EXHIBIT 10.1
TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (this "Agreement") is made and entered
into as of the 19th day of April 1999, by and between CALIFORNIA AMPLIFIER,
INC., a Delaware corporation ("Buyer"), and GARDINER COMMUNICATIONS CORP., a
Delaware corporation ("Seller").
R E C I T A L S
WHEREAS, Buyer, Seller and Seller's shareholders have entered into an Asset
Purchase Agreement dated as of April 19, 1999 (the "Asset Purchase Agreement")
providing for the purchase by Buyer of certain assets of Seller;
WHEREAS, Buyer and Seller desire to enter into this Agreement pursuant to
which Seller will provide Buyer with certain Transition Services (as defined
herein) for a limited period of time as specified herein;
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to each of Buyer's and Seller's obligation to consummate the
transactions contemplated by the Asset Purchase Agreement; and
WHEREAS, the parties hereto each recognize and acknowledge that the
performance by Seller of the Transition Services is an integral component of
Buyer's decision to enter into the Asset Purchase Agreement and that the failure
of Seller to provide the Transition Services as contemplated by this Agreement
would cause Buyer substantial hardship;
NOW, THEREFORE, in consideration of the covenants and agreements set forth
in the Purchase Agreement and in further consideration of the mutual covenants
and agreement contained herein, the parties hereto agree as follows:
A G R E E M E N T
ARTICLE I
TRANSITION SERVICES
1.1 PERFORMANCE OF TRANSITION SERVICES.
(a) Subject to the terms and conditions set forth herein and in SCHEDULE A
hereto, Seller shall provide Buyer with certain services set forth in SCHEDULE A
hereto (the "Transition Services").
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(b) Seller shall provide the Transition Services in accordance with the
terms and conditions set forth in SCHEDULE A and shall provide such Transition
Services with that degree of skill, attention and care that Seller exercises and
has heretofore exercised with respect to furnishing comparable services to
itself.
(c) All employees and representatives of Seller providing the Transition
Services hereunder to Buyer during the term of this Agreement (collectively, the
"Transition Services Employees") shall be deemed for all purposes (including
compensation and employee benefits) to be employees or representatives solely of
Seller and not to be employees or representatives of Buyer or to be independent
contractors thereof. In performing their respective duties hereunder, all such
employees and representatives of Seller shall be under the direction, control
and supervision of Seller (and not of Buyer) and Seller shall have the sole
right to exercise all authority with respect to the employment (including
termination of employment), assignment and compensation of such employees and
representatives, subject to compliance with the terms and provisions contained
in this Agreement including, without limitation, the provision of the Transition
Services.
1.2 COOPERATION. Any and all of the Transition Services provided by
Seller pursuant to this Agreement shall be performed in cooperation with Buyer.
1.3 REASONABLE EFFORTS. During the term of this Agreement, Seller shall
use commercially reasonable efforts to assist Buyer in taking over the
Transition Services upon the expiration or earlier termination of this Agreement
in a reasonably expeditious manner and consistent with the purpose and intent of
this Agreement.
1.4 CONFIDENTIALITY.
(a) Buyer and Seller agree to hold, and to cause their respective
employees and representatives to hold, in strictest confidence all information
concerning the other party hereto furnished to or obtained by Buyer or Seller in
the course of receiving or providing the Transition Services contemplated hereby
(except to the extent that such information either has entered the public domain
through no fault of Buyer or Seller, as the case may be, or has been lawfully
acquired from sources other than Buyer or Seller, as the case may be), and
neither party shall disclose or release any such confidential information to any
person, except its employees, representatives and agents who have a need to know
such information in connection with such party's performance hereunder, unless
such disclosure or release is compelled by judicial or administrative process,
or in the opinion of counsel to such party, such disclosure or release is
necessary or desirable in light of other requirements of law.
(b) Without limiting the right of either party to pursue all other legal
and equitable remedies for a violation of this Section 1.4 by the other party,
Buyer and Seller agree that other remedies cannot fully compensate Buyer or
Seller, as the case may be, for such a violation and that Buyer or Seller, as
the case may be, shall be entitled to injunctive relief to prevent a violation
or continuing violation hereof.
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1.5 RELATIONSHIP OF PARTIES. Nothing in this Agreement contained shall be
deemed or construed by the parties or any other person as creation the
relationship of principal and agent or of partnership or joint venture between
Buyer and Seller.
