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TRANSITION SERVICES AGREEMENT

Transition Agreement

TRANSITION SERVICES AGREEMENT | Document Parties: HARRIS CORPORATION | HARRIS STRATEX NETWORKS, INC | Stratex Merger Corp You are currently viewing:
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HARRIS CORPORATION | HARRIS STRATEX NETWORKS, INC | Stratex Merger Corp

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Title: TRANSITION SERVICES AGREEMENT
Governing Law: Delaware     Date: 2/1/2007
Industry: Communications Equipment     Sector: Technology

TRANSITION SERVICES AGREEMENT, Parties: harris corporation , harris stratex networks  inc , stratex merger corp
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EXHIBIT 10.7

 

 

TRANSITION SERVICES AGREEMENT

Between

HARRIS CORPORATION

and

HARRIS STRATEX NETWORKS, INC.

Dated: January 26, 2007

 

 

 

 

 

TABLE OF CONTENTS

ARTICLE I

Services

 

 

 

 

 

 

 

 

Section 1.01

 

Definitions

 

 

1

 

Section 1.02

 

Provision of Services

 

 

1

 

Section 1.03

 

Quality and Scope of Services

 

 

1

 

Section 1.04

 

Additional Services; Initial Costs.

 

 

2

 

Section 1.05

 

Disclaimer of Warranties

 

 

2

 

Section 1.06

 

Independent Contractor; Employees

 

 

3

 

Section 1.07

 

Cooperation; Resources.

 

 

4

 

Section 1.08

 

Information From the Company; No Duty of Verification

 

 

4

 

Section 1.09

 

Exceptions to Harris’ Obligation to Perform.

 

 

4

 


ARTICLE II

 

 

 

 

 

 

 


Cost of the Services

 

           

Section 2.01

 

Cost of the Services

 

 

5

 

Section 2.02

 

Manner and Timing of Payments

 

 

6

 

Section 2.03

 

Taxes

 

 

6

 

Section 2.04

 

Access to Records

 

 

6

 

 

 

 

 

 

 

 


ARTICLE III

 

 

 

 

 

 

 


Limitation of Liability; Indemnification

 

           

Section 3.01

 

Limitation of Liability

 

 

6

 

Section 3.02

 

Indemnification by the Company

 

 

7

 

Section 3.03

 

Indemnification by Harris

 

 

7

 

Section 3.04

 

Indemnification Procedures

 

 

7

 

Section 3.05

 

Maximum Liability; Limitation of Damages

 

 

7

 

 

 

 

 

 

 

 


ARTICLE IV


Term and Termination

 

           

Section 4.01

 

Term

 

 

8

 

Section 4.02

 

Termination for Default

 

 

8

 

Section 4.03

 

Termination by the Company

 

 

9

 

Section 4.04

 

Effect of Termination

 

 

9

 

Section 4.05

 

Survival

 

 

10

 



-i-

 

 

 

 

 

 

 

 

 

 


ARTICLE V

 

 

 

 

 

 

 


Confidentiality; Ownership of Data

 

 

 

 

 

 

 

Section 5.01

 

Definitions of Confidential Information, Disclosing Party and Recipient

 

 

10

 

Section 5.02

 

Use and Disclosure Limitations

 

 

10

 

Section 5.03

 

Disclosure Required by Law

 

 

11

 

Section 5.04

 

Relief

 

 

11

 

Section 5.05

 

Other Related Matters

 

 

11

 

 

 

 

 

 

 

 


ARTICLE VI

 

 

 

 

 

 

 


General Provisions

 

           

Section 6.01

 

Governing Law and Venue; Waiver of Jury Trial

 

 

12

 

Section 6.02

 

Severability

 

 

13

 

Section 6.03

 

Amendment; Waiver

 

 

13

 

Section 6.04

 

Assignment.

