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Transition Services Agreement

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Sectors: Manufacturing
Governing Law: New York, View New York State Laws
Effective Date: July 16, 2007
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Exhibit 10.2

TRANSITION SERVICES AGREEMENT

This Transition Services Agreement (the " Services Agreement" ) is made as of this 16 th day of July , 2007 by and between American Standard Companies Inc., a Delaware corporation (" ASD" ), and WABCO Holdings Inc., a Delaware corporation (" WABCO" ). ASD and WABCO have entered into a Separation and Distribution Agreement dated as of July 16, 2007 (as amended from time to time, the " Separation Agreement" ), which sets forth, among other things, the terms of the separation of the VCS Business from ASD, which shall occur in a series of transactions. Prior to the Effective Time, the VCS Business received certain services from and provided certain services to ASD and certain of its Subsidiaries and Affiliates. Each of the ASD and WABCO desires that these services continue to be provided after the Effective Time upon the terms and conditions set forth in this Services Agreement.

In consideration of the mutual covenants and agreements contained in this Agreement, the Parties hereto hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions Incorporated . All capitalized terms not otherwise defined in this Services Agreement have the meaning ascribed to them in the Separation Agreement.

1.2 Additional Definitions . Unless the context otherwise requires, the following terms, and their singular or plural, used in this Services Agreement shall have the meanings set forth below: (a) " ASD" shall have the meaning set forth in the preamble to this Services Agreement. (b) " ASD Entities" means, collectively, ASD and its Affiliates that are listed as Providers on Schedule A or Recipients on Schedule B (and which shall not include any WABCO Entities).

(c) " ASD Provided Services" shall have the meaning set forth in Section 2.1 of this Services Agreement.

(d) " Confidential Information" shall have the meaning set forth in Section 8.1 of this Services Agreement.

(e) " Force Majeure" shall have the meaning set forth in Section 6.1 of this Agreement.

(f) " Initial Term" shall have the meaning set forth in Section 4.1. (g) " Losses" shall mean any and all damages, losses, deficiencies, liabilities, obligations, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including internal costs and the costs and expenses of any and all actions and demands, assessments, judgments, settlements and compromises relating thereto and the reasonable costs and expenses of attorneys' , accountants' , consultants' and other professionals' fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder). (h) " Party" means each of the entities set forth on the signature pages to this Services Agreement. (i) " Person" means an individual, partnership, corporation, trust, unincorporated association, or other entity or association.

(j) " Prime Rate" shall mean the rate per annum publicly announced by JPMorgan Chase Bank (or successor thereto) from time to time as its prime rate in effect at its principal office in New York City. For purposes of this Agreement, any change in the Prime Rate shall be effective on the date such change in the Prime Rate is publicly announced as effective.

(k) " Provider" shall mean the person identified on Schedule A or B to this Services Agreement providing the services set forth therein.

(l) " Recipient" shall mean the person identified on Schedule A or B to this Services Agreement receiving the services set forth therein.

(m) " Renewal Term" shall have the meaning set forth in Section 4.1 of this Agreement.

(n) " Sales and Service Tax" shall have the meaning set forth in Section 3.4(a). (o) " Term" shall mean the Initial Term and the Renewal Term, if any, or, with respect to a particular service provided for hereunder, such shorter period as may be applicable pursuant to the terms of this Services Agreement or the exercise of a Party' s right of early termination as provided for herein. (p) " WABCO" shall have the meaning set forth in the preamble to this Services Agreement. (q) " WABCO Entities" means, collectively, WABCO and its Affiliates that are listed as Recipients on Schedule A or as Providers on Schedule B (and which shall not include any ASD Entities).

(r) " WABCO Provided Services" shall have the meaning set forth in Section 2.2 of this Services Agreement.

Other terms are used as defined elsewhere herein.

