EXHIBIT 10.13
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT, dated as of July [__], 2004 (this
"Agreement"), is made by and between The Great Lakes Companies, Inc., a
Wisconsin corporation ("GLC"), and Great Lakes Hospitality Partners, LLC, a
Wisconsin limited liability company ("GLC Hospitality").
W I T N E S S E T H:
WHEREAS, GLC and GLC Hospitality will enter into an Assignment and
Assumption Agreement, to be dated as of the closing date of the Transaction (as
defined in that certain Confidential Solicitation of Consents and Private
Placement Memorandum for Combination of Certain Businesses of the Great Lakes
Companies, Inc. and Offering of Common Stock of Great Wolf Resorts, Inc.),
pursuant to which GLC will transfer certain assets to GLC Hospitality and have
GLC Hospitality assume certain liabilities of GLC (the "Assignment Agreement");
WHEREAS, in connection with the transactions contemplated by the
Assignment Agreement, GLC and GLC Hospitality wish to enter into this Agreement
for purposes of continuity and transition; and
WHEREAS, GLC Hospitality desires to cause GLC to provide the Services set
forth on Schedule A to GLC Hospitality, and GLC is willing to provide such
Services, and GLC desires to cause GLC Hospitality to provide the Services set
forth on Schedule B to GLC, and GLC Hospitality is willing to provide such
Services, all on the terms and conditions set forth below;
NOW, THEREFORE, the parties hereto, in consideration of the premises and
the mutual covenants contained herein, agree as follows:
SECTION 1. SPECIFIC DEFINITIONS.
In addition to the terms defined elsewhere in this Agreement, as used in
this Agreement, the following terms have the respective meanings set forth
below:
"Applicable Rate" shall mean the rate of interest per annum announced from
time to time by the Wall Street Journal as the prime lending rate plus 4% per
annum.
"Loss" shall mean all losses, liabilities, damages, claims, demands,
judgments or settlements of any nature or kind, known or unknown, fixed,
accrued, absolute or contingent, liquidated or unliquidated, including all
reasonable costs and expenses (legal, accounting or otherwise as such costs are
incurred) relating thereto.
"GLC Hospitality Services" shall mean those transitional services to be
provided by GLC Hospitality to GLC set forth on Schedule B hereto to assist GLC
in operating GLC's business.
"GLC Services" shall mean those transitional services to be provided by
GLC to GLC Hospitality set forth on Schedule A hereto to assist GLC Hospitality
in operating GLC Hospitality's business.
"Person" shall mean any natural person, corporation, business trust,
limited liability company, joint venture, association, company, partnership or
government, or any agency or political subdivision thereof.
"Services" shall mean, collectively, the GLC Services and the GLC
Hospitality Services.
SECTION 2. SERVICES.
2.1 Services. (a) GLC shall provide to GLC Hospitality each GLC Service
set forth on Schedule A as and if any GLC Service is reasonably requested by GLC
Hospitality to be performed by GLC during the term of this Agreement. Additional
services may be provided to GLC Hospitality by GLC if such arrangement is agreed
to in writing and executed by GLC and GLC Hospitality.
(b) GLC Hospitality shall provide to GLC each GLC Hospitality
Service set forth on Schedule B as and if any GLC Hospitality Service is
reasonably requested by GLC to be performed by GLC Hospitality during the term
of this Agreement. Additional services may be provided to GLC by GLC Hospitality
if such arrangement is agreed in writing and executed by GLC and GLC
Hospitality.
2.2 Standard of Service. In performing the Services, GLC and GLC
Hospitality shall provide substantially the same level of service and use
substantially the same degree of care as is customary in the industries in which
GLC and GLC Hospitality, as appropriate, operate.
SECTION 3. LICENSES AND PERMITS.
Each party warrants and covenants that all duties and obligations
(including with respect to GLC, all GLC Services and with respect to GLC
Hospitality, all GLC Hospitality Services) to be performed hereunder shall be
performed in compliance with all material applicable federal, state, provincial
and local laws, rules and regulations. Each party shall obtain and maintain all
material permits, approvals and licenses necessary or appropriate to perform its
duties and obligations (including with respect to GLC, the GLC Services and with
respect to GLC Hospitality, the GLC Hospitality Services) hereunder and shall at
all times comply with the terms and conditions of such permits, approvals and
licenses.
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SECTION 4. PAYMENT.
