|
Exhibit 10.10
FORM OF
AGREEMENT
FOR THE PROVISION OF TRANSITION SERVICES
BY AND AMONG
INTERNATIONAL PAPER COMPANY
AND
KAPSTONE KRAFT PAPER COMPANY
Dated as of January 1, 2007
AGREEMENT FOR THE PROVISION OF
TRANSITION SERVICES
THIS AGREEMENT (this " Agreement "), effective as of
12.01 am on January 1, 2007 (the " Effective Date "),
by and among International Paper Company, a New York corporation
(the " Seller ") and Kapstone Kraft Paper Corporation, a
Delaware corporation (" Buyer "). Buyer is referred to
herein as the " Service Receiver ," and Seller is referred
to herein as the " Service Provider ."
WHEREAS, the Service Provider and the Service Receiver are
parties to that certain Agreement of Purchase and Sale dated as of
June 23, 2006 (the " Purchase Agreement "), pursuant to
which the Buyer purchased from the Seller certain Assets related to
the Business (as both Assets and Business are defined in the
Purchase Agreement);
WHEREAS, this Agreement is the Transition Services Agreement
referred to in Section 1.5(s) of the Purchase
Agreement; and
NOW, THEREFORE, in consideration of the foregoing and the
respective warranties, covenants and agreements hereinafter set
forth, and intending to be legally bound hereby, the parties hereto
agree as follows:
Section 1.
Definitions
" EDS Letter of Intent " means the Letter of
Intent to be entered into at the Closing by the Service Receiver
and Electronic Data Systems Corporation and EDS Information
Services LLC, a form of which is attached hereto as Exhibit
A .
" SAP Transitional Services Agreement " means the
Transitional Services Agreement to be entered into at the Closing
by the Service Provider, the Service Receiver and SAP America,
Inc., a form of which is attached hereto as
Exhibit B .
" Service Receiver Data " means all the data
provided by the Service Receiver or created by the Service Provider
solely on behalf of the Service Receiver that is used by the
Service Provider solely in relation to the provision of the
Services including, without limitation, employee information,
customer information, product details and pricing information.
" Services " means any of the services set forth
in the Schedules attached hereto.
" Term " means, with respect to each of the
Services, the period of time beginning on the Closing Date and
expiring on the date set forth in the applicable Schedule.
" User Access Agreement " means a User Access
Agreement, a form of which is attached hereto as Exhibit
C , to be entered into by each employee of the Service
Receiver who will have access to certain of the Service
Provider’s applications that are designated by the
Service
1
Provider (including, but not limited to, TRAMS,
the Wood Procurement System, and CBOPS) for the benefit of the
Service Provider.
All terms not otherwise defined herein shall have the meaning
ascribed to such terms in the Purchase Agreement.
Section 2.
Services
(a)
Commencing on the Closing Date and continuing
throughout the respective Terms, the Service Provider shall provide
to the Service Receiver, in connection with the Service
Receiver’s operation of the Business, the Services set forth
on Schedules attached hereto, in each case subject to the terms and
conditions set forth herein. The Services shall be performed by
Service Provider with substantially the same degree of care, skill,
prudence, quality and efficiency for comparable services performed
for the Business when it was owned by the Service Provider.
The Services shall also be substantially equivalent in nature,
scope, volume and quality as provided for the Business in the
ordinary course in the six (6) months immediately prior to
Closing. Systems (as defined in Section 15) will be operated
as is and maintenance will be limited to break/fix. Any
Enhancements (defined below) to the Systems will be dealt with on a
case by case basis and will require the Service Receiver to provide
a written description of the Enhancement, project plan,
deliverables, staffing and cost estimates. Such a description
will be reviewed by the Project Manager appointed by Service
Provider as set forth in Section 4 herein, and such Project Manager
will determine whether any work will be performed. The
Service Provider will bill such services in respect to the Systems
at a cost of $ per hour. In
addition, Service Receiver shall reimburse Service Provider for all
reasonable out-of-pocket expenses incurred by Service Provider in
connection therewith. For purposes of this agreement,
"Enhancement(s)" shall mean any new improvements, modifications,
releases, updates, upgrades and versions of the Systems.
(b)
The Service Receiver understands that the Services
provided hereunder are transitional in nature and are furnished by
the Service Provider for the purpose of facilitating the
transactions contemplated by the Purchase Agreement. The Service
Receiver further understands that the Service Provider is not in
the business of providing Services to third parties and will not
provide the Services beyond the applicable Term. In the event
that Service Provider, in its discretion, requires additional
resources in order to perform its obligations hereunder, the
Service Provider may engage such resources at the Service
Receiver’s sole cost and expense upon Service
Receiver’s consent, which shall not be unreasonably
withheld. The Service Receiver agrees to transition to its
own internal organization or other third party service providers
the provision of each of the Services as promptly as reasonably
practicable, but in no case later than the expiration of the
applicable Term. Service Provider shall reasonably cooperate
with any third party service providers for the transition of the
Services.
(c)
The Service Receiver understands that certain
Services will be provided to it by the Service Provider pursuant to
agreements between the Service Provider and various vendors.
