DRAFT — SUBJECT TO REVIEW AND COMMENT April 7, 2025

DRAFT — SUBJECT TO REVIEW AND COMMENT April 7, 2025
Prepared by: Calderwood & Harkness LLP One Liberty Plaza, 44th Floor New York, NY 10006
James Prentice, Partner Direct: (212) 555-8100 jprentice@calderwoodharkness.com
TRANSITION SERVICES AGREEMENT
by and between
MERIDIAN CONSUMER BRANDS LLC a Delaware limited liability company
("Provider")
and
LAKEBRIDGE HOME & PERSONAL CARE, INC. an Ohio corporation
("Recipient")
Dated as of [●], 2025 (the "Closing Date")
In connection with the Asset Purchase Agreement dated as of [●], 2025 for the Divestiture of the PureGlow Personal-Care Product Line
TABLE OF CONTENTS
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TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this "Agreement") is entered into as of [●], 2025 (the "Effective Date"), by and between Meridian Consumer Brands LLC, a Delaware limited liability company, with its principal offices at 450 Park Avenue South, 14th Floor, New York, NY 10016 (the "Provider" or "Service Provider"), and Lakebridge Home & Personal Care, Inc., an Ohio corporation, with its principal offices at 7100 Rockside Road, Suite 400, Independence, OH 44131 (the "Recipient" or "Service Recipient"). Provider and Recipient are each referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Provider and Recipient have entered into that certain Asset Purchase Agreement, dated as of [●], 2025 (as it may be amended, restated, supplemented, or otherwise modified from time to time, the "APA"), pursuant to which Provider has agreed to sell, transfer, convey, assign, and deliver to Recipient, and Recipient has agreed to purchase and accept from Provider, the Acquired Assets (as defined in the APA) constituting the PureGlow personal-care product line, comprising PureGlow-branded body wash, lotion, facial cleanser, and hand soap across twenty-three (23) stock-keeping units ("SKUs") in four (4) product categories, for an aggregate purchase price of Forty Million Dollars ($40,000,000), subject to the adjustments and true-up mechanisms set forth in the APA;
WHEREAS, the Acquired Assets include, among other things, inventory, manufacturing equipment, intellectual property (including trademarks, trade names, product formulations, and associated goodwill), customer contracts, and related assets, and Recipient is assuming certain Assumed Liabilities (as defined in the APA) in connection therewith;
WHEREAS, the PureGlow product line generated approximately Fifty-Eight Million Dollars ($58,000,000) in revenue during the fiscal year ended December 31, 2024 ("FY2024"), and includes a 127,000 square-foot manufacturing facility located at 2200 Dryden Road, Dayton, OH 45439, which is leased from Buckeye Industrial Realty Partners LLC pursuant to a facility lease that is being assigned to Recipient at the Closing pursuant to a separate Lease Assignment and Assumption Agreement, and approximately seventy-four (74) employees at the Dayton manufacturing plant and Provider's New York headquarters who will be offered employment by Recipient in connection with the transactions contemplated by the APA;
WHEREAS, in connection with the consummation of the transactions contemplated by the APA, Provider has agreed to provide to Recipient, and Recipient has agreed to accept from Provider, certain transitional services on the terms and subject to the conditions set forth herein, in order to facilitate the orderly separation and migration of the PureGlow product line from Provider's retained business operations and to enable Recipient to develop independent operational capability with respect to the PureGlow product line;
WHEREAS, Provider operates a diversified, multi-brand consumer products platform spanning household cleaning, personal care, and pet-care categories, with approximately Six Hundred Twenty Million Dollars ($620,000,000) in consolidated annual revenue for FY2024, and the PureGlow product line has historically been integrated into Provider's shared corporate infrastructure, including shared information technology systems, financial reporting and accounting platforms, human resources and payroll systems, distribution and logistics networks, and regulatory and quality assurance functions;
WHEREAS, Provider is a portfolio company of Hargrove Capital Partners Fund IV LP, which holds approximately 78.4% of the outstanding equity interests in Provider, with management rollover holders holding approximately 14.1% and minority co-investors holding approximately 7.5%; and
WHEREAS, the Parties desire to set forth the terms and conditions pursuant to which Provider shall provide, and Recipient shall receive, certain transitional services during the period following the Closing Date to facilitate the orderly separation and transition of the PureGlow product line.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the Parties, the Parties hereby agree as follows:
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Additional Services" has the meaning set forth in Section 2.8.
