EXHIBIT 10.12
TRANSITION SERVICES AGREEMENT
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THIS TRANSITION SERVICES AGREEMENT dated as of _________ , 1999, by and
between ARCH CHEMICALS, INC., a Virginia corporation ("ARCH"), and ▇▇▇▇
CORPORATION, a Virginia corporation ("OLIN").
WITNESSETH:
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WHEREAS, OLIN and ARCH have entered into a Distribution Agreement (as
defined below);
WHEREAS, pursuant to the Distribution Agreement, OLIN has agreed to
transfer certain assets and businesses constituting the Arch Assets and the Arch
Business, respectively (each as defined in the Distribution Agreement) to ARCH;
WHEREAS, prior to the Distribution Date (as defined in the Distribution
Agreement), the Arch Business has received various support services from, and
provided various support services to, OLIN and its subsidiaries; and
WHEREAS, following the Distribution Date, OLIN and ARCH desire that for a
period of transition and for purposes of continuity, OLIN continue to provide
certain services to ARCH and its subsidiaries and that ARCH continue to provide
certain services to OLIN and its subsidiaries, all in a manner and amount as
historically provided prior to the Distribution Date, and on terms and
conditions as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, OLIN and ARCH agree as follows:
1. Definitions.
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The following terms have the meanings hereinafter assigned to them:
"ARCH Services" means each Service listed on Exhibit A hereto.
"Confidential Information" means any and all information disclosed to the
receiving Party by a disclosing Party pursuant to this Agreement, in any form
such as, but not limited to, visual, oral, written, graphic, electronic or model
form, including but not limited to, know-how and trade secrets, whether of a
business or a technical nature, whether patented or not and whether in the
laboratory, pilot plant or commercial plant stage (including without limitation
drawings, operating conditions, specifications, safety instructions,
environmental recommendations, emergency instructions) owned or controlled by a
Party.
"Customer" means (i) with respect to OLIN Services, ARCH and its
subsidiaries and (ii) with respect to ARCH Services, OLIN and its subsidiaries.
"Distribution Agreement" means that certain Distribution Agreement, dated
as of [ ], 1999, by and between ARCH and OLIN.
"Employee Benefits Information" means information relating to the
administration of ARCH's and OLIN's employee benefit programs as provided in
Exhibits attached hereto, including but not limited to information and/or data
submitted for reimbursement of, or in support of, any benefits claim (including
but not limited to health, counseling, medical, dental, or disability claims).
"Governmental Authority" means any federal, state or local government,
governmental authority, regulatory or administrative agency, governmental
commission, board, bureau, court or tribunal or any other similar arbitral body.
"OLIN Services" means each Service listed on Exhibit B hereto.
"Party" or "Parties" means either ARCH or OLIN or both of them.
"Prime Rate" means the rate of interest published as the "Prime Rate" in
the Wall Street Journal under the title "Money Rates" and defined therein as
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being the base rate on corporate loans at large money center commercial banks
(or if no longer published, an equivalent rate agreed by the Parties).
"Provider" means (i) with respect to OLIN Services, OLIN and (ii) with
respect to ARCH Services, ARCH.
"Services" means the furnishing, supply, distribution and delivery of each
service as set forth in Exhibit A or Exhibit B hereto to be provided by or on
behalf of a Party pursuant to the terms and conditions of this Agreement.
"Service Charge" - See Section 4 hereof.
"Service Description" means the description of each individual Service
respectively provided in Exhibits A and B.
"Standard of Care" - See Section 2(b) hereof.
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2. Services.
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(a) Subject to the terms of this Agreement, (i) OLIN will provide to ARCH
and its subsidiaries the OLIN Services in substantially the same manner, to
the same location and as and to the extent provided by OLIN (and not by an
outside contractor) to the Arch Business as it existed prior to the Distribution
Date during the one-year period immediately preceding the date of this
Agreement, and (ii) ARCH shall provide to OLIN and its subsidiaries the ARCH
Services in substantially the same manner, to the same location and as and to
the extent provided by the Arch Business as it existed prior to the Distribution
Date (and not by an outside contractor) during the one-year period immediately
preceding the date of this Agreement.