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ARTICLE 2

SERVICES PROVIDED

2.1 ASD Provided Services . Pursuant to the terms of this Services Agreement, the ASD Entities agree to provide, or cause to be provided, to the WABCO Entities, commencing on the date immediately following the Effective Time, the services described in Schedule A to this Services Agreement (the " ASD Provided Services" ).

2.2 WABCO Provided Services . Pursuant to the terms of this Services Agreement, the WABCO Entities agree to provide, or cause to be provided, to the ASD Entities, commencing on the date immediately following the Effective Time, the services described in Schedule B to this Services Agreement (the " WABCO Provided Services" ). 2.3 Other Services . If, after the execution of this Services Agreement and prior to the two month anniversary of the Effective Time, the Parties determine that a service provided by or to the VCS Business as conducted by ASD prior to the Effective Time was inadvertently omitted from the Schedules to this Services Agreement, then the Parties shall negotiate in good faith to attempt to agree to the terms and conditions upon which such services would be added to this Services Agreement, it being agreed that the charges for such services should be determined on a basis consistent with the methodology for determining the initial prices provided for herein ( i.e. , sufficient to cover a Provider' s reasonable estimate of its actual costs and, if applicable, consistent with the prices such Provider would charge to an Affiliate), in each case without taking into account any profit margin or projected savings from increased efficiency. Upon the Parties' agreement on the fees and other specific terms and conditions applicable to such services, the Parties shall update this Services Agreement through the substitution of the relevant Schedule, or additions or supplements to the relevant Schedule, which substitutions, additions or supplements shall describe the service and the related fees and other specific terms and conditions applicable thereto. ARTICLE 3

COMPENSATION 3.1 Compensation for ASD Provided Services . Subject to Section 3.5, the compensation for the ASD Provided Services for the duration of the Term shall be as described for each individual service provided to the WABCO Entities as set forth on Schedule A. For the avoidance of doubt, the ASD Provided Services shall commence on the date immediately following the Effective Time.

3.2 Compensation for WABCO Provided Services . Subject to Section 3.5, the compensation for the WABCO Provided Services for the duration of the Term shall be as described for each individual service provided by the WABCO Entities set forth on Schedule B. For the avoidance of doubt, the WABCO Provided Services shall commence on the date immediately following the Effective Time.


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3.3 Allocation of Certain Expenses . (a) Each Provider shall bear the costs and expenses of obtaining any and all consents from third parties which may be necessary in connection with such Provider' s performance of its obligations hereunder, including, with respect to the obligations of the WABCO Entities acting in their capacity as Providers, the costs of obtaining the consent to the assignment of all leases of equipment and licenses of software which may be necessary to provide the services contemplated hereby.

(b) In addition to the payment of all compensation provided under Section 3.1 or Section 3.2, as applicable, Recipient shall reimburse Provider for all reasonable out-of-pocket costs and expenses incurred by Provider or its Affiliates in connection with providing the applicable services hereunder (including all travel-related expenses) to the extent that such costs and expenses are not reflected in the compensation for such services on Schedule A or Schedule B, as applicable; provided, however, any such expenses exceeding $1000 per month (other than routine business travel and related expenses) shall require advance approval of Recipient. Any travel-related expenses incurred by Provider in performing the applicable services hereunder shall be incurred and charged to Recipient in accordance with Provider' s then applicable business travel policies.

(c) In the event that Recipient terminates any individual service as contemplated by Section 4.2 earlier than the expiration of the Initial Term or the Renewal Term, if applicable, Recipient shall reimburse Provider for any and all costs and expenses incurred by Provider or any of its subsidiaries as a result of such early termination by Recipient, including incremental early termination fees and other costs incurred in order to terminate or reduce the level of services provided by third parties under Contracts with Recipient or any of its subsidiaries, which services are affected by such early termination, such reimbursement to be due and payable within five business days following Recipient' s receipt of any invoice from Provider with respect to such costs and expenses.

