Document:

EXHBIT 10.2

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT (this “Agreement”) dated as of November 10, 2014, by and between UNITED HEALTH PRODUCTS, INC., a Nevada corporation (“Company”) and Nate Knight (“Employee”).

 

W I T N E S S E T H:

 

WHEREAS, Company desires to engage the services of Employee and Employee desires to provide the services to Company in connection with Company’s business; and

 

WHEREAS, both parties desire to clarify and specify the rights and obligations which each have with respect to the other in connection with Employee’s services.

 

NOW, THEREFORE, in consideration of the agreements and covenants herein set forth, the parties hereby agree as follows:

 

1. Employment

 

Employee hereby agrees to be employed by Company as Chief Financial Officer of the Company, and Employee hereby agrees to render his services in such capacities for the Term (as hereinafter defined), all subject to and on the terms and conditions herein set forth.

 

2. Duties and Responsibilities of Employee

 

(a) Employee will be the Chief Financial Officer of Company, subject to the other provisions of this Section 2. Employee may work from his home office so long as Employee is able to perform the duties associated with Chief Financial Officer of the Company in accordance with the Company’s By-Laws.

 

(b) During the term of this Agreement, Employee will exercise such authority, perform such executive duties and functions and discharge such responsibilities as he deems appropriate as are customarily vested in an officer of a public company with said title.

 

3. Exclusivity of Service 

 

The Company agrees that Employee shall be required to devote the necessary business time, effort and attention to the business and efforts of the Company and its subsidiaries as the Company deems necessary for the performance of his duties. Employee may pursue other outside business interests that are not related to the same business as the Company, as long as it does not interfere with the Employee’s responsibilities for the Company.

 

	 
	
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4. Compensation; Bonus

 

(a) In consideration for Employee’s services to be performed under this Agreement and as compensation therefor, Company shall pay to Employee, commencing as of the date set forth above, a base salary at the rate of Four Thousand ($4,000) Dollars per month (the “Employee Base Salary”) which Employee Base Salary may be increased in the sole discretion of the Board. The Board shall determine whether to pay Employee’s Base Salary on a monthly basis, weekly basis or some other convenient mutually acceptable basis.

 

(b) Upon the execution of this Agreement, Employee shall receive 500,000 shares of the Company’s Common Stock with an appropriate restrictive legend placed on the certificate. The 500,000 shares shall be deemed validly issued, fully paid and non-assessable in exchange for services previously rendered.

 

(c) In addition to the Employee Base Salary, Employee shall receive an annual or other bonus at the sole discretion of the Board of Directors of the Company.

 

(d) Employee shall be entitled to reimbursement of all out-of-pocket expenses incurred on behalf of the Company. Employee reimbursement for amounts in excess of $500 shall be approved in writing by another executive officer of the Company.

 

5. Indemnification

 

Employee shall be entitled to the following during and in respect of the term of this Agreement:

 

The Company shall provide to Employee to the full extent provided for under the laws of the Company’s state of incorporation and the Company’s Certificate of Incorporation and Bylaws, indemnification for any claim or lawsuit which may be asserted against Employee when acting in such capacity for the Company and/or any subsidiary or affiliated business. The Company shall use reasonable best efforts to include Employee as an insured under all applicable directors’ and officers’ liability insurance policies maintained by the Company, and any other subsidiary or affiliated business.

 

6.  Additional Compensation

 

In the event the Company seeks to terminate this Agreement in connection with a change in control, merger and/or strategic acquisition, the Board of Directors of the Company may determine in its sole discretion to provide termination pay in the form of cash, stock and/or other securities.

 

	 
	
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7. Term of Employment

 

Employee’s employment with the Company shall be considered an employee “at will,” except for the notice provisions provided in the next sentence. Employee and the Company agree to provide 30 days prior written notice to the other party prior to the termination of Employee’s employment with the Company.

 

8. Non-Competition; Non-Solicitation

 

(a) Employee hereby agrees and covenants that during the Term hereof that he will not directly or indirectly engage in or become interested (whether as an owner, principal, agent, stockholder, member, partner, trustee, venturer, lender or other investor, director, officer, employee, consultant or through the agency of any corporation, limited liability company, partnership, association or agent or otherwise) in any business enterprise which is engaged in the current business of the Company during the Term; provided, however, that ownership of not more than 15% of the outstanding securities of any class of any entity that are listed on a national securities exchange or traded in the over-the-counter market shall not be considered a breach of this Section 8.

 

(b) Employee agrees and covenants that during the Term hereof he and his agents will not (without first obtaining the written permission of Company) directly or indirectly participate in the solicitation of any business of any type conducted by Company during the period of this Agreement from any person or entity which was a client or customer of Company during the period of this Agreement, or was a prospective customer of Company from which Employee solicited business or for which a proposal for submission was prepared during the period.

