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Transition Services Agreement

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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.
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