ARTICLE II
PAYMENT FOR TRANSITION SERVICES
2.1 PRODUCTS. As payment to Seller for products that Seller produces on
Buyer's behalf, Buyer shall pay Seller the price per unit as set forth on
SCHEDULE B multiplied by the number of units produced no later than ten
(10) days from the date Seller invoices Buyer of such production. The parties
hereto acknowledge and agree that the price per unit paid for such products
shall include all manufacturing costs of Seller in connection with the
production of such products and that Buyer will not separately be responsible
for such costs except as provided in Section 3.3 of this Agreement. Buyer shall
be responsible for all shipping or freight costs except as provided in
SCHEDULE A. Buyer shall reimburse Seller no later than ten (10) days from the
date Seller invoices Buyer of such shipment for operating costs in connection
with the production and shipping of such products on an as incurred basis,
PROVIDED, that Buyer approves such costs in advance in writing and, PROVIDED
FURTHER, that the initial operating costs shall be as set forth on SCHEDULE C.
Seller shall invoice Buyer on a monthly basis.
ARTICLE III
TERM; TERMINATION
3.1 TERM. Seller shall provide the Transition Services for a term
commencing on the date hereof and ending on the date that is four (4) months
from the date hereof, unless terminated by Buyer in accordance with Section 3.2
hereof; PROVIDED, HOWEVER, that Buyer and Seller may extend the term of this
Agreement by mutual agreement.
3.2 TERMINATION. This Agreement shall terminate upon the expiration of
the term of this Agreement. Notwithstanding the foregoing, Buyer may terminate
this Agreement at any time upon written notice to Seller at least fifteen (15)
days prior to the date of termination of this Agreement; PROVIDED, HOWEVER, that
Buyer shall promptly pay Seller for the Transition Services rendered up to and
through the date of termination of this Agreement in accordance with Section 2.1
hereof.
3.3 EFFECT OF TERMINATION. Upon expiration or earlier termination of this
Agreement, Buyer shall have the option to assume management and control of the
Garland, Texas production facility immediately upon written notice to Seller,
which option shall expire ten (10) days after the expiration or earlier
termination of this Agreement. In the event Buyer exercises such option, Buyer
shall immediately (i) purchase all applicable inventories from Seller, (ii)
assume responsibility for purchasing ongoing manufacturing supplies and (iii)
hire all Transition Services Employees remaining at the Garland, Texas
production facility (the "Facility") at the expiration or earlier termination of
this Agreement and deemed necessary by Buyer. In addition,
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to the extent permitted by Seller's lease for the Facility, Buyer shall enter
into a short-term sublease for the Facility with Seller.
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ARTICLE IV
GENERAL TERMS AND CONDITIONS
4.1 CONSTRUCTION. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware, without
giving effect to the conflicts of laws provisions thereof.
4.2 NOTICES. All notices, requests, demands and other communications
called for or contemplated hereunder shall be in writing and shall be deemed to
have been duly given when delivered to the party to whom addressed or when sent
by telecopy, telegram, telex or wire (if promptly confirmed by registered or
certified mail, return receipt requested, prepaid and addressed) to the parties,
their successors in interest, or their assignees at the following addresses, or
at such other addresses as the parties may designate by written notice in the
manner aforesaid:
If to Buyer: California Amplifier, Inc.
460 Calle San Pablo
Camarillo, California 93012
Fax: (805) 987-2655
Attention: Fred Sturm
With copies to: Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Suite 4800
Los Angeles, California 90071
Fax: (213) 229-7520
Attention: Peter F. Ziegler, Esq.
If to Seller: Gardiner Communications Corp.
3505 Security Street
Garland, Texas 75042
Fax: (214) 341-1933
Attention: James M. Harris
With copies to: Vinson & Elkins L.L.P.
2001 Ross Avenue
Suite 3700
Dallas, Texas 75201
Fax: (214) 999-7994
Attention: William D. Young, Esq.
4.3 ASSIGNMENT. Neither this Agreement nor any right, remedy, obligation
or liability arising hereunder or by reason hereof nor any of the documents
executed in connection herewith may be assigned by any party without the consent
of the other parties. Nothing contained herein, express or implied, is intended
to confer upon any person or entity other than the parties hereto
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and their successors in interest any rights or remedies under or by reason of
this Agreement unless so stated herein to the contrary.
4.4 AMENDMENTS AND WAIVERS. This Agreement and all Schedules hereto may
be modified only by a written instrument duly executed by each party. No
condition to any party's obligations and no breach of any covenant, agreement,
warranty or representation shall be deemed waived unless expressly waived in
writing by the party whose obligations are subject to such condition or who
might assert such breach. No waiver of any right hereunder shall operate as a
waiver of any other right or of the same or a similar right on another occasion.
