Exhibit 10.3

 

EXECUTION VERSION

 

TRANSITION SERVICES AGREEMENT

 

TRANSITION SERVICES AGREEMENT (this “Agreement”), dated as of December 16, 2014,
by and between B/E AEROSPACE, INC., a corporation organized under the laws of
the State of Delaware (“B/E”), and KLX INC., a corporation organized under the
laws of the State of Delaware (“KLX”). Each of B/E and KLX is sometimes referred
to herein as a “Party”, and together, as the “Parties”.

 

WHEREAS, the Parties entered into that certain Separation and Distribution
Agreement, dated as of December 15, 2014 (the “Separation Agreement”;
capitalized terms used in this Agreement but not otherwise defined herein have
the meanings ascribed to such terms in the Separation Agreement);

 

WHEREAS, pursuant to and subject to the terms of the Separation Agreement, the
Manufacturing Business will be separated from the CMS Business;

 

WHEREAS, prior to the date of this Agreement, members of the B/E Group have
provided to members of the KLX Group, and members of the KLX Group (or their
Representatives, as former Representatives of B/E) have provided to members of
the B/E Group, certain services necessary to conduct their respective
businesses;

 

WHEREAS, it is contemplated under the terms of the Separation Agreement that, in
connection with the Separation Transaction and the Distribution, for a limited
period of time following the Distribution, B/E or one or more other members of
the B/E Group will continue to provide certain of such services to members of
the KLX Group, and KLX or one or more other members of the KLX Group will
continue to provide certain of such services to members of the B/E Group; and

 

WHEREAS, B/E and KLX are each willing to provide, or cause to be provided, such
transition services on the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1                                     Definitions.

 

(a)                                          For the purposes of this Agreement:

 

“Additional Service” means a service: (1) that was provided by B/E or another
member of the B/E Group (or that was provided by a third party on behalf of B/E
or another member of the B/E Group) to KLX or another member of the KLX Group as
of the Distribution Date or that was provided by KLX or another member of the
KLX Group (or that was provided by a third party on behalf of KLX or another
member of the KLX Group or any former

 

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Representatives of B/E that are, following the Distribution Date,
Representatives of KLX) to B/E or another member of the B/E Group as of the
Distribution Date; and (2) that the recipient of such service reasonably
believes (y) was inadvertently or unintentionally omitted from Schedule A or
Schedule B and (z) is necessary or advisable for the conduct of the CMS Business
or the Manufacturing Business, as the case may be.

 

“Agreement” has the meaning given in the Preamble.

 

“B/E” has the meaning given in the Preamble.

 

“B/E Indemnified Person” has the meaning given in Section 10.2.

 

“B/E Service” has the meaning given in Section 2.l(a)(i).

 

“B/E Service Receiver Data” has the meaning given in Section 8.1(b).

 

“Equipment” has the meaning given in Section 4.5(a).

 

“Fees” has the meaning given in Section 5.1(a).

 

“Force Majeure Event” has the meaning given in Section 4.4(a).

 

“Group” means, with respect to any Party, Service Provider or Service Recipient,
such Party, Service Provider, or Service Recipient, respectively, and each of
such Party’s, Service Provider’s or Service Recipient’s Affiliates,
respectively.

 

“KLX” has the meaning given in the Preamble.

 

“KLX Indemnified Person” has the meaning given in Section 10.1.

 

“KLX Service” has the meaning given in Section 2.1 (a)(ii).

 

“KLX Service Receiver Data” has the meaning given in Section 8.1(a).

 

“Migration Assistance” has the meaning given in Section 2.5(a).

 

“Monthly License Fee” has the meaning given in Section 3.3.

 

“Party” and “Parties” have the meanings given in the Preamble.

 

“Party Provider” shall mean, in relation to any Service Provider, B/E (if such
Service Provider is a member of the B/E Group) or KLX (if such Service Provider
is a member of the KLX Group).

 

“Party Recipient” shall mean, in relation to any Service Recipient, B/E (if such
Service Recipient is a member of the B/E Group) or KLX (if such Service
Recipient is a member of the KLX Group).

 

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“Personnel” means, with respect to any Party, the Representatives of such Party,
and the employees, officers, directors, agents, representatives, advisors,
independent contractors and consultants of any third parties engaged by such
Party or the other members of such Party’s Group to provide a Third Party
Service.

 

“Records” has the meaning given in Section 6.5.

 

“Representatives” means, with respect to any Party, the employees, officers,
directors, agents, representatives, advisors, independent contractors and
consultants of (i) such Party and (ii) the other members of such Party’s Group.

 

“Sales Taxes” has the meaning given in Section 5.3.

 

“Security Regulations” has the meaning given in Section 6.4(a).

 

“Separation Agreement” has the meaning given in the Recitals.

 

“Service Coordinator” has the meaning given in Section 2.2.

 

“Service Provider” means (i) a member of the B/E Group, when it is providing a
B/E Service to a member of the KLX Group under the terms of this Agreement; and
(ii) a member of the KLX Group, when it is providing a KLX Service to a member
of the B/E Group under the terms of this Agreement.

 

“Service Receiver Data” means either KLX Service Receiver Data or B/E Service
Receiver Data, as applicable.

 

“Service Recipient” means (i) a member of the KLX Group, when it is receiving a
B/E Service from a member of the B/E Group under the terms of this Agreement;
and (ii) a member of the B/E Group, when it is receiving a KLX Service from a
member of the KLX Group under the terms of this Agreement.

 

“Shared Real Property” has the meaning given in Section 3.1.

 

“Systems” has the meaning given in Section 6.4(a).

 

“Term” shall mean, with respect to each of the Transition Services, Migration
Assistance or the License granted under Article III, the period of time
beginning on the Distribution Date and expiring on the earlier of (i) the date
set forth in the applicable Schedule (or if not specified therein, such period
as may be reasonably requested by the Service Recipient to which such Transition
Service or Migration Assistance is provided or, in the case of the License
granted under Article III, by KLX), or (ii) the last day of the twenty-fourth
(24th) month following the date hereof, in each case unless earlier terminated
pursuant to Section 11.2.

 

“Terminating Party” has the meaning given in Section 11.2(a).

 

“Terminating Third Party Service” has the meaning given in Section 11.2(c).

 

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“Third Party Service” has the meaning given in Section 2.1(b)(1).

 

“Transition Services” means the B/E Services and the KLX Services.

 

(b)                                 In this Agreement, except to the extent
otherwise provided or where the context otherwise requires:

 

(i)                                 when a reference is made in this Agreement
to an Article, Section, Exhibit or Schedule, such reference is to an Article or
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated;

 

(ii)                              the headings for this Agreement are for
reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement;

 

(iii)                           whenever the words “include”, “includes” or
“including” are used in this Agreement, they are deemed to be followed by the
words “without limitation”;

 

(iv)                          the words “hereof, “herein” and “hereunder” and
words of similar import, when used in this Agreement, refer to this Agreement as
a whole and not to any particular provision of this Agreement;

 

(v)                             the definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms; and

 

(vi)                          references to a Person are also to its successors
and permitted assigns.

