EXHIBIT 10.21
* Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions. The omitted portions are
indicated by [****].
EXECUTION COPY
TRANSITION SERVICES AGREEMENT
BETWEEN
DREYER'S GRAND ICE CREAM, INC.
AND
INTEGRATED BRANDS, INC.
DATED AS OF JULY 5, 2003
This TRANSITION SERVICES AGREEMENT (this "Agreement"), dated
as of July 5, 2003, is by and between Xxxxxx'x Grand Ice Cream, Inc., a Delaware
corporation ("Dreyer's"), and Integrated Brands, Inc., a New Jersey corporation
("Integrated Brands").
WHEREAS, Dreyer's, New December, Inc., a Delaware corporation,
Nestle Ice Cream Company, LLC, a Delaware limited liability company ("NICC"),
and Integrated Brands have entered into an Amended and Restated Asset Purchase
and Sale Agreement, as amended and restated on June 4, 2003 (the "Asset Sale
Agreement"), pursuant to which, among other things, Integrated Brands shall
purchase from Dreyer's and NICC, and Dreyer's and NICC shall sell, or cause to
be sold, subject to the terms and conditions thereof, the Ice Cream Assets (as
defined in the Asset Sale Agreement) and the Distribution Assets (as defined in
the Asset Sale Agreement); and
WHEREAS, in connection with the Asset Sale Agreement,
Integrated Brands desires that Dreyer's provide, or cause to be provided, to
Integrated Brands, and Dreyer's is willing to provide, or cause to be provided,
to Integrated Brands, certain transition services following the closing of the
transactions contemplated by the Asset Sale Agreement, on the terms and
conditions set forth herein; and
WHEREAS, as an essential part of the transactions contemplated
by the Asset Sale Agreement, Dreyer's has agreed to provide, or cause to be
provided, such transition services to Integrated Brands to facilitate Integrated
Brands' acquisition of the Ice Cream Assets and the Distribution Assets; and
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual covenants and agreements contained in this Agreement, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Agreement to Provide Services.
1.1 Agreement. Upon the terms and subject to the
conditions contained herein and in Exhibit A attached hereto, Dreyer's hereby
agrees to provide, or cause its Affiliates (as defined in the Asset Sale
Agreement) to provide, to Integrated Brands the Transition Services (as defined
herein), and Integrated Brands agrees to pay Dreyer's the Service Costs (as
defined herein) for such Transition Services.
1.2 Transition Services. In this Agreement, the term
"Transition Services" shall mean and refer to the services relating to the Ice
Cream Assets and the Distribution Assets and as more fully described on Exhibit
A and Exhibit B (as such Exhibits may be amended or modified from time to time
as provided herein). If Integrated Brands desires Dreyer's to provide a service
not described on Exhibit A or Exhibit B, Integrated Brands shall provide
Dreyer's written notice thereof at least ten (10) days prior to the date that
Integrated Brands desires such service to begin, and Dreyer's and Integrated
Brands shall cooperate and use reasonable best efforts to reach a mutual written
agreement with respect to the provision of such service and the terms and
conditions related thereto within such 10-day period.
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1.3 Transition Period. Dreyer's shall provide the
Transition Services to Integrated Brands during the periods (each, a "Transition
Period") that shall commence on the Closing Date (as defined in the Asset Sale
Agreement) and shall, with respect to each Transition Service, continue for the
period of time shown on Exhibit A or Exhibit B or otherwise agreed to in writing
by the parties for such Transition Service, unless earlier terminated in
accordance with Section 1.4. In the event that Integrated Brands reasonably
requires any particular Transition Service beyond the Transition Period
specified in Exhibit A or Exhibit B, Dreyer's shall, if requested by Integrated
Brands, continue to provide such Transition Service for a reasonable period of
time after the applicable Transition Period specified therein so long as
Integrated Brands is using its reasonable best efforts to end its need for such
Transition Service as promptly as practicable after expiration of such
Transition Period.
1.4 Phase-Out or Termination of Transition Services.
(a) Integrated Brands shall have the unconditional right,
in its sole and absolute discretion, to direct that any or all of the Transition
Services be terminated effective on a date established by Integrated Brands
("Early Termination") that is prior to the termination date for such Transition
Services set forth on Exhibit A or Exhibit B. Any such Early Termination shall
be final, and the amounts payable by Integrated Brands hereunder with respect to
such terminated Transition Services will be appropriately prorated on a daily
basis for any partial month based on the actual number of days in such month.