 

 

13

 

Section 6.05

 

No Third-Party Beneficiaries

 

 

13

 

Section 6.06

 

Notices

 

 

14

 

Section 6.07

 

Entire Agreement; Controlling Provisions

 

 

14

 

Section 6.08

 

Headings

 

 

15

 

Section 6.09

 

Counterparts

 

 

15

 

Section 6.10

 

Construction

 

 

15

 

Section 6.11

 

Management of Enforcement by the Company

 

 

15

 

Section 6.12

 

Effectiveness

 

 

15

 

Section 6.13

 

Fees

 

 

15

 

Section 6.14

 

Force Majeure

 

 

16

 

Section 6.15

 

Compliance with Law

 

 

16

 

Section 6.16

 

No Set-Off

 

 

16

 

Section 6.17

 

Future Litigation and Other Proceedings

 

 

16

 

Section 6.18

 

Facilities and Systems Security

 

 

17

 

 

           

Schedule I

 

Services

 

Schedule I-1

   

Exhibit A

 

Wire Transfer Instructions

 

  Exhibit A-1

   


-ii-

 

 

TRANSITION SERVICES AGREEMENT

     This TRANSITION SERVICES AGREEMENT (this " Agreement "), dated as of January 26, 2007 (the " Effective Date "), is made by and between HARRIS CORPORATION, a Delaware corporation (" Harris "), and HARRIS STRATEX NETWORKS, INC., a Delaware corporation (the " Company ").

RECITALS

     WHEREAS, Harris, the Company, Stratex Networks, Inc., a Delaware corporation (" Stratex "), and Stratex Merger Corp. a Delaware corporation and wholly owned subsidiary of the Company, have entered into an Amended and Restated Formation, Contribution and Merger Agreement, dated as of December 18, 2006, as amended by that certain letter agreement, dated January 26, 2007 (the " Formation Agreement "), among the parties thereto, pursuant to which the Company was formed to acquire Stratex pursuant to the Merger (as defined in the Formation Agreement) and to receive the Contributed Assets (as defined in the Formation Agreement) from Harris in the Contribution Transaction (as defined in the Formation Agreement), in each case on the terms and subject to the conditions set forth in the Formation Agreement; and

     WHEREAS, Harris and Stratex would not have entered into the Formation Agreement without the undertakings contained in this Agreement and the execution and delivery of this Agreement is a condition to closing under the Formation Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants in the Agreements, the parties agree as follows:

ARTICLE I
SERVICES

      Section 1.01 Definitions . All capitalized terms used but not defined in this Agreement shall have the meanings assigned to them in the Formation Agreement; provided, however , that notwithstanding the foregoing neither the Company nor any of its Subsidiaries shall be deemed to be a Subsidiary or Affiliate of Harris or any of its other Subsidiaries or Affiliates for purposes of this Agreement.

      Section 1.02 Provision of Services . Except as otherwise provided in this Agreement, on the terms and subject to the conditions set forth in this Agreement, Harris shall, or shall cause one of its Affiliates to, provide to the Company and its Affiliates, for use in connection with the MCD Business as such business is conducted by the Company following the Closing, each of the Services described on Schedule I attached to this Agreement (each, a " Service " and collectively, the " Services "), commencing on the date of this Agreement and continuing through the Term (as defined in Section 4.01 of this Agreement) unless (a) otherwise specified for a particular Service on Schedule I , (b) a particular Service is terminated in accordance with to Section 4.02 or Section 4.03 , (c) otherwise mutually agreed to by the parties in writing, or (d) this Agreement is terminated in accordance with the terms and conditions hereof prior to the expiration of the Term.

      Section 1.03 Quality and Scope of Services . The Services shall be performed in a manner, amount, and quality substantially consistent with the manner, amount or quality of the Services as was being provided by Harris to the MCD Business during the six-month period

 

 

 

prior to the Effective Date, and in no event shall Harris shall have an obligation to perform any Service in any other manner, amount or quality (enhanced, increased or otherwise) unless expressly so specified in Schedule I with respect to a particular Service (including any advantage of systems, equipment, facilities, training, services or improvements procured, obtained or made by Harris after the Effective Date). Notwithstanding anything to the contrary contained in this Agreement, with respect to any Service, Harris may, in its sole discretion and at no additional charge to the Company, (i) perform such Service substantially consistent with any improved or enhanced practice as Harris deems reasonably prudent, or (ii) otherwise make changes from time to time in the manner in which such Service is provided if (A) Harris is making similar changes in the manner in which such Service is provided for its own businesses, (B) Harris furnishes to the Company substantially the same notice Harris provides to its own businesses with respect to such changes, and (C) such changes do not create a substantial risk that such changes would reasonably result in a material disruption of the MCD Business as conducted by the Company following the Closing or in the incurrence of a material loss or liability by the Company.

      Section 1.04 Additional Services; Initial Costs .