Service Provider shall promptly notify Service Receiver of the
vendors and the Services that will be provided by such vendors in
writing. The Service Receiver will cooperate with any third
party providing Services on behalf of the Service Provider in order
to facilitate the provision and receipt of such Services. The
Service Receiver acknowledges that such Services
2
are dependent on such cooperation, and that its
failure to so cooperate shall relieve the Service Provider of its
obligation to provide the related Services to the extent such
failure renders such provision impractical or
impossible.
(d)
The Service Receiver will use commercially
reasonable efforts to provide information, including the Service
Receiver Data, and documentation necessary for the Service Provider
to provide the Services in accordance with the standards set forth
in Section 2(a). The Service Receiver will provide such
information and documentation in the format Service Receiver
currently has such information and documentation or as otherwise
agreed by the parties. The Service Receiver acknowledges that
certain Services are dependent upon such information and
documentation, and that its failure to provide such information and
documentation as set forth herein shall relieve the Service
Provider of its obligation to provide the related Services to the
extent such failure renders such provision impractical or
impossible. The Service Provider shall assist the Service
Receiver in identifying which types of Service Receiver Data are
required for the provision of Services.
(e)
The Service Receiver will reasonably cooperate with
the Service Provider in order to facilitate the provision and
receipt of the Services. The Service Receiver acknowledges
that such Services are dependent on such cooperation, and that its
failure to so cooperate shall relieve the Service Provider of its
obligation to provide the related Services to the extent such
failure renders such provision impractical or impossible. The
Service Receiver will comply with all applicable policies and
procedures of the Service Provider provided to the Service Receiver
in connection with its receipt of the Services. Without the
prior written consent of the Service Provider, the Service Receiver
will not allow any third parties access to Service Provider’s
network including, but not limited to, WAN or Internet
connectivity, during the term of this Agreement.
Section 3.
Payment
(a)
In consideration for the provision of Services by
the Service Provider, the Service Receiver agrees to pay to the
Service Provider those amounts determined in accordance with the
rates and charges set forth in the applicable Schedule attached
hereto. In addition, the Service Receiver shall pay the Service
Provider all incidental costs and expenses reasonably incurred by
the Service Provider in providing the Services including, but not
limited to, air fare (coach class), lodging, meals, mileage,
parking and ground transportation, in each case in accordance with
the Service Provider’s standard policies with respect to such
incidental costs and expenses. Notwithstanding the above, the
Service Provider shall have the option to increase the charges for
any Service provided to the Service Receiver (i) at any time it
increases the charges to its own business units for substantially
the same service; provided , however , that any
increases in charges for such Services shall be limited to the
average increases in rates charged for substantially the same
services to the Service Provider’s business units;
provided , further such increase shall not exceed
% or (ii) if the Service is provided
pursuant to an agreement between the Service Provider and a third
party, and the third party increases its charges under such
agreement.
(b)
Within twenty-one (21) days of the last day of each
calendar month, the Service Provider shall provide to the Service
Receiver an invoice for the preceding month’s
3
Services, which shall include (i) the Services
provided by the Service Provider to the Service Receiver for such
month in accordance with the Schedules, (ii) the charges for such
Services, (iii) a list of the actual costs and expenses incurred by
the Service Provider for such month, and (iv) reasonable
documentation verifying the actual expenses in addition to the
rates and charges set forth in the Schedules attached hereto.
The amount stated in such invoices shall be paid by the Service
Receiver in full within thirty (30) days of the invoices being
issued to an account designated by the Service Provider.
(c)
Without prejudice to the Service Provider’s
other rights and remedies, where any sum remains unpaid five (5)
days after the applicable due date, it shall carry interest, which
shall accrue daily, from the due date until the date of actual
payment, at an annual interest rate of nine percent
(9%).
(d)
All payments due to the Service Provider under this
Agreement shall be exclusive of any sales tax or other applicable
similar tax or levy, which shall be payable by the Service Receiver
except for any taxes based on Service Provider’s net
income.
(e)
The Service Receiver shall pay all amounts due under
this Agreement free of any set-off, deduction or
withholding.
(f)
In the event of any material service interruption,
whether or not scheduled, or any other disputed invoiced amount,
Service Provider and Service Receiver agree to negotiate in good
faith to adjust the relevant charges for the applicable Services or
other costs if and to the extent appropriate.
Section 4.
Project Managers
The Service Provider and the Service Receiver shall each appoint
a person to act as its project manager (each, a " Project
Manager ") to deal with issues arising out of the performance
of this Agreement, and to facilitate orderly provision and receipt
of the Services. Initially, the Project Manager for the Service
Provider shall be Dennis Schroeder, and the Project Manager for the
Service Receiver shall be Danny Tomlinson. Each party agrees
to provide reasonable access (in person, by telephone or
electronically via e-mail) during normal business hours to its
Project Manager for problem resolution.
Section 5.
