Master Transition Services Agreement

Master Transition Services Agreement

Exhibit 10.3
          This Master Transition Services Agreement (this “Agreement”) is entered into as of [], 2011, by and among ITT Corporation, an Indiana corporation (“ITT”), Exelis Inc., an Indiana corporation (“Exelis”) and Xylem Inc., an Indiana corporation (“Xylem”). Each of ITT, Exelis and Xylem is sometimes referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used herein and not otherwise defined herein have the meanings given to such terms in the Distribution Agreement of even date herewith, by and among ITT, Exelis and Xylem (as such may be amended from time to time, the “Distribution Agreement”).
W I T N E S S E T H :
          WHEREAS, the Board of Directors of ITT has determined that it is appropriate, desirable and in the best interests of ITT, ITT’s shareholders and ITT’s other constituents, to separate, pursuant to and in accordance with the Distribution Agreement, ITT into three separate, publicly traded companies, one for each of (i) the ITT Retained Business, which shall be owned and conducted, directly or indirectly, by ITT, (ii) the Defense Business, which shall be owned and conducted, directly or indirectly, by Exelis and (iii) the Water Business, which shall be owned and conducted, directly or indirectly, by Xylem.
          WHEREAS, in order to provide for an orderly transition under the Distribution Agreement, each of ITT, Exelis and Xylem desire to provide to the other certain services for specified periods following the Distribution Date, all in accordance with and subject to the terms and conditions set forth herein.
          NOW, THEREFORE, in consideration of the mutual covenants and agreements of the Parties contained herein, the Parties agree as follows:
     1. Services Provided.
          (a) With respect to each Service (as defined in Section 1(b)), the Party required to provide such Service is the “Service Provider” and the other Party is the “Service Recipient”. In performing the Services, Service Provider and each of its Affiliates shall use commercially reasonable efforts to provide, or to ensure that any Third Party Provider (as defined in Section 1(b)) shall provide, the Services in the same manner, within the same amount of time and at the same level of service (including, as applicable, with respect to type, frequency, quality, and quantity), with the same degree of reasonable skill and care and with the same level of security and control as provided and used in providing the Services during the twelve month period prior to the Distribution Date (excluding any actions taken in contemplation of the Distribution). Notwithstanding the foregoing, if there is an increase in the complexity of a Service (whether as a result of increased quantity or quality, changing frequency or regulatory requirements or otherwise), Service Recipient acknowledges and agrees that such Service may not be provided within the same amount of time as it had previously taken during such period, and, in such a case, Service Provider and each of its Affiliates shall use commercially reasonable efforts to provide, or to ensure that any Third Party Provider shall provide, such Service in a timely manner. Notwithstanding anything herein to the contrary, the Services are to be provided in a manner that does not disparately treat Service Recipient (or its Subsidiaries or its or their

 


 

personnel or business) as compared to Service Provider’s treatment of itself (or its Affiliates or its or their personnel or business) in connection with the provision of a Self-Service (as defined in Section 2(a)(v)).
          (b) During the period commencing on the Distribution Date and ending on the date that is two (2) years from the date hereof, unless an earlier or later date is otherwise specified for a Service on Schedule A, Schedule B or Schedule C hereto (for each such Service, such end date being herein referred to as the “Termination Date”, with Schedule A, Schedule B and Schedule C being herein referred to as the “Services Schedules”), Service Provider shall provide, or shall cause one or more of its Affiliates or a contractor, subcontractor, vendor or other third-party service provider (each, a “Third Party Provider”) to provide, upon the terms and subject to the conditions set forth herein, the services described on the Services Schedules, including under the headings “General Services Description” and “Scope of Services” (the “Services”); provided, Service Provider shall obtain the consent of Service Recipient (not to be unreasonably withheld, delayed or conditioned) in the event any such Service is to be provided by a Third Party Provider or Affiliate if such Services were not provided by such Third Party Provider or Affiliate to Service Recipient during the twelve month period prior to the Distribution Date; provided further, Service Provider shall remain primarily responsible for the performance by any such Affiliate or Third Party Provider of its obligations hereunder. Irrespective of whether Service Provider, an Affiliate or a Third Party Provider is providing a Service, Service Recipient may direct that any such Service be provided directly to Service Recipient or any other member of such Party’s Group.
          (c) Each Service provided hereunder shall be terminated on its applicable Termination Date (as defined in Section 1(b)), unless otherwise terminated earlier by Service Recipient pursuant to Section 11. Service Provider shall be under no obligation to provide a Service to Service Recipient after the Termination Date applicable to such Service, except to the extent otherwise agreed in writing by Service Provider and Service Recipient.
     2. Consideration.
          (a) Costs and Fees.
     (i) For each Service, Service Recipient shall pay (in accordance with Section 2(b)) Service Provider an amount equal to the Monthly Costs (as defined in Section 2(a)(i)(1)); provided that (i) for any Service performed from and after January 1, 2012 through and including the day before the expiration date of the Minimum Service Period (as defined in Section 11(b)) for such Service, Service Recipient shall pay, along with and in addition to such Monthly Costs, an amount equal to 2% of such Monthly Costs and (ii) for any Service performed from and after the expiration date of the Minimum Service Period for such Service through and including the date as of which the provision of such Service hereunder has been terminated, Service Recipient shall pay, along with and in addition to the Monthly Costs, an amount equal to 10% of such Monthly Costs, unless, upon request by Service Recipient to terminate a Service, Service Provider is unable to transition the Service to Service Recipient or its designated Subsidiary in a commercially reasonable manner which does not unduly disrupt the Service and as a result, Service Recipient is unable to terminate such Service on or after the date on which

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the Minimum Service Period expires (in which case any third party, out-of-pocket costs resulting to Service Recipient shall be shared in accordance with Section 11(b)).
     (1) The “Monthly Costs” for each Service shall be an amount equal to the sum of (A) the costs or expenses incurred as set forth on the applicable Services Schedule; provided that if a Services Schedule is silent regarding costs and expenses, the amount under this subsection (A) shall be equal to Service Provider’s allocated costs (including salary, wages and benefits, but excluding severance and retention costs, which shall be handled pursuant to Section 2(a)(ii)) for any of its (or its Affiliates’) employees involved in providing Services, plus (B) any reasonable out-of-pocket costs and expenses incurred in connection with retaining Third Party Providers, including any fees for any Third Party Consent or Alternate Method, or pursuing any warranty or indemnity against a Third Party Provider in accordance with Section 3(d); provided that Service Recipient shall only be responsible for 50% of the fees for any Third Party License, with Service Provider responsible for the other 50%, plus (C) any sales, transfer, goods, services, value added, gross receipts or similar taxes, fees, charges or assessments (including any such taxes that are required to be withheld); provided that the Parties agree to use commercially reasonable efforts to minimize any such tax with respect to the Services, plus (D) other reasonable miscellaneous out-of-pocket costs and expenses; provided, however, that any such expenses exceeding $5,000 per month for each Service (other than routine business travel and related expenses) shall require advance approval of Service Recipient. The Monthly Costs for a Service shall not include any severance and retention costs incurred by Service Provider as a result of retaining the necessary employees to supply such Service to Service Recipient in accordance with the terms of this Agreement, which costs shall be handled pursuant to Section 2(a)(ii) below.
     (2) Any costs and expenses provided for on a Services Schedule shall be subject to an increase of 4.5% per annum beginning on January 1, 2012 in order to adjust for inflation.
     (3) Service Provider shall notify Service Recipient of any event that may reasonably be expected to increase the Monthly Costs by more than 5%.
     (ii) Subject to the terms of this Section 2(a)(ii), Service Provider shall use commercially reasonable efforts to retain its workforce required to provide the Services and, consistent with its severance and retention policies then in effect, may make severance and retention payments to employees providing the Services. As provided for on Annex A (the “Severance and Retention Schedule”), Service Recipient shall be responsible for the percentage as therein provided of Service Provider’s actual severance and retention costs (which are estimated in the Severance and Retention Schedule) for those individuals or job descriptions as set forth therein; provided that Service Recipient shall only be so responsible for its portion of severance costs if such costs were incurred as a result of terminating such an employee in connection with the termination of a Service; provided further that (a) if the severance and retention costs change from the

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estimates provided in the Severance and Retention Schedule, Service Recipient shall be responsible for its percentage of such costs so long as such change in costs is consistent with the Service Provider’s severance and retention policies as then in effect and (b) any such employee is actually terminated and not rehired for at least ninety (90) days following such termination. Service Provider shall prepare and deliver, within thirty (30) days following the end of each quarterly period ending each March 31, June 30, September 30 and December 31 (it being understood that the first such period shall be shorter than one quarter), to Service Recipient an invoice setting forth the amount of severance and retention costs to be paid by Service Recipient in accordance with the foregoing provisions of this Section 2(a)(ii), which invoice Service Recipient shall pay pursuant to the terms of Section 2(b).
     (iii) Unless the Parties otherwise agree in writing, (i) where Services are provided in a country outside of the United States by a Person located in the same country, amounts shall be invoiced and paid in the local currency of the entity providing the Services and (ii) if payments are to be made between legal entities not within the same country, such amounts shall be invoiced and paid in U.S. Dollars. To the extent necessary, local currency conversion on any such invoice shall be based on Service Provider’s internal exchange rate for the then-current month, based upon the average for such month, as calculated consistently with how such local currency conversion was calculated in the twelve month period prior to the Distribution Date.
     (iv) All charges based on a monthly or other time basis will be pro-rated based on actual calendar days elapsed during the period of service.
     (v) With respect to any service that a Service Provider provides or causes an Affiliate to provide to itself or its Affiliates that is the same or substantially similar to a Service provided to Service Recipient or its Subsidiaries hereunder (such service, a “Self-Service”), if Service Provider determines to no longer provide such Self —Service to itself or its Affiliates, Service Provider shall notify Service Recipient of such termination no later than the number of days prior to such termination as is provided in Section 11(b) for terminating the corresponding Service. If Service Provider terminates a Self-Service prior to the end of the Minimum Service Period applicable for the corresponding Service, the Monthly Costs of such Service following any such termination and up to but not including date on which the Minimum Service Period expires shall be calculated as if Service Provider had not terminated such Self-Service. Notwithstanding the foregoing, Service Provider shall continue to provide the Service in accordance with the provisions of this Agreement, unless such Service is otherwise terminated pursuant to Section 11, and Service Provider shall not be permitted to terminate any Self-Service prior to the Termination Date for the applicable Service if such termination would adversely affect the level of service, security or control of such Service or the scope or content thereof required pursuant to Sections 1(a) and 4(a).
          (b) Invoices and Payment.
     (i) Service Provider shall invoice Service Recipient for the amounts owed hereunder in arrears on a calendar monthly basis or, in the case of Section 2(a)(ii), as

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provided therein, and shall provide reasonable documentation supporting such amounts owed pursuant to Section 2(a), except to the extent such amounts are set forth on the Services Schedules. Service Recipient shall pay the amount of such invoice by electronic transfer of immediately available funds not later than thirty (30) days after of the date of such invoice. Neither Party nor any of its respective Subsidiaries shall have a right of set-off against the other Party or its Subsidiaries, except in connection with any amounts billed hereunder. In the event Service Recipient does not pay Service Provider in accordance with the terms hereof (i) all amounts so payable and past due shall accrue interest from the 31st day after the date of the invoice to the receipt of payment at a rate per annum equal to the six (6)-month LIBOR rate (as quoted in the “Money Rates” section of The Wall Street Journal or any other similarly reputable published source on the 31st day after the date of the invoice, or the next Business Day, if such day is not a Business Day) plus 3% (the “Interest Rate”, with the applicable rate to be recalculated every six months), until such amounts, together with all accrued and unpaid interest thereon, are paid in full, and (ii) Service Recipient shall pay, as additional fees, all reasonable out-of-pocket costs and expenses incurred by Service Provider in attempting to collect and collecting amounts due under this Section 3, including all reasonable attorneys fees and expenses.
     (ii) In the event that Service Recipient in good faith disputes an invoice submitted by Service Provider, Service Recipient may withhold payment of any amount subject to the dispute; provided, however, that (x) Service Recipient shall continue to pay all undisputed amounts in accordance with the terms hereof, (y) Service Recipient shall notify Service Provider, in writing, of any disputed amounts and the reason for any dispute by the due date for payment of the invoice containing any disputed charges and (z) in the event any dispute is resolved in the Service Provider’s favor, any amount that the Service Recipient should have paid shall be deemed to have accrued interest at the Interest Rate from the date such payment should have been made. In the event of a dispute regarding the amount of any invoice, the Parties shall use all reasonable efforts to resolve such dispute within thirty (30) days after Service Recipient provides written notification of such dispute to Service Provider. Each Party shall provide full supporting documentation concerning any disputed amount or invoice within thirty (30) days after written notification of the dispute. Unpaid fees that are under good faith dispute shall not be considered a basis for default hereunder. To the extent that a dispute regarding the amount of any invoice cannot be resolved pursuant to this Section 2(b)(ii), the dispute resolution procedures set forth in Section 9 herein shall apply.
     3. Cooperation.
          (a) Service Recipient and Service Provider shall cooperate and work together in good faith to develop a global transition plan in order to facilitate a smooth and orderly termination of a Service by its applicable Termination Date or at such earlier time as Service Recipient terminates Service Provider’s performance of the Services in accordance with Section 11. In furtherance of the foregoing, Service Provider will, if requested and at Service Recipient’s expense, provide Service Recipient with reasonable support necessary to transition or migrate the services to Service Recipient or any third party or parties chosen by the Service

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Recipient, which may include consulting and training and providing reasonable access to data and other information and to Service Provider’s employees; provided, however, that such activities shall not unduly burden or interfere with Service Provider’s business and operations.
          (b) It is understood that it will require significant efforts by the Parties to implement this Agreement and ensure performance hereunder. Service Recipient shall (i) cooperate with and provide Service Provider with such information and documentation as is reasonably necessary for Service Provider to perform the Services; and (ii) perform such other duties and tasks as may be reasonably required to permit Service Provider to perform the Services, including (x) cooperating in obtaining any consents or approvals from third parties necessary to facilitate Service Provider’s ability to provide the Services and (y) upon thirty (30) days prior written notice by the Service Provider, conducting such testing as may be reasonably required by Service Provider in connection with any updates or changes to the applicable systems or processes involved in providing a Service. A Service Provider shall not be deemed to be in breach of its obligations to provide or make available any Service to the extent that Service Recipient has not provided information and access to appropriate personnel that is reasonably necessary for the performance of such Service.
          (c) Service Recipient shall use commercially reasonable efforts to make or obtain any approvals, permits and licenses and implement any systems as may be necessary for it to perform the Services independently in each country and applicable jurisdiction as soon as practicable following the Distribution Date.
          (d) Upon Service Recipient’s written request and without prejudice to Service Recipient’s direct rights against a Third Party Provider, Service Provider shall use commercially reasonable efforts to pursue any warranty or indemnity under any contract Service Provider or its Subsidiaries may have with a Third Party Provider with respect to any Service provided to Service Recipient by such Third Party Service Provider.
          (e) Service Provider shall use commercially reasonable efforts to obtain, if required, the consent of any relevant Third Party Provider (a “Third Party Consent”) or a license from any relevant Third Party Provider (a “Third Party License”), and Service Recipient shall, as necessary, cooperate with Service Provider in obtaining any such Third Party Consent or Third Party License. If a Third Party Consent or Third Party License cannot be obtained on reasonable terms, the Parties will use commercially reasonable efforts to arrange for an alternative method of obtaining any such Service on Service Recipient’s behalf (“Alternative Method”), which may include Service Provider providing such Service itself. If there is any Third Party Consent or Third Party License which was not required as of the date hereof but will subsequently be required before the Minimum Service Period expires for a particular Service, Service Provider shall identify in writing to Service Recipient such Third Party Consent or Third Party License within sixty (60) days of the date hereof.
          (f) The Parties shall use the fiscal month, quarter and year ends as set forth in Schedule D in connection with the provision and receipt of applicable Services hereunder, for so long as such Services are being provided.

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          (g) In connection with the provision of Services hereunder, except as provided pursuant to Section 2(a)(iii) for local currency conversion for invoices, the Parties shall use the same methodology to determine the appropriate foreign exchange conversion rate as used in the twelve month period prior to the Distribution Date, which may be determined or based upon the average for the month or other applicable period or the spot rate at the end of such month or period or otherwise.
     4. Performance Standard; Reports; Personnel.
          (a) Except as otherwise provided in the Services Schedule and Section 1(a) herein, nothing in this Agreement shall require or be interpreted to require Service Provider to provide a Service to Service Recipient beyond the scope and content of such Service as provided by Service Provider to the ITT Retained Business, Water Business or Defense Business, as the case may be, during the twelve month period prior to the Distribution Date, excluding any actions taken in contemplation of the Distribution.
          (b) Service Provider shall not make changes in the manner of providing a Service unless (i) Service Provider is making similar changes in a Self-Service being performed for itself or its Subsidiaries or such changes are de minimus, in each case so long as such changes do not adversely affect the level of service, security or control of such Service or the scope or content thereof required pursuant to Sections 1(a) and 4(a) above, (ii) such changes are required by Service Provider or Service Recipient pursuant to applicable Law (including changes required by Service Provider or Service Recipient in connection with the provision of the Services to the other Party) or (iii) Service Recipient provides its prior written consent (which shall not be unreasonably withheld, conditioned or delayed) to such changes (in each case, for the avoidance of doubt, with the costs of any such change to be included in the calculation of Monthly Costs). In the event Service Provider determines to change the location of delivery of any Service, Service Provider shall provide Service Recipient with thirty (30) days prior written notice. All Services shall be performed in compliance with applicable Law, including all applicable U.S. and non-U.S. laws and regulations relating to export controls, sanctions, and imports, including without limitation those regulations maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the Export Administration Regulations maintained by the U.S. Department of Commerce, Bureau of Industry and Security, and the International Traffic in Arms Regulations maintained by the U.S. Department of State, Directorate of Defense Trade Controls.
          (c) In performing the Services, Service Provider shall prepare and furnish to Service Recipient reports concerning the Services with such reports to contain substantially the same data, in substantially the same format, and prepared and delivered on substantially the same timetable, as reports prepared during the twelve month period prior to the Distribution Date (excluding any reports solely prepared in contemplation of the Distribution), except as may be otherwise required by Service Recipient or Service Provider pursuant to applicable Law. Upon Service Recipient’s written request for modifications to the reporting and data transfer practices reasonably required to assist Service Recipient in transitioning off the Service, Service Provider shall cooperate and consult in good faith with Service Recipient to make such modifications; provided that if Service Provider reasonably determines in its sole discretion that any such

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modification may cause Service Provider to be in breach of its obligations to the other Party hereunder (including as a result of breaching its obligations as a Service Provider to the other Party as Service Recipient), then Service Provider shall not be under any obligation to make such modifications.
          (d) Service Provider shall use commercially reasonable efforts consistent with past practice to make available such personnel as may be required to provide the Services. Service Provider shall have the right to designate which personnel it will assign to perform the Services. Service Provider also shall have the right to remove and replace any such personnel at any time or designate any of its Subsidiaries or a Third Party Provider (subject to Section 1(a) herein) at any time to perform the Transition Services; provided, however, that Service Provider shall use its commercially reasonable efforts consistent with past practice to limit the disruption to Service Recipient in the transition of the Services to different personnel. Subject to and consistent with Section 2(a)(ii), Service Provider shall have no obligation to retain any individual employee for the sole purpose of providing a particular Transition Service.
          (e) In the event Service Recipient or any of it Subsidiaries hires away an employee of Service Provider or its Subsidiaries, and such employee was providing Services to Service Recipient and will not continue to provide such Service, Service Provider shall have the option, in its sole discretion (in addition to any other remedies available to it under the Distribution Agreement or otherwise), upon ten (10) Business Days written notice to Service Recipient to reduce its obligations with respect to such Service (with a proportionate reduction in the applicable Monthly Costs) effective on the date of such employee’s termination of employment with Service Provider. Any provision of Service thereafter pursuant to such a reduction in Service Provider’s obligations shall be deemed to be consistent with Service Provider’s obligations under this Agreement, so long as Service Provider satisfies the other obligations contained in this Section 4 with respect to such Service.
          (f) Each Party agrees that it shall take appropriate action by instruction of or agreement with its personnel (including any Third Party Provider) to ensure that all such personnel performing or otherwise involved with Services shall be bound by and comply with all of the terms and conditions of this Agreement.
          (g) In the event Service Provider has received a notice of default or breach in the performance of a Service hereunder (including as a result of substantial errors in the performance of such Service), it will use its commercially reasonable efforts to cure such default or breach. In the event Service Provider is unable to cure such default within thirty (30) days from receipt of notice thereof, in addition to the rights available under Section 11, there shall be an adjustment to Monthly Costs to reflect the costs to Service Recipient associated with such default, breach or error, including any reasonable out-of-pocket costs and expenses incurred by Service Recipient in retaining any Third Party Provider to provide such Service or in providing the such Service itself.
          (h) Each Party shall notify the applicable other Party as promptly as practicable after becoming aware of any breach of this Agreement committed by either it or the applicable other Party. Service Provider shall notify Service Recipient of any event that may reasonably be expected to materially impact a Service provided hereunder, which may include a

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Termination Notice (as defined in Section 11(b)) provided by the other Party as Service Recipient hereunder or a notice of termination of a Self-Service, issued pursuant and in accordance with, Section 2(a)(v).
          (i) In the event of any conflict, as reasonably determined by Service Provider in its sole discretion, between requests for modification or termination of Services made by the two other Parties and each properly delivered hereunder, Service Provider shall determine which request it received first and, subject to the other terms and conditions of this Agreement, make such modifications or terminations pursuant to the request that was first received before making any modifications or terminations pursuant to any requests received afterwards.
     5. New Services.
          If, after the date hereof and on or prior to March 31, 2012, or, with respect to Services provided in connection with any Transfer that, pursuant to Section 2.6(a) of the Distribution Agreement, is not consummated at or prior to the Effective Time, one hundred (100) days following the actual date of such Transfer (notwithstanding that under Section 2.6(b) of the Distribution Agreement such Transfer may be deemed to have occurred on the Effective Time) the Parties determine that a service required by Service Recipient and provided by Service Provider or one of its Subsidiaries prior to the Distribution Date was inadvertently omitted from the Services Schedules, Service Recipient may request that Service Provider perform such service (“New Service”) in addition to the Services being provided hereunder. Service Provider shall promptly begin performing any New Service consistent with past practice upon a timely written request from Service Recipient (which request may be in the form of email) including (i) a description of the work Service Recipient anticipates being performed by Service Provider in connection with such New Service and (ii) a schedule for commencing and completing such New Service, and Service Provider and Service Recipient shall enter into good faith negotiations to agree to an amendment to the Services Schedules providing for such New Service; provided that if no agreement for an Additional Service Schedule Amendment has been reached in writing in thirty (30) days, such New Service shall be deemed to have a Minimum Service Period expiring on June 30, 2012 and a Termination Date of two years from the Distribution Date, with Monthly Costs as provided for in Section 2(a)(i), calculated as if the amendment to the Services Schedule for such New Service were silent regarding costs and expenses (such amendment or deemed amendment pursuant to the foregoing proviso, an “Additional Service Schedule Amendment”). Any New Service shall be considered a Service hereunder and the Services Schedules shall incorporate, and be deemed to be duly amended by, such Additional Service Schedule Amendment.
     6. Intellectual Property; IT Security.
          (a) Except as provided in the Services Schedules, the Monthly Costs shall include the allocable portion of any amounts that are required to be paid by Service Provider to any third party licensors of software that is used by Service Provider in connection with the provision of any Services hereunder, including (i) license, right-to-use and royalty fees and (ii) any amounts required to obtain the consent of such licensors to allow Service Provider to provide any of the Services hereunder. Service Recipient agrees to comply and cause its Subsidiaries to comply with the terms of any license or other agreement of Service Provider or

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any of its Subsidiaries relating to software that is provided to Service Recipient and is used in connection with the provision of any Services hereunder; provided that in the event that Service Provider enters into new software licenses after the Distribution Date, Service Recipient shall have the prior opportunity to review and confirm its ability to comply therewith, which it shall do in good faith. In the event that Service Recipient provides notice of its inability to comply therewith, Service Provider may at its sole discretion discontinue its provision of any Services under such new software licenses effective after thirty (30) days notice of the same, and Service Recipient shall indemnify Service Provider for any claims by third parties arising out of or in connection with Service Recipient’s noncompliance or violation of such software licenses. Subject to the foregoing, Service Provider shall use commercially reasonable efforts to obtain any consent that may be required from such licensors in order to provide any of the Services hereunder and the Parties shall cooperate to identify any material licenses or consents necessary for such provision and shall use commercially reasonable efforts to minimize the costs associated therewith.
          (b) If the receipt or provision of any Service hereunder requires the use by a Party of the Intellectual Property (other than Trademarks) of the other Party, then such Party and its Subsidiaries shall have the non-exclusive, royalty-free, non-sublicensable (except as required for its and its Subsidiaries’ receipt or provision of Services) right and license to use such Intellectual Property for the sole purpose of, and only to the extent necessary for, the receipt or provision of such Services hereunder, pursuant to the terms and conditions of this Agreement. This license does not permit a Party to access, possess, or modify the source code of the other Party or to reverse engineer the software of the other Party. Upon the Termination Date applicable to such Service, or the earlier termination of any Services in accordance with Section 11, the license herein to the applicable Intellectual Property will terminate; and the applicable Service Recipient and/or Service Provider shall cease all use of the Intellectual Property licensed hereunder. Nothing in this Section 6(b) shall be deemed to limit, modify or terminate any License Agreement between the Parties.
          (c) Subject to the limited licenses granted in Section 6(b), each Party shall exclusively own any Intellectual Property that it creates, develops or invents in connection with the provision of any Services hereunder.
          (d) While using or accessing any computers, systems, software, networks, information technology or related infrastructure or equipment (including any data stored thereon or transmitted thereby) (“Systems”) of the other Party (whether or not a Service), each Party shall and shall cause each of its Subsidiaries to, adhere in all respects to the other Party’s controlled processes, policies and procedures (including any of the foregoing with respect to Confidential Information, data, communications and system privacy, operation, security and proper use) as in effect on the Distribution Date or as communicated to such Party from time to time in writing.
          (e) Those employees of Service Recipient and Service Provider (or their respective Affiliates) having access to the other Party’s Systems may be required by Service Provider or Service Recipient, as the case may be, to enter into a customary non-disclosure agreement in connection with, and as a condition to, such access.

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     7. Records.
          Service Provider shall provide to Service Recipient, taking into consideration the financial reporting, internal controls and other public company requirements of Service Recipient, all information and records reasonably required to maintain full and accurate books relating to the provision of Services to the extent any such information and/or records were provided or maintained during the twelve month period prior to the Distribution Date, excluding any actions taken in contemplation of the Distribution. Upon reasonable notice and reasonable request from the Service Receiver, and at the Service Receiver’s cost, Service Provider shall (a) make available for inspection and copying by Service Receiver’s agents or representatives such information, books and records relating to the Services during reasonable business hours and (b) certify that the controls in effect prior to the Distribution Date continue to be in effect, or if Service Provider is aware of any instances where such controls are not so in effect, in lieu of certification for such instances, provide a list of such instances and descriptions of the change in such controls thereof.
     8. Force Majeure; Reduction of Services.
          No Party (or any Person acting on its behalf) shall have any liability or responsibility for failure to fulfill any obligation (other than a payment obligation) under this Agreement so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event: (a) notify the other applicable Parties of the nature and extent of any such Force Majeure condition and (b) use due diligence to remove any such causes and resume performance under this Agreement as soon as feasible. Notwithstanding the foregoing, Service Recipient shall be entitled to terminate Services so affected by a Force Majeure upon fifteen (15) day prior written notice in respect of any such delay or failure resulting from any such Force Majeure without any penalty or obligation to pay for Services not performed; provided that, for the avoidance of doubt, Service Recipient shall remain responsible, pursuant to and in accordance Section 2(a)(ii), for its portion of any severance and retention costs for any such Services.
     9. TSA Managers; Dispute Resolution.
          (a) Each Party shall nominate in writing one representative to act as the primary contact with respect to the provision and receipt of Services (a “TSA Manager”), with the initial TSA Managers as listed on Schedule E. Each Party may, at its discretion, from time to time select another individual to serve in these capacities during the term of this Agreement; provided, however, each Party shall notify the other Party promptly (and in any event within five (5) Business Days) of any change in an individual serving in this capacity, setting forth the name and contact information of the replacement, and stating that such replacement is authorized to act for such Party in accordance with this Section 9(a).
          (b) The TSA Managers shall meet as expeditiously as possible to resolve any dispute hereunder, and notwithstanding anything in Article IX (Dispute Resolution) of the Distribution Agreement to the contrary, in the event any dispute is not so resolved within thirty

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(30) days, a TSA Manager may provide written notice of such dispute to the Chief Financial Officer of each Party (or such other executive as designated by the Chief Executive Officer of such Party), who shall attempt within a period of fifteen (15) days following the end of such previous thirty (30) day period to conclusively resolve any such issue, and in the event the dispute remains unresolved following such fifteen (15) day period, either Party may submit the dispute to mediation in accordance with Section 9.2 (Mediation) of the Distribution Agreement (provided that, for the avoidance of doubt, the forty-five (45) day waiting period referenced therein shall be inapplicable), and if any dispute remains unresolved after the Mediation Period (as defined in the Distribution Agreement), such dispute shall be determined, at the request of either Party, by arbitration in accordance with Section 9.3 (Arbitration) of the Distribution Agreement and the other applicable provisions of Article IX (Dispute Resolution) of the Distribution Agreement. Each Party may treat an act of any other Party’s TSA Manager or Chief Financial Officer (or such other executive as designated by the Chief Executive Officer of such other Party), in each case that is consistent with the provisions of this Agreement, as being authorized by such other Party to resolve such dispute without inquiring behind such act or ascertaining whether such TSA Manager or Chief Financial Officer (or such other executive as designated by the Chief Executive Officer of such other Party) had authority to so act; provided, however, that none of the TSA Managers or Chief Financial Officer or other executives so designated shall have authority to amend this Agreement, except as otherwise provided pursuant to Section 16.
          (c) In the event of any dispute between the Parties regarding a Service, prior to the applicable Termination Date, Service Provider shall not discontinue the supply of any such Service, unless so provided for in a settlement agreement between the Parties or arbitral determination pursuant to and in accordance with Section 9(b) herein and Article IX of the Distribution Agreement or as requested by Service Recipient pursuant to a Termination Notice.
     10. Disclaimer; Limited Liability.
          (a) Service Recipient acknowledges that Service Provider is not in the business of providing the Services and that the Services being provided pursuant to this Agreement are provided as an accommodation to Service Recipient. Other than in the event of Service Provider’s gross negligence or willful misconduct, Service Provider will not be liable for any error or omission in rendering Services under this Agreement, or for any defect in Services so rendered; provided that if there is a substantial error in any of the Services, Service Provider shall use commercially reasonable efforts to attempt to correct the error, or if Service Provider is unable to so correct such error, to provide an adjustment to the Monthly Cost for such Service in reasonable proportion to that which the error bears to the Service provided for such month, which adjustment may, pursuant to Section 4(g), include any reasonable out-of-pocket costs and expenses incurred by Service Recipient in retaining a Third Party Provider to provide such Service or in providing such service itself. Other than in the event of Service Recipient’s gross negligence or willful misconduct, and other than for the Monthly Costs, severance and retention costs owed under Section 2(a)(ii) and other amounts expressly owed hereunder, Service Recipient will not be liable for any damages caused in connection with the Services provided under this Agreement.