"Agreement" has the meaning set forth in the preamble.
"APA" means that certain Asset Purchase Agreement, dated as of [●], 2025, by and between Provider and Recipient, as it may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
"Closing Date" has the meaning ascribed to such term in the APA. The target Closing Date is June 16, 2025.
"Confidential Information" has the meaning set forth in Section 7.1.
"Cost-Plus 5%" means Provider's actual cost of providing a Service, plus a markup of five percent (5%), as more fully described in Section 5.1.
"Cost-Plus 10%" means Provider's actual cost of providing a Service, plus a markup of ten percent (10%), as more fully described in Section 5.1.
"Effective Date" means the Closing Date.
"Extension Period" means each additional three (3) month period by which the Service Term may be extended pursuant to Section 3.2.
"Force Majeure Event" means any event or circumstance beyond a Party's reasonable control, including acts of God, natural disasters (including earthquakes, hurricanes, floods, and fires), epidemics, pandemics, governmental orders, sanctions, embargoes, war (whether declared or undeclared), armed conflict, terrorism, sabotage, riots, civil disturbance, labor disputes (including strikes, lockouts, and work stoppages), utility failures (including prolonged power outages or telecommunications failures), cyberattacks (including ransomware, denial-of-service attacks, or data breaches caused by third-party actors), and any other events or circumstances of a similar nature that are beyond a Party's reasonable control and could not have been prevented or avoided through the exercise of commercially reasonable diligence.
"Initial Term" means the twelve (12) month period commencing on the Effective Date.
"Migration Plan" means the written plan to be jointly developed by the Parties pursuant to Section 4.5 for the transition of each Service from Provider's systems and resources to Recipient's own systems and resources.
"Party" and "Parties" have the meanings set forth in the preamble.
"Provider" has the meaning set forth in the preamble. Provider's principal offices are located at 450 Park Avenue South, 14th Floor, New York, NY 10016.
"Provider Personnel" means the employees, agents, consultants, or independent contractors of Provider or its affiliates who are responsible for delivering or performing the Services under this Agreement.
"Recipient" has the meaning set forth in the preamble. Recipient's principal offices are located at 7100 Rockside Road, Suite 400, Independence, OH 44131.
"Recipient Personnel" means the employees, agents, consultants, or independent contractors of Recipient or its affiliates who are responsible for interfacing with Provider and receiving or utilizing the Services under this Agreement.
"Service" or "Services" means the transition services described in Article II and set forth in detail in the Service Schedules attached as Exhibit A hereto, together with any Additional Services agreed to by the Parties pursuant to Section 2.8.
"Service Category" means each of the following categories of Services: (A) IT Systems Migration Services, (B) Accounting/ERP Services, (C) Warehousing and Logistics Services, (D) Regulatory and Quality Services, and (E) HR and Payroll Services, each as more fully described in Article II and the applicable Service Schedules.
"Service Charges" means the fees payable by Recipient for the Services as set forth in Article V and the applicable Service Schedules.
"Service Coordinator" means each Party's designated representative under Section 4.1.
"Service Level" means the standard of service described in Section 4.3.
"Service Schedules" means the detailed descriptions of each Service Category attached as Exhibits A-1 through A-5 to this Agreement.
"Service Term" means the Initial Term, as may be extended by one or more Extension Periods pursuant to Section 3.2, provided that the maximum aggregate Service Term shall not exceed eighteen (18) months from the Effective Date.
"Steering Committee" has the meaning set forth in Section 4.2.
"Taxes" means all federal, state, local, and foreign taxes, duties, levies, imposts, assessments, and similar governmental charges, including income taxes, franchise taxes, sales taxes, use taxes, value-added taxes, excise taxes, property taxes, withholding taxes, and payroll taxes, together with any interest, penalties, additions to tax, or additional amounts imposed with respect thereto.
"Third-Party Consents" means any consents, approvals, authorizations, or waivers required from third-party licensors, vendors, service providers, or other persons in order for Provider to provide any Service to Recipient without violating or breaching any agreement, license, or obligation owed to such third party.
"Transferred Employees" means the approximately seventy-four (74) employees of Provider who are offered employment by Recipient in connection with the transactions contemplated by the APA, as more fully described in the APA.
Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the APA. In the event of a conflict between a definition set forth herein and the corresponding definition in the APA, the definition set forth in this Agreement shall control for purposes of this Agreement.