Dispute Resolution
(a)
In the event of any dispute, controversy or claim
arising out of or relating to this Agreement, or the breach,
termination or validity thereof, including the dispute of any fees
or any claim by a party that the other party has breached the terms
hereof (each, a " Dispute "), the Project Managers shall
meet (by telephone or in person) no later than two (2) business
days after receipt of notice by either party of a request for
resolution of a Dispute. The Project Managers shall enter
into negotiations aimed at resolving any such Dispute. If the
Project Managers are unable to reach a mutually satisfactory
resolution of the Dispute within ten (10) business days after
receipt of notice of the Dispute, the Dispute shall be referred to
an Executive Committee (the " Executive Committee ")
comprised of at least one member of the senior management of each
party. The initial members of the Executive Committee,
including relevant contact information, are set forth on Schedule
IX, and either party may replace its Executive
4
Committee members at any time with other members
of similar seniority by providing notice in accordance with Section
13. The Executive Committee will meet (by telephone or in
person) during the next ten (10) business days and attempt to
resolve the Dispute. In the event that the Executive
Committee is unable to resolve the Dispute, the Dispute shall be
referred to arbitration as set forth in Section 5(b).
(b)
Any Dispute that cannot be resolved by the Executive
Committee shall be settled exclusively by arbitration before a
single arbitrator (" Arbitrator "), in accordance with this
Section 5(b) and the Commercial Arbitration Rules and Expedited
Procedures of the American Arbitration Association (" AAA ")
then in effect (the " Rules "). Judgment upon any
award rendered by the Arbitrator may be entered by any state or
federal court having jurisdiction thereof. Such arbitration
shall be administered by the AAA and shall be the exclusive remedy
for determining any such Dispute, regardless of its
nature.
(i)
If the parties are unable to agree upon an
arbitrator, within fifteen (15) days of receipt by respondent of
the demand for arbitration, the parties shall select a single
arbitrator from a list of nine (9) arbitrator-candidates selected
by the AAA. Any arbitrator-candidate proposed by the AAA
shall be an attorney (or retired judge) admitted to practice for at
least fifteen (15) years, with significant experience as an
arbitrator of large commercial cases. If the parties are
unable to agree upon an arbitrator from the list so drawn within
fifteen (15) days of receipt thereof, then the parties shall each
have the opportunity to strike up to three (3) names from the list
without cause, to rank the remaining names in order of preference
in accordance with the Rules, and to simultaneously return the list
to the AAA within twenty (20) days of the transmittal date (or on
such date as directed by the AAA). If a party does not return
the list within the time specified, all persons named therein shall
be considered acceptable. Of the arbitrator-candidates
remaining on the list and in accordance with the designated order
of mutual preference, the AAA shall invite the acceptance of an
arbitrator to serve. If for any reason none of the
arbitrators remaining on the list are available to serve, the
parties shall repeat the striking and ranking process with a new
list supplied by the AAA until an Arbitrator is
selected.
(ii)
Consistent with the expedited nature of arbitration,
the parties shall be entitled to reasonable discovery subject to
the discretion of the Arbitrator. The Arbitrator may, upon an
appropriate motion, dismiss any claim without an evidentiary
hearing if the party bringing the motion establishes that it would
be entitled to summary judgment if the matter had been pursued in
court litigation. In the event of a conflict between the
applicable rules of the AAA and the provisions of this Section
5(b)(ii), the provisions of this Section 5(b)(ii) shall
govern.
(iii)
Any filing fees shall be borne initially by the
party requesting arbitration. Thereafter, each party shall be
responsible for its own expenses and attorneys’ fees, and
fifty percent (50%) of the costs and fees of the
arbitration.
(iv)
The Arbitrator shall have the authority to award any
remedy of relief in accordance with the terms of this Agreement and
the laws of State of Tennessee. The Arbitrator shall render
an award and written opinion, stating the findings of fact and
conclusions of law on which the award is based, and the award shall
be final and binding upon the parties.
5
Neither party shall have the right to appeal the
Arbitrator’s decision, except on the limited grounds set
forth in the Federal Arbitration Act, 9 U.S.C. § 1 et
seq.
(v)
Unless mutually agreed by the parties otherwise, any
arbitration shall take place in Chicago, Illinois.
Section 6.
Ownership and Transfer of Intellectual
Property
(a)
The Service Receiver Data shall be and shall remain
the property of the Service Receiver and, to the extent reasonably
practicable without unreasonable cost or effort, shall be promptly
provided by the Service Provider upon the Service Receiver’s
request; provided that in no event shall the Service
Provider be required to change the format or otherwise modify the
Service Receiver Data. Service Provider shall only use the
Service Receiver Data to provide the Services to Service Receiver
as set forth herein and for no other purpose whatsoever. In
the event that the Service Receiver requires any additional
migration services, the Service Receiver shall submit a written
request describing such services to the Service Provider’s
Project Manager, and the Service Provider shall decide, in its sole
discretion, whether to provide such migration services. All
such migration services shall be provided at the Service
Receiver’s sole cost and expense. The Service
Provider’s services will be billed at $___ per hour which is
consistent with the rate for enhancements to the Systems. In
addition, Service Receiver shall reimburse Service Provider for all
out-of-pocket expenses incurred by Service Provider in connection
therewith.
(b)
All other data, informat
| 