4.1 Service Fees. (a) In consideration for the provision of each of the
GLC Services, GLC Hospitality shall compensate GLC for the Services provided to
GLC Hospitality pursuant to this Agreement in an amount to be determined in good
faith by GLC as the amount which an unaffiliated third party would charge GLC
Hospitality for performing comparable services.
(b) In consideration for the provision of each of the GLC
Hospitality Services, GLC shall compensate GLC Hospitality for the Services
provided to GLC pursuant to this Agreement in an amount to be determined in good
faith by GLC Hospitality as the amount which an unaffiliated third party would
charge GLC for performing comparable services.
4.2 Costs and Expenses. (a) In addition to the fees payable in accordance
with Section 4.1(a), GLC Hospitality shall reimburse GLC for all reasonable and
necessary out-of-pocket costs and expenses (including postage and other delivery
costs, telephone, telecopy and similar expenses) incurred by GLC with respect to
third parties in connection with the provision of GLC Services to GLC
Hospitality pursuant to the terms of this Agreement or paid by GLC on behalf of
GLC Hospitality.
(b) In addition to the fees payable in accordance with Section
4.1(b), GLC shall reimburse GLC Hospitality for all reasonable and necessary
out-of-pocket costs and expenses (including amounts for premiums, claims, fees,
postage and other delivery costs, telephone, telecopy and similar expenses)
incurred by GLC Hospitality with respect to third parties in connection with the
provision of GLC Hospitality Services to GLC pursuant to the terms of this
Agreement or paid by GLC Hospitality on behalf of GLC.
4.3 Invoices. (a) GLC will invoice GLC Hospitality in U.S. dollars: (i) as
of the last day of each calendar month for any fees payable by GLC Hospitality
in accordance with Section 4.1(a) for GLC Services listed on Schedule A provided
pursuant to the terms of this Agreement during such month; (ii) as of the last
day of each calendar month for any amounts payable by GLC Hospitality in
accordance with Section 4.2(a) for any out-of-pocket costs and expenses incurred
during the immediately preceding month to the extent GLC has received an invoice
from such third party; and (iii) as of the last day of each calendar month for
any taxes (excluding income taxes) payable with respect to the provision of GLC
Services to GLC Hospitality during such month. GLC shall deliver or cause to be
delivered to GLC Hospitality each such invoice within thirty (30) days following
the last day of the calendar month to which such invoice relates. GLC
Hospitality shall pay each such invoice received by electronic funds transfer
within thirty (30) days of the date on which such invoice was received.
(b) GLC Hospitality will invoice GLC in U.S. dollars: (i) as of the
last day of each calendar month for any fees payable by GLC in accordance with
Section 4.1(b) for GLC Hospitality Services listed on Schedule B provided
pursuant to the terms of this Agreement during such month; (ii) as of the last
day of each calendar month for any amounts payable by GLC in accordance with
Section 4.2(b) for any out-of-pocket costs and expenses incurred during the
immediately preceding month to the extent GLC Hospitality has received an
invoice from such third party; and (iii) as of the last day of each calendar
month for any taxes (excluding
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income taxes) payable with respect to the provision of GLC Hospitality Services
to GLC during such month. GLC Hospitality shall deliver or cause to be delivered
to GLC each such invoice within thirty (30) days following the last day of the
calendar month to which such invoice relates. GLC shall pay each such invoice
received by electronic funds transfer within thirty (30) days of the date on
which such invoice was received.
4.4 Late Payment. Any amount not paid when due shall be subject to a late
payment fee computed daily at a rate equal to the Applicable Rate.
Notwithstanding the foregoing, in the event a party disputes the accuracy of any
invoice, a party shall pay the undisputed portion of such invoice as provided
herein, and the parties hereto will promptly meet and seek to resolve the
disputed amount of the invoice. Each party agrees to pay the other party's
reasonable attorneys' fees and other costs incurred in collection of any amounts
owed to such other party hereunder and not paid when due. Notwithstanding
anything to the contrary contained herein, in the event either party fails to
make a payment when due hereunder, and such failure continues for a period of
thirty (30) days following delivery of written notice to such non-paying party
of such failure, the other party shall have the right to cease provision of
Services to such non-paying party until such overdue payment (and any applicable
late payment fee accrued with respect thereto) is paid in full. Such right of
the party providing Services shall not in any manner limit or prejudice any of
such party's other rights or remedies in the event of the non-paying party's
failure to make payments when due hereunder, including any rights or remedies
pursuant to Section 7.
