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Exhibit 10.2
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT (this " Agreement ")
is made as of December 15, 2008, by and between Potlatch
Land & Lumber, LLC, a Delaware limited liability company
(" Potlatch "), and Clearwater Paper Corporation, a Delaware
corporation (formerly named Potlatch Forest Products Corporation)
(" Clearwater ") (each, a " Party ," and together,
the " Parties ").
RECITALS:
WHEREAS, Potlatch Corporation and Clearwater have entered into
that certain Separation and Distribution Agreement, dated as of
December 15, 2008 (the " Separation and Distribution
Agreement "), pursuant to which and subject to the terms and
conditions set forth therein, the Retained Business and the
Pulp-Based Business shall be separated into two independent
companies (the " Separation "), and the Clearwater Common
Stock shall thereafter be distributed on a pro rata basis to
Potlatch Corporation’s shareholders (capitalized terms not
otherwise defined in this Agreement shall have the meaning set
forth in the Separation and Distribution Agreement); and
WHEREAS, in order to facilitate the Separation, the Parties have
agreed that certain shared services and certain common uses of
facilities and equipment should continue for a transitional period
after the Effective Time.
NOW, THEREFORE, in consideration of the mutual promises
contained herein, the Parties hereby agree as follows:
1. Description of Transition Services .
(a) Potlatch shall (or shall cause its applicable Affiliate, as
necessary, to), subject to the terms and provisions of this
Agreement (including Exhibit A ):
(i) provide Clearwater (or its Affiliate, as applicable) with
general services of a financial, technical, commercial,
administrative or advisory nature as set forth on Exhibit A
(the " Potlatch Services ");
(ii) where applicable, assist Clearwater (or its Affiliate, as
applicable) in the efficient transfer of each of the Potlatch
Services, including training of the personnel primarily responsible
for each of the Potlatch Services going forward; and
(iii) render such other specific services as may be from time to
time reasonably requested, within the scope of the services set
forth on Exhibit A or, if such additional services are not
contemplated by Exhibit A , at its discretion and its
reasonable ability to supply such additional services at the time
of such request.
Unless otherwise specifically provided on Exhibit A ,
Potlatch will provide each of the Potlatch Services until the date
that is 18 months after the Distribution Date. Clearwater may, at
its option, upon no less than 30 days’ prior written notice
(or such other period as the Parties may
mutually agree), direct Potlatch to no longer
provide all or any category or portion of the Potlatch
Services.
(b) Clearwater shall (or shall cause its applicable Affiliate,
as necessary, to), subject to the terms and provisions of this
Agreement (including Exhibit B ):
(i) provide Potlatch (or its Affiliate, as applicable) with
general services of a financial, technical, commercial,
administrative or advisory nature as set forth on Exhibit B
(the " Clearwater Services ," and together with the Potlatch
Services, the " Transition Services ");
(ii) where applicable, assist Potlatch (or its Affiliate, as
applicable) in the efficient transfer of each of the provided
Clearwater Services, including training of the personnel primarily
responsible for each of the Clearwater Services going forward;
and
(iii) render such other specific services as may be from time to
time reasonably requested, within the scope of the services set
forth on Exhibit B or, if such additional services are not
contemplated by Exhibit B , at its discretion and its
reasonable ability to supply such additional services at the time
of such request.
Unless otherwise specifically provided on Exhibit B ,
Clearwater will provide each of the Clearwater Services until the
date that is 18 months after the Distribution Date. Potlatch may,
at its option, upon no less than 30 days’ prior written
notice (or such other period as the Parties may mutually agree),
direct Clearwater to no longer provide all or any category or
portion of the Clearwater Services.
2. Consideration for Services . Each Party receiving the
services (the " Receiving Party ") shall pay the Party
providing the services (the " Performing Party ") in
accordance with this Section 2 , and each Performing
Party shall accept as consideration for the services rendered
hereunder, the following service charges:
(a) for the Transition Services rendered pursuant to
Section 1(a)(i) and Section 1(b)(i) , the
Receiving Party will be charged the fees set forth on Exhibit
A or Exhibit B , as applicable; and
(b) for any additional services rendered pursuant to
Section 1(a)(iii) and Section 1(b)(iii) ,
the Receiving Party will be charged certain fees to be negotiated
and agreed to in good faith by the Parties at the time such
services are requested.
The monthly and hourly fees set forth on Exhibit A and
Exhibit B will be equitably adjusted, as mutually agreed
upon by the parties in writing, throughout the term of the
Agreement as necessary to reflect any increase or decrease in
services or other appropriate adjustment.
3. Terms of Payment . Each Performing Party shall submit
in writing an invoice covering its charges for services it renders
hereunder. Such invoice shall be submitted on a monthly basis and
shall contain a summary description of the charges and services
rendered. Payment shall be made no later than 30 days after the
invoice date.