          (a) In the event that the Company has determined that it requires an increase or enhancement in the manner, amount or quality of any Service as compared to the manner, amount or quality of such Service as was being provided by Harris to the MCD Business during the six-month period prior to the Effective Date, the Company shall notify Harris of such determination and request that Harris so increase or enhance the manner, amount or quality, as the case may be, of such Service. Following the receipt of such notification and request, Harris shall consider in good faith such request by the Company to provide such incremental services; provided, however , that this Section 1.04 shall in no way modify or increase Harris’ obligations under Section 1.03 and Harris shall have the sole right to determine the scope, terms and fees of such incremental services to the extent that Harris elects to increase or enhance the manner, amount or quality of any Service. If Harris agrees to provide such incremental services, Schedule I to this Agreement shall be amended, without further action by any party hereto, to reflect such incremental services, the scope and terms thereof and the Service Fees therefor (such fees to be determined in accordance with Section 2.01 as if such incremental services had been included on Schedule I as of the date hereof).

          (b) If Harris or any of its Affiliates are required to (i) modify, increase, alter, obtain or otherwise change any software, process, method, asset or system (for example, because previously shared hardware capacity must be duplicated) or staffing or (ii) enhance their facilities or training, in order to perform the Services pursuant to Section 1.02 , then Harris shall obtain the Company’s prior written approval of any additional cost or expense that Harris or any of its Affiliates expects to incur in connection with such increase or enhancement, and the Company shall pay any such additional cost or expense incurred by Harris or such Affiliate to provide such Services to the extent so approved by the Company, and if the Company does not approve such additional cost or expense, neither Harris nor any of its Affiliates shall have any obligation to provide the Services that require such increases for their respective performances.

      Section 1.05 Disclaimer of Warranties . The Company acknowledges and agrees that Harris does not as part of its usual or regular conduct of business provide any or all of the Services, or any related services, on a commercial basis and that Harris does not warrant or

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assume responsibility for its provision of any or all of the Services. EXCEPT AS OTHERWISE PROVIDED HEREIN, THE SERVICES ARE PROVIDED "AS IS" WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND. HARRIS MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE QUALITY, SUITABILITY, AVAILABILITY, RELIABILITY, SECURITY, PERFORMANCE OR ADEQUACY OF THE SERVICES, AND HARRIS MAKES NO EXPRESS, STATUTORY OR IMPLIED REPRESENTATIONS OR WARRANTIES, AT LAW OR IN EQUITY, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT, QUIET ENJOYMENT, NO ENCUMBRANCES, SYSTEM INTEGRATION, ACCURACY, WORKMANLIKE EFFORT AND WARRANTIES ARISING THROUGH COURSE OF DEALING OR USAGE OF TRADE, AND HARRIS HEREBY EXPRESSLY DISCLAIMS ANY AND ALL SUCH REPRESENTATIONS AND WARRANTIES. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY HARRIS OR THEIR AUTHORIZED REPRESENTATIVES SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF HARRIS’ OBLIGATIONS UNDER THIS AGREEMENT.

      Section 1.06 Independent Contractor; Employees . The parties acknowledge and agree that each party is engaged in a business that is independent from that of the other party and that Harris shall perform the Services under this Agreement as an independent contractor with the sole right to supervise, manage, operate, control and direct the performance of the Services, including the right to designate which such resources Harris shall assign to perform any Service and the right to remove and replace any such resources at any time or, subject to Section 6.04(b) , to designate a third party provider to perform such Service. Harris shall have and maintain exclusive control over all of its own employees, agents, subcontractors and operations as of the Effective Date. Harris shall be solely responsible for payment of compensation to its employees and for any injury to them in the course of their employment. Harris shall assume full responsibility for payment of all federal, state and local taxes or contributions imposed or required under unemployment insurance, social security and income tax Laws with respect to such employees. The Company shall have and maintain exclusive control over all of its own employees, agents, other contractors and operations as of the Effective Date. The Company shall be solely responsible for payment of compensation to its employees and for any injury to them in the course of their employment. The Company shall assume full responsibility for payment of all federal, state and local taxes or contributions imposed or required under unemployment insurance, social security and income tax Laws with respect to such employees. Harris has no authority (express, implied or apparent) to represent the Company as to any matters or to incur any obligations or liability on behalf of the Company, and Harris shall not be, act as, purport to act as, or be deemed to be, the agent, representative, employee or servant of the Company. The Company has no authority (express, implied or apparent) to represent Harris as to any matters or to incur any obligations or liability on behalf of Harris, and the Company shall not be, act as, purport to act as, or be deemed to be, the agent, representative, employee or servant of Harris. No partnership, joint venture, association, alliance, syndicate, or other entity, or fiduciary, employee/employer, principal/agent or any relationship other than that of independent contractors is created hereby, expressly or by implication.