Integrated Brands may request that the level of any specific item of the
Transition Services be reduced or phased out, subject to mutual written
agreement of the parties.
(b) This Agreement may be terminated as follows: (i) by
either party hereto immediately in the event the other party has been
adjudicated bankrupt, has failed to vacate an involuntary bankruptcy or
reorganization petition within thirty (30) days of the date of such filing,
files such a petition on a voluntary basis, fails to vacate the appointment of a
receiver or trustee for the other party or for a substantial portion of its
assets, makes an assignment for the benefit of such other party's creditors or
ceases to do business as a going concern, or (ii) by Integrated Brands upon
written notice to Dreyer's in the event that Dreyer's breaches any material term
of this Agreement if Dreyer's fails to remedy such breach within the cure period
set forth in Section 7.1 hereof.
2. Payment for Transition Services.
2.1 Service Costs. In consideration for Dreyer's
provision of the Transition Services, Integrated Brands will reimburse Dreyer's
for Dreyer's "Service Costs", which shall be determined in accordance with
Exhibit A and shall consist of the following, to the extent identified on
Exhibit A: (a) Dreyer's cost for [****] providing the Transition Services at a
rate equal to the [****] in providing such services at [****] rate based on each
such [****], and (b) Dreyer's [****] incurred by Dreyer's in connection with
providing, or in order to provide or cause to be provided to Integrated Brands,
Transition Services (the "Reimbursable Expenses"); provided that in no event
shall Service Costs include any cost, expense, fee, charge or other amount (i)
with respect to any item, service, property or other matter for which Integrated
Brands is otherwise obligated to pay under the Asset Sale Agreement or the
Collateral Agreements (other than this Agreement, as defined in the Asset Sale
Agreement), or (ii) relating to any
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obligation, covenant or agreement of Dreyer's or any of its Affiliates pursuant
to the Asset Sale Agreement or the Collateral Agreements (other than this
Agreement) for which Dreyer's or its Affiliates is obligated to pay under such
agreement. Dreyer's shall use reasonable best efforts to provide Integrated
Brands at least thirty (30) days' written notice in the event that any
Reimbursable Expenses shall increase materially above the amounts paid by
Dreyer's in connection with the Ice Cream Assets immediately prior to the
Closing (as defined in the Asset Sale Agreement).
2.2 Reimbursement of Service Costs. Dreyer's shall
invoice Integrated Brands for Service Costs promptly after the end of each
calendar quarter during the Transition Period. Such invoices shall set forth in
reasonable detail the Transition Services provided during such quarter and the
Service Costs payable by Integrated Brands therefor. All invoices shall be paid
not later than thirty (30) calendar days following receipt by Integrated Brands
of Dreyer's invoice in accordance with the written instructions provided by
Dreyer's to Integrated Brands; provided that no such payment by Integrated
Brands shall be deemed to be a waiver by Integrated Brands of its rights under
Section 2.3. This Section 2.2 shall survive any termination of this Agreement
with respect to Transition Services performed pursuant to this Agreement for
which Dreyer's has not yet been reimbursed by Integrated Brands.
2.3 Audits; Objections. Integrated Brands shall have the
right, upon reasonable written notice and at Integrated Brands' expense, to
review the applicable books and records of Dreyer's and its Affiliates with
respect to Dreyer's obligations under this Agreement and to confer with
employees of Dreyer's and such Affiliates to review the accuracy of any of the
invoices provided to Integrated Brands hereunder (during business hours and
without unreasonably disrupting Dreyer's or such Affiliates' normal operations).
In the event that Integrated Brands disputes any such invoice or the amount of
any such remittances, Integrated Brands shall notify Dreyer's in writing of its
objections, and Integrated Brands and Dreyer's shall negotiate in good faith to
attempt to resolve such dispute.
3. Service Standards; Disclaimer of Warranties; Scope of
Services.
(a) As a general principle, Dreyer's shall, and shall
cause its Affiliates to, perform the Transition Services with substantially the
same degree of care, skill, diligence and compliance with applicable law and in
substantially the same manner as corresponding services were provided to or on
behalf of Dreyer's with respect to the Ice Cream Assets immediately prior to the
Closing. Subject to the foregoing, Dreyer's and its Affiliates shall not be in
breach of this Agreement or have any liability of any nature whatsoever to
Integrated Brands in connection with the performance of this Agreement, and
Integrated Brands shall be solely responsible for all losses, damages, costs and
expenses of whatever nature incurred by Integrated Brands in connection with the
performance of this Agreement by Dreyer's and its Affiliates, except to the
extent that such losses, damages, costs and expenses are attributable to
negligence or willful misconduct on the part of Dreyer's, its Affiliates or any
of their respective employees, directors, contractors or other representatives.
