Transition Services Agreement - L-3 Communications Corporation and Engility Corp

EX-10.3 5 d414356dex103.htm TRANSITION SERVICES AGREEMENT - L-3 COMMUNICATIONS CORPORATION AND ENGILITY CORP Transition Services Agreement - L-3 Communications Corporation and Engility Corp

Exhibit 10.3

EXECUTION COPY

TRANSITION SERVICES AGREEMENT

between

L-3 COMMUNICATIONS CORPORATION

and

ENGILITY CORPORATION

Dated as of July 16, 2012

TABLE OF CONTENTS


		Page

ARTICLE I DEFINITIONS			1

Section 1.01	Definitions		1

Section 1.02	Currency		3

ARTICLE II TRANSITION SERVICE SCHEDULES			3

ARTICLE III SERVICES			4

Section 3.01	Services Generally		4

Section 3.02	Service Levels		4

Section 3.03	Impracticability		4

Section 3.04	Additional Resources		4

Section 3.05	Additional Services		5

ARTICLE IV TERM			5

ARTICLE V COMPENSATION			5

Section 5.01	Charges for Services		5

Section 5.02	Payment Terms		5

Section 5.03	Taxes		6

Section 5.04	Records and Audits		6

ARTICLE VI GENERAL OBLIGATIONS			6

Section 6.01	Performance Metrics		6

Section 6.02	Disclaimer of Warranties		7

Section 6.03	Transitional Nature of Services; Changes		7

Section 6.04	Responsibilities for Errors; Changes		7

Section 6.05	Cooperation and Consents		7

Section 6.06	Alternatives		7

Section 6.07	Personnel		8

Section 6.08	Insurance		8

ARTICLE VII TERMINATION			8

Section 7.01	Termination		8

Section 7.02	Survival		9

Section 7.03	Payment		9

Section 7.04	User ID; Passwords		10

ARTICLE VIII RELATIONSHIP BETWEEN THE PARTIES			10


ARTICLE IX SUBCONTRACTORS		10

ARTICLE X INTELLECTUAL PROPERTY		10

Section 10.01	Allocation of Rights by Ancillary Agreements	10

Section 10.02	Existing Ownership Rights Unaffected	10

Section 10.03	Third Party Software	11

Section 10.04	Termination of Licenses	11

ARTICLE XI NO OBLIGATION		11

ARTICLE XII CONFIDENTIALITY		11

Section 12.01	Confidentiality	11

Section 12.02	Permitted Purpose	11

Section 12.03	Disclosure	11

Section 12.04	Expiration of Confidentiality Provisions	11

ARTICLE XIII LIMITATION OF LIABILITY AND INDEMNIFICATION		12

Section 13.01	Indemnification	12

Section 13.02	Limitation of Liability	13

Section 13.03	Provisions Applicable with respect to Indemnification Obligations	13

ARTICLE XIV ASSIGNMENT		13

Section 14.01	Prohibition of Assignment	13

Section 14.02	Assignment to L-3	13

ARTICLE XV MISCELLANEOUS		14

Section 15.01	Notices	14

Section 15.02	Governing Law; Jurisdiction	14

Section 15.03	Waiver of Jury Trial	14

Section 15.04	Judgment Currency	14

Section 15.05	Entire Agreement	14

Section 15.06	Conflicts	15

Section 15.07	Force Majeure	15

Section 15.08	Amendment and Waiver	15

Section 15.09	Further Assurances	15

Section 15.10	Severability	16

Section 15.11	Counterparts	16

TRANSITION SERVICES AGREEMENT

TRANSITION SERVICES AGREEMENT (this “Agreement”), dated as of July 16, 2012, between L-3 Communications Corporation, a Delaware corporation (“L-3”), and Engility Corporation, a Delaware corporation (formerly known as L-3 Services, Inc.) (“Engility” and, together with L-3, the “Parties”, and each individually, a “Party”). Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Distribution Agreement.

RECITALS

WHEREAS, L-3 Communications Holdings, Inc., of which L-3 is a wholly owned Subsidiary, and Engility Holdings, Inc. have entered into a Distribution Agreement, dated as of July 16, 2012 (as amended, restated or modified from time to time, the “Distribution Agreement”), which contains the terms and conditions relating to the separation of the Spinco Business such that the Spinco Business is to be held, as at the Effective Time, directly or indirectly, by Engility Holdings, Inc. and its direct or indirect subsidiaries and affiliates, including Engility; and

WHEREAS, in connection therewith, L-3 will provide certain transitional services to Engility following the Distribution Date, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements and covenants contained in this Agreement and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. As used herein, the following terms have the following meanings:

“Agreement” has the meaning set forth in the Preamble to this Agreement and in Article II.

“Commercially Reasonable Efforts” means the efforts that a reasonable and prudent Person desirous of achieving a business result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible in the context of commercial relations of the type envisaged by this Agreement; provided, however, that an obligation to use Commercially Reasonable Efforts under this Agreement does not require the Person subject to that obligation to assume any material obligations or pay any material amounts to a Third Party.

“Consent” means any written approval, consent, ratification, waiver or other authorization.

“Contract” means any contract, agreement, lease, license, commitment, consensual obligation, promise or undertaking (whether written or oral and whether express or implied) that is legally binding on any Person or any part of its property under applicable Law.

“Distribution Agreement” has the meaning set forth in the Recitals to this Agreement.

“Dollars” or “$” means the lawful currency of the United States of America.

“Engility” has the meaning set forth in the Preamble to this Agreement.

“Engility Group” means Engility Holdings, Inc. and its direct and indirect Subsidiaries and affiliates from time to time after the Effective Time.

“Engility Indemnified Parties” has the meaning set forth in Section 13.01.

“Event of Default” has the meaning set forth in Section 7.01.

“Expiration Date” has the meaning set forth in Article IV.

“Fair Market Value” means, in relation to the pricing of services under this Agreement, terms that would be agreed between non-affiliated third parties for comparable services on a comparable scale, as determined by mutual agreement of the Parties.

“Force Majeure Event” has the meaning set forth in Section 15.07.

“Governmental Authorization” means any Consent, license, certificate, franchise, registration or permit issued, granted, given or otherwise made available by, or under the authority of, any Governmental Entity or pursuant to any applicable Law.

“Impracticability” has the meaning set forth in Section 3.03.

“Party” has the meaning set forth in the Preamble to this Agreement.

“L-3” has the meaning set forth in the Preamble to this Agreement.

“L-3 Indemnified Parties” has the meaning set forth in Section 13.01.

“Permitted Purpose” has the meaning set forth in Section 12.02.

“Sales Taxes” means any sales, use, consumption, goods and services, value added or similar Tax, duty or charge imposed pursuant to applicable Law.

“Service(s)” has the meaning set forth in Section 3.01(b).

“Service Manager” has the meaning set forth in Section 6.07(c).

“Service Provider” means L-3 when it is providing a Service to Engility hereunder in accordance with a Transition Service Schedule.

“Service Recipient” means Engility when it is receiving a Service hereunder in accordance with a Transition Service Schedule.

“Service Recipient Representative” has the meaning set forth in Section 6.07(c).

“Subcontractor” has the meaning set forth in Article IX.

“Subsidiary” of any Person means any corporation, partnership, limited liability entity, joint venture or other organization, whether incorporated or unincorporated, of which a majority of the total voting power of capital stock or other interests entitled (without the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person.

“Term” has the meaning set forth in Article IV.

“Third Party” means a Person that is not a Party to this Agreement or its Subsidiary.

“Transition Service Schedule” has the meaning set forth in Article II.

Section 1.02 Currency. Except as otherwise specified in a Transition Service Schedule, all references to currency herein are to lawful money of the United States of America.

ARTICLE II

TRANSITION SERVICE SCHEDULES

This Agreement will govern individual transition Services to be provided to Engility, the details of which are set forth in the Transition Service Schedules attached to and forming part of this Agreement (each transition service schedule, a “Transition Service Schedule”).

For each Service, the Parties shall set forth in a Transition Service Schedule, among other things (i) the time period during which the Service will be provided if different from the Term of this Agreement, (ii) a summary of the Service to be provided and (iii) the charge for the Service or the method for determining the charge for the Service and any other terms the Parties deem applicable thereto. Obligations regarding a Transition Service Schedule shall be effective upon the Distribution Date. This Agreement and all the Transition Service Schedules shall be defined as the “Agreement” and each Transition Service Schedule is incorporated herein wherever reference to this Agreement is made.

ARTICLE III

SERVICES

Section 3.01 Services Generally.

(a) Except as otherwise provided in the Transition Service Schedule, for the Term hereof, L-3 shall provide or cause to be provided to Engility the Services described in the Transition Service Schedules.

(b) Each of the services on the Transition Service Schedule shall be referred to herein as a “Service.” Collectively, the services described on all the Transition Service Schedules shall be referred to herein as the “Services.”

(c) During the Term, Service Recipient may request any Service previously provided to it by Service Provider that it deems reasonably necessary for the ongoing operation of the Spinco Business in substantially the same manner that it was conducted by Service Provider immediately prior to the Distribution. Service Provider will use Commercially Reasonable Efforts to provide all such requested Services to Service Recipient, but only if such Services were provided by Service Provider to Service Recipient prior to the Distribution Date, except in the event of an Impracticability or as otherwise provided in this Agreement.