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4. Method of Payment . All amounts payable
for services shall be remitted in U.S. dollars to a bank to be
designated in the invoice or otherwise in writing, unless otherwise
provided for and agreed upon in writing by the Parties. Detailed
billing information will be provided upon request.
5. WARRANTIES . THIS IS A SERVICE AGREEMENT. EXCEPT AS
EXPRESSLY STATED IN THIS AGREEMENT, THERE ARE NO EXPRESS WARRANTIES
OR GUARANTIES AND THERE ARE NO IMPLIED WARRANTIES OR GUARANTIES,
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY, TITLE AND FITNESS FOR A PARTICULAR PURPOSE.
6. Indemnity . Each Party shall indemnify, defend and
hold harmless the other Party and its Affiliates, directors,
officers, employees and agents, and each of the successors and
assigns of any of the foregoing, from and against any and all Third
Party Claims relating to, arising out of or resulting from gross
negligence or willful misconduct of such Party in the performance
of its obligations hereunder, or breach of this Agreement, other
than to the extent such Third Party Claims are attributable to the
gross negligence, negligence, willful misconduct or breach of this
Agreement by any Person so indemnified.
7. Limitation on Liability .
(a) In no event shall either Party have any liability, whether
based on contract, tort (including, without limitation,
negligence), warranty or any other legal or equitable grounds, for
any punitive, consequential, special, indirect loss or damage
suffered by the other Party arising from or related to this
Agreement, including without limitation, loss of data, profits
(excluding profits under this Agreement), interest or revenue, or
use or interruption of business, even if such Party is advised of
the possibility of such losses or damages.
(b) In no event shall a Party be liable for the acts or
omissions of third party providers of equipment or services.
(c) In no event will a Party’s liability, whether based on
contract, tort (including without limitation, negligence), warranty
or any other legal or equitable grounds, exceed in the aggregate
the amount of fees paid or owed to such Party for services provided
pursuant to this Agreement for the six month period prior to the
date the claim giving rise to such liability occurred or, if six
months has not elapsed between the Effective Time and the date
giving rise to such liability, then the amount of aggregate monthly
fees set forth on Exhibit A or Exhibit B , as
applicable, multiplied by six; provided , however ,
that in either case such fees shall exclude any amounts paid or to
be paid to third party providers for equipment or services.
(d) The limitations set forth in Section 7(c) above
shall not apply to liabilities which may arise as the result of
(i) willful misconduct or gross negligence of a Party or its
Affiliates; (ii) indemnity obligations pursuant to
Section 6 ; (iii) the other party’s breach
of the confidentiality obligations set forth in this Agreement;
(iv) amounts inadvertently overpaid by either Party, or
(v) amounts for charges otherwise due and payable under this
Agreement.
8. Termination .
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(a) This Agreement shall terminate on
June 16, 2010, but may be terminated earlier in accordance
with the following:
(i) upon the mutual written agreement of the Parties;
(ii) by either Party for material breach of any of the terms
hereof by the other Party if the breach is not cured within 30
calendar days after written notice of breach is delivered to the
defaulting Party; or
(iii) by either Party upon written notice to the other Party if
the other Party shall become insolvent or shall make an assignment
for the benefit of creditors, or shall be placed in receivership,
reorganization, liquidation or bankruptcy.
(b) Upon any termination, each Party shall be compensated for
all Transition Services performed to the date of termination in
accordance with the provisions of this Agreement.
(c) In the event of a termination and upon expiration of this
Agreement (or one or more of the services), the Performing Party
shall be entitled to the payment or reimbursement of, and the
Receiving Party shall pay and reimburse the Performing Party within
30 days of such termination or expiration for all amounts due to
the Performing Party under this Agreement, including amounts
incurred in connection with the provision of services through the
date of such termination or expiration that are not yet due and
payable to the Performing Party under this Agreement. Upon
termination by the Receiving Party of any service(s) hereunder
pursuant to the last sentence of Section 1(a) or the
last sentence of Section 1(b) , as applicable, the
Receiving Party shall reimburse the Performing Party for any and
all costs and expenses accruing after such termination and incurred
by the Performing Party as a result of the provision of the
service(s) (e.g., additional license fees).
9. Performance of Transition Services . The Performing
Party shall perform its duties and discharge its obligations under
this Agreement in a commercially reasonable manner based upon its
current practices (including the software and equipment utilized by
the Performing Party) in providing analogous services for itself or
its Affiliates as of the Effective Time (or prior practices in the
absence of a current practice) and in accordance with any service
levels and performance obligations specified in the applicable
section of Exhibit A or Exhibit B , as applicable.
