Exhibit 99.3
TRANSITIONAL SERVICES
AGREEMENT
This Transitional Services Agreement
(this "Agreement") is made as of April 21, 2007 between THE
STANDARD REGISTER COMPANY, an Ohio corporation ("Seller") and
EXPED, LLC, an Ohio limited liability company ("Purchaser"), under
the following circumstances:
A.
Pursuant to the Asset Purchase Agreement
dated as of the date hereof (the “Asset Purchase
Agreement”) between Seller and Purchaser, Seller has agreed
to sell to Purchaser, and Purchaser has agreed to purchase from
Seller, specified assets used in or related to the Business as
provided therein. The capitalized terms used herein that are
not defined in this Agreement shall have the respective meanings
given in the Asset Purchase Agreement.
B.
In connection with its acquisition of the
Business, Purchaser desires to retain the services of Seller to
provide certain transitional services, and, accordingly, as
required by the Asset Purchase Agreement, Seller and Purchaser are
entering into this Agreement concurrently with the Closing under
the Asset Purchase Agreement.
NOW, THEREFORE , in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained herein,
the parties agree as follows:
Section 1 . Transition Services .
Subject to the terms and conditions
herein, the following apply to the provision of transitional
services (each a "Service" and collectively, the "Services"):
(a)
During Seller's normal business hours,
Seller agrees to provide to Purchaser those Services set forth on
Schedule A attached hereto.
(b)
Seller agrees to provide to Purchaser the
employees of Seller listed on Schedule C (the "Leased Employees")
until no later than June 18, 2007. The Leased Employees shall
perform the same or similar job functions, relating to the
Business, as each performed prior to the date hereof.
Thereafter, the SRC Transition Personnel will become
employees of Purchaser in accordance with Section 10 of this
Agreement. The SRC Retained Personnel will not become
employees of Purchaser.
(c)
Seller shall allow Purchaser to use the
office space listed on Schedule B (the "Space") to the extent and
in the manner used by employees of Seller immediately prior to the
date hereof in connection with the operation of the Business,
subject to and in accordance with the provisions of Section 9,
below.
(d)
Seller shall allow Leased Employees and
SRC Transition Personnel to use all telecommunications equipment
and hardware and software listed on Schedule A related to the Space
that was used in the Business immediately prior to the date
hereof.
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(e)
Except as otherwise provided herein,
Seller shall provide the Services to Purchaser until the earliest
of (i) termination of this Agreement pursuant to Section 2, below;
(ii) discontinuation of the Services pursuant to Section 4, below;
or (iii) October 31, 2007 (the "Transition Period").
Section 2 . Termination .
(a)
This Agreement may be terminated at any
time:
(i)
by an agreement in writing signed by each
of the parties;
(ii)
by either Purchaser or Seller upon breach
or default by the other. Such termination shall be effective
twenty (20) days after receipt by the breaching party of written
notice by the non-breaching party of the breach if such breach or
default is not cured within such twenty (20) days after such
receipt, provided that with respect to a breach or default of
Purchaser under Section 3, Seller may terminate this Agreement if
such breach or default is not cured five (5) business days after
Purchaser's receipt of notice from Seller of such breach or
default; or
(iii)
by either Purchaser or Seller if (A) a
trustee or receiver is appointed for the other party, (B) a court
orders that any assets of the other party be attached, (C) the
other party makes an assignment for the benefit of creditors, or
(D) a voluntary or involuntary petition or proceeding is filed by
or against the other party under any bankruptcy, reorganization,
insolvency or similar law relating to relief of creditors or
debtors. Such termination shall be effective ten (10) days
after certified receipt by the other party of notice of such
termination.
(b)
This Agreement shall terminate at the end
of the Transition Period, unless extended by written agreement
between the parties hereto.
(c)
In the event this Agreement is terminated
for any reason, the parties shall be fully discharged from their
obligations hereunder (except as set forth in Section 3, 8,
10(b)(i)).
(d)
Termination of this Agreement will have
no effect on any other agreements between Purchaser and Seller
except to the extent such effect is identified and mutually and
specifically agreed upon in writing between the parties.
Section 3 . Compensation .
(a)
In consideration for the Services,
Purchaser shall provide Seller compensation for the Services on the
terms and/or at the rates as set forth on Schedule F
.
(b)
Seller shall invoice Purchaser for the
payments described in Section 3(a). Each such invoice shall
be in reasonable detail and contain such information as Purchaser
may reasonably request. Purchaser shall remit to Seller the
amount reflected on each such invoice within five (5) business days
after its receipt.
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(c)
Seller shall keep and maintain complete
and accurate books, records and accounts of its activities
hereunder and the Services provided hereunder. Seller shall
prepare and furnish to Purchaser such information and reports
regarding its activities hereunder and the Services provided
hereunder as Purchaser may reasonably request from time to time.
Purchaser (and its representatives) shall have the right to
examine, inspect and copy the books, records and accounts of Seller
relating to the Services provided hereunder at reasonable intervals
during regular business hours.