Section 3.02 Service Levels. Except as otherwise provided in the Transition Service Schedule for a specific Service: (a) the Service Provider shall provide the Services only to the extent such Services are being provided immediately prior to the Distribution Date and at a level of service substantially similar to that provided immediately prior to the Distribution Date and (ii) the Services will be available only for purposes of conducting the business of the Service Recipient substantially in the manner it was conducted prior to the Effective Time; provided, however, that nothing in this Agreement will require the Service Provider to favor the Service Recipient over its other business operations. All Services are provided on an “as is” basis, and L-3 is permitted to modify all Services as it sees fit in the ordinary course of its business.

Section 3.03 Impracticability. The Service Provider shall not be required to provide any Service to the extent the performance of such Service becomes impractical due to cause or causes outside the reasonable control of the Service Provider, including, without limitation, failure of the Service Recipient to comply with Section 6.01, unfeasible technological requirements, or to the extent the performance of such Services would require the Service Provider to violate any applicable Law, or would result in the breach of any license, Governmental Authorization or Contract (each, an “Impracticability”).

Section 3.04 Additional Resources. In accordance with Section 6.07 below and except as specifically provided in a Transition Service Schedule for a specific Service, in providing the Services, the Service Provider shall not be obligated to: (a) hire any additional employees; (b) maintain the employment of any specific employee; (c) purchase, lease or license any additional facilities, equipment or software; or (d) pay any costs related to the transfer or conversion of the Service Recipient’s data to the Service Provider or any alternate supplier of Services.

Section 3.05 Additional Services. The Transition Service Schedules may be amended at any time by mutually agreed upon amendment of this Agreement to add additional Services. The charges for such additional Services shall be as set forth in the amended Transition Service Schedules.

ARTICLE IV

TERM

The term of this Agreement shall commence on the Distribution Date and end 18 months following the Distribution Date, unless earlier terminated under Article VII (the “Term”, and the last day of the Term, the “Expiration Date”). The Parties may agree on an earlier expiration date respecting a specific Service by specifying such date on the Transition Service Schedule for that Service. Services shall be provided up to and including the date set forth in the applicable Transition Service Schedule, subject to earlier termination as provided in Article VII. It shall be the sole responsibility of the Service Recipient, upon and after expiration or early termination of this Agreement with respect to a specific Service, to perform, render and provide for itself (or to make arrangements with one or more Third Party service providers to perform, render and provide) such Service, and to do all necessary planning and make all necessary preparations in connection therewith.

ARTICLE V

COMPENSATION

Section 5.01 Charges for Services. The Service Recipient shall pay (a) the Service Provider or (b) the Third Party service provider, as applicable, (i) the Dollar value charges, or (ii) the charges determined by the method, in either case, if any, set forth on the Transition Service Schedules for each of the Services listed therein, or, if no such charges are specifically indicated otherwise, by the Fair Market Value of the Services. If there is any inconsistency between the Transition Services Schedule and this Section 5.01, the terms of the Transition Service Schedule shall govern.

Section 5.02 Payment Terms. Except as otherwise specified in a Transition Service Schedule, the Service Provider shall invoice the Service Recipient monthly (or on such other basis as the Parties may mutually determine) for all charges for Services to be paid to the Service Provider as set forth on the Transition Service Schedules pursuant to this Agreement. Such invoices shall generally identify the Services provided to the Service Recipient during the preceding month and specify the Service fee applicable to each Service so identified. Except as otherwise specified in a Transition Service Schedule, the Service Recipient shall pay the Service Provider for all such Services within 30 days after receipt of an invoice therefor by wire transfer of immediately available funds to the account designated by the Service Provider for this purpose. Late payments shall bear interest at a rate per annum equal to the Prime Rate plus 2.0%, calculated for the actual number of days elapsed, accrued from and excluding the date on which such payment was due up to and including the date of payment. Late payment for any Service provided hereunder shall entitle Service Provider to suspend, at Service Provider’s sole discretion, the provision of any or all Services to Service Recipient hereunder.

Section 5.03 Taxes. The fees and charges payable by the Service Recipient under this Agreement and set forth on the Transition Service Schedules shall be exclusive of any Sales Taxes or excise Taxes or any customs or import charges or duties or any similar charges or duties which may be imposed by any Governmental Entity in connection with the purchase or delivery of the Services or materials to the Service Recipient. The Service Recipient shall remit to the Service Provider any Sales Taxes properly payable to the Service Provider pursuant to this Agreement. Applicable Sales Taxes shall be indicated by the Service Provider separately on all of the Service Provider’s invoices. The Parties shall cooperate with each other to minimize any applicable Sales Taxes and each shall provide the other with any reasonable certificates or documents which are useful for such purpose.

Section 5.04 Records and Audits. Service Provider shall maintain detailed books and records of the costs on which the fees charged to Service Recipient hereunder have been based. Service Recipient shall have the right, at its sole cost and expense, to have the applicable books and records of Service Provider audited by a nationally recognized independent certified public accountant, mutually selected by the Parties, under appropriate confidentiality provisions, for the purpose of verifying the accuracy of all fees and out-of-pocket cost calculations under this Agreement. Any such audit shall be conducted no more than twice during the Term and shall be conducted upon at least thirty (30) days’ advance notice during normal business hours and in a manner that does not interfere unreasonably with Service Provider’s business. The results of any such audit shall be binding on the Parties absent manifest error, and shall be delivered in writing to each Party. Any underpayment or overbilling determined by such audit shall promptly be paid by Service Recipient or refunded by Service Provider, as applicable, plus interest at a rate of simple interest per annum equal to the Applicable Rate, from the date of any such underpayment or overbilling.

ARTICLE VI

GENERAL OBLIGATIONS

Section 6.01 Performance Metrics. Subject to Article III and any other term or condition of this Agreement, each Party shall maintain sufficient resources to perform their obligations hereunder. Any specific performance metrics for the Service Provider or the Third Party service provider for a specific Service may be set forth in the corresponding Transition Service Schedule. Where none is set forth, the Service Provider shall (consistent with the other terms and conditions of this Agreement) use Commercially Reasonable Efforts to provide Services, or to cause the Services to be provided, in accordance with the policies, procedures, service levels and practices in effect before the Distribution Date and shall exercise the same care and skill as the Service Provider exercises in performing similar services for itself. To the extent within the possession and control of the Service Recipient, the Service Recipient shall (i) provide, and shall cause the other relevant members of the Engility Group to provide, the Service Provider, Third Party service provider and/or Subcontractor with any and all information and documentation, and (ii) take actions and make decisions in a timely manner, in each case sufficient for the Service Provider to perform the Services it is obligated to perform hereunder (and to perform its obligation to cause the Services to be provided, where applicable) as they were performed before the Distribution Date and shall make available, as reasonably requested by the Service Provider, sufficient resources and timely decisions, approvals and acceptances in order that the Service Provider may perform its obligations hereunder in a timely manner.

Section 6.02 Disclaimer of Warranties. No Party makes any warranties or conditions, express, implied, conventional or statutory, including but not limited to, the implied warranties or conditions of merchantability, of quality or fitness for a particular purpose, with respect to the Services or other items or deliverables provided by it or any Third Party service provider.

Section 6.03 Transitional Nature of Services; Changes. The Parties acknowledge the transitional nature of the Services and that the Service Provider may make changes from time to time in the manner of performing the Services if the Service Provider is making similar changes in performing similar services for itself.

Section 6.04 Responsibilities for Errors; Changes. Except as set forth in Article XIII, the Service Provider’s sole responsibility to the Service Recipient:

(a) for material errors or omissions in Services, shall be to furnish correct information, payment and/or adjustment in the Services, at no additional cost or expense to the Service Recipient; provided, that the Service Provider must promptly advise the Service Recipient of any such material error or omission of which it becomes aware; and

(b) for failure to deliver any Service because of Impracticability, shall be to use Commercially Reasonable Efforts, subject to Section 3.03, to make the Services available or to resume performing the Services as promptly as reasonably practicable.

Section 6.05 Cooperation and Consents. The Parties shall cooperate with each other in all matters relating to the provision and receipt of Services. Such cooperation shall include exchanging information, performing true-ups and adjustments and obtaining all Third Party Consents, licenses or sublicenses necessary to permit each Party to perform its obligations hereunder (including by way of example, not by way of limitation, rights to use Third Party software needed for the performance of Services). Pursuant to Section 10.03, the costs of obtaining such Third Party Consents, licenses or sublicenses shall be borne by the Service Recipient.

Section 6.06 Alternatives. If the Service Provider reasonably believes it is unable to provide any Service because of a failure to obtain necessary Consents, licenses or sublicenses pursuant to Section 6.05 or because of Impracticability, the Parties shall reasonably and in good faith cooperate to determine the best alternative approach. Until such alternative approach is found or the problem otherwise resolved to the reasonable satisfaction of the Parties, the Service Provider shall not be obligated to continue providing the Service. To the extent an agreed upon alternative approach requires the occurrence of costs or expenditures above and beyond that which is included in the Service Provider’s charge for the Service in question, such additional costs and expenditures shall be discussed between the Parties and, unless otherwise agreed, be borne by the Service Recipient.

Section 6.07 Personnel.