Section 1.2 — Rules of Interpretation
The following rules of interpretation shall apply to this Agreement:
(a) The headings and captions contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision of this Agreement.
(b) References in this Agreement to "Articles," "Sections," and "Exhibits" are to Articles, Sections, and Exhibits of and to this Agreement, unless otherwise specified.
(c) Whenever the context requires, words importing the singular number shall include the plural and vice versa, words importing the masculine gender shall include the feminine and neuter genders and vice versa, and words importing persons shall include individuals, corporations, partnerships, limited liability companies, trusts, unincorporated associations, and other entities.
(d) The word "including" (and correlative words such as "include" and "includes") means "including without limitation" and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.
(e) All references to currency or dollar amounts in this Agreement refer to United States dollars unless otherwise expressly specified.
(f) The term "business day" means any day other than a Saturday, Sunday, or day on which commercial banks are authorized or required to be closed in New York, New York or Columbus, Ohio.
(g) References to any statute, law, or regulation shall be deemed to refer to such statute, law, or regulation as amended, modified, supplemented, or replaced from time to time (and, in the case of statutes, include any rules and regulations promulgated under such statute), unless the context requires otherwise.
(h) References to "days" mean calendar days unless "business days" are expressly specified.
(i) The words "herein," "hereof," "hereto," and "hereunder," and words of similar import, refer to this Agreement as a whole and not to any particular Article, Section, or other subdivision hereof.
(j) References to any Party include references to such Party's successors and permitted assigns.
ARTICLE II — SERVICES
Section 2.1 — Scope of Services
(a) Subject to the terms and conditions of this Agreement, Provider shall provide to Recipient the transition services described in this Article II and set forth in detail in the Service Schedules attached hereto as Exhibits A-1 through A-5 (collectively, "Exhibit A"), in each case solely in connection with the operation of the PureGlow product line as conducted by Provider during the period prior to the Closing Date.
(b) The Services are transitional in nature and are intended solely to facilitate Recipient's development of independent operational capability with respect to the PureGlow product line. The Services are not intended to be, and shall not be construed as, a permanent or long-term arrangement, and Recipient acknowledges and agrees that it shall use commercially reasonable efforts to develop its own systems, resources, and capabilities to replace the Services as promptly as reasonably practicable in accordance with the Migration Plan.
(c) Provider shall provide the Services in the ordinary course and in a manner consistent with the manner in which such services were provided to the PureGlow product line prior to the Closing Date, subject to the Service Levels set forth in Section 4.3. Provider shall not be required to provide any Service in a manner that would require Provider to materially expand or modify its existing infrastructure, systems, or personnel resources beyond what is reasonably necessary to maintain the level of service provided prior to the Closing Date.
(d) To the extent that the provision of any Service requires any Third-Party Consent, Provider shall use commercially reasonable efforts to obtain such Third-Party Consent; provided, however, that Provider shall not be required to make any payment, incur any liability, or grant any accommodation to any third party in order to obtain any such consent (unless Recipient agrees to reimburse Provider for such costs). If any required Third-Party Consent cannot be obtained despite Provider's commercially reasonable efforts, Provider shall use commercially reasonable efforts to provide an alternative arrangement that is reasonably satisfactory to Recipient, and the Parties shall cooperate in good faith to implement such alternative arrangement.
Section 2.2 — IT Systems Migration Services (Service Category A)
(a) General Description. Provider shall provide information technology systems migration services to facilitate the migration of PureGlow-related data, systems access, and IT infrastructure from Provider's shared enterprise systems to Recipient's own IT environment (collectively, the "IT Systems Migration Services"), as more fully described in Exhibit A-1.
(b) Scope. The IT Systems Migration Services shall include the following components:
(i) ERP Data Extraction and Migration. Provider shall extract and deliver to Recipient all PureGlow-related data currently residing in Provider's enterprise resource planning ("ERP") system (currently Harborline Software), including master data, transactional data, historical financial data, inventory records, bill-of-materials data, vendor records, customer records, and product specification data. Provider shall cooperate with Recipient and Recipient's designated ERP implementation vendor to facilitate the orderly migration of such data to Recipient's own ERP system.
(ii) Email and Collaboration Tools Transition. Provider shall maintain email accounts and access to collaboration tools (including Ashgrove Software, Aldermere Systems, and Teams) for the Transferred Employees during the transition period until such employees are migrated to Recipient's own email and collaboration platforms. Provider shall cooperate in the transfer of email archives and shared files related to the PureGlow product line.
