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EXHIBIT 10.3
EXECUTION COPY
TRANSITION SERVICES AGREEMENT
TRANSITION SERVICES AGREEMENT, effective as of July 31, 2000 (this
"Agreement"), is made by and between B/E AEROSPACE, INC., a Delaware corporation
("B/E") and ADVANCED THERMAL TECHNOLOGIES, INC., a Delaware corporation (the
"Company").
WHEREAS, the Company is currently a wholly-owned subsidiary of B/E and
receives administrative and other services from B/E;
WHEREAS, the Company is considering carrying out an initial public
offering (the "Public Offering") of shares of its common stock pursuant to a
registration statement filed under the Securities Act of 1933, as amended;
WHEREAS, B/E possesses certain administrative capabilities and
resources which it is willing to provide to the Company after the Public
Offering under the terms set forth in this Agreement; and
WHEREAS, the Company desires to obtain from B/E certain administrative
services under the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. FURNISHING OF SERVICES; FEES; OTHER.
1.1. FURNISHING OF SERVICES. Subject to the terms and conditions of
this Agreement, B/E shall provide, to the extent reasonably
available, as requested by the Company, services as described in
Exhibit A attached hereto, as Exhibit A may be amended by mutual
agreement of the Company and B/E from time to time ("Services").
The Company shall have no obligation to procure Services
hereunder, such procurement being at the Company's sole
discretion, and nothing in this Agreement shall be deemed to
limit in any way the right of the Company to procure such
Services from others or enter into any other agreement for such
purpose.
1.2. FEES FOR SERVICES. Services shall be furnished by B/E at its then
Applicable Cost. "Applicable Cost" shall mean (x) the respective
direct and indirect costs and expenses, including overhead and
sales, general and administrative expenses, incurred by B/E in
performing its obligations under this Agreement, which, except to
the extent that such costs and
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expenses are adjusted for comparability, will be equal to or less
than those usually charged by B/E for similar work under like
conditions of service, plus (y) 10%.
1.3. TAXES. In addition to the prices paid by the Company hereunder,
the Company shall pay any present or future sales, use, excise,
or other similar taxes applicable to the sale of Services or, if
such sale is exempt from tax, the Company shall furnish B/E with
a tax exemption certificate acceptable to the taxing authorities.
The foregoing shall not apply to any taxes imposed on B/E's
income generated by this Agreement, and the Company shall not be
responsible for any income taxes for which B/E is liable.
1.4. BILLING. On a monthly basis, B/E shall submit to the Company for
payment a billing invoice setting forth B/E's good faith estimate
of the amount of fees payable by the Company to B/E for Services
rendered during the preceding month. B/E, at its option, may also
invoice the Company for any costs paid by the Company to
third-parties in the course of providing any Services
("Third-Party Costs") immediately upon payment of such
Third-Party Costs. Within thirty (30) days after the close of
each calendar quarter, B/E will compute and reconcile the actual
amounts of fees payable by the Company to B/E in respect of such
calendar quarter (the "Actual Quarter's Charge") against the sum
of the estimated amounts previously invoiced to the Company by
B/E in respect of each calendar month occurring within such
calendar quarter (the "Estimated Quarter's Charge") and will send
the Company a statement of such computation and reconciliation
(the "Quarterly Statement"). The parties agree that if (a) the
Actual Quarter's Charge for such calendar quarter is greater than
the Estimated Quarter's Charge for such calendar quarter, then
the Company shall pay such difference (the "Quarterly Shortfall")
to B/E within fifteen (15) days after B/E sends the Quarterly
Statement for such calendar quarter to the Company; and (b) if
the Estimated Quarter's Charge for such calendar quarter is
greater than the Actual Quarter's Charge for such calendar
quarter, then B/E shall reimburse the Company for the amount of
such difference within fifteen (15) days after B/E sends the
Quarterly Statement for such calendar quarter to the Company,
subject to B/E's right to offset as a credit any amounts
previously invoiced by B/E to the Company under this Section 1.4.
and not yet paid to B/E.
