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Transition Services Agreement

This is an actual contract by Vertex Aerospace.

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Sectors: Manufacturing
Governing Law: New York, View New York State Laws
Effective Date: June 27, 2001
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Exhibit 10.10


EXECUTION COPY


TRANSITION SERVICES AGREEMENT dated as of June 27, 2001 (this "Services Agreement"), between RAYTHEON AIRCRAFT HOLDINGS, INC., a Delaware corporation ("Seller"), RAYTHEON AEROSPACE LLC, a Delaware limited liability company and a wholly owned subsidiary of Seller (the "Company"), and RA AEROSPACE HOLDINGS, LLC, a Delaware limited liability company ("Buyer"). Each of Seller and Buyer are sometimes hereinafter referred to as a "Party" and collectively as the "Parties".


WHEREAS Seller, Buyer, Wing Corp. and Raytheon Aerospace Company have entered into the Combination Agreement dated as of April 5, 2001 (as amended by Amendment Number One dated as of June 27, 2001, the "Agreement"), relating to the formation of a joint venture by Seller, Buyer and Company, pursuant to which Raytheon Aerospace Company merged with and into Wing Corp. and Wing Corp. was converted into the Company; and


WHEREAS Buyer is interested in purchasing certain services from Seller and its subsidiaries and Seller and its Subsidiaries are interested in providing such services to Buyer during a transition period commencing on the Closing Date.


WHEREAS Seller and its Subsidiaries are interested in purchasing certain services from Buyer and Company and Buyer and Company are interested in providing such services to Seller and its Subsidiaries during a transition period commencing on the Closing Date.


NOW, THEREFORE, the Parties hereby agree as follows:


ARTICLE I


DEFINITIONS


All terms used herein and not defined herein shall have the meanings assigned to them in the Agreement.


ARTICLE II


AGREEMENT TO PROVIDE AND ACCEPT SERVICES


SECTION 2.01. PROVISION OF SERVICES. (a) On the terms and subject to the conditions contained herein, Seller shall provide, or shall cause its Subsidiaries or third parties designated by it and reasonably acceptable to Buyer (such designated Subsidiaries and third parties, together with the Seller, being herein collectively referred to as the "Seller Service Providers") to provide, to the Buyer and the Company the services ("Seller Services") listed on the attached Schedule 1 ("Schedule 1"). Each Seller Service shall be provided in exchange for the consideration set forth with respect to such Seller Service on Schedule 1 or as the Parties may otherwise agree in writing. Each of the Seller Services shall be provided and accepted in accordance with the terms, limitations and conditions set forth herein and on Schedule 1.


(b) On the terms and subject to the conditions contained herein, Buyer and Company shall provide, or shall cause their Subsidiaries or third parties designated by it and reasonably acceptable to Seller (such designated Subsidiaries and third parties, together with the Buyer and Company, being herein collectively referred to as the "Buyer Service Providers," and together with the Seller Service Providers, the "Service Providers") to provide, to the Seller the services ("Buyer Services" and together with the Seller Services, the "Services") listed on the attached Schedule 1 ("Schedule 1"). Each Buyer Service shall be provided in exchange for the consideration set forth with respect to such Buyer Service on Schedule 1 or as the Parties may otherwise agree in writing. Each of the Buyer Services shall be provided and accepted in accordance with the terms, limitations and conditions set forth herein and on Schedule 1.


SECTION 2.02. ACCESS. Buyer and Company shall make available on a timely basis to the Seller Service Providers all information and materials reasonably requested by any of the Seller Service Providers to enable it to provide the Seller Services. Buyer and Company shall provide to the Seller Service Provider reasonable access to the Buyer's and the Company's premises to the extent necessary for the purpose of providing the Seller Services.


ARTICLE III


SERVICES; PAYMENT; INDEPENDENT CONTRACTORS


SECTION 3.01. SERVICES TO BE PROVIDED. (a) Unless otherwise agreed by the Parties, Buyer and Seller shall be required to perform, or to cause the other applicable Service Providers to perform, the Services only in a manner that is substantially similar in all material respects to the manner in which such Services were performed for the Company or the Seller, as the case may be, prior to the Closing Date, and the Services shall be used for substantially the same purposes and in substantially the same manner as the Services had been used prior to such date; PROVIDED, HOWEVER, that in no event shall the scope of the Services required to be performed hereunder exceed that described on Schedule 1 unless otherwise agreed in writing. Each of Seller and the Seller Service Providers shall act under this Services Agreement solely as an independent contractor and not as an agent of the Buyer or the Company. Each of Buyer, Company and the Buyer Service Providers shall act under this Services Agreement solely as an independent contractor and not as an agent of the Seller.