(b) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THERE
ARE NO OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, MADE OR GIVEN BY
EITHER PARTY HEREUNDER, INCLUDING, WITHOUT
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LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OF ANY TRANSITION SERVICES PROVIDED HEREUNDER.
(c) The Transition Services shall be provided only in
connection with the Ice Cream Assets and the Distribution Assets and not to any
other business of Integrated Brands or its Affiliates.
4. Force Majeure. Neither party shall be liable for any
failure of performance attributable to acts, events or causes (including, but
not limited to, war, terrorism, riot, rebellion, civil disturbances, power
failures, failure of telephone lines and equipment, flood, storm, fire and
earthquake or other acts, conditions or events of nature, or any law, order,
proclamation, regulation, ordinance, demand or requirement of any Governmental
Entity (as defined in the Asset Sale Agreement), or any strike, lockout, work
stoppage or other labor action) beyond its control that prevent, in whole or in
part, performance by such party hereunder. The party so unable to perform shall
promptly notify the other party of its inability to perform. The affected
provisions and/or other requirements of this Agreement shall be suspended during
the period of such disability and Dreyer's shall have no liability to Integrated
Brands or any other party in connection therewith other than by reason of breach
or nonfulfillment of its covenants in this Section 4. Dreyer's shall make all
reasonable best efforts to remove such disability as soon as and to the extent
reasonably possible and to assist Integrated Brands in finding third parties to
provide affected Transition Services.
5. Access to Coordinator. At Integrated Brands' request,
Dreyer's shall make reasonable best efforts to provide Integrated Brands,
shortly after such request, with access to the employees of Dreyer's with
responsibility for coordinating the Transition Services hereunder.
6. Indemnification. Dreyer's shall indemnify, defend and
hold harmless Integrated Brands, CoolBrands International. its Affiliates, their
officers, directors, employees, agents and representatives from and against any
and all losses, liabilities, claims, damages, actions, fines, penalties,
expenses or costs (including court costs and reasonable attorneys' fees)
("Losses") arising out of (i) the negligence or willful misconduct of Dreyer's,
its Affiliates or their respective employees, directors, contractors or other
representatives in providing the Transition Services, or (ii) a breach of the
terms or conditions of this Agreement (other than a breach in respect of
providing the Transition Services). Integrated Brands shall indemnify, defend
and hold harmless Dreyer's, Nestle USA, Inc., and their Affiliates, their
officers, directors, employees, agents and representatives from and against any
and all Losses arising out of (x) the negligence or willful misconduct of
Integrated Brands, its Affiliates or their respective employees, directors,
contractors or other representatives in connection with the Transition Services
or (y) any breach by Integrated Brands of any term or condition of this
Agreement. Notwithstanding any other provision of this Agreement, neither party
shall be liable for lost profit, lost revenue or any other form of indirect,
incidental, special, consequential or punitive damages, even if that party has
been informed of the possibility of such damages. The indemnities under this
Section 6 shall be the sole and exclusive remedy available to each party
hereunder, except in case of willful misconduct by a party or its Affiliates.
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7. General Provisions.
7.1 Notice of Breach. In the event of a material breach
of this Agreement by a party, the party claiming the breach shall give notice of
such breach (in accordance with Section 7.2 hereof) to the other party, which
party shall have forty-five (45) calendar days to cure such breach. In the event
that the party claiming the breach is Integrated Brands, Integrated Brands shall
also give notice of such breach to Nestle Holdings, Inc., a Delaware
corporation, in accordance with Section 7.2 hereof. In the event of such cure
within such 45-day period, such notice of breach shall be deemed rescinded.
Either party's failure to send a notice of breach or to pursue legal remedies
available to it shall not constitute or be construed as a waiver or
acquiescence, and each party expressly reserves the right to subsequently pursue
such remedies for the same or any other breach, either of the same or different
character.
7.2 Notices. All notices or other communications required
or permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by postage prepaid, registered, certified or express mail or by
reputable overnight courier service and shall be deemed given when delivered by
hand, three days after mailing (one (1) Business Day (as defined in the Asset
Sale Agreement) in the case of guaranteed overnight express mail or guaranteed
overnight courier service), as follows (or at such other address for a party as
shall be specified by like notice):
(i) If to Dreyer's or New Dreyer's:
Xxxxxx'x Grand Ice Cream, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
(ii) If to Integrated Brands:
Integrated Brands, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxx, Co-Chief Executive Officer
with a copy to:
Xxxxxxx Procter LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx, Esq.
