TRANSITION SERVICES
AGREEMENT
THIS TRANSITION SERVICES AGREEMENT, dated as of
February 24, 2006 (this “ Agreement ”), by and
among LITTON SYSTEMS, INC., a Delaware corporation, (“
Seller ”), and Simclar, Inc., a Florida corporation,
and its wholly-owned subsidiary Simclar Interconnect Technologies,
Inc., a Delaware corporation (each a “ Buyer ”
and collectively, the “ Buyers ”).
WHEREAS, the Seller and the Buyers have entered
into a Share and Asset Purchase and Sale Agreement, dated as of
December 21, 2005 (the “ Purchase Agreement ”)
pursuant to which the Seller agreed to sell to the Buyers and the
Buyers agreed to purchase from the Seller certain of the Assets,
all as more particularly set forth in the Purchase Agreement;
and
WHEREAS, the Buyers and the Seller desire to
enter into an arrangement for the Seller to provide, or to cause to
be provided, certain transition services solely with respect to
Buyers’ operations at the Springfield Facility to the Buyers
for a period after the Closing.
NOW THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions . Capitalized terms used herein and not
otherwise defined in this Agreement shall have the meanings
ascribed to such terms in the Purchase Agreement.
SECTION 2. Seller Services .
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a.
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The Seller
agrees that it shall provide or cause its Affiliate to provide the
services substantially as described on the Schedules to this
Agreement solely with respect to Buyers’ operations at the
Springfield Facility (the “ Seller
Services ”) for the period of time as set forth on the
Schedules. The termination of each Seller Service shall occur
automatically at the end of the period set forth next to such
Seller Service on each Schedule. Notwithstanding anything set forth
on the Schedules hereto, the Seller shall cease to provide any
Seller Service within 30 days of receiving a written request from
the Buyers to terminate such Seller Service.
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b.
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The
consideration to be paid to the Seller pursuant to this Agreement
for providing the Seller Services is set forth on the Schedules
hereto. In addition, the Buyers will or will cause their Affiliates
to reimburse the Seller for any payments made by the Seller in
respect of the Seller Services.
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c.
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In providing
the Seller Services, none of the Seller nor any of its respective
Affiliates shall be obligated to: (i) hire any additional
employees; (ii) maintain the employment of any specific employee,
(iii) purchase, lease or license any additional equipment, property
or materials; or (iv) pay any costs related to the transfer of any
data to the Buyers or their Affiliates.
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d.
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The Seller
agrees to use commercially reasonable efforts to cause third
parties to perform the services that are required in order for the
Seller to perform the Seller Services. The Buyers understand that
the Seller Services provided hereunder are transitional in nature
and are furnished by the Seller solely for the purpose of
facilitating the purchase of the Shares and Assets by the Buyers.
The Buyers understand that the Seller is not in the business of
providing the Seller Services to third parties and have no long
term interest in continuing to provide the Seller
Services.
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e.
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The Seller
shall only be obligated to provide Seller Services during normal
business hours and in a manner that will not interfere with the
Sellers’ business operations.
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f.
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If during the
term of this Agreement Buyers desire that Sellers perform certain
additional services which are necessary to Buyers’ operations
at the Springfield Facility and which are not part of the Seller
Services (the “Additional Services”), then Buyers may
seek to negotiate an agreement with Seller with respect to the
provision of such Additional Services. Seller shall perform such
Additional Services solely pursuant to a written agreement
regarding such Additional Services. Seller shall determine in its
sole discretion whether to enter into any agreement regarding
Additional Services.
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SECTION 3. Billing and Payment .
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a.
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Within thirty
(30) days after the end of each month during the term of this
Agreement, Seller will submit a reasonably detailed written invoice
to Buyers with respect to the Seller Services provided during the
immediately preceding month together with an accounting of the
charges for such Seller Services and setting forth any payments
made by the Seller in respect of the Seller Services. Within ten
(10) days after the receipt of each such invoice, Buyers shall, or
shall cause their Affiliates to, remit payment of the full amount
of each such invoice to the Seller. Unless agreed to by the
parties, all amounts payable by Buyers for the Seller Services
rendered pursuant to this Agreement shall be remitted in United
States dollars.