1.5. PAYMENT. The Company shall pay in full to B/E the amount due as
stated on each B/E invoice within thirty (30) days after the date
of such invoice; provided that the Company shall pay in full the
amount of any Third-Party Costs billed to the Company on any B/E
invoice within ten (10) days of the date of such invoice; and
provided further that the Company shall pay any Quarterly
Shortfall to B/E within fifteen (15) days after B/E issues the
Company an invoice for such Quarterly Shortfall as provided in
Section 1.4.
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1.6. ACCESS TO ASSETS. The Company shall make available to B/E all
such Company equipment, inventory, supplies and information as
may be reasonably necessary for B/E to perform any Services under
this Agreement. B/E agrees to use these Company assets solely for
the purposes contemplated hereby.
1.7. PERFORMANCE. Performance dates for Services shall be established
by the mutual agreement of the parties.
1.8. EXCUSABLE DELAYS.
a. Except with respect to any obligation of payment, neither
party shall be liable to the other for delay in performance
or failure to perform due to (1) causes beyond its
reasonable control or (2) acts of God, acts of the other
party, and acts (including failure to act) of any
governmental authority.
b. Any party whose performance is excused pursuant to Section
1.8.a. shall notify the other party of any delay or failure
so excused and shall specify a revised performance date
(which shall be agreed to with the other party pursuant to
Section 1.7.) as soon as practicable after becoming aware of
any delay specified in Section 1.8.a.
1.9. AUDIT RIGHTS. Upon reasonable notice, the Company, at its own
cost and expense, shall have the right to cause a mutually
acceptable third party (it being understood that any nationally
recognized independent certified public accounting firm shall be
acceptable to both B/E and the Company) to audit and inspect the
books and records of B/E relating to work performed for or on
behalf of the Company, pursuant to this Agreement, provided that
such third party agrees in writing to be bound by appropriate
confidentiality obligations and that such party will not disclose
to the Company any proprietary rates or other cost data which is
deemed to be competition sensitive by B/E.
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2. PERSONNEL. B/E shall provide the services of appropriately
skilled and experienced employees during the term of this
Agreement. Such personnel shall be designated by B/E for the work
contemplated by this Agreement, but the Company may at any time,
upon reasonable advance notice (confirmed in writing), notify B/E
that the services of any one or more of such personnel are no
longer required, in which case the Company shall not be obligated
to pay B/E for any future services of such personnel.
3. TERMS. This Agreement shall terminate on December 31, 2003 or on
such other date as may be agreed by the parties, unless sooner
terminated pursuant to the provisions of this Agreement.
4. DEFAULT; REMEDIES.
4.1. EVENTS OF DEFAULT. A party to this Agreement will be in
default hereunder if such party commits a material breach of
any term or condition of this Agreement and such breach
continues uncured for thirty (30) days (or fifteen (15) days
in the case of a failure by the Company to pay B/E any sums
payable to B/E when due under this Agreement) following
receipt of written notice of such breach from the other
party.
4.2. REMEDIES. In the event of a default by the Company
hereunder, B/E may exercise any or all of the following
remedies: (a) declare immediately due and payable all sums
for which the Company is liable under this Agreement; (b)
decline to provide any Service hereunder; and (c) upon
written notice to the Company, terminate this Agreement. In
the event of any default by B/E hereunder, upon written
notice to B/E, the Company may terminate this Agreement. In
addition to the foregoing, a non-defaulting party will have
all other rights remedies available to it under applicable
law, including, but not limited to, equitable relief.
5. TERMINATION. Either party hereto shall have the right to
terminate this Agreement (i) in accordance with Section 4.2.,
(ii) upon written notice to the other party, if the other party
shall be adjudged bankrupt, become insolvent, make a general
assignment for the benefit of creditors, have a receiver or
trustee appointed for the benefit of creditors generally, file a
voluntary petition in bankruptcy or initiate reorganization
proceedings or take any step toward liquidation, or (iii) upon
180 days' prior written notice to the other party.
