Exhibit 10.10
[Form of Transition Services Agreement by and
between Walter Industries, Inc. and Mueller Water Products,
Inc.]
TRANSITION SERVICES
AGREEMENT
This Transition Services Agreement (this “ Services
Agreement ”) is made as of the _____ day of _________,
2006, by and among (i) Walter Industries, Inc., a Delaware
corporation (“ Walter ”) on behalf of itself and
each of the other Walter Entities, and (ii) Mueller Water Products,
Inc., a Delaware corporation (“ Mueller ”), on
behalf of itself and each of the other Mueller Entities. The
Mueller Entities currently receive certain services from and
provide certain services to the Walter Entities. Each of the
Walter Entities and the Mueller Entities desire that these services
continue to be provided after the initial public offering of shares
of Mueller and the subsequent spin-off of Mueller’s common
stock to Walter’s shareholders, upon the terms and conditions
set forth in this Services Agreement.
In consideration of the mutual covenants and agreements contained
in this Services Agreement, the parties hereto hereby agree as
follows:
ARTICLE 1.
DEFINITIONS
1.1
Unless the context otherwise requires, the following terms and
their singular or plural, used in this Services Agreement shall
have the meanings set forth below:
a)
“ Force Majeure ”
shall have the meaning set forth in Section 7.1 of this Services
Agreement.
b)
“ Mueller ” shall
have the meaning set forth in the preamble to this Services
Agreement.
c)
“ Mueller Entities
” means, collectively, Mueller and any of its Affiliates that
are listed as Recipients on Schedule A or as Providers on Schedule
B.
d)
“ Mueller Provided
Services ” shall have the meaning set forth in Section
2.2 of this Services Agreement.
e)
“ Person ” means
an individual, partnership, corporation, trust, unincorporated
association, or other entity or association.
f)
“ Provider ”
shall mean the particular Walter Entity or Mueller Entity, in any
Services Agreement.
g)
“ Recipient ”
shall mean the particular Walter Entity or Mueller Entity, in any
given location, that is receiving services or leasing or subleasing
property (as tenant) pursuant to this Services
Agreement.
h)
“ Term ” shall
have the meaning set forth in Section 5.1 of this Services
Agreement.
i)
“ Walter ” shall
have the meaning set forth in the preamble to this Services
Agreement.
j)
“ Walter Entities
” means, collectively, Walter and any of its Affiliates that
are listed as Providers on Schedule A or as Recipients on Schedule
B.
k)
“ Walter Provided
Services ” shall have the meaning set forth in Section
2.1 of this Services Agreement.
Other terms are used as defined
elsewhere herein.
ARTICLE 2.
SERVICES
2.1
Walter Provided Services. Pursuant to the terms of
this Services Agreement, the Walter Entities agree to provide, or
cause to be provided, to the respective Mueller Entities the
services described in Schedule A to this Services Agreement (the
“Walter Provided Services”).
2.2
Mueller Provided Services . Pursuant to the terms of
this Services Agreement, the Mueller Entities agree to provide, or
cause to be provided, the services described in Schedule B to this
Services Agreement (the “Mueller Provided
Services”).
2.3
Other Services . If, after the execution of this
Services Agreement, the parties determine that a service provided
by the Walter Entities to the Mueller Entities or by the Mueller
Entities to the Walter Entities prior to the date hereof was
omitted from the Schedules to this Services Agreement, then the
parties shall negotiate in good faith to agree to the terms and
conditions upon which such services would be added to this Services
Agreement, it being agreed that the charges for such services
should be determined on a basis consistent with the methodology for
determining the initial prices provided for in Section
3.3.
ARTICLE 3.
COMPENSATION
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3.1
Compensation for Walter Provided Services . Subject to
Section 3.4, the compensation for the Walter Provided Services for
the duration of the Term shall be as described for each individual
service provided as set forth on Schedule A plus applicable sales
or value-added taxes, if any.
3.2
Compensation for Mueller Provided Services . Subject
to Section 3.4, the compensation for the Mueller Provided Services
for the duration of the term shall be as described for each
individual service as set forth on Schedule B plus applicable sales
or value-added taxes, if any.
3.3
Methodology for Determining Prices . The parties agree
that the prices charged by a Provider for any Service provided
hereunder shall be sufficient to cover such Provider’s
reasonable estimate of its actual costs and, if applicable,
consistent with the prices such provider would charge to an
Affiliate, in each case without taking into account any profit
margin or projected savings from increased efficiency.