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(iii) If to Nestle Holdings, Inc. :
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
000 Xxxxx Xxxxx Xxxxxxxxx.
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
with a copy to:
Howrey, Xxxxx, Xxxxxx & White LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Esq.
In the event that Integrated Brands gives notice regarding any breach or
violation of this Agreement by Dreyer's, Integrated Brands should also
concurrently provide a copy of such notice to Nestle Holdings, Inc.
7.3 Assignment; Successors and Assigns. Except as set
forth below, this Agreement and the rights and obligations hereunder shall not
be assigned or transferred in whole or in part by Integrated Brands or Dreyer's
without the prior written consent of the other party hereto. Integrated Brands
may assign or delegate its rights, obligations or liabilities under this
Agreement in whole or in part to one or more Affiliates of Integrated Brands or
to the lender or lenders providing to it the financing to consummate the
transactions contemplated by the Asset Sale Agreement, in each case without
Dreyer's consent (provided that a pledge of Integrated Brands' rights,
obligations or liabilities under this Agreement to such lender or lenders shall
not constitute an assignment hereunder until such time as any such lender
exercises its rights under the pledge agreement or other applicable agreement or
document); provided, however, that in any such event, Integrated Brands shall
remain fully liable for the fulfillment of all its obligations hereunder.
Dreyer's may not assign but may delegate its rights, obligations or liabilities
under this Agreement in whole or in part to one or more Affiliates of Dreyer's;
provided that, in any such event, Dreyer's shall remain fully liable for the
fulfillment of all of its obligations hereunder. Any attempted assignment or
delegation in contravention hereof shall be null and void. This Agreement shall
be binding upon and inure to the benefit of the successors and assigns of the
parties hereto.
7.4 No Third-Party Beneficiaries. Except for persons
entitled to indemnification under Section 6 hereof, this Agreement is for the
sole benefit of the parties hereto, and nothing herein express or implied shall
give or be construed to give to any person or entity, other than the parties
hereto, any legal or equitable rights hereunder.
7.5 Remedies. Nothing contained herein shall be deemed to
be a limitation on any remedies that may be available to any party under the
Asset Sale Agreement or any other Collateral Agreement.
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7.6 Interpretation; Definitions. The headings contained
in this Agreement or in any Schedule hereto are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement. The
terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa. This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted. When a reference is made in
this Agreement to Articles, Sections or Exhibits, such reference shall be to an
Article or Section of or Exhibit to this Agreement unless otherwise indicated.
All references in this Agreement to Dreyer's shall include Dreyer's Affiliates,
as and to the extent applicable. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The phrases "the date of this Agreement," "the
date hereof" and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to the date set forth in the first paragraph of this
Agreement. The words "hereof," "hereby," "herein," "hereunder" and similar terms
in this Agreement shall refer to this Agreement as a whole (including the
Exhibits) and not to any particular Section in which such words appear. All
references herein to dollar amounts shall be deemed to be references to U.S.
Dollars.
7.7 Amendments. No amendment to this Agreement shall be
effective unless it shall be in writing and signed by each party hereto.
7.8 Counterparts. This Agreement and any amendments
hereto may be executed by facsimile and in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to the other party.
7.9 Severability. If any provision of this Agreement or
the application of any such provision to any person or circumstance 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.
7.10 Governing Law; Waiver of Jury Trial. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York applicable to agreements made and to be performed entirely within such
state, without regard to the choice-of-law principles of such state. Each party
hereby waives to the fullest extent permitted by applicable law, any right it
may have to a trial by jury in respect to any litigation directly or indirectly
arising out of, under, or in connection with this Agreement or the transactions
contemplated hereby or disputes relating hereto.
7.11 Actions and Proceedings. Dreyer's and its Affiliates
and Integrated Brands hereby irrevocably consent to the exclusive jurisdiction
and venue of the courts of the State of New York and the United States District
Court for the Southern District of New York in connection with any action or
proceeding arising out of this Agreement or any related transaction. Integrated
Brands irrevocably appoints Integrated Brands' Co-Chief Executive Officer as its
authorized agent upon whom process may be served in any such action or
proceeding instituted in any such court and waives any objections to personal
jurisdiction with respect thereto. Dreyer's and its Affiliates hereby appoint
Dreyer's General Counsel as their
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authorized agent upon whom process may be served in any such action or
proceeding instituted in any such court and waive any objections to personal
jurisdiction with respect thereto.