(iii) E-Commerce Platform Data Transfer. Provider shall extract and deliver to Recipient all PureGlow-related data from Provider's e-commerce platforms, including product listings, digital assets (product images, descriptions, and marketing content), historical order data, and customer account information, to the extent transferable under applicable law and Provider's agreements with its e-commerce platform providers.
(iv) Point-of-Sale Data Feeds. Provider shall maintain and continue to provide PureGlow-related point-of-sale data feeds from retail partners during the transition period, and shall cooperate in the transition of such data feeds to Recipient's own systems.
(v) Cybersecurity Support. Provider shall maintain cybersecurity protections with respect to PureGlow-related data residing on Provider's systems during the Service Term, including firewall protection, intrusion detection, malware protection, and data encryption, consistent with Provider's existing cybersecurity protocols and standards.
(vi) Legacy System Hosting and Maintenance. To the extent that PureGlow-related data remains on Provider's legacy systems during the Service Term, Provider shall continue to host and maintain such systems in a manner sufficient to preserve the integrity and accessibility of such data.
(c) Read-Only Access. During the Service Term, Provider shall provide Recipient with read-only access to historical PureGlow-related data residing in Provider's systems, subject to reasonable security protocols and access controls established by Provider. Such access shall be provided through secure remote access methods designated by Provider.
(d) Recipient Responsibilities. Recipient shall be solely responsible for procuring, implementing, and configuring its own ERP system, email and collaboration platforms, e-commerce systems, and other IT infrastructure. Provider shall cooperate with Recipient in facilitating data migration but shall have no responsibility for the design, implementation, configuration, testing, or performance of Recipient's IT systems.
Section 2.3 — Accounting/ERP Services (Service Category B)
(a) General Description. Provider shall provide accounting, financial reporting, and ERP-related services for the PureGlow product line during the transition period (collectively, the "Accounting/ERP Services"), as more fully described in Exhibit A-2.
(b) Scope. The Accounting/ERP Services shall include the following components:
(i) General Ledger Maintenance. Provider shall maintain general ledger accounts for PureGlow operations within Provider's accounting system during the transition period, including recording of revenue, cost of goods sold, operating expenses, and other transactions attributable to the PureGlow product line.
(ii) Accounts Payable and Accounts Receivable Processing. Provider shall continue to process accounts payable and accounts receivable for the PureGlow product line during the transition period, including invoice processing, payment disbursement, cash application, and collections support, in each case in a manner consistent with past practice.
(iii) Month-End and Quarter-End Close Support. Provider shall perform month-end and quarter-end close procedures for the PureGlow product line, including account reconciliations, accruals, adjustments, and preparation of trial balances.
(iv) Financial Statements and Management Reports. Provider shall prepare and deliver to Recipient monthly financial statements and management reports related to the PureGlow product line, including income statements, balance sheets, and cash flow statements, in each case on a stand-alone PureGlow basis, consistent in format and content with the financial information provided to Provider's management prior to the Closing Date.
(v) Net Working Capital True-Up Support. Provider shall provide reasonable cooperation and support in connection with the post-closing net working capital true-up process under the APA, including the preparation and delivery of relevant financial data and supporting documentation. The APA establishes a net working capital target of Six Million Three Hundred Fifty Thousand Dollars ($6,350,000), subject to a two-hundred-fifty-thousand-dollar ($250,000) collar, with a ninety (90) day post-closing true-up deadline. Provider shall cooperate in good faith with Recipient and the independent accounting firm selected pursuant to the APA (if applicable) to facilitate the timely completion of the true-up process.
(vi) Tax Reporting Support. Provider shall provide tax reporting support for the PureGlow product line during the transition period, including the preparation of tax-related schedules, support for sales and use tax filings, and coordination with Provider's tax advisors as necessary.
(c) Tax Advisor Coordination. Provider's accounting and tax advisor, Graymoor & Keene LLP (Howard Ellison, Tax Partner), shall be available for reasonable consultation with Recipient's accounting and tax advisor, Redfield Samuels LLP, as needed with respect to carve-out financial matters, tax reporting, and the net working capital true-up process. Any fees charged by Graymoor & Keene LLP for such consultations shall be included in the Service Charges for this Service Category unless otherwise agreed by the Parties.
