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TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (the “ Agreement ”) is effective at the Business Transfer Time (the “ Effective Date ”), by and between MeadWestvaco Corporation, a Delaware corporation (“ Service Provider ”), and Monaco SpinCo Inc., a Delaware corporation (“ Spinco ”).
A. Service Provider and Spinco have entered into a Separation Agreement, dated as of November 17, 2011 (as amended, modified or supplemented from time to time in accordance with its terms, the “ Separation Agreement ”), pursuant to which (1) Service Provider and certain of its subsidiaries have agreed to contribute and transfer to Spinco, and Spinco has agreed to receive and assume, certain assets and liabilities of Service Provider’s Consumer & Office Products business (the “ Business ”) and (2) following such contribution and transfer and other transactions specified in the Separation Agreement, Service Provider has agreed to distribute (the “ Distribution ”) all of the shares of common stock, par value $0.001 per share, of Spinco (the “ Spinco Common Stock ”) to Service Provider’s stockholders without consideration on a pro rata basis;
B. Service Provider, Spinco, ACCO Brands Corporation, a Delaware corporation (“ Acquirer ”) and Augusta Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Acquirer (“ Merger Sub ”), have entered into a Merger Agreement, dated as of November 17, 2011 (as amended, modified or supplemented from time to time in accordance with its terms, the “ Merger Agreement ”), pursuant to which, immediately following the Distribution, Spinco and Merger Sub will merge and the Spinco Common Stock will be converted into shares of common stock of Acquirer on the terms and subject to the conditions of the Merger Agreement; and
C. In connection with the transactions contemplated by the Separation Agreement and the Merger Agreement, the parties desire that Service Provider provide certain services to Spinco on the terms and conditions set forth herein.
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 hereby agree as follows:
1.1 Defined Terms. All capitalized terms used but not defined herein have the meanings set forth in the Separation Agreement.
PROVISION OF THE SERVICES
2.1 Description of the Services . Service Provider shall provide, or cause to be provided, the following services (collectively, the “ Services ”) in support of the Business. Spinco shall use its commercially reasonable efforts to provide such assistance and resources (including, but not limited to, human resources) as are required for Service Provider to provide the Services to Spinco, including without limitation the purchase (at Spinco’s expense) of any software and hardware assets required for the Services as requested by Service Provider. Service Provider shall be relieved of its obligations hereunder to the extent that (a) Spinco fails to provide the assistance or resources referred to in the previous sentence, (b) such failure renders performance or ongoing performance by Service Provider of its obligations unlawful, or reasonably impracticable or unreasonable (in Service Provider’s reasonable determination) and (c) such failure (i) if reasonably capable of being cured, is not cured by Spinco within ten (10) days following written notice to Spinco by Service Provider of any such purported failure, or (ii) by its nature or timing is not reasonable capable of being cured (it being understood and agreed that Service Provider shall be relieved of its obligations hereunder during any such cure period). For the avoidance of doubt, it is acknowledged that, subject to its obligations to Service Provider under the provisions of this Agreement, Spinco shall be free at any time (and without obligation to notify or inform Service Provider) to arrange for any service identical to or similar to the Services to be provided to it by any Person whatsoever.
2.1.1 Ongoing Services . Service Provider or its designee shall provide each of the services (collectively, the “ Ongoing Services ”) specified in Schedule 2.1.1 (to the extent such schedule covers Ongoing Services, the “ Ongoing Services Schedule ”) to Spinco, in accordance with the terms and conditions for such Ongoing Services listed on the applicable schedule and set forth in this Agreement.
2.1.2 Additional Services . Spinco and Service Provider expressly acknowledge that the obligation of Service Provider to provide transitional services following the Effective Date is limited to the Ongoing Services set forth in the Ongoing Services Schedule, in each case in accordance with the terms and conditions set forth in such Schedule, and there exists no other obligation on the part of Service Provider to provide any other transition or other services to Spinco or any other party following the Effective Date, except as provided in this section. Spinco may request additional transition services to the extent such transition services reasonably relate to the transition of the Business to Spinco (“ Additional Services ”). Upon receipt of any such request, (i) if receipt of such request occurs within one hundred and twenty (120) days after the date hereof, Service Provider shall use its commercially reasonable efforts to provide any such Additional Service to the extent that such Additional Services were historically provided by Service Provider to the Business and are generally consistent with this Agreement and (ii) if receipt of such request occurs more than one hundred and twenty (120) days after the date hereof, Service Provider shall consider such request in its sole discretion and determine in its sole discretion whether to provide such Additional Services. If Service Provider provides such Additional Services in accordance with the preceding sentence, Service Provider and Spinco shall: (i) negotiate in good faith the terms of the provision of such Additional Services, including the additional fees for such Additional Services and the duration of such Additional
Services, and (ii) document the provision of such Additional Services in an amendment to this Agreement. In the event that Service Provider declines to provide any such Additional Service, subject to the first sentence of this Section 2.1.2, Service Provider shall use commercially reasonable efforts to assist Spinco in finding another service provider to provide the requested additional transition services to the extent such transition services reasonably relate to the transition of the Business to Spinco.