(b) In providing the Services, the Provider shall employ the same standards
of care, priority and diligence employed in providing services of the same type
for itself and its affiliates ("Standard of Care").
(c) Exhibits A and B identifies the Services to be provided by the Parties
and subject to the mutual agreement of the Parties acting reasonably, may be
amended from time to time, to add any additional Services, or to modify or
delete Services, as the Parties may agree.
(d) No Provider employee shall be considered a Customer employee for any
purpose, and the Provider shall provide the Services as an independent
contractor.
(e) The Customer shall, in a timely manner, take all such actions as may be
reasonably necessary or desirable in order to enable or assist the Provider in
the provision of the Services, including, but not limited to, providing
necessary information and specific written authorizations and consents, and the
Provider shall be relieved of its obligations hereunder to the extent that the
Customer's failure to take any such action renders performance by the Provider
of such obligations unlawful or impracticable.
(f) A Provider shall not be required to expand its facilities, incur new
long-term capital expenses or employ additional personnel to provide Services to
the other Party.
3. Confidentiality.
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(a) Confidentiality Obligation. Each of the Parties agrees to keep
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confidential and neither disclose to others nor use, except as permitted herein,
any Confidential Information or any Employee Benefits Information received from
the other Party pursuant to this Agreement.
(b) Limits on Disclosure. The receiving Party shall treat all Confidential
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Information in the same manner and with the same degree of care (but in any
event with no less of a degree of care than is reasonable for such information)
as it uses with respect to its own Confidential Information of like nature, and
shall disclose Confidential Information of the other Party only to
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its employees who have a need to know it, provided that such employees agree in
writing to be bound by all confidentiality obligations provided for in this
Agreement. The receiving Party shall treat all Employee Benefits Information
with highest standard of care reasonable for such information, and shall
disclose Employee Benefit Information of the other Party only to its employees
who have a strict need to know such information, provided that such employees
agree in writing to be bound by all confidentiality obligations provided for in
this Agreement.
(c) Exceptions. The obligations set forth in this Section 3 shall not
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apply with respect to any Confidential Information which:
(i) Public Knowledge. Is generally available to the public or
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subsequently becomes generally available to the public through
no breach by the receiving Party of secrecy obligations under
this Agreement or prior agreements between the Parties
concerning the Confidential Information; or
(ii) Received from a Third Party. Is received from a third party who
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is legally free to disclose such Confidential Information and
who did not receive such Confidential Information in confidence
from the disclosing Party; or
(iii) Independently Developed. Is independently developed by the
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receiving Party without reference to the Confidential
Information received from the disclosing Party.
(d) Permitted Disclosures. The provisions of this Section 3
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notwithstanding, in exercising the rights granted under this Agreement, either
Party may disclose Confidential Information to others for the purpose of
obtaining consulting services under a license agreement permitted hereunder,
provided that any such third party, to which such Confidential Information is
disclosed shall have first entered into a written secrecy and non-use agreement
imposing obligations on such party that are at least as stringent as those
imposed on the Parties pursuant to this Agreement.
(e) Subpoena or Demand. The provisions of this Section 3 notwithstanding,
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a Party may disclose Confidential Information and/or Employee Benefits
Information pursuant to a subpoena or demand for production of documents in
connection with any suit or arbitration proceeding, any administrative procedure
or hearing before a governmental or administrative agency or instrumentality
thereof, or any legislative hearing or other similar proceeding, provided that
the receiving Party shall promptly notify the disclosing Party of the subpoena
or demand and provided further that in such instances, the Parties use their
reasonable best efforts to maintain the confidential nature of the Confidential
Information and/or Employee Benefits Information by protective order or other
means.