Section 2.4 — Warehousing and Logistics Services (Service Category C)
(a) General Description. Provider shall provide warehousing, distribution, and logistics services for PureGlow finished goods and raw materials during the transition period (collectively, the "Warehousing and Logistics Services"), as more fully described in Exhibit A-3.
(b) Scope. The Warehousing and Logistics Services shall include the following components:
(i) Shared Distribution Center Access. To the extent that any PureGlow finished goods or raw materials continue to be stored at or distributed through Provider's shared distribution centers or warehousing facilities (other than the Dayton manufacturing facility, which is being assigned to Recipient at Closing as described below), Provider shall continue to provide warehousing and storage services for such goods and materials during the transition period.
(ii) Order Fulfillment and Shipping. Provider shall continue to support order fulfillment and shipping for PureGlow products through Provider's distribution infrastructure during the transition period, including picking, packing, and shipping of customer orders in accordance with existing procedures.
(iii) Inventory Management and Tracking. Provider shall maintain inventory management and tracking systems for PureGlow products (twenty-three (23) SKUs across four (4) product categories) during the transition period, including inventory counts, cycle counting, and inventory reporting, in each case consistent with past practice.
(iv) Freight and Carrier Management. Provider shall manage freight and carrier relationships for PureGlow product shipments during the transition period, including rate negotiation, carrier selection, routing, and shipment tracking, to the extent such functions are performed through Provider's centralized logistics operations.
(v) Customer Order Coordination. Provider shall coordinate with the eight (8) customer supply and distribution agreements that are being assigned to Recipient in connection with the APA, including the supply agreement with Hartwell Retail Group (Provider's largest PureGlow customer, with FY2024 sales of approximately Fourteen Million Two Hundred Thousand Dollars ($14,200,000), representing approximately 24.5% of PureGlow revenue), to ensure continuity of order processing, delivery scheduling, and customer communication during the transition period.
(c) Dayton Facility. The Parties acknowledge that the lease for the 127,000 square-foot manufacturing facility located at 2200 Dryden Road, Dayton, OH 45439 (the "Dayton Facility") is being assigned to Recipient at Closing pursuant to a separate Lease Assignment and Assumption Agreement between Provider, Recipient, and Buckeye Industrial Realty Partners LLC (the landlord), with annual base rent of One Million One Hundred Forty-Three Thousand Dollars ($1,143,000) and a remaining lease term through June 30, 2030. The Warehousing and Logistics Services under this Agreement relate to any shared or retained distribution points and logistics infrastructure maintained by Provider, and do not pertain to the Dayton Facility itself following its assignment to Recipient at Closing.
Section 2.5 — Regulatory and Quality Services (Service Category D)
(a) General Description. Provider shall provide regulatory compliance and quality assurance support services for PureGlow products during the transition period (collectively, the "Regulatory and Quality Services"), as more fully described in Exhibit A-4.
(b) Scope. The Regulatory and Quality Services shall include the following components:
(i) FDA Product Listing Transfer Support. Provider shall cooperate with Recipient in transferring FDA product listings for the PureGlow facial cleanser containing salicylic acid, which is classified as an over-the-counter ("OTC") drug product subject to FDA regulation under the OTC Drug Monograph system. Provider shall provide all necessary documentation and information to enable Recipient to file its own FDA product listings and drug establishment registrations. FDA product listing numbers shall be confirmed during the due diligence process and set forth in the final version of Exhibit A-4.
(ii) Quality Assurance and Quality Control. Provider shall continue to perform quality assurance ("QA") and quality control ("QC") testing and processes for PureGlow products during the transition period, including incoming raw material testing, in-process inspections, finished goods release testing, and stability testing, in each case consistent with Provider's existing QA/QC protocols.
(iii) Product Safety and Compliance Testing. Provider shall support product safety and compliance testing for PureGlow products during the transition period, including microbiological testing, preservative efficacy testing, and compliance with applicable consumer product safety regulations.
(iv) Product Labeling and Claims Review. Provider shall provide labeling and claims review support for PureGlow products during the transition period, including review of product labels, marketing claims, and packaging for compliance with FDA regulations, FTC guidelines, and applicable state laws.
(v) Adverse Event Reporting and Recall Coordination. Provider shall maintain adverse event reporting systems for PureGlow products during the transition period and shall coordinate with Recipient on any product recalls, market withdrawals, or safety alerts, in each case consistent with Provider's existing adverse event reporting procedures and applicable regulatory requirements.