12


 

          (b) Service Provider shall have no responsibility to maintain insurance to cover any loss or damage to goods or equipment to which Service Recipient has title that are in the possession or control of Service Provider, its Subsidiaries or a Third Party Provider as a result of this Agreement and the risk of loss with respect to such goods or equipment shall be solely with Service Recipient. Service Recipient shall obtain from its insurance company a waiver of subrogation on behalf of Service Provider and its Subsidiaries effective as of Distribution Date. Service Recipient shall have no responsibility to maintain insurance to cover any loss or damage to goods or equipment to which Service Provider has title that are in the possession or control of Service Recipient or its Subsidiaries as a result of this Agreement and the risk of loss with respect to such goods or equipment shall be solely with Service Provider. Service Provider shall obtain from its insurance company a waiver of subrogation on behalf of Service Recipient and its Subsidiaries effective as of the Distribution Date.
          (c) NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESSED OR IMPLIED (INCLUDING WARRANTIES OF NON-INFRINGEMENT, MERCHANTIBILITY, ACCURACY, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION), ARE MADE BY SERVICE PROVIDER OR ANY OF ITS AFFILIATES WITH RESPECT TO THE PROVISION OF SERVICES UNDER THIS AGREEMENT AND, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL SUCH REPRESENTATIONS OR WARRANTIES ARE HEREBY WAIVED AND DISCLAIMED. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, UNDER NO CIRCUMSTANCES, INCLUDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY REMEDY, SHALL SERVICE PROVIDER BE LIABLE FOR, INCLUDING BUT NOT LIMITED TO, ANY LOST PROFITS, REMITTANCES, COLLECTIONS, INVOICES, PENALITIES, INTEREST OR SPECIAL, INCIDENTIAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES CAUSE BY THE PERFORMANCE OF, ANY DELAY IN THE PERFORMING, FAILURE TO PERFORM OR DEFECTS IN THE PERFORMANCE OF, THE SERVICES CONTEMPLATED TO BE PERFORMED BY SERVICE PROVIDER PURSUANT TO THIS AGREEMENT, REGARDLESS OF WHETHER A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
     11. Term and Service Termination Dates.
          (a) This Agreement (other than Sections 9, 10, 11 and 13) shall terminate upon the last of the Termination Dates in respect of all Services to be provided hereunder; provided that the rights of the parties in respect of any claims that have accrued prior to such termination shall survive such termination.
          (b) For each Service, the minimum service period (“Minimum Service Period”) during which Service Provider is obligated to provide such Service to Service Recipient is set forth on the Services Schedule. The Parties agree to cooperate if necessary to adjust such Minimum Service Period (and the applicable Termination Date) to end on a date that is the end of a calendar or fiscal month, as deemed appropriate. Service Recipient may terminate any Service prior to its Termination Date by providing to Service Provider written notice of termination, which shall be deemed irrevocable upon delivery (a “Termination Notice”), not less

13


 

than (i) thirty (30) days before the date of such earlier termination if the Service is to be terminated on or before December 31, 2011, (ii) sixty (60) days before the date of such earlier termination if the Service is to be terminated after December 31, 2011 but on or before June 30, 2012, (iii) ninety (90) days before the date of such earlier termination if Service is to be terminated after June 30, 2012 but on or before December 31, 2012 and (iv) one hundred and twenty (120) days before the date of such earlier termination if Service is to be terminated on or after January 1, 2013; provided that if the Services Schedule indicates that any Service is dependent on one or more other Services, then each such Service must be terminated together; provided further that any termination may be on a location by location basis if so indicated on the Services Schedules. In the event a Service is terminated prior to the end of its Minimum Service Period pursuant to Service Recipient’s Termination Notice, Service Recipient shall pay a make-whole fee equal to the actual out-of-pocket costs and any additional costs that would have been incurred by Service Provider if such Service had not been terminated (which costs, for the avoidance of doubt, exclude the 2% and 10% increases described in Section 2(a)(i)) between the actual date of termination of the Service and the applicable date on which the Minimum Service Period expires (subject to Service Provider exercising commercially reasonable efforts to mitigate such costs). Notwithstanding the foregoing, upon the receipt of a Termination Notice, if Service Provider is unable to transition the applicable Service to the Service Recipient or its designee in a commercially reasonable manner which does not unduly disrupt the Service on the requested termination date, Service Provider shall use commercially reasonable efforts consistent with past practice to transition such Service as soon as possible, and any resulting third party, out-of-pocket costs to Service Recipient shall be shared equally between Service Provider and Service Recipient.
          (c) In the event either Party defaults in the performance of any of its obligations under this Agreement, and if such default is not excused and not cured within thirty (30) days after written notice from the other Party specifying such default, then the non-defaulting Party may at any time thereafter terminate, at its option, any such Service that is the subject of such default by giving five (5) days prior written notice; provided that if no such termination notice is given within fifteen (15) days after the end of the thirty (30) day cure period, then the non-defaulting Party waives all rights to terminate such Service with respect to such default; provided further, that such fifteen (15) day period referred to in the immediately foregoing proviso shall be extended if (x) the Parties dispute whether there has been a default hereunder or (y) agree that there has been a default hereunder and have a dispute related to such default, and in either case are attempting to resolve such dispute pursuant to Section 9(b) until ten (10) days after there has been a final determination pursuant to the procedures in Section 9(b).
     12. Independent Contractor.
          The Parties hereto understand and agree that this Agreement does not make either of them an agent or legal representative of the other for any purpose whatsoever. No Party is granted, by this Agreement or otherwise, any right or authority to assume or create any obligation or responsibilities, express or implied, on behalf of or in the name of any other Party, or to bind any other Party in any manner whatsoever. The Parties expressly acknowledge (i) that Service Provider is an independent contractor with respect to Service Recipient in all respects,

14


 

including the provision of the Services, and (ii) that the parties are not partners, joint venturers, employees or agents of or with each other.
     13. Confidentiality.
          (a) Any Confidential Information of either Party shall be subject to Section 8.6 of the Distribution Agreement. With respect to any information disclosed by one Party to another Party for the purpose of this Agreement or otherwise accessible to such other Party during the performance hereunder (“Confidential Information”), the Party receiving such Confidential Information agrees that it will use the same skill and care as set forth in Section 4(a) to prevent the disclosure or accessibility to others of the disclosing Party’s Confidential Information and will use such Confidential Information only for the purposes of this Agreement, the Distribution Agreement and the Ancillary Agreements. The receiving Party and its employees, representatives and agents (including any Third Party Provider) (collectively, the “Recipient Parties”) shall only disclose and permit access to the other’s Party’s Confidential Information to such Recipient Parties who have a need to know such Confidential Information for the purposes of this Agreement, the Distribution Agreement and the Ancillary Agreements. For Confidential Information provided with respect to any Service, the obligations of the Recipient Parties pursuant to this Section 13 shall expire on the date that is five (5) years from the termination of such Service. Each Party shall provide prompt written notice of any breach of the obligations under this Section 13 by such Party or its Recipient Parties and shall use commercially reasonable efforts to assist the other Party in remedying any such breach.
          (b) Specifically excluded from the definition of Confidential Information is any and all information that:
     (i) is independently developed by or on behalf of a Recipient Party without use of or reference to Confidential Information;
     (ii) is or becomes available to the public, other than as the result of a breach by a Recipient Party of the confidentiality obligations under this Agreement; or
     (iii) is rightfully received from a third party not known by the Recipient Party to be bound by an obligation of confidentiality to the disclosing Party.
          (c) If the Recipient Party is required to disclose Confidential Information by law, process or regulation, to the extent legally permissible, such Recipient Party shall promptly notify the disclosing Party, reasonably cooperate with the disclosing Party to the extent it may seek to limit such disclosure and, insofar as a protective order or waiver from the disclosing Party is not obtained, only disclose such Confidential Information as is required to be disclosed.
          (d) In connection with any permitted disclosure of this Agreement to any third party, each Party shall redact the portions of the Services Schedules that are not relevant to such third party’s inquiry.
          (e) It is further understood and agreed that money damages may not be a sufficient remedy for any breach of this Section 13 and that each Party shall be entitled to seek

15


 

equitable relief, including injunction and specific performance, as remedy for any such breach. Such remedies shall not be deemed to be the exclusive remedies for a breach, but shall be in addition to all other remedies herein described available at law or equity.
     14. Beneficiary of Services; No Third Party Beneficiaries.
          This Agreement is for the sole benefit of the Parties hereto, and nothing expressed or implied shall give or be construed to give any person any legal or equitable rights hereunder, whether as a third-party beneficiary or otherwise. Each Party agrees, and each Party in its capacity as a Service Recipient represents and warrants, that the Services shall be provided solely to, and shall be used solely by, Service Recipient and its Subsidiaries. Service Recipient shall not resell or provide the Services to any other Person, or permit the use of the Services by any Person other than Service Recipient and its Subsidiaries.
     15. Entire Agreement.
          This Agreement, together with the Distribution Agreement and the other Ancillary Agreements, constitutes the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior agreements, understandings and negotiations, both written and oral, between the Parties with respect to the subject matter hereof. In the event and to the extent that there shall be a conflict between the provisions of this Agreement and the provisions of the Distribution Agreement or any other Ancillary Agreement, the Parties agree that this Agreement shall govern. The Parties agree that, in the event of an express conflict between the terms of this Agreement and a Services Schedule, the terms of the Services Schedule shall govern.
     16. Amendment; Waiver.
          This Agreement and the Services Schedules may be amended, and any provision of this Agreement may be waived, if but only if such amendment or waiver is in writing and signed, in the case of an amendment, by each of the Parties, or in the case of a waiver, by the Party against whom the waiver is effective. No failure or delay by either Party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
     17. Notices.
          All notices, requests and other communications to any Party hereunder shall be in writing (including telecopy or similar writing) and shall be given as follows:
          if to ITT or to any of its Affiliates:
ITT Corporation
1133 Westchester Avenue
Suite 3000
White Plains, NY 10604

16


 

Attn: General Counsel
Facsimile: (914) 696-2970
          if to Exelis or to any of its Affiliates:
Exelis Inc.
1650 Tysons Boulevard
Suite 1700
McLean, VA 22102
Attn: Chief Legal Officer
Facsimile:
          if to Xylem or to any of its Affiliates:
Xylem Inc.
1133 Westchester Avenue
Suite 2000
White Plains, NY 10604
Attn: General Counsel
Facsimile:
or to such other address or telecopy number and with such other copies, as such Party may hereafter specify for the purpose of notice to the other parties. Each such notice, request or other communication shall be effective (i) if given by fax, when such fax is transmitted to the fax number specified in this Section 17 and evidence of receipt is received or (ii) if given by any other means, upon delivery or refusal of delivery at the address specified in this Section 17.
     18. Non-Assignability.
          Neither this Agreement nor any of the rights, interests or obligations of either Party hereunder may be assigned or transferred by any such Party without the prior written consent of the other Party (not to be unreasonably withheld, delayed or conditioned), and any purported assignment, without such prior written consent shall be null and void; provided a Party may assign or transfer all its rights hereunder without such consent to an acquirer in connection with a sale of all or substantially all of its assets or other similar change in control of such Party.
     19. Further Assurances.
          From time to time after the date hereof, without further consideration, each Party shall use commercially reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things reasonably proper or advisable under applicable Law, and execute and deliver such documents as may be required or appropriate to carry out the provisions of this Agreement and to consummate, perform and make effective the transition contemplated hereby.

17


 

     20. Definitions and Rules of Construction.
     (a) Defined terms used in this Agreement have the meanings ascribed to them by definition in this Agreement or in the Distribution Agreement.
     (b) This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting or causing any instrument to be drafted.
     (c) Whenever the words “include”, “including”, or “includes” appear in this Agreement, they shall be read to be followed by the words “without limitation” or words having similar import.
     (d) As used in this Agreement, the plural shall include the singular and the singular shall include the plural.
     21. Counterparts; Effectiveness.
          This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. Copies of executed counterparts transmitted by telecopy, telefax or other electronic transmission service shall be considered original executed counterparts for purposes of this Section 21, provided that receipt of copies of such counterparts is confirmed. This Agreement shall become effective when each Party has received a counterpart hereof signed by the other Party hereto.
     22. Section Headings.
          The section headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
     23. Severability.
          If any provision of this Agreement shall be declared by any court of competent jurisdiction to be illegal, void or unenforceable, all other provisions of this Agreement shall not be affected and shall remain in full force and effect, and the Parties shall negotiate in good faith to replace such illegal, void or unenforceable provision with a provision that corresponds as closely as possible to the intentions of the parties as expressed by such illegal, void, or unenforceable provision.
     24. Governing Law.
          This Agreement shall be governed by and construed in accordance with the Laws, but not the Laws governing conflicts of Laws (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law), of the State of New York.

18


 

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
         
  ITT CORPORATION
 
 
  By:      
    Name:      
    Title:      
 
         
  EXELIS INC.
 
 
  By:      
    Name:      
    Title:      
 
         
  XYLEM INC.
 
 
  By:      
    Name:      
    Title:      
 

19


 

Schedule AB1
eBuyITT INVOICE PROCESSING
SERVICES
Capitalized terms used herein and not otherwise defined shall have the meaning assign such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, expect where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Philip Galluzzi
ITT Corporation
  Manager, TDS Business
Relationships & Corporate Travel
      phil.galluzzi@ittcorp.net
 
           
Mary Marts Xylem Inc.
  Sr. Financial Analyst, Fluid and Motion Control       mary.marts@itt.com
GENERAL SERVICE DESCRIPTION
Service Provider will perform eBuyITT Invoice Processing Services for Service Receiver.
Service Receiver and its Subsidiaries will utilize the Service Provider’s resources based on the functionality, processes, input and output screens and documents that support the Service Provider’s business and business processes in the twelve months prior to the Distribution Date.
SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, the Service Provider shall provide to Service Recipient the services identified below (collectively, the “Services”).

1


 

                         
                Minimum Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
      Provide eBuyITT Invoice Processing Services:                
 
                       
 
     
     eBuyITT Invoice Review — The Service Provider will receive designated invoice submissions from the Service Receiver’s eBuyITT enabled Suppliers (via EDI transaction or manual entry) and prep invoices and feed the submitted invoices to Perfect Commerce. The Service Provider will use the daily invoice feeds from Perfect Commerce to prep invoices for financial back office operations.
  4,174 Hard Copy
Invoices Annually*
/ 16,501 Invoices
Annually
           
 
                       
 
     
     eBuyITT Exception Handling and Resolution — The Service Provider will reconcile and re-validate invoices flagged with validation errors. Once the invoice is validated, the Service Provider will process it as stated above. Mismatched invoices will not be paid without resolution.
  1,300 Transactions
Annually
           
 
                       
 
     
     Invoice Recording & Payment Processing — Service Provider will send the balanced invoices to an internal business unit within the Service Provider, on a daily basis, for additional Accounts Payable recording and payment processing for the Service Receiver.
  4,174 Hard Copy
Invoices Annually*
/ 16,501 Invoices
Annually
           
                         
SS-eBuyITT—01
  eBuyITT Invoice
Processing Services
 
     Vendor File Maintenance — The Service Provider will receive vendor master data for new vendor setup from an internal business unit to perform Vendor File Maintenance.
  As Needed Basis     18     Cost plus 2% - 10%
                         
 
     
     Tax Exempt Certificate File Maintenance — The Service Provider will receive Service Receiver Supplier’s tax exempt vendor certificates from an internal business unit to maintain tax exempt master file.
  4,174 Hard Copy
Invoices Annually*
/ 16,501 Invoices
Annually
           
 
                       
 
     
     Cost Distribution Services — Service Provider will use validated invoices as documented above to provide Service Receiver a cost distribution file transmitted via FTP and/or email, or transmitted to an internal business unit data and centralized tax services via the current Purchase to pay distribution process to all Service Receiver’s business units that are currently on Purchase to Pay. The Service Provider will provide cost distribution and taxability indicators, per agreed frequency to the Service Receiver’s business units that are not currently supported by the Shared Services Accounts Payable (P2P) process).
  As Needed Basis            
 
                       
       
     eBuyITT Aged-Invoice Workflow Notification — Service Provider will perform routine communication of aged open invoices requiring Service Receiver triage and action.
  As Needed Basis            

2


 

 
*   Note: The BAU transaction volume for hard copy invoices, and not the total invoice volume (i.e., both electronic and hard copy), will be used as the pre-distribution date baseline to calculate changes in service volumes (plus or minus 10%) as defined in the next section.
Service Volumes Greater or Less Than Observed Pre-Distribution Date
Service Provider will deliver the same volume of Services as delivered in the 12 months prior to the Distribution Date, plus or minus 10% (such activity, including any such 10% deviation, “Business as Usual activities” or “BAU”) at no additional cost per unit. Service Provider will accommodate Service Receiver’s inorganic (Mergers, Acquisitions, and Divestitures) activities on a time and materials basis with respect to the one-time set-up fees. The table below will then apply following the completion of the one-time set-up activities
         
Scenario   One-Time Setup Fees   Monthly Fees
Service Volume within BAU [Note: BAU already includes +/- 10% of pre-distribution date volumes]
  No incremental one-time fees when Service Receiver utilizes services and structure as-is with no changes under this agreement   Steady-State fee structure for requisite service as documented below
 
       
Service Volume greater or less than BAU
  Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver provided the Service Receiver utilizes services and structure as-is with no significant changes under this agreement   Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver incremental to the base service costs documented below for the requisite service
Ad-Hoc development/services or processing of reports consistent with what was provided prior to the distribution date will be supported as part of this agreement. Service Provider will use commercially reasonable efforts based on provider’s current abilities to accommodate regulatory or legal ad-hoc requests. Ad-hoc requests which may need to be performed to assist Service Receiver in meeting new legal obligations will be provided on a time and materials basis as described in the Additional Pricing section of this agreement. Any changes to 3rd party relationships which require interface modifications or re-writes (e.g., Benefits provider change) are not included as part of the scope of this agreement. Should the Service Receiver require such changes, Parties agree to negotiate in good faith with regard to such modification. In the event modifications to the services provided are required by law for only the Service Recipient and such modifications increase the cost for Service Provider, Service Recipient that requires the modifications shall pay all the additional costs including the costs for the other Service Recipients.

3


 

Exit Services
The following services will be provided upon receipt of a Termination Notice to exit from this Service.
             
Service #   Service Name   Description of Service   Service Charge ($/hour)
 
      Service Provider will make commercially reasonable efforts to assist Service Receiver in exiting of this agreement. These efforts include:    
 
           
 
     
     Support of data extraction requests from the Service Receiver
   
 
           
SS-eBuyITT-02
  eBuyITT Invoice
Processing Services
Migration
 
     Providing Subject Matter Expertise in helping the Service Receiver understand current state business processes, and current state functional data mapping
  Time and Materials Based on Additional Pricing Section
 
           
 
      Service Provider will provide the following knowledge transfer services:    
 
           
SS-eBuyITT-03
  eBuyITT Invoice
Processing Services
Knowledge Transfer
 
     Existing non-sensitive documentation maintained by the Service Provider will be given to the Service Receiver as it relates to eBuyITT services
  Time and Materials Based on Additional Pricing Section
Supplemental Services
For requests for supplemental services relating to eBuyITT Invoice Processing by Service Receiver not mentioned in this Schedule or not included within the costs documented in this agreement, Service Receiver will provide a discreet project request and submit such request to Service Provider using the formalized Change Request attached as Annex A for consideration by Service Provider.
Where notice is required a number of business days prior to some required action by Service Provider, notice must be received by 12 noon Eastern Time to be counted as received during such business day. Service Provider shall, within a commercially reasonable period, provide a price quote to be commercially reasonable based on the current cost of the Services to Service Receiver taking into account, such items as the specific time the request was made, service delivery volumes, exit planning activities, and other activities Service Provider is currently engaged in at the time of the request, but not later than 30 days after the request was made. If Service Provider, in its sole discretion determines (i) such request would increase the ongoing operating costs for Service Provider (as a service recipient) or any other service receiver or (ii) that it is not capable of making such changes with its current staff during the time period requested without interrupting the Services provided to itself or any other service receiver. Service Provider need not provide a price quote or perform the services. Where a price quote is provided, Service Provider shall provide the service requested upon acceptance of the price.

4


 

LOCATIONS
Services are initially provided from Palm Coast, FL USA to other USA locations.
PREREQUISITES/DEPENDENCIES
    Service Receiver will maintain current Cost Distribution data delivery methodologies (e.g., FTP drop site/email attachment receipt).
 
    If Service Receiver or their suppliers provides inaccurate information to Service Provider it will be the responsibility of the Service Receiver to rectify any problems and bear any costs incurred to rectify the issue.
 
    Security and access controls will be maintained as set forth in the Master Services Agreement.
 
    Service Receiver must actively be engaged on the GSCS Service Agreement from Global Supply Chain Services (GSCS) and utilize Perfect Commerce as the eProcurement platform for the duration this agreement is in effect.
SERVICE LEVEL
Service Provider will classify incidents at its own discretion. Such classifications shall be consistent with the priorities Service Provider set for itself as a recipient of services.
In the event incidents cannot be resolved, Service Provider shall promptly notify Service Receiver and work together to try and resolve such incidents.

5


 

ADDITIONAL PRICING
Hourly Rate for Services Not Specified but Provided by Service Provider Employees (including but not limited to modifications, consulting, exit strategy development, transition, etc.) are documented below. Such services will be provided solely at the Service Provider’s discretion. Service Provider is not obligated to provide additional services not specified in this agreement. The employee category is defined by the Service Provider. The rates documented below shall be commercially reasonable and designated by the Service Provider, closest to its current cost to provide the service. The hourly rates below include the 4.5% amount for inflation each year. These rates apply to internal Service Provider employees only, and should external resources be required, the costs for those external resources will be reviewed with the Service Receiver prior to execution of the project.
Additional Pricing Rates (All in USD)
                         
Location   Low     Medium     High  
USA
  $ 75     $ 100     $ 125  
Greece
  $ 35     $ 46     $ 58  
Mexico
  $ 19     $ 25     $ 31  
Sweden
  $ 75     $ 100     $ 125  

6


 

SCHEDULE AB2
P-CARD TRANSACTION PROCESSING
Capitalized terms used herein and not otherwise defined shall have the meaning assign such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Philip Galluzzi
ITT Corporation
  Manager, TDS Business
Relationships & Corporate Travel
      phil.galluzzi@ittcorp.net
             
Mary Marts
Xylem Inc.
  Sr. Financial Analyst,
Fluid and Motion Control
      mary.marts@itt.com
GENERAL SERVICE DESCRIPTION
Service Provider will perform P-Card Transaction Processing Services for Service Receiver.
Service Receiver and its Subsidiaries will utilize the Service Provider’s resources based on the functionality, processes, input and output screens, and documents that support the Service Provider’s business and business processes in the twelve months prior to the Distribution Date.
SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, the Service Provider shall provide to Service Recipient the services identified below (collectively, the “Services”).

 


 

                         
                Minimum Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
      Provide P-Card Transaction Processing Services:                
 
                       
 
     
  P-Card Invoice Review — The Service Provider will receive a notification and data file from US Bank once monthly containing transaction details and Company information for Service Receiver’s P-Card holders. In addition, the Service Provider will receive from an internal business unit an authorization to proceed with the P-Card File download. The Service Provider will review the file, format data for financial processing, and validate invoices for completeness and accuracy. The Service Provider will flag invoices with validation errors. The Service Provider will use booked AP invoices to generate proprietary data files to be sent via email to Service Receiver’s Treasury Department for payment settlement.
  125 Transactions
Annually
           
 
                       
SS-PCard
Processing-01
  P-Card Transaction
Processing Services
 
  P-Card Exception Handling and Resolution — The Service Provider will reconcile and re-validate invoices flagged with validation errors. Once the invoice is validated, the Service Provider will process it as stated above. Mismatched invoices will not be paid without resolution. For processing credits, the Service Provider will insure that management accounts have monthly debit balances prior to transmission to Service Receiver’s Treasury Department. If a management account is received as a zero or credit balance, the Service Provider will remove credit transactions from being processed in ascending order until the management account reflects a debit balance. The Service Provider will communicate the removed credits to the internal business unit for resolution.
  40 Transactions
Annually
    18     Cost plus 2% - 10%
 
                       
 
     
  P-Card Cost Distribution — The Service Provider will use validated invoices as documented above to provide Service Receiver a Cost Distribution file transmitted via File Transfer Protocol (FTP) and/or email.
  15 Transactions per Month            
 
                       
 
     
  P-Card File Maintenance — The Service Provider will perform file maintenance based on internal business unit approval for new and/or changes to P-Card holders. Only valid, internal business unit-approved cardholder transactions are processed. Three (3) business days prior notice is required to maintain P-Card file.
  As Needed Basis            

2


 

Service Volumes Greater or Less Than Observed Pre-Distribution Date
Service Provider will deliver the same volume of Services as delivered in the 12 months prior to the Distribution Date, plus or minus 10% (such activity, including any such 10% deviation, “Business as Usual activities” or “BAU”) at no additional cost per unit. Service Provider will accommodate Service Receiver’s inorganic (Mergers, Acquisitions, and Divestitures) activities on a time and materials basis with respect to the one-time set-up fees. The table below will then apply following the completion of the one-time set-up activities
         
Scenario   One-Time Setup Fees   Monthly Fees
Service Volume within BAU [Note: BAU already includes +/- 10% of pre-distribution date volumes]
  No incremental one-time fees when Service Receiver utilizes services and structure as-is with no changes under this agreement   Steady-State fee structure for requisite service as documented below
 
       
Service Volume greater or less than BAU
  Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver provided the Service Receiver utilizes services and structure as-is with no significant changes under this agreement   Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver incremental to the base service costs documented below for the requisite service
Ad-Hoc development/services or processing of reports consistent with what was provided prior to the distribution date will be supported as part of this agreement. Service Provider will use commercially reasonable efforts based on provider’s current abilities to accommodate regulatory or legal ad-hoc requests. Ad-hoc requests which may need to be performed to assist Service Receiver in meeting new legal obligations will be provided on a time and materials basis as described in the Additional Pricing section of this agreement. Any changes to 3rd party relationships which require interface modifications or re-writes are not included as part of the scope of this agreement. Should the Service Receiver require such changes, Parties agree to negotiate in good faith with regard to such modification. In the event modifications to the services provided are required by law for only the Service Recipient and such modifications increase the cost for Service Provider, Service Recipient that requires the modifications shall pay all the additional costs including the costs for the other Service Recipients.

3


 

Exit Services
The following services will be provided upon receipt of a Termination Notice to exit from this Service.
             
Service #   Service Name   Description of Service   Service Charge ($/hour)
 
      Service Provider will make commercially reasonable efforts to assist Service Receiver in exiting of this agreement. These efforts include:    
 
           
SS-PCard
Processing-02
  P-Card Transaction
Processing
Migration
 
  Support of data extraction requests from the Service Receiver
  Time and Materials Based on Additional Pricing Section
 
     
  Providing Subject Matter Expertise in helping the Service Receiver understand current state business processes, and functional data mapping
   
 
           
 
      Service Provider will provide the following knowledge transfer services:    
 
           
SS-PCard
Processing-03
  P-Card Transaction
Processing
Knowledge Transfer
 
  Existing non-sensitive documentation maintained by the Service Provider will be given to the Service Receiver as it relates to P-Card Transaction Processing services
  Time and Materials Based on Additional Pricing Section
Supplemental Services
For requests for supplemental services relating to P-Card Transaction Processing by Service Receiver not mentioned in this Schedule or not included within the costs documented in this agreement, Service Receiver will provide a discreet project request and submit such request to Service Provider using the formalized Change Request attached as Annex A for consideration by Service Provider.
Where notice is required a number of business days prior to some required action by Service Provider, notice must be received by 12 noon Eastern Time to be counted as received during such business day. Service Provider shall, within a commercially reasonable period, provide a price quote to be commercially reasonable based on the current cost of the Services to Service Receiver taking into account, such items as the specific time the request was made, service delivery volumes, exit planning activities, and other activities Service Provider is currently engaged in at the time of the request, but not later than 30 days after the request was made. If Service Provider, in its sole discretion determines (i) such request would increase the ongoing operating costs for Service Provider (as a service recipient) or any other service receiver or (ii) that it is not capable of making such changes with its current staff during the time period requested without interrupting the Services provided to itself or any other service receiver. Service Provider need not provide a price quote or perform the services. Where a price quote is provided, Service Provider shall provide the service requested upon acceptance of the price.

4


 

LOCATIONS
     Services are initially provided from Palm Coast, FL, USA to other USA locations.
PREREQUISITES/DEPENDENCIES
    If Service Receiver, or their Supplier(s), provides inaccurate     information to Service Provider it will be the responsibility of the Service Receiver to rectify any problems and bear any costs incurred to rectify the issue.
 
    Service Receiver, in a separate and independent agreement, must utilize US Bank as the P-Card supplier for the duration this agreement is in effect.
 
    Service Receiver must actively be engaged on the GSCS Service Agreement from Global Supply Chain Services (GSCS) for the duration this agreement is in effect.
 
    Service Receiver must maintain current Cost Distribution data delivery methodologies (e.g., FTP drop site/email attachment receipt) and payment settlement interface (Treasury) for the duration this agreement is in effect.
 
    Security and access controls will be maintained as set forth in the Master Services Agreement.
SERVICE LEVEL
     Service Provider will classify incidents at its own discretion. Such classifications shall be consistent with the priorities Service Provider set for itself as a recipient of services.
     In the event incidents cannot be resolved, Service Provider shall promptly notify Service Receiver and work together to try and resolve such incidents.

5


 

ADDITIONAL PRICING
Hourly Rate for Services Not Specified but Provided by Service Provider Employees (including but not limited to modifications, consulting, exit strategy development, transition, etc.) are documented below. Such services will be provided solely at the Service Provider’s discretion. Service Provider is not obligated to provide additional services not specified in this agreement. The employee category is defined by the Service Provider. The rates documented below shall be commercially reasonable and designated by the Service Provider, closest to its current cost to provide the service. The hourly rates below include the 4.5% amount for inflation each year. These rates apply to internal Service Provider employees only, and should external resources be required, the costs for those external resources will be reviewed with the Service Receiver prior to execution of the project.
Additional Pricing Rates (All in USD)
                         
Location   Low   Medium   High
USA
  $ 75     $ 100     $ 125  
Greece
  $ 35     $ 46     $ 58  
Mexico
  $ 19     $ 25     $ 31  
Sweden
  $ 75     $ 100     $ 125  

6


 

SCHEDULE AB3
TELECOM INVOICE PROCESSING
SERVICES (TAPS)
Capitalized terms used herein and not otherwise defined shall have the meaning assign such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Philip Galluzzi
ITT Corporation
  Manager, TDS Business
Relationships & Corporate Travel
      phil.galluzzi@ittcorp.net
 
           
Mary Marts
Xylem Inc.
  Sr. Financial Analyst,
Fluid and Motion Control
      mary.marts@itt.com
GENERAL SERVICE DESCRIPTION
Service Provider will perform Telecom Invoice Processing Services (TAPS), for Long Distance Voice and Data Circuitry, for Service Receiver.
Service Receiver and its Subsidiaries will utilize the Service Provider’s resources based on the functionality, processes, input and output screens and documents that support the Service Provider’s business and business processes in the twelve months prior to the Distribution date.
SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, Service Provider shall provide to Service Recipient the services identified below (collectively, the “Services”).