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(f) Government Audit. The provisions of this Section 3 notwithstanding, a
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Party may disclose Confidential Information (other than information which is not
required by U.S. Government regulations to be made available to U.S. Government
auditors (e.g., internal audit reports) to U.S. Government auditors upon request
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during the performance of a governmental audit or review of any U.S. Government
contract of such Party in the normal course of the audit function and according
to standard practices; provided that prompt notice of the disclosure of such
information shall be given prior to such disclosure to the Party from which the
information was obtained.
4. Compensation.
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(a) Service Charge. In consideration of the provision of the Services, the
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Customer shall, for each Service performed, pay Provider monthly the applicable
fee plus the additional charges set forth in Exhibits A or B (such monthly fee
and additional charges being collectively, the "Service Charge" for such
Service) which monthly fee shall be either (i) a base fee, as specified on
Exhibits A or B, or (ii) if not otherwise specified, the Provider's directly
allocable cost for such Service. Unless otherwise stated in Exhibits A or B,
such allocations shall be made on a basis consistent with the allocation
methodology used by OLIN immediately prior to the Distribution, which shall
include a fair and reasonable allocation for Provider's employee benefit costs
relating to employees, and for Provider's facilities and other overhead. In
addition to such monthly fee, Provider shall be entitled to reimbursement from
Receiver upon receipt of reasonable supporting documentation for all out-of-
pocket expenses incurred in connection with Provider's provision of the Services
which are not included as part of the normal allocated cost. The monthly
Service Charge will be prorated for the number of days of Service received in
the calendar month (based on a thirty day month) in which the Service is
terminated.
(b) Invoicing and Payments. The monthly fee of the Service Charge for any
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month will be paid in advance on the last business day of the preceding month
except that the first monthly fee paid hereunder shall be paid immediately
following the Distribution Date. Monthly fees which are based on cost
allocations shall be estimated and paid based on then current budgeted cost
allocations, with the Provider providing a reconciling invoice quarterly within
thirty (30) days after the end of the quarter, and any net credit applied to the
next monthly fees due thereafter and any net payment due from the Receiver
within fifteen (15) days thereafter. Except as otherwise set forth herein, the
Provider will invoice the Customer for any additional costs incurred by the
Provider for the benefit of the Customer which are to be paid pursuant to
Exhibits A or B hereto, and such invoices will be payable within fifteen (15)
days of receipt. Upon termination of this Agreement, there will be a final
accounting and each Party shall promptly pay to the other Party any amounts owed
to the other Party. All payments due hereunder shall be made by electronic
funds transfer unless otherwise agreed by the Parties.
(c) Taxes. To the extent not included directly in the price the Provider
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charges for Services, the Customer shall pay to the Provider the amount of any
taxes or charges set forth in
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(i) through (iii) below imposed now or in the future by any Governmental
Authority including any increase in any such tax or charge imposed on Provider
after the Distribution Date.
(i) Any applicable sales, use, gross receipts, value added or
similar tax that is imposed as a result of, or measured by, any
sale or Service rendered hereunder unless covered by an
exemption certificate,
(ii) Any applicable real or personal property taxes, including any
special assessments, and any impositions imposed on the
Provider in lieu of or in substitution for such taxes on any
property used in connection with any sale or Service rendered
hereunder, and
(iii) Any other governmental taxes, duties, and/or charges of any
kind, excluding any income or franchise taxes imposed on the
Provider, which the Provider is required to pay with respect to
any sale or Service rendered hereunder.
(d) Late Payments. In the event the Customer disputes the accuracy of any
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invoice, the Customer shall pay the undisputed portion of such invoice and the
Parties will promptly meet and seek to resolve the dispute. If the Customer
fails to pay any undisputed amount owed under this Agreement, the Customer shall
correct such failure promptly following notice of the failure, and shall pay the
Provider interest on the amount paid late at two percent (2%) above the Prime
Rate prorated for the number of days such overdue amounts are outstanding.