(a) Right to Designate and Change Personnel. The Service Provider will have the right to designate which personnel it will assign to perform the Services. The Service Provider also will have the right to remove and replace any such personnel at any time or designate any of its Affiliates or a Subcontractor at any time to perform the Services, pursuant to Article IX; provided, however, that the Service Provider will use Commercially Reasonable Efforts to limit the disruption to the Service Recipient in the transition of the Services to different personnel or to a Subcontractor. In the event that personnel with the designated level of experience are not then employed by the Service Provider, the Service Provider will use Commercially Reasonable Efforts to provide such personnel or Subcontractor personnel having an adequate level of experience; provided, however, that the Service Provider will have no obligation to retain any individual employee for the sole purpose of providing the applicable Services.

(b) Financial Responsibility. The Service Provider will directly pay for all personnel expenses, including wages, of its employees performing the Services.

(c) Service Managers and Service Recipient Representatives. During the Term of this Agreement, the Parties will appoint (i) in the case of the Service Provider, one of its employees (the “Service Manager”) for each Service as indicated in each Transition Service Schedule who will have responsibility for managing and coordinating the delivery of such Service and (ii) in the case of the Service Recipient, one of its employees (the “Service Recipient Representative”) for each Service as indicated in each Transition Service Schedule who will have responsibility for managing and coordinating the Service Recipient’s utilization of such Service. The Service Managers will coordinate and consult with the Service Recipient Representatives. The Parties may, at their discretion, select other individuals to serve in these capacities during the Term of this Agreement upon providing notice to the other Party. For greater certainty, a Service Manager or a Service Recipient Representative may serve as such in respect of one or more Transition Service Schedules.

Section 6.08 Insurance. Each Party shall obtain and maintain at its own expense insurance of the type generally maintained in the ordinary course of its business. The Service Provider shall not be required to obtain and maintain any particular insurance in relation to providing any Service.

ARTICLE VII

TERMINATION

Section 7.01 Termination. Service Recipient may terminate any Service, with or without cause, at any time upon at least 60 days’ prior notice to the Service Provider, except with respect to the Services described on Transition Service Schedule No. 1 (Ethics Training Module System), No. 2 (Health/Welfare Plans), No. 3 (Health/Welfare Services Support), No. 11 (File 2011 and 2012 Federal and State Income Tax Return) and No. 12 (Travel Program), each of which Services shall remain in effect until the termination date for such Service as indicated on the applicable Transition Service Schedule. As soon as reasonably practicable following receipt of any such early termination notice, the Service Provider shall advise the Service Recipient as to whether termination of such Service will (a) require the termination or partial termination of, or otherwise affect the provision of, certain other Services or (b) result in any early termination

costs, including those related to Subcontractors. In the event that such termination is expected by the Service Provider to result in any early termination costs, the Service Provider will provide to the Service Recipient such information as it has reasonably available regarding the estimated amount of such costs, which in the case of a Subcontractor may be based upon information provided by such Subcontractor. Any early termination costs shall be borne by the Service Recipient.

In addition, the Parties agree that either Party may terminate this Agreement (and the corresponding Transition Service Schedule) with respect to a specific Service upon providing notice to the other Party in the event that an Event of Default occurs in relation to such other Party, and such termination shall take effect immediately upon the non-defaulting Party providing such notice to the other (except as otherwise specified in clause (c) below).

For the purposes of this Agreement, each of the following shall individually and collectively constitute an “Event of Default”:

(a) in relation to the Service Recipient, if the Service Recipient defaults in payment to the Service Provider of any payments which are due and payable by it to the Service Provider pursuant to this Agreement, and such default is not cured within 15 days following receipt by the Service Recipient of notice of such default;

(b) either Party breaches any of its material obligations to the other Party pursuant to this Agreement (other than as set out in paragraph (a) above), and fails to cure it within 30 days after receipt of written notice from the non-defaulting Party specifying the default in reasonable detail and demanding that it be rectified; provided, that if such breach is not capable of being cured within 30 days after receipt of such written notice and the Party in default has diligently pursued efforts to cure the default within the 30 day period, no Event of Default under this paragraph (b) shall occur; and provided, further, that no failure of the Service Provider to provide any Services shall constitute an “Event of Default” if such failure is a result of the Service Recipient’s failure to comply with its obligations under the final sentence of Section 6.01 in all respects; and

(c) either Party (i) is bankrupt or insolvent or takes the benefit of any statute in force for bankrupt or insolvent debtors, or (ii) files a proposal or takes any action or proceeding before any court of competent jurisdiction for its dissolution, winding-up or liquidation, or for the liquidation of its assets, or a receiver is appointed in respect of its assets, which order, filing or appointment is not rescinded within 60 days.

Section 7.02 Survival. Notwithstanding the foregoing, in the event of any termination or expiration with respect to one or more Services, but less than all Services, this Agreement shall continue in full force and effect with respect to any Services not terminated or expired. Section 5.04 and Articles VII, X, XII, XIII and XV shall survive the termination or expiration of this Agreement in accordance with its terms (where applicable).

Section 7.03 Payment. Immediately following the Expiration Date, the Service Provider shall cease, or cause its Subcontractors to cease, providing the Services, and the Service

Recipient shall promptly pay or cause the other relevant members of the Engility Group to which it belongs, to promptly pay all fees accrued pursuant to Article V but unpaid to the Service Provider.

Section 7.04 User ID; Passwords. The Parties shall use Commercially Reasonable Efforts upon the termination or expiration of this Agreement or of any specific Service hereto to ensure that access by one Party to the other Party’s systems is cancelled.

ARTICLE VIII

RELATIONSHIP BETWEEN THE PARTIES

The Service Provider is and will remain at all times an independent contractor in the performance of all Services hereunder. In all matters relating to this Agreement, the Service Provider will be solely responsible for the acts of its employees and agents, and employees or agents of the Service Provider shall not be considered employees or agents of the Service Recipient. Except as otherwise provided herein, the Service Provider will not have any right, power or authority to create any obligation, express or implied, on behalf of the Service Recipient nor shall the Service Provider act or represent or hold itself out as having authority to act as an agent or partner of the Service Recipient, or in any way bind or commit the Service Recipient to any obligations. Nothing in this Agreement is intended to create or constitute a joint venture, partnership, agency, trust or other association of any kind between the Parties or Persons referred to herein, and each Party shall be responsible only for its respective obligations as set forth in this Agreement. Neither the Service Provider nor its employees shall be considered an employee or agent of the Service Recipient for any purpose, except as expressly agreed by the Parties. The Service Provider shall have sole responsibility for the supervision, daily direction and control, payment of salary (including withholding of income taxes and deductions at source), worker’s compensation, disability benefits and the like of its employees.

ARTICLE IX

SUBCONTRACTORS

The Service Provider may engage a “Subcontractor” to perform all or any portion of the Service Provider’s duties under this Agreement. As used in this Agreement, “Subcontractor” will mean any Person or entity engaged to perform hereunder, other than employees of the Service Provider or its Affiliates.

ARTICLE X

INTELLECTUAL PROPERTY

Section 10.01 Allocation of Rights by Ancillary Agreements. This Agreement and the performance of this Agreement will not affect the ownership of any patent, trademark or copyright or other intellectual property rights allocated in the Distribution Agreement or any of the Ancillary Agreements.

Section 10.02 Existing Ownership Rights Unaffected. Neither Party will gain, by virtue of this Agreement, any rights of ownership of copyrights, patents, trade secrets, trademarks or any other intellectual property rights owned by the other.

Section 10.03 Third Party Software. In addition to the consideration set forth elsewhere in this Agreement, the Service Recipient shall also pay any amounts (and applicable Sales Taxes) that are required to be paid to any licensors of software that is used by the Service Provider (other than as a part of its normal operations), to the extent that such software is used in connection with the provision of any Service hereunder, and any amounts (and applicable Sales Taxes) that are required to be paid by the Service Provider to any such licensors to obtain the Consent of such licensors to allow the Service Provider to provide any of the Services hereunder.

Section 10.04 Termination of Licenses. Any license granted hereunder by the Service Provider shall terminate and be of no further force and effect upon the expiration or early termination of this Agreement or the termination of the particular Service associated with the granted license, if earlier.

ARTICLE XI

NO OBLIGATION

Neither Party assumes any responsibility or obligation whatsoever, other than the responsibilities and obligations expressly set forth in this Agreement (including the schedules hereto), in the Distribution Agreement or in a separate written agreement between the Parties.

ARTICLE XII

CONFIDENTIALITY

Section 12.01 Confidentiality. The terms of the Confidentiality provisions set forth in Article XI of the Distribution Agreement shall apply to all Confidential Information disclosed in the course of the Parties’ interactions under this Agreement. This Article XII sets out additional matters regarding Confidential Information for the purposes of this Agreement.

Section 12.02 Permitted Purpose. The term “Permitted Purpose” means the provision of a Service by the Service Provider or its Subcontractors to the Service Recipient under this Agreement.

Section 12.03 Disclosure. The Service Provider and its Subcontractors may use Confidential Information in connection with a Permitted Purpose; provided, that:

(a) the Service Provider shall not disclose any Confidential Information to any employee of the Service Provider or to any of its Subcontractors who does not have a need to know such Confidential Information in order to perform the Permitted Purpose; and

(b) the Service Provider and its Subcontractors shall not use the Confidential Information other than for such Permitted Purpose.

Section 12.04 Expiration of Confidentiality Provisions. The obligations of the Parties under this Article XII shall expire on the third anniversary of the date of this Agreement.