1


 

                           
                  Minimum Service    
              BAU Transaction   Period    
Service #   Service Name     Description of Service   Volume   (in mo.)   Service Charge
        Provide Telecom Invoice Processing (TAPS) Services:                
         
         
     TAPS supplier statements — The Service Provider will receive Service Receiver’s current Primary Telecom Service Supplier statements monthly. The statements are transmitted via EDI, or entered manually via paper statements, to the Service Provider. To produce balanced TAPS statements, the Service Provider will perform various validation and duplication protection routines with criteria including Master Control Number, Account number, and AT&T Statement numbers. Only total current charges are recognized in the TAPS system for processing each month.
  2,100 Transactions
Annually
           
 
                         
SS-TAPS-01
  Telecom Invoice
Processing Services
(TAPS)
   
    TAPS Exception Handling and Resolution - Service Provider will reconcile accounts that failed validation. The Service Provider will make commercially reasonable efforts to gain resolution from the Service Receiver, to produce resolved accounts that are ready for financial processing. Accounts that fail validation are not paid without resolution.
  60
Transactions
Annually
    9     Cost plus 2% - 10%
 
                         
 
       
     Invoice Recording & Payment Processing — Service Provider will send the balanced invoices to an internal business unit within the Service Provider, on a monthly basis, for additional Accounts Payable recording and payment processing for the Service Receiver.
  2,100 Transactions
Annually
           
 
                         
 
       
     TAPS Cost Distribution — The Service Provider will transmit to the Service Receiver a Cost Distribution file from the processed validated Statements, Service Provider will transmit this file via FTP and/or email to the Service Receiver.
  15
Transactions per
Month
           
                           
 
       
     TAPS Customer File Maintenance — The Service Provider will perform Customer File Maintenance after receiving a Change Request from the Service Receiver. Only valid, ITT Customer accounts and Statements are processed. Three (3) business days prior notice are required to maintain the Customer file.
  30
Transactions
Annually
           

2


 

Service Volumes Greater or Less Than Observed Pre-Distribution
Service Provider will deliver the same volume of Services as delivered in the 12 months prior to the Distribution Date, plus or minus 10% (such activity, including any such 10% deviation, “Business as Usual activities” or “BAU”) at no additional cost per unit. Service Provider will accommodate Service Receiver’s inorganic (Mergers, Acquisitions, and Divestitures) activities on a time and materials basis with respect to the one-time set-up fees. The table below will then apply following the completion of the one-time set-up activities
         
Scenario   One-Time Setup Fees   Monthly Fees
Service Volume within BAU [Note: BAU already includes +/- 10% of pre-distribution volumes]
  No incremental one-time fees when Service Receiver utilizes services and structure as-is with no changes under this agreement   Steady-State fee structure for requisite service as documented in this agreement
 
       
Service Volume greater or less than BAU
  Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver provided the Service Receiver utilizes services and structure as-is with no significant changes under this agreement   Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver incremental to the base service costs documented below for the requisite service
Ad-Hoc development/services or processing of reports consistent with what was provided prior to the distribution date will be supported as part of this agreement. Service Provider will use commercially reasonable efforts based on provider’s current abilities to accommodate regulatory or legal ad-hoc requests. Ad-hoc requests which may need to be performed to assist Service Receiver in meeting new legal obligations will be provided on a time and materials basis as described in the Additional Pricing section of this agreement. Any changes to 3rd party relationships which require interface modifications or re-writes are not included as part of the scope of this agreement. Should the Service Receiver require such changes, Parties agree to negotiate in good faith with regard to such modification. In the event modifications to the services provided are required by law for only the Service Recipient and such modifications increase the cost for Service Provider, Service Recipient that requires the modifications shall pay all the additional costs including the costs for the other Service Recipients.

3


 

Exit Services
The following services will be provided upon receipt of a Termination Notice to exit from this Service.
               
Service #   Service Name     Description of Service   Service Charge ($/hour)
 
      Service Provider will make commercially reasonable efforts to assist Service Receiver in exiting of this agreement. These efforts include:    
 
             
SS-TAPS-02
  Telecom Invoice
Processing (TAPS)
Migration
   
     Support of data extraction requests from the Service Receiver
   
 
             
     
     Providing Subject Matter Expertise in helping the Service Receiver understand current state business processes and functional data mapping
  Time and Materials Based on Additional Pricing Section
 
             
 
      Service Provider will provide the following knowledge transfer services:    
 
             
SS-TAPS-03
  Telcom Invoice
Processing (TAPS)
Knowledge Transfer
   
     Existing non-sensitive documentation maintained by the Service Provider will be given to the Service Receiver as it relates to Telecom Invoice Processing (TAPS) services
  Time and Materials Based on Additional Pricing Section
Supplemental Services
For requests for supplemental services relating to Telecom Invoice Processing Services (TAPS) by Service Receiver not mentioned in this Schedule or not included within the costs documented in this agreement, Service Receiver will provide a discreet project request and submit such request to Service Provider using the formalized Change Request attached as Annex A for consideration by Service Provider.
Where notice is required a number of business days prior to some required action by Service Provider, notice must be received by 12 noon Eastern Time to be counted as received during such business day. Service Provider shall, within a commercially reasonable period, provide a price quote to be commercially reasonable based on the current cost of the Services to Service Receiver taking into account, such items as the specific time the request was made, service delivery volumes, exit planning activities, and other activities Service Provider is currently engaged in at the time of the request, but not later than 30 days after the request was made. If Service Provider, in its sole discretion determines (i) such request would increase the ongoing operating costs for Service Provider (as a service recipient) or any other service receiver or (ii) that it is not capable of making such changes with its current staff during the time period requested without interrupting the Services provided to itself or any other service receiver. Service Provider need not provide a price quote or perform the services. Where a price quote is provided, Service Provider shall provide the service requested upon acceptance of the price.

4


 

LOCATIONS
Services are initially provided from Palm Coast, FL, USA to other USA locations and select EU and Asia locations.
PREREQUISITES/DEPENDENCIES
  Security and access controls will be maintained as set forth in the Master Services Agreement.
 
  If Service Receiver, or their Supplier(s), sends inaccurate data to Service Provider it will be the responsibility of the Service Receiver to rectify any problems and bear any costs incurred to rectify the issue.
 
  Service Receiver must actively be engaged in the circuitry configuration and inventory control of their networks and have Subject Matter Experts (SME) available to assist with statement processing discrepancies.
 
  Service Receiver, in a separate and independent agreement, must utilize AT&T as the telecommunication data vendor.
 
  Service Receiver will maintain current Cost Distribution data delivery methodologies (e.g., FTP drop site/email attachment receipt).
SERVICE LEVEL
Service Provider will classify incidents at its own discretion. Such classifications shall be consistent with the priorities Service Provider set for itself as a recipient of services.
In the event incidents cannot be resolved, Service Provider shall promptly notify Service Receiver and work together to try and resolve such incidents.
ADDITIONAL PRICING
Hourly Rate for Services Not Specified but Provided by Service Provider Employees (including but not limited to modifications, consulting, exit strategy development, transition, etc.) are documented below. Such services will be provided solely at the Service Provider’s discretion. Service Provider is not obligated to provide additional services not specified in this agreement. The employee category is defined by the Service Provider. The rates documented below shall be commercially reasonable and designated by the Service Provider, closest to its current cost to provide the service. The hourly rates below include the 4.5% amount for inflation each year. These rates apply to internal Service Provider employees only, and should external resources be

5


 

rerquired, the costs for those external resources will be reviewed with the Service Receiver prior to execution of the project.
Additional Pricing Rates (All in USD)
                         
Location   Low     Medium     High  
USA
  $ 75     $ 100     $ 125  
Greece
  $ 35     $ 46     $ 58  
Mexico
  $ 19     $ 25     $ 31  
Sweden
  $ 75     $ 100     $ 125  

6


 

SCHEDULE AB4
U.S
ACTIVE SALARIED ELIGIBLE
EMPLOYEES MEDICAL, PHARMACY
AND DENTAL PROGRAM
Capitalized terms used herein and not otherwise defined shall have the meaning assigned such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this Service should be directed to:
             
Name   Title   Phone   e-mail
Service Provider’s
Contact
  Mgr, Benefits Planning and Administration       Deb.macchia@itt.com
ITT Corporation
Deborah Macchia
           
            Lisa.munoz@itt.com
Lisa Munoz   Benefits Analyst        
             
             
Thomas Hickey   Manager, Benefits Financial Reporting   [          ]   Thomas.hickey@itt.com
             
Service Recipient’s Contact            
Xylem Inc.            
    Director, Global Benefits        
Keith Dick           Keith.dick@itt.com

 


 

PARTIES TO THE AGREEMENT
Service Provider: ITT Corporation — White Plains, NY
Service Recipient: Xylem Inc. — White Plains, NY
TERM
Services provided hereunder shall terminate December 31, 2013; provided that for the avoidance of doubt the coverages provided hereunder and described below only apply to Claims (as defined herein) made by Service Recipient’s Covered Employees (as defined herein) and incurred on or before December 31, 2011.
GENERAL SERVICE DESCRIPTION
Service Provider currently provides active medical, pharmacy(Rx) and dental administration for coverages provided through Empire and Anthem (medical), Medco(Rx), MetLife(dental) and SHPS (FSA) (Empire, Anthem, Medco, MetLife and SHPS collectively, the “Vendors”) for its U.S. Active, Salaried, Eligible Employees (“Covered Employees”). Service Provider shall keep the current contracts with the Vendors and the ITT CORPORATION SALARIED MEDICAL AND DENTAL PLAN (PLAN NUMBER 502 EIN 13-5158950) and the ITT Salaried Medical Plan and Salaried Dental Plan General Plan Terms (collectively, the “Plans”) and all coverage thereunder in full force through December 31, 2011 for Service Recipient’s Covered Employees. All claims of Service Recipient’s Covered Employees made under the Plans and incurred on or prior to December 31, 2011 the (“2011 Plan Year”) will be adjudicated in accordance with the current contract and Service Provider will continue to take such actions on behalf of Service Recipient’s Covered Employees as if such employees are employees of Service Provider.
All medical, dental, pharmacy and FSA claims of Service Recipient’s Covered Employees made under the Plans (the “Claims”) will be paid by the Vendors on behalf of the Service Provider. Service Recipient will pay Service Provider for coverage based on 2011 budget premium rates previously set for the calendar year 2011 and described in the “Pricing” section below. Service Recipient will pay Service Provider monthly premium payments for this service, for any full or partial months, based on actual enrollment for the months covered post-spin using enrollments as of the first (1st) calendar day of the month, commencing on the day after the Distribution Date. Service Recipient will prepare and deliver to Service Provider a monthly self bill containing cost breakdown by business unit and plan tier as set forth on Attachment A, within five (5) Business Days after the beginning of each calendar month. The Service Recipient will be required to pay the Service Provider the monthly premium payments within ten (10) Business Days after the beginning of each calendar month. A detailed listing of Service Recipient’s employees covered, including the Plans and enrollment tier in which they are enrolled, will be made available to Service Provider upon its reasonable request.
Service Provider will retain responsibility for executing funding of Claim payments and eligibility management with Vendors through December 31, 2013.

2


 

Service Provider will conduct a Headcount True-Up (as defined below) of the monthly premiums and establish an Incurred But Not Reported (“IBNR”) claims reserve for Claims incurred prior to December 31, 2011 date, but paid after that date, and conduct a reconciliation of such reserve. See “Headcount True-Up” and “IBNR Reconciliation” sections under Additional Pricing for details.
SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, Service Provider shall provide to Service Recipient the services identified below or described above (collectively, the “Services”).
    Monthly Premium billing.
 
    Monthly administrative services billing (for administrative services billed on an hourly basis. See Additional Pricing section for Hourly Rates).
 
    See General Service Description for a description of payments and billing hereunder. See Pricing for a description of the Headcount True-Up (as defined below) and reconciliation for IBNR (as defined below) Claims.
 
    Claims processing
    All Vendor Claims process will remain unchanged from the process as used during the 12-month period prior to the Distribution Date.
 
    The Claims appeal process will not change from the process as used during the 12-month period prior to the Distribution Date. Empire/Anthem/Medco, MetLife and SHPS will handle all appeals as provided under the Employee Retirement Income Security Act. Once all such appeals have been exhausted, escalations will be handled by Service Provider.
 
    Service Provider will pay all Claims incurred during the 2011 Plan Year.
    Eligibility
    All eligibility adjustments (adding dependents, new hires, ect.) will be handled by local Service Recipient HR through the Infinium interface.
 
    The Service Recipient may add or remove employees/dependants to coverage in accordance with the terms of the Plans, generally upon a qualifying event, new hire or termination. These rules will be the same rules in effect immediately prior to Distribution Date and will remain in effect until January 31, 2012.
 
    Manual adjustments to eligibility will be handled directly with the Vendors by authorized Service Recipient local HR. These adjustments will be one off type adjustments that cannot be made through Infinium due to timing.
 
    All file transmissions to Vendors will be handled by the Exelis Inc. Fort Wayne Shared Service team under the HR/Payroll/Benefits Transition Services Agreement.

3


 

    All files normally maintained manually by the Service Recipient local HR departments during the twelve (12) month period prior to the Distribution Date will remain unchanged.
 
    COBRA qualifying events notices will be handled by SHPS. Service Recipient Local HR department will notify SHPS of termination of employment (as is the current practice in the twelve (12) months prior to Distribution Date). SHPS will provide election notice to Covered Employees with appropriate coverages. There is a separate Letter of Intent with SHPS, attached as Appendix B.
    Claims payment
    All Covered Employee Claims made under the Plans and incurred for the 2011 Plan Year will be paid by Service Provider.
 
    Vendor administrative service charges for the 2011 Plan Year will be paid by Service Provider.
 
    Empire and MetLife maintain bank accounts which Service Provider funds daily to pay claims. Each Vendor will separate claims paid by claims incurred date.
 
    Service Provider will pay all Medical and Dental Claims incurred for the 2011 Plan Year, but submitted for payment after the end of the 2011 Plan Year but no later than allowed under the terms of the applicable Plan.
 
    MEDCO invoices bi-weekly for claims paid. Service Provider will pay for all MEDCO claims incurred for the 2011 Plan Year.
PREREQUISITES/DEPENDENCIES
Service Recipient Responsibilities
    Service Recipient will provide accurate and timely employee enrollments via Infinium.
 
    Service Recipient will research eligibility issues as needed.
 
    In case of inaccurate data sent to Service Provider it will be the responsibility of the Service Recipient to rectify any problems and assessments incurred.
 
    Local Human Resources/Benefits departments will support Covered Employees.

4


 

BILLING LOCATION
Service Recipient will provide Service Provider a self billed invoice and payment to their address set forth below. The bill will cover all charges for Services under this Schedule provided by Service Provider. The invoice will contain the number of enrolled employees per tier per coverage, as set forth in Schedule A. A detailed list of Covered Employees will be provided by the Service Provider upon reasonable request of the Service Recipient. All administrative functions handled by the Service Provider in the twelve (12) month period prior to the Distribution Date are contained in the fee structure set forth below. The Service Provider and Service Recipient agree to negotiate in good faith for any additional services related to the Service provided hereunder that are outside the normal course of business.
SERVICE LEVEL
The Service Provider will provide the same service level to the Service Recipient as it provides to its Covered Employees.
NOTICE REQUIREMENTS
ITT Corporation
1133 Westchester Avenue, Suite 3000
White Plains, NY 10604
Attn: Deborah Macchia
Xylem Inc.
1133 Westchester Avenue, Suite 2000
White Plains, NY 10604
Attn: Keith Dick
Termination notices are not required. Service Provider will pay Claims incurred during the 2011 Plan Year, during the period from November 1, 2011 through December 31, 2013 with no further premium billed to the Service Recipient. Pursuant to the terms of the Plans there is a twenty-four (24) month Claim filing limit.
PRICING
In addition to the costs specifically set forth below, Service Recipient shall also pay all routine business travel expenses relating to such Services. The below table contains the monthly premium rates the Service Provider shall charge. The Service Recipient will be required to pay the Service Provider the monthly premium payments within ten (10) Business Days after the

5


 

beginning of each calendar month. A detailed listing of Service Recipient’s Covered Employees, including the Plans and enrollment tier in which they are enrolled, will be made available to Service Provider upon its reasonable request. Each business unit has been banded 1 through 5. Depending on the assigned band the appropriate budget amount is charged to that business unit. The amounts in the table are per employee per month, by plan and coverage tier. See “General Service Description” for further detail on payment and billing for the monthly premium payments.
Medical and Pharmacy Premium
                         
    Basic  
    Employee     Employee        
Rating Band   Only     + 1     Family  
Band 1
  $     $     $  
Band 2
  $     $     $  
Band 3
  $     $     $  
Band 4
  $     $     $  
Band 5
  $     $     $  
                         
    Enhanced  
    Employee     Employee        
Rating Band   Only     + 1     Family  
Band 1
  $     $     $  
Band 2
  $     $     $  
Band 3
  $     $     $  
Band 4
  $     $     $  
Band 5
  $     $     $  
                         
    EPO  
    Employee     Employee        
Rating Band   Only     + 1     Family  
Band 1
  $     $     $  
Band 2
  $     $     $  
Band 3
  $     $     $  
Band 4
  $     $     $  
Band 5
  $     $     $  
                         
    HDHP  
    Employee     Employee        
Rating Band   Only     + 1     Family  
Band 1
  $     $     $  
Band 2
  $     $     $  
Band 3
  $     $     $  
Band 4
  $     $     $  
Band 5
  $     $     $  

6


 

Dental Premium
                 
MetLife Dental        
EE   EE+1     Family  
 
  $       $    
Add FSA pricing
Additional Pricing
Hourly Rates
Hourly Rates for Services not specified or normally provided by Service Provider in the twelve (12) month period prior to the Distribute Date but otherwise provided by Service Provider employees (including but not limited to modification, consulting, exit strategy development, transition, etc.) are documented below. The employee category is defined by Service Provider. The rates documented below apply to Service Provider employees only, should external resources be required, the costs for those external resources will be reviewed with the Service Recipient prior to execution of the project.
Notwithstanding anything in the Agreement to the contrary, the following rates shall not be subject to (a) the 4.5% increase for inflation in 2012 described in Section 2(a)(3) (but such rates shall be subject to such increase in 2013) or (b) the 2% or 10% increases described in the proviso to Section 2(a)(i) of the Agreement.
         
General Category of Employee   Hourly Rate  
1. Secretarial/Administrative
  $ 50.00  
2. Non-Executive
  $ 100.00  
3. Executive
  $ 150.00  
Headcount True-Up
Service Provider shall conduct a “headcount” true-up by March 31, 2012 (the “Headcount True-Up”), based on actual enrollment during the period beginning on the day after the Distribution Date and ending on December 31, 2011. The Headcount True-Up will be based on reviewing the actual monthly Infinium enrollment by Plan and coverage tier, by unit, but, for the avoidance of doubt, no true-up of actual Claims will be conducted. The Service Provider shall promptly provide the results of the Headcount True-Up to Service Recipient together with any supporting

7


 

data reasonably requested by Service Recipient. Within ten (10) Business Days after the parties reach agreement on the amount of the Headcount True-Up, the appropriate party shall pay to the other the amount so due.
IBNR Reconciliation
    Reconciliation for Incurred But Not Reported (“IBNR”) Claims
    The premiums collected from Service Recipient hereunder will be credited to Service Provider’s active medical ledger.
 
    The amount that Service Provider should hold in reserve to cover payment for all IBNR Claims incurred for the 2011 Plan Year shall be calculated in accordance with the following procedures:
    This calculation will be made by June 30, 2012 using the same methods, assumptions, processes, etc. as used during the 12-month period prior to the Distribution Date to calculate the IBNR Claim reserve remaining to pay Claims incurred before January 1, 2012, but paid after June 30, 2012.
 
    Service Provider and Service Recipient will engage Towers Watson, or such other person as the parties may agree to engage (the “Calculation Agent”), to calculate the target level of the IBNR claim reserve, whose determination shall be binding and conclusive on the Service Provider and Service Recipient.
 
    The IBNR Claim reserve will have its final reconciliation calculated the Calculation Agent by June 30, 2012.
    If the amount held for the IBNR Claim reserve is greater than the target level of the IBNR Claim reserve, as determined herein, within ten (10) Business Days of Service Provider being notified of such determination by the Calculation Agent, Service Provider shall pay its proportionate amount to Service Recipient (based upon Service Recipient’s number of Covered Employees (as of December 31, 2011) in relation to the total number of Covered Employees (for all of the Parties to the Agreement) in the IBNR Claim reserve pool (as of December 31, 2011) (the “Proportionate Amount”)), required, when included with the Proportionate Amounts to be paid to the other Parties to the Agreement, required to bring the amount held for the IBNR Claim reserve to its targeted level, as determined by the Calculation Agent.
 
    If the amount held for the IBNR Claim reserve is less than the target level of the IBNR claim reserve, as determined herein, within ten (10) Business Days of Service Recipient being notified of such determination by the Calculation Agent and its Proportionate Amount by the Service Provider, Service Recipient shall pay its Proportionate Amount to Service Provider, required, when included with the Proportionate Amounts to be paid by the other Parties to the Agreement,

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      necessary to bring the amount held for the IBNR Claim reserve to its targeted level, as determined by the Calculation Agent.

9


 

Attachment A
(Monthly self bill example)
         
Unit   Value Center   Grand Total
FTC-HQ
  HQ    
Motion and Flow Controls HQ
  HQ    
ITT Heat Transfer
  RCW    
ITT Bell & Gossett Division
  RCW    
Rule Industries
  Flow Controls    
Sanitaire (WPCC)
  WWW    
AC Custom Pump
  IP    
Flo-Jet
  Flow Controls    
Sanitaire — Royce
  WWW    
Sanitaire WET
  RCW    
Flowtronex
  RCW    
RCW
  RCW    
ITT Water Technology, Inc.
  RCW    
Texas Turbine Operations-Lubbock
  RCW    
Flygt Florida
  WWW    
Leopold Salary
  WWW    
WEDECO
  WWW    
ITT Flygt Corp.
  WWW    
Flygt-Indiana
  WWW    
Laing
  RCW    
Nova Analytics
  ITT Analytics    
Global Water Instruments
  ITT Analytics    
Bellingham and Stanley
  ITT Analytics    
Aanderaa Data Instruments
  ITT Analytics    

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Attachment B
(SHPS LOGO)
May 20, 2011
Ms. Deb Macchia
Manager, Benefits Planning and Communication
ITT Corporation
1133 Westchester Avenue
White Plains, NY 10604
RE:   Trivestiture of ITT Corporation
Dear Ms. Macchia:
As you know, SHPS Human Resource Solutions, Inc. (“Company”) currently provides ITT Corporation (“Client”) spending account administration (“SAM”) and COBRA services (collectively “Services”) pursuant to a Service Agreement dated January 1, 2008 (“the Service Agreement”). This letter acknowledges the intent of Client to separate into three different entities; namely, Defense Co. (“Defense”), ITT Co. (“ITT”) and Water Co. (“Water”). As part of this restructuring, you have requested we perform certain implementation services in order to set up ITT and Water as separate entities. It is the intent of the parties that Defense will assume the Service Agreement and that ITT and Water will enter into a transition services agreement with Defense through December 31, 2011. Existing services provided by the Company to Defense, ITT and Water will continue through December 31, 2011. Effective January 1, 2012, ITT and Water will enter into separate agreements with the Company. The Company agrees to (i) continue performing ongoing Service and (ii) provide implementation services, pursuant to terms and conditions of the Service Agreement and the following:
     
1. Services
  Beginning on or about June 1, 2011, Company will begin implementation services to setup ITT and Water. Company will continue providing ongoing Services to the Client, including Defense, ITT and Water populations, until the Separation Date.
 
   
2. Termination Fee
  Company agrees to defer implementation Fees in an amount of $        . Of this amount, $         shall be with respect to ITT ($         for COBRA and $         for FSA, respectively) and $         shall be with respect to Water ($         for COBRA and $         for FSA, respectively) (the “Deferred Implementation Fees”) over the period between January 1, 2012 and December 31, 2012, which will be included in the new agreements. In the event the Service Agreement is terminated for any reason prior to the expiration the Separation Date the Client shall pay Company the Deferred Implementation Fees in accordance with the payment terms set forth in the Service Agreement.
If the foregoing correctly sets forth the understanding of the parties, please acknowledge your acceptance of this Agreement by signing both copies of this letter at the place provided below and return one to my attention.

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SCHEDULE AB5
XYLEM RETIREE MEDICAL AND
FINANCIAL SHARED SERVICES (FSS)
ACTIVE MEDICAL AND DENTAL
ADMINISTRATION
Capitalized terms used herein and not otherwise defined shall have the meaning assigned such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this Service should be directed to:
             
Name   Title   Phone   e-mail
Service Provider’s Contact
           
 
ITT Corporation Conrad Arnold
  Director Human Resources       Conrad.arnold@itt.com
 
Service Recipient’s Contact
Xylem Inc.
Dawn DeRue
  Human Resources Mgr.       Dawn.derue@itt.com
PARTIES TO THE AGREEMENT
Service Provider: ITT Corporation– Seneca Falls, NY (IP)
Service Recipient: Xylem Inc. — Auburn, NY and ITT Water Technologies, Inc. — Seneca
Falls, NY (Financial Shared Services)) (collectively, “Service Recipients”)
TERM
Services provided hereunder shall terminate June 30, 2012; provided that for the avoidance of doubt the coverages provided hereunder and described below only apply to Claims (as defined herein) made by Service Recipient’s Covered Employees (as defined herein) and incurred on or before December 31, 2011.

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GENERAL SERVICE DESCRIPTION
Service Provider currently provides administration for the Financial Shared Services active medical through Excellus Blue Cross\Blue Shield BluePoint2 E Plan, Group              , dept. 0007 and active Dental through Excellus Dental plan, Group               dept. 0007 and Retiree medical (pre 65 MVP), Group               (collectively, the “Benefit Plans”) for Service Recipients’ employees covered under such Benefit Plans (such employees, the “Covered Employees”). Service Provider shall keep the Benefit Plans and all coverage thereunder in full force through December 31, 2011 for Service Recipient’s Covered Employees. Each Service Recipient may add or remove Covered Employees to or from coverage under the Benefit Plans as outlined under the terms of the Benefit Plans. All claims of Service Recipient’s Covered Employees made under the Benefit Plans (the “Claims”) and incurred on or prior to December 31, 2011 the (“2011 Plan Year”) will be adjudicated in accordance with the current contract and Service Provider will continue to take such actions on behalf of Service Recipients’ Covered Employees as if such employees are employees of Service Provider.
All Claims of Service Recipients’ Covered Employees made under the Benefit Plans will be paid on behalf of the Service Provider.
Service Recipients will pay Service Provider for coverage based on 2011 budget premium rates previously set for the calendar year 2011 and described in the “Pricing” section below. Service Recipients will pay Service Provider monthly premium payments for this service, for any full or partial months, based on actual enrollment for the months covered post-spin using enrollments as of the first (1st) calendar day of the month, commencing on the day after the Distribution Date.
The Service Recipients will be required to pay the Service Provider the monthly premium payments within ten (10) Business Days after the beginning of each calendar month. A detailed listing of Service Recipient’s employees covered, including the Plans and enrollment tier in which they are enrolled, will be made available to Service Provider upon its reasonable request.
SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, Service Provider shall provide to Service Recipient the services identified below or described above (collectively, the “Services”).
    Monthly premium billing.
 
    Monthly administrative services billing (for administrative services billed on an hourly basis. See Additional Pricing section for Hourly Rates).
See General Service Description for a description of payments and billing hereunder
The following services listed below will be provided by “experts”, who are employees of Service Provider, (the “Experts”) with the following persons the initial Experts: Cindy Jansen, Porzia Quinn and Conrad Arnold.

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    Administration as needed on daily basis for the Benefit Plans. The Service Provider will provide all services that were provided during the twelve (12) months prior to the Distribution Date. The Service Provider will maintain the same level of service provided during the twelve (12) months prior to the Distribution Date.
    Answer any questions pertaining to medical coverage.
 
    Assist in resolving any issues that may arise regarding, medical coverage, ex. Claims, Medicare questions, etc.
 
    Add employees/dependents to the Medical coverage as needed.
 
    Reconcile and pay premiums from Medical carriers pertaining to the Exelis employees.
    Should the Service Recipient need services not provided during the twelve (12) months prior to the Distribution Date, the parties will negotiate in good faith to determine any additional cost involved in the services
PREREQUISITES/DEPENDENCIES
The Experts remain employees of Service Provider. Service Recipients acknowledge and agree that Service Provider has discretion to terminate the Experts and the Experts have the ability to terminate their employment with Service Provider. In the event the initially named Experts are no longer employed by Service Provider, Service Provider’s then current benefit manager (or such other person as has the skill and knowledge to so provide such Services) will, at the request of the Service Recipients, provide such Service as described herein.
The Service Recipients’ human resources department shall cooperate with the Service Provider, including the Experts, in order for the Service Provider and Experts to provide such Service under this Schedule.
BILLING LOCATION
Service Provider will provide ITT Water Technologies, Inc. and Xylem, Inc. FSS each with separate invoices to their address set forth below. The bill will cover all charges for services under this Schedule provided by Service Provider to both Service Recipients and, to the extent reasonably feasible, will be itemized between the two Service Recipients. The invoice will contain the number of Covered Employees per tier per coverage. A detailed list of Covered Employees and dependents covered will be provided by the Service Provider upon reasonable request of the Service Recipient. All administrative functions handled by the Service Provider in the twelve (12) month period prior to the Distribution Date are contained in the fee structure

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set forth below. The Service Provider and Service Recipients agree to negotiate in good faith for any additional services related to the Service provided hereunder that are outside the normal course of business.
SERVICE LEVEL
The Service Provider, including the Experts, will provide the same service level to the Service Recipients as it provides to its own Covered Employees.
NOTICE REQUIREMENTS
ITT Corporation
240 Falls Street
Seneca Falls, NY 13148
Xylem Inc.
1 Goulds Drive
Auburn, NY 13021
ITT Water Technologies, Inc
1 Goulds Drive
Auburn, NY 13021
PRICING
In addition to the costs specifically set forth below, Service Recipients shall also pay all routine business travel expenses relating to the Services. The Service Recipients shall pay the Service Provider based on the number of Covered Employees as of the first (1st) calendar day of the month. The Service Recipient will be required to pay the Service Provider the monthly premium payments within ten (10) Business Days after the beginning of each calendar month. A detailed listing of Service Recipient’s Covered Employees, including the Plans and enrollment tier in which they are enrolled, will be made available to Service Provider upon its reasonable request. See “General Service Description” for further detail on payment and billing for the monthly premium payments. The below table are the rates the Service Provider shall charge.

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Coverage       Employee  
(Invoicing for medical/dental premiums Only as noted below):        
BluePoint POS (FSS) Active
           
 
  Employee   $  
 
  Employee + 1   $  
 
  Employee + Child(ren)   $  
 
  Family   $  
Dental (FSS) Active
           
 
  Employee   $  
 
  Employee + 1   $  
 
  Family   $  
MVP (Retirees Pre 65)
           
 
  Employee   $  
 
  Employee + 1   $  
 
  Family   $  
Additional Pricing
Hourly Rates for Services not specified or normally provided by Service Provider in the twelve (12) month period prior to the Distribute Date but otherwise provided by Service Provider employees (including but not limited to modification, consulting, exit strategy development, transition, etc.) are documented below. The employee category is defined by Service Provider. The rates documented below apply to Service Provider employees only, should external resources be required, the costs for those external resources will be reviewed with the Service Recipient prior to execution of the project.
Notwithstanding anything in the Agreement to the contrary, the following rates shall not be subject to (a) the 4.5% increase for inflation in 2012 described in Section 2(a)(3) (but such rates shall be subject to such increase in 2013) or (b) the 2% or 10% increases described in the proviso to Section 2(a)(i) of the Agreement.
         
General Category of Employee
  Hourly Rate
1. Secretarial/Administrative
  $ 50.00
2. Non-Executive
  $ 100.00
3. Executive
  $ 150.00

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SCHEDULE AB6
EPICOR 9 AND MFG PRO
Capitalized terms used herein and not otherwise defined shall have the meaning assign such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Kevin Loucks
ITT Corporation
  Manager, Transition
Management Office
      kevin.loucks@itt.com
             
Eva Jakubowska
Xylem Inc.
  RCW IT Director       eva.jakubowska@itt.com
GENERAL SERVICE DESCRIPTION
Service Provider will perform Epicor 9 and MFG Pro Application Support Services for the Service Receiver.
Service Receiver and its Subsidiaries will utilize Service Provider’s resources based on the functionality, processes, input and output screens and documents that support Service Provider’s business and business processes in the twelve months prior to the Distribution Date.
SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, Service Provider shall provide to Service Recipient the services identified below (collectively, the “Services”).