(vi) Regulatory File Transfer. Provider shall transfer to Recipient all regulatory files, product registrations, correspondence with regulatory authorities, technical dossiers, and related documentation pertaining to PureGlow products, in each case within a timeframe to be set forth in the Migration Plan.
(c) Cooperation. Provider shall cooperate in good faith with Recipient in effecting the orderly transfer of all regulatory filings, product registrations, and related correspondence to Recipient, and shall execute such documents and take such actions as are reasonably necessary to facilitate such transfer.
Section 2.6 — HR and Payroll Services (Service Category E)
(a) General Description. Provider shall provide human resources administration and payroll processing services for the Transferred Employees during the transition period following the Closing Date (collectively, the "HR and Payroll Services"), as more fully described in Exhibit A-5.
(b) Scope. The HR and Payroll Services shall include the following components:
(i) Payroll Processing and Tax Withholding. Provider shall continue to process payroll for the Transferred Employees during the transition period, including calculation and disbursement of wages, salary, overtime, and other compensation, as well as all applicable federal, state, and local tax withholdings and payroll tax deposits.
(ii) Benefits Administration. Provider shall continue to administer employee benefits for the Transferred Employees during the transition period, including health insurance, dental insurance, vision insurance, and retirement plan (401(k)) participation, in each case under Provider's existing benefit plans and on terms consistent with those provided to the Transferred Employees prior to the Closing Date, until such time as Recipient's own benefit plans are operational and the Transferred Employees are enrolled therein.
(iii) Workers' Compensation Administration. Provider shall maintain workers' compensation coverage for the Transferred Employees during the transition period to the extent such employees remain on Provider's payroll, and shall cooperate in the transition of workers' compensation coverage to Recipient's own insurance programs.
(iv) COBRA Administration. Provider shall administer COBRA (Consolidated Omnibus Budget Reconciliation Act) continuation coverage for any eligible employees who do not transition to Recipient's employment or whose coverage under Provider's plans is terminated in connection with the transactions contemplated by the APA.
(v) Employee Records Transfer. Provider shall transfer to Recipient all personnel files, employment records, benefits enrollment records, payroll records, and other employee-related documentation pertaining to the Transferred Employees, in each case subject to applicable privacy laws and within a timeframe to be set forth in the Migration Plan.
(vi) Coordination with Recipient's HR Systems. Provider shall cooperate with Recipient in the onboarding of the Transferred Employees to Recipient's own human resources information systems ("HRIS"), payroll systems, and benefits platforms, including providing data exports and supporting parallel payroll processing during the transition period.
(vii) WARN Act Compliance Support. Provider shall provide reasonable cooperation and support in connection with compliance with the Worker Adjustment and Retraining Notification Act (the "WARN Act") and applicable state equivalents, to the extent applicable to the transactions contemplated by the APA.
(c) Timing. Recipient shall offer employment to all seventy-four (74) Transferred Employees at Closing in accordance with the terms of the APA. The HR and Payroll Services under this Agreement are intended to bridge the period from the Closing Date until Recipient's own payroll, HRIS, and benefits systems are fully operational and the Transferred Employees have been migrated to Recipient's platforms. The target dates for Recipient's payroll system go-live and benefits transition shall be set forth in the Migration Plan.
Section 2.7 — Excluded Services
Notwithstanding anything to the contrary in this Agreement, the Services shall not include, and Provider shall have no obligation to provide:
(a) any services not specifically described in this Article II or the Service Schedules attached as Exhibit A, unless otherwise agreed by the Parties in writing pursuant to Section 2.8;
(b) any services relating to Provider's retained business operations, including Provider's household cleaning products, pet-care products, or any other product lines or business segments other than the PureGlow personal-care product line;
(c) legal services, including legal advice, contract negotiation, litigation support, or regulatory advocacy;
(d) strategic, corporate development, or investment banking advisory services, including services related to mergers and acquisitions, capital raising, or business strategy;
(e) any services that would require Provider to violate any applicable law, regulation, governmental order, or any agreement with a third party to which Provider is a party or by which Provider is bound; and
(f) any services that would require Provider to hire additional personnel, acquire additional equipment, or maintain existing equipment beyond what is reasonably necessary to provide the Services at the Service Levels described in Section 4.3. Provider shall have no obligation to expand its workforce, infrastructure, or systems capacity beyond the level maintained for the PureGlow product line prior to the Closing Date.
Section 2.