5. Government Contracts. In the event that the Services to be performed
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involve contracts the Customer may have as a U.S. Government prime contractor or
subcontractor, the provisions of such contracts that are required by any
applicable U.S. federal acquisition regulation, including but not limited to,
the ▇▇▇▇▇-▇▇▇▇▇▇ Public Contracts Act, Fair Labor Standards Act, Officials Not
to Benefit, Covenant Against Contingent Fees, Nondiscrimination in Employment,
Military Security Requirements, Office of Federal Procurement Policy Act and
Examination of Records, shall be binding on Provider to the extent necessary to
enable the Customer to meet its legal and contractual commitments.
If the Services to be performed by Provider include the receiving,
handling, or developing of any U.S. Government classified material or data,
Provider agrees, and agrees to cause all persons or entities in its employ or
control, to comply with all applicable security regulations and requirements.
Each Provider agrees to immediately submit a confidential report to Customer
whenever, for any cause, it has reason to believe that there is an active danger
of espionage or sabotage affecting any work under such U.S. Government
contracts.
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Each Provider represents and warrants that it is familiar with the laws,
rules, orders, and regulations applicable to the performance of U.S. Government
procurement contracts with federal agencies including, but not limited to, the
Department of Defense, the Department of Energy, and the National Aeronautics
and Space Administration; that each will abide by all such laws, rules, orders
and regulations; that it, and each of its employees performing Services
hereunder, is eligible to act as a consultant to a U.S. Government defense
contractor under all applicable federal laws and regulations regarding post-
government employment; and that it will provide any and all certifications,
representations, reports, records or any other document required to be submitted
by suppliers under federal contracts.
6. Limitation of Liability; Indemnity.
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(a) A Provider shall have no liability to the Customer or any third party
in connection with the provision of the Services except to the extent such
Services were provided in breach of the Provider's Standard of Care and, in such
a case, only to the extent of the following:
(i) a dollar amount limited to the amount of insurance proceeds paid
to Provider therefor from a third party insurance company, and
(ii) at the option of the Customer, the Provider shall either:
(x) perform again the particular Service performed in breach of
the Standard of Care at no cost to Customer, or
(y) give the Customer a refund of the portion of the Service
Charge attributable to the cost of performance of the
Service provided in breach of the Standard of Care.
In no event shall the Provider be liable in connection with its provision of the
Services for any indirect, special or consequential damages, including any fines
or penalties payable by the Customer to any government agency, or for any loss
of profits or other economic damages.
(b) The Customer hereby agrees to indemnify and hold the Provider and its
affiliates, officers, directors, agents and employees (collectively, the
"Provider Indemnitees") harmless from and against any and all liabilities,
losses, damages, expenses, fines and penalties of any kind, including reasonable
attorneys' fees and disbursements, incurred by the Provider Indemnitees either:
(i) as the result of any claim made against the Provider Indemnitees
by any third party arising out of the Provider's provision of the
Services (except to the extent, and only to the extent, of
Provider's liability to Customer for the respective Service as
provided in Paragraph 6(a) above); and/or
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(ii) arising out of the Customer's negligence or malfeasance in
connection with its use of the Services.
7. Insurance. The Provider shall procure and maintain fire, extended
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casualty, public liability, worker's compensation, employer's liability, and
such other types of insurance which are reasonably necessary to protect itself
and the Customer and consistent with past practice (which may include self-
insurance). If requested, such policies of insurance with third party insurers
shall name Customer as an additional insured party to the extent applicable.
8. Force Majeure. Neither the Customer nor the Provider shall be liable
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for any delays in its performance hereunder caused by events beyond its
reasonable control (a "force majeure event") including, without limitation:
acts of God, acts of government, fire, equipment breakdown, strikes or other
similar labor disputes (settlement of which shall be in the sole discretion of
the employer), or the inability to acquire materials or third-party services.
Upon the occurrence of any event which is reasonably expected to or does cause a
delay in performance hereunder, the person or Party whose performance is or may
be delayed shall give prompt written notice thereof to the Customer or Provider,
as the case may be. The Parties shall use reasonable efforts to cooperate and
minimize the impact of such force majeure event on the provision of Services.