1


 

                         
                Minimum    
                Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
      Provide Epicor 9 Application support required to support Enterprise Resource Planning (ERP) services:                
 
                       
 
     
     Access to Epicor 9 Application — Service Provider will provide access to application for authorized service receiver users per the security guidelines outlined in the Master Services Agreement. Service Provider after receiving an emailed Access Request Form from the Service Receiver, will create new application and database users pre-approved by Service Recipient, maintain application and database passwords, maintain application and database security to meet security and controls guidelines identified in Master Services Agreement, as well as monitor and restrict unauthorized access to source code and data. Service Provider will maintain production batch schedule, production Interfaces, execute batch jobs, assess impact of failed batch jobs, and adjust schedule to account for batch job failures and delays. Service Provider will execute web server and application server configuration changes, monitor and maintain application administration. The lead-time required for these activities is one day.
  Three Requests per Month            
 
                       
IT-Epicor 9-01
  Epicor 9
Application
Support
Services
 
     Epicor 9 Application Support & Maintenance — Service Provider will monitor incident resolution requests, and recommend and implement incident resolution per the SLA outlined in the Service Level section of this agreement. Service Provider will identify and communicate breaks in application discovered by automated or monitoring system, develop solution and approach to address break in application, and implement fixes to resolve break in application.
        12     Cost plus
2% - 10%
 
                       
 
     
     The Service Provider after receiving an emailed Epicor 9 Modification Request Form from the Service Receiver, will create or modify for the Service Receiver Crystal Reports, Business Process Management (BPM) procedures, Business Activity Queries (BAQ), Dashboard, User Defined fields, and or propose and create an alternate solution as necessary. A lead-time of 4 days is required for these Program Change Requests.
  40 Hours per Month            
 
                       
 
     
     The Service Provider after receiving an emailed request will provide training and consulting on process and Epicor 9 modules, to the Service Receivers users, as needed and requested.
  Two sessions per year, for 8 hours per session            

2


 

                         
                Minimum    
                Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
     
     Epicor 9 Application Database Support — Service Provider on receipt of an emailed Service Request Form, will trouble shoot database related incidents, maintain database schema if necessary, bounce databases as required, perform data cleanup activities as needed, monitor and maintain, and provide support for all database issues in test/dev environments, archive and truncate database tables as required, compact databases as required, backup, restore, compress, and delete old log files as needed, and conduct scheduled maintenance activities.
  Daily Backups are performed


One Restore per week
           
 
                       
 
     
    The Service Provider, after receiving an emailed Service Request Form from the Service Receiver, will create or modify the following: Progress SQL database interfaces, Electronic Invoice process, SQL Reporting, and Application tuning. The lead-time for these services will be three weeks.
  2 Service Requests per Month            
 
                       
 
     
    Access to SICAF Electronic Invoicing for Epicor 9 Application — Service Provider will provide access to application for authorized service receiver users per the security guidelines outlined in the Master Services Agreement. Service Provider after receiving an emailed Access Request Form from the Service Receiver, will create new application and database users pre-approved by Service Recipient, maintain application and database passwords, maintain application and database security to meet security and controls guidelines identified in Master Services Agreement, as well as monitor and restrict unauthorized access to source code and data. Service Provider will maintain production batch schedule, execute batch jobs, assess impact of failed batch jobs, and adjust schedule to account for batch job failures and delays.
  2 Service Requests per Month            
 
                       
 
     
     SICAF Electronic Invoicing Application Support & Maintenance — Service Provider will monitor incident resolution requests, and recommend and implement incident resolution per the SLA outlined in the Service Level section of this agreement. Service Provider will identify and communicate breaks in application discovered by automated or monitoring system. The Service Provider will utilize the SICAF Vendor for all activities to develop solutions and approach to address break in application. The SICAF Vendor will implement fixes to resolve break in application.
               

3


 

                         
                Minimum    
                Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
      Provide MFG Pro Application support required to support Enterprise Resource Planning (ERP) services:                
 
                       
 
     
    Access to MFG Pro Application — Service Provider will provide access to application for authorized service receiver users per the security guidelines outlined in the Master Services Agreement. Service Provider after receiving an emailed Access Request Form from the Service Receiver, will create new application and database users pre-approved by Service Recipient, maintain application and database passwords, maintain application and database security to meet security and controls guidelines identified in Master Services Agreement, as well as monitor and restrict unauthorized access to source code and data. Service Provider will maintain production batch schedule, production Interfaces, execute batch jobs, assess impact of failed batch jobs, and adjust schedule to account for batch job failures and delays. Service Provider will execute web server and application server configuration changes, monitor and maintain application administration. The lead-time required for these activities is one day.
  One Request per Month     3      
 
                       
IT-MFG Pro-01
  MFG Pro
Application
Support
Services
 
     MFG Pro Application Support & Maintenance — Service Provider will monitor incident resolution requests, and recommend and implement incident resolution per the SLA outlined in the Service Level section of this agreement. Service Provider will identify and communicate breaks in application discovered by automated or monitoring system, develop solution and approach to address break in application, and implement fixes to resolve break in application.
               
 
                       
 
     
     MFG Pro Application Database Support — Service Provider on receipt of an emailed Service Request Form, will trouble shoot database related incidents, maintain database schema if necessary, bounce databases as required, perform data cleanup activities as needed, monitor and maintain, and provide support for all database issues in test/dev environments, archive and truncate database tables as required, compact databases as required, backup, restore, compress, and delete old log files as needed, and conduct scheduled maintenance activities.
  Daily Backups are performed


One Restore per Month
           
Note: The costs incurred by the Service Provider from a 3rd Party necessary to troubleshoot, maintain or resolve failures in the systems environment for Epicor 9 will be allocated evenly between the Service Provider and Service Receiver as an additional charge. All of the costs incurred by the Service Provider from a 3rd Party necessary to troubleshoot, maintain or resolve failures in the systems environment for MFG Pro will be passed on to the Service Receiver as an additional charge.

4


 

Service Volumes Greater Than or Less Than Observed Pre-Distribution Date
Service Provider will deliver the same volume of Services as delivered in the 12 months prior to the Distribution Date, plus or minus 10% (such activity, including any such 10% deviation, “Business as Usual activities” or “BAU”) at no additional cost per unit. Service Provider will accommodate Service Receiver’s inorganic (Mergers, Acquisitions, and Divestitures) activities on a time and materials basis with respect to the one-time set-up fees. The table below will then apply following the completion of the one-time set-up activities
         
Scenario   One-Time Setup Fees   Monthly Fees
Service Volume within BAU [Note: BAU already includes +/- 10% of pre-distribution date volumes]
  No incremental one-time fees when Service Receiver utilizes services and structure as-is with no changes under this agreement   Steady-State fee structure for requisite service as documented below
 
       
Service Volume greater or less than BAU
  Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver provided the Service Receiver utilizes services and structure as-is with no significant changes under this agreement   Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver incremental to the base service costs documented below for the requisite service
Ad-Hoc development/services or processing of reports consistent with what was provided prior to the distribution date will be supported as part of this agreement. Service Provider will use commercially reasonable efforts based on provider’s current abilities to accommodate regulatory or legal ad-hoc requests. Ad-hoc requests which may need to be performed to assist Service Receiver in meeting new legal obligations will be provided on a time and materials basis as described in the Additional Pricing section of this agreement. Any changes to 3rd party relationships which require interface modifications or re-writes are not included as part of the scope of this agreement. Should the Service Receiver require such changes, Parties agree to negotiate in good faith with regard to such modification. In the event modifications to the services provided are required by law for only the Service Recipient and such modifications increase the cost for Service Provider, Service Recipient that requires the modifications shall pay all the additional costs including the costs for the other Service Recipients.

5


 

Exit Services
The following services will be provided upon receipt of a Termination Notice to exit from this Service.
             
Service #   Service Name   Description of Service   Service Charge ($/hour)
 
      Service Provider will make commercially reasonable efforts to assist Service Receiver in exiting of this agreement. These efforts include:    
 
           
IT-Epicor 9-03
  Epicor 9 and MFG Pro Application Migration  
    Support of data extraction requests from the Service Receiver
  Time and Materials Based on Additional Pricing Section
 
           
 
     
    Providing Subject Matter Expertise in helping the Service Receiver understand current state data schema and configuration details
   
 
           
 
      Service Provider will provide the following knowledge transfer services:    
 
           
IT-Epicor 9-04
  Epicor 9 and MFG Pro Application Knowledge Transfer  
    Existing non-sensitive documentation maintained by the Service Provider will be given to the Service Receiver as it relates to the Epicor 9 and MFG Pro Application and related interfaces
  Time and Materials Based on Additional Pricing Section
Supplemental Services
For requests for supplemental services relating to Epicor 9 and MFG Pro by Service Receiver not mentioned in this Schedule or not included within the costs documented in this agreement, Service Receiver will provide a discreet project request and submit such request to Service Provider using the formalized Change Request attached as Annex A for consideration by Service Provider.
Where notice is required a number of business days prior to some required action by Service Provider, notice must be received by 12 noon Eastern Time to be counted as received during such business day. Service Provider shall, within a commercially reasonable period, provide a price quote to be commercially reasonable based on the current cost of the Services to Service Receiver taking into account, such items as the specific time the request was made, service delivery volumes, exit planning activities, and other activities Service Provider is currently engaged in at the time of the request, but not later than 30 days after the request was made. If Service Provider, in its sole discretion determines (i) such request would increase the ongoing operating costs for Service Provider (as a service recipient) or any other service receiver or (ii) that it is not capable of making such changes with its current staff during the time period requested without interrupting the Services provided to itself or any other service receiver. Service Provider need not provide a price quote or perform the services. Where a price quote is provided, Service Provider shall provide the service requested upon acceptance of the price.

6


 

LOCATIONS
Services are initially provided from Tizayuca, Mexico, to sites in Queteretaro and Mexico City, Mexico.
PREREQUISITES/DEPENDENCIES
  Service Receiver will maintain the applications and interfaces documented in Attachment A.
 
  Service Receiver will maintain the current data delivery methodologies (e.g., FTP drop site/email) ensuring they are accessible and reachable to the Service Provider for the period of this TSA.
 
  Security and access controls will be maintained as set forth in the Master Services Agreement.
 
  Service Provider must keep the TSA Gateway active and accessible to the Service Receiver as needed for the period of this TSA.
 
  If Service Receiver provides inaccurate information to Service Provider, it will be the responsibility of the Service Receiver to rectify any problems and bear any costs incurred to rectify the issue.
SERVICE LEVEL
Service Provider will classify incidents at its own discretion. Such classifications shall be consistent with the priorities Service Provider set for itself as a recipient of services.
Support for Epicor 9 and MFG Pro will be provided Monday through Friday, 8:30am to 5:30pm Mexico time. For emergencies Epicor 9 and MFG Pro support staff is available by contacting Manuel Moreno, via his mobile phone.
All incidents will be handled and responded to as they have been during the 12 months prior to the Distribution Date. In the event incidents cannot be resolved, Service Provider shall promptly notify Service Receiver and work together to try and resolve such incidents.

7


 

ADDITIONAL PRICING
Hourly Rate for Services Not Specified but Provided by Service Provider Employees (including but not limited to modifications, consulting, exit strategy development, transition, etc.) are documented below. Such services will be provided solely at the Service Provider’s discretion. Service Provider is not obligated to provide additional services not specified in this agreement. The employee category is defined by the Service Provider. The rates documented below shall be commercially reasonable and designated by the Service Provider, closest to its current cost to provide the service. The hourly rates below include the 4.5% amount for inflation each year. These rates apply to internal Service Provider employees only, and should external resources be required, the costs for those external resources will be reviewed with the Service Receiver prior to execution of the project.
Additional Pricing Rates (All in USD)
             
Location   Low   Medium   High
USA   $75   $100   $125
Greece   $35   $46   $58
Mexico   $19   $25   $31
Sweden   $75   $100   $125

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ATTACHMENT A
             
Interface Name   Business Purpose   Source System   Destination System
 
  Service Provider’s Epicor 9 application will create 2 flat files, one containing Sales Order header and one with Sales Order detail information.        
 
           
Sales Orders
  This interface is executed from a daily Batch schedule, and runs at 3am Daily.   Epicor 9   Service Receiver
 
           
 
  The flat files are transmitted with FTP to a Service Receiver’s FTP site.        
 
           
 
  Service Provider’s Epicor 9 application will generate 2 flat files, one containing Invoice header and one with Invoice detail information.        
 
           
Invoicing
  This interface is executed from a daily Batch schedule, and runs at 3am Daily.   Epicor 9   Service Receiver
 
           
 
  The flat files are transmitted with FTP to a Service Receiver’s FTP site.        

9


 

Schedule AB7

ePrism
Capitalized terms used herein and not otherwise defined shall have the meaning assign such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Vassilis Gerardos
ITT Corporation
  Knowledge
Management
Supervisor, Athens
Group
      vasilis.gerardos@itt.com
 
           
Doug Olson
Xylem Inc.
  eBusiness Manager
ITT Residential &
Commercial Water
      doug.olson@itt.com
GENERAL SERVICE DESCRIPTION
Service Provider will perform ePrism Application Support Services for the Service Receiver.
Service Receiver and its Subsidiaries will utilize Service Provider’s resources based on the functionality, processes, input and output screens and documents that support Service Provider’s business and business processes in the twelve months prior to the Distribution Date.
SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, Service Provider shall provide to Service Recipient the services identified below (collectively, the “Services”).

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                Minimum Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
      Provide ePrism Application support services required to support Integrated Sales and Manufacturing, including a WEB based Sales and Manufacturing configuration capability set of services:            
 
                   
 
     
     ePrism Knowledge Engineering — Service Provider, after receiving a service request from the Service Receiver, will update the appropriate information within ePrism.
           
 
                   
 
     
     ePrism Data and Curve Management — Service Provider, after receiving a service request, validated data, and specifications will maintain the information within ePrism.
  350 Knowledge
Engineer Hours per
Month
       
 
                   
IT-ePrism-01
  ePrism Application
Support Services
 
     ePrism Application Support & Maintenance — Service Provider will provide System Administration services to the Service Receiver’s ePrism application. Service Provider will provide Break/Fix support and monitor incident resolution requests, and recommend and implement incident resolution per the Service Level Agreement (SLA) outlined in the Service Level section of this agreement. Service Provider will identify and communicate breaks in application discovered by automated or monitoring system, develop solution and approach to address break in application, and implement fixes to resolve break in application.
      24*   “Cost plus 2% - 10%”
 
                   
 
     
     The Service Provider will only provide modifications to the Service Receiver’s ePrism code in the following situations for the redesign and modification of existing products, as listed in Attachment A.
  305 Programmer
Hours per Month
       
 
                   
 
     
     The Service Provider will perform code changes to the Service Receiver’s ePrism code stream if the Service Provider determines it is appropriate and necessary to address with Product Specific Requests that have been approved by the Joint ePrism Committee.
           
 
                   
 
     
     The Service Provider will deliver these changes to the Service Receiver in a Quarterly release cycle.
           
 
*   Beyond the minimum service period this agreement can be extended for another 12 months on a month-to-month basis
Service Volumes Greater Than or Less Than Observed Pre-Distribution Date
Service Provider will deliver the same volume of Services as delivered in the 12 months prior to the Distribution Date, plus or minus 10% (such activity, including any such 10% deviation, “Business as Usual activities” or “BAU”) at no additional cost per unit. Service Provider will accommodate Service Receiver’s inorganic (Mergers, Acquisitions, and Divestitures) activities

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on a time and materials basis with respect to the one-time set-up fees. The table below will then apply following the completion of the one-time set-up activities
         
Scenario   One-Time Setup Fees   Monthly Fees
Service Volume within BAU [Note: BAU already includes +/- 10% of pre-distribution date volumes]
  No incremental one-time fees when Service Receiver utilizes services and structure as-is with no changes under this agreement   Steady-State fee structure for requisite service as documented below
 
       
Service Volume
greater or less than
BAU
  Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver provided the Service Receiver utilizes services and structure as-is with no significant changes under this agreement   Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver incremental to the base service costs documented below for the requisite service
Ad-Hoc development/services or processing of reports consistent with what was provided prior to the distribution date will be supported as part of this agreement. Service Provider will use commercially reasonable efforts based on provider’s current abilities to accommodate regulatory or legal ad-hoc requests. Ad-hoc requests which may need to be performed to assist Service Receiver in meeting new legal obligations will be provided on a time and materials basis as described in the Additional Pricing section of this agreement. Any changes to 3rd party relationships which require interface modifications or re-writes are not included as part of the scope of this agreement. Should the Service Receiver require such changes, Parties agree to negotiate in good faith with regard to such modification. In the event modifications to the services provided are required by law for only the Service Recipient and such modifications increase the cost for Service Provider, Service Recipient that requires the modifications shall pay all the additional costs including the costs for the other Service Recipients.
Exit Services
The following services will be provided upon receipt of a Termination Notice to exit from this Service.
             
Service #   Service Name   Description of Service   Service Charge ($/hour)
 
      Service Provider will make commercially reasonable efforts to assist Service Receiver in exiting of this agreement. These efforts include:    
             
IT-ePrism-02
  ePrism Application
Migration
 
     Providing Subject Matter Expertise in helping the Service Receiver understand current state data schema and configuration details
  Time and Materials Based on Additional Pricing Section
 
           
IT-ePrism-03
  ePrism Application
Data Migration
  Service Provider will provide data and rule extraction services in a common understandable format to assist the Service Receiver to migrate from the ePrism application.   No Charge

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Service #   Service Name   Description of Service   Service Charge ($/hour)
 
      Service Provider will provide the following knowledge transfer services:    
 
IT-ePrism-04
  ePrism Application
Knowledge Transfer
 
     Existing non-sensitive documentation maintained by the Service Provider will be given to the Service Receiver as it relates to the ePrism application support services and related interfaces
  Time and Materials Based on Additional Pricing Section
Supplemental Services
For requests for supplemental services relating to ePrism by Service Receiver not mentioned in this Schedule or not included within the costs documented in this agreement, Service Receiver will provide a discreet project request and submit such request to Service Provider using the formalized Change Request attached as Annex A for consideration by Service Provider.
Where notice is required a number of business days prior to some required action by Service Provider, notice must be received by 12 noon Eastern Time to be counted as received during such business day. Service Provider shall, within a commercially reasonable period, provide a price quote to be commercially reasonable based on the current cost of the Services to Service Receiver taking into account, such items as the specific time the request was made, service delivery volumes, exit planning activities, and other activities Service Provider is currently engaged in at the time of the request, but not later than 30 days after the request was made. If Service Provider, in its sole discretion determines (i) such request would increase the ongoing operating costs for Service Provider (as a service recipient) or any other service receiver or (ii) that it is not capable of making such changes with its current staff during the time period requested without interrupting the Services provided to itself or any other service receiver. Service Provider need not provide a price quote or perform the services. Where a price quote is provided, Service Provider shall provide the service requested upon acceptance of the price.
LOCATIONS
Services are initially provided from Athens, Greece to global locations.
PREREQUISITES/DEPENDENCIES
  Service Receiver will maintain applications and interfaces     required for the services documented in this agreement.
 
  If Service Receiver sends inaccurate data to Service Provider, it will be the responsibility of the Service Receiver to rectify any problems and bear any costs incurred to rectify the issue.

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  Service Receiver must provide access to secure VPN for the Service Provider’s staff, required at all times, for the period of this TSA.
 
  Service Receiver must implement the necessary hardware and have the appropriate support personnel in place.
 
  Service Provider must complete the in-process ePrism enhancements and projects as specified in Attachment B, prior to the Distribution Date, or as determined by the Joint ePrism Committee.
 
  Service Receiver, on termination of this TSA, must and will remove all versions of the ePrism executable code from the Service Receiver’s environment, located on online or offline storage. Service Receiver will provide appropriate notification upon removal completion to Service Provider.
 
  Service Provider, on termination of this TSA, must and will remove all versions and copies of the Service Receiver’s versions of the ePrism executable code, data and rule information, located online or offline storage. Service Provider will provide appropriate notification upon removal completion to the Service Receiver.
 
  Security and access controls will be maintained as set forth in the Master Services Agreement.
SERVICE LEVEL
Service Provider will classify incidents at its own discretion. Such classifications shall be consistent with the priorities Service Provider set for itself as a recipient of services.
The Service Provider will provide support to the Service Receiver, 12 hours per day, 8:30 am to 8:30 pm Greece time, Monday through Friday except on Greek and U.S. holidays as appropriate.
In the event incidents cannot be resolved, Service Provider shall promptly notify Service Receiver and work together to try and resolve such incidents.
ADDITIONAL PRICING
Hourly Rate for Services Not Specified but Provided by Service Provider Employees (including but not limited to modifications, consulting, exit strategy development, transition, etc.) are documented below. Such services will be provided solely at the Service Provider’s discretion. Service Provider is not obligated to provide additional services not specified in this agreement. The employee category is defined by the Service Provider. The rates documented below shall be commercially reasonable and designated by the Service Provider, closest to its current cost to provide the service. The hourly rates below include the 4.5% amount for inflation each year. These rates apply to internal Service Provider employees only, and should external resources be

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required, the costs for those external resources will be reviewed with the Service Receiver prior to execution of the project.
Additional Pricing Rates (All in USD)
                         
Location   Low     Medium     High  
USA
  $ 75     $ 100     $ 125  
Greece
  $ 35     $ 46     $ 58  
Mexico
  $ 19     $ 25     $ 31  
Sweden
  $ 75     $ 100     $ 125  

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ATTACHMENT A
List of Existing Products/Models to be supported:
  1.   Building Services
  a.   Waste Water Products
  b.   Water Supply
  2.   Vertical Turbine Products
  a.   All Vertical Turbine Products for Water and Industrial Applications

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ATTACHMENT B
This is the list of ePrism Enhancements and Projects that will be completed by October 3, 2011, unless specifically noted otherwise. The actual release schedule for these enhancements will be determined by the joint ePrism steering committee:

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SCHEDULE AB8
ERP-LX & TANGO APPLICATION
INDIA
Capitalized terms used herein and not otherwise defined shall have the meaning assign such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Kevin Loucks
ITT Corporation
  Manager, Transition
Management Office
      kevin.loucks@itt.com
 
           
Eva Jakubowska
Xylem Inc.
  RCW IT Director       eva.jakubowska@itt.com
GENERAL SERVICE DESCRIPTION
Service Provider will perform ERP-LX & Tango Application Support Services for Baroda, India and Hong Kong for Service Receiver.
Service Receiver and its Subsidiaries will utilize Service Provider’s resources based on the functionality, processes, input and output screens, and documents that support the Service Provider’s business and business processes in the twelve months prior to the Distribution date.
SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, Service Provider shall provide to Service Recipient the services identified below (collectively, the “Services”).

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                Minimum Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
      Provide hosting and ongoing application support for ERP-LX and Tango (Sarbanes-Oxley Auditing) for Baroda, India and the Hong Kong Trading Company:                
 
                       
 
     
   Access to ERP-LX &Tango Applications — Service Provider will provide access to the application for authorized service receiver users per the security guidelines outlined in the Master Services Agreement. Service Provider will create new application and database users pre-approved by Service Recipient, maintain application and database passwords, maintain application and database security to meet security and controls guidelines identified in Master Services Agreement, as well as monitor and restrict unauthorized access to source code and data. Service Provider will maintain production batch schedule, execute batch jobs, assess impact of failed batch jobs, and adjust schedule to account for batch job failures and delays. Service Provider will execute web server and application server configuration changes; and monitor and maintain application administration.
               
 
                       
IT-ERP- LX & Tango
India -01
  ERP-LX & Tango
Application Support
Services
 
     ERP-LX &Tango Support & Maintenance — Service Provider will monitor incident resolution requests, and recommend and implement incident resolution per the SLA outlined in the Service Level section of this agreement. Service Provider will identify and communicate breaks in application discovered by automated or monitoring system, develop solution and approach to address break in application, and implement fixes to resolve break in application.
  38 ERP-LX named
users
    3     Cost plus 2% – 10%
 
                       
 
     
     ERP-LX & Tango Database Support — Service Provider will trouble shoot database related incidents, maintain database schema if necessary, bounce databases as required, perform data cleanup activities as needed, monitor and provide support for all database issues in test/dev environments, archive and truncate database tables as required, compact databases as required, backup, compress, and delete old log files as needed, and conduct scheduled maintenance activities.
               
 
                       
       
      ERP-LX & Tango Hosting Services — Service Provider will provide hosting for ERP-LX environment from Seneca Falls Data Center (SFDC).
               

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Service Volumes Greater or Less Than Observed Pre-Distribution Date
Service Provider will deliver the same volume of Services as delivered in the 12 months prior to the Distribution Date, plus or minus 10% (such activity, including any such 10% deviation, “Business as Usual activities” or “BAU”) at no additional cost per unit. Service Provider will accommodate Service Receiver’s inorganic (Mergers, Acquisitions, and Divestitures) activities on a time and materials basis with respect to the one-time set-up fees. The table below will then apply following the completion of the one-time set-up activities.
         
Scenario   One-Time Setup Fees   Monthly Fees
Service Volume within BAU [Note: BAU already includes +/- 10% of pre-distribution date volumes]
  No incremental one-time fees when Service Receiver utilizes services and structure as-is with no changes under this agreement   Steady-State fee structure for requisite service as documented below
 
       
Service Volume
greater or less than
BAU
  Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver provided the Service Receiver utilizes services and structure as-is with no significant changes under this agreement   Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver incremental to the base service costs documented below for the requisite service
Ad-Hoc development/services or processing of reports consistent with what was provided prior to the distribution date will be supported as part of this agreement. Service Provider will use commercially reasonable efforts based on provider’s current abilities to accommodate regulatory or legal ad-hoc requests. Ad-hoc requests which may need to be performed to assist Service Receiver in meeting new legal obligations will be provided on a time and materials basis as described in the Additional Pricing section of this agreement. Any changes to 3rd party relationships which require interface modifications or re-writes are not included as part of the scope of this agreement. Should the Service Receiver require such changes, Parties agree to negotiate in good faith with regard to such modification. In the event modifications to the services provided are required by law for only the Service Recipient and such modifications increase the cost for Service Provider, Service Recipient that requires the modifications shall pay all the additional costs including the costs for the other Service Recipients.

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Exit Services
The following services will be provided upon receipt of a Termination Notice to exit from this Service.
             
Service #   Service Name   Description of Service   Service Charge ($/hour)
 
      Service Provider will make commercially reasonable efforts to assist Service Receiver in exiting of this agreement. These efforts include:    
 
           
 
     
   Support of data extraction requests from the Service Receiver
   
 
           
IT-ERP- LX & Tango
India -02
  ERP-LX & Tango
Application
Migration
 
   Providing Subject Matter Expertise in helping the Service Receiver understand current state data schema and configuration details
  Time and Materials Based on Additional Pricing Section
 
           
 
      Service Provider will provide the following knowledge transfer services:    
 
           
IT-ERP- LX & Tango
India -03
  ERP-LX & Tango
Application
Knowledge Transfer
 
     Existing non-sensitive documentation maintained by the Service Provider will be given to the Service Receiver as it relates to the ERP-LX and Tango applications and related interfaces
  Time and Materials Based on Additional Pricing Section
Supplemental Services
For requests for supplemental services relating to ERP-LX & Tango Applications by Service Receiver not mentioned in this Schedule or not included within the costs documented in this agreement, Service Receiver will provide a discreet project request and submit such request to Service Provider using the formalized Change Request attached as Annex A for consideration by Service Provider.
Where notice is required a number of business days prior to some required action by Service Provider, notice must be received by 12 noon Eastern Time to be counted as received during such business day. Service Provider shall, within a commercially reasonable period, provide a price quote to be commercially reasonable based on the current cost of the Services to Service Receiver taking into account, such items as the specific time the request was made, service delivery volumes, exit planning activities, and other activities Service Provider is currently engaged in at the time of the request, but not later than 30 days after the request was made. If Service Provider, in its sole discretion determines (i) such request would increase the ongoing operating costs for Service Provider (as a service recipient) or any other service receiver or (ii) that it is not capable of making such changes with its current staff during the time period requested without interrupting the Services provided to itself or any other service receiver. Service Provider need not provide a price quote or perform the services. Where a price quote is provided, Service Provider shall provide the service requested upon acceptance of the price.

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LOCATIONS
Services are initially provided from Seneca Falls, NY, USA to Baroda, India and Hong Kong.
PREREQUISITES/DEPENDENCIES
    Service Receiver will maintain the applications and interfaces documented in Attachment A.
 
    If Service Receiver provides inaccurate information to Service Provider, it will be the responsibility of the Service Receiver to rectify any problems and bear any costs incurred to rectify the issue.
 
    Service Receiver must have eLogia System active and maintained for the duration this agreement is in effect.
 
    Security and access controls will be maintained as set forth in the Master Services Agreement.
SERVICE LEVEL
Service Provider will classify incidents at its own discretion. Such classifications shall be consistent with the priorities Service Provider set for itself as a recipient of services. Incidents classified using this methodology will be triaged as documented in Attachment B. In the event incidents cannot be resolved, Service Provider shall promptly notify Service Receiver and work together to try and resolve such incidents.
ADDITIONAL PRICING
Hourly Rate for Services Not Specified but Provided by Service Provider Employees (including but not limited to modifications, consulting, exit strategy development, transition, etc.) are documented below. Such services will be provided solely at the Service Provider’s discretion. Service Provider is not obligated to provide additional services not specified in this agreement. The employee category is defined by the Service Provider. The rates documented below shall be commercially reasonable and designated by the Service Provider, closest to its current cost to provide the service. The hourly rates below include the 4.5% amount for inflation each year. These rates apply to internal Service Provider employees only, and should external resources be required, the costs for those external resources will be reviewed with the Service Receiver prior to execution of the project.

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Additional Pricing Rates (All in USD)
                         
Location   Low   Medium   High
USA
  $ 75     $ 100     $ 125  
Greece
  $ 35     $ 46     $ 58  
Mexico
  $ 19     $ 25     $ 31  
Sweden
  $ 75     $ 100     $ 125  

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ATTACHMENT A
                         
Interface Name   Program Name   Business Purpose   Owner   Source   Destination   Frequency
eLogia
  ORDZ761C   Perform product
configuration
  Water Co.   Wintel Emmaboda   iSeries Emmaboda   Continuous
 
                       
ePrism
  ORD789   Perform product
configuration
  ITT Co.   Wintel ITT Co.   iSeries Emmaboda   Continuous
 
                       
Supplier Portal
  PUR500   Issue Purchase
Orders via a Portal
  Water Co.   Wintel Emmaboda   iSeries Emmaboda   Continuous
 
                       
Supplier Portal
  PUR500   Issue Purchase
Orders via a Portal
  Water Co.   iSeries Emmaboda   Wintel Emmaboda   Continuous
 
                       

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ATTACHMENT B

Production Support Break Fix Service Level Agreement
A Remedy help desk request must be entered for each incident. For Urgent incidents, a phone call may also be initiated directly to the Service Provider’s Support Team. The primary support number for North America is +1-219-405-9459 (available 24 hours/day) and the secondary support number is +              (available 8:00 AM — 5:00 PM Eastern Time, Monday through Friday). All support calls will be returned within 15 minutes.
         
Severity   Description   Resolution
Urgent
  Service Receiver is unable to enter orders or ship product. No work around is available for the issue.   Service Provider will provide a work around or permanent solution within four (4) hours for 95% of these incidents.
 