4.5 REMEDIES. No remedy conferred by any of the specific provisions of
this Agreement is intended to be exclusive of any other remedy. Each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder now or hereafter existing at law or in equity or by statute or
otherwise, and the election by a party of one or more remedies shall not
constitute a waiver of the party's right to pursue any other available remedies.
4.6 ATTORNEYS' FEES. In the event that any action or proceeding,
including arbitration, is commenced by any party hereto for the purpose of
enforcing any provision of this Agreement, the parties to such action,
proceeding or arbitration may receive as part of any award, judgment, decision
or other resolution of such action, proceeding or arbitration their costs and
reasonable attorneys' fees as determined by the person or body making such
award, judgment, decision or resolution. Should any claim hereunder be settled
short of the commencement of any such action or proceeding, including
arbitration, the parties in such settlement shall be entitled to include as part
of the damages alleged to have been incurred reasonable costs of attorneys or
other professionals in investigating or counseling on such claim.
4.7 BINDING NATURE OF AGREEMENT. The Agreement includes each of the
Schedules which are referred to herein or attached hereto, all of which are
incorporated by reference herein. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective executors, heirs, legal representatives, successors and
assigns.
4.8 EXPENSES. The costs and expenses of Seller, including the legal fees
and disbursements of Vinson & Elkins L.L.P., shall be borne by Seller. The
costs and expenses of Buyer, including the legal fees and disbursements of
Gibson, Dunn & Crutcher LLP, shall be borne by Buyer.
4.9 ENTIRE AGREEMENT. The Agreements contain the entire understanding of
the parties and supersede all prior agreements and understandings relating to
the subject matter hereof.
4.10 SEVERABILITY. Any provision of this Agreement which is invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.
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4.11 COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts and the signatures delivered by telecopy, each of which
when so executed and delivered shall be an original with the same effect as if
the signatures thereto and hereto were upon the same instrument and delivered in
person. This Agreement shall become effective when each party hereto shall have
received a counterpart hereof signed by the other parties hereto.
4.12 SECTION HEADINGS. The headings of each Section, subsection or other
subdivision of this Agreement are for reference only and shall not limit or
control the meaning thereof.
4.13 ARBITRATION.
(a) Except as provided in subparagraph (d), any controversy, dispute
or claim arising out of, in connection with, or in relation to the
interpretation, performance or breach of this Agreement, including any
claim based on contract, tort or statute, shall be settled, at the request
of either party, by arbitration conducted in Los Angeles, California, or
such other location upon which the parties may mutually agree, before and
in accordance with the then existing Rules of Commercial Arbitration of the
American Arbitration Association ("AAA"), and judgment upon any award
rendered by the arbitrator may be entered by any State or Federal court
having jurisdiction thereof. Any controversy concerning whether a dispute
is an arbitrable dispute shall be determined by the arbitrator. The
parties intend that this agreement to arbitrate be valid, specifically
enforceable and irrevocable. The designation of a situs or specifically a
governing law for this agreement or the arbitration shall not be deemed an
election to preclude application of the Federal Arbitration Act, if it
would be applicable.
(b) The sole arbitrator shall be selected in accordance with the
procedures of the AAA.
(c) The arbitrator shall award to the prevailing party in any
arbitration proceeding commenced hereunder, and the court shall include in
its judgment for the prevailing party in any claim arising under this
Agreement or relating to the transactions contemplated hereby, the
prevailing party's costs and expenses (including expert witness expenses
and reasonable attorneys' fees) of investigating, preparing and presenting
such arbitration claim or cause of action.
(d) Any party hereto may request a court of competent jurisdiction to
grant provisional injunctive relief to such party solely for the purpose of
maintaining the status quo until an arbitrator can render an award on the
matter in question and such award can be confirmed by a court having
jurisdiction thereof.
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IN WITNESS WHEREOF, the parties to this Agreement hereby indicate their
acceptance of the terms and conditions stated herein by the signatures of their
authorized representatives as of the date first stated above.
GARDINER COMMUNICATIONS CORP.
By: /s/ James M. Harris
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Name: James M. Harris
Title: President
CALIFORNIA AMPLIFIER, INC.
By: /s/ FRED STURM
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Name: Fred Sturm
Title: President and Chief Executive Officer
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