ARTICLE XIII

LIMITATION OF LIABILITY AND INDEMNIFICATION

Section 13.01 Indemnification. L-3 shall indemnify, defend and hold harmless Engility, each other member of the Engility Group and each of their respective directors, officers and employees, and each of the heirs, executors, trustees, administrators, successors and assignors of any of the foregoing (collectively, the “Engility Indemnified Parties”), from and against any and all Liabilities of the Engility Indemnified Parties incurred by, borne by or asserted against any of them directly resulting from any of the following items (without duplication):

(a) the breach or the failure of performance by L-3 of any of the covenants, promises, undertakings or agreements which it is obligated to perform under this Agreement;

(b) death of or injury of any person whomsoever, including but not limited to directors, officers, employees, servants or agents of Engility, of another member of the Engility Group or contractors, resulting from the acts or omissions of L-3 or its Affiliates under or in connection with this Agreement, to the extent that such Liabilities are not covered by worker’s compensation;

(c) loss of, or damage to, or destruction of any property whatsoever, including without limitation, property of Engility or of another member of the Engility Group, resulting from the acts or omissions of L-3 or its Affiliates under or in connection with this Agreement, to the extent such liabilities are not covered by insurance; and

(d) any claim or assertion that the execution or performance by Engility of its obligations under this Agreement violates or interferes with any contractual or other right or obligation or relationship of L-3 to or with any other Person,

caused by, arising out of, or in any way related to this Agreement, but subject however to the limitations of liability provided in Section 13.02 of this Agreement.

Engility shall indemnify, defend and hold harmless L-3, its Subsidiaries and each of their and its respective directors, officers and employees, and each of the heirs, executors, trustees, administrators, successors and assignors of any of the foregoing (collectively, the “L-3 Indemnified Parties”), from and against any and all Liabilities of the L-3 Indemnified Parties incurred by, borne by or asserted against any of them directly resulting from any of the following items (without duplication):

(a) the breach or the failure of performance by Engility of any of the covenants, promises, undertakings or agreements which it is obligated to perform under this Agreement (including Engility’s failure to pay Third Party service provider’s bills on a timely basis);

(b) death of or injury of any person whomsoever, including but not limited to directors, officers, employees, servants or agents of L-3, its Subsidiaries or its contractors, resulting from the acts or omissions of Engility or its Affiliates under or in connection with this Agreement, to the extent that such Liabilities are not covered by worker’s compensation;

(c) loss of, or damage to, or destruction of any property whatsoever, including without limitation, property of L-3 or of any of its Subsidiaries, resulting from the acts or omissions of Engility or its Affiliates under or in connection with this Agreement, to the extent such liabilities are not covered by insurance; and

(d) any claim or assertion that the execution or performance by L-3 of its obligations under this Agreement violates or interferes with any contractual or other right or obligation or relationship of Engility to or with any other Person,

caused by, arising out of, or in any way related to this Agreement, but subject however to the limitations of liability provided in Section 13.02 of this Agreement.

Section 13.02 Limitation of Liability. Notwithstanding anything to the contrary herein, the total aggregate liability of the Service Provider to the Service Recipient for all events, acts or omissions of the Service Provider under or in connection with this Agreement or the Services provided by the Service Provider hereunder, whether based on an action or claim in contract, warranty, equity, negligence, tort or otherwise, shall not exceed an amount equal to the the greater of (i) $250,000 and (ii) solely in the case of gross negligence by the Service Provider (but for the sake of clarity, not any Third Party) in the performance of its obligations hereunder, the amount that the Service Recipient has actually paid the Service Provider for such Services under this Agreement.

In no event shall a Party or any Subsidiary or Affiliate of that Party be liable to any member of the other Party or any Subsidiary or Affiliate of the other Party for any special, consequential, indirect, collateral, incidental or punitive damages, lost profits, or failure to realize expected savings, or other commercial or economic loss of any kind, however caused and on any theory of liability (including negligence), arising in any way out of this Agreement, whether or not such Person has been advised for the possibility of any such damages.

Section 13.03 Provisions Applicable with respect to Indemnification Obligations. Article VI of the Distribution Agreement shall apply mutatis mutandis with respect to any Liability subject to indemnification or reimbursement pursuant to this Article XIII.

ARTICLE XIV

ASSIGNMENT

Section 14.01 Prohibition of Assignment. Neither Party shall assign or transfer this Agreement, in whole or in part, or any interest or obligation arising under this Agreement except as permitted by Section 6.07(a) and Section 14.02, without the prior written consent of the other Party.

Section 14.02 Assignment to L-3. L-3 may elect to have one or more of its Subsidiaries or Affiliates assume the rights and obligations of L-3 under this Agreement.

ARTICLE XV

MISCELLANEOUS

Section 15.01 Notices. All notices and other communications hereunder shall be given in the manner set forth in Section 13.02 of the Distribution Agreement.

Section 15.02 Governing Law; Jurisdiction. This Agreement shall be construed in accordance with, and governed by, the laws of the State of New York, without regard to the conflicts of law rules of such state. Each of the Parties (a) consents to submit itself to the personal jurisdiction of the courts of the State of New York or any federal court with subject matter jurisdiction located in the Southern District of New York (and any appeals court therefrom) in the event any dispute arises out of this Agreement or any Ancillary Agreement or any transaction contemplated hereby or thereby, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (c) agrees that it will not bring any action relating to this Agreement or any Ancillary Agreement or any transaction contemplated hereby or thereby in any court other than such courts.

Section 15.03 Waiver of Jury Trial. EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 15.03.

Section 15.04 Judgment Currency. The obligations of the Service Recipient to make payments hereunder shall not be discharged by an amount paid in any currency other than Dollars, whether pursuant to a court order or judgment or arbitral award or otherwise, to the extent that the amount so paid upon conversion to Dollars and transferred to an account indicated by the Service Provider under normal banking procedures does not yield the amount of Dollars due; and the Service Recipient, as a separate obligation and notwithstanding any such judgment, agrees to indemnify the Service Provider against, and to pay to the Service Provider on demand, in Dollars, any difference between the sum originally due in Dollars and the amount of Dollars received upon any such conversion and transfer.

Section 15.05 Entire Agreement. This Agreement, the other Ancillary Agreements, the Distribution Agreement and exhibits, schedules and appendices hereto (including the Transition Services Schedules) and thereto, and the specific agreements contemplated herein or thereby, contain the entire agreement between the Parties with respect to the subject matter hereof and supersedes all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter. No agreements or understandings exist between the Parties other than those set forth or referred to herein or therein.

Section 15.06 Conflicts. In case of any conflict or inconsistency between this Agreement and the Distribution Agreement with respect to the Services, this Agreement shall prevail. In case of any conflict or inconsistency between the terms and conditions of this Agreement (excluding, for the purpose of this Section 15.06, any Transition Service Schedule thereto) and the terms of any Transition Service Schedule, the provisions of the Transition Service Schedule shall prevail.

Section 15.07 Force Majeure. No Party shall be deemed in default of this Agreement to the extent that any delay or failure in the performance of its obligations under this Agreement results from superior force (“Force Majeure”) or any act, occurrence or omission beyond its reasonable control, such as fires, explosions, accidents, strikes, lockouts or labor disturbances, floods, droughts, earthquakes, epidemics, seizures of cargo, wars (whether or not declared), civil commotion, acts of God or the public enemy, action of any government, legislature, court or other Governmental Entity, action by any authority, representative or organization exercising or claiming to exercise powers of a government or Governmental Entity, compliance with applicable Law, blockades, power failures or curtailments, inadequacy or shortages or curtailments or cessation of supplies of raw materials or other supplies, failure or breakdown of equipment of facilities or, in the case of computer systems, any failure in electrical or air conditioning equipment (a “Force Majeure Event”). If a Force Majeure Event has occurred and its effects are continuing, then, upon notice by the Party who is delayed or prevented from performing its obligations to the other Party (i) the affected provisions or other requirements of this Agreement shall be suspended to the extent necessary during the period of such disability, (ii) the Party which is delayed or prevented from performing its obligations by a Force Majeure Event shall have the right to apportion its Services in an equitable manner to all users and (iii) such Party shall have no liability to the other Party or any other Person in connection therewith. The Party which is delayed or prevented from performing its obligations by the Force Majeure Event shall resume full performance of this Agreement as soon as reasonably practicable following the cessation of the Force Majeure Event (or the consequences thereof).

Section 15.08 Amendment and Waiver. This Agreement may not be altered or amended, nor may any rights hereunder be waived, except by an instrument in writing executed by the Parties. No waiver of any terms, provision or condition of or failure to exercise or delay in exercising any rights or remedies under this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, provision, condition, right or remedy or as a waiver of any other term, provision or condition of this Agreement.

Section 15.09 Further Assurances. Each Party agrees to use Commercially Reasonable Efforts to execute any and all documents and to perform such other acts as may be necessary or expedient to further the purposes of this Agreement and the relations contemplated hereby. Without limiting the foregoing and the provisions of the Distribution Agreement, each Party shall make available during normal business hours for inspection and copying by the other Party and such other Persons as the other Party shall designate in writing, all books and records in the possession which relate to the Services and which are necessary to confirm the said Party’s compliance with its obligations under this Agreement.