       
High
  Service Receiver is able to enter orders and ship product, but in a degraded mode and productivity is seriously impacted.   Service Provider will provide a work around or permanent solution within two (2) working days for 95% of these incidents.
 
       
Medium
  Service Receiver is able to function normally with minor impact from problem.   Service Provider will provide a permanent solution within five (5) working days for 95% of these incidents.
 
       
Low
  Service Receiver is able to function normally. Issue is an inconvenience.   Service Provider will provide a permanent solution within 30 working days for 95% of these issues.

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SCHEDULE AB9
MyITT.COM APPLICATION
Capitalized terms used herein and not otherwise defined shall have the meaning assign such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Ken Gill
ITT Corporation
  Manager , Web, Social
Media & Collaboration
Solutions
      ken.gill@itt.com
 
           
Beth Davidovich
Xylem Inc.
  Director, Corporate IT
& Collaboration COE
      beth.davidovich@itt.com
GENERAL SERVICE DESCRIPTION
Service Provider will perform myITT.com Portal Application Support Services for Service Receiver.
Service Receiver and its Subsidiaries will utilize the Service Provider’s resources based on the functionality, processes, input and output screens and documents that support the Service Provider’s business and business processes in the twelve months prior to the Distribution date.
The Service Receiver may request changes or enhancements to such systems and the Service Provider shall implement those changes provided (i) such changes or enhancements do not materially and negatively impact the Service Provider (acting as a service recipient) or any other service receiver, (ii) Service Receiver agrees to pay for such changes or enhancements in accordance with the pricing schedule below, (iii) such changes do not increase the ongoing operating costs for the Service Provider (as a service recipient) or any other service receiver and (iv) Service Provider, in its discretion, deems that it is capable of making such changes with its current staff during the time period requested without interrupting the Services provided to itself or any other service receiver. Notwithstanding the forgoing, Service Provider is required to make any changes required by law.

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SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, the Service Provider shall provide to Service Recipient the services identified below (collectively, the “Services”).
                     
                Minimum Service    
                Period    
Service #   Service Name   Description of Service   Transaction Volume   (in mo.)   Service Charge
 
      Provide hosting and ongoing myITT.com application support:            
 
                   
 
     
     Access to myITT.com Application — Service Provider will use help desk tickets from Service Receiver and provide access to myITT.com application for an unlimited number of authorized Service Receiver users per the security guidelines outlined in the Master Services Agreement. One business day is required to respond to the ticket after receiving the request.
           
 
                   
IT- myITT.com Portal-01
  myITT.com Maintenance Support Services  
      myITT.com Support & Maintenance — Service Provider will use help desk tickets from Service Receiver to support closing the help ticket within 1 business day of request. Service Provider will monitor incident resolution requests, and recommend and implement incident resolution per the SLA outlined in the Service Level section of this agreement. Service Provider will identify and communicate breaks in application discovered by automated or monitoring system, develop solution and approach to address break in application, and implement fixes to resolve break in application.
  40calls/month   3   Cost plus 2% - 10%
Services that will not be provided as part of this agreement are:
  Creating new sites (on myITT.com)
 
  Updating functionality in existing sites
 
  Updating functionality or providing support on sites migrated to Connect beyond initial functionally ported over from myITT.com
Service Volumes Greater or Less Than Observed Pre-Distribution Date
Service Provider will deliver the same volume of Services as delivered in the 12 months prior to the Distribution Date, plus or minus 10% (such activity, including any such 10% deviation, “Business as Usual activities” or “BAU”) at no additional cost per unit. Service Provider will accommodate Service Receiver’s inorganic (Mergers, Acquisitions, and Divestitures) activities

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on a time and materials basis with respect to the one-time set-up fees. The table below will then apply following the completion of the one-time set-up activities.
         
Scenario   One-Time Setup Fees   Monthly Fees
Service Volume within BAU [Note: BAU already includes +/- 10% of pre-distribution date volumes]
  No incremental one-time fees when Service Receiver utilizes services and structure as-is with no changes under this agreement   Steady-State fee structure for requisite service as documented in this agreement
 
       
Service Volume
greater or less than
BAU
  Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver provided the Service Receiver utilizes services and structure as-is with no significant changes under this agreement   Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver incremental to the base service costs documented below for the requisite service
Exit Services
The following services will be provided upon receipt of a Termination Notice to exit from this Service.
             
Service #   Service Name   Description of Service   Service Charge ($/hour)
 
      Service Provider will make commercially reasonable efforts to assist Service Receiver in exiting of this agreement. These efforts include:    
 
           
 
     
•     Support of data extraction requests from the Service Receiver or third parties authorized to act on behalf of the Service Receiver
   
 
           
IT- myITT.com
Portal-02
  myITT.com Migration  
•     Providing Subject Matter Expertise in helping the Service Receiver understand current state business processes, functional data mapping, and impacts of design decisions
  Time and Materials Based on Additional Pricing Section
 
           
 
     
   Service Provider will support Service Receiver or third parties authorized to act on behalf of Service Receiver in project managing the myITT.com site migration
   
 
           
 
      Service Provider will provide the following knowledge transfer services:    
 
           
IT- myITT.com
Portal-03
  myITT.com Knowledge Transfer  
   Existing non-sensitive documentation maintained by the Service Provider will be given to the Service Receiver as it relates to myITT services
  Time and Materials Based on Additional Pricing Section

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Supplemental Services
For requests for supplemental services relating to myITT Applications by Service Receiver not mentioned in this Schedule or not included within the costs documented in this agreement, Service Receiver will provide a discreet project request and submit such request to Service Provider using the formalized Change Request attached as Annex A for consideration by Service Provider.
Where notice is required a number of business days prior to some required action by Service Provider, notice must be received by 12 noon Eastern Time to be counted as received during such business day. Service Provider shall, within a commercially reasonable period, provide a price quote to be commercially reasonable based on the current cost of the Services to Service Receiver taking into account, such items as the specific time the request was made, service delivery volumes, exit planning activities, and other activities Service Provider is currently engaged in at the time of the request, but not later than 30 days after the request was made. If Service Provider, in its sole discretion determines (i) such request would increase the ongoing operating costs for Service Provider (as a service recipient) or any other service receiver or (ii) that it is not capable of making such changes with its current staff during the time period requested without interrupting the Services provided to itself or any other service receiver. Service Provider need not provide a price quote or perform the services. Where a price quote is provided, Service Provider shall provide the service requested upon acceptance of the price.
LOCATIONS
Services are initially provided from Seneca Falls, NY, USA and White Plains, NY, USA and by on-shore and off-shore consultants to global participants.
PREREQUISITES/DEPENDENCIES
    Service Receiver will maintain site, content and applications within the Oracle Webcenter Interaction Suite (formerly Plumtree) and interfaces to AD domains.
 
    Service Receiver, in a separate independent agreement, must have project management, migration architect, developer etc. services active with Avanade for the period of time to complete the migration project.
 
    Service Receiver will use its resources to support migration services for data clean up, testing and cleaning in a timely manner.
 
    If Service Receiver sends inaccurate data to Service Provider it will be the responsibility of the Service Receiver to rectify any problems and bear any costs incurred to rectify the issue.

4


 

    Security and access controls will be maintained as set forth in the Master Services Agreement.
SERVICE LEVEL
Service Provider will classify incidents at its own discretion. Such classifications shall be consistent with the priorities Service Provider set for itself as a recipient of services. Incidents classified using this methodology will be triaged as documented in Attachment A.
In the event incidents cannot be resolve in the time outlined in Attachment A, Service Provider shall promptly notify Service Receiver and work together to try and resolve such incidents.
ADDITIONAL PRICING
In addition to the costs specifically set forth above, Service Receiver shall also pay commercially reasonable business travel expenses relating to the Services.
Hourly Rate for Services Not Specified but Provided by Service Provider Employees (including but not limited to modifications, consulting, exit strategy development, transition, etc.) are documented below. Such services will be provided solely at the Service Provider’s discretion. Service Provider is not obligated to provide additional services not specified in this agreement. The employee category is defined by the Service Provider. The rates documented below shall be commercially reasonable and designated by the Service Provider, closest to its current cost to provide the service. The hourly rates below include the 4.5% amount for inflation each year. These rates apply to internal Service Provider employees only, and should external resources be required, the costs for those external resources will be reviewed with the Service Receiver prior to execution of the project.
Additional Pricing Rates (All in USD)
                         
Location   Low   Medium   High
USA
  $ 75     $ 100     $ 125  
Greece
  $ 35     $ 46     $ 58  
Mexico
  $ 19     $ 25     $ 31  
Sweden
  $ 75     $ 100     $ 125  

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ATTACHMENT A
         
Scenario   Response Time   Description
Non-Critical Remedy ticket assignment on Weekdays during Business hours
  3 Hrs.   Ticket will be picked-up or assigned to one of the team members within 3 hrs.
 
       
Critical Remedy ticket assignment on Weekdays during Business hours
  1 Hr.   Ticket will be picked-up or assigned to one of the team members within 1 hr.
 
       
Non-Critical Remedy ticket assignment on Weekdays during off-hours
  Next Business Day   Ticket will be picked-up or assigned to one of the team members on Next Business Day
 
       
Critical Remedy ticket assignment on Weekdays during off-hours
  2 Hr.   Ticket will be picked-up or assigned to one of the team members within 2 hr.
 
       
Non-Critical Remedy ticket assignment on Weekends and Holidays
  Next Business Day   Ticket will be picked-up or assigned to one of the team members on Next Business Day
 
       
Critical Remedy ticket assignment on Weekends and Holidays
  2 Hr.   Ticket will be picked-up or assigned to one of the team members within 2 hr.
 
    Note:
 
1.   Business hours are 8:00 am — 5:00 pm ET
 
2.   Critical Incident — The portal is completely down or inaccessible
 
3.   Non-Critical Incident — All incidents which are not classified as critical as defined in this agreement

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SCHEDULE AB10
P2P DELIVERY ENVIRONMENT
Capitalized terms used herein and not otherwise defined shall have the meaning assign such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Tom Restaino
ITT Corporation
  Director, Information Technology Financial Shared Services       tom.restaino@ittcorp.com
 
           
Eva Jakubowska Xylem Inc.
  RCW IT Director       eva.jakubowska@itt.com
GENERAL SERVICE DESCRIPTION
Service Provider will perform Purchase-to-Pay (P2P) Delivery Environment Application Support Services for the Service Receiver.
Service Receiver and its Subsidiaries will utilize Service Provider’s resources based on the functionality, processes, input and output screens and documents that support Service Provider’s business and business processes in the twelve months prior to the Distribution Date.
SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, Service Provider shall provide to Service Recipient the services identified below (collectively, the “Services”).

1


 

                         
                Minimum Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
      Provide application support services for P2P Delivery Environment, which consists of SAP, Vendor Portal, Taxware, OpenText, and Interface Infrastructure MQ and XI (MQ support is only on Provider’s MQ):                
 
                       
 
     
     Access to P2P Delivery Environment — Service Provider will provide access to applications through user request form(s) submitted by Service Receiver via Service Provider P2P Help Desk tickets for authorized service receiver users. Service Provider will maintain and reset SAP user passwords and application security through Provider P2P Help Desk requests. , Service Provider will monitor and restrict unauthorized access to source code and data. User add/update/delete requests will be completed within three (3) business days of receipt of complete, approved form.
               
 
                       
IT-P2P-01
  P2P Delivery
Environment
Application Support
Services
 
     P2P Delivery Environment Support & Maintenance — Service Provider will monitor incident resolution requests; and recommend and implement incident resolution. Service Provider will identify and communicate breaks in application, develop solution to address break, and implement fixes to resolve break. Service Provide reserves the right to charge time and material for a Service Receiver initiated break which requires greater than 8 hours to resolve. Service Provider will maintain production batch schedule, assess impact of failed batch jobs, and adjust schedule to account for batch job failures and delays. Service Provider will execute web server and application server configuration changes; and monitor and maintain application administration. Service Provider will provide SAP Basis support, development support for the P2P Delivery Environment, and configuration management in support of business as usual activities (excludes enhancement requests by Service Receiver). Requests for support and maintenance will be submitted and tracked via Service Provider Help Desk ticket.
  219 SAP Users
122,741 Invoice
Postings per Year
64,008 New Purchase
Orders Created per
Year
    18     “Cost plus 2% - 10%”
 
                       
 
     
      Service Provider will publish scheduled down time which will allow for normal maintenance of the P2P environment including operating system upgrades; database maintenance, and other tasks required in order to keep environment running efficiently. Ad-Hoc down time will be communicated to Service Receiver with 72 hours advance notice where possible.
               
 
                       
 
     
     P2P Delivery Environment Testing Support — Support of Receiver requested testing cycles are included in services during the TSA with the following exceptions to be treated as supplemental services and charged via Time and Materials Based on Additional Pricing Section:
               

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                Minimum Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
     
     Testing requiring a client refresh more than twice a year.
               
 
                       
 
     
     Testing requiring run and verification of a full month-end close where Provider and Receiver aren’t in consensus that the change has an impact to month-end close.
               
 
                       
 
     
   SAP Shared Services Application Master Programs, Tables and Data Maintenance — The Service Provider reserves the right to be the sole owner and administrator of Master Programs, Tables, Data, and Application Security and Access controls will as necessary get joint approval from all Service Receivers for those proposed changes that will impact another Service Receiver.
               
 
                       
   
        In addition, the Provider will provide the following services: Complete SAP Month End jobs and reports to support postings (Vendor Banking Approvals).
         
Service Volumes Greater Than or Less Than Observed Pre-Distribution Date
Service Provider will deliver the same volume of Services as delivered in the 12 months prior to the Distribution Date, plus or minus 3% (such activity, including any such 3% deviation, “Business as Usual activities” or “BAU”) at no additional cost per unit. Service Provider will accommodate Service Receiver’s inorganic (Mergers, Acquisitions, and Divestitures) activities on a time and materials basis with respect to the one-time set-up fees. The table below will then apply following the completion of the one-time set-up activities.
         
Scenario   One-Time Setup Fees   Monthly Fees
Service Volume within BAU [Note: BAU already includes +/- 10% of pre-distribution date volumes]
  No incremental one-time fees when Service Receiver utilizes services and structure as-is with no changes under this agreement   Steady-State fee structure for requisite service as documented below
 
       
Service Volume greater or less than BAU
  Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver provided the Service Receiver utilizes services and structure as-is with no significant changes under this agreement   Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver incremental to the base service costs documented below for the requisite service
Ad-Hoc development/services or processing of reports consistent with what was provided prior to the distribution date will be supported as part of this agreement. Service Provider will use commercially reasonable efforts based on provider’s current abilities to accommodate regulatory or legal ad-hoc requests. Ad-hoc requests which may need to be performed to assist Service Receiver in meeting new legal obligations will be provided on a time and materials basis as described in the Additional Pricing section of this agreement. Any changes to 3rd party

3


 

relationships which require interface modifications or re-writes are not included as part of the scope of this agreement. Should the Service Receiver require such changes, Parties agree to negotiate in good faith with regard to such modification. In the event modifications to the services provided are required by law for only the Service Recipient and such modifications increase the cost for Service Provider, Service Recipient that requires the modifications shall pay all the additional costs including the costs for the other Service Recipients.
Exit Services
The following services will be provided upon receipt of a Termination Notice to exit from this Service.
             
Service #   Service Name   Description of Service   Service Charge ($/hour)
 
      Service Provider will make commercially reasonable efforts to assist Service Receiver in exiting of this agreement. These efforts include:    
 
           
 
     
   Support of data extraction requests from the Service Receiver
   
 
           
IT-P2P-02
  P2P Delivery
Environment
Migration
 
   Providing Subject Matter Expertise in helping the Service Receiver understand current state data schema and configuration details
  Time and Materials Based on Additional Pricing Section
 
           
 
      Service Provider will provide the following knowledge transfer services:    
 
           
IT-P2P-03
  P2P Delivery
Environment
Knowledge Transfer
 
   Existing non-sensitive documentation maintained by the Service Provider will be given to the Service Receiver as it relates to the P2P Delivery Environment and related interfaces
  Time and Materials Based on Additional Pricing Section
Supplemental Services
For requests for supplemental services relating to P2P Delivery Environment by Service Receiver not mentioned in this Schedule or not included within the costs documented in this agreement, Service Receiver will provide a discreet project request and submit such request to Service Provider using the formalized Change Request attached as Annex A for consideration by Service Provider.
Where notice is required a number of business days prior to some required action by Service Provider, notice must be received by 12 noon Eastern Time to be counted as received during such business day. Service Provider shall, within a commercially reasonable period, provide a price quote to be commercially reasonable based on the current cost of the Services to Service Receiver taking into account, such items as the specific time the request was made, service delivery volumes, exit planning activities, and other activities Service Provider is currently engaged in at the time of the request, but not later than 30 days after the request was made. If Service Provider, in its sole discretion determines (i) such request would increase the ongoing

4


 

operating costs for Service Provider (as a service recipient) or any other service receiver or (ii) that it is not capable of making such changes with its current staff during the time period requested without interrupting the Services provided to itself or any other service receiver. Service Provider need not provide a price quote or perform the services. Where a price quote is provided, Service Provider shall provide the service requested upon acceptance of the price.
LOCATIONS
Services are initially provided from Seneca Falls, NY, USA to other USA and Canada locations.
PREREQUISITES/DEPENDENCIES
  Service Receiver will maintain the interfaces documented in Attachment A.
 
  If Service Receiver, or the Service Receiver’s Supplier(s), provides inaccurate information to Service Provider, it will be the responsibility of the Service Receiver to rectify any problems and bear any costs incurred to rectify the issue.
 
  Service Receiver must have one of following the ERP systems active and maintained along with associated interfaces for the duration this agreement is in effect: Business Planning and Control System (BPCS), and PRMS.
 
  Service Receiver must have MQ Series active and maintained for the duration this agreement is in effect.
 
  Service Receiver must submit requests, into the Service Provider’s P2P Help Desk system.
 
  Service Receiver will support testing as required for changes implemented by Service Provider.
 
  Security and access controls will be maintained as set forth in the Master Services Agreement.

5


 

SERVICE LEVEL
Service Provider will classify incidents at its own discretion. Such classifications shall be consistent with the priorities Service Provider set for itself as a recipient of services.
The P2P Delivery Environment scheduled downtime will be Mondays and Tuesdays from 10:00 PM to 3:30 AM ET and Sundays from 1:00 AM to 8:00 AM ET.
Service Provider P2P Help Desk support is available 8:00 AM — 5:00 PM ET Monday through Friday except for holidays. Items are assessed for priority within one (1) hour of receipt. Barring circumstances outside of Service Provider’s control, urgent priority items are addressed within one (1) hour. High priority items will be responded to within one (1) business day and medium priority within two (2) business days. Priority is assessed by the helpdesk staff with direction from Service Receiver.
In the event incidents cannot be resolved, Service Provider shall promptly notify Service Receiver and work together to try and resolve such incidents.
ADDITIONAL PRICING
Hourly Rate for Services Not Specified but Provided by Service Provider Employees (including but not limited to modifications, consulting, exit strategy development, transition, etc.) are documented below. Such services will be provided solely at the Service Provider’s discretion. Service Provider is not obligated to provide additional services not specified in this agreement. The employee category is defined by the Service Provider. The rates documented below shall be commercially reasonable and designated by the Service Provider, closest to its current cost to provide the service. The hourly rates below include the 4.5% amount for inflation each year. These rates apply to internal Service Provider employees only, and should external resources be required, the costs for those external resources will be reviewed with the Service Receiver prior to execution of the project.
Additional Pricing Rates (All in USD)
                         
Location   Low   Medium   High
USA
  $ 75     $ 100     $ 125  
Greece
  $ 35     $ 46     $ 58  
Mexico
  $ 19     $ 25     $ 31  
Sweden
  $ 75     $ 100     $ 125  

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ATTACHMENT A
                 
Interface Name   Business Purpose   Source   Destination   Frequency
Vendor
  Central Vendor Master Maintenance   Service Provider   Service Receiver   Real-time
 
               
Purchase Order
  Purchase Order add, change, delete   Service Receiver   Service Provider   Real-time
 
               
Receipts
  Receipt posting and reversals   Service Receiver   Service Provider   Real-time
 
               
Invoice Posting
  Invoice posting and reversals   Service Provider   Service Receiver   Real-time
 
               
Invoice Payment
  Payment posting and reversals   Service Provider   Service Receiver   Real-time
 
               
Month End Reconciliation:    
 
               
ME_APRECLS
  ME A/P trade reclass   Service Provider   Service Receiver   Month End
 
               
ME_FCREVAL
  ME Foreign Currency revaluation   Service Provider   Service Receiver   Month End
 
               
ME_HCR
  ME Headquarter cash reclearing   Service Provider   Service Receiver   Month End
 
               
ME_ICRECFX
  MW Intercompany FX reclass   Service Provider   Service Receiver   Month End
 
               
ME_ICRECLS
  ME Intercompany Payables reclass   Service Provider   Service Receiver   Month End
 
               
ME_OCR
  ME Uncleared Cash reclass   Service Provider   Service Receiver   Month End
 
               
ME_SMLDIFF
  ME Small Difference balancing   Service Provider   Service Receiver   Month End
 
               
ME_SSF
  ME Shared Service Fee - 2PP   Service Provider   Service Receiver   Month End
 
               
ME_SSFEBUY
  ME Shared Service Fee — eBuyITT   Service Provider   Service Receiver   Month End
 
               
ME_TAXRCLS
  ME Sales & Use tax reclass (for self-assessed tax)   Service Provider   Service Receiver   Month End
 
               
ME_VDPFX
  MW Vendor down payment   Service Provider   Service Receiver   Month End

7


 

SCHEDULE AB11
PRMS SHARED SERVICES AND ERP
APPLICATION SUPPORT
Capitalized terms used herein and not otherwise defined shall have the meaning assign such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
PRMS Shared Services
           
 
           
Tom Restaino
ITT Corporation
  Director, Information Technology
Financial Shared Services
      tom.restaino@ittcorp.com
 
           
Shashank Patel
Xylem Inc.
  RCW Controller       shashank.patel@itt.com
 
           
PRMS ERP Services
           
 
           
Kevin Loucks
ITT Corporation
  Manager, Transition
Management Office
      kevin.loucks@itt.com
 
           
Eva Jakubowska Xylem Inc.
  RCW IT Director       eva.jakubowska@itt.com
GENERAL SERVICE DESCRIPTION
Service Provider will provide PRMS Shared Services and ERP Application Support Services for Service Receiver.
Service Receiver and its Subsidiaries will utilize Service Provider’s resources based on the functionality, processes, input and output screens, and documents that support the Service Provider’s business and business processes in the twelve months prior to the Distribution date.

1


 

SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, Service Provider shall provide to Service Recipient the services identified below (collectively, the “Services”).
                         
                Minimum Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
      Provide PRMS Shared Services Application Support services e.g., Customer Master, Accounts Receivable (AR), General Ledger (GL), Cash Application, and Order Release:                
 
                       
IT-PRMS-01
  PRMS Shared
Services
Application Support
Services
 
     Access to PRMS Shared Services Application — Service Provider will provide access to application for authorized Service Receiver per the security guidelines outlined in the Master Services Agreement. Service Provider will receive the PRMS Shared Services Application User Access forms and menu sets from Service Receiver to update menu sets and user profiles; Service Provider will provide periodic SOX access reports to allow Service Receiver to conduct internal SOX user access compliance certifications. Service Provider will create new application and database users pre-approved by Service Recipient, maintain application and database passwords, maintain application and database security to meet security and controls guidelines identified in Master Services Agreement, as well as monitor and restrict unauthorized access to source code and data. Security access will need a five day lead time, and the SOX access reports will be performed no more than twice a year.
  15 new or modified
Users per Month
  18       Cost plus 2% - 10%
 
                       
   
     Access to PRMS Shared Services AutoClear — Service Provider will provide access to application for authorized Service Receiver per the security guidelines outlined in the Master Services Agreement. Service Provider will use the PRMS Shared Services AutoClear user access forms and menu sets from Service Receiver to update menu sets and user profiles; Service Provider will provide periodic SOX access reports to allow Service Receiver to conduct internal SOX user access compliance certifications. Service Provider will create new application and database users pre-approved by Service Recipient, maintain application and database passwords, maintain application and database security to meet security and controls guidelines identified in Master Services Agreement, as well as monitor and restrict unauthorized access to source code and data. Security access will need a five day lead time, and the SOX access reports will be performed no more than twice a year.
         

2


 

                         
                Minimum Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
     
     PRMS Shared Services Application Support & Maintenance — Service Provider will monitor Help Desk incident resolution requests from the Service Receiver, and recommend and implement incident resolution per the SLA outlined in the Service Level section of this agreement. Service Provider will receive Help Desk ticket from Service Receiver to update applications and ensure regulatory and security compliance. Service Provider will identify and communicate breaks in application discovered by automated or monitoring system, develop solution and approach to address break in application, and implement fixes to resolve break in application. Service Provider will maintain production batch schedule, execute batch jobs, assess impact of failed batch jobs, and adjust schedule to account for batch job failures and delays. Service Provider will execute web server and application server configuration changes, monitor and maintain application administration Robot and CL programs.
               
 
                       
 
     
     PRMS Shared Services Application Master Programs, Tables and Data Maintenance — The Service Provider reserves the right to be the sole owner and modifier of PRMS Master Programs, Tables and Data. The Service Provider on receiving a Help Desk Master Data change ticket form from the Service Receiver will as necessary get joint approval from all Service Receivers for those proposed changes that will impact another Service Receiver, and then maintain the PRMS Master Programs, Tables and Data appropriately.
               
 
                       
 
     
     PRMS Shared Services Database Support — Service Provider’s IT staff and data center will monitor incident resolution requests, and recommend and implement incident resolution per the SLA outlined in the Service Level section of this agreement. Service Provider will identify and communicate breaks in application discovered by automated or monitoring system, develop solution and approach to address break in application, and implement fixes to resolve break in application.
               
 
                       
 
     
     PRMS Shared Service Application Capacity Management — The Service Provider will monitor the environment and make recommendations for capacity changes to the Service Receiver as necessary.
               
 
                       
IT-PRMS-02
  PRMS ERP
Application Support
Services
  Provide PRMS ERP Support services e.g. Materials Resource Planning (MRP), Enterprise Resource Planning (ERP), Order Processing and Invoicing, Debit and Credit Memo, Inventory, Forecasting, Purchasing and Receiving, Costing and Shipping and Manufacturing Operations:                

3


 

                         
                Minimum Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
     
     Access to PRMS ERP Application — Service Provider will provide access to application for authorized Service Receiver per the security guidelines outlined in the Master Services Agreement. Service Provider will use the PRMS Shared Services Application user access forms and menu sets from Service Receiver to update menu sets and user profiles; Service Provider will provide periodic SOX access reports to allow Service Receiver to conduct internal SOX user access compliance certifications. Service Provider will create new application and database users pre-approved by Service Recipient, maintain application and database passwords, maintain application and database security to meet security and controls guidelines identified in Master Services Agreement, as well as monitor and restrict unauthorized access to source code and data. Security access will need a five day lead time, and the SOX access reports will be performed no more than twice a year.
  25 new or modified
Users per Month
    9     Cost plus 2% - 10%
 
                       
 
     
     PRMS ERP Support & Maintenance — Service Provider will monitor Help Desk incident resolution requests from the Service Receiver, and recommend and implement incident resolution per the SLA outlined in the Service Level section of this agreement. Service Provider will address all things other than Applications incidents, identify and communicate breaks in application discovered by automated or monitoring system, develop solution and approach to address break in application, and implement fixes to resolve break in application. Service Provider will maintain production batch schedule, execute batch jobs, notification of failed batch jobs, and adjust schedule to account for batch job failures and delays. Service Provider will execute web server and application server configuration changes, monitor and maintain application administration Robot and CL programs.
               
 
 
     
     The Service Provider after receiving Help Desk production control requests and tested objects from the Service Receiver will move the tested objects into the PRMS ERP production environment. Should the object fail in the process of being moved into production, the Service Provider will work with the Service Receiver to triage and troubleshoot the issues, and move the corrected objects into the PRMS ERP production environment.
               

4


 

                         
                Minimum Service    
            BAU Transaction   Period    
Service #   Service Name   Description of Service   Volume   (in mo.)   Service Charge
 
     
     PRMS ERP Operating System and Database Support — Service Provider will monitor incident resolution requests, and recommend and implement incident resolution per the SLA outlined in the Service Level section of this agreement. Service Provider will identify and communicate breaks in OS discovered by automated or monitoring system, develop solution and approach to address break in OS, and implement fixes to resolve break in OS. The Service Provider on receiving Help Desk service requests from the Service Receiver will perform the following:
               
 
                       
 
                 Create, add files to and Manage Journals                
 
                 Perform program and database backups                
 
                 Perform program and database restores                
 
                 Reorganize Files                
 
                 Create and add to Data Mirrors                
 
                       
 
     
     PRMS ERP Capacity Management — The Service Provider will monitor the environment and make recommendations for capacity changes to the Service Receiver as necessary.
               
Service Volumes Greater Than or Less Than Observed Pre-Distribution Date
Service Provider will deliver the same volume of Services as delivered in the 12 months prior to the Distribution Date, plus or minus 10% (such activity, including any such 10% deviation, “Business as Usual activities” or “BAU”) at no additional cost per unit. Service Provider will accommodate Service Receiver’s inorganic (Mergers, Acquisitions, and Divestitures) activities on a time and materials basis with respect to the one-time set-up fees. The table below will then apply following the completion of the one-time set-up activities.
Service Provider will actively monitor CPU and storage utilization of AS400 based applications in the Seneca Falls Data Center. Costs associated with increasing capacity of CPU and Storage within the AS400 environment will be split and allocated to each AS400 based applications by the Service Provider and an applicable portion of costs borne by the Service Receiver. Service Provider is required to provide Service Receiver with 30 days prior notice in advance of any increases in costs related to incremental allocation of CPU and storage costs.
         
Scenario   One-Time Setup Fees   Monthly Fees
Service Volume within BAU [Note: BAU already includes +/- 10% of pre-distribution date volumes]
  No incremental one-time fees when Service Receiver utilizes services and structure as-is with no changes under this agreement   Steady-State fee structure for requisite service as documented below
 
       
Service Volume greater or less than BAU
  Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver provided the Service Receiver utilizes services and structure as-is with no significant changes under this agreement   Service Provider will develop a commercially reasonable quote for acceptance by the Service Receiver incremental to the base service costs documented below for the requisite service
Ad-Hoc development/services or processing of reports consistent with what was provided prior to the distribution date will be supported as part of this agreement. Service Provider will use commercially reasonable efforts based on provider’s current abilities to accommodate regulatory or legal ad-hoc requests. Ad-hoc requests which may need to be performed to assist Service Receiver in meeting legal obligations will be provided on a time and materials basis as described in the Additional Pricing section of this agreement. Any changes to 3rd party relationships which require interface modifications or re-writes are not included as part of the scope of this

5


 

agreement. Should the Service Receiver require such changes, Parties agree to negotiate in good faith with regard to such modification. In the event modifications to the services provided are required by law for only the Service Recipient and such modifications increase the cost for Service Provider, Service Recipient that requires the modifications shall pay all the additional costs including the costs for the other Service Recipients.
Exit Services
The following services will be provided upon receipt of a Termination Notice to exit from this Service.
               