 

ARTICLE II

SERVICES

 

Section 2.1                            Services to be Provided.

 

(a)                                 In General.

 

(i)                                 During the applicable Term, and in
accordance with the terms and conditions of this Agreement, B/E shall provide
(or cause to be provided), or shall cause another member of the B/E Group to
provide (or cause to be provided), to KLX or another member of the KLX Group:
(1) the services described in Schedule A hereto; and (2) any Additional Services
as may be requested in writing by KLX, identifying in reasonable detail the
specifics of such service to be performed by a member of the B/E Group (each
such service, a “B/E Service”).

 

(ii)                              During the applicable Term, and in accordance
with the terms and conditions of this Agreement, KLX shall provide (or cause to
be provided), or shall cause another member of the KLX Group to provide (or
cause to be provided), to B/E or another member of the B/E Group: (1) the
services described in Schedule B hereto; and (2) any Additional Services as may
be requested in writing by B/E,

 

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identifying in reasonable detail the specifics of such service to be performed
by a member of the KLX Group (each such service, a “KLX Service”).

 

(b)                                  Third Party Services.

 

(i)                                 A Service Provider may, in its discretion
and with prior written notice to the Service Recipient, engage, or cause another
member of the Service Provider’s Group to engage, one or more third parties to
provide some or all of the Transition Services (any such Transition Service
provided by a third party, a “Third Party Service”).

 

(ii)                              To the extent that any third party proprietor
of information or software to be disclosed or made available to any Service
Recipient in connection with the performance of Transition Services hereunder
requires the execution of a specific form of non-disclosure agreement, license
agreement, use agreement or other terms and conditions as a condition of its
consent to use of the same for the benefit of any member of the Service
Recipient’s Group or to permit any member of the Service Recipient’s Group to
access such information or software, the Party Recipient will execute, or will
cause, as necessary, such other member of the Party Recipient’s Group or its or
their respective Representatives to execute, such form or agreement.

 

(iii)                           Nothing in this Section 2.1(b) shall in any way
affect any Party’s obligation to provide (or cause to be provided) the
Transition Services pursuant to this Agreement, and the Parties shall remain at
all times during the applicable Terms fully responsible for the performance of
the Transition Services.

 

Section 2.2                            Service Coordinators.

 

B/E and KLX shall each nominate a representative to act as the primary contact
person with respect to the performance of the Services (each, a “Service
Coordinator”). Except as otherwise provided herein, all communications relating
to the Transition Services provided hereunder shall be directed to the Service
Coordinators. Except as set forth on Schedule A or Schedule B, the initial
Service Coordinators for B/E and KLX, including relevant contact information,
are set forth on Schedule C hereto. Either Party may replace its Service
Coordinator at any time by providing prior written notice to the other Party of
such replacement. Solely for the avoidance of doubt, any notice or other
communications to be given or made pursuant to this Agreement, including any
notice of replacement of a Service Coordinator pursuant to this Section 2.2,
shall be given or made in accordance with the terms of Section 12.1, and no
notice or other communication to any Service Coordinator shall be a proper
notice or other communication for the purposes of this Agreement.

 

Section 2.3                            Standard of Performance.

 

Each Party shall (and shall use commercially reasonable efforts to cause any
Person performing Transition Services on its behalf to) use commercially
reasonable efforts, skill and judgment in providing Transition Services
hereunder. Without limiting the foregoing, all Transition Services shall be
provided in a timely and workmanlike manner, consistent with the

 

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manner and level of care with which such Transition Services were provided in
the ordinary course prior to the Distribution Date.

 

Section 2.4                            Cooperation.

 

(a)                                 Each Party shall use commercially reasonable
efforts, and shall use commercially reasonable efforts to cause the other
members of such Party’s Group and any third party providing Third Party Services
on behalf of any member of such Party’s Group, to cooperate with the members of
the other Party’s Group in all matters relating to the provision and receipt of
Transition Services and to minimize the expense, distraction and disturbance to
the other Party’s Group’s business, and shall perform all obligations hereunder
in good faith and in accordance with principles of fair dealing.

 

(b)                                 Each Party will use commercially reasonable
efforts to provide (and will use commercially reasonable efforts to cause each
other member of such Party’s Group to provide) information and documentation
sufficient for each Service Provider to perform (or cause to be performed) the
Transition Services in the manner and with the level of care they were provided
in the ordinary course prior to the Distribution Date, and will use commercially
reasonable efforts to make available, as reasonably requested in writing by a
Service Provider, sufficient resources and timely decisions, approvals and
acceptances in order that such Service Provider may perform (or cause to be
performed) its obligations under this Agreement in a timely and efficient
manner.

 

Section 2.5                            Migration Assistance.

 

(a)                                 Prior to the end of the applicable Term,
each Party shall provide (or cause to be provided) to the other Party (and any
other member of the other Party’s Group), upon written request, with such
reasonable support and assistance as is necessary to migrate the Transition
Services to such other Party’s internal organization or to a third party
provider of such other Party or another member of such other Party’s Group (such
support and assistance, “Migration Assistance”), which may include, without
limitation, (i) consulting, (ii) training, (iii) providing reasonable access to
data and other information in the standard format and medium (whether electronic
or otherwise) of the Service Provider and (iv) reasonable access during normal
business hours to employees of the Service Provider. Any written request for
Migration Assistance shall include, in reasonable detail, the requesting Party’s
estimate of the scope and cost of such Migration Assistance.

 

(b)                                 Upon the written request of the other Party,
a Party receiving Migration Assistance pursuant to Section 2.5(a) shall pay any
actual costs incurred and documented by such other Party (or another member of
such other Party’s Group) in connection with any Migration Assistance (other
than Migration Assistance provided pursuant to Section 11.2(c)(iv)), whether
performed by Representatives of such other Party or by an external service
provider; provided, however, that to the extent (i) any such costs materially
exceed the estimate included in the written request for such Migration
Assistance, or (ii) the scope of the Migration Assistance for which such costs
were incurred materially exceeds the scope included in the written request for
such Migration Assistance, the party receiving such Migration Assistance shall
be under no obligation to pay such costs unless the incurrence of such costs or
the increased

 

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scope of such Migration Assistance, as applicable, was consented to in writing
by the Party receiving such Migration Assistance prior to the commencement of
such Migration Assistance.

 

(c)                                  Representatives of the Party providing
Migration Assistance shall be granted reasonable access to the respective
facilities of the other Party (or another member of the other Party’s Group)
during normal business hours.