3.4
Price Adjustments . It is the intent of the parties
that the prices set forth on the Schedules hereto are consistent
with the methodology for determining prices as described in Section
3.3. If the parties determine in good faith that the initial
prices set forth on the Schedules hereto are not consistent with
such methodology, then the parties shall negotiate in good faith to
adjust such prices in a manner that is consistent with such
methodology.
3.5
Allocation of Certain Expenses .
(a)
(i) In respect of software
applications which are resident in the Mueller Entities while they
are affiliates of the Walter Entities, Mueller shall bear the costs
and expenses of obtaining any and all licenses for such software
applications for Mueller.
(ii) Walter and Mueller
cooperate in good faith to minimize the costs and expenses to be
incurred pursuant to this Section 3.5(a).
(b)
Walter and Mueller shall each bear the costs and expenses of
obtaining any and all consents from third parties which may be
necessary in connection with the other party’s provision of
services to the Recipient hereunder.
3.6
Terms of Payment; Dispute Resolution .
(a)
Except as otherwise expressly provided herein, Providers shall
invoice Recipients monthly (or, if mutually agreeable to Provider
and Recipient, quarterly or semi-annually) in arrears for the
services provided by them under this Services Agreement.
Payment in U.S. dollars shall be made by Recipients within 30 days
after receipt of any invoice. No Recipient shall withhold any
payments to its Provider under this Services Agreement, and no
Provider shall withhold the provision of any services to its
Recipient, notwithstanding any dispute that may be pending between
them, whether
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under this Services Agreement or otherwise (any
required adjustment being made on subsequent invoices), unless such
withholding is provided for in an arbitral award in accordance with
Section 9.6 of this Services Agreement.
(b)
If there is a dispute between any Recipient and any Provider
regarding the amounts shown as billed to such Recipient on any
invoice, such Provider shall furnish to such Recipient reasonable
documentation to substantiate the amounts billed including, but not
limited to listings of the dates, times and amounts of the services
in question where applicable and practicable. Upon delivery
of such documentation, such Recipient and such Provider shall
cooperate and use their best efforts to resolve such dispute among
themselves. If such disputing parties are unable to resolve
their dispute within thirty (30) calendar days of the initiation of
such procedure, and such Recipient believes in good faith and with
a reasonable basis that the amounts shown as billed to such
Recipient are inaccurate or are otherwise not in accordance with
the terms of this Services Agreement, then such Recipient shall
have the right, as its own expense, to commence arbitration in
accordance with Section 9.1 of this Services Agreement.
ARTICLE 4.
OCCUPANCY
RIGHTS
4.1
Any Employee of a Walter Entity or Mueller Entity who is located at
a facility of the other party may remain at such location for a
period not to exceed 180 days after the date of the spin-off;
provided , however , that such employee shall be
required to adhere to all applicable security restrictions and
guidelines at such facility. Thereafter, the owner of such
facility may require such employee(s) to vacate the premises
unless, prior to such time, the parties have executed a formal
lease or other occupancy arrangements upon commercially reasonable
terms that are mutually acceptable to the parties.
ARTICLE 5.
TERM
5.1
Term . Except as expressly provided otherwise in this
Services Agreement, or with respect to specific services as
indicated on the Schedules hereto, the term of this Services
Agreement shall commence immediately and shall expire automatically
at the time the term of every service described on the Schedules
hereto has terminated (the “ Term ”). The
obligation of any Recipient to make a payment for services
previously rendered shall not be affected by the expiration of the
term and shall continue until full payment is made.
5.2
Termination of Individual Services . (a) Each of
the individual services described on the schedules hereto has a
separate term which, in respect of some services, includes a right
of extension. Unless earlier terminated pursuant to the
following sentence, the obligation of a Provider to provide a
service will terminate upon the expiration of the
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term of such service. Effective between
the respective Provider and Recipient, a Recipient may terminate at
any time during the Term any individual service provided under this
Services Agreement on a service-by-service basis (and/or
location-by-location basis where an individual service is provided
to multiple locations of a Recipient) upon written notice to the
Provider identifying the particular service (or location) to be
terminated and the effective date of termination, which date shall
not be less than 30 days after receipt of such notice unless the
Provider otherwise agrees. Effective upon the termination of
any service, an appropriate reduction will be made in the fees
charged to such Recipient.
ARTICLE 6.
CERTAIN
COVENANTS
6.1
Points of Contact. Each Provider and Recipient shall name a
point of contact which shall be added to the Schedules
hereto. Such points of contact shall be responsible for the
implementation of this Services Agreement between the respective
Provider and its Recipient, including resolutions of any issues
that may arise during the performance hereunder on a day-to-day
basis.
6.2
Cooperation; Reasonable Care .
(a) &n