Service #   Service Name     Description of Service   Service Charge ($/hour)
 
      Service Provider will make commercially reasonable efforts to assist Service Receiver in exiting of this agreement. These efforts include:    
 
             
 
       
     Support of data extraction requests from the Service Receiver
   
 
             
IT-PRMS-03
  PRMS Application
Migration
   
     Providing Subject Matter Expertise in helping the Service Receiver understand current state data schema and configuration details
  Time and Materials Based on Additional Pricing Section
 
             
 
      Service Provider will provide the following knowledge transfer services:    
 
             
IT-PRMS-04
  PRMS Application
Knowledge Transfer
   
     Existing non-sensitive documentation maintained by the Service Provider will be given to the Service Receiver as it relates to the PRMS Shared Services Application and related interfaces
  Time and Materials Based on Additional Pricing Section
Supplemental Services
For requests for supplemental services relating to PRMS Application by Service Receiver not mentioned in this Schedule, Service Receiver will provide a discreet project request and submit such request to Service Provider using the formalized Change Request attached as Annex A for consideration by Service Provider.
Where notice is required a number of business days prior to some required action by Service Provider, notice must be received by 12 noon Eastern Time to be counted as received during such business day. Service Provider shall, within a commercially reasonable period, provide a price quote to be commercially reasonable based on the current cost of the Services to Service Receiver taking into account, such items as the specific time the request was made, service delivery volumes, exit planning activities, and other activities Service Provider is currently engaged in at the time of the request, but not later than 30 days after the request was made. If

6


 

Service Provider, in its sole discretion determines (i) such request would increase the ongoing operating costs for Service Provider (as a service recipient) or any other service receiver or (ii) that it is not capable of making such changes with its current staff during the time period requested without interrupting the Services provided to itself or any other service receiver. Service Provider need not provide a price quote or perform the services. Where a price quote is provided, Service Provider shall provide the service requested upon acceptance of the price.
LOCATIONS
Services are initially provided from Seneca Falls, NY, USA to global locations.
PREREQUISITES/DEPENDENCIES
  Service Receiver will for the period of this TSA, maintain and have active the applications and interfaces documented in Attachment A.
  If Service Receiver, or the Service Receiver’s Supplier(s), sends inaccurate information to Service Provider, it will be the responsibility of the Service Receiver to rectify any problems and bear any costs incurred to rectify the issue.
  Service Receiver must have bank accounts in place prior to the Distribution Date. Changes or new bank accounts must be communicated to Service Provider and completed on a time and materials basis.
  Service Receiver must have DDM, FTP, GetPaid and Custom.net Applications active and maintained for the duration this agreement is in effect.
  Security and access controls will be maintained as set forth in the Master Services Agreement.
  Service Receiver, in a separate and independent agreement, must have Websphere MQ systems active and maintained with the correct interfaces and data feeds to the Supplier Portal by the Service Receiver for the period of time in which this agreement is in effect.
  Service Receiver must have Elogia, system active and maintained for the duration this agreement is in effect.
  Service Receiver must have Electronic Data Interchange (EDI) active and maintained during the period in which this agreement is in effect.

7


 

SERVICE LEVEL
Service Provider will classify incidents at its own discretion. Such classifications shall be consistent with the priorities Service Provider set for itself as a recipient of services. Incidents classified using this methodology will be triaged as documented in Attachment B.
In the event incidents cannot be resolved in the time outlined in Attachment B, Service Provider shall promptly notify Service Receiver and work together to try and resolve such incidents.
ADDITIONAL PRICING
Hourly Rate for Services Not Specified but Provided by Service Provider Employees (including but not limited to modifications, consulting, exit strategy development, transition, etc.) are documented below. Such services will be provided solely at the Service Provider’s discretion. Service Provider is not obligated to provide additional services not specified in this agreement. The employee category is defined by the Service Provider. The rates documented below shall be commercially reasonable and designated by the Service Provider, closest to its current cost to provide the service. The hourly rates below include the 4.5% amount for inflation each year. These rates apply to internal Service Provider employees only, and should external resources be required, the costs for those external resources will be reviewed with the Service Receiver prior to execution of the project.
Additional Pricing Rates (All in USD)
                         
Location   Low     Medium     High  
USA
  $ 75     $ 100     $ 125  
Greece
  $ 35     $ 46     $ 58  
Mexico
  $ 19     $ 25     $ 31  
Sweden
  $ 75     $ 100     $ 125  

8


 

ATTACHMENT A
                 
Interface Name   Business Purpose   Source   Destination   Frequency
Credit Held Orders
  Credit held orders for review and release (approval) by FSS   VC ERP System(s)   PRMS Shared
Services
Application
  Real-Time
 
               
Order Value
Synchronization
  Weekly open order value synchronization with VC’s to re-compute credit values   VC ERP System(s)   PRMS Shared
Services
Application
  Real-Time
Weekly
 
               
Invoices
  Invoice posting and reversals   VC ERP System(s)   PRMS Shared
Services
Application
  Daily
 
               
Customer
  Central customer master administration   PRMS Shared
Services
Application
  VC ERP System(s)   Real-Time
 
               
Credit Values
  Central credit administration (gross$, open orders, net available$)   PRMS Shared Services Application   VC ERP System(s)   Real-Time
 
               
Credit Held Orders Released
  Release (approval) to ship previously credit held order   PRMS Shared Services Application   VC ERP System(s)   Real-Time

9


 

ATTACHMENT B
     
COST & SERVICE METRICS   TARGET PERFORMANCE
System Availability — Percentage of hours the Seneca Falls (SFDC) administered AS/400 processors were available during production workdays for both batch and interactive utilization, Monday through Saturday, 24 hours per day.
  99.90%
 
   
Interactive Service Availability — Percentage of hours the Seneca Falls (SFDC) administered AS/400 processors were available during production workdays for interactive utilization; Monday through Friday ( 20 hours per day ) and Saturday ( 14 hours per day ).
  99.90%
 
   
 
  85.0% <   Day
 
  90.0% <   Days
 
  95.0% <   Days
 
iSeries Service Requests
          1) Running Robot Jobs
          2) Requesting a Restore
          3) Running Batch Jobs
          4) Requesting a File Copy
          5) Printing/ Re-Printing Reports
          6) Permission to use EZVIEW and Query Commands
          7) Requesting a Back Up
          8) New printer configurations
  Service Commitment: Service requests are processed Monday through Friday between the hours of 6:00 AM to 9:00 PM (EST). Response Time is measured from the time the request is received and logged in at the Seneca Falls Data Center (SFDC). Turn around for ROBOT jobs is 2 weeks. No production changes will be made from the Wednesday before M/E until M/E processing is complete. No production changes will be made in December.
 
   
 
  98.0% <   Days
 
  99.0% <   Days
 
  100.0% <   Days
 
iSeries User Profile Requests —
1) Create new user accounts or
2) Change a current user account or
3) Deactivate a user account on the Seneca Falls AS/400’s.
  Service Commitment: Service requests are processed Monday through Friday between the hours of 6:00 AM to 9:00 PM (EST). Response Time is measured from the time the request is received and logged in at the Seneca Falls Data Center (SFDC). Turn around time for user profiles is 3 business days
Note: Service Level Objectives/Targets are measured during the following service window:
6:00 AM to 2:00 AM (EST) ; Monday through Friday
6:00 AM to 8:00 PM (EST) ; Saturday

10


 

Need More Information?
Points of Contents
             
    Jean Lindsley        
    Datacenter Services,        
Name   Chief of Technology   Supervisor Name   TBD
Telephone Number
      Telephone Number    
Email Address
  jean.lindsley@itt.com   Email Address    
 
           
Customer Info Link
           

11


 

SCHEDULE AB12
POST SPIN HYPERCARE
Capitalized terms used herein and not otherwise defined shall have the meaning assign such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Karla Viglasky
ITT Corporation
  Chief Information Officer       karla.viglasky@itt.com
 
           
Peter Olive
Xylem Inc.
  Chief Information Officer       peter.olive@itt.com
GENERAL SERVICE DESCRIPTION
Service Provider will perform Post Spin Hypercare Support Services for Service Receiver.
Service Receiver and its Subsidiaries will utilize Service Provider’s resources based on the functionality, processes, input and output screens, and documents that support the Service Provider’s business and business processes in the twelve months prior to the Distribution date.
SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, Service Provider shall provide to Service Recipient the services identified below (collectively, the “Services”).

1


 

                           
                  Minimum    
              BAU   Service    
    Service         Transaction   Period   Service
Service #   Name     Description of Service   Volume   (in mo.)   Charge
 
      Provide Post Spin Hypercare support services:                
 
                         
 
      Facility Shutdown Services – Service Provider will provide Service Receiver with Facility Shutdown services that include:                
 
                         
 
       
    Disposition of network and computer assets
               
 
                         
 
       
     Disposition of furniture and miscellaneous equipment; boxing of HR files, ITT logo, posters, etc.
               
 
                         
 
       
     Maintain working environment for remaining employees
               
 
                         
 
       
     Control the activation and deactivation of access cards
               
 
                         
 
       
     Close all third party contracts with vendors, such as food, vending machines, cable, printers, cleaning, etc.
               
 
                         
 
      Program Shutdown Services – Service Provider will provide Service Receiver with Program Shutdown services that include:                
 
                         
IT-Hypercare-01
  Hypercare Support
Services
   
     Crisis management for final cutover, to ensure all projects go live on spin date
        3 *     Cost plus 2% - 10%
 
                         
 
       
     Command center support and ramp down
               
 
                         
 
       
     Access to TPMO and IT-SS Connect sites through ITT Co. Active Directory and VPN accounts for up to 20 people
               
 
                         
 
      Financial Support Services –Service Provider will provide Service Receiver with financial support services that include:                
 
                         
 
       
     Purchase Order (invoice payment) and Contract management for suppliers assisting with separation
               
 
                         
 
       
    Miscellaneous Support Services – Service Provider will provide Service Receiver with supplemental and miscellaneous project support services that include:
               
 
                         
 
       
      Project management, strategy development, infrastructure consulting, etc. Prioritization and resource allocation for these services will be jointly agreed to by CIOs.
               
 
                         
 
      All requests for support will be directed to and coordinated through Cindy Hoots.                
 
*   TSA duration will end on 12/31/2011 regardless of actual spin-date.
 
**   Costs represent salary expense (no retention or severance) and additional facility charges for the Hanover location.

2


 

LOCATIONS
Services are initially provided from Hanover, MD, USA to other USA locations.
PREREQUISITES/DEPENDENCIES
    Security and access controls will be maintained as set forth in the Master Services Agreement.
 
    Travel and expenses will be paid by the requesting organization.
SERVICE LEVEL
Service Provider will classify incidents at its own discretion. Such classifications shall be consistent with the priorities Service Provider set for itself as a recipient of services.
In the event incidents cannot be resolved, Service Provider shall promptly notify Service Receiver and work together to try and resolve such incidents.

3


 

SCHEDULE AB13
SERVICES TSA SCHEDULE FOR
MEXICO
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Service
Provider
Aracili Europa

Service
Recipient
Anna Guerrero
  Controller IP Mexico
Bombas Goulds de Mèxico,
S. de R.L. de C.V

Controller, WWW Mexico
ITT Water Technology
Mexico, S. de R.L. de C.V.
   



   
  Araceli.europa@ittcorp.net



Anna.Guerrero@fluidtechnology.net
PARTIES TO THE AGREEMENT
1.   Service Provider — Bombas Goulds de Mèxico , S. de R.L. de C.V
 
2.   Service Recipient — ITT Water Technology Mexico, S. de R.L. de C.V.
GENERAL SERVICE DESCRIPTION
1.   Finance & Accounting Services
 
2.   Payroll Services
 
3.   Accounts Payables Services
 
4.   Billing and Accounts Receivables Services
 
5.   Cost Accounting Services
TERM AND OPTION
1.   Minimum Service Period — 9 months — Commencing on the Distribution Date
 
2.   The Monthly Costs are set forth below under Pricing & Payment Terms. The Service Recipient and Service Provider agree that, except as set forth in this Services TSA Schedule for Mexico (“this TSA”) no additional 2%, 10% or 4.5% increase in such pricing should be applied as set forth in Section 2 of the Agreement.
 
3.   Service Recipient shall have the option to renew at 1.10 times the monthly fixed charge as noted below for an additional 3 months if written notice is provided 60 days prior to the end of the Minimum Service Period.
 
4.   Service Recipient will have the option to terminate this agreement at any time, with no additional make-whole fee as required by Section 11(b) of the Agreement, after the 1st 3 months with 2 months advance written notice to the Service Provider

J-1


 

SERVICES TO BE PROVIDED
1.   Finance and accounting services
  a.   Maintain general ledger and chart of accounts
 
  b.   Reconcile balance sheet accounts at a minimum of once per quarter
 
  c.   Reconcile Service Recipient legal entity bank accounts a minimum of once a month
 
  d.   Close books and prepare local financial statements monthly on a timely basis
  i.   US GAAP financial statements will be prepared as required by the Mexican Government
 
  ii.   Prepare all required JV’s required to close the books on a monthly basis
 
  iii.   File required local statutory financial statements with the authorities in a timely manner
 
  iv.   File required US GAAP financial statements (P&L and Balance Sheet) in both local currency and on a US FAS 52 basis with the Service Recipient’s parent company by the 1st Monday after the closing date
  e.   Request cash when needed from the Service Recipient’s parent company in order to support business activities
 
  f.   Analyze cash requirements at a minimum of once per month and allocate funds to bank accounts (vendor invoices / purchase orders, payroll, tax payments, customer receipts, special unusual items)
 
  g.   Perform all bank account related maintenance (signatory changes, relationship management etc)
 
  h.   Prepare, file and pay (provided Service Recipient has made available to Service Provider sufficient funds) all required local statutory tax returns (including but not limited to income tax, sales tax, VAT, GST, payroll related, social security, housing, property taxes). Provide information to Service Recipient’ tax advisor in this regard.
 
  i.   Prepare and file all required statutory reports with the appropriate governmental authorities on a timely basis
 
  j.   Fixed Asset accounting
  i.   Maintain detailed fixed asset subsidiary ledger and reconcile to general ledger
  k.   Provide required support to Service Recipient’s internal & external auditors
 
  l.   Provide required support for government audits
 
  m.   Respond to special requests from service recipients legal advisors
 
  n.   Prepare monthly financial forecasts
 
  o.   Prepare annual budget, strategic plan, and operating plan financial statements
 
  p.   Prepare required business review meeting materials on a monthly basis
 
  q.   Respond to Service Recipient’s ad hoc requests for financial data in a timely manner within reason
2.   Payroll Services
  a.   Process payroll on a bi weekly basis (provided Service Recipient has made available to Service Provider sufficient funds)
 
  b.   Download employee time clock information
 
  c.   Input employee information obtained from Service Recipient’s HR function
  i.   New Hires

 


 

  ii.   Terminations
 
  iii.   Vacations
 
  iv.   Salary changes
 
  v.   Validate approvals
  d.   Maintain and update payroll related files
  i.   Vacations
 
  ii.   Salary advances
 
  iii.   Child support
 
  iv.   Housing withholdings
 
  v.   Employee savings
 
  vi.   Leaving indemnity
  e.   Provide employees with bank cards
 
  f.   Calculate payroll via payroll software
 
  g.   Review printed payroll reports for accuracy
 
  h.   Make net pay file and submit to bank & validate deposits to employee bank accounts on a timely basis
 
  i.   Print and distribute pay stubs / advices to employees on a timely basis
 
  j.   File copies of pay stubs and file payroll booklet
3.   Accounts Payable Services
  a.   Process vendor invoices for payment twice per week (provided Service Recipient has made available to Service Provider sufficient funds)
 
  b.   Perform 3 way match in Accounts payable system
 
  c.   Review invoice approvals
 
  d.   Maintain PO balance when partial shipments
 
  e.   Maintain form control over purchase orders (Note: all other purchasing department activities to be performed by the Service Recipient)
 
  f.   Invoice coding to general ledger account
 
  g.   Process vendor check run once per week
 
  h.   Process vendor wire transfers twice per week
 
  i.   Review and process travel expense reports and travel advances twice per week
 
  j.   Process payroll child support withholding payments on a weekly basis
 
  k.   Process employee savings fund withdrawal requests twice per week
4.   Billing and Accounts Receivables Services
  a.   Generate customer invoices from ERP system on a daily basis
 
  b.   Review invoices for accuracy
 
  c.   Charge taxes (VAT, Sales) as required by law
 
  d.   Update and control customer master file based on information provided by Service Recipient
 
  e.   Recommend customer credit terms.
 
  f.   Maintain accounts receivable subsidiary ledger and reconcile to general ledger
 
  g.   Post billings to accounts receivable ledger on a daily basis
 
  h.   Post cash receipts to open accounts receivable ledger on a timely basis and follow up with customers when unable to identify cash received to open accounts receivables
 
  i.   Follow up as required with customers via telephone and email on past due receivables to ensure cash is collected as quickly as possible
 
  j.   Travel to customers in special circumstances only to facilitate collection of open accounts receivables
 
  k.   Recommend customers be places on credit hold or shipping hold when appropriate. Service Recipient must approve Service Provider’s recommendation

 


 

  l.   Prepare and analyze aged accounts receivables report and review monthly with Service Recipient
 
  m.   Recommend write offs of overdue accounts receivables
5.   Cost Accounting Services
  a.   Prepare and review all plant inventory and manufacturing variance journal entries on a monthly basis
 
  b.   Reconciliation of perpetual inventory to general ledger
 
  c.   Prepare instructions and oversee annual physical inventory including test count audits
 
  d.   Reconcile physical inventory and record appropriate book to physical adjustment to general ledger
 
  e.   Coordination and oversight of cycle count program
 
  f.   Review of cycle count program adjustments and record adjustments in general ledger
 
  g.   Review and analysis of manufacturing variances on a monthly basis
 
  h.   Review of financial statement inventory balances on a monthly basis with comparison to prior month balances
 
  i.   Establish and substantiate appropriate inventory reserves (Excess and Obsolete, Lower of Cost or Market, Inventory revaluation)
 
  j.   Develop new standard costs once per year in Q4 of each year
 
  k.   Prepare annual cost of production statement for the Mexico Government in Q1-Q2 of each year
 
  l.   Prepare annual transfer price analysis in support of annual statutory audit in Q1-Q2 of each year

 


 

LOCATIONS
1.   IP facility located at the following address;     
Bombas Goulds de Mèxico , S. de R.L. de C.V
Avenida eje Oriente Poniente Lote 4 Manzana 9
Ciudad Industrial Tizayuca , Hidalgo
Mexico
Z.C 43800
PREREQUISITES/DEPENDENCIES
1.   Power of Attorney is granted to the IP Mexico Controller to     execute banking transactions, and access RCW IT systems only. If approval is required from Service Recipient in advance of any filing with any governmental agency and approval is not obtained in a timely manner, the Service Recipient, in addition to its waiver of liability as set forth in Section 10 of the Agreement, waives all rights to make any claim for damages resulting from the late filing and agrees to pay and fines or penalties that result from the late filing(s).The Power of Attorney that is granted to the IP Mexico Controller will cease the date that this agreement is terminated
 
2.   Both the Service Provider and the Service Recipient agree to the month end closing dates for the 3 month period of this agreement
 
3.   If US GAAP compliant reporting is required by the Service Recipient, then the Service Recipient agrees to provide the Service Provider with the software to facilitate this reporting and to install the software and train Service Provider’s employees at Service Recipient’s cost prior to the commencement date of this agreement
 
4.   After the termination of this agreement, it may be necessary from time to time for the Service Provider, on behalf of the Service Recipient, to respond to inquiries made by government authorities about Service Recipient’s financial statements and tax filings, including providing support for audits. In this event, the Service Provider will contact the Service Recipient and agree on an appropriate course of action and response. To the extent that Service Provider’s resources are to be used to respond to the inquiries, the Service Provider will be entitled to invoice the Service Recipient at the following rates per hour provided if assistance is needed under this section after 2012, the parties will renegotiate such rates in good faith;
  a.   Clerical — US$20.00
 
  b.   Professional — US$30.00
 
  c.   Management — US$77.00
5.   To the extent that the Service Provider is required to terminate any of its employees who are providing services solely to the Service Recipient (and not supporting any other aspect of the Service Provider’s business) under this agreement at the end of this agreement because of lack of work, the Service Recipient agrees to reimburse the Service Provider for any one time termination costs that are required to be paid as per government regulation or company policy.
 
6.   At the termination of this agreement, the Service Recipient will provide the necessary support at its own expense to transfer data to its own systems. The Service Provider will agree to provide training to the Service Recipient’s employees on the Service Provider’s premises or via conference call / web ex prior to the termination of the agreement. The Service Provider will not be required to send any of its employees to any other Service Recipient location.

 


 

7.   Service Recipient is precluded from hiring Service Provider’s employees that provide the services under this agreement for the duration of this agreement plus for an additional two years after the agreement is terminated.
 
8.   In the event of 3rd party claims against the Service Recipient which are unrelated to this agreement, the Service Recipient agrees to indemnify the Service Provider for any costs that the Service Provider may incur in the event that the 3rd party elects to also claim damages against the Service Provider because of their relationship with the Service Recipient. The Service Recipient also agrees to defend the Service Provider at its sole cost to the extent permitted to do so under Mexican Law
TAX STATUS
1.   Service Provider — Payments received under the terms of this agreement will be considered taxable income in Mexico
 
2.   Service Recipient — Payments made under the terms of this agreement will be tax deductible in Mexico
 
3.   VAT of 15% of the invoice amount will be charged by the service provider to the service recipient
BILLING LOCATION
NOTICES
All correspondence with respect to this agreement should be sent to the Service Owners listed above with copies to the following;
1.   Service Provider — Joanne Scalard
1133 Westchester Ave
White Plains, NY 10605
 
2.   Service Recipient — Dan Kelly
1133 Westchester Avenue
White Plains, NY 10605

 


 

NOTICE REQUIREMENTS
         
No.   Third Party Provider   Prior Notice Requirement to
Terminate Service
         
    None required   See Term and Option above
         
         
         
         
         
         
PRICING & PAYMENT TERMS
1.   The monthly fixed charge for all services provided under this TSA will be $13,000 for the 1st 9 months of this agreement — Payable in US Dollars
 
2.   Invoices will be prepared monthly and mailed to the service provider via email.
 
3.   There will be no additional backup attached to these invoices
 
4.   The 1st invoice will be dated the Commencement Date
 
5.   Invoice payment terms are net 30 days from invoice date.
 
6.   Subsequent invoices will follow every 30 days
 
7.   Exit costs as well as costs incurred to respond to inquiries by the authorities by the Service Provider on behalf of the Service Recipient will be billed by the Service Provider as soon as practicable with appropriate backup documentation

 


 

SCHEDULE AB14
SERVICES TSA SCHEDULE FOR
NOGALES
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Service
Provider
Arnulfo Soto
  Controller ICS Nogales
Mexico
      Arnulfo.soto@ittcorp.net
             
Service
Recipient
John Sullivan
  Controller, Flow Control       John.sullivan@fluidtechnology.net.
PARTIES TO THE AGREEMENT
  1.   Service Provider – ITT Cannon de Mexico, S.A. de C.V.
  2.   Service Recipient – Jabsco Sociedad de Responsabilidad Limitada de Capital Variable
GENERAL SERVICE DESCRIPTION
  1.   Finance & Accounting Services
 
  2.   Payroll Services
 
  3.   Accounts Payables Services
 
  4.   Import / Export Services
TERM AND OPTION
  1.   Minimum Service Period — 12 months – Commencing on the Distribution Date
 
  2.   The Monthly Costs are set forth below under Pricing & Payment Terms. The Service Recipient and Service Provider agree that, except as set forth in this Services TSA Schedule for Nogales (“this TSA”) no additional 2%, 10% or 4.5% increase in such pricing should be applied as set forth in Section 2(a) of the Agreement.
 
  3.   Service Recipient shall have the option to renew at 1.15 times the monthly fixed charge as noted below for an additional 3 months if written notice is provided 60 days prior to the end of the Minimum Service Period. Service Recipient will have the option to terminate this agreement at any time, with no additional make-whole fee as required by Section 11(b) of the Agreement, after the 1st 6 months with 6 months advance written notice to the Service Provider

 


 

SERVICES TO BE PROVIDED
1. Finance and accounting services
  a.   Maintain general ledger and chart of accounts
 
  b.   Reconcile balance sheet accounts at a minimum of once per quarter
 
  c.   Reconcile banks accounts a minimum of once a month
 
  d.   Close books and prepare local financial statements monthly on a timely basis
  i.   US GAAP financial statements will be prepared as required by the Mexican Government
 
  ii.   Prepare all required JV’s required to close the books on a monthly basis
 
  iii.   File required local statutory financial statements with the authorities in a timely manner
 
  iv.   File required US GAAP financial statements (P&L and Balance Sheet) in both local currency and on a US FAS 52 basis with the Flow Control USA LLC parent company by the 1st Monday after the closing date
  e.   Request cash when needed from the Flow Control USA LLC parent company in order to support business activities via creation of maquilladora services invoice on a monthly basis
 
  f.   Analyze cash requirements at a minimum of once per month and allocate funds to bank accounts (vendor invoices / purchase orders, payroll, tax payments, customer receipts, special unusual items)
 
  g.   Perform all bank account related maintenance (signatory changes, relationship management etc)
 
  h.   Prepare, file and pay (provided Service Recipient has made available to Service Provider sufficient funds) all required local statutory tax returns (including but not limited to income tax, sales tax, VAT, GST, payroll related, social security, housing, property taxes). Provide information to Service Recipient’ tax advisor in this regard.
 
  i.   Prepare and file all required statutory reports with the appropriate governmental authorities on a timely basis
 
  j.   Fixed Asset accounting (leasehold improvements only)
 
  i.   Maintain detailed fixed asset subsidiary ledger and reconcile to general ledger
 
  k.   Provide required support to Tenant’s internal & external auditors
 
  l.   Provide required support for government audits
2.   Payroll Services
  a.   Process payroll on a weekly basis (provided Service Recipient has made available to Service Provider sufficient funds)
 
  b.   Download employee time clock information
 
  c.   Input employee information obtained from Service Recipient’s on site HR manager
  i.   New Hires
 
  ii.   Terminations
 
  iii.   Vacations
 
  iv.   Salary changes
 
  v.   Validate approvals
  d.   Prepare and print weekly hours report
 
  e.   Distribute weekly hours report to employee supervisors and obtain
  i.   Employee signature
 
  ii.   Supervisor approvals

 


 

  f.   Maintain and update payroll related files
  i.   Vacations
 
  ii.   Salary advances
 
  iii.   Child support
 
  iv.   Housing withholdings
 
  v.   Employee savings
 
  vi.   Leaving indemnity
  g.   Provide employees with bank cards
 
  h.   Calculate payroll via payroll software
 
  i.   Review printed payroll reports for accuracy
 
  j.   Review time clocked vs. payroll report and resolve differences
 
  k.   Make net pay file and submit to bank & validate deposits to employee bank accounts on a timely basis
 
  l.   Print and distribute pay stubs / advices to employees on a timely basis
 
  m.   File copies of pay stubs and file payroll booklet
3.   Accounts Payable Services
  a.   Process vendor invoices for payment, twice per month on the 10th and 25th of each month through the Peso ledger (provided Service Recipient has made available to Service Provider sufficient funds)
 
  b.   Perform 3 way match in Accounts payable system
 
  c.   Review invoice approvals
 
  d.   Maintain PO balance when partial shipments
 
  e.   Maintain form control over purchase orders and assignment of PO numbers (Note: all other purchasing department activities to be performed by the Service Recipient)
 
  f.   Invoice coding to general ledger account
 
  g.   Process vendor check run twice per month on the 10th and 25th of each month
 
  h.   Process vendor wire transfers
 
  i.   Review and process travel expense reports and travel advances as required
 
  j.   Review and process employee salary advances once per week
 
  k.   Process payroll child support withholding payments on a weekly basis
4.   Import / Export Services
  a.   Supervise activities of Service Recipient’s personnel (Service Recipient’s personnel are required to perform the following activities)
  i.   Exports
  1.   Classify merchandise
 
  2.   Input parts and data to CAM system
 
  3.   Process pro forma invoice, packing list, pedimento
 
  4.   Review above for accuracy
 
  5.   Dispatch truck
  ii.   Imports
  1.   Review list of goods
 
  2.   Classify merchandise
 
  3.   Input parts and data to CAM system
 
  4.   Coordinate with counterpart broker
 
  5.   Process pro forma invoice, packing list, pedimento
 
  6.   Review above for accuracy
 
  7.   Dispatch truck
  iii.   Other Shipments (Chihuahua, Durango, Guadalajara)

 


 

  1.   Review list of goods
 
  2.   Classify merchandise
 
  3.   Input parts and data to CAM system
 
  4.   Coordinate with counterpart broker
 
  5.   Process pro forma invoice, packing list, pedimento
 
  6.   Review above for accuracy
 
  7.   Dispatch truck
  iv.   Virtual imports exports
  1.   Review list of goods
 
  2.   Classify merchandise
 
  3.   Input parts and data to CAM system
 
  4.   Coordinate with counterpart broker
 
  5.   Process pro forma invoice, packing list, pedimento
 
  6.   Review above for accuracy
 
  7.   Dispatch truck
  v.   In cases of customs inspection, coordinate with inspector for clearance of goods
 
  vi.   Tracking of open and close Pedimentos
 
  vii.   Process complimentary Pedimentos to pay duties
 
  viii.   Prepare paperwork required to comply with Anexo 24
 
  ix.   Import / export record keeping
  b.   Provide support for classification of merchandise for US & Mexico customs purposes
 
  c.   Review import export shipment information for accuracy
 
  d.   Coordinate shipments and carriers to Service Recipient factories/customers in Mexico (Chihuahua, Durango, Guadalajara)
 
  e.   Coordinate virtual import/exports
  i.   Coordinate with counterpart broker
 
  ii.   Review documentation for accuracy
 
  iii.   Agree with data to be submitted
  f.   Coordination of customs shipment inspection activities to ensure timely resolution and clearance of goods
 
  g.   Record keeping
  i.   Ensure customs related documents are filed on a timely basis
 
  ii.   Assure easy access to customs documentation when needed
  h.   Coordinate with broker to ensure timely opening and closing of Mexican Pedimentos
 
  i.   Ensure Mexican Pedimento duties are paid on a timely basis
 
  j.   Maintain relationship with the Mexico Secretary of the Economy. Provide information as required.
 
  k.   Insure timely compliance with Anexo 24
 
  l.   Completion and filing of annual report of Foreign Business Trnsactions
 
  m.   Process and file amendment applications for the Maquila Program
 
  n.   Provide information to the tax authorities as required or requested
 
  o.   Support D&T audits of customs activities
  i.   Attend meetings
 
  ii.   Provide information
 
  iii.   Maintain control over audits
  p.   Support customs audits
  i.   Attend meetings
 
  ii.   Provide information & review audit findings and comments

 


 

5. IT Services
  a.   CAM applications support
 
  b.   Qualisys applications support
 
  c.   Timekeeping system support

 


 

LOCATIONS
1.   ICS Nogales Mexico facility located at the following address;
ITT Cannon de Mexico, S.A. de C.V.
Avenida del Libre Comercio S/N
Entre Calzada Industrial Nuevo Nogales y
Calzeda del Raquet Club
Col. Parque Industrial Nuevo Nogales
Nogales, Sonora C.P. 84093
PREREQUISITES/DEPENDENCIES
 
1.   New Flow Control Mexico legal entity is established and fully     capable of legally conducting business by the commencement date of this agreement
 
2.   New Flow Control Mexico legal entity has registered with all of the appropriate governmental agencies and secured required permits (including but not limited to US and Mexico customs permits)
 
3.   New Flow Control Mexico legal entity Bank account(s) are established by the commencement date of this agreement
 
4.   Nogales Mexico Financial, HR/Payroll, and Import export hardware and software platforms are separated by the commencement date of this agreement.
 