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      Section 1.07 Cooperation; Resources .

          (a) Subject to the terms and conditions set forth in this Agreement, Harris and the Company shall use good faith efforts to cooperate with each other in all matters relating to the provision and receipt of Services. Such good faith cooperation shall include, subject to Section 5.01 , (i) exchanging information reasonably requested by the other party (including such information reasonably requested in connection with any internal or external audit, whether in the United States or any other country); (ii) providing electronic access to data systems used in connection with the Services; (iii) performing true-ups and adjustments; and (iv) making available, as reasonably requested by the other party, timely decisions, approvals and acceptances, and obtaining all consents, licenses, sublicenses or approvals necessary or desirable in order to permit each party to perform its obligations under this Agreement in a timely and efficient manner. The Company shall use reasonable best efforts to provide information and documentation sufficient for Harris to satisfy its obligations under this Agreement. In connection with the Services, the Company shall make reasonably available for consultation with Harris those employees and consultants or other service providers of the Company reasonably necessary for the effective provision by Harris of such Services.

          (b) In the event any cost is incurred by Harris or any of its Affiliates in connection with obtaining or soliciting the consent of any third party in accordance with Section 1.07(a) , such cost shall be paid by the Company and the Company shall reimburse Harris or any of its Affiliates, as the case may be, upon receipt of an invoice from Harris or its Affiliates, as applicable, with respect to such costs.

      Section 1.08 Information From the Company; No Duty of Verification . Harris shall not be liable for any impairment of any Service caused by its not receiving information, either timely or at all, or by its receiving inaccurate or incomplete information from the Company that is required or reasonably requested by Harris. In the absence of actual knowledge to the contrary, Harris shall not have any responsibility for verifying the correctness of any information given to it by or on behalf of the Company for the purpose of providing any Service.

      Section 1.09 Exceptions to Harris’ Obligation to Perform .

          (a) Notwithstanding anything to the contrary contained in this Agreement, Harris shall not be required to provide such Service (i) to the extent the performance of such Service would require Harris to violate any applicable Law or would result in the breach of any contract or agreement due to a failure to obtain necessary consents, licenses, sublicenses, or approvals pursuant to Section 1.07 ; (ii) if Harris reasonably determines that providing such Service would result in a significant disruption of Harris’ or any of its Affiliates’ businesses or operations, would materially increase the scope of Harris’ responsibilities under this Agreement, or would be impracticable; or (iii) if any such Service unreasonably inhibits any employee of Harris or any of its Affiliates from discharging his or her obligations to Harris or any of its Affiliates or places any employee of Harris or any of its Affiliates in a conflict of interest with respect to his or her employment with Harris or any of its Affiliates. If Harris reasonably determines that it is unable to provide any Service in accordance with the terms of this Agreement as a result of the circumstances set forth in subparagraphs (i) through (iii) above, the parties shall cooperate in good faith to determine the best alternative approach. Until such

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alternative approach is found or the problem is otherwise resolved to the satisfaction of the parties, Harris shall use commercially reasonable efforts to provide a comparable service, or in the case of data systems, support the function to which the data system relates or permit the Company to have reasonable access to the data system so that the Company can support the function itself. In such case, the parties shall negotiate in good faith to determine the amounts to be paid for any such comparable service (such fees to be determined in accordance with Section 2.01 , but including any out-of-pocket costs incurred by Harris in providing or arranging for such comparable service). To the extent that Harris provides any comparable services to the Company pursuant to this Section 1.09 and the fees for any such comparable service (as described in the immediately preceding sentence) exceed the Service Fee for the corresponding Service that Harris determined it was unable to provide pursuant to this Section 1.09 , the parties shall share such excess amount equally.

          (b) Notwithstanding anything to the contrary contained in this Agreement:

               (i) if the Company elects to decommission, replace, modify or change its information technology or communications systems, networks, equipment, configurations, processes, procedures, practices or any other aspect of its business relationship relating to a Service in a manner that adversely affects Harris’ ability to provide such Service as required hereunder, then Harris shall have no liability whatsoever with respect to the effectiveness or quality of such Service and shall be excused from performance of such Service until the Company mitigates the adverse effect of such change, and the Company shall be responsible for all direct expenses incurred by Harris in connection with the cessation and, if applicable, the resumption of such Service; and

               (ii) Harris may suspend performance of any Service and the Company’s access to information technology or communications systems used by Harris if, in Harris’ reasonable judgment, the integrity, security or performance of such systems, or any data stored thereon, is being or is likely to be jeopardized by the activities of the Company, its employees, agents, representatives or contractors.