Section 15.10 Severability. The provisions of this Agreement are severable and should any provision hereof be void, voidable or unenforceable under any applicable Law, such provision shall not affect or invalidate any other provision of this Agreement, which shall continue to govern the relative rights and duties of the Parties as though such void, voidable or unenforceable provision were not a part hereof.

Section 15.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same Agreement.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Agreement as of the day and year first above written.


L-3 COMMUNICATIONS CORPORATION

By:	/s/ Steven M. Post
	Name:	Steven M. Post
	Title:	Senior Vice President

ENGILITY CORPORATION

By:	/s/ Thomas O. Miiller
	Name:	Thomas O. Miiller
	Title:	Senior Vice President, General Counsel and Corporate Secretary

[Signature Page to Engility Transition Services Agreement]

General Description of Service

Service Provider/L-3 -

Point of Contact

Service Recipient/
Engility -

Point of Contact

Transition Term
Expiration Date for
Applicable Service

Pricing

Additional Information

Ethics Training Module System

Third Party service provider: SAI Global

Service Provider will provide Service Recipient with a set of 4 master discs containing the SAI training module content licensed by the Service Provider for use by the Service Recipient until the Transition Term Expiration Date for this Service.

L-3 Communications Corporation

Service Manager: Kathy Press

Address: 600 Third Ave, New York, NY 10016

Phone: (212) 805-5712

Fax: (212) 805-5602

E-mail: Kathy.Press@L-3com.com

Engility Corporation

Representative: Cristina Potter

Address: 3750 Centerview Drive Chantilly, VA 20151

Phone: (703) 375-6512

Fax: (703) 708-5703

E-mail: Cristina.Potter@Engilitycorp.com

12/31/2012

$3,766.00 per month will be billed by L-3 to Engility.*

Service Recipient may use training content on their existing tracking and reporting system(s) for the remainder of 2012 (after which time, use of training content shall cease). Service Provider will not be responsible to support or host this training for Service Recipient.

Health/Welfare Plans

Third Party service providers: Aetna, Blue Cross Blue Shield, Kaiser Permanente, HMSA, Empathia, Wells Fargo, Gallagher Benefit Services, Executive Health, SHPS, Active Health, Onsite Wellness, Pathfinder Health, WageWorks, VSP, ASI, Marsh Voluntary Benefits, Zurich, HDMS, Aetna International, Chartis, Mitchell Silverberg and Knupp LLP, Sibson MGC Workers’ Compensation Matters: ACE, Chartis, ESIS, Zurich

L-3 Communications Corporation

Service Manager for Health/Welfare Plans: Sabina Marotta

Address: 600 Third Ave, New York, NY 10016

Phone: (212) 805-5371

Fax: (212) 805-5333

E-mail: Sabina.Marotta@L-3com.com

Service Manager for Workers’ Compensation: Al Blake

Address: 600 Third Ave, New York, NY 10016

Phone: (858) 694-7908

Fax: (858) 694-7906

E-mail: Al.Blake@L-3com.com

Engility Corporation

Representative: Tom Murray/Debra Bosman

Address: 3750 Centerview Drive

Chantilly, VA 20151

Phone: (703) 375-6481

Fax: (703) 390-8375

E-mail: Tom.Murray@Engilitycorp.com

12/31/2012 (except for IBNR and Workers’ Compensation matters which may extend beyond this date until claims run out)

Estimated to be approximately $4,231,897.00 per month based on section 4.a-m of attached Schedule 2.a. Actual monthly pricing will be billed by L-3 to Engility.* Additionally, Engility shall reimburse L-3 for any and all costs and expenses incurred by L-3 in connection with workers’ compensation claims related to past or present employees of Engility or any of Engility’s affiliates or their predecessor companies. See Attachment C to Schedule 2.a for a general description of workers’ compensation coverage and services. Actual monthly pricing for workers’ compensation charges will be billed by L-3 to Engility.*

As set forth on attached Schedule 2.a: Health & Welfare Schedule

Health/Welfare Services Support

Third Party service provider: Xerox

L-3 Communications Corporation

Service Manager: Sabina Marotta

Address: 600 Third Ave, New York, NY 10016

Phone: (212) 805-5371

Fax: (212) 805-5333

E-mail: Sabina.Marotta@L-3com.com

Engility Corporation

Representative: Tom Murray/Debra Bosman

Address: 3750 Centerview Drive

Chantilly, VA 20151

Phone: (703) 375-6481

Fax: (703) 390-8375

E-mail: Tom.Murray@Engilitycorp.com

12/31/2012

Estimated to be approximately $41,730.00 per month based on section 4.a-m of attached Schedule 2.a. Actual monthly pricing will be billed by L-3 to Engility.*

As set forth on attached schedule 2.a: Health & Welfare Schedule

Email Forwarding Service

Service Provider currently provides Service Recipient with email services for Service Recipient domains. Service Provider will continue to forward emails from legacy Service Provider email addresses to new Service Recipient email addresses until the Transition Term Expiration Date for this Service.

L-3 Communications Corporation

Service Manager: Steve Davidson

Address: 1 Federal St, Camden, NJ 08102

Phone: (856) 338-2331

Fax: (856) 338-4418

E-mail: Stephen.Davidson@L-3com.com

Engility Corporation

Representative: Paul Hibbs

Address: 3750 Centerview Drive, Chantilly, VA 20151

Phone: (703) 375-6576

Fax: (703) 708-5702

E-mail: Paul.Hibbs@Engilitycorp.com

2 months from Distribution Date

No charge for this Service during stated transition term.

Utilization of Service Provider’s IP Addresses

(148.104.32.0; 166.20.95.0/24; 166.20.96.0/24; 166.20.108.0/23; 166.20.117.0/24; 166.20.118.0/23; 166.20.120.0/24; 166.20.128.0/23; 166.20.130.0/24; 166.20.131.0/24; 166.20.132.0/23; 166.20.188.0/22; 166.20.208.0/23; 166.20.220.0/23; 148.104.96.0/20; 166.20.93.0/24; 166.20.192.0/20; 166.20.222.0/24; 141.199.120.0/22; 141.199.125.0/24; 141.199.126.0/23; 141.199.128.0/20; 141.199.145.0/24; 141.199.146.0/23; 141.199.148.0/23; 141.199.152.0/23; 141.199.155.0/24; 141.199.156.0/24)

Service Provider currently provides Service Recipient with IP address space and will continue to do so until the Transition Term Expiration Date for this Service.

L-3 Communications Corporation

Service Manager: Steve Davidson

Address: 1 Federal St, Camden, NJ 08102

Phone: (856) 338-2331

Fax: (856) 338-4418

E-mail: Stephen.Davidson@L-3com.com

Engility Corporation

Representative: Paul Hibbs

Address: 3750 Centerview Drive, Chantilly, VA 20151

Phone: (703) 375-6576

Fax: (703) 708-5702

E-mail: Paul.Hibbs@Engilitycorp.com

6 months from Distribution Date

No charge for this Service during stated transition term.

On Distribution Date, Service Recipient will ensure that these address are only used internal to their business. Service Recipient must discontinue their use at the end of the transition term.

General Description of Service

Service Provider/L-3 -

Point of Contact

Service Recipient/Engility -

Point of Contact

Transition Term
Expiration Date for
Applicable Service

Pricing

Additional
Information

Telecommunication Services

Third Party service provider: AT&T Wireless

L-3 has established pricing agreements for telecommunication services which the Service Recipient utilizes. L-3 will continue to provide use of established pricing to the Service Recipient after the Distribution Date until the Transition Term Expiration Date for this Service.

L-3 Communications Corporation

Service Manager: Steve Davidson

Address: 1 Federal St., Camden, NJ 08102

Phone: (856) 338-2331

Fax: (856) 338-4418

E-mail: Stephen.Davidson@L-3com.com

Engility Corporation

Representative: Paul Hibbs

Address: 3750 Centerview Drive, Chantilly, VA 20151

Phone: (703) 375-6576

Fax: (703) 708-5702

E-mail: Paul.Hibbs@Engilitycorp.com

3/27/2013

Estimated to be approximately $34,038.00 per month based on historical monthly costs. Actual monthly charges will be billed directly by Third Party service provider to Engility.

Service Recipient may discontinue use of this service at any time by notifying telecommunications provider of discontinuance. Upon Expiration Date or discontinuance by Service Recipient, Service Recipient will be removed from L-3’s contract with Third Party Service provider.

Wire Line Voice and Data

Third Party service provider: AT&T

L-3 Communications Corporation

Service Manager: Steve Davidson

Address: 1 Federal St., Camden, NJ 08102

Phone: (856) 338-2331

Fax: (856) 338-4418

E-mail: Stephen.Davidson@L-3com.com

Engility Corporation

Representative: Paul Hibbs

Address: 3750 Centerview Drive, Chantilly, VA 20151

Phone: (703) 375-6576

Fax: (703) 708-5702

E-mail: Paul.Hibbs@Engilitycorp.com

6/1/2013

Estimated to be approximately $253,294.00 per month based on historical monthly costs. Actual monthly charges will be billed directly by Third Party service provider to Engility.