5.   Power of Attorney is granted to the ICS Nogales Controller to execute banking transactions and access Flow Control IT systems for the purpose of providing all services contained in this agreement. The ICS Nogales Controller will not be granted Power of Attorney to file appropriate reports and tax returns with governmental authorities. If approval is required from Service Recipient in advance of any filing with any governmental agency and approval is not obtained in a timely manner, the Service Recipient, in addition to its waiver of liability as set forth in Section 10 of the Agreement, waives all rights to make any claim for damages resulting from the late filing and agrees to pay and fines or penalties that result from the late filing(s) The Power of Attorney that is granted to the ICS Nogales Controller under this provision will cease on the date that this agreement is terminated
 
6.   The Service Recipient agrees to provide Power of Attorney privileges to 2 of its employees as of the commencement date of this TSA, for the purpose of reviewing, authorizing and signing, tax returns and other statutory reports which are prepared by the Service Provider as per the services described in this agreement
 
7.   Both the Service Provider and the Service Recipient agree to the month end closing dates for the 1 year period of this agreement 8. If US GAAP compliant reporting is required by the Service Recipient, then the Service Recipient agrees to provide the Service Provider with the software to facilitate this reporting and to install the software and train Service Provider’s employees at Service Recipient’s cost prior to the commencement date of this agreement
 
9.   Service Recipient contracts with a tax advisor prior to the commencement of this agreement
 
10.   The Service Recipient will hire its own local Nogales HR Manager and Import Export Broker prior to the commencement date of this TSA. The Service Provider will assist in the proper training of these individuals prior to the commencement date of this TSA. If the Service Recipient fails to hire these employees by the commencement date of this agreement, the monthly fixed charge will increase based upon good faith negotiations

 


 

    between the parties, until such time as the positions are filled and Service Provider agrees to provide the services that would have been performed by these individuals during the time that the positions are vacant.
11.   If during the term of this agreement, the Service Recipient’s HR Manager or Import Export clerical positions become vacant, the monthly fixed charge will increase based upon good faith negotiations between the parties, until such time as both positions are filled and Service Provider agrees to provide the services that would have been performed by these individuals during the time that the positions are vacant.
 
12.   After the termination of this agreement, it may be necessary from time to time for the Service Provider, on behalf of the Service Recipient, to respond to inquiries made by government authorities about Service Recipient’s financial statements and tax filings, including providing support for audits. In this event, the Service Provider will contact the Service Recipient and agree on an appropriate course of action and response. To the extent that Service Provider’s resources are to be used to respond to the inquiries, the Service Provider will be entitled to invoice the Service Recipient at the following rates per hour, provided if assistance is needed under this section 12 after 2012, the parties will renegotiate such rates in good faith;
  a.   Clerical – 255 Mexico Pesos ($20.00 notional US$)
 
  b.   Professional – 382.00 Mexico Pesos ($30.00 notional US$)
 
  c.   Management – 980.00 Mexico Pesos($77.00 notional US$)
13.   To the extent that the Service Provider terminates any of its employees who are providing services solely to the Service Recipient (and not supporting any other aspect of the Service Provider’s business) under this TSA at the end of this agreement because of lack of work, the Service Recipient agrees to reimburse the Service Provider for any one time termination costs that are required to be paid as per government regulation or company policy.
 
14.   At the termination of this agreement, the Service Recipient will provide the necessary support at its own expense to transfer data to its own systems. The Service Provider will agree to provide training to the Service Recipient’s employees on the Nogales premises or via conference call / web ex prior to the termination of the agreement. The Service Provider will not be required to send any of its employees to any other Service Recipient location.
 
15.   Service Recipient is precluded from hiring Service Provider’s employees that provide the services under this TSA for the duration of this TSA plus for an additional one year after the TSA is terminated. Notwithstanding the above, the Service Recipient will have the right to hire the ICS 2 import export clerks that are providing services to the Service Recipient under the terms of this agreement, upon termination of this agreement
 
16.   The Service Provider’s IT department will be allowed access to tenant’s designated areas as per the floor plan that forms a part of the Nogales facility rental TSA for purposes of providing the services that are included in this agreement. The landlord’s IT department will have the right to access the tenant’s IT data in order to provide the services that are included in this agreement The Service Recipient will hire an onsite IT support to oversee all of the Service Recipient’s IT operations. To the extent that the IT services listed in the services provided section of this TSA are required from the Service Provider, for whatever reason including but not limited to the inexperience of the Service Recipient’s IT Manager or the failure to the Service Recipient to hire an IT Manager by the commencement date of this agreement, the Service Recipient agrees that they will accept charges for services provided in accordance with the Pricing and Payment Terms provision #3 as shown in this agreement.

 


 

TAX STATUS
1.   Service Provider – Payments received under the terms of this agreement will be considered taxable income in Mexico
 
2.   Service Recipient – Payments made under the terms of this agreement will be tax deductible in Mexico
BILLING LOCATION
1.   Nogales, Sonora, Mexico
NOTICES
    All correspondence with respect to this agreement should be sent to the Service Owners listed above with copies to the following;
  1.   Service Provider – Suzy Lee
 
      666 East Dyer Road
 
      Santa Ana, Ca. 92705
  2.   Service Recipient – Dan Kelly
 
      Xylem Inc.
 
      Suite 2000
 
      1133 Westchester Avenue
 
      White Plains, NY 10605
NOTICE REQUIREMENTS
         
        Prior Notice Requirement to
No.   Third Party Provider   Terminate Service
    None required   See Term and Option above
         
         
         
         

 


 

PRICING & Payment Terms
1.   The monthly fixed charge for finance, accounting, accounts payable and payroll services will be 216,393 Mexico Pesos ($16,998 notional US$) for the term of this agreement – Payable in Mexico Pesos
 
2.   The monthly fixed charge for import and export services will be 126,696 Mexico Pesos ($9,952 notional US$) for the term of this agreement – Payable in Mexico Pesos
 
3.   IT Services, as defined in this agreement, will be charged on a time and materials basis. Materials will be charged at Service Provider’s cost and required labor will be charged at a rate of 318.00 Mexico Pesos ($25.00 notional US$) per hour. Invoices will be prepared monthly and mailed to the Service Recipient via email.
 
4.   There will be no additional backup attached to these invoices for items 1 and 2 above. For item 3 copies of vendor invoices will be attached to the invoice to support the materials charges and timesheets showing the number of hours and dates worked by person will be attached to support labor charges
 
5.   VAT of 11% will be added to all invoices
 
6.   The 1st invoice will be dated the same date as the Distribution Date
 
7.   Invoice payment terms are net 30 days from invoice date.
 
8.   Subsequent invoices will follow every 30 days
 
9.   Exit costs as well as costs incurred to respond to inquiries by the authorities by the Service Provider on behalf of the Service Recipient will be invoiced & billed by the Service Provider as soon as practicable with appropriate backup documentation.

 


 

SCHEDULE AB15
SUBCONTRACT ARRANGEMENT IN WUXI
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Service Provider
           
 
           
Paul Chen and
  Finance Controller — Motion Tech Wuxi       paul.chen@ittcorp.net
 
           
Stephen Chan
  China Share Service Manager       stephen.chan@itt.com
 
           
Service Recipient
           
 
           
Meng Hing Chua
  Vice President and Director of Finance     menghing.chua@itt.com
PARTIES TO THE AGREEMENT
Service Provider: ITT High Precision Manufactured Products (Wuxi) Co., Ltd. of No. 570 Yangda Road, Meicun, New District, Wuxi City, the PRC
Service Recipient: ITT (Shanghai) Trading Co. Ltd. of Suite 3011-3014, Floor 30, Tower A, Hongqiao Shanghai City, 100 Zunyi Road, Changning District, Shanghai, the PRC
GENERAL SERVICE DESCRIPTION
     Service Provider will operate and manage (the “Service”) Service Recipient’s flow control business at the premises (the “Business”) currently located in the Premises during the term of this transition services agreement in a substantially similar manner, with the same level of customer service and response time with the same degree of reasonable skill and care and with the same level of security and control as the Business was operated and managed during the twelve month period prior to the Distribution Date. Service Provider will provide various services in connection with the operation and management of the Business including but not limited to the services set forth in “Services to be Provided”.

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TERM AND OPTION
1.   Term. The Minimum Service Period for this Schedule commences on the Distribution Date to March 31, 2012 and, if Service Recipient has not served a notice on Service Provider to terminate the Service, shall be further extended to May 31, 2012 (the term of Service is hereinafter referred as the “Term”). Service Recipient may terminate the Service at any time prior to the end of the Term by providing thirty (30) days prior written notice without any additional make-whole fee as required by Section 11(b) of the Agreement.
2.   Surviving clause. The following provisions of this Schedule shall survive the termination of this Schedule: (a) Indemnification, (b) paragraphs 6 and 7 of “Pricing, Payment Terms” (Audit, Post-termination Revenues and Expenses), (c) paragraph 4 of “Term and Option(Access to Business Records After the Term,) (d) Insurance with respect to managing post Term claims and (e) Tax Status.
3.   Access to the Premises and Business Records during the Term. In addition to the right of access given to Service Recipient pursuant to Section 3(a) of the Agreement, during the Term, Representatives of Service Recipient (or its designee) shall be given access to the Premises during regular business hours if and to the extent reasonably necessary to:
  3.1   provide or receive any of the Services;
 
  3.2   examine, copy or photocopy, at Service Recipient’s expense, the Business Records, the Business Contracts and the purchase orders, customer invoices and any other contracts and/or agreements signed with the relevant customers, suppliers, distributors and agents relating to or in connection with the Business, during business hours and on reasonable prior written notice, to enable Service Recipient to verify the information contained in the monthly balance sheet and the monthly profit and loss accounts that Service Provider furnishes to Service Recipient in accordance with “Services to be Provided” and to determine the amount of the Monthly Costs payable by Service Provider or Service Recipient, as the case may be; and
 
  3.3   to inspect or examine the Assets, or otherwise transfer the Assets out of the Premises, as the case may be.
4.   Access to Business Records after the Term. For a period of seven (7) years from the expiration date of the Term:
  4.1   Service Provider shall make available, and allow Service Recipient (or its designee) to make copy of at Service Recipient’s expense, any books, accounts, returns and records (not delivered to Service Recipient (or its designee) prior to the expiration date of the Term (including, without limitation, Service Provider’s statutory books and accounting records, tax records, and all other records relating to the Business) which contain information which should be provided to Service Recipient (or its designee) or which is required for the purpose of the Business, any annual, tax or other returns, audits in connection with it for inspection by Representatives of Service Recipient (or its designee) during working hours on reasonable advance notice being given;
 
  4.2   If any Business Information is not in the possession of Service Recipient (or its designee) or readily discoverable by Service Recipient (or its designee) but is in the possession or under the control of or available to Service Provider or any other member of its Group, Service

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      Provider shall deliver copies of such Business Information to the Service Recipient promptly on request.
SERVICES TO BE PROVIDED
1.   Export/Import
2.   Materials Planner
3.   Material and Logistics
4.   Plant Purchasing
5.   Warehouse (excluding bonded material)
6.   Shipment
7.   Logistics
8.   IT Support
9.   Customers Support
10.   Accounts Payable Invoice Processing including bank disbursements and reconciliations
11.   Accounts Receivable Invoice processing and collection
12.   Manufacturing and assembly of the products the Business produces
13.   Certain administrative and tax preparation/filing services
14.   Facility and related services that enable to the Business to continue operations
15.   Payroll and all HR services, for the employees Service Provider utilizes to operate and manage the Business
16.   Foreign exchange verification
17.   External audit and relating consulting services
18.   Vendor and customer data maintenance
19.   Accounting services to maintain accounting records
20.   Security
21.   Environmental, health and safety services
22.   Administrative services, including office supplies and equipment, location assistant, reception and shuttle bus/car service
23.   All other services which were provided to Service Recipient in the last twelve months
24.   Invoice and payment. Service Provider shall maintain separate accounts for the Business during the Term. As promptly as practicable and in any event within ten (10) Business Days after the beginning of each calendar month, Service Provider shall prepare and deliver to Service Recipient a balance

3


 

      sheet as at the end of the preceding calendar month and the profit and loss account in respect of the preceding calendar month (including separate line items for the Monthly Costs, Monthly Expenses and Monthly Revenues) in respect of the Business, prepared in accordance with the Generally Accepted Accounting Principles of the PRC and certified by the Finance Manager of Service Provider.
 
25.   Affixation of company chop. To the extent that any documents of Service Recipient (or its designee) need to be affixed with the company chop of Service Provider, Service Provider shall render all assistance to execute or affix its company chop on all such documents as Service Recipient (or its designee) may from time to time reasonably request for the purpose of vesting in it the full benefit of the Business, provided such request has been approved by the General Manager of Wuxi Flow Control Business and the Legal Counsel of Service Recipient (or its designee).
EMPLOYEES
1.   In addition to the Services to be provided by Service Provider to Service Recipient above, during the Term Service Provider shall supervise the Employees in accordance with the terms in this section.
2.   Service Provider shall:
  2.1   continue the employment of the Employees with Service Provider to ensure that the Business shall be carried on in the ordinary course of business; and
 
  2.2   allow the Employees to perform their duties under the supervision of, fully comply with directions and instructions received from, and promptly carry out orders and assignments given by, any of the Representative of Service Recipient. Notwithstanding the forgoing, the Parties acknowledge and agree that the Employees shall comply with or otherwise subject to the policy (including compensation and benefits policy), handbook or guidelines as applicable to other employees of Service Provider.
3.   Service Recipient and Service Provider acknowledge the importance of Employees to the ongoing success of the Business subsequent to the Distribution Date.
4.   Upon Service Recipient’s request, Service Provider shall terminate, or procure its staffing agency to terminate, any of the Employees during the Term. Notwithstanding the foregoing, Service Provider may, without the prior approval of Service Recipient, terminate the employment of any Employee in good faith on reasonable grounds pursuant to the employment laws and regulations of the PRC provided that Service Provider shall notify Service Recipient forthwith its decision of termination.
TRANSFER OF EMPLOYEES
1.                
             

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2.   Service Provider and Service Recipient (or its designee) shall within fifteen (15) Business Days before the end of the Term jointly issue a written notice to all Employees, confirming the Employee Transfer Date and enclosing the new employment contract to be signed by Service Recipient (or its designee) with each of the Employees.
3.   Service Provider shall pay Employees wages, bonuses, overtime pay, social insurance, statutory severance and housing fund contributions and other payments and benefits of such Employee in relation to his or her employment with Service Provider in accordance with the employment laws and regulations of the PRC during the Term up to and including the expiration date of the Term, provided that Service Recipient shall reimburse Service Provider all such payment incurred during the Term in accordance with “Pricing and Payment Terms”.
4.    
INSURANCE
1.   Notwithstanding the provisions of Section 10(b) of the Agreement and without prejudice to its express obligations under this Schedule, Service Provider agrees that during the Term, it will maintain, at Service Recipient’s expenses, insurance policies covering the Business similar in scope, amount and coverage as Service Provider maintained during the twelve month period prior to the Distribution Date. In the event any claim needs to be made under these insurance policies, Service Provider will make such claim on Service Recipient’s behalf and transfer to Service Recipient all funds received less any out of pocket costs incurred in collection of such funds.

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INDEMNIFICATION
1.   Notwithstanding anything in the Agreement to the contrary, the indemnification obligations and procedures set forth in Article VII of the Distribution Agreement shall apply to any Indemnifiable Losses (as defined in the Distribution Agreement) Service Provider or any member of its Group incurs as a result of or in connection with providing the Services described in this Schedule. For the avoidance of doubt, Service Provider (or such member of its Group that has suffered an Indemnifiable Loss) shall be the “Indemnitee” and Service Recipient the “Indemnifying Party”, as such terms are defined in the Distribution Agreement. Notwithstanding the foregoing or anything in the Distribution Agreement to the contrary, Service Provider shall be permitted to consent to entry of judgment or settle any claim without the consent of Service Recipient and remain entitled to indemnification from Service Recipient; provided, that any such judgment or settlement is for a monetary amount under USD5,000; provided further that any such consent, judgment or settlement does not permit or provide for any injunction, declaratory relief, other order or other non-monetary relief to be entered against Service Recipient or any member of its Group.
2.   For the period of seven (7) years from the expiration date of the Term, upon any claim being made against Service Provider, Service Recipient shall give such information and assistance to Service Provider for the purpose of avoiding, disputing, resisting, compromising, defending or contesting any such claim and liability, including:
  2.1   assignment of a legal advisor or a Representative appointed by Service Recipient to work with Service Provider or its professional advisors in avoiding, disputing, resisting, compromising, defending or contesting any such claim and liability; and
 
  2.2   access (during business hours and on reasonable prior written notice) such access to its personnel and to any relevant records and information in relation to the Business as Service Provider or its professional advisers reasonably request.
LOCATIONS
    The premises of Service Provider located at Building 3, No. 570 Yangda Road, Meicun, New District, Wuxi City, the PRC (“Premises”).
PREREQUISITES/DEPENDENCIES
  1.   Service Provider and Service Recipient shall enter into an Asset Purchase Agreement dated _____________________, 2011 pursuant to which Service Recipient shall agree to purchase from Service Provider all of the Assets and assume all of the liabilities related to the Business.
 
       

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TAX STATUS
1.   Monthly Costs received by Service Provider under this Schedule during the Term shall be considered taxable income in China. Service Provider shall:
  1.1   duly file all tax returns and provided all information required or requested to be delivered to any tax authority. All such returns and information remain correct and complete and none is, or is likely to become, the subject of any investigation or dispute by or with any tax authority;
 
  1.2   prepare, keep and preserve complete, accurate and up-to-date records both as required by law and to enable it to deliver correct and complete tax returns and to calculate any present or, so far as possible, future tax liability of Business or the entitlement of the Business to claim any relief.
2.   Notwithstanding the foregoing, any tax payable by Service Provider arising from the provision of Service or the operation of the Business shall be borne by Service Recipient (or its designee) in accordance with “Pricing and Payment Terms”.
BILLING LOCATION
NOTICES
    All correspondence with respect to this agreement should be sent to the Service Owners listed above with copies to the following:
NOTICE REQUIREMENTS
    SERVICE PROVIDER:
    Address:
    2405-6, 24/F, ING tower, 308 Dec Voeux Road Central, Hong Kong
    Fax:
    For the attention of: Mr. Stephen Chan, China Share Service Manager
    SERVICE RECIPIENT:
    Address:
    Suite 3011-3014, Floor 30, Tower A, Hongqiao Shanghai City, 100 Zunyi Road, Changning District,
Shanghai, the People’s Republic of China
    Fax:
    For the attention of: Mr. Meng Hing Chua, Vice President and Director of Finance

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PRICING & PAYMENT TERMS
1.   The Parties agree that, notwithstanding the provisions of Section 2(a) of the Agreement, Service Recipient (or its designee) shall be entitled to all economic rights and benefits, and shall assume all economic loss, arising from and in connection with the conduct of the Business by Service Provider during the Term.
2.   During the Term, Service Recipient or Service Provider, as the case may be, shall pay an amount equal to the Monthly Costs (“Monthly Costs”) to the other Party calculated in accordance with the following formula:
      Monthly Costs = Monthly Expenses plus RMB20,000 minus Monthly Revenues
 
      where:
 
      Monthly Expenses means the aggregate of:
  (a)   all documented, reasonable out-of-pocket costs and expenses incurred by Service Provider which are necessary to provide Services, provided, however, that any such expenses exceeding USD5,000 per month for each Service shall require advance approval of Service Recipient; plus
 
  (b)   all wages, bonuses, overtime pay, social insurance and housing fund contributions, and other payments, benefits, retention and severance payments due to any of the Employees retained by Service Provider for the purpose of providing the Services; plus
 
  (c)   all rents, rates, gas, water, electricity and other outgoings (including management fees) relating to or payable in respect of the Premises; plus
 
  (d)   any sales, services, value added or similar taxes, fees, charges, assessments, or income taxes (including any such taxes that are required to be withheld) arising from or in connection with the provision of Services; and
 
      Monthly Revenues means the aggregate of:
 
  (a)   all revenues, rebates, refunds or otherwise payments collected or received by Service Provider arising from or in connection with the Business, as the case may be, during the Term; plus
 
  (b)   all rents, rates, gas, water, electricity and other outgoings (including management fees) relating to the premises located at Room 902, E3 Building, Oriental Plaza, No.1 Chang’an Avenue, Beijing 100738, PRC and payable by ITT (China) Investment Company Limited in the amount of RMB32,060.82 per calendar month for the period from 31 October 2011 to 31 December 2011 and RMB34,173.63 per calendar month for the period from 1 January 2012 to the expiration date of the Term. In the event a total of RMB 511,059 is not added to Monthly Revenue over the life of the Term by the month prior to the end of the Term, the last month of the Term shall include that amount such that the total amount included in Monthly Revenue under this subsection (b) during the whole Term will equal RMB 511,059.

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3.   An amount equal to the Monthly Costs shall be paid by Service Recipient or Service Provider, as the case may be, to the other Party in the following manner:
  3.1   If the Monthly Costs is a positive number, then Service Recipient shall pay to Service Provider the Monthly Costs in accordance with section 2(b) of the Agreement
 
  3.2   If the Monthly Costs is zero, then no payment is due from Service Recipient or Service Provider to the other Party.
 
  3.3   If the Monthly Costs is a negative number, then Service Provider shall pay to Service Recipient the Monthly Costs in accordance with Section 2(b) of the Agreement.
4.   For the avoidance of doubt, no additional mark-up or inflation rate, as specified in Section 2(a)(i) of the Agreement, shall apply to any sum payable by Service Recipient to Service Provider under this Schedule.
5.   Taxes related to sums payable. Each Party shall pay all sums payable by it under this Schedule free and clear of all deductions or withholdings unless the law requires a deduction or withholding to be made. If a deduction or withholding is so required, the relevant Party shall pay such additional amount as will ensure that the net amount the payee receives equals the full amount which it would have received had the deduction or withholding not been required.
6.   Audit. Service Provider and Service Recipient shall, as promptly as practicable and in any event within fifteen (15) Business Days following the expiration date of the Term, jointly appoint Deloitte & Touche, or such other accounting firm as may be agreed to (“Auditors”) to conduct an audit of the accounts of the Business. The auditor shall, within thirty (30) days from its engagement, prepare and deliver to the Parties an audited balance sheet to be made up as at the expiration date of the Term and an audited profit and loss account for the period from the Distribution Date to the expiration date of the Term in respect of the Business, in accordance with the Generally Accepted Accounting Principles of the PRC. The costs and expenses of engaging the Auditors shall be borne by Service Recipient (or its designee). The balance sheet and profit and loss account prepared by the Auditors shall, in the absence of manifest error, be final and binding on the Parties. The Auditors shall be deemed to act as an expert and not as an arbitrator.
7.   Post-termination Revenues and Expenses. To the extent that any payment, rebate or refund is made to Service Provider in respect of the Business after the expiration date of the Term, Service Provider shall receive the same as trustee, place the same in a separate bank account, record the payment separately in its books, and account to Service Provider for the same within five (5) Business Days after the end of each calendar month for all funds collected during such calendar month. To the extent that any cost or expense is paid by Service Provider after the expiration date of the Term in connection with the Business arising from an act, event or circumstance that occurs during the Term, Service Provider shall provide Service Recipient with all relevant invoices, receipts and contracts, as the case may be, and Service Recipient shall, upon verifying the documents provided, pay to Service Provider within five (5) Business Days after the end of each calendar month for all payments made by Service Provider arising from or in connection with the Business during such calendar month.

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Definitions
1.   Definitions and interpretation of words and expressions used in this Schedule shall be as set forth below:
    Auditors” has the meaning set out in “Pricing and Payment Terms”.
    Assets” means the assets of Service Provider relating primarily to, used primarily in, or arising primarily from, the Business, to be transferred to Service Recipient pursuant to the Asset Purchase Agreement, dated ___________________, 2011 between Service Provider and Service Recipient.
    Business” has the meaning set out in “General Service Description”.
    Business Days” means, for the purpose of this Schedule, a day (excluding Saturdays, Sundays and public holidays) on which banks generally are open in the PRC for the transaction of normal banking business.
    Business Contracts” means customer contracts, supplier contracts, and all other contracts and engagements entered into and orders placed or received (a) on or before the Distribution Date by or on behalf of Service Provider in connection with the Business and which at Distribution Date remain (in whole or in part) to be performed; and (b) during the Term.
    Business Information” means all information relating to the Business, existing at the Distribution Date or otherwise arising during the Term, including but not limited to details of customers, suppliers, distributors and agents, sales targets, sales statistics, market share statistics, market surveys and information relating to future business development or planning, information relating to discounts, commissions and rebates received and/or paid and litigation or legal advice, in whatever form (including computer disks or tapes) that information may be recorded or stored.
    Business Records” means all books and records in whatever form (including computer disks or tapes) containing or relating to Business Information or on which Business Information is recorded or stored.
    Employees” means the employees physically located at the Premises, employed by Service Provider to support the Business immediately prior to the Distribution Date, a list of whom is stated in the Annex.
    Employees Transfer Date” has the meaning set out in “Transfer of Employees”.
    Monthly Costs” has the meaning set out in “Pricing and Payment Terms”.
    Parties” mean collectively, Service Provider and Service Recipient of this Schedule, and a “Party” means either of them.
    PRC” means the People’s Republic of China excluding, for the purpose of this Agreement, Hong Kong Special Administrative Region, Macau Special Administrative Region, and Taiwan.
    Premises” has the meanings set out in “Location”.

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    Representatives” means, the Service Owners identified under the section entitled “Service Owner” or such other person(s) designated by Service Recipient (or its designee) from time to time.
    RMB” means Renminbi, the lawful currency of the PRC.
    Service” has the meaning set out in “General Service Description”.
    Term” has the meaning set out in “Term and Option”.
    USD” means United States Dollars, the lawful currency of the United States of America.

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Annex
List of Flow Control Employees in Wuxi
The employees who are retained by Service Provider to provide the Services are set forth below:
         
        Date of Commencement of Employment with
Name of Employees   Position   Service Provider
         
         
         
         
         
         
         
         
         
         

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SCHEDULE AB16
BASIC TIME AND MATERIALS SUPPORT
Capitalized terms used herein and not otherwise defined shall have the meaning assigned to such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, except where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this Service should be directed to:
             
Name   Title   Phone   e-mail
Service Provider’s Contact
           
 
           
ITT Corporation
           
Daryl Bowker
  TSA Manager   Office:   Daryl.bowker@ittcorp.com
 
           
Service Recipient’s Contact
           
 
           
Xylem Inc.
           
Tim Coogan
  TSA Manager   Office   Tim.Coogan@itt.com
PARTIES TO THE AGREEMENT
Service Provider: ITT Corporation
Service Receiver: Xylem Inc.
TERM AND OPTION
The Term shall be 18 months commencing on the Distribution Date. There shall be no Minimum Service Period

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GENERAL SERVICE DESCRIPTION
Service Receiver may need assistance after the Distribution Date from the Service Provider for miscellaneous services, including but not limited to consulting, advisory, knowledge transfer and other similar services in various areas including, but not limited to finance, tax, accounting, insurance, treasury, human resources and communications, which are not already provided for under all of the other TSAs between ITT Corporation, Xylem Inc., and Exelis Inc.
The Service Provider hereby agrees to cause its and its affiliates employees (collectively, “Experts”) to provide a reasonable amount of services upon reasonable notice and request from the Service Receiver on a time and materials basis from the Distribution Date through June 30, 2013 (the “Minimum Term” and the “Maximum Term”).
To utilize this TSA Schedule, employees of Service Receiver should request such services via email or telephonically where both parties have a clear expectation of the estimated number of hours of assistance being requested. For projects that are expected to require more than 5 to 10 hours of assistance a one or two paragraph project plan should be agreed to in order to avoid misunderstandings. The project plan should be put together by the Service Provider’s “Expert “with respect to the requested services.
Employees of Service Receiver should advise their TSA manager that a request for services has been made together with a description of such services requested and the estimated number of hours requested.
The “Expert” should advise their TSA manager that a request for services has been made and the estimated number of hours requested.
SCOPE OF SERVICES
The scope of services will depend on the needs of the Service Recipient and the capabilities and availability of the Experts.
LOCATIONS
All locations around the world
PREREQUISITES/DEPENDENCIES
The Experts remain employees of Service Provider. Service Receivers acknowledge and agree that Service Provider has discretion to terminate the Experts and the Experts have the ability to terminate their employment with Service Provider. In the event the Experts are no longer

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employed by Service Provider, Service Provider will, at the request of the Service Receiver, use commercially reasonable efforts to provide similar services. However, if Service Receivers or an affiliate employ any of the Experts, the specific service requested under this Schedule can be terminated by the Service Provider, at the Service Provider’s sole discretion on 5 business days notice to the Service Receiver.
TAX STATUS
Sales tax will be charged as determined by the Service Provider and the Service Receiver shall pay such tax along with the payment for the service provided.
BILLING LOCATION
Service Provider will provide Service Receiver with an invoice to its address set forth below under Notice Requirements, except in cases where services are provided outside of the United States, in which case invoices will be created by the Service Provider’s legal entity in the country where the services are being performed and invoiced to the Service Receiver’s legal entity that requested the services in the Service Provider’s local currency. The bill will cover all charges for services under this Schedule from Service Provider and, to the extent reasonably feasible, will be itemized among Service Receiver’s legal entities if identified by the Service Receiver when requesting the service. The invoice will contain the number of hours each Expert worked, a short paragraph describing the services and the US dollar amount per Expert.
The Experts shall track their time on either a time sheet or any other proper method such as the utilizing the time sheet attached hereto and Service Provider agrees that the time sheets will accompany the invoice that is sent to the Service Recipient for payment. In cases where the requested services are expected to take longer than 30 days to complete, the Service Provider will be allowed to invoice the Service Receiver once per month for all costs incurred to date.
NOTICE REQUIREMENTS
No notice of Termination is required under this Schedule and there shall be no make-whole fee under this Schedule.
Notices and bills to the Service Provider should be sent to:
ITT Corporation
240 Fall Street
Seneca Falls, NY 13148
Attention: Daryl R. Bowker

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Notices and bills to the Service Receiver should be sent to:
Xylem Inc.
1133 Westchester Avenue
Suite 2000
White Plains, NY 10604
Attention: Tim Coogan
PRICING
In addition to the costs specifically set forth below, Service Receivers shall also pay all business travel expenses relating to the Services in accordance with Service Providers documented travel policies and any incremental out of pocket costs incurred by the Service Provider in order to provide the requested services that are invoiced by unaffiliated 3rd parties. Service Provider agrees to provide vendor invoices as backup to the Service Receiver when invoicing the Service Receiver under the terms of this TSA.
The hourly rates below includes a 4.5% increase for inflation and the 2% profit margin and shall be applicable in 2011 and 2012. The rates shall increase by 4.5% in 2013.
     
Service   Hourly Rate*
Hourly Rate Administrative/Secretarial.
  $50 per hour
Hourly Rate for a Non Executive
  $100 per hour
Hourly Rate for an Executive
  $150 per hour
 
*   Note: In cases where invoicing is done outside the United States, the above rates should be converted to local currency based on the exchange rate on the date the invoice is prepared.

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SCHEDULE AB17
MANUFACTURING SERVICES TSA
SCHEDULE FOR VADODARA INDIA
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Service Provider
  General Manager, ITT    
Rabi Burman
  Corporation India Pvt Ltd.        
 
  Plot No 731A, GIDC Savli,        
 
  Manjusar, Savli Road.        
 
  Vadodara, Gujarat 391 770       Rabi.Burman@itt.com 
 
           
Service Recipient
  President, Xylem Water    
Sam Yamdagni
  Solutions India Pvt Ltd.        
 
  Plot No 731B, GIDC Savli,        
 
  Manjusar, Savli Road.        
 
  Vadodara, Gujarat 391 770       Sam.Yamdagni@itt.com
PARTIES TO THE AGREEMENT
  1.   Service Provider — ITT Corporation India Pvt. Ltd.
 