7.12 Waiver. Except as otherwise provided in this
Agreement, any failure of either of the parties hereto to comply with any
obligation, covenant, agreement or condition herein may be waived by the party
entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Any consent given by any party pursuant to this Agreement shall be
valid only if contained in a written consent signed by such party.
7.13 Mutual Confidentiality Covenants.
7.13.1 Obligation. Both parties shall keep confidential and
shall not cause or permit the disclosure to any third party of any confidential
information disclosed by either party pursuant to this Agreement. Dreyer's shall
disclose Integrated Brands' confidential information only to those Persons who
require such information for the purpose of performing the Collateral Agreements
and shall use such information solely for the purpose of performing its
obligations under the Collateral Agreements. Confidential information may
include, but is not limited to, formulas, production processes, research,
marketing and sales information. Said confidentiality requirement shall not
apply to any information which (i) has entered into the public domain through no
wrongful act or breach of any obligation of confidentiality on the receiving
party's or any third party's part; (ii) was in the lawful knowledge and
possession of, or was independently developed by, the receiving party prior to
the time it was disclosed to, or learned by, the receiving party as evidenced by
written records kept in the ordinary course of business by the receiving party,
except this Section 7.13.1 will not apply to Dreyer's with respect to
information relating to the Ice Cream Assets and the Distribution Assets all of
which shall remain subject to the restrictions notwithstanding Sellers'
Knowledge (as defined in the Asset Sale Agreement); (iii) was rightfully
received from a third party not in violation of any contractual, legal or
fiduciary obligation of such third party; or (iv) was approved for release by
written authorization by the party having rights in such information.
7.13.2 Compelled Disclosure. In the event that a party is
required by law or court order or stock exchange to disclose any confidential
information of the other party, that party shall (i) notify the other party in
writing as soon as possible, but in no event less than ten (10) calendar days
prior to any such disclosure; (ii) cooperate with the other party to preserve
the confidentiality of such confidential information consistent with applicable
law; and (iii) use its best efforts to limit any such disclosure to the minimum
disclosure necessary to comply with such law or court order.
7.14 Authority. Neither of the parties hereto shall act or
represent or hold itself out as having authority to act as an agent or partner
of the other party, or in any way bind or commit the other party to any
obligations. Nothing contained in this Agreement shall be construed as creating
a partnership, joint venture, agency, trust or other association of any kind,
each party being individually responsible only for its obligations as set forth
in this Agreement.
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7.15 Term of Agreement. Unless terminated earlier pursuant
to Section 1.4 hereof, this Agreement will terminate and be of no further force
or effect immediately as of the time and date that the last remaining Transition
Period (as such Transition Period may have been extended pursuant hereto) shall
have either expired or been terminated; provided that upon termination or
expiration of this Agreement, (i) neither party hereto shall be relieved of any
liability for any breach or nonfulfillment of any provision of this Agreement
and (ii) Section 6 and Sections 7.2 and 7.13 will survive any termination or
expiration of this Agreement. The amounts that Integrated Brands is obligated to
pay on a quarterly basis pursuant to Section 2 will be prorated on a daily basis
for any partial month of the term of this Agreement.
7.16. Exhibits. All Exhibits annexed hereto or referred
to herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein.
7.17 Entire Agreement. This Agreement (including the
Exhibits hereto), the Asset Sale Agreement and the other Collateral Agreements
contain the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings, whether written or oral, relating to such subject matter.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
XXXXXX'X GRAND ICE CREAM, INC.
By: /s/ T. Xxxx Xxxxxx
----------------------------------
T. Xxxx Xxxxxx
Chairman of the Board of Directors and
Chief Executive Officer
INTEGRATED BRANDS, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Xxxxx X. Xxxxx
Co-Chief Executive Officer
[Signature Page to Transition Services Agreement]
EXHIBIT A
Transition Services
[****]
Exhibit A to Transition Services Agreement
* Certain information in this document, including Exhibit A (consisting of two
pages), has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to the
omitted portions. The omitted portions are indicated by [****].
EXHIBIT B
Computer and Accounting Services
[****]
Exhibit B to Transition Services Agreement
* Certain information in this document, including Exhibit B (consisting of four
pages), has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to the
omitted portions. The omitted portions are indicated by [****].
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