Telecommunication Services

Third Party service provider: Verizon Wireless

L-3 Communications Corporation

Service Manager: Steve Davidson

Address: 1 Federal St., Camden, NJ 08102

Phone: (856) 338-2331

Fax: (856) 338-4418

E-mail: Stephen.Davidson@L-3com.com

Engility Corporation

Representative: Paul Hibbs

Address: 3750 Centerview Drive, Chantilly, VA 20151

Phone: (703) 375-6576

Fax: (703) 708-5702

E-mail: Paul.Hibbs@Engilitycorp.com

11/30/2012

Estimated to be approximately $171,199.00 per month based on historical monthly costs. Actual monthly charges are expected to be billed directly by Third Party service provider to Engility.

Service Recipient may discontinue use of this service at any time by notifying telecommunications provider of discontinuance. Upon Expiration Date or discontinuance by Service Receipient, Service Recipient will be removed from L-3’s contract with Third Party Service provider.

Telecommunication Services

Third Party service provider: T-Mobile

L-3 Communications Corporation

Service Manager: Steve Davidson

Address: 1 Federal St, Camden, NJ 08102

Phone: (856) 338-2331

Fax: (856) 338-4418

E-mail: Stephen.Davidson@L-3com.com

Engility Corporation

Representative: Paul Hibbs

Address: 3750 Centerview Drive, Chantilly, VA 20151

Phone: (703) 375-6576

Fax: (703) 708-5702

E-mail: Paul.Hibbs@Engilitycorp.com

12/31/2012

Estimated to be approximately $11,239.00 per month based on historical monthly costs. Actual monthly charges will be billed directly by Third Party service provider to Engility.

Service Recipient may discontinue use of this service at any time by notifying telecommunications provider of discontinuance. Upon Expiration Date or discontinuance by Service Receipient, Service Recipient will be removed from L-3’s contract with Third Party Service provider.

Telecommunication Services

Third Party service provider: Sprint

L-3 Communications Corporation

Service Manager: Steve Davidson

Address: 1 Federal St, Camden, NJ 08102

Phone: (856) 338-2331

Fax: (856) 338-4418

E-mail: Stephen.Davidson@L-3com.com

Engility Corporation

Representative: Paul Hibbs

Address: 3750 Centerview Drive, Chantilly, VA 20151

Phone: (703) 375-6576

Fax: (703) 708-5702

E-mail: Paul.Hibbs@Engilitycorp.com

6 months from Distribution Date

Estimated to be approximately $29,492.00 per month based on historical monthly costs. Actual monthly charges will be billed directly by Third Party service provider to Engility.

Service Recipient may discontinue use of this service at any time by notifying telecommunications provider of discontinuance. Upon Expiration Date or discontinuance by Service Receipient, Service Recipient will be removed from L-3’s contract with Third Party Service provider.

General Description of Service

Service Provider/L-3 -

Point of Contact

Service Recipient/Engility -

Point of Contact

Transition Term
Expiration Date for
Applicable Service

Pricing

Additional Information

File 2011 and 2012 Federal and State Income Tax Returns

Includes the following services:

• Service Recipient’s federal tax returns for 2011 tax year and stub period from 1/1/12 to Distribution Date.

• Service Recipient’s state tax returns for 2011 and stub period returns from 1/1/12 to Distribution Date.

L-3 Communications Corporation

Service Manager: Larry Van Blerkom

Address: 600 Third Ave, New York, NY, 10016

Phone: (212) 805-5357

Fax: (212) 682-7959

E-mail: Lawrence.VanBlerkom@L-3com.com

Engility Corporation

Representative: Mike Alber

Address: 3750 Centerview Drive, Chantilly, VA 20151

Phone: (703) 375-6409

Fax: (703) 708-5703

E-mail: Mike.Alber@Engilitycorp.com

10/15/2013

Estimated to be approximately $216,430.00 based on historical costs. Actual charges will be billed by L-3 to Engility.

As set forth in the Tax Matters Agreement. This Service does not include the following services for 2011 and 2012: preparation of estimated tax payments or other potential quarterly tax compliance-related tasks.

Travel Program

Third Party service provider:

AMEX - Travel Services

L-3 currently has established pricing agreements with American Express Travel, and with airline, hotel, Hertz Rent-A-Car and other vendors. L-3 will continue to provide use of established pricing to the Service Recipient after the Distribution Date until the Transition Term Expiration Date for this Service.

L-3 Communications Corporation

Service Manager: Doug Schneider

Address: 600 Third Ave, New York, NY 10016

Phone: (212) 805-5609

Fax: (212) 805-5602

E-mail: Doug.Schneider@L-3com.com

Engility Corporation

Representative: Michael Dallara

Address: 3750 Centerview Drive, Chantilly VA 20151

Phone: (703) 375-6581

Fax: (703) 708-5703

E-mail: Michael.Dallara@Engilitycorp.com

12/31/2013

Estimated to be approximately $104,011.00 per month based on historical monthly costs for services described in attached schedule 12.a. Actual monthly charges are expected to be billed by L-3 to Engility.*

Engility must follow L-3 travel policies and procedures. Any changes Engility wants to make that may impact travel supplier agreements must be pre-approved by L-3 in writing if acceptable to L-3 in its sole discretion.

Additional information is set forth on attached schedule 12.a: Travel Services.

Taleo usage rights and L-3 application administration

Third Party service provider: Taleo

Third Party service provider will provide separate instance of system for Service Recipient’s use after the Distribution Date until the Transition Term Expiration Date for this Service. L-3 will provide system administrative services in support of the Service Recipient, including maintenance of master data, user and permission management and primary interface to Taleo for service issues.

L-3 Communications Corporation

• Contractual contact: Erin Pfarner

Address: 2116 Arlington Downs Road, Arlington, TX 76011

Phone: (817) 619-4721

Fax: n/a

E-mail: Erin.Pfarner@L-3com.com

• Functional contact: Marissa Daly

Address: 600 Third Ave, New York, NY 10016

Phone: (212) 805-5316

Fax: n/a

E-mail: Marissa.Daly@L-3com.com

Engility Corporation

Representative: Tom Murray

Address: 3750 Centerview Drive, Chantilly, VA 20151

Phone: (703) 375-6481

Fax: (703) 390-8375

E-mail: Tom.Murray@Engilitycorp.com

5/30/2013

$54,900.00 for Service Recipient’s right to use the Taleo System will be billed by L-3 to Engility.* L-3 system administration services will be invoiced to Engility at cost under the Transitional Consulting Services (Item 14) on this schedule.

If this Service is terminated early, the $54,900.00 shall be payable by Service Recipient as an early termination fee.

Transitional Consulting Services

Various L-3 employees may be requested by Engility to provide consulting time in order to assist with transition until the Transition Term Expiration Date for this Service.

L-3 Communications Corporation

• Operational contacts: Various employees with subject matter knowledge

• Organizational contact: Kristin Courcy

Address: 600 Third Ave., New York, NY 10016

Phone: (212) 805-5426

Fax: (212) 805-5602

E-mail: Kristin.Courcy@L-3com.com

Engility Corporation

• Operational contacts: Various employees who require subject matter knowledge

• Organizational contact: Michael Dallara

Address: 3750 Centerview Drive, Chantilly, VA 20151

Phone: (703) 375-6581

Fax: (703) 708-5703

E-mail: Michael.Dallara@Engilitycorp.com

12/31/2013

From Distribution Date - Sept. 30, 2012: cost From Oct. 1, 2012 - Dec. 31, 2013: cost + 10%. To be billed directly by L-3 to Engility.

Cost = aggregate total of all consultants’ hourly rates + fringe rate of 55%.

*	Pursuant to Article XIII of the Agreement, Engility will promptly indemnify L-3 for all costs and expenses to L-3 associated with Engility’s failure to pay any fees or pass through fees owed to a Third Party service provider in a timely manner.

Health and Welfare Plan Administration

Schedule 2.a

Description of service as of Distribution Date – December 31, 2012:

L-3 will provide continuation of coverage and administrative support for insured and self-insured benefit plans and other Health & Welfare programs as follows:

Medical (including Incentive Credit Accounts) and Prescription Drugs (including mail order Rx fulfillment)

Dental

Vision

Short term disability (including state statutory plans)

Long term disability (separate Engility contract with Aetna as of July 1, 2012)

Basic Life and Basic Accidental Death and Dismemberment insurance

Employee assistance program (Empathia)

COBRA (SHPS)

Flexible spending accounts (FSA) (Wageworks)

10.

Commuter benefits (pre-tax and post-tax) (Wageworks)

11.

Voluntary plans through Marsh@Work Solutions (GUL; LTC; VAD&D; Group Legal; Group auto/home)

12.

TALX

During the Transition Period, L-3 shall provide the following services:

1.	Engility employees will have continued use of the L-3 Benefit Center (XEROX) including but not limited to website, customer service, eligibility, employee and dependent enrollments, qualifying family status changes, etc.

2.	Engility HR Representatives will be able to process post-closing employment activity such as new hires, terminations, employee transfers etc.

XEROX will continue to process and transmit (where applicable) all vendor interface files for employee eligibility, employee data changes, terminations, etc. including preparation of required monthly insured premium statements, self-insured ASO statements and invoices for any other health and welfare administrative costs incurred by L-3 on behalf of Engility throughout the HR Transition Services period (see Attachment B for file feed details).

4.	L-3 will invoice and Engility will reimburse L-3 for costs and services provided as follows (see Attachment A for additional information):

Self-insured medical/Rx, dental and vision coverage – During the Transition Period, Engility will be billed on an actual administrative fees and claims paid basis for all Engility medical/Rx claims below the Stop-Loss point ($150,000). Engility will be billed for all claims paid on or after the first of the month following spin date regardless of incurred date; this includes claims incurred before the end of the Transition Period (December 31, 2012) and presented for payment after January 1, 2013 (run-out claims). The current accrual payment and charge back process will continue in place for the full spin month.