  2.   Service Recipient — Xylem Water Solutions India Pvt. Ltd.
GENERAL SERVICE DESCRIPTION
  1.   Manufacturing of Xylem products
 
  2.   Finance & Accounting Services
 
  3.   Accounts Payables Services
TERM AND OPTION
  1.   Minimum Service Period — 2 months — Commencing on the Distribution Date
 
  2.   The Monthly Costs are set forth below under Pricing & Payment Terms. The Service Recipient and Service Provider agree that, except as set forth in this Manufacturing Services TSA Schedule for India (“this TSA”) no additional 2%, 10% or 4.5% increase in such pricing should be applied as set forth in Section 2 of the Agreement.
 
  3.   Service Recipient shall have the option to renew at 1.0 times the monthly fixed charge as noted below for an additional 3 months if written notice is provided 15 days prior to the end of the Minimum Service Period.

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  4.   Service Recipient will have the option to terminate this agreement at any time, with no additional make-whole fee as required by Section 11(b) of the Agreement, after the 1st 3 months with 1 month advance written notice to the Service Provider
SERVICES TO BE PROVIDED
  1.   Manufacturing of Xylem products
  a.   Provide order acknowledgement to Xylem India for the orders placed
 
  b.   Manufacture Xylem products based on orders placed by Xylem India and supervised by Xylem India employees seconded to ITT
 
  c.   Use Xylem assets and processes currently employed in Baroda and manufacture products per SOPs
 
  d.   Manage the factory employees seconded to ITT by Xylem
 
  e.   Place orders to suppliers on a timely manner and manage inventories in order to properly supply & fulfill customer orders
 
  f.   Ship finished goods directly to Xylem customers as requested in the purchase order
 
  g.   Maintain records of purchase cost based on latest purchase price as per BOM, stores and spares and packing material purchased for products manufactured by Xylem Water Solutions India Private Limited
 
  h.   Invoice Xylem for the manufacturing services on a monthly basis
  2.   Finance and accounting services
  a.   Maintain general ledger and chart of accounts
 
  b.   Reconcile balance sheet accounts at a minimum of once per quarter
 
  c.   Close books and prepare local financial statements monthly on a timely basis
  i.   US GAAP financial statements will be prepared as required by the Indian Government
 
  ii.   File required local statutory financial statements with the authorities in a timely manner
 
  iii.   File required US GAAP financial statements (P&L and Balance Sheet) in both local currency and on a US FAS 52 basis with the Service Recipient’s parent company by the 1st Monday after the closing date
  d.   Prepare and file all required statutory reports with the appropriate governmental authorities on a timely basis
 
  e.   Fixed Asset accounting
  i.   Maintain detailed fixed asset subsidiary ledger and reconcile to general ledger
  f.   Provide required support to Service Recipient’s internal & external auditors
 
  g.   Provide required support for government audits
 
  h.   Respond to special requests from service recipients legal advisors
 
  i.   Prepare monthly financial forecasts
 
  j.   Respond to Service Recipient’s ad hoc requests for financial data in a timely manner within reason

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  3.   Accounts Payable Services
  a.   Process vendor invoices for payment twice per week (provided Service Recipient has made available to Service Provider sufficient funds)
 
  b.   Perform 3 way match in Accounts payable system
 
  c.   Review invoice approvals
 
  d.   Maintain PO balance when partial shipments
 
  e.   Maintain form control over purchase orders (Note: all other purchasing department activities to be performed by the Service Recipient)
 
  f.   Invoice coding to general ledger account
 
  g.   Process vendor check run once per week
 
  h.   Process vendor wire transfers twice per week
 
  i.   Review and process travel expense reports and travel advances twice per week
 
  j.   Process payroll child support withholding payments on a weekly basis
 
  k.   Process employee savings fund withdrawal requests twice per week

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LOCATIONS
  1.   IP facility located at the following address;
Plot No 731A, GIDC Savli, Manjusar, Savli Road.
Vadodara, Gujarat 391 770, India
PREREQUISITES/DEPENDENCIES
  1.   After the termination of this agreement, it may be necessary from time to time for the Service Provider, on behalf of the Service Recipient, to respond to inquiries made by government authorities about Service Recipient’s financial statements and tax filings, including providing support for audits. In this event, the Service Provider will contact the Service Recipient and agree on an appropriate course of action and response. To the extent that Service Provider’s resources are to be used to respond to the inquiries, the Service Provider will be entitled to invoice the Service Recipient at the following rates per hour provided if assistance is needed under this section after 2012, the parties will renegotiate such rates in good faith;
  a.   Clerical — US$20.00
 
  b.   Professional — US$30.00
 
  c.   Management — US$77.00
  2.   At the termination of this agreement, the Service Recipient will provide the necessary support at its own expense to transfer data to its own systems. The Service Provider will agree to provide training to the Service Recipient’s employees on the Service Provider’s premises or via conference call / web ex prior to the termination of the agreement. The Service Provider will not be required to send any of its employees to any other Service Recipient location.
  3.   In the event of 3rd party claims against the Service Recipient which are unrelated to this agreement, the Service Recipient agrees to indemnify the Service Provider for any costs that the Service Provider may incur in the event that the 3rd party elects to also claim damages against the Service Provider because of their relationship with the Service Recipient. The Service Recipient also agrees to defend the Service Provider at its sole cost to the extent permitted to do so under Indian Law.
TAX STATUS
  1.   Service Provider — Payments received under the terms of this agreement will be considered taxable income in India
 
  2.   Service Recipient — Payments made under the terms of this agreement will be tax deductible in India
 
  3.   Service Provider takes credit of service tax paid on employee secondment

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BILLING LOCATION
NOTICES
    All correspondence with respect to this agreement should be sent to the Service Owners listed above with copies to the following;
  1.   Service Provider — Joanne Scalard
 
    1133 Westchester Ave
 
      White Plains, NY 10605
 
  2.   Service Recipient — Dan Kelly
 
    1133 Westchester Avenue
 
      White Plains, NY 10605
NOTICE REQUIREMENTS
         
        Prior Notice Requirement to Terminate
No.   Third Party Provider   Service
 
  None required   See Term and Option above
         
         
         
         
         
         

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PRICING & PAYMENT TERMS
  1.   The monthly charges for contract manufacturing services provided under this TSA will be calculated on actual basis and the Service Provider will add 15% margin to the actual costs incurred.
  a.   Service Recipient has an option to extend the TSA for another 3 months at the same monthly rate
 
  b.   Service provider calculates all variable costs monthly — direct material and other costs (PPV, packaging, stores & spares, freight, customs, related to the manufacturing activity) and invoices the Service Recipient
 
  c.   Service Recipient will charge as service fee 5% of the cost of Direct Labor and Indirect Labor being supplied (seconded) to the Service Provider
 
  d.   Service Provider will credit Service Recipient labor fees from the overall monthly charges
 
  e.   Refer to the table below for monthly calculation for the contract manufacturing fees
  2.   All Invoices are payable in Indian Rupees (INR).
 
  3.   Invoices will be prepared monthly and mailed to the service recipient via email or regular mail.
 
  4.   Service Provider to attach additional backup of all variable costs (direct materials, attached to these invoices
 
  5.   The 1st invoice will be dated on the last day of the financial closing in November
 
  6.   Invoice payment terms are net 30 days from invoice date.
 
  7.   Subsequent invoices will follow every 30 days

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SCHEDULE AB18
SERVICES TSA ANNEX FOR
AXMINSTER
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to: John Veness
             
Name   Title   Phone   e-mail
Service Provider
John Veness
  General Manager       John.Veness@itt.com
 
           
Service Recipient
Duncan Lewis
  General Manager       Duncan.Lewis@itt.com
PARTIES TO THE AGREEMENT
 
 
 
 
 
  1.   Service Provider: ITT Industries Ltd.     
 
  2.   Service Recipient: Lowara (UK) Ltd.
GENERAL SERVICE DESCRIPTION
  1.   Operations Services
 
  2.   Import/Export Services
 
  3.   INTRASTAT Compliance Services
TERM AND OPTION
  1.   24 months — Commencing on the date of the separation into 3 companies
 
  2.   The 24 month Term shall not be extended. Service Recipient will have the option to terminate this agreement at any time after the 1st 12 months with 6 months advance written notice to the Service Provider.
SERVICES TO BE PROVIDED
  1.   Operations Services
  a.   Lowara may need the services of ITT’s personnel for assistance with operations reporting.
 
  b.   Lowara may need the services of ITT’s personnel for assistance with operational processes including quality control.
  2.   Import/Export Services

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  a.   Lowara may require the assistance of ITT personnel in the matters of export and import processes.
 
  b.   Lowara may require the assistance of ITT personnel in the matters of export and import regulatory compliance.
  3.   INTRASTAT Services
  a.   Lowara may require the assistance of ITT personnel for collecting information for INTRASTAT.
 
  b.   Lowara may require the assistance of ITT personnel for reporting information to the governmental authorities for INTRASTAT.

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LOCATIONS
1.   Lowara facility located at the following address:
Lowara (UK) Ltd.
Millwey Rise Industrial Estate
Axminster EX13 5HU, United Kingdom
PREREQUISITES/DEPENDENCIES
1.   Real Estate Sublease is in effect.     
 
2.   Service Recipient will follow all of Service Provider’s Environmental, Safety, & Health (ES&H) policies and procedures while using the pump testing facilities. Service Provider will provide its ES&H written policies to Service Recipient at the outset of this agreement and agrees to provide overview training prior to the Service Recipient’s use of the pump testing facilities.
 
3.   Service Recipient’s customers will be granted access to the test facility along with Service Recipient’s representatives for a customer witnessed pump test.
 
4.   Service recipient is precluded from hiring Service Provider’s employees that may provide these services under this agreement for the duration of this agreement plus an additional 1 year after the agreement is terminated.
 
5.   In the event of 3rd party claims against Service Recipient which are unrelated to this agreement, the Service Recipient agrees to indemnify the Service Provider for any costs that the Service Provider may incur in the event that the 3rd party elects to also claim damages against the Service Provider because of their relationship with the Service Recipient. The Service Recipient also agrees to defend the Service Provider at is sole cost the extent permitted to do so under United Kingdom law.
TAX STATUS
1.   Service Provider — Payments received under the terms of this agreement will be considered taxable income in the United Kingdom
 
2.   Service Recipient — Payments made under the terms of this agreement will be tax deductible in the United Kingdom
 
3.   VAT of the current rate % of the invoice amount will be charged by the service provider to the service recipient
BILLING LOCATION
    Lowara (UK) Ltd. Millwey Rise Industrial Estate Axminster EX13 5HU, United Kingdom

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SERVICE LEVEL
 
1.   Service Provider agrees to use reasonable care and diligence in the fulfillment of all services described above. Service Provider also agrees that it will promptly carry out services based on reasonable business practices and judgment.
NOTICES
    All correspondence with respect to this agreement should be sent to the Service Owners listed above.
NOTICE REQUIREMENTS
         
        Prior Notice Requirement to
No.   Third Party Provider   Terminate Service
N/A
  None required   See Term and Option above
PRICING & PAYMENT TERMS
1.   The hourly fixed charge for Operations services, Import/Export services, and INTERSTAT Compliance services will be Cost plus 2% - 10% per hour for the term of this agreement — Payable in British Pounds.
 
2.   The fixed hourly rate of Cost plus 2% - 10% per hour shall be the minimum charge. Partial hour charges will be rounded up to include the entire hour. For example, a service provided in 2 hours and 20 minutes will be charged at 3 hours or Cost plus 2% - 10%.
 
3.   Invoices will be prepared monthly and mailed to the service provider via email. Invoices shall include the date services were provided, the name(s) of the person(s) who provided the service, and the number of hours spent providing the service.
 
4.   There will be no additional backup attached to these invoices.
 
5.   Invoice payment terms are net 30 days from invoice date.

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SCHEDULE AB19
TESTING SERVICES TSA SCHEDULE FOR INDIA
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Service Provider
Rabi Burman
  General Manager, ITT
Corporation India Pvt Ltd.
Plot No 731A, GIDC Savli,
Manjusar, Savli Road.
Vadodara, Gujarat 391 770
   
 
  Rabi.Burman@itt.com
 
           
Service Recipient
Sam Yamdagni
  President, Xylem Water
Solutions India Pvt Ltd.
Plot No 731B, GIDC Savli,
Manjusar, Savli Road.
Vadodara, Gujarat 391 770
      Sam.Yamdagni@itt.com 
PARTIES TO THE AGREEMENT
1.   Service Provider — ITT Corporation India Pvt. Ltd.
 
2.   Service Recipient — Xylem Water Solutions India Pvt. Ltd.
GENERAL SERVICE DESCRIPTION
1.   Testing services for Xylem products using IP test bed infrastructure in the Baroda plant
TERM AND OPTION
1.   Minimum Service Period — 22 months — Commencing on the Date of physical separation of Service Provider and Service Recipient. Physical separation occurs when Xylem manufacturing operations move in to the new Service Recipient plant.
 
2.   The Hourly Costs are set forth below under Pricing & Payment Terms.
 
3.   Service Recipient will have the option to terminate this agreement at any time, with no additional make-whole fee as required by Section 11(b) of the Agreement, after the 1st 12 months with 1 month advance written notice to the Service Provider
 
4.   This Agreement cannot be extended beyond 24 months after the Distribution Date.

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SERVICES TO BE PROVIDED
1. Testing of Xylem products
  a.   Service Provider provides Service Recipient full access to the test bed and infrastructure to fully test pumps and other related products
 
  b.   Service Provider also provides tools, equipment and personnel to fully validate a product
 
  c.   Service Provider also fully tests the products per instructions from Service Recipient or its customers or its agents
 
  d.   Service Provider provides full report(s) on the results of the test and performance of the products
 
  e.   Service Provider personnel will take control of the products at the loading dock and transfer the products to the test bed, install them on the test bed, fully test the products, remove the products and package them and return as required by Service Recipient
 
  f.   Service Recipient or its agents or its customers will have access to the products while they are being prepared for testing, while products are being tested and while the products are being processed for return to Xylem
 
  g.   Service Recipient or its agents or its customers will have access to the control room in order to witness the test.
 
  h.   Only Service Provider personnel are allowed to run the test and operate all tools, machinery and controls related to the testing of these products

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LOCATIONS
1. IP facility located at the following address;
Plot No 731A, GIDC Savli, Manjusar, Savli Road.
Vadodara, Gujarat 391 770, India
PREREQUISITES/DEPENDENCIES
 
1.   After the termination of this agreement, it may be necessary from     time to time for the Service Provider, on behalf of the Service Recipient, to respond to inquiries made by customers or government authorities about Service Recipient’s financial statements and tax filings, including providing support for audits. In this event, the Service Provider will contact the Service Recipient and agree on an appropriate course of action and response. To the extent that Service Provider’s resources are to be used to respond to the inquiries, after the TSA ends, the Service Provider will be entitled to invoice the Service Recipient at the following rates per hour provided if assistance is needed under this section after 2012, the parties will renegotiate such rates in good faith;
  a.   Clerical — US$20.00
 
  b.   Professional — US$30.00
 
  c.   Management — US$77.00
2.   At the termination of this agreement, the Service Recipient will provide the necessary support at its own expense to transfer data to its own systems. The Service Provider will agree to provide training to the Service Recipient’s employees on the Service Provider’s premises or via conference call / web ex prior to the termination of the agreement. The Service Provider will not be required to send any of its employees to any other Service Recipient location. 3. In the event of 3rd party claims against the Service Recipient which are unrelated to this agreement, the Service Recipient agrees to indemnify the Service Provider for any costs that the Service Provider may incur in the event that the 3rd party elects to also claim damages against the Service Provider because of their relationship with the Service Recipient. The Service Recipient also agrees to defend the Service Provider at its sole cost to the extent permitted to do so under Indian Law.
TAX STATUS
 
1.   Service Provider — Payments received under the terms of this agreement will be considered taxable income in India
 
2.   Service Recipient — Payments made under the terms of this agreement will be tax deductible in India

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BILLING LOCATION
NOTICES
All correspondence with respect to this agreement should be sent to the Service Owners listed above with copies to the following;
1.   Service Provider — Joanne Scalard
 
  1133 Westchester Ave
 
    White Plains, NY 10605
 
2.   Service Recipient — Dan Kelly
 
  1133 Westchester Avenue
 
    White Plains, NY 10605
NOTICE REQUIREMENTS
         
        Prior Notice Requirement to Terminate
No.   Third Party Provider    Service 
    None required   See Term and Option above
         
         
         
         
         
         

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PRICING & PAYMENT TERMS
1.   The hourly fixed charge for testing services provided under this TSA will be cost plus 10% to 15% handling charges.
  a.   Year 1 handling charges: 10% to 15%. Year 2 handling charges: 10% to 15%
2.   Refer to the table below for the pricing details
 
3.   All Invoices are payable in Indian Rupees (INR).
 
4.   Invoices will be prepared monthly and mailed to the service recipient via email or regular mail.
 
5.   The 1st invoice will be dated on the last day of the financial closing in December 2011
 
6.   Invoice payment terms are net 30 days from invoice date.
 
7.   Subsequent invoices will follow every 30 days as long as there is activity. If Service Recipient doesn’t use any testing services in any given month, Service Provider doesn’t have to provide an invoice.

5


 

                                 
        Details   INR     USD     Source  
       
Sale Value (To end Customer)
                     
Add  
Taxes
                     
       
Total Sales Value
                   
 
Less  
Actual Cost of Material
                     
Less  
PPV
                     
Less  
Actual Cost of Packing Material
                     
Less  
Actual Cost of Stores & Spares
                     
Less  
Actual Cost of Freight
                     
Less  
Actual Customs cost
                     
       
Total Cost
                   
       
 
                       
       
Margin
                   
  5 %  
Manpower Deputation Charges
                       
       
 
                       
       
Debit Note Basic Value
                       
Add  
Service Tax
                       
       
Xylem DN to ITTCo
                       
Notes
 
1   Invoices shall be raised on a monthly basis
 
2   All data will be from ERP Lx
 
3   Freight & Customs data will be based on actual bills booked
                 
Xylem Manpower Deputation Charges           (INR)  
Salary Cost   Cost - Aug     Margin  
DL
               
Overheads
               
S&M
             
G&A
             
Total
               

6


 

Schedule AC1
ACCOUNTS PAYABLE, SUPPLIER
PAYMENT AND SALES & USE TAX
SERVICES
Capitalized terms used herein and not otherwise defined shall have the meaning assign such term in the Agreement. The Services provided hereunder are subject in all respects to the terms and conditions of the Agreement, expect where expressly noted.
SERVICE OWNER
All service matters and general inquiries regarding this service should be directed to:
             
Name   Title   Phone   e-mail
Kim Acker
ITT Corporation
  ITT Shared Service
Working Capital
Manager
      kim.acker@itt.com
             
Elizabeth Webster
Exelis Inc.
  Senior Business Analyst       elizabeth.webster@itt.com
GENERAL SERVICE DESCRIPTION
Service Provider will perform Accounts Payable, Supplier Payment and Sales and Use Tax Services for Service Receiver.
Service Receiver and its Subsidiaries will utilize the Service Provider’s resources based on the functionality, processes, input and output screens and documents that support the Service Provider’s business and business processes in the twelve months prior to the Distribution Date.
SCOPE OF SERVICES
Upon the terms and subject to the conditions of this Services Schedule and the Agreement, the Service Provider shall provide to Service Recipient the services identified below (collectively, the “Services”).

 


 

                         
                Minimum    
            BAU   Service    
            Transaction   Period   Service
Service #   Service Name   Description of Service   Volume   (in mo.)   Charge
 
      Provide Accounts Payable, Supplier Payment and Sales and Use Tax Services:                
 
                       
 
      Sales and Use Tax Services — The Service Provider will provide:                
 
                       
SS-AP-SP -01
  Accounts Payable and Supplier Payment Processing Services  
  The Service Provider based on Sales and Use tax data received in a predefined form from the Service Receiver’s Business Units, will prepare the Sales and Use Tax Returns. A list of all valid Service Receiver Business Units is found in Attachment A.
  720 Returns per Year            
 
                       
 
     
  The Service Provider will file all required Sales and Use Tax Returns together with payments that are required. The Service Provider will send copies of the Returns to the appropriate Service Receiver Business Units.
  720 Returns per Year            
 
                       
 
     
  The Service Provider, on receipt of phone calls and emails, will respond to routine inquiries and correspondence from the various jurisdictions.
               
 
                       
 
     
  Taxware Configuration Support — The Service Provider on receiving Jurisdiction Change information from the Service Receiver will configure jurisdictional tax obligations. The Service Provider on receipt of a request from the Service Receiver will provide Use Tax information (via the ZUSE_TAX report) to the Service Receiver.
               
 
                       
 
     
  Value Added Tax (VAT) Recovery Support — The Service Provider will review vendor invoices for VAT charges, and submit VAT included invoices to 3rd party (Meridian) for submission to VAT Taxing Authorities. Upon receipt of a VAT refund check from the Service Receiver’s 3rd party (Meridian), Service Provider will provide the funds to the Service Receiver’s Business Unit.
        18     Cost plus 2% - 10%
 
                       
 
      Accounts Payable and Supplier Payment Vendor Master Data Maintenance:                
 
                       
 
     
  The Service Provider on receiving Service Receiver approved remit-to vendor set-ups and update requests submitted via the vendor portal, will utilize address standardization and duplicate checking to review and approve or reject the vendor request. If approved, the add/changed Vendor information will be updated in the vendor master within 1 hour between the hours of 8:00am and 5:00pm EST.
               
 
                       
 
     
  The Service Provider on receiving a Credit Reference Request form, will forward the request to the Service Provider’s Banking partner (Citibank) where they process the request.
               
 
                       
 
     
  The Service Provider after receiving electronic banking details from the Service Receiver or their Vendor, adds all Banking Details. The Service Provider requires complete (per banking requirement instructions) electronic banking details be sent to the Vendor Administrator, and will be processed within 48 hours.
               

2


 

                         
                Minimum    
            BAU   Service    
            Transaction   Period   Service
Service #   Service Name   Description of Service   Volume   (in mo.)   Charge
 
     
  The Service Provider reserves the right to be the sole owner and administrator of Master Programs, Tables, Data, and Application Security and Access controls will as necessary get joint approval from all Service Receivers for those proposed changes that will impact another Service Receiver.
               
 
                       
 
      In addition, the Provider will provide the following services: Complete SAP Month End jobs and reports to support postings.                
 
                       
 
      Accounts Payable and Supplier Payment Document Management and Processing:                
 
                       
 
     
  The Service Provider will pick up mail from the Service Receiver’s Seneca Falls Post Office Box.
  159,878 Documents
per Year
           
 
                       
 
     
  The Service Provider on receiving incoming documents (e.g., mail, fax, non-Service Receiver email) from the Service Receiver or Service Receiver’s Suppliers, are opened, reviewed, and scanned into SAP within 1 business day, and are indexed within 2 business days. Priority documents are indexed within 1 business day. The Service Provider’s Document Processing and Help Desk Teams determine priority. Upon completion of indexing, the documents route to either the Check Request portal for further input by the Service Receiver or on to Document Processing for matching by the Service Provider.
               
 
                       
 
     
  Non-compliant workflow handling — Accounts Payable document received by the Service Provider, which does not contain sufficient information to be indexed, is routed to the Service Receiver for Non-Compliant Workflow review. The Service Receiver must provide direction to the Service Provider prior to any additional processing.
               
 
                       
 
     
  Duplicate Checking — The Service Provider for each Accounts Payable document received compares it to previously received and processed documents to ensure no duplicate invoices are processed, and will delete duplicate as necessary.
               
 
                       
 
     
  The Service Provider will store all Service Receiver’s Invoices and attachment information onsite and off-site with an external document storage vendor (Iron Mountain).
               
 
                       
 
      Accounts Payable and Supplier Payment Document Processing:                
 
                       
 
     
  The Service Provider will for all Purchase Order related invoices either 2 or 3 way match them. Any documents found by the Service Provider having exceptions or needing approvals, are parked for review by the Service Receiver, all matched documents are posted.
  241,547 Documents
per Year
           

3


 

                         
                Minimum    
            BAU   Service    
            Transaction   Period   Service
Service #   Service Name   Description of Service   Volume   (in mo.)   Charge
 
     
  The Service Provider receives electronic documents via interface from the Service Receiver or an internal business group within Provider. Documents are received and posted automatically unless an exception exists. A combination of one or more of these components: PO, tax review, and an Accounts Payable document can be received from the Service Receiver or an internal business group within Provider. The Service Provider will retain all hard copy invoices for DCAA audit requirements.
  84,587 Documents
per Year
           
 
                       
 
     
  For Service Receiver’s Business Units that cannot support foreign currency payments through Receiver’s Purchase Order systems, the Service Provider requires additional processing prior to payment. Invoices received in a currency other than USD and CAD require an update to the Purchase Order prior to invoice posting. The Service Provider will provide the Service Receiver the converted USD or CAD value, so that the Purchase Order can be updated to match the provided amount.
               
 
                       
 
     
  The Service Provider determining any Accounts Payable document that does not pass the 2 or 3 way match or requires approval, must be parked for review by the Service Receiver.
               
 
                       
 
     
  The Service Provider on receiving returned ‘parked’ documents from the Service Receiver, will:
               
 
                       
 
     
     Process the returned corrective actions for each ‘parked’ document, specified by the Service Receiver. The Service Receiver must review each ‘parked’ document.
               
 
                       
 
     
     Review the directions provided by the Service Receiver and either post, delete, delete and recreate, or re-park the document based on the comments provided by the Service Receiver and the ability to match the document
               
 
                       
 
     
  No item in the processing queue should remain in the queue greater than 5 business days. On a daily basis the processing team will also work priorities based on status and due date.
               
 
                       
 
     
  The Service Provider will review upon receipt of a One-Time Vendor check request submitted via the check request portal from the Service Receiver, will be reviewed by the Service Provider, and sent to the Service Receiver’s approver regardless of approval limit.
               
 
                       
 
     
  The Service Provider on receiving Stop Payment and Void notifications from the Service Receiver’s bank, will process Stop payments and voids within SAP (in conjunction with Treasury processing with the bank) and Invoice reversals when necessary.
  521 Requests per
Year
           

4


 

                         
                Minimum    
            BAU   Service    
            Transaction   Period   Service
Service #   Service Name   Description of Service   Volume   (in mo.)   Charge
 
      Accounts Payable and Supplier Payment Vendor Payment Processing:                
 
                       
 
     
  The Service Provider will execute Payment runs on Mondays, Wednesdays, and Fridays (excluding USA and Canadian holidays) at 8:00am EST, for those invoices, which have reached to their Due Dates, and transmit Payment file to the Service Receiver’s Bank.
  1,368 Payment Runs
per Year
           
 
                       
 
     
  The Service Provider will review any exceptions from the payment process, and will update the system accordingly.
               
 
                       
 
     
  The Service Provider on receipt of a Vendor Refund request from the Service Receiver, or a returned payment from the Post Office, will process them appropriately
               
 
                       
 
     
  The Service Provider on receipt of an Emergency request, will provide to the Service Receiver Emergency payment services. These services are processed from Seneca Falls, between 1:00pm and 2:00pm EST daily excluding USA/Canadian Holidays. All overnight instructions are to be provided in advance. This service should be reserved for true emergencies only based on the urgency of the transaction (shut-offs which severely impact business operations) subject to approval by Service Provider. Emergency Check requests received by the Service Provider after 2:00pm EST are subject to additional charges.
               
 
                       
 
     
  The Service Provider will process Intercompany Payments twice each month.
               
 
                       
 
      Accounts Payable and Supplier Payment Help Desk Processing — The Service Provider will provide Help Desk services to the Service Receiver:                
 
                       
 
     
  The Service Provider will receive inquiries via Issuetrak from the Service Receiver or their Vendors are received and recorded centrally. The Service Provider will create Tickets, assign priority and will be resolved by the Service Provider Help Desk staff or appropriate resources.
  4,376 Internal User
Inquiries per Year
           
 
                       
 
     
  The Service Provider will receive approved User ID requests through Issuetrak from the Service Receiver, and will update the appropriate user access information necessary to provide user access.
               
 
                       
 
     
  The Service Provider will provide access to applications through user request form(s) submitted by Service Receiver via Service Provider P2P Help Desk tickets for authorized service receiver users. Service Provider will maintain and reset SAP user passwords and application security through Provider P2P Help Desk requests. Service Provider will monitor and restrict unauthorized access to source code and data. User add/update/delete requests will be completed within three (3) business days of receipt of complete, approved form.
  176 Requests (Adds, Deletes, and Updates) per Year            

5


 

                         
                Minimum    
            BAU   Service    
            Transaction   Period   Service
Service #   Service Name   Description of Service   Volume   (in mo.)   Charge
 
     
  Tickets are assigned a priority of High, Medium and Urgent. High tickets are resolved within 1 business day, and Medium tickets are resolved within 2 business Days. Urgent priority tickets are responded to within 1 hour, during normal Service Provider business day. Tickets classified as User set-ups and others are completed within 3 days.
               
 
                       
 
      The Service Provider will receive approved User ID requests through Issuetrak from the Service Receiver and will update the appropriate user.                
 
                       
 
      Accounts Payable and Supplier Payment Reporting and Processing:                
 
                       
 
     
  Daily Reporting — The Service Provider will continue to provide any daily reports currently provided to the Service Receiver automatically through email or SAP inbox.
  11 Postings per
Business Unit per
Month (month-end
processing)
           
 
                       
 
     
  Month-End Processing — All transactions posted throughout the month are accounted for at month end and updates sent to the Service Receiver’s Business Units for posting on their ledger. Reports are sent to Service receiver via an email or SAP inbox.
               
 
                       
 
     
  Year-End Processing — All parked documents as of 12/31 are completed and recreated in the new fiscal year via an electronic message.
               
 
                       
 
     
  1099’s — Service Provider will consolidate all transactions posted against vendors labeled as 1099 vendors throughout the year for 1099 issuance and filing. Service Receiver must continue to provide any non SAP 1099 data to the Service Provider and review and obtain W-9 for all One Time Vendor requests for 1099 compliance.
               
 
                       
 
      Accounts Payable and Supplier Payment Audit Support:                
 
                       
 
     
  The Service Provider will continue to provide existing reporting, invoice copies, and payment information (in conjunction with Treasury) upon audit request. Service Receiver will be responsible for transactions for which Service Provider systems are not the system of record.
               

6


 

                         
                Minimum    
            BAU   Service    
            Transaction   Period   Service
Service #   Service Name   Description of Service   Volume   (in mo.)   Charge
 
      Provide application support services for P2P Delivery Environment, which consists of SAP, Vendor Portal, Taxware, OpenText, and Interface Infrastructure MQ and XI (MQ support is only on Provider’s MQ):                
 
                       
SS-AP-SP -02
  P2P Delivery
Environment
Application Support
Services
 
  P2P Delivery Environment Support & Maintenance — Service Provider will monitor incident resolution requests; and recommend and implement incident resolution. Service Provider will identify and communicate breaks in application, develop solution to address break, and implement fixes to resolve break. Service Provide reserves the right to charge time and material for a Service Receiver initiated break which requires greater than 8 hours to resolve. Service Provider will maintain production batch schedule, assess impact of failed batch jobs, and adjust schedule to account for batch job failures and delays. Service Provider will execute web server and application server configuration changes; and monitor and maintain application administration. Service Provider will provide SAP Basis support, development support for the P2P Delivery Environment, and configuration management in support of business as usual activities (excludes enhancement requests by Service Receiver). Requests for support and maintenance will be submitted and tracked via Service Provider Help Desk ticket.
  534 SAP Users
241,547 Invoice
Postings per Year
44,022 New Purchase
Orders Created per Year
           
 
                       
 
     
    Service Provider will publish scheduled down time which will allow for normal maintenance of the P2P environment including operating system upgrades; database maintenance, and other tasks required in order to keep environment running efficiently. Ad-Hoc down time will be communicated to Service Receiver with 3 business days advance notice where possible.
               
 
              &