 

Section 2.6                            General Inquiries Assistance. In addition
to the obligations set forth herein, for a period of eighteen (18) months after
the date of this Agreement, each Party shall (and shall cause each other member
of such Party’s Group to) provide general assistance to the other Party (and to
the other members of such Party’s Group), by way of responding to reasonable
inquiries (whether or not related to Transition Services).

 

ARTICLE III

REAL ESTATE

 

Section 3.1                            KLX Group’s Occupancy Rights.

 

B/E hereby grants KLX and the other members of the KLX Group a limited,
nontransferable and non-sublicenseable license for reasonable use and access to
the space utilized by B/E (or any of its Affiliates) in the conduct of the CMS
Business as of the date of this Agreement at each of the locations listed on
Schedule D hereto (collectively, the “Shared Real Property”) for the sole
purpose of transitioning the CMS Business and in accordance with the terms,
covenants and conditions hereof. The KLX Group’s right to use and access the
Shared Real Property shall be consistent with the use and access of such Shared
Real Property in the conduct of the CMS Business as of the Distribution Date,
and shall include the right to use and access the fixtures, improvements and
furnishings located within the Shared Real Property consistent with the manner
of such use and access as of the Distribution Date.

 

Section 3.2                            Use.

 

KLX and the other members of the KLX Group shall use the Shared Real Property
(and the fixtures, improvements and furnishings contained therein) for the same
purpose as the Shared Real Property is utilized as of the Distribution Date and
for no other purpose.

 

Section 3.3                            License Fee.

 

KLX shall pay to B/E, in accordance with the provisions of Article V, a monthly
gross license fee for each Shared Real Property as listed on Schedule D hereto
(each, a “Monthly License Fee”).

 

Section 3.4                            License Term.

 

The license granted under this Article III will be effective as of the date of
this Agreement and will automatically expire on the date which is provided in
Schedule D hereto with respect to each location.

 

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Section 3.5                            Compliance with B/E and Landlord’s
Policies.

 

To the extent they are or have previously been provided in writing by B/E to
KLX, KLX shall (and shall cause the other members of the KLX Group to) comply
with (i) the policies and procedures, security requirements and regulations of
B/E’s (or such other member of the B/E Group that is lessee thereunder) landlord
(whether provided in the relevant lease or otherwise) and (ii) the reasonable
policies and procedures, security requirements and rules and regulations of B/E
or such other member of the B/E Group, in each case with respect to each Shared
Real Property and the KLX Group’s occupancy of the Shared Real Property.

 

Section 3.6                            Surrender.

 

Upon the expiration or termination of the license granted under this
Article III, KLX shall, at KLX’s sole cost and expense, (i) remove KLX’s
personal property, equipment, trade fixtures and other goods and effects
(including those of any other member of the KLX Group), and repair any damage to
the Shared Real Property resulting from such removal, and (ii) otherwise quit
and deliver up the Shared Real Property peaceably and quietly and in as good
order and condition as the same were in on the date of this Agreement,
reasonable wear and tear, and damage outside the reasonable control of the
relevant member of the KLX Group by fire and the elements excepted; provided,
however, that nothing herein shall require KLX (or any other member of the KLX
Group) to repair, restore, or in any other way be responsible for any condition
of the Shared Real Property not caused by KLX or another member of the KLX
Group. In the event KLX fails to repair and perform the aforementioned
facilities restoration and otherwise deliver the Shared Real Property as set
forth above, B/E shall have the right to make said reasonable repairs and
reasonably perform such facilities restoration, charge KLX the reasonable costs
of such repairs and restoration, and KLX shall reimburse B/E within thirty (30)
days of receipt of invoice. Any property left in the Shared Real Property after
the expiration or termination of the license granted under this Article III, and
not removed by KLX, shall be deemed to have been abandoned and to be the
property of B/E to dispose of as B/E deems expedient and at KLX’s sole cost and
expense.

 

Section 3.7                            License Rights.

 

The rights granted herein in favor of the KLX Group are in the nature of a
license and shall not create any leasehold or other estate or possessory rights
in KLX or any other member of the KLX Group, and if the license granted under
this Article III expires or is terminated, KLX and the other members of the KLX
Group shall vacate the Shared Real Property, and any occupancy or activity of
KLX or the other members of the KLX Group thereafter in the Shared Real Property
shall be considered a trespass.

 

Section 3.8                            Relocation.

 

B/E shall have the right, at B/E’s sole cost and expense, and only after
receiving KLX’s prior written consent (which consent shall not be unreasonably
withheld, conditioned or delayed), to relocate KLX and the other members of the
KLX Group to other area(s) of each Shared Real Property by providing KLX
reasonable prior written notice, provided that such relocation does not reduce
the rights of KLX or increase the obligations of KLX under this

 

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Agreement or unreasonably interrupt the day-to-day operations of KLX or any
other member of the KLX Group.

 

Section 3.9                            Alterations.

 

No member of the KLX Group shall make any alterations, additions or improvements
to the Shared Real Property without the prior written consent of B/E.

 

ARTICLE IV

LIMITATIONS

 

Section 4.1                            General Limitations.

 

Notwithstanding anything to the contrary herein, no Party (nor any other member
of either Party’s Group) shall be required to (a) hire any third party service
provider to provide any Transition Service, (b) expand its facilities, incur
long-term capital expenses, increase its employee headcount or maintain the
employment of any specific employee in order to provide any Transition Service,
(c) purchase, upgrade, enhance or otherwise modify any computer hardware,
software or network environment, (d) provide any support or maintenance services
for any computer hardware, software or network environment that has been
materially upgraded, enhanced or otherwise modified from the computer hardware,
software or network environments in use as of the Distribution Date, or
(e) provide Transition Services hereunder that are greater in nature or scope
than the comparable services provided in the conduct of the other Party’s
business during the twelve (12) months immediately prior to the Distribution
Date; provided, however, that nothing in this Section 4.1 shall in any way
relieve any obligation of any Party to provide (or cause to be provided) the
Transition Services pursuant to this Agreement, and the Parties shall remain, at
all time during the Terms, fully responsible for the performance of the
Transition Services.

 

Section 4.2                            Third Party Limitations.

 

Each Party acknowledges and agrees that any Transition Services (including Third
Party Services) provided using third party Intellectual Property are subject to
the terms and conditions of any applicable agreements between the Service
Provider and such third parties. With respect to such Transition Services, the
Party Provider thereof shall use commercially reasonable efforts to (and shall
use commercially reasonable efforts to cause any other Service Provider thereof
to) (a) obtain any necessary consent (including any necessary licenses) from
such third parties in order to provide the Transition Services or (b) if any
such consent is not obtained, provide acceptable alternative arrangements to
provide the relevant Transition Services; provided, however, that, at the
written request of the Party Provider, the Party Recipient shall reimburse the
Party Provider for any reasonable and documented additional incremental costs
incurred by the Service Provider in carrying out its obligations under
subsection (a) or (b), above. The Party Recipient shall use commercially
reasonable efforts to assist the Party Provider in obtaining any such necessary
consent or license.