6. OWNERSHIP OF DATA AND INFORMATION.
6.1. DATA. B/E shall maintain records in sufficient detail to
reflect all work done and results achieved hereunder in
accordance with B/E's regular practices in the performance
of work under this Agreement ("Data").
6.2. OWNERSHIP. Except as provided in this Agreement, all such
Data maintained under Section 6.1. above shall be the
property of the Company and shall be made available to the
Company, at its written request, no later
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than the termination of this Agreement. B/E may retain a
copy of all Data delivered to the Company to be held on a
confidential basis pursuant to Section 11.
7. DISCLAIMER OF WARRANTY; LIMITATION OF LIABILITY.
7.1. DISCLAIMER OF WARRANTY. ALL SERVICES PROVIDED HEREUNDER ARE
PROVIDED TO THE COMPANY ON AN "AS IS" BASIS WITHOUT WARRANTY
OF ANY KIND. B/E HEREBY DISCLAIMS ANY EXPRESS OR IMPLIED
WARRANTIES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, THE
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
7.2. LIMITATION OF LIABILITY. The total liability of B/E on any
and all claims, whether in contract, warranty, tort
(including, but not limited to, negligence) or otherwise,
arising out of, connected with, or resulting from the
performance or nonperformance of any agreement resulting
herefrom or the furnishing of any Service, shall not exceed
the total amount paid by the Company hereunder for all
Services provided during the term of this Agreement.
7.3. LIMITATION OF DAMAGES. In no event, whether as a result of
breach of contract, warranty, tort (including, but not
limited to, negligence) or otherwise, shall B/E be liable
for any special, consequential, incidental, indirect or
exemplary damages, including, but not limited to, loss of
profits or revenue, loss of use of equipment, cost of
capital, cost of substitute goods, facilities, services or
replacement power, downtime costs or claims of the Company's
customers for such damages.
8. RELATIONSHIP OF THE PARTIES. Each party hereto will operate as,
and have the status of, an independent contractor and will not
act as or be an agent, partner, co-venturer or employee of the
other party. Except as expressly provided in this Agreement,
neither party will have the right or authority to assume or
create any obligations, express or implied, on behalf of or in
the name of any other party, or to bind the other party in any
respect whatsoever.
9. RECORD RETENTION.
9.1. B/E shall maintain accurate records and accounts of all
transactions relating to its performance of Services
pursuant to this Agreement. Such records and accounts shall
reflect such information as would normally and reasonably be
examined by an independent accountant in performing a
complete audit in accordance with United States generally
accepted accounting principles ("GAAP") for the purpose of
certifying financial statements and shall be maintained by
in a manner that will enable an independent accountant to
complete an audit of the Company in
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accordance with GAAP. The Company shall have the right to
inspect and copy, at its expense upon reasonable notice and
at reasonable intervals during B/E's regular office hours,
the separate records and accounts maintained by B/E relating
to Services, provided that such records shall be
Confidential Information (as defined in Section 11.2.) of
B/E and shall be held in confidence by the Company as
provided in Section 11.2. hereof.
9.2. The Company shall maintain accurate records and accounts of
all transactions relating to the provision of Services under
this Agreement and all records, books, contracts,
instruments, computer data and other data and information
(collectively, "Information") insofar as such Information
may be reasonably required by B/E to comply with all
applicable federal, state, county and local laws,
administrative or court orders, ordinances, regulations and
codes, including but not limited to the Employment
Retirement Income Security Act of 1974, as amended, and
securities laws. Without limiting the foregoing, Information
may be requested under this Section 9.2. for audit,
accounting, claims, regulatory, litigation and tax purposes,
as well as for purposes of fulfilling disclosure and
reporting obligations and for performing this Agreement and
the transactions contemplated hereby.