3.4 Taxes .

(a) In addition to the compensation payable to Provider determined exclusive of the taxes payable by Recipient under this Section 3.4, Recipient will pay and be liable for all sales, service, value added, lease, use, transfer, consumption or similar taxes levied and measured by: (i) the cost of services provided to Recipient under this Agreement or (ii) Provider' s cost in acquiring property or services used or consumed by Provider in providing Services under this Agreement (the " Sales and Service Taxes" ). Such taxes will be payable by Recipient to Provider in accordance with Section 3 or as otherwise mutually agreed in writing by the parties and under the terms of the applicable law which govern the relevant Sales and Service Tax. Recipient' s obligation to pay Sales and Service Taxes under this Section 3.4 shall be subject to the receipt of (i) a computation of the Sales and Service Taxes payable under this Section 3.4 identifying the nature and amount of the goods or services on which the Sales and Service Tax is assessed and the applicable rate and (ii) a valid and customary invoice (or other document) under the terms of applicable law for each Sales and Service Tax. If Recipient complies with the terms of this Section 3.4 regarding the payment of Sales and Service Taxes, it shall not be liable for any interest, penalties or other charges attributable to Provider' s improper filing relating to Sales and Service Taxes or late payment or failure to remit Sales and Service Taxes to the relevant taxing authority.


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(b) Each of Provider and Recipient shall pay and be responsible for their own personal property taxes and taxes based on their own income or profits or assets.

(c) Payments for services or other amounts under this Agreement shall be made net of withholding taxes, provided however , that if Provider reasonably believes that a reduced rate of withholding applies or Provider is exempt from withholding, Recipient shall only be required to apply such reduced rate of withholding or not withhold if Provider provides Recipient with evidence reasonably satisfactory to Recipient that a reduced rate of or no withholding is required, including rulings or certificates from, or other correspondence with taxing authorities and tax opinions rendered by qualified persons, to the extent reasonably requested by Recipient. Recipient shall promptly remit any amounts withheld to the appropriate taxing authority and in the event that Recipient receives a refund of any amounts previously withheld from payments to Provider and remitted, Recipient shall surrender such refund to Provider.

(d) Each of Provider and Recipient shall promptly notify the other party of any deficiency claim or similar notice by a taxing authority with respect to Sales and Service Taxes payable under this Service Agreement, and of any pending tax audit or other proceeding relating to Sales and Service Taxes or withholding with respect to this Service Agreement, and shall afford such party all reasonable opportunity to participate in any such audit or proceeding affecting its interests. 3.5 Price Adjustments .

(a) The Parties shall review the Providers' respective costs of providing services hereunder as of September 30, 2007, and each two-month anniversary thereafter. If it is determined in connection with any such review that a Provider' s cost of providing services hereunder (taken individually) exceeds by at least five percent (5%) the charge for such service(s) because of a significant increase in usage by the Recipient or other circumstances beyond the reasonable control of the Provider (including, without limitation, events of Force Majeure), then, upon request of such Provider, such Provider and its Recipient shall negotiate in good faith to determine an appropriate adjustment to the then-current prices for such services on a basis consistent with the methodology for determining the initial prices provided for herein (as described in Section 2.3).

(b) If the Parties determine (which determination shall be made in good faith) that the initial prices set forth on the Schedules hereto are not consistent with the methodology for determining the initial prices as described in Section 3.5(a), then the Parties shall negotiate in good faith to adjust such charges in a manner that is consistent with such methodology.

3.6 Terms of Payment; Dispute Resolution; Audits .

(a) Provider shall invoice the Recipient for the Services provided by Section 3.1 or Section 3.2, as applicable, monthly in advance on the first calendar day of each month of the term following the date hereof (or the first business day following each such date). Provider


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shall also provide invoices to Recipient monthly in arrears for amounts, such as Sales and Service Taxes and out-of-pocket or other expenses, that are payable in addition to the flat fee for service that was paid in advance pursuant to the first sentence of this Secti
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