EXHIBIT 10.12
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT, dated as of July 30, 2004 (this
"Agreement"), is made by and between The Great Lakes Companies, Inc., a
Wisconsin corporation ("GLC"), and Great Lakes Housing Partners, LLC, a
Wisconsin limited liability company ("GLC Housing").
W I T N E S S E T H:
WHEREAS, GLC and GLC Housing 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 Housing and have GLC Housing
assume certain liabilities of GLC (the "Assignment Agreement");
WHEREAS, in connection with the transactions contemplated by the
Assignment Agreement, GLC and GLC Housing wish to enter into this Agreement for
purposes of continuity and transition; and
WHEREAS, GLC Housing desires to cause GLC to provide the Services set
forth on Schedule A to GLC Housing, and GLC is willing to provide such Services,
and GLC desires to cause GLC Housing to provide the Services set forth on
Schedule B to GLC, and GLC Housing 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 Housing Services" shall mean those transitional services to be
provided by GLC Housing 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 Housing set forth on Schedule A hereto to assist GLC Housing in
operating GLC Housing'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 Housing
Services.
SECTION 2. SERVICES.
2.1 Services. (a) GLC shall provide to GLC Housing each GLC Service set
forth on Schedule A as and if any GLC Service is reasonably requested by GLC
Housing to be performed by GLC during the term of this Agreement. Additional
services may be provided to GLC Housing by GLC if such arrangement is agreed to
in writing and executed by GLC and GLC Housing.
(b) GLC Housing shall provide to GLC each GLC Housing Service set
forth on Schedule B as and if any GLC Housing Service is reasonably requested by
GLC to be performed by GLC Housing during the term of this Agreement. Additional
services may be provided to GLC by GLC Housing if such arrangement is agreed in
writing and executed by GLC and GLC Housing.
2.2 Standard of Service. In performing the Services, GLC and GLC Housing
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
Housing, 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
Housing, all GLC Housing 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 Housing, the GLC Housing 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 Housing shall compensate GLC for the Services provided to GLC
Housing 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 Housing
for performing comparable services.
(b) In consideration for the provision of each of the GLC Housing
Services, GLC shall compensate GLC Housing for the Services provided to GLC
pursuant to this Agreement in an amount to be determined in good faith by GLC
Housing 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 Housing 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 Housing pursuant to the terms of this Agreement or paid by GLC on behalf
of GLC Housing.
(b) In addition to the fees payable in accordance with Section
4.1(b), GLC shall reimburse GLC Housing 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 Housing with respect to third parties in connection with the
provision of GLC Housing Services to GLC pursuant to the terms of this Agreement
or paid by GLC Housing on behalf of GLC.
4.3 Invoices. (a) GLC will invoice GLC Housing in U.S. dollars: (i) as
of the last day of each calendar month for any fees payable by GLC Housing 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 Housing 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 Housing during such month. GLC shall deliver or cause to be delivered to
GLC Housing each such invoice within thirty (30) days following the last day of
the calendar month to which such invoice relates. GLC Housing 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 Housing 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 Housing 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 Housing has received an invoice from such
third party; and (iii) as of the last day of each calendar month for any taxes
(excluding income
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taxes) payable with respect to the provision of GLC Housing Services to GLC
during such month. GLC Housing 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 Housing 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 Housing harmless
from and against any Loss to which GLC Housing may become subject arising out
of, by reason of or otherwise in connection with the provision hereunder by GLC
Housing of GLC Housing Services, other than Losses resulting from GLC Housing'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 Housing harmless from and against any Loss to which GLC Housing may
become subject arising out of, by reason of or otherwise in connection with the
provision hereunder by GLC of GLC Services to GLC Housing where such Losses
resulted from GLC's gross negligence, willful misconduct or material breach of
its obligations pursuant to this Agreement.
(b) GLC Housing 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 Housing
of GLC Housing Services to GLC where such Losses resulted from GLC Housing'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 Housing, 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 Housing on an interim basis until GLC
Housing can perform
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the GLC Services for itself, and for GLC Housing to provide the GLC Housing
Services to GLC on an interim basis until GLC can perform the GLC Housing
Services for itself. Accordingly, each of GLC and GLC Housing 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 Housing
becomes self-sufficient or engages other sources to provide any GLC Service, GLC
Housing 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 Housing Service, GLC
shall be entitled to release GLC Housing from providing any or all of the GLC
Housing Services hereunder by delivering a written notice thereof to GLC Housing
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 Housing shall discontinue
the provision of the GLC Housing Services specified in such notice and any such
GLC Housing 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 Housing if GLC Housing 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 Housing specifying such default or breach and requiring it to be remedied.
7.3 Early Termination by GLC Housing. GLC Housing 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 Housing
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 Housing 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 Housing 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 Housing, as the case may be), without
retaining a copy thereof, and (c) each of GLC and GLC Housing 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 Housing:
Attn: Xxxx Xxxxxxx
000 Xxxx Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
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 Housing, 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 versa. The words "include", "includes" and
"including" when used in this Agreement shall be
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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 Housing 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 Housing assigns or
subcontracts the Agreement to an entity controlled by, or under common control
with, GLC Housing 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 Housing 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: /s/ Xxxx Xxxxxxx
----------------------------
Name: Xxxx Xxxxxxx
Title: Co-Chairman
Great Lakes Housing Partners, LLC
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chairman and Secretary
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 HOUSING 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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