SCA employees covered under the L-3 SCA VEBA will no longer be covered within the SCA VEBA as of midnight of the day prior to July 1, 2012. SCA VEBA claims incurred prior to July 1, 2012, and presented for payment after July 1, 2012 will continue to be paid from the SCA VEBA and not charged back to Engility. These employees will be eligible for new fully insured medical/Rx, dental and vision plans as of July 1, 2012.

Fully insured coverage – billed on a premium rate basis for fully insured medical/Rx, dental, vision, basic life and AD&D, short term disability, long-term disability and any other similar plans invoiced to L-3 on behalf of Engility employees commencing with the first full month after spin date.

Other vendor and/or administrative services – billed on an administrative fees paid basis commencing with the first full month after spin date.

FSA administration (HCRA & DCRA) will continue to be handled by L-3’s vendor – Wageworks. Payroll deductions for FSA contributions will be processed by Engility payroll (Ceridian) through the Transition Period. Engility will retain deducted FSA contributions and L-3 will bill Engility for FSA claims and administrative expense for all 2012 claims submitted through March 31, 2013.

Incentive Credit Accounts (ICA) associated with the Aetna POS II and Blue Cross EPO will continue to be handled by L-3’s vendor, Wageworks. WageWorks ICA fund balances in WageWorks accounts as of December 31, 2012 will be used to pay for claims incurred prior to January 1, 2013 (run out claims). Engility will be billed by L-3 for ICA credits paid to employees and WageWorks’ administration fees. Remaining outstanding notional ICA balance information will be transferred to Engility employees who continue enrollment in incentive credit eligible plans by WageWorks on or shortly after April 1, 2013. Notional ICA fund balance information will also be transmitted to Aetna on or shortly after April 1, 2013 for those employees who switch to the Aetna HealthFund (AHF) as of January 1, 2013.

Aetna HealthFund HRA balances remaining as of December 31, 2012, if any, will be used to pay for claims incurred prior to January 1, 2013 (run out claims). Aetna will transfer remaining 2012 notional HRA balances to Engility employees who continue enrollment in the AHF plans on or shortly after April 1, 2013. Balances are not transferred for employees who leave the AHF to enroll in a different Engility plan (e.g. Aetna POS II, Blue Cross EPO).

Commuter expense benefits will continue to be handled by L-3’s vendor – WageWorks. Payroll deductions for pre and post tax contributions will be processed by Engility’s payroll vendor for the entire Transition Period. Engility will retain contributions and be billed by L-3 Corporate for claims and administrative expense.

Voluntary Benefits Plans – Group Universal Life (GUL), Long Term Care insurance (LTC), Voluntary AD&D(VADD), Group legal and Group Home/Auto premiums will be payroll deducted by Engility’s Payroll Center. Administrative and customer services currently provided by L-3’s Voluntary Plans administrator – Marsh@Work Solutions will also continue through the Transitional Services Period.

During the transition period, short-term disability coverage and administration will be provided by L-3 as currently administered. Long-term disability coverage resulting from a disability that occurs prior to July 1, 2012 will be provided by L-3. Long-term disability coverage resulting from a disability that occurs on or after July 1, 2012 will be insured under an Engility LTD plan with Aetna that became effective July 1, 2012.

COBRA coverage for employees who are terminated (or otherwise have a COBRA “qualifying event”) prior to July 18, 2012 will be provided by L-3 for the duration of the applicable COBRA period. COBRA coverage for employees who are terminated (or otherwise have a COBRA “qualifying event”) on or after July 18, 2012 will be provided by L-3 until December 31, 2012, at which point they will receive the required HIPAA Notice of Credible Coverage.

Engility will be billed the current Benefit Overhead Charge (BOC) of $8.00 per “benefit eligible” employee per month during the transition period, including employees on COBRA who are terminated (or otherwise have a COBRA “qualifying event”) on or after July 18, 2012. This fee covers outside vendor costs including EAP, COBRA administration, L-3 ERISA attorney fees, annual enrollment communications, etc. Engility will not be billed a current Benefit Overhead Charge for employees on COBRA who are terminated (or otherwise have a COBRA “qualifying event”) prior to July 18, 2012; provided, that all COBRA premiums paid by such employees shall be directed to L-3.

Engility will be billed for consulting time spent by L-3 Corporate staff associated with oversight and administration of Engility plans after the spin-date.

5.	Effective with the Closing Date, Business Travel and Accident coverage (BTA), Unemployment and ISOS coverage is excluded from this agreement and will be insured and managed by Engility. See Attachment C for additional information regarding Workers’ Compensation.

Effective with the Closing Date, Engility will have entered into its own contract with TALX for state unemployment eligibility/benefit administration and employment verifications. Engility via their Ceridian payroll will provide TALX with appropriate payroll data. Separation costs incurred with TALX for setting up Engility will be borne by L-3.

7.	Effective with the end date of the Transition Period, December 31, 2012, L-3 will cease to have any responsibility to provide health care benefits to Engility except for processing and billing for run-out claims.

All Health & Welfare transition benefits will end on December 31, 2012.

Attachment A to Health and Welfare Plan Administration Schedule 2.a

Provider:

Organization: L-3 Human Resources – Benefits


Address:		L-3 Communications
		600 Third Avenue
		New York New York 10016

Contact:		Poppy-Anne Koch
		Director, Health and Welfare plans
Phone:		858.552.9507
Email:		Poppy-Anne.Koch@l-3com.com

Receiver:


Organization: Engility
Address:
Contact:		Debra Bosman
		Benefits Director
Phone:		703-375-6443
Confidential Fax:		703-995-4506 Confidential Fax
Email:		Debra.Bosman@l-3com.com

Basis for cost:

Other than the costs identified on this schedule, both L-3 and Engility will pay their respective costs in supporting the migration of Engility off of L-3 business infrastructure including but not limited to conversion efforts and knowledge transfer.

See attached schedule for Health and Welfare costs and respective start-up and on-going fees.

Benefit/Vendor Costs:

L-3 will bill Engility for all health and welfare plan costs (insured plan premiums, self-insured plan claims and fees, administrative vendor fees) on a mutually agreeable payment schedule with Engility.

Estimated cost:

See Basis for Cost above and in the schedule below


Term of service:		Through December 31, 2012 (except for administration of run-out associated with run-out claims).


Vendor Schedule	Contact Name	Telephone Fax	Product	Employer Cost
Aetna Medical/Rx MosesAB@aetna.com	Ann B. Moses Senior Account Executive Aetna Metro NY/NNJ National Accounts	P: 860.335.0652 F: 860.907.3731	AHF POS II Rx plan administration	ASO fee: $43.90 PEPM – AHF ASO fee:$42.36 PEPM – POS II ASO fee: $-0- Rx Claims billed as incurred

Anthem Blue Cross Blue Shield Anthem National Accounts 3 Huntington Quadrangle Melville, NY 11747 peter.lunde@antem.com	Peter Lunde \| National Account Executive	P: 631.751.4628 C: 631. 678.6535 F: 631.751.0116	EPO plan administration	ASO fee: $48.49 PEPM – EPO Claims billed as incurred

ActiveHealth Management 1333 Broadway, 4th Floor New York, NY 10018 jkeim@activehealth.net	Jeremy W. Keim Senior Account Executive	P: 626.421.6677 C: 646.641.2313	Disease Management administration	ASO fee: $4.90 PEPM – all

Vision Service Plan 3333 Quality Dr. MS 164 Rancho Cordova, CA 95670 heather.heibeck@vsp.com	Heather Heibeck	P: 916.851.4247 F: 916.463.9030	Vision plan administration	ASO fee: 6% of paid claims Claims billed as incurred

Aetna MosesAB@aetna.com	Ann B. Moses	P: 860.335.0652 F: 860.907.3731	Medical/dental TBD for SCA VEBA	Premiums as billed

Empathia cwilson@empathia.com	Carol Wilson	P: 800.634.6433	Employee Assistance Program	Included in BOC service charge

ASI (Tricare Supplement) pmarshall@asicorporation.com	Pauline Marshall	P: 800.638.2610, ext. 113		Premiums as billed

Aetna Dental (DMO) MosesAB@aetna.com	Ann B. Moses	P: 860.335.0652 F: 860. 907.3731	DMO	Premiums as billed – DMO ASO fee: $2.78 PEPM Claims billed as incurred

Kaiser Permanente (CA and Mid-Atlantic) 2101 East Jefferson Street 6th Floor East Rockville, MD 20852 Maureen.M.Breheny@kp.otg	Maureen M. Brehenys Senior Account Manager Kaiser Permanente	P: 301.816.6871 F: 301.816.7187	HMO	Premiums as billed

HMSA Hawaii Medical Service Association www.HMSA.com	David Shiroma Account Executive Account Management & Sales	P: 808.948.6069 F: 808.948.6653	PPO/HMO	Premiums as billed

Aetna International 980 Jolly Road, U13S Blue Bell, PA 19422 GaffneyJ@aetna.com	Jody Gaffney International Account Executive	P: 215.775.0367 F: 860.975.1399	Medical/Dental coverage	Premiums as billed