 

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Section 4.3                            Compliance with Laws.

 

(a)                                 No Party shall provide, or cause to be
provided, nor shall any Party be required to provide or cause to be provided,
any Transition Service to the extent that the provision of such Transition
Service would require such Party, any member of such Party’s Group, or any
Representative of such Party, to violate: (i) any applicable Law, (ii) any
policies and/or procedures of such Party designed to respond to applicable Law,
or (iii) any other policies and/or procedures of such Party in existence as of
the Distribution Date, which policy or procedure, in the case of subparagraph
(ii) or (iii) above, continues in effect at such Party or another member of such
Party’s Group which would otherwise provide such Transition Service.

 

(b)                                 If any Party cannot provide (or cause to be
provided) a Transition Service due to Section 4.3(a), the Parties shall
cooperate, in full compliance with Section 2.4(a). to identify a reasonably
acceptable alternative arrangement to provide the affected Transition Service;
provided, however, that, at the written request of the Party Provider, the Party
Recipient shall reimburse the Party Provider for any reasonable and documented
additional incremental costs incurred by the Service Provider in providing such
Transition Service under such alternative arrangement.

 

Section 4.4                            Force Majeure.

 

(a)                                 The Party Provider shall, at all times
during the applicable Terms, use commercially reasonable efforts to provide, or
cause to be provided, the Transition Services without interruption. In the event
and to the extent that any Service Provider is wholly or partially prevented
from, or delayed in, providing one or more Transition Services, or one or more
Transition Services are interrupted or suspended, by reason of events beyond the
reasonable control of such Service Provider or the other members of such Service
Provider’s Group (including acts of God, acts of any Governmental Entity, acts
of the public enemy or due to fire, explosions, accidents, floods, embargoes,
epidemics, wars, acts of terrorism, nuclear disasters, labor difficulties, civil
unrests and/or riots, civil commotions, insurrections, severe or adverse weather
conditions, any lack of or shortage of electrical power, malfunctions of
equipment or software programs or any other cause beyond the reasonable control
of the Service Provider, the other members of the Service Provider’s Group or,
in the case of any Third Party Services, the third party providing such Third
Party Service on behalf of the Service Provider or another member of the Service
Provider’s Group (each, a “Force Majeure Event”)), the Party Provider shall not
be obligated to deliver (or cause to be delivered) the affected Transition
Services during such period, and the Party Recipient shall not be obligated to
make any payment for any reason hereunder in relation to any Transition Services
not delivered; provided, however that, during the duration of a Force Majeure
Event, the Party Provider shall use commercially reasonable efforts to avoid or
remove such Force Majeure Event, and shall use commercially reasonable efforts
to resume its performance under this Agreement with the least practicable delay.

 

(b)                                 In the event that any Service Provider has
knowledge that the provision of any Transition Service is or will be (or would
reasonably be expected to be) affected by a Force Majeure Event, the Party
Provider shall, to the extent reasonably practicable, promptly provide, in
writing, notice of such Force Majeure Event to the Party Recipient,

 

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describing in reasonable detail such Force Majeure Event, the affected
Transition Service, and the Service Provider’s reasonable estimate of the scope
and duration of such Force Majeure Event.

 

Section 4.5                            Title to Equipment: Management and
Control; Reservation of Rights.

 

(a)                                 Except as otherwise provided herein, all
procedures, methods, systems, strategies, tools, equipment, facilities and other
resources of any member of the Service Provider’s Group used by such member of
the Service Provider’s Group in connection with the provision of Transition
Services (the “Equipment”) shall remain the property of such member of the
Service Provider’s Group and shall at all times be under the sole direction and
control of such member of the Service Provider’s Group.

 

(b)                                 Except as otherwise provided herein,
management of and control over the provision of the Transition Services
(including the determination or designation at any time of the Equipment,
Personnel and other resources to be used in connection with the provision of the
Transition Services) shall reside solely with the Service Provider. Without
limiting the generality of the foregoing, all labor matters relating to any
employees of the Service Provider or the other members of the Service Provider’s
Group shall be within the exclusive control of the Service Provider, and no
member of the Service Recipient’s Group shall take any action with regard to
such matters. The Party Provider shall provide for and pay (or cause to be
provided for and paid) the compensation and other benefits of its employees,
including salary, health, accident and workers’ compensation benefits and all
taxes and contributions which an employer is required to pay relating to the
employment of employees. No member of the Service Recipient’s Group shall in any
event be liable to the Service Provider or any other member of the Service
Provider’s Group, or to any of their respective Personnel, for any failure on
the part of any member of the Service Provider’s Group to perform any obligation
on the part of such member of the Service Provider’s Group with regard to the
compensation, benefits or taxation of its employees or other Personnel.

 

(c)                                  Nothing in this Section 4.5 shall in any
way affect any right or obligation of any Party, or any allocation of any assets
of any Party, as provided in the Separation Agreement or any other Ancillary
Agreement or pursuant to any Continuing Arrangement.

 

Section 4.6                            Interim Basis Only.

 

Each Party acknowledges that the purpose of this Agreement is to provide the
Transition Services on an interim basis. Accordingly, at all times from and
after the Distribution Date, each Party shall use its respective commercially
reasonable efforts to make or obtain any approvals, permits or licenses,
implement any computer systems and take, or cause to be taken, any and all other
actions necessary or advisable for the Service Recipients to provide the
Transition Services for themselves as soon as practicable after the date of this
Agreement.

 

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ARTICLE V

PAYMENT

 

Section 5.1                            Fees.

 

(a)                                 In connection with each Transition Service,
the Party Recipient shall pay to the Party Provider (i) the fees set forth in
the applicable Schedule with respect to such Transition Service, or if not
specified therein, fees for such Transition Service as determined by the mutual
agreement of both Parties, negotiated in good faith, and (ii) any reasonable and
documented third party fees, costs and expenses which are charged to or incurred
by the Service Provider or another member of the Service Provider’s Group in
connection with provision of Transition Services to the Service Recipient and
which are not included in the fees set forth in the Schedules (collectively, the
“Fees”).

 

(b)                                 It is the intent of the Parties that the
Fees reasonably approximate the actual cost to the Service Provider of providing
the Transition Services, without any intent to cause the Service Provider to
receive any profit or incur any loss with respect thereto. If at any time a
Party reasonably believes that the Fees with respect to any Transition Service
are materially insufficient to compensate the Service Provider for the cost of
providing such Transition Service, or that the Fees with respect to any
Transition Service materially overcompensate the Service Provider for the cost
of providing such Transition Service, such Party shall promptly provide notice
to the other Party of the same, identifying such Transition Service and setting
forth in reasonable detail its rationale for such belief, and shall include with
such notice all available documentation with regard to the cost of providing
such Transition Service.