(b) If it is necessary for any Seller Service Provider to increase staffing or acquire equipment or make any investments or capital expenditures to accommodate an increase in the use of any Seller Service beyond the level of use of such Seller Service by the Buyer or the Company prior to the Closing Date, as a result of an increase in volume of the business of the Company or a change in the manner in which the business of the Company is being conducted, Seller shall inform Buyer in writing of such increase in staffing level, equipment acquisitions, investments or capital expenditures before any such cost or expense is incurred. Upon mutual agreement of the Parties as to the necessity of any such increase, Buyer (unless Buyer and Seller


shall otherwise agree in writing) shall advance to the relevant Seller Service Providers an amount equal to the actual costs and expenses to be incurred in connection therewith. If such mutual agreement is not reached, Seller's obligation to provide or cause to be provided such Seller Service shall be limited to the level of use of such Seller Service by the Company prior to the Closing Date.


(c) The Service Providers shall have the right to shut down temporarily for any reason specified in Article V (Force Majeure) hereof.


(d) Buyer and Seller agrees to use their reasonable good faith efforts to reduce or eliminate their dependency on the Services as soon as is reasonably practicable.


(e) If it is necessary for Seller or any other Seller Service Provider to increase staffing or acquire equipment or make any investments or capital expenditures or otherwise absorb or incur incremental expenses in order to provide any Seller Service as a result of the initial conversion or transition of such Seller Service (including, for example, costs incurred by Seller or a Seller Service Provider in order to segregate data or systems for the Company from other data or systems of Seller or the Seller Service Provider), then Buyer agrees to reimburse the Seller Service Provider in cash, promptly upon receipt of a written invoice, an amount equal to one half of the actual costs and expenses incurred by the Seller Service Provider in connection therewith.


(f) The parties will use good faith efforts to reasonably cooperate with each other in all matters relating to the provision and receipt of Services. Such cooperation shall include obtaining all consents, licenses or approvals necessary to permit each party to perform its obligations hereunder; PROVIDED that neither Buyer nor Seller shall be required to pay any amounts to any third parties or to grant any accommodation, financial or otherwise, to secure the same. The parties will, for a period of five (5) years after the Closing Date, maintain documentation supporting the information contained in the Exhibits and Schedules and cooperate with each other in making such information available as needed, subject to appropriate confidentiality requirements, in the event of any tax audit or litigation.


SECTION 3.02. BUYER PAYMENT. Statements will be delivered to Buyer each month by Seller or such other Seller Service Providers designated by Seller for Seller Services provided to the Buyer and the Company during the preceding month, and each such statement shall set forth a brief description of such Seller Services and the amounts charged therefor and such amounts shall be payable by Buyer net 30 days after the date of such statement. Statements not paid within such 30-day period shall be subject to late charges, calculated based on the then current prime or base rate of Chase Manhattan Bank plus one percentage point, for each month or portion thereof the statement is overdue. In addition to the charges for the Seller Services provided hereunder, Buyer will reimburse Seller and the other Seller Service Providers for any and all actual out-of-pocket ancillary fees, costs, or expenses incurred by Seller or such Seller Service Providers in connection with providing for the Seller Services hereunder, including shipping and transportation costs, duties, taxes and other fees or expenses, where such ancillary


fees, costs or expenses are not specifically included, or exceed, the amounts provided for such items on Schedule 1.


SECTION 3.03. SELLER PAYMENT. Statements will be delivered to Seller each month by Buyer or such other Buyer Service Providers designated by Buyer for Buyer Services provided to the Seller during the preceding month, and each such statement shall set forth a brief description of such Buyer Services and the amounts charged therefor and such amounts shall be payable by Seller net 30 days after the date of such statement. Statements not paid within such 30-day period shall be subject to late charges, calculated based on the then current prime or base rate of Chase Manhattan Bank plus one percentage point, for each month or portion thereof the statement is overdue. In addition to the charges for the Buyer Services provided hereunder, Seller will reimburse Buyer and the other Buyer Service Providers for any and all actual out-of-pocket ancillary fees, costs, or expenses incurred by Buyer or such Buyer Service Providers in connection with providing for the Buyer Services hereunder, including shipping and transportation costs, duties, taxes and other fees or expenses, where such ancillary fees, costs or expenses are not specifically included, or exceed, the amounts provided for such items on Schedule 1.


SECTION 3.04. DISCLAIMER OF WARRANTY. EXCEPT AS EXPRESSLY SET FORTH IN THE AGREEMENTS, THE SERVICES AND GOODS TO BE PURCHASED UNDER THIS SERVICES AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.


SECTION 3.05. TAXES. The amounts set forth as the applicable consideration with respect to each Service on Schedule 1 do not include any sales tax, value added tax, goods and services tax or similar tax (collectively, "Taxes") and any such Taxes required to be paid by any Service Provider in connection with this Services Agreement or the performance hereof will be promptly reimbursed to such Service Providers and such reimbursement shall be in addition to the amounts required to be paid as set forth on Schedule 1.

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