Section 4 . Discontinuation of Services
. Purchaser may
discontinue a particular Service or all Services provided by Seller
by sending notice of such discontinuation to Seller not less than
thirty (30) days prior to the date such Service is to be
discontinued. Once a particular Service or all Services have
been discontinued, Seller shall not be required to resume providing
such Service or Services. The parties contemplate that
certain of the Services will be discontinued from time to time
prior to the end of the Transition Period. Seller agrees to
cooperate with and to provide, at Purchaser's sole cost (invoiced
as provided in Section 3(b), above), reasonable assistance to
Purchaser in connection with the transition of the Services
discontinued hereunder (whether at the expiration or termination of
this Agreement, under this Section 4, or otherwise), including
without limitation all costs related to Purchaser's vacation of
Licensed Premises.
Section 5 . Representations and Warranties
. Seller shall provide
IT Support and Administrative Support (as described on Schedule A
attached hereto) in a manner which is substantially similar in
nature, quality and timeliness to the services performed by Seller
for the Business, consistent with Seller's normal operation of its
business, prior to the date hereof, and in accordance with all
applicable laws. SELLER MAKES NO OTHER WARRANTIES IN THIS
AGREEMENT, EXPRESS OR IMPLIED.
Section 6 . Covenants . During the Transition Period, Seller shall
maintain the Space so that the Business can be operated therein
consistent with the manner in which Seller operated the Business
prior to the date hereof. During the Transition Period,
Seller shall, at Purchaser’s request, take such steps
reasonably necessary to ensure that the Leased Employees comply
with the terms of any agreements between any such Leased Employee
and Seller, including, without limitation, any agreements to assign
intellectual property, any confidentiality agreements or any
non-competition/non-solicitation covenants.
Section 7 . Reserved . Intentionally Omitted.
Section 8 . Confidentiality .
Purchaser and Seller each acknowledge
that in connection with the provision or receipt of Services, each
party will have access to highly confidential information about the
other party which, if exploited in contravention of this provision,
would seriously, adversely and irrevocably affect the business of
the other party. Consequently, each party agrees that during
the Transition Period and for a period of five (5) years following
the termination of this Agreement, it shall maintain the
confidentiality of all information about the business, operations
and financial condition of the other party that it has access to by
virtue of the provision or receipt of Services, and it shall not
use any such information for any purpose, except as is strictly
necessary to comply with the terms of this Agreement. Each
party further agrees that during the Transition Period and for a
period of five (5) years following the termination of this
Agreement, it shall not, nor
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shall any of its Affiliates or employees,
use in any manner any of the confidential information to which it
or any of its Affiliates or employees have access by virtue of
providing or receiving the Services, except if such information (a)
is now, or hereafter becomes, through no act or failure to act on
the part of the receiving party, generally known or available; (b)
is known by the receiving party, without being in breach of any
other obligation, at the time of receiving such information,
provided the receiving party can demonstrate such knowledge by
dated written records; provided, however, that Seller’s
knowledge of any confidential information as it existed at the time
such information was transferred to Purchaser pursuant to the Asset
Purchase Agreement shall still be considered Confidential
Information under this Agreement; (c) is hereafter furnished to the
receiving party by a third party who is not bound by an obligation
of confidentiality to the disclosing party with respect to such
information; (d) is independently developed by or on behalf of the
receiving party without any breach of this Agreement as
demonstrated by dated written records; (e) is subject of a written
permission to disclose provided by the disclosing party; (f) is
necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the
transactions contemplated hereby, or (g) is required to be
furnished or disclosed to a Governmental Entity or by Laws.
If a party is compelled by a requirement of a Governmental
Entity or by Laws (including, without limitation, by subpoena or
court order, but not pursuant to routine filing requirements) or
discovery to disclose any confidential information, such party will
promptly notify the other party in writing prior to making any
disclosure to provide the other party a reasonable opportunity to
either waive any objection to such disclosure or request a remedy
from the appropriate authority, and the parties will reasonably
cooperate in efforts to obtain such a remedy. If the notified
party waives its objections or is unsuccessful in its request or
fails to make such a request, the party required to disclose
confidential information will furnish only that portion of such
confidential information that is legally required.
Section 9 . License .
(a) Definitions:
(i)
“Licensed Premises” means the
Space, and may refer to one or all of such areas, as the context
implies. The Licensed Premises are comprised of the service
and utilities areas, individual offices and/or workstations and
other space designated for use by employees of Purchaser and SRC
Transition Personnel. The Licensed Premises shall also
include furniture, fixtures, and equipment to the extent agreed in
this Agreement
(ii)
“Seller's Property” means,
with respect to any particular Licensed Premises, the real property
owned by Seller that is adjacent to and associated with each
Licensed Premises.