 

(c)                                  Upon the delivery of a notice pursuant to
Section 5.1 (b), the Parties shall cooperate, in full compliance with
Section 2.4(a), to come to a mutually acceptable agreement with regard to the
appropriate Fees for such Transition Service.

 

Section 5.2                            Billing and Payment Terms.

 

(a)                                 Each Party shall invoice the other Party on
a monthly basis for any (i) Fees, costs or other amounts payable pursuant to
this Agreement; and (ii) in the case of an invoice delivered by B/E, the Monthly
License Fee payable with respect to any Shared Real Property.

 

(b)                                 Each invoice delivered pursuant to
Section 5.2(a) shall set forth a brief description of the Transition Services
and the Migration Assistance provided, and, with respect to any amounts payable
other than Fees pursuant to Section 5.1 (a)(i) or the Monthly License Fee,
reasonable documentation to support the charges thereon. Any invoice delivered
by B/E that includes a Monthly License Fee shall include the month of occupancy
of each Shared Real Property to which such Monthly License Fee pertains.

 

(c)                                  Each invoice delivered pursuant to this
Section 5.2 shall be payable within 30 days after the date of the invoice.

 

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(d)                                 Payment of all invoices provided hereunder
shall be made in United States dollars unless otherwise mutually agreed upon by
the Parties.

 

(e)                                  If any invoice delivered pursuant to (and
in compliance with) this Section 5.2 is not paid in full within thirty (30) days
after the date of the invoice, interest shall accrue on the unpaid amount at the
annual rate equal to the “Prime Rate” as reported on the thirtieth (30th) day
after the date of the invoice in The Wall Street Journal (or, if such day is not
a business day, the first business day immediately after such day), calculated
on the basis of a year of three hundred and sixty (360) days and the actual
number of days elapsed between the end of the thirty (30)-day payment period and
the actual payment date.

 

(f)                                   If there is an Agreement Dispute between
the Parties regarding the amounts shown as billed to the Service Recipient on
any invoice, the Party Provider shall, upon the written request of the Party
Recipient, furnish to the Party Recipient additional documentation reasonably
necessary to substantiate the amounts billed including, but not limited to,
listings of the dates, times and amounts of the Transition Services in question
where applicable and practicable.

 

Section 5.3                            Sales Taxes.

 

All consideration under this Agreement is exclusive of any sales, transfer,
value-added, goods or services tax or similar gross receipts based tax
(including any such taxes that are required to be withheld, but excluding all
other taxes including taxes based upon or calculated by reference to income,
receipts or capital) imposed against or on Transition Services, Monthly License
Fees or Migration Assistance (“Sales Taxes”) provided hereunder, and such Sales
Taxes will be added to the consideration where applicable. Such Sales Taxes
shall be separately stated on the relevant invoice. The Party Recipient shall be
responsible for any such Sales Taxes and shall either (i) remit such Sales Taxes
to the Party Provider (and the Party Provider shall remit such amounts to the
applicable taxing authority) or (ii) provide the Party Provider with a
certificate or other acceptable proof evidencing an exemption from liability for
such Sales Taxes.

 

Section 5.4                            No Offset.

 

No Party shall withhold any payments to the other Party under this Agreement in
order to offset payments due to such Party pursuant to this Agreement, the
Separation Agreement or otherwise, unless such withholding is mutually agreed
to, in advance, by the Parties.

 

ARTICLE VI

ACCESS AND SECURITY

 

Section 6.1                            Access; Work Policy.

 

(a)                                 At all times during the Term, each Party
shall provide, and shall cause the other member of its Group to provide, the
other Party and its Personnel reasonable ingress to and egress from its
facilities and premises, and reasonable access to its equipment and Personnel,
for any purpose connected with the delivery or receipt of Transition Services

 

13

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hereunder, the exercise of any right under this Agreement or the performance of
any obligations required by this Agreement.

 

(b)                                 Each Party shall comply, and shall cause its
respective Personnel to comply, with the other Party’s safety and security
regulations applicable to each specific site or facility while working at such
site or facility. Except as otherwise agreed to by the Parties, each Party shall
cause its Personnel to observe the working hours, working rules, and holiday
schedules of the other Party while working on the premises of the other Party.

 

Section 6.2                            Additional Security Measures.

 

Each Party acknowledges and agrees that any Service Provider may take physical
or information security measures that affect the manner in which Transition
Services are provided, so long as the substance or overall functionality of any
affected Transition Services remains the same as it was as of the Distribution
Date.

 

Section 6.3                            Security Breaches.

 

In the event of a security breach that relates to the Transition Services, the
Parties shall, subject to any applicable Law, cooperate with each other in good
faith regarding the timing and manner of (a) notification to their respective
customers, potential customers, employees and/or agents concerning a breach or
potential breach of security and (b) disclosures to appropriate Governmental
Entities.

 

Section 6.4                            Systems Security.

 

(a)                                 If any Party or its Personnel are given
access to any computer systems or software of any member of the other Party’s
Group (“Systems”) in connection with such Party’s performance or receipt of
Transition Services, such Party shall comply, and shall cause the other members
of its Group and its Personnel to comply, with all of such other Party’s system
security policies, procedures and requirements (as amended from time to time,
the “Security Regulations”), and will not tamper with, compromise or circumvent
any security or audit measures employed by such other Party.

 

(b)                                 Each Party shall use commercially reasonable
efforts to ensure that only those of its Personnel who are specifically
authorized to have access to the Systems of the other Party gain such access,
and to prevent unauthorized access, use, destruction, alteration or loss of
information contained therein, including notifying its Personnel regarding the
restrictions set forth in this Agreement and establishing appropriate policies
designed to effectively enforce such restrictions.

 

(c)                                  If, at any time, either Party determines
that the other Party or its Personnel has sought to circumvent, or has
circumvented, its Security Regulations, that any unauthorized Personnel of the
other Party has accessed its Systems or that the other Party or any of its
Personnel has engaged in activities that may lead to the unauthorized access,
use, destruction, alteration or loss of data, information or software, such
Party shall immediately terminate any such Personnel’s access to the Systems and
promptly notify the other Party.

 

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(d)                                 Each Party shall access and use, and shall
cause their respective Personnel to access and use, only those Systems, and only
such data and information within such Systems, to which it or they have been
granted the right to access and use. Any Party shall have the right to deny the
Personnel of the other Party access to such Party’s Systems, after prior written
notice and consultation with the other Party, in the event the Party reasonably
believes that such Personnel pose a security concern.

 

Section 6.5                            Records and Inspection Rights.