10. LIMITATIONS ON OBLIGATIONS; SERVICE PROVIDERS.
10.1.LIMITATIONS ON B/E'S OBLIGATIONS. Notwithstanding anything
herein to the contrary, B/E may, at its sole discretion,
decline to provide any Service hereunder if: (a) facilities
or personnel of B/E are not reasonably available to provide
such Service; (b) providing such Service requested by the
Company would materially interfere with B/E's conduct of its
business; or (c) in B/E's good faith judgment based upon the
advice of its tax advisors, B/E's providing such Service
could result in significant tax disadvantages for B/E, could
conflict with any applicable law, regulation or ordinance or
could result in a conflict of interest. B/E may, at any time
and in its sole discretion, change in any reasonable respect
the manner, scheduling or timing of the Services to be
rendered, provided that B/E shall provide the Company at
least thirty (30) days' prior written notice of such change.
Nothing in this Agreement shall limit or restrict the right
of B/E or any of B/E's directors, officers or employees,
agents, subsidiaries or affiliates to engage in any other
business or devote their time and attention in part to the
management or other aspects of any other business, whether
or not of a similar nature, or to limit or restrict the
right of B/E to engage in any other business or to render
services of any kind to any entity.
10.2.SERVICE PROVIDERS. Services to be provided by B/E hereunder
may, in B/E's sole discretion, be provided by employees or
service providers of B/E or any of its subsidiaries (other
than the Company); provided, however, that B/E shall remain
responsible, in accordance with the terms
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of this Agreement, for the performance of any Service it
causes to be so provided.
11. CONFIDENTIALITY.
11.1.If a party discloses to the other party, in connection with
its performance under this Agreement, information which the
disclosing party deems to be confidential, proprietary
information, the disclosing party shall, if such information
is written, xxxx such information with the legend
"CONFIDENTIAL, PROPRIETARY INFORMATION" or with another
legend conveying the same meaning or, if such information is
oral, notify the receiving party at the time of disclosure
that it is confidential, proprietary information and, within
thirty (30) days thereafter, transmit such information to
the receiving party (previously provided in oral form) in
written form, marked as indicated above.
11.2.Written information disclosed by a party to the other party
not marked as indicated in Section 11.1. and oral
information disclosed by a party to the other party not
designated as confidential, proprietary information upon
disclosure and reduced to writing and marked as indicated in
Section 11.1. shall be considered to have been disclosed
without restriction. Written information disclosed by a
party to the other party marked as indicated in Section
11.1. and oral information disclosed by a party to the other
party designated as confidential, proprietary information
upon disclosure and reduced to writing and marked as
indicated in Section 11.1., and all written or graphic
notes, analyses, studies and drawings or other documents or
graphic depictions prepared by the receiving party's
employees or representatives that disclose such information
referred to in this sentence (collectively, "Confidential
Information") shall be subject to the following Sections
11.2. a., b., and c.:
a. The receiving party shall use reasonable efforts, like
those used to safeguard its own confidential,
proprietary information of a similar type:
(i). not to disclose Confidential Information of the
disclosing party to persons or entities other than the
receiving party's employees or representatives involved
with the performance of this Agreement; and
(ii). not to use Confidential Information of the
disclosing party for any purpose other than performing
under this Agreement.
b. The restrictions in Section 11.2.a. above shall not
apply to any information of a disclosing party which:
(i). the receiving party possessed without such
restrictions prior to receipt from the disclosing
party;
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(ii). is disclosed to the receiving party by a source
other than the disclosing party, which source is not
under a confidentiality obligation to the disclosing
party;
(iii). is disclosed by the party, without restriction,
to a person or entity other than the receiving party;
(iv). is now or becomes publicly known (such as, but
not limited to, information disclosed in patents or
publications) through no violation of this Agreement;
(v). is independently developed by the receiving party
after the date of this Agreement without use of
Confidential Information of the disclosing party, by
persons who have not had access to Confidential
Information;
(vi). is disclosed or used with the prior written
consent of the disclosing party;
(vii). the receiving party reasonably believes (based
upon receipt of a legal opinion) is required to be
disclosed to comply with an applicable law, rule or
regulation or court order or other compulsory process
of a court or other government body; or
(viii). is disclosed or used after that date which
falls five (5) years after the receipt of the
Confidential Information.