 

(c) Employee agrees and covenants that during the Term of this Agreement he will not (without first obtaining the written permission of Company) directly or indirectly recruit for employment, or induce or seek to cause such person to terminate his or her employment with Company, any person who then is an employee of Company or who was an employee of Company during the preceding six (6) months.

 

9. Violation of Other Agreements and Authority

 

Employee represents and warrants to Company that he is legally able to enter into this Agreement; that he is not prohibited by the terms of any agreement, understanding or policy from entering into this Agreement; that the terms hereof will not and do not violate or contravene the terms of any agreement, understanding or policy to which Employee is or may be a party, or by which Employee may be bound; that Employee is under no physical or mental disability that would materially interfere with the performance of his duties under this Agreement. Employee agrees that, as it is a material inducement to Company that Employee make the foregoing representations and warranties and that they be true in all material respects.

 

	 
	
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10. Company Authority Relative to this Agreement

 

The Company has the requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement. The Board of Directors of the Company has duly authorized the execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated on its part by this Agreement, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or for the Company to consummate the transactions contemplated by it. The Company has duly validly executed and delivered this Agreement and it is a valid and binding Agreement of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy or insolvency laws affecting creditors’ rights generally and to general principles of equity.

 

11. Notices

 

Any and all notices, demands or requests required or permitted to be given under this Agreement shall be given in writing and sent by email to the email address set forth at the foot of this Agreement. In the case of Employee sending an email to the Company, Employee shall provide a formal notice to each Board member with a copy to Morse & Morse, PLLC, as corporate/securities counsel.

 

12. Waivers

 

No waiver by any party of any default with respect to any provision, condition or requirement hereof shall be deemed to be a waiver of any other provision, condition or requirement hereof; nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.

 

13. Preservation of Intent

 

Should any provision of this Agreement be determined by a court having jurisdiction in the premises to be illegal or in conflict with any laws of any state or jurisdiction or otherwise unenforceable, Company and Employee agree that such provision shall be modified to the extent legally possible so that the intent of this Agreement may be legally carried out.

 

14. Entire Agreement

 

This Agreement sets forth the entire and only agreement or understanding between the parties relating to the subject matter hereof and supersedes and cancels all previous agreements, negotiations, letters of intent, correspondence, commitments and representations in respect thereof among them, and no party shall be bound by any conditions, definitions, warranties or representations with respect to the subject matter of this Agreement except as provided in this Agreement.

 

	 
	
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15. Inurement; Assignment

 

The rights and obligations of Company under this Agreement shall inure to the benefit of and shall be binding upon any successor of Company or to the business of Company, subject to the provisions hereof. Neither this Agreement nor any rights or obligations of Employee hereunder shall be transferable or assignable by Employee.

 

16. Amendment

 

This Agreement may not be amended in any respect except by an instrument in writing signed by the parties hereto.

 

17. Headings

 

The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

 

18. Counterparts

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.

 

19. Governing Law

 

This Agreement shall be governed by, construed and enforced in accordance with the internal laws of the State of Nevada, without giving reference to principles of conflict of laws. Any lawsuit commenced under the terms of this Agreement shall be commenced in a federal and/or state court located in Las Vegas, Nevada.

 

	 
	
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	 	UNITED HEALTH PRODUCTS, INC.	 
	 	 	 	 
		By:		 
	 	 	Douglas Beplate, President	 
	 	 	
Email address:

d.beplate@unitedhealthproductsinc.com

douglas@bpl8.com

	 

 

	 	 	 	 
	 	 	
Nate Knight 

Email address: 
n.knight@unitedhealthproductsinc.com

nate_knight@hotmail.com 

	 

 

 

6Exhibit 10.1

 

FORM OF TRANSITION SERVICES AGREEMENT

 

TRANSITION SERVICES AGREEMENT (this “Agreement”), dated as of [                      ], 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 [                      ], 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

 

 

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 2.1(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.

 

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“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).

 

“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

 

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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).

 

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

 

“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,

 

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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, 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,

 

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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 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

 

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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 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.

 

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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.

 

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 

 

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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 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 

 

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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.

 

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 

 

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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, 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.

 

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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.

 

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 

 

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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.

 

(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.

 

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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 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

 

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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.

 

(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 

 

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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 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 

 

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(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 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 

 

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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”), 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.

 

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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.

 

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 

 

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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 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.

 

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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):

 

(i)                                     if to B/E:

 

1400 Corporate Center Way

Wellington, FL 33414

Facsimile:  +1 (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:  [·]

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.

 

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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 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

 

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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.

 

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.

 

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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.

 

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IN WITNESS WHEREOF, 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:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
KLX   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Transition Services Agreement]

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