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b.
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The Seller and
its Affiliates providing Seller Services shall keep supporting
documentation of all costs incurred in providing the Seller
Services and all payments made by the Seller in respect of the
Seller Services. In the event Buyers dispute any charges invoiced
by Seller, Buyers shall deliver a written statement describing the
dispute to Seller within ten (10) days following receipt of the
disputed invoice. The statement shall provide a reasonably detailed
description of the disputed items. Upon delivery of the written
statement, Buyers and Seller shall seek to cooperate and negotiate
in good faith to resolve such disputed charges.
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SECTION 4. No Warranties; Limitation on Liability;
Indemnification .
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a.
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No
Warranties . Seller makes
no representations or warranties, express or implied, including but
not limited to any implied warranties of merchantability or fitness
for a particular purpose with respect to the Seller Services to be
provided hereunder. Without limiting the generality of the
foregoing, the Buyers hereby acknowledge and agree that Seller is
not and will not be acting as Buyers’ accountants, financial
advisors, human resources personnel or information technology
personnel.
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b.
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Limitation
on Liability; Consequential Damages . Buyers agree that Seller, its Affiliates, and
each officer, director, employee, agent and representative of
Seller and/or any of its Affiliates (the “ Seller
Parties ”) shall not be liable to Buyers for, and Buyers
hereby release the Seller Parties from, any loss, liability, cost,
expense, penalty, demand, judgment, damage, claim or cause of
action (including but not limited to attorneys fees and other
expenses of litigation) (“ Losses ”) arising
from any act or omission of Seller Parties in connection with this
Agreement and/or the Seller Services, except to the extent any such
Loss results from the gross negligence or willful misconduct of any
of the Seller Parties. In no event shall the Seller Parties be
liable to the Buyers for consequential, incidental or punitive
loss, damages or expenses (including lost profits or savings) as a
result of any acts or omissions of the Seller Parties in connection
with this Agreement and/or the Seller Services.
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c.
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Indemnification . Buyers agree to indemnify, defend and hold
harmless the Seller Parties, from any and all Losses incurred by
any of them arising out of or connected with the Seller Services or
in any way related to this Agreement, regardless of the legal
theory asserted (other than such as result directly from the Seller
Parties’ gross negligence or willful misconduct). Seller
shall use reasonable efforts to promptly notify Buyers in writing
of any Losses for which Seller intends to claim indemnification
hereunder (however, failure to give such notice shall not relieve
Buyers from their obligations hereunder). Buyers may not settle any
claim, action or demand without the prior written consent of the
Seller. In addition, the Buyers and their Affiliates shall be
liable for, and indemnify the Seller Parties against, all Losses
incurred by the Seller Parties to the extent caused by the
negligence or willful misconduct of, or the breach of this
Agreement by, the Buyers and/or their Affiliates.
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SECTION 5. Confidentiality .
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a.
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Nondisclosure and Nonuse . Seller shall cause each Affiliate providing
Seller Services to hold, and cause its directors, officers,
employees, agents, consultants and advisors to keep confidential,
unless compelled to disclose by judicial or administrative process
or, in the opinion of its counsel, by other requirements of law,
all confidential human resource, financial, tax, and other data or
information of or concerning the Buyers obtained or created
pursuant to this Agreement (the “Buyer Information”) or
otherwise relating to the Seller Services provided hereunder
(except to the extent that this Agreement, the Purchase Agreement
or any other ancillary agreement permits or requires the use or
disclosure of such Buyer Information or to the extent such Buyer
Information can be shown to have been (i) in the public domain
through no fault of the Seller or its Affiliates, (ii) lawfully
acquired after the date of this Agreement on a nonconfidential
basis from a third party, or (iii) independently generated without
any reference to any proprietary or confidential information of the
Buyers), and Seller and its Affiliates shall not (x) use such Buyer
Information, except in connection with the performance of this
Agreement, or (y) disclose such Buyer Information to any other
person or entity, except its employees, directors, officers and
agents who need to know such Buyer Informat
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