|
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
-2-
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.
-3-
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
-4-
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.
-5-
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
-6-
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
|