4.5 Fees, Etc. Upon Termination of Services. In the event of a termination
of Services pursuant to Section 7.1, with respect to the calendar month in which
such Services cease to be provided (the "Termination Month"), the recipient of
such Services shall be obligated to pay a pro rata share of the fee for such
Service listed on Schedule A or Schedule B, as applicable, equal to the product
of (x) the monthly fee established by the parties for such Service in accordance
with Section 4.1(a) or Section 4.1(b) of this Agreement, as applicable,
multiplied by (y) a fraction, the numerator of which is the number of days in
the Termination Month such Services are provided, and the denominator of which
is 30.
SECTION 5. INDEMNIFICATION.
5.1 Indemnification by Principal. (a) GLC Hospitality agrees to indemnify,
defend and hold GLC harmless from and against any Loss to which GLC may become
subject arising out of, by reason of or otherwise in connection with the
provision hereunder by GLC of GLC Services, other than Losses resulting from
GLC's gross negligence, willful misconduct or material breach of its obligations
pursuant to this Agreement.
(b) GLC agrees to indemnify, defend and hold GLC Hospitality
harmless from and against any Loss to which GLC Hospitality may become subject
arising out of, by reason of or otherwise in connection with the provision
hereunder by GLC Hospitality of GLC Hospitality Services, other than Losses
resulting from GLC Hospitality's gross negligence, willful misconduct or
material breach of its obligations pursuant to this Agreement.
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5.2 Indemnification by Provider. (a) GLC agrees to indemnify, defend and
hold GLC Hospitality harmless from and against any Loss to which GLC Hospitality
may become subject arising out of, by reason of or otherwise in connection with
the provision hereunder by GLC of GLC Services to GLC Hospitality where such
Losses resulted from GLC's gross negligence, willful misconduct or material
breach of its obligations pursuant to this Agreement.
(b) GLC Hospitality agrees to indemnify, defend and hold GLC
harmless from and against any Loss to which GLC may become subject arising out
of, by reason of or otherwise in connection with the provision hereunder by GLC
Hospitality of GLC Hospitality Services to GLC where such Losses resulted from
GLC Hospitality's gross negligence, willful misconduct or material breach of its
obligations pursuant to this Agreement.
5.3 Procedures for Indemnification. Any indemnification claims made
hereunder shall be made in accordance with the terms of the Assignment
Agreement.
SECTION 6. CONFIDENTIALITY.
Each party shall keep confidential the Schedules to this Agreement and all
information received from the other party regarding the Services, including any
information received with respect to GLC or GLC Hospitality, and to use such
information only for the purposes set forth in this Agreement unless otherwise
agreed to in writing by the party from which such information was received. In
the event a party is required by any court or legislative or administrative body
(by oral questions, interrogatories, requests for information or documents,
subpoena, civil investigation demand or similar process) to disclose any
confidential information provided pursuant to this Agreement, the party shall
provide the other party with prompt notice of such requirement in order to
afford the other party an opportunity to seek an appropriate protective order or
other remedy. However, if the other party is unable to obtain or does not seek
such protective order and the party required to disclose the confidential
information is, in the opinion of its counsel, legally compelled to disclose
such confidential information, disclosure of such information may be made
without liability under this Agreement. The covenants in this Section 6 shall
survive any termination of this Agreement indefinitely with respect to
information qualifying as a trade secret under applicable law and for a period
of three (3) years from the date such termination becomes effective with respect
to all other information.
SECTION 7. TERM.
7.1 Duration. (a) Subject to Sections 6, 7.2, 7.3 and 7.4, the term of
this Agreement shall commence on the date hereof and shall continue in full
force and effect until the earlier of (i) the expiration of the duration or term
period assigned to the Services as agreed upon between the parties from time to
time in accordance with this Agreement or (ii) two (2) years following the
closing date of the Transaction.
(b) Each party acknowledges that the purpose of this Agreement is
for GLC to provide the GLC Services to GLC Hospitality on an interim basis until
GLC Hospitality can
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perform the GLC Services for itself, and for GLC Hospitality to provide the GLC
Hospitality Services to GLC on an interim basis until GLC can perform the GLC
Hospitality Services for itself. Accordingly, each of GLC and GLC Hospitality
shall use its commercially reasonable efforts to make or obtain such approvals,
permits and licenses and implement such systems, as shall be necessary for it to
provide the appropriate Services for itself as promptly as practicable. As GLC
Hospitality becomes self-sufficient or engages other sources to provide any GLC
Service, GLC Hospitality shall be entitled to release GLC from providing any or
all of the GLC Services hereunder by delivering a written notice thereof to GLC
at least thirty (30) days prior to the effective date of release of such GLC
Service(s). At the end of such thirty (30) day period (or such shorter period as
may be agreed by the parties), GLC shall discontinue the provision of the GLC
Services specified in such notice and any such GLC Services shall be excluded
from this Agreement, and Schedule A shall be deemed to be amended accordingly.