In the event that Section 11.2.b.(vii). is applicable,
the receiving party shall notify the disclosing party,
in writing, of its intention to disclose the
Confidential Information, allowing a reasonable period
prior to such intended disclosure, where the receiving
party reasonably believes that such notice can be so
provided without violating an applicable law, rule or
regulation or court order or other compulsory process
of a court or other governmental body, so that the
disclosing party may take such action as it deems
appropriate to protect its Confidential Information.
c. Upon expiration or termination of this Agreement, the
receiving party shall, upon receipt of the disclosing
party's written request, at the receiving party's
option, either destroy or return to the disclosing
party all of the disclosing party's Confidential
Information (and all copies thereof); provided,
however, that one copy may be maintained by the
receiving party's legal counsel (but such copy shall
continue to be subject to the provisions of this
Agreement). If the receiving party elects to destroy
the disclosing party's Confidential Information
(subject to the proviso at the end of the preceding
sentence), the receiving party shall certify such
destruction in writing to the disclosing party.
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11.3.Each employee or representative of a party shall be
informed of this Section 11. and shall agree to comply with
its provisions before any Confidential Information of the
other party is disclosed to such employee or representative.
11.4.Nothing contained in this Section 11. shall be construed as
granting, by implication, estoppel or otherwise, any
licenses or rights under any patents, copyrights, or other
legally protectable proprietary rights (present or future)
of either party hereto to the other party.
12. MISCELLANEOUS.
12.1.COMPLIANCE WITH LAWS. B/E agrees to comply with the
provisions of any applicable federal, state or local law or
ordinance and all lawful standards, permits, licenses,
approvals, orders, rules and regulations promulgated
pursuant thereto in performing its obligations under this
Agreement.
12.2.ASSIGNMENT. Neither the Company nor B/E may assign any of
its rights or obligations under this Agreement to a third
party without the other party's prior written approval. Any
such attempted assignment shall be null and void.
12.3.NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this
Agreement to the Company or B/E shall be in writing and
shall be deemed to have been duly given upon receipt
(subject to the last sentence of this Section 12.3.) if
delivered personally, by a national overnight delivery
service or by facsimile transmission, or upon deposit in the
U.S. mail (certified or registered mail, postage prepaid,
return receipt requested):
if to B/E, to:
B/E Aerospace, Inc.
0000 Xxxxxxxxx Xxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel and Secretary
Facsimile: (000) 000-0000
if to the Company to:
Advanced Thermal Technologies, Inc.
0000 Xxxx Xx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
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or to such other address or telecopy number and with such
other copies as such party may hereafter specify by written
notice to the other party in the manner specified above. In
the case of delivery in person, by a national overnight
courier service or by facsimile transmission, such notice,
request, demand, waiver and other communication shall be
effective upon receipt, provided that if the day of receipt
is not a business day (i.e., the day of receipt is a
Saturday, Sunday or any other day on which the principal
commercial banks located in Florida are not open for
business), then the notice shall be deemed to have been
received on the next succeeding business day.
12.4.HEADINGS. The captions in this Agreement are included for
convenience of reference only and shall be ignored in the
construction or interpretation hereof.