 

Each Party shall maintain, and shall cause the other members of such Party’s
Group to maintain, accurate records of the receipts, invoices, reports and other
documents relating to the Transition Services (the “Records”) for the period
applicable to such Records under B/E’s records retention policy in effect as of
the date of this Agreement, following the expiration of the applicable Term, in
order to provide the other Party the opportunity to verify the accuracy,
completeness and appropriateness of the charges for the Transition Services and
that the Transition Services are being provided in accordance with the terms of
this Agreement and the applicable Schedule. Upon reasonable written notice from
the Party Recipient of any Transition Service, the Party Provider shall make
available to the Party Recipient or its Representatives (at the Party
Recipient’s sole cost and expense) reasonable access to, or at the Party
Recipient’s sole cost and expense, copies of, the Records with respect to such
Transition Service during regular business hours.

 

ARTICLE VII

CONFIDENTIALITY

 

Section 7.1                            Confidential Information.

 

(a)                                 Notwithstanding any termination of this
Agreement, the Parties shall hold, and shall cause each of the other members of
their respective Groups to hold, and shall each cause their respective
Representatives to hold, and shall use commercially reasonable efforts to cause
their respective other Personnel to hold, in strict confidence, and not to
disclose or release or use, without the prior written consent of the other
Party, any and all Confidential Information concerning the other Party (or any
other member of such Party’s Group) or its respective business; provided,
however, that the Parties may disclose, or may permit disclosure of,
Confidential Information (i) to their respective auditors, attorneys, financial
advisors, bankers and other appropriate consultants and advisors who have a need
to know such Confidential Information and are informed of their obligation to
hold such Confidential Information confidential to the same extent as is
applicable to the Parties and in respect of whose failure to comply with such
obligations, the applicable Party will be responsible, (ii) if the Parties or
any other member of their respective Groups are required or compelled to
disclose any such Confidential Information by judicial or administrative process
or by other requirements of Law or stock exchange rule, (iii) as required in
connection with any legal or other proceeding by one Party against the other
Party, or (iv) as necessary in order to permit a Party to prepare and disclose
its financial statements, Tax Returns or other required disclosures.
Notwithstanding the foregoing, in the event that any demand or request for
disclosure of Confidential Information is made pursuant to clause (ii) above,
each Party shall, to the extent not prohibited by applicable Law, promptly
notify the other of the existence of such request or demand and shall provide
the

 

15

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other a reasonable opportunity to seek an appropriate protective order or other
remedy, which such Parties will reasonably cooperate in obtaining, at the sole
cost of the Party seeking such order or other remedy. In the event that such
appropriate protective order or other remedy is not obtained, the Party whose
Confidential Information is required to be disclosed shall or shall cause the
other Party to furnish, or cause to be furnished, only that portion of the
Confidential Information that is legally required to be disclosed and shall use
commercially reasonable efforts, at the sole cost and expense of the Party whose
Confidential Information is required to be disclosed, to ensure that
confidential treatment is accorded such Confidential Information.

 

(b)                                 Nothing in this Article VII shall in any way
affect any right or obligation of any Party with regard to any Party’s
Confidential Information as provided in the Separation Agreement or any other
Ancillary Agreement or pursuant to any Continuing Arrangement.

 

ARTICLE VIII

INTELLECTUAL PROPERTY AND DATA

 

Section 8.1                            Ownership of Data and Intellectual
Property.

 

(a)                                 KLX shall own all data and information
(i) provided by any member of the KLX Group to any member of the B/E Group in
connection with such member of the KLX Group’s receipt of Transition Services or
(ii) created by or for B/E or any other member of the B/E Group solely in
relation to the provision of Transition Services to KLX or another member of the
KLX Group (collectively, “KLX Service Receiver Data”).

 

(b)                                 B/E shall own all data and information
(i) provided by any member of the B/E Group to any member of the KLX Group in
connection with such member of the B/E Group’s receipt of Transition Services or
(ii) created by or for KLX or any other member of the KLX Group solely in
relation to the provision of Transition Services to B/E or another member of the
B/E Group (collectively, “B/E Service Receiver Data”).

 

(c)                                  Upon the written request of a Party, and at
such Party’s sole cost and expense, any Service Receiver Data in possession of
the other Party or any other member of the such other Party’s Group shall be
promptly provided to the requesting Party in the format in which such Service
Receiver Data is maintained as of the time of such request; provided, however,
that such other Party may retain the relevant Service Receiver Data and provide
a copy thereof to the requesting Party: (i) if necessary for the Party holding
such Service Receiver Data (or any other member of such Party’s Group) to comply
with the requirements of Section 6.5, (ii) if necessary for the Party holding
such Service Receiver Data (or any other member of such Party’s Group) to
continue to provide the Transition Services during the Term; or (iii) if the
Party holding such Service Receiver Data (or any other member of such Party’s
Group holding such Service Receiver Data) is unable to delete the Service
Receiver Data from its archives using commercially reasonable efforts. After
completion of the Transition Services hereunder, neither Party nor any other
member of either Party’s Group shall retain any copy of Service Receiver Data of
the other Party or any other member of the other Party’s Group (unless required
by Law or if clause (i) or (iii) above applies), and each Party shall deliver,
or cause to be delivered, upon the written request of the other Party, within
such time period as the Parties may reasonably

 

16

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agree, at the sole cost and expense of the requesting Party, all Service
Receiver Data of the requesting Party in its possession (or in the possession of
any other member of its Group) to the requesting Party.

 

(d)                                 All other data, information and Intellectual
Property provided by each Party (including each other member of such Party’s
Group) and their respective licensors and information, content and software
providers in connection with performance of the Transition Services shall remain
the property of such Party. No right or license with respect to any Intellectual
Property is granted under this Agreement other than as is strictly necessary for
a Party to perform, and the other Party to receive and use, the Transition
Services as contemplated herein, and then only to the extent of the interest
held by the Party granting such right.

 

ARTICLE IX

LIMITATION OF LIABILITY; DISCLAIMER OF WARRANTIES

 

Section 9.1                            Limitation of Liabilities.

 

(a)                                 EXCEPT IN THE CASE OF FRAUD, IN NO EVENT
SHALL ANY MEMBER OF THE B/E GROUP OR THE KLX GROUP BE LIABLE TO ANY MEMBER OF
THE KLX GROUP OR THE B/E GROUP, RESPECTIVELY, FOR ANY SPECIAL,
CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER
CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY
OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER. THAT THE FOREGOING LIMITATIONS
SHALL NOT LIMIT EACH PARTY’S INDEMNIFICATION OBLIGATIONS AS SET FORTH IN
ARTICLE X.

 

Section 9.2                            Disclaimer of Warranties.

 

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES, AND EACH
PARTY EXPRESSLY DISCLAIMS, ANY AND ALL REPRESENTATIONS OR WARRANTIES WHATSOEVER,
WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE TRANSITION SERVICES
TO BE PROVIDED UNDER THIS AGREEMENT, INCLUDING WARRANTIES WITH RESPECT TO
MERCHANTABILITY, OR SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, TITLE AND
NON-INFRINGEMENT OF ANY SOFTWARE OR HARDWARE PROVIDED HEREUNDER, AND ANY
WARRANTIES ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE OR TRADE USAGE.

