set forth in the applicable exhibit;
provided, however, that where such dates are not
specified in the exhibits, the term of a Service shall coincide
with the term of this Agreement; provided, further, that the
Receiving Party with respect to any Service may terminate the term
of such Service upon thirty (30) days notice to the Providing
Party.
(c)
Notwithstanding
anything to the contrary set forth in this Agreement, if any party
hereto defaults in any of its material obligations with respect to
a Service hereunder, and such default is not cured within 30 days
after the resolution, pursuant to Section 7, of a dispute
entered as a result of such default, the party not in default shall
be entitled, without prejudice to any of its other rights conferred
on it by this Agreement, and in addition to any other remedies
available to it by law or in equity, to terminate its obligations
with respect to such Service.
Section 12.
Consequences
of Termination .
(a)
Termination or
expiration of this Agreement for any reason shall be without
prejudice to any rights that shall have accrued to the benefit of a
party prior to such termination or expiration. Such
termination, relinquishment, or expiration shall not relieve a
party from obligations that are expressly indicated to survive the
termination or expiration of this Agreement.
(b)
Upon termination
or expiration of this Agreement, each party, at the request of the
other, shall return all relevant records and materials in its
possession or control containing or comprising the other
party’s Information and to which the returning party does not
retain rights hereunder (except one copy of which may be retained
in such files for archival purposes).
Section 13.
Disclaimer of
Warranties . EACH PARTY EXPRESSLY
DISCLAIMS ALL WARRANTIES, EXPRESS, STATUTORY AND IMPLIED,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT, QUIET
ENJOYMENT, NO ENCUMBRANCES, SYSTEM INTEGRATION, ACCURACY,
WORKMANLIKE EFFORT AND WARRANTIES ARISING THROUGH COURSE OF DEALING
OR USAGE OF TRADE. NEITHER PARTY MAKES ANY REPRESENTATIONS OR
WARRANTIES AS TO THE QUALITY, SUITABILITY, AVAILABILITY,
RELIABILITY, SECURITY, PERFORMANCE OR ADEQUACY OF THE
SERVICES.
12
Section 14.
Damag
|