2.1.3 Setup Services . As part of the Services, Service Provider shall take those actions necessary, as reasonably agreed to by Spinco, to prepare for providing the Ongoing Services or any Additional Services (the “ Setup Services ”), and Spinco shall pay or reimburse Service Provider fifty percent (50%) of the Reimbursable Set-Up Costs in respect of the Setup Services (whether conducted prior to or after the Effective Date). For purposes of this Agreement, “ Reimbursable Set-Up Costs ” means the third-party costs to provide the Setup Services; provided that Reimbursable Set-Up Costs shall not include costs for shared applications in respect of Setup Services to the extent such Setup Services are for Service Provider’s benefit whether conducted prior to or after the Effective Date and shall in no event include costs incurred or intended to be incurred independent of the transactions contemplated by this Agreement, the Separation Agreement or the Merger Agreement. If Spinco does not agree to a Setup Service, the parties shall work together to agree upon a commercially reasonable alternative arrangement, or Spinco may modify the scope of the Ongoing Services or Additional Services, as the case may be, such that such Setup Service is not necessary, subject to Service Provider’s consent. If the parties fail to agree upon an alternative arrangement, Spinco may, with notice to Service Provider, terminate the applicable Ongoing Services or Additional Services, as applicable.
2.1.4 Migration Services . Service Provider shall reasonably assist Spinco in preparing to migrate Ongoing Services from Service Provider’s infrastructure to Spinco’s infrastructure (the “ Migration Services ”). Spinco shall pay or reimburse Service Provider one hundred percent (100%) of the Reimbursable Migration Costs in respect of the Migration Services (whether conducted prior to or after the Effective Date). For purposes of this Agreement, “ Reimbursable Migration Costs ” means the costs that are reasonably necessary to provide the Migration Services.
2.1.5 Services . For the avoidance of doubt, when used in this Agreement, reference to a particular “ Service ” or “ Services ” shall include all of the services (or, if applicable, the single service) described in the Ongoing Services Schedule or in Sections 2.1.1, 2.1.3 or 2.14 , as the case may be. All of the Services shall be for the sole use and benefit of Spinco.
2.2 Performance Standards . With respect to those Services that Service Provider provided to the Business prior to the Effective Date, Service Provider shall perform such Services with substantially the same degree of care, skill, and diligence with which Service Provider performs such Services for itself, consistent with past practices during the six months prior to the Effective Date, including without limitation with respect to the quality and timeliness of such Services, subject to variation in the provision of such Services agreed to by Service Provider and Spinco. In no event shall Service Provider be required to provide the Services at a level greater than the level of Services used by the Business immediately prior to the Effective Date. If there is a conflict between the immediate needs of the Service Provider and those of
Spinco as to the use of or access to a particular Service, which conflict cannot reasonably be avoided, Service Provider shall have the right, in its sole discretion, to establish reasonable priorities, at particular times and under particular circumstances, as between Service Provider and Spinco. In any such situation, Service Provider shall provide notice to Spinco of any changes at the earliest practical opportunity.
2.3 Cost of Providing the Services . Unless otherwise expressly set forth in this Agreement, Service Provider shall bear all costs of providing the Services. Spinco shall reimburse for all copying, long distance telephone, delivery and other out-of-pocket and third-party expenses incurred by Service Provider (or any Subcontractor of Service Provider in accordance with Section 9.3) in order to provide the Services. Service Provider shall be solely responsible for the payment of all compensation for Service Provider’s personnel assigned to perform Services under this Agreement, and shall be responsible for workers’ compensation insurance, unemployment insurance, severance and other termination costs, employment taxes and all other employer payment obligations relating to Service Provider’s personnel.
2.4 Compliance with Laws . Service Provider shall not be required to provide Services which violate any applicable Laws in connection with its performance of the Services.
2.5 Acknowledgment and Agreement . Spinco understands that the Services provided hereunder are transitional in nature and are furnished by Service Provider solely in connection with the transactions contemplated by the Separation Agreement and the Merger Agreement. Spinco understands that Service Provider is not in the business of providing the Services to third parties and that neither party has any long-term interest in Service Provider continuing the provision of any or all of the Services. Spinco shall: (i) within 60 days after the Effective Date provide to Service Provider a plan and timeline, in form and detail reasonably satisfactory to Service Provider, for the transition to Spinco or third party suppliers of each of the Services (the “ Migration Plan ”), and (ii) as promptly and as reasonably practicable after the Effective Date, transition the provision of each such Service from Service Provider to Spinco or a third party supplier. Nothing in this Section 2.5 shall extend the Service Termination Date (as defined in Section 7.1.1) in any manner.
MANAGEMENT AND CONTROL; CONSENTS
3.1 Service Provider Coop