9. Disputes. In the event of any disputes arising out of or in
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connection with the execution, interpretation, performance or nonperformance of
this Agreement, Provider and Customer shall use the following procedure prior to
either Party pursuing other available legal remedies:
Upon signing of this Agreement, each Party will designate one
representative ("Representative") for the purpose of resolving disputes which
may arise from time to time. A Party may change its Representative to act
hereunder at any time upon notice to the other. Upon a dispute arising, either
or both Representatives may request in writing a conference with the other. If
so requested, the conference shall occur within ten (10) days of the initial
written request and shall be held via telephone or at a mutually agreed upon
location, at the option of the Representatives. The purpose and scope of the
conference shall be limited to issues related to resolving the dispute. At the
conference, each Representative shall use their reasonable best efforts to
attempt to resolve the dispute. If the dispute has not been settled within
thirty (30) days of the first meeting of the Representatives, the parties shall
establish a Management Appeal Board ("MAB") within ten (10) days of receipt of a
request by either Party to set up a MAB. The MAB shall consist of two (2)
members of each respective Party's management. OLIN shall appoint two members
to represent OLIN, and ARCH shall appoint two members to represent ARCH. The
sole purpose of MAB shall be to resolve any dispute over which the
Representatives failed to resolve. The MAB members shall be comprised of
persons other than the Representatives. The MAB shall meet at OLIN's
headquarters or other place mutually
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agreed upon and shall confer to resolve the dispute by good faith negotiations,
which may include presentations by the Representatives or others.
In the event the Parties are unable to resolve their disputes within ninety
(90) days after the establishment of a MAB, upon election by either Party such
disputes shall be solely and finally settled by a board of three (3) arbitrators
in accordance with the Commercial Arbitration Rules (the "Arbitration Rules") of
the American Arbitration Association ("AAA"). The Party electing arbitration
shall notify the other Party in writing in accordance with the Arbitration Rules
and such notice shall be accompanied by the name of the arbitrator selected by
the Party serving the notice. The other Party shall choose the second
arbitrator, and the two arbitrators so selected shall choose a neutral
arbitrator who shall be the third arbitrator. If a Party fails to select an
arbitrator or to advise the other Party of its selection within thirty (30) days
after receipt by such a Party of the notice of the intent to arbitrate, the
second arbitrator shall be selected by the AAA. If the third arbitrator shall
not have been selected within thirty (30) days after the selection of the second
arbitrator, the appointment shall be made by the AAA. All such proceedings
shall be conducted in Norwalk, Connecticut or another mutually agreed upon
location. The arbitrators shall make detailed findings of fact and law in
writing in support of the decision of the arbitrator panel, but shall not be
empowered to award reimbursement of attorneys' fees and other costs of
arbitration to the prevailing Party. The provisions of this Section 9 shall not
be deemed to preclude any Party hereto from seeking preliminary injunctive
relief to protect or enforce its rights hereunder, or to prohibit any court from
making preliminary findings of fact in connection with granting or denying such
preliminary injunctive relief, or to preclude any Party hereto from seeking
permanent injunctive or other equitable relief after and in accordance with the
decision of the arbitrator panel. Whether any claim or controversy is
arbitrable or litigable shall be determined solely by the arbitrator panel
pursuant to the provisions of this Section 9. Any monetary award of the
arbitrators panel shall include interest from the date of any breach or any
violation of this Agreement. The arbitrators shall fix an appropriate rate of
interest from the date of the breach or other violation to the date when the
award is paid in full. The Parties agree that the decision of the arbitrators
shall be final and conclusive and that judgment on the arbitration award may be
entered in any court having jurisdiction over the Parties or their assets.
It is expressly agreed that the failure of the parties to resolve a dispute
on any issue to be resolved hereunder shall not relieve either Party from any
obligation set forth in this Agreement. In addition, the Parties expressly
state their mutual determination that the failure to resolve any such disputes
shall not hinder or delay the providing of the Services, and that,
notwithstanding the pendency of any such dispute, neither Party will be excused
of its obligations hereunder to cooperate with the other to effectuate the
purposes of this Agreement.