12.5.AMENDMENT; WAIVER. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver
is in writing and signed, in the case of an amendment, by
B/E and Company, or in the case of a waiver, by the party
against whom the waiver is to be effective. No failure or
delay by either party in exercising any right, power or
privilege under this Agreement shall operate as a waiver
thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
12.6.BINDING EFFECT; BENEFIT. The provisions of this Agreement
shall be binding upon and inure to the benefit of the
parties and their respective successors and, subject to
Section 12.2., permitted assigns. Nothing in this Agreement,
expressed or implied, is intended to confer on any person
other than the parties hereto or their respective successors
and, subject to Section 12.2., permitted assigns any rights,
remedies, obligations or liabilities under or by reason of
this Agreement.
12.7.GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of [New
York] applicable to contracts executed in and to be
performed in that state.
12.8.SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced
by any rule of law, or public policy, such term or
provision, as to such jurisdiction, shall be ineffective,
and all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long
as the economic or legal substance of the transactions set
forth in this Agreement is not affected in any manner
materially adverse to any party hereto. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the
transactions set
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forth in this Agreement be consummated as originally
contemplated to the fullest extent possible.
12.9.SURVIVAL. The provisions of Sections 6, 7, 8, 9,11 and 12
shall survive the expiration or earlier termination of this
Agreement. In addition, the provisions of this Agreement
shall continue to apply with respect to Services performed,
including any obligation of the Company to pay for such
Services, prior to such expiration or termination and shall
govern the relationship between the parties with respect
thereto.
12.10.REMEDIES. Any right or remedy of the Company or B/E with
respect to breach set forth in this Agreement shall not,
unless the contrary is expressly indicated, be exclusive and
in addition thereto the Company and B/E shall have all
rights and remedies available to them under applicable law,
including, but not limited to, equitable relief.
12.11.ENTIRE AGREEMENT. This Agreement and the Exhibits thereto
constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior
agreements, understandings and negotiations, both written or
oral, between the parties with respect to the subject matter
hereof. No representation, inducement, promise,
understanding, condition or warranty not set forth in this
Agreement has been made or relied upon by any party to this
Agreement.
12.12.COUNTERPARTS. This Agreement may be executed and delivered
(including by facsimile transmission) in one 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
B/E AEROSPACE, INC.
By: /s/ XXXXXX X. XXXXXXXXX
---------------------------
Name: XXXXXX X. XXXXXXXXX
Title: SENIOR V.P.AND C.F.O.
ADVANCED THERMAL
TECHNOLOGIES, INC.
By: /s/ XXXXXXX X. XXXXXXX
---------------------------
Name: XXXXXXX X. XXXXXXX
Title: CFO
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EXHIBIT A
LIST OF SERVICES
- PAYROLL PROCESSING AND ADMINISTRATION - B/E will continue to include
the Company's employees in its payroll system, arranging for bi-weekly
payroll payments and all the related tax payments and required
informational filing.
- HUMAN RESOURCES ADMINISTRATION - B/E will continue to provide
personnel oversight and services for the ongoing human resource
administration requirements of the Company including recruitment and
hiring assistance, statutory compliance, compensation recommendations,
and employee record retention.
- BENEFITS - Company employees will continue to be included in the B/E
benefit plans.
- MARKETING SUPPORT - Company sales and marketing efforts will be
supported by B/E's staff and expertise including the development of
promotional materials, press releases, and sales strategies, and sales
calling efforts.
- INFORMATIONAL TECHNOLOGY AND TELECOMMUNICATIONS SERVICES - the Company
will continue to be serviced by B/E's management information,
telephone, and email systems.
- TREASURY MANAGEMENT - B/E will support the Company in the processing
of cash receipts and disbursements and in other banking and investment
matters.
- ACCOUNTING AND FINANCE ASSISTANCE - Company staff will be assisted in
accounting research, financial reports, auditing and other financial
support with the necessary expertise at B/E.
- SALES ORDER ENTRY ADMINISTRATION - the Company will continue to
utilize the sales order/backlog system maintained at B/E.
- CORPORATE ADMINISTRATIVE SERVICES--B/E administrative and executive
staff will be available to support the Company's developing
requirements.