 

ARTICLE X

INDEMNIFICATION

 

Section 10.1                     Indemnification of KLX.

 

(a)                                 Subject to the terms of this Article X, from
and after the Distribution Date, B/E shall indemnify and hold harmless KLX and
the other members of the KLX Group, and each of their respective Representatives
(each, a “KLX Indemnified Person”),

 

17

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from and against any and all Indemnifiable Losses incurred by such KLX
Indemnified Person arising out of the undertaking, performance or completion by
or on behalf of B/E or any other member of the B/E Group of a Transition Service
pursuant to this Agreement, to the extent such Indemnifiable Losses arise from
the gross negligence or willful misconduct of any member of the B/E Group, or
any Representative of B/E.

 

Section 10.2                     Indemnification of B/E.

 

(a)                                 Subject to the terms of this Article X, from
and after the Distribution Date, KLX shall indemnify and hold harmless B/E and
the other members of the B/E Group, and each of their respective Representatives
(each, a “B/E Indemnified Person”), from and against any and all Indemnifiable
Losses incurred by such B/E Indemnified Person arising out of the undertaking,
performance or completion by or on behalf of KLX or any other member of the KLX
Group of a Transition Service pursuant to this Agreement, to the extent such
Indemnifiable Losses arise from the gross negligence or willful misconduct of
any member of the KLX Group, or any Representative of KLX.

 

Section 10.3                     Indemnification Procedures.

 

The provisions of Section 7.04 (Procedures for Indemnification), Section 7.05
(Cooperation in Defense and Settlement), Section 7.06 (Indemnification
Obligations Net of Insurance Proceeds) and Section 7.07 (Additional Matters;
Survival of Indemnities) of the Separation Agreement are incorporated herein by
reference and shall apply to this Agreement and the Parties mutatis mutandis.

 

Section 10.4                     Rights of the Parties.

 

The rights and obligations of the Parties provided in this Article X shall be in
addition to (and not in lieu of) any rights or obligations with respect to
indemnification provided pursuant to the Separation Agreement and any Ancillary
Agreement or Continuing Arrangement, and nothing herein shall in any way limit
the rights and obligations of any Party pursuant thereto.

 

ARTICLE XI

TERM AND TERMINATION

 

Section 11.1                     Term of Agreement.

 

The term of this Agreement shall become effective on the Distribution Date and
shall remain in force until the earlier of (a) termination or expiration of all
of the respective Terms and (b) termination in accordance with Section 11.2. The
obligation of any Party to make a payment for Transition Services or Migration
Assistance previously rendered (or, in the case of KLX, to make a payment in
respect of a Monthly License Fee previously accrued) shall not be affected by
the termination of this Agreement or the expiration of the Term and shall
continue until full payment is made.

 

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Section 11.2                     Termination.

 

(a)                                 Termination by B/E or KLX. This Agreement
may be terminated by either Party (the “Terminating Party”‘) upon written notice
to the other Party, if:

 

(i)                                      the other Party materially breaches
this Agreement (which, for the avoidance of doubt, includes any failure to make
payment in full for Transition Services and Migration Assistance, or of any
Monthly License Fee, except in a case where there is a good faith dispute
thereto) and such breach is not cured, to the reasonable satisfaction of the
Terminating Party, within thirty (30) days of written notice thereof; or

 

(ii)                                   the other Party makes a general
assignment for the benefit of creditors or becomes insolvent, or a receiver is
appointed for, or a court approves reorganization or arrangement proceedings on,
such Party.

 

(b)                                 Partial Termination. Except as otherwise
described in the Schedules hereto: (i) a Party Recipient may, on thirty (30)
days’ written notice to the Party Provider, terminate its receipt of any
specific Transition Service set forth on any part of Schedule A or Schedule B:
and (ii) upon receipt of any notice pursuant to Section 4.4(b), the Party
Recipient may, upon written notice to the Party Provider, immediately terminate
its receipt of any Transition Service affected by any Force Majeure Event
described therein. Any termination notice delivered pursuant to this
Section 11.2(b) shall specify in detail the Transition Service or Transition
Services to be terminated, and the date on which such Transition Service or
Transition Services is to be terminated.

 

(c)                                  Third Party Services. If any Service
Provider receives notice from a third party that such third party intends to
cease providing a Third Party Service (a “Terminating Third Party Service’”)
(and such intention is not the result of any action or inaction by any member of
the Party Provider or any member of the Party Provider’s Group), and the
termination of such Third Party Service would thereby render such Service
Provider incapable of providing the relevant Transition Service:

 

(i)                                 The Party Provider shall elect (in its sole
discretion): (1) to obtain such Third Party Service from an alternate third
party service provider; or (2) to terminate such Transition Service, effective
upon the termination of the Terminating Third Party Service.

 

(ii)                              The Party Provider shall promptly notify the
Party Recipient of the third party’s impending termination of services and of
the Party Provider’s election under Section 11.2(c)(i), and shall include with
such notice a copy of any correspondence received from such third party with
regard to such Third Party Service, and a description, in reasonable detail, of
the affected Transition Service.

 

(iii)                           In the event the Party Provider elects to obtain
such Third Party Service from an alternate third party service provider, such
Third Party Service shall continue to be provided to the Service Recipient
hereunder; provided, however, that the Service Recipient shall have the option
to terminate such Transition Service by

 

19

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written notice to the Party Provider, effective upon the termination of the
Terminating Third Party Service.

 

(iv)                          In the event the Party Provider elects to
terminate such Third Party Service, such Transition Service shall, effective
upon the termination of such Terminating Third Party Service, terminate, and
thereafter, notwithstanding anything to the contrary contained herein, no member
of the Party Provider’s Group shall have any further obligation to provide such
Transition Service to any member of the Party Recipient’s Group; provided,
however, that, in the event any Third Party Service is terminated pursuant to
this Section 11.2(c)(iv), at the written request of the Party Recipient thereof,
the Party Provider shall provide (or cause to be provided), at its sole cost and
expense, Migration Assistance to the Service Recipient thereof.

 

Section 11.3                     Effect of Termination.

 

In the event that this Agreement is terminated for any reason:

 

(a)                                 Each Party acknowledges and agrees that the
obligations of the Parties to provide the Transition Services, or to cause the
Transition Services to be provided hereunder, shall immediately cease. Upon
cessation of any Party Provider’s obligation to provide (or cause to be
provided) any Transition Service, the Party Recipient shall, and shall cause any
other Service Recipient to, stop using, directly or indirectly, such Transition
Service.

 

(b)                                 Upon request, each Party shall, and shall
cause the other members of its Group to, return to the other Party all tangible
personal property and books, records or files owned by such other Party or its
Affiliates and third parties and used in connection with the provision of
Transition Services that are in their possession as of the termination date.