As GLC becomes self-sufficient or engages other sources to provide any GLC
Hospitality Service, GLC shall be entitled to release GLC Hospitality from
providing any or all of the GLC Hospitality Services hereunder by delivering a
written notice thereof to GLC Hospitality at least thirty (30) days. At the end
of such thirty (30) day period (or such shorter period as may be agreed by the
parties), GLC Hospitality shall discontinue the provision of the GLC Hospitality
Services specified in such notice and any such GLC Hospitality Services shall be
excluded from this Agreement, and Schedule B shall be deemed to be amended
accordingly.
7.2 Early Termination by GLC. GLC may terminate this Agreement by giving
written notice to GLC Hospitality if GLC Hospitality shall default in the
performance of any of its material obligations under, or breach any of its
warranties set forth in, this Agreement, and such default or breach shall
continue and not be remedied for a period of thirty (30) days after GLC has
given written notice to GLC Hospitality specifying such default or breach and
requiring it to be remedied.
7.3 Early Termination by GLC Hospitality. GLC Hospitality may terminate
this Agreement by giving written notice to GLC if GLC shall default in the
performance of any of its material obligations under, or breach any of its
warranties set forth in, this Agreement and such default or breach shall
continue and not be remedied for a period of thirty (30) days after GLC
Hospitality has given written notice to GLC specifying such default or breach
and requiring it to be remedied.
7.4 Force Majeure. In the event the performance by GLC Hospitality or GLC
of their respective duties or obligations hereunder is interrupted or interfered
with by reason of any cause beyond its reasonable control, including fire,
storm, flood, earthquake, explosion, war, strike or labor disruption, rebellion,
insurrection, quarantine, act of God, boycott, embargo, shortage or
unavailability of supplies, riot, or governmental law, regulation or edict
(collectively, the "Force Majeure Events"), the party affected by such Force
Majeure Event shall not be deemed to be in default of this Agreement by reason
of its nonperformance due to such Force Majeure Event, but shall give prompt
written notice to the other party of the Force Majeure Event. The party affected
by the Force Majeure Event shall cooperate with the other party in obtaining, at
the other party's sole expense, an alternative source for the affected Services,
and the other party shall be released from any payment obligation to the party
affected by the Force Majeure Event with respect to such Services during the
period of such Force Majeure Event. Additionally, upon
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and during the occurrence of a Force Majeure Event, at the sole option of the
party receiving the Services affected by the Force Majeure Event, the term of
this Agreement shall be tolled with respect to any Services that are not being
provided by a third party.
7.5 Consequences on Termination. In the event this Agreement expires or is
terminated in accordance with this Section 7, then (a) all Services to be
provided will promptly cease, (b) each of GLC and GLC Hospitality shall promptly
return all confidential information received from the other party in connection
with this Agreement (including the return of all information received with
respect to the Services of GLC or GLC Hospitality, as the case may be), without
retaining a copy thereof, and (c) each of GLC and GLC Hospitality shall honor
all credits and make any accrued and unpaid payment to the other party as
required pursuant to the terms of this Agreement, and no rights already accrued
hereunder shall be affected.
SECTION 8. RECORDS.
Each of the parties shall create and, for a period of six (6) years after
the termination or expiration of this Agreement, maintain full and accurate
books in connection with the provision of the Services, and all other records
relevant to this Agreement, and upon reasonable notice from the other party
shall make available for inspection and copy by such other party's agents such
records during reasonable business hours.
SECTION 9. DISPUTE RESOLUTION.
9.1 Dispute Resolution under Assignment Agreement. Any dispute arising out
of or relating to the performance, breach or interpretation of this Agreement
shall be handled in accordance with the terms of the Assignment Agreement.
9.2 Continuity of Service and Performance. Unless otherwise agreed herein
or in writing, the parties will continue to provide Services and honor all other
commitments under this Agreement and each Ancillary Agreement (as defined in the
Assignment Agreement), if any, during the course of dispute resolution pursuant
to the provisions of this Section 9 with respect to all matters not subject to
such dispute, controversy or claim.
SECTION 10. NOTICES.