This obligation is subject to the following conditions:
(a) The Performing Party shall not be required to perform any
service in a manner that would constitute a violation of applicable
law;
(b) The Performing Party shall not be required to perform any
service for the benefit of any Person other than the Receiving
Party and its Affiliates;
(c) Except as set forth in Exhibit A or Exhibit B
, as applicable, the Performing Party shall not be obligated to
(i) hire or train additional employees, (ii) purchase,
lease or license any additional equipment or software
(iii) use or make available to the Receiving Party any
upgrades, improvements or other changes in the equipment or
software used by the Performing Party to the extent that the
Performing Party would incur additional cost or expense not
advanced by the
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Receiving Party in doing so, or (iv) pay any
cost related to the transfer or conversion of information to the
Receiving Party upon termination of the services;
(d) Except as set forth in Exhibit A or Exhibit B
, the Performing Party shall be solely responsible for maintaining,
during the applicable service period, equipment, software,
licenses, personnel, facilities and other resources reasonably
necessary for its provision of the services for which it is
responsible that are substantially equivalent to those resources
that were available to the Performing Party at the Effective
Time;
(e) The Receiving Party shall, and shall cause its applicable
Affiliates to, make available on a timely basis to the Performing
Party and to any third party provider, (i) information
reasonably requested by such Person to enable the performance of
services, and (ii) reasonable access to the premises of the
Receiving Party and such Affiliates and the systems, software and
networks located therein, to the extent necessary for the purpose
of providing the services; and
(f) The Receiving Party shall use commercially reasonable
efforts to reduce or eliminate its dependency on each service as
soon as is reasonably practicable.
10. Independent Contractor . Each Performing Party is
providing services pursuant to this Agreement as an independent
contractor and the Parties hereby acknowledge that they do not
intend to create a joint venture, partnership or any other type of
agency between them.
11. Confidentiality . Each Party shall keep confidential,
and use reasonable efforts to cause its Affiliates and each of
their respective officers, directors, employees, agents and
advisors to keep confidential, all information relating to the
other Party, and its respective subsidiaries and businesses
obtained in connection with the provision or receipt of services
under or pursuant to this Agreement, all in accordance with, and
subject to the terms of the confidentiality provisions of the
Separation and Distribution Agreement. Nothing in this
Section 11 shall be construed to prevent the Receiving
Party from disclosing information relating to this Agreement or the
services provided to the Receiving Party upon receipt of the
written consent of the Performing Party, which consent will not be
unreasonably withheld or delayed, to the extent that such
disclosure is required to permit the Receiving Party to arrange for
the provision of such services after the termination of this
Agreement.
12. Ownership of Information . Any information owned by
one Party or any of its Affiliates that is provided to another
Party or any of its Affiliates pursuant to this Agreement shall
remain the property of the providing Party. Except to the extent
necessary for the Performing Party or any of its Affiliates to
provide services to the Receiving Party or any of its Affiliates
under this Agreement, nothing contained in this Agreement shall be
construed as granting or conferring rights of license or otherwise
in any such information. Furthermore, each Receiving Party
acknowledges that it will acquire no right, title or interest
(including any license rights or rights of use) in any intellectual
property that is owned or licensed by any Performing Party, by
reason of the provision of the services provided hereunder. No
Receiving Party will remove or alter any copyright, trademark,
confidentiality or other proprietary notices that appear on any
intellectual property owned or licensed by any Performing Party,
and each Receiving Party shall reproduce any such notices on any
and all copies thereof. No Receiving Party will
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attempt to decompile, translate, reverse engineer
or make excessive copies of any intellectual property owned or
licensed by any Performing Party, and each Receiving Party shall
promptly notify such Performing Party of any such attempt of which
it becomes aware.
13. Records . Each Performing Party shall maintain and
retain records related to the provision of its services under this
Agreement consistent with its policies regarding its own retention
of records. As needed from time to time during the period in which
services are provided, and upon termination of the provision of any
service, the Parties agree to provide each other with records
related to the provision of the services under this Agreement to
the extent that (i) such records exist in the ordinary course
of business, (ii) the Party providing such records is
reimbursed for any costs related to supplying such records, and
(iii) such records are reasonably necessary for the requesting
Party to comply with its obligations under this Agreement or
applicable law.
14. Amendment; Waiver . This Agreement may be modified or
amended only by the agreement of the Parties hereto in writing,
duly executed by the authorized representatives of each Party. Any
term or provision of this Agreement may be waived, or the time for
its performance may be extended, by the Party or Parties entitled
to the benefit thereof. Any such waiver shall be validly and
sufficiently given for the purposes of this Agreement if, as to any
Party, it is in writing signed by an authorized representati
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