 

(c)                                  The rights and obligations of each Party
under Section 4.5(a) (Title to Equipment), Article V (Payment), Section 6.5
(Records and Inspection Rights), Article VII (Confidentiality), Article VIII
(Intellectual Property and Data), Article IX (Limitation of Liability;
Disclaimer of Warranties), Article X (Indemnification). Section 11.1 (Term of
Agreement), Section 11.3 (Effect of Termination) and Article XII (Miscellaneous)
shall survive the termination of this Agreement.

 

ARTICLE XII

MISCELLANEOUS

 

Section 12.1                     Notices.

 

All notices, requests, claims, demands and other communications hereunder (other
than, for the avoidance of doubt, communications relating to the Transition
Services provided hereunder and directed to a Service Coordinator pursuant to
Section 2.2) shall be in writing and shall be given or made (and shall be deemed
to have been duly given or made upon receipt) by delivery in person, by an
internationally recognized overnight courier service, by facsimile (with
confirmation of delivery) or registered or certified mail (postage prepaid,
return receipt requested) to the respective Parties at the following addresses
(or at such other address for a Party as shall be specified in a notice given in
accordance with this Section 12.1):

 

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(i)

 

if to B/E:

 

 

 

 

 

1400 Corporate Center Way

 

 

Wellington, FL 33414

 

 

Facsimile: (561) 791-3966

 

 

Attention: General Counsel

 

 

 

 

 

with copies to:

 

 

 

 

 

Shearman & Sterling LLP

 

 

599 Lexington Avenue

 

 

New York, NY 10022-6069

 

 

Telecopy: (212) 848-7179

 

 

Attention: Creighton O’M Condon, Esq.

 

 

Robert M. Katz, Esq.

 

 

 

(ii)

 

if to KLX:

 

 

 

 

 

1300 Corporate Center Way

 

 

Wellington, FL 33414

 

 

Facsimile: (561) 791-5497

 

 

Attention: General Counsel

 

 

 

 

 

with copies to:

 

 

 

 

 

Shearman & Sterling LLP

 

 

599 Lexington Avenue

 

 

New York, NY 10022-6069

 

 

Telecopy: (212) 848-7179

 

 

Attention: Creighton O’M. Condon, Esq.

 

 

Robert M. Katz, Esq.

 

Section 12.2                     Severability.

 

If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any Law, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect for so long as the
economic or legal substance of the transactions contemplated by this Agreement
is not affected in any manner materially adverse to either Party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner in order that the transactions contemplated by
this Agreement are consummated as originally contemplated to the greatest extent
possible.

 

Section 12.3                     Entire Agreement.

 

The Separation Agreement, this Agreement, the other Ancillary Agreements and the
Continuing Arrangements constitute the entire agreement of the Parties and their
Affiliates

 

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with respect to the subject matter hereof and thereof and supersede all prior
agreements and undertakings, both written and oral, between the Parties with
respect to the subject matter hereof and thereof.

 

Section 12.4                  Amendment.

 

This Agreement may not be amended or modified except (a) by an instrument in
writing signed by, or on behalf of, the Parties or (b) by a waiver in accordance
with Section 12.5.

 

Section 12.5                  Waiver.

 

Either Party to this Agreement may (a) extend the time for the performance of
any of the obligations or other acts of the other Party and (b) waive compliance
with any of the agreements of the other Party or conditions to such Party’s
obligations contained herein. Any such extension or waiver shall be valid only
if set forth in an instrument in writing signed by the Party to be bound
thereby. Any waiver of any term or condition shall not be construed as a waiver
of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition of this Agreement. The failure of
either Party to assert any of its rights hereunder shall not constitute a waiver
of any of such rights.

 

Section 12.6                  Assignment.

 

Neither this Agreement nor any of the rights, interests or obligations under
this Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by either Party without the prior written consent of the other Party,
such consent not to be unreasonably withheld, delayed or conditioned. Any
purported assignment without such consent shall be void. Subject to the
preceding sentences, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the Parties and their respective successors and
assigns. Notwithstanding the foregoing, either Party may assign this Agreement
without consent in connection with (a) a merger transaction in which such Party
is not the surviving entity and the surviving entity acquires or assumes all or
substantially all of such Party’s Assets, or (b) the sale of all or
substantially all of such Party’s Assets; provided, however, that such
assignment shall be effective only if, and as of the time when, the assignee
expressly assumes in writing all of the obligations of the assigning Party under
this Agreement, and the assigning Party provides written notice and evidence of
such assignment and assumption to the non-assigning Party. No assignment
permitted by this Section 12.6 shall release the assigning Party from liability
for the full performance of its obligations under this Agreement.

 

Section 12.7                  Parties in Interest.

 

This Agreement shall be binding upon and inure solely to the benefit of the
Parties and their respective successors and permitted assigns, and nothing
herein, express or implied (including the provisions of Article X relating to
indemnified parties), is intended to or shall confer upon any other Person any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.

 

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Section 12.8                  Currency.

 

Unless otherwise specified in this Agreement, all references to currency,
monetary values and dollars set forth herein means United States dollars, and
all payments hereunder shall be made in United States dollars unless otherwise
mutually agreed upon by the Parties.

 

Section 12.9                  Governing Law.

 

This Agreement shall be governed by, and construed in accordance with, the Laws
of the State of Delaware, regardless of the Laws that might otherwise govern
under applicable principles of conflicts of laws thereof.

 

Section 12.10           Waiver of Jury Trial.

 

EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE
PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.10.

 

Section 12.11           Counterparts.

 

This Agreement may be executed and delivered (including by facsimile
transmission or portable document format (“pdf’)) in counterparts, and by the
different Parties in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement.

 

Section 12.12           Relationship of the Parties.

 

Expect as specifically provided herein, neither Party shall act or represent or
hold itself out as having authority to act as an agent or partner of the other
Party or in any way bind or commit the other Party to any obligations or
agreement. Nothing contained in this Agreement shall be construed as creating a
partnership, joint venture, agency, trust, fiduciary relationship or other
association of any kind, each Party being individually responsible only for its
obligations as set forth in this Agreement. The Parties’ respective rights and
obligations hereunder shall be limited to the contractual rights and obligations
expressly set forth herein on the terms and conditions set forth herein.

 

[Remainder of page intentionally left blank]

 

23

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IN WITNESS WHEROF, the Parties have caused this Agreement to be executed as of
the date first written above by their respective officers thereunto duly
authorized.

 

 

 

B/E AEROSPACE, INC.

 

 

 

 

 

By

/s/ Amin J. Khoury

 

 

Name:

Amin J. Khoury

 

 

Title:

Chairman and Co-Chief Executive Officer

 

[Signature Page to Transition Services Agreement]

 

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KLX INC.

 

 

 

 

 

By

/s/ Thomas P. McCaffrey

 

 

Name:

Thomas P. McCaffrey

 

 

Title:

President and Chief Operating Officer

 

[Signature Page to Transition Services Agreement]

 

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