All notices and other communications hereunder shall be in writing, shall
reference this Agreement and shall be hand delivered or mailed by registered or
certified mail (return receipt requested) or sent by any means of electronic
message transmission with delivery confirmed (by voice or otherwise) to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by like notice) and will be deemed given on the date on which
such notice is received:
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To GLC:
Attn: Xxxxxxx Xxxxxxxxx
000 Xxxx Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
To GLC Hospitality:
Xxxx Xxxxxxx
____________________
____________________
____________________
SECTION 11. MISCELLANEOUS.
11.1 Waivers, Modifications, Amendments. Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by GLC Hospitality, on the one hand,
and GLC, on the other hand, or in the case of a waiver, by the party against
whom the waiver is to be effective. No failure or delay by any party in
exercising any right, power or privilege hereunder 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.
The rights and remedies herein provided shall be cumulative and in addition to
other or further remedies provided by law or equity.
11.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF WISCONSIN APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF WISCONSIN.
11.3 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person,
corporation, partnership or other entity or any circumstance, is invalid and
unenforceable, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
persons, corporations, partnerships or other entities or circumstances shall not
be affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any jurisdiction.
11.4 Reference; Interpretation. References in this Agreement to any gender
include references to all genders, and references to the singular include
references to the plural and vice
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versa. The words "include", "includes" and "including" when used in this
Agreement shall be deemed to be followed by the phrase "without limitation."
Unless the context otherwise requires, references in this Agreement to Sections
and Schedules shall be deemed references to Sections of, and Schedules to, this
Agreement. Unless the context otherwise requires, the words "hereof", "hereby"
and "herein" and words of similar meaning when used in this Agreement refer to
this Agreement in its entirety and not to any particular Section or provision of
this Agreement. This Agreement shall not be construed against either party as
the principal drafter hereof.
11.5 Entire Agreement. This Agreement (including all Schedules hereto)
contains the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral or written, with respect to such matters.
11.6 Assignment. GLC Hospitality may not, directly or indirectly, assign
or subcontract, or attempt to assign or subcontract, any of its rights or
obligations hereunder, in whole or in part, by operation of law or otherwise,
except with the prior written consent of GLC; it being understood that such
consent shall not be unreasonably withheld if GLC Hospitality assigns or
subcontracts the Agreement to an entity controlled by, or under common control
with, GLC Hospitality with the financial and other resources and expertise to
perform all of the obligations of such party hereunder. Any attempted assignment
or delegation not in compliance with the forgoing shall be null and void and of
no effect. Nothing contained herein shall prevent a party from providing
Services through or with the assistance of third parties whom such party
regularly used to provide such Services prior to the date hereof. The parties
understand and agree that, in connection with the Transaction, GLC intends to
merge with a newly formed subsidiary of Great Wolf Resorts, Inc., a Delaware
corporation ("GL Services"), and that following such merger, GL Services shall
be entitled to, and succeed to, all of the rights of, and be subject to all of
the obligations of, this Agreement.
11.7 Binding Effect. This Agreement shall be binding upon the parties
hereto and their respective successors and permitted assigns, if any, and except
as provided herein, shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns, if any.
11.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.
11.9 No Agency or Partnership. Nothing in this Agreement will create, or
will be deemed to create, a partnership or the relationship of principal and
agent or of employer and employee between the parties.
11.10 Provisions Unaffected. Nothing contained in this Agreement shall
affect the rights and obligations of GLC and GLC Hospitality pursuant to the
Assignment Agreement.
[SIGNATURES FOLLOW ON NEXT PAGE.]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered on
behalf of the parties as of the date first herein above written.
The Great Lakes Companies, Inc.
By: ____________________________
Name:
Title:
Great Lakes Hospitality Partners, LLC
By: ____________________________
Name:
Title:
SCHEDULE A
GLC SERVICES
- Administrative Services (including, but not limited to, secretarial,
clerical and other administrative support services).
- Corporate Services (including rent and other occupancy-related
costs).
- Accounting Services
- Financing Services
- Risk Management Services
- Legal Services
- Tax Services
- Information Technology Services
- Human Resources Services
- Payroll Services (including, without limitation, payroll processing
costs)
- Operational Services
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SCHEDULE B
GLC HOSPITALITY SERVICES
- Administrative Services (including, but not limited to, secretarial,
clerical and other administrative support services)
- Corporate Services (including rent and other occupancy-related
costs)
- Accounting Services
- Financing Services
- Risk Management Services
- Legal Services
- Tax Services
- Information Technology Services
- Human Resources Services
- Payroll Services (including, without limitation, payroll processing
costs)
- Operational Services
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