(b)
Seller hereby grants to Purchaser a
license and the right to: (i) use the Licensed Premises and the
Seller's Property for the Permitted Use only; (ii) use "common
areas" at the Seller's Property; (iii) access the Licensed Premises
through the Seller's Property, but only if the Licensed Premises
cannot be adequately accessed from other "common areas"; (iv) use
elevators, cafeterias, hallways, lavatories, and lounges within the
Seller's Property to the extent that they are generally available
to all occupants of the Seller's Property; (v) use other areas
within the Seller's Property to the extent required under this
Agreement; and (vi) use parking lots and parking spaces to the
extent
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they are made available to Purchaser on a
non-exclusive basis (the "License"). This License is not a
grant of real property rights.
(c)
Software Licenses: By June 18,
2007, Purchaser shall obtain licenses to use any software on the
computers included in the Assets from the applicable software
providers to the extent such licenses are required under the terms
of the licenses of such software to Seller or remove such software
and/or related keys from Purchaser's systems.
(d)
Permitted Use
(i)
The Licensed Premises and the Seller's
Property will be used solely to operate the Business in accordance
with the requirements of this Agreement and the Asset Purchase
Agreement (“Permitted Use”). Purchaser will
observe and comply with: (A) any applicable Law; (B) the
principles, rights, responsibilities, and obligations articulated
in this Agreement; (C) Seller's then current standards, rules and
procedures relating to the premises; and (D) all other reasonable
requests of Seller as relating to the Licensed Premises.
(ii)
Purchaser shall abide by and observe the
security measures adopted by Seller to protect its personnel and
assets, including confidential or proprietary business information;
and emergency preparedness and management protocols and procedures
required as a part of Seller's risk management program for the
Seller's Property. Seller will establish security protocols
with respect to the Licensed Premises and Purchaser will assure
that its employees comply with those protocols throughout the
Transition Period.
(iii)
Purchaser will not at any time
over-burden or exceed the capacity of the mains, feeders, ducts,
conduits, or other facilities by which such utilities are supplied
to, distributed in or serve the Licensed Premises.
(e)
Condition Of Licensed Premises.
Purchaser will accept the Licensed Premises in
“As-Is/Where-Is” condition. SELLER EXPRESSLY
DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS
TO THE LICENSED PREMISES, INCLUDING ANY WARRANTIES AS TO THEIR
CONDITION OR SUITABILITY FOR USE BY PURCHASER.
(f)
Alterations. Purchaser will not
make or permit any improvements, alterations, fixed decorations,
substitutions or modifications to the Licensed Premises without
Seller's prior written consent.
(i)
If Seller consents to any such
Alterations, such Alterations will: (A) be performed at Purchaser's
sole cost and expense; (B) be made in strict compliance with
Seller’s then current standards, rules and procedures, and
(C) remain a part of the Licensed Premises at the termination
or expiration of this Agreement. Purchaser will be solely
responsible for any and all moving expenses incurred while using
the Licensed Premises.
(ii)
Seller will be the vendor of choice for
all approved Alterations and other construction and related
services at the Licensed Premises, including the installation of
fixtures, workstations and other similar items. Unless Seller
elects otherwise by written notice to Purchaser,
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all such services will be contracted
through Seller. Purchaser will reimburse Seller for one
hundred percent (100%) of the costs of all such work, including the
costs of preparing plans and specifications for the work (if
applicable), plus a reasonable and customary management fee not to
exceed ten percent (10%) of the cost of the work.
(g)
Possession / Surrender. Purchaser
will have the right to possess and occupy the Licensed Premises on
and after the date hereof. Purchaser shall be responsible for
all costs and expenses of relocating Purchaser's employees to the
Licensed Premises, to the extent provided in this Agreement.
(i)
Purchaser will surrender possession of
the Licensed Premises to Seller upon the termination of this
Agreement broom clean and in as good order and condition as on the
date hereof, subject to ordinary wear and tear; provided, however,
that Seller shall continue to provide such cleaning services in the
Licensed Premises as it provided immediately prior to the date
hereof. Purchaser will be responsible for all expenses of
relocating employees of Purchaser to new space.
(ii)
If Purchaser remains in possession of the
Licensed Premises after the termination of this Agreement, then
Seller may (A) declare a default and exercise the remedies
available under this Agreement, including summary proceedings to
recover possession of the Licensed Premises, in which case
Purchaser may owe Damages and additional rent for holding over and
(B) require Purchaser to vacate the Licensed Premises without
advance notice.
(h)
Indemnification.
(i)
Subject to the provisions of this Section
9, Purchaser and DoubleDay Holdings, LLC will defend, indemnify and
hold Seller, and its respective officers, directors and agents
harmless from and against any and all Damages, proximately caused
by: (A) any act, omission, negligence, work or other activity
performed by the employees or agents of Purchaser or its Affiliates
in the Licensed Premises or on Seller's Property; or (B) claims by
any of the employees or agents of Purchaser or its Affiliates
stemming from its presence on Seller's Property; or (C) claims of
third-parties other than Seller’s employees (including the
Leased Employees through Jun