10. Books and Records. The Provider shall, upon reasonable notice and
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during normal business hours, allow the Customer's financial personnel
reasonable access to its books,
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records and other information necessary to confirm the calculation of the
compensation and reimbursement due the Provider hereunder.
11. Term and Termination of Particular Services.
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(a) The term of this Agreement shall commence as of the date hereof and
shall continue until Services are no longer provided hereunder. Unless
otherwise agreed by the Parties, each Service shall terminate on the earliest of
(i) thirty (30) days (or such later date as is stipulated in the notice)
following receipt by the Provider of written notice from the Customer to
terminate the Service, (ii) the last day of the term for such Service as
specified in the respective Service Description, or (iii) the date on which the
Provider discontinues providing such Services to its own business, provided that
the Provider has given the Receiver at least ninety (90) days' notice of its
intention to discontinue such Service to its own operations. If the Provider
employs a third party provider to provide a Service previously provided directly
by the Provider, then it will request that such third party provide such Service
to the Receiver.
(b) Upon termination of a Service with respect to which the Provider holds
books, records or files, including current and archived copies of computer
files, owned by Customer and used by Provider in connection with the provision
of a Service to Customer, Provider will return all of such books, records or
files as soon as reasonably practicable, provided however, that Provider may
make a copy, at its expense, of such books, records or files for archival
purposes only.
12. Non-Waiver. The Customer's or the Provider's waiver of any breach or
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failure to enforce any of the terms or conditions of this Agreement at any time
shall not in any way affect, limit or waive such person's right thereafter to
enforce strict compliance with every term and condition hereof.
13. Assignment. Neither this Agreement nor any right or obligation
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hereunder is assignable or transferable by either party (in whole or part)
without the prior written consent of the other party and any such purported
assignment without such consent shall be void, except that either party shall
have the right to assign this Agreement and its rights and obligations
hereunder, without obtaining the prior written consent of the other party, to
any entity with which the assigning party merges or transfers a substantial part
of its assets or businesses to which this Agreement relates, provided that such
assignee or transferee accepts such assignment or transfer and the rights and
obligations hereunder in writing. Nothing in this Agreement, express or
implied, is intended to confer any rights or remedies under this Agreement on
any person or entity other than ARCH or OLIN and their respective successors and
permitted assigns.
14. Applicable Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Connecticut, without giving effect to
its conflict of laws provisions.
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15. Captions. The titles contained in this Agreement are for reference
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purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
16. Amendment. This Agreement may be modified or amended only pursuant to
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a written agreement executed on behalf of each of OLIN and ARCH. No
modification or addition to this Agreement shall be effected by the
acknowledgment or acceptance by either party of any purchase order, invoice,
acknowledgment, release or other forms submitted by the other party containing
additional, other or different terms or conditions.
17. Notices. All notices, consents, termination notices, and other
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communications to be given hereunder, other than routine immaterial
communications, shall be by telex or electronic facsimile, confirmed in writing
as hereinafter provided, or in writing which shall be valid and sufficient only
if delivered by hand, by confirmed facsimile (with a copy mailed first class to
the address listed below promptly thereafter), by national overnight courier
service or by registered or certified mail, return receipt requested, postage
prepaid, addressed to the other party at its address as set forth below, or to
such other address as has theretofore been designated by the other party by
notice given in accordance with this Section.
If to ▇▇▇▇
▇▇▇▇ CORPORATION
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to ARCH
ARCH CHEMICALS, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ___________
Telecopier: __________
18. Entire Agreement. This Agreement (including the exhibits and
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schedules referred to herein) constitutes the entire agreement with respect to
the subject matter hereof between the parties hereto and supersedes all prior
agreements and understandings, oral and written, between the parties hereto,
with respect to the subject matter hereof.
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19. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall for all purposes be deemed to be an original
and all of which together shall constitute one and the same instrument.
20. Severability. If any provision of this Agreement or the application
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of any such provision to any person or circumstances shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
▇▇▇▇ CORPORATION
By: ___________________________________
Name:
Title:
ARCH CHEMICALS, INC.
By: ___________________________________
Name:
Title:
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