ARTICLE II
COST OF THE SERVICES

      Section 2.01 Cost of the Services . In consideration of the provision of the Services, the Company shall pay to Harris, without set-off, a service fee for each such Service in the amount equal to (a) all internal costs allocated to the maximum extent reasonably practicable to the provision of such Service on a fully allocated basis consistent with current charges to the MCD Business, and (b) any additional out-of-pocket costs or expenses incurred by Harris in connection with the provision of such Service, including without limitation, payments or costs for an ongoing license, grant or provision of rights or services (all such fees with respect to each Service, the " Service Fee ", and collectively for all Services, the " Service Fees "), in each case, with respect to the relevant payment period set forth on Schedule I . The Company shall not be obligated to pay for any individual Service that was properly terminated pursuant to Section 4.02 or Section 4.03 unless the Company knowingly accepts the benefits of such Services following any such termination. The Company will pay Harris the Service Fee relating to any terminated Service until the effective date of termination.

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      Section 2.02 Manner and Timing of Payments . All payments shall be made, without set-off, within thirty (30) days after receipt of an invoice therefor. Harris shall send invoices on a monthly basis for payments to be made under this Agreement. Such invoices shall specify in reasonable detail the costs and expenses to be reimbursed by the Company, and Harris shall provide such supporting detail as the Company may from time to time reasonably request. All payments made by the Company under this Agreement shall be by wire transfer of the payment amount to Harris’ account identified in Exhibit A attached hereto or other account notified in writing by Harris to the Company, or if requested in writing by Harris, by check. All such payments shall be effective upon receipt. If payment on any invoice is not received as specified herein on the applicable date, such amount shall be subject to a late payment charge calculated at one percent (1%) per month from the due date until payment is made. If the Company disputes in good faith any portion of the amount due on any invoice, then the Company shall notify Harris in writing of the nature and basis of the dispute within 10 Business Days after the Company’s receipt of such invoice. If no notification is provided to Harris in accordance with the immediately preceding sentence, the invoiced amount shall be deemed to be accurate and correct and shall not be subject to dispute or contest by the Company or any Affiliate thereof. In the event notification is so provided to Harris, the parties shall use their reasonable best efforts to resolve the dispute prior to the payment due date.

      Section 2.03 Taxes . Unless the Company provides Harris with a proper tax exemption certificate, the Company shall be responsible for and pay all applicable taxes (including without limitation any sales or value added taxes) that may be imposed with respect to or in connection with the provision of the Services, except for income taxes imposed on Harris for payment received with respect to such Services. To the extent Harris pays or is required to pay any such taxes that are the responsibility of the Company in accordance with the preceding sentence, the Company shall reimburse and indemnify Harris with respect to all amounts (including without limitation attorneys fees and costs of investigation) incurred in connection with the provision of such Services.

      Section 2.04 Access to Records . Harris shall keep reasonable books and records of all Services for the Company to verify all charges made by Harris under this Agreement and to comply with all applicable requirements of Law. Harris shall, upon the Company’s reasonable request and at the Company’s sole cost and expense, make such books and records available to the Company, upon reasonable notice and during normal business hours for the sole purpose of the Company’s verifying any charges made by Harris hereunder or complying with any applicable requirement of Law. Nothing in this Section 2.04 or Section 4.05 shall require Harris to maintain its books and records relating to the Services provided to the Company under this Agreement indefinitely or in a manner, or for a length of time, inconsistent with the manner or length of time that it maintains its books and records with respect to its other businesses.

ARTICLE III
LIMITATION OF LIABILITY; INDEMNIFICATION

      Section 3.01 Limitation of Liability . The Company agrees that none of Harris and its Affiliates and their respective, officers, directors, employees, stockholders, agents, representatives, successors and assigns (each, a " Harris Indemnified Person " and collectively, the " Harris Indemnified Persons ") shall have any liability, whether direct or indirect, in

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contract or tort or otherwise, to the Company or any of its Affiliates for or in connection with the Services provided or to be provided by any Harris Indemnified Person pursuant to this Agreement or any other services provided by any Harris Indemnified Person, the trans


 
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