Chartis jack_savulich@ajg.com	Jack Savulich Gallagher Benefits Services	P: 212.918.9625	BTA/War Risk	Premiums as billed

Aetna Life & Disability MosesAB@aetna.com	Ann B. Moses	P: 860.335.0652 F: 860.907.3731	Life and AD&D Insurance	Premiums as billed

Aetna Life & Disability MosesAB@aetna.com	Ann B. Moses	P: 860.335.0652 F: 860. 907.3731	Short and Long-term Disability Insurance	Premiums/fees as billed

Marsh Voluntary Benefits (various insurers) 12421 Meredith Drive Urbandale, IA 50398 ddennis.m.chartier@Marshpm.com	Dennis M. Chartier, FLMI v Vice President, Client Executive	P: 515.365.3126 C: 515.365.0296	GUL, LTC, VAD&D, MetLaw, Auto/Home	Premiums as billed

WageWorks Eunice.jackson@wageworks.com	Eunice Jackson, CFC Manager, Client Services	P: 209.952.9095 C: 650.703.2060	Flexible Spending Accounts administration	Administration fee billed to Engility $4.20 per participant per month

WageWorks Eunice.jackson@wageworks.com	Eunice Jackson, CFC Manager, Client Services	P: 209.952.9095 C: 650.703.2060	Incentive Credit Account administration	Admin fee will be billed - $6.00 per account per month

WageWorks Eunice.jackson@wageworks.com	Eunice Jackson, CFC Manager, Client Services	P: 209.952.9095 C: 650.703.2060	Commuter Account administration	Admin fee will be billed - $4.95 per participant per month

L-3 ERISA Attorney RLO@msk.com	Robert Lowe	P: 310.312.3180	As needed	Included in BOC service charge


Vendor Schedule	Contact Name	Telephone Fax	Product	Employer Cost
Sibson/MGC 333 West 34th Street New York, NY 10001-24 rcarter@sibson.com	Randolph B. Carter Senior Vice President, Communications	P: 212.251.5022 C: 917.531.4797 F: 212.251.5909	Communication	Included in BOC service charge

SHPS, Inc 11405 Bluegrass Pkwy Louisville, KY 40299 todd.rogers@shps.com	Todd Rogers Client Service Manager SHPS COBRA Operations	P: 502.261.3546	COBRA administration	Included in BOC service charge

HDMS ecarten@hdms.com	Elizabeth Carten Senior Consultant	P: 857.239.9500 C: 312.909.7435	Self-insured health plan data aggregation	Included in BOC service charge

Xerox HR Solutions, LLP 101 Woodcrest Road Cherry Hill, NJ 08003 keith.s.brown@acs-inc.com	Keith Brown	P: 856.651.2830 F: 856.651.3124 C: 757.619.9022	H&W benefit administration	Billed at $72.00 per eligible employee per annum, billed monthly

Zurich Insurance Co. Ltd 7045 College Blvd. Overland Park, Kansas 66211 cherie.russell@zurichna.com	Cherie Russell	P: 913.664.4707 F: 913.664.4026	Life insurance, AD&D insurance, Long-term disability insurance	Premiums as billed

Attachment B to Health and Welfare Plan Administration Schedule 2.a

Health and Welfare Benefits

Interface Requirements

For L-3 Communications

Version 1.0

March 28, 2012

To XEROX


#	File / Interface	File Generator	Frequency	Run Day: Date when the file is currently run	“As of” Day: Date through which the file will reflect updates

1	Demographic File	Ceridian Engility stand-alone payroll	Twice a Week	Tuesday, Friday	09/28/2011

2	Payroll Back Feed	Ceridian Engility stand-alone payroll	Quarterly	1/25 (Bi- Weekly 2/ Weekly) and 1/18 (Bi- Weekly 1)	Last Payroll Run

3	FSA Deposits	Ceridian Engility stand-alone payroll	Weekly	Friday	Last Payroll File Run

From XEROX
#	File / Interface	File Receiver	Frequency	Run Day: Date when the file is currently run	“As of” Day: Date through which the file will reflect updates

1	FSA File	Wageworks	Weekly	Tuesday	Run Date

2	Payroll Interface	Ceridian Engility stand-alone payroll	Weekly	Thursday	Run Date

3	Disability File	Aetna	Weekly	Wednesday	Run Date

4	MSP	Wageworks	Quarterly	15^th of the Month	Run Date

5	Medical / Dental / Vision /RX	Medical / Dental / Vision / RX Carriers	Weekly, except Aetna and Anthem 2 x per week	Tuesday for Aetna & BCBS Thursday for Aetna International and all others	Friday/Wednesday

6	COBRA	SHPS	Twice a Week	Wednesday/ Saturday	Run Date

7	Initial COBRA Rights	SHPS	Weekly	Wednesday/ Saturday	Run Date

8	Group Legal	Marsh	Weekly	Tuesday	Run Date

9	Demographic Changes File	Ceridian Engility stand-alone payroll	Weekly	Thursdays	Run Date

10	Vendor Billing & Payment	L-3 Communications Medical/ Dental/ RX/ Vision/ Life Insurance Carriers	Monthly	Monthly - See revised calendar.	Run Date

11	Quarterly Reconciliation with healthcare carriers	Ongoing reconciliation with carriers to ensure covered lives match XEROX and Carrier	Quarterly	N/A	Dates to be Determined

Attachment C to Health and Welfare Plan Administration Schedule 2.a

Workers’ Compensation Insurance


Type of Insurance	Insurer/TPA	Policy Term	Deductible or Program Type	Claim Management Services
WC/EL	Chartis/ESIS Chartis/ESIS ACE/ESIS	2/1/12 – 2/1/13 2/1/11 – 2/1/12 2003 to 2/1/11	$1,000,000 $1,000,000 250K – 1M	L-3 shall be available to provide services to assist Engility in managing Engility (or Engility affiliated or predecessor company) related worker’s compensation claims associated with occurrences that took place prior to the Distribution Date, whether or not those occurrence based claims were reported prior to the Distribution Date. In addition, at Engility’s request, L-3 shall be available to offer non-binding recommendations with respect to Engility’s potential settlement of such claims.

WC/EL-DBA	Zurich – Current Chartis – Current Ace – 2003-2010	6/30/11 – 6/30/12 6/1/11 – 6/1/12	Guaranteed cost. Premium exposure reimbursed by the Government (whole or in part).	L-3 shall be available to provide services to assist Engility in managing Engility (or Engility affiliated or predecessor company) related worker’s compensation claims associated with occurrences that took place prior to the Distribution Date, whether or not those occurrence based claims were reported prior to the Distribution Date. In addition, at Engility’s request, L-3 shall be available to offer non-binding recommendations with respect to Engility’s potential settlement of such claims.

WC/EL - DBA	Zurich North America	6/30/2012 – 6/30/2013	Guaranteed cost. Premium exposure reimbursed by the Government (whole or in part).	L-3 shall be available to provide services to assist Engility in managing Engility (or Engility affiliated or predecessor company) related worker’s compensation claims associated with occurrences that took place prior to the Distribution Date, whether or not those occurrence based claims were reported prior to the Distribution Date. In addition, at Engility’s request, L-3 shall be available to offer non-binding recommendations with respect to Engility’s potential settlement of such claims.

Travel Services

Schedule 12.a

Description of Service as of Distribution Date – December 31, 2013:

TRAVEL AGENCY (AMERICAN EXPRESS TRAVEL):

Engilty will have access to:

•

A dedicated L-3/Engility team of travel reservation specialists via telephone. Service hours will mirror L-3’s current service configuration.

•

An online dedicated travel reservation tool for the booking of domestic USA & Canada travel reservations as applicable 24 hours a day/7 days a week.

Services will include all bookings (by telephone or online) of Engility business travel via airline, hotel, car rental, groups/meetings and all other normal travel related services. All current L-3/American Express Travel contract service and performance standards will apply to Engility. Any changes of current practices or procedures need to be approved in advance by the L-3 Director, Global Travel.

Engility will pay a “pro-rated” share of L-3’ s monthly American Express billing costs. The “Pro-rata share” will be determined as the amount of Engility’s total airfare spent in a given month as a percentage of L-3’ s and Engility’s total airfare spend with American Express .

Example: July 1, 2012 thru July 31, 2012 - Total Airfare booked/ticked via American Express = $8.0MM (Engility = $1.2MM and L-3 = $6.8MM) Engility in this example will be billed by L-3 (Not American Express) 15% of our total American Express charges for the month. L-3 can and will provide the monthly American Express billing as backup along with a report run by American Express Travel on a monthly basis breaking out the percentage of each Company. Using “Airfares” as the measurement is standard travel industry practice.

AIRLINES:

Engility travelers will utilize L-3 airline contracts based on the understanding by the airline suppliers that the L-3 travel team will be directing and managing the booking process. American Express Travel Agency transaction fees will be passed through from L-3 on a monthly billing statement.

HOTELS:

All hotel charges are paid directly by Engility travelers and/or Engility.

CAR RENTAL:

All car rental charges are paid directly by Engility travelers and/or Engility.

OTHER SERVICES:

All other L-3 current travel supplier contracts will be available to Engility for utilization until December 31, 2013. These additional services include but are not limited to: (a) Negotiated Airport Parking and (b) International VISA Services and Ground Transportation Services.

All travel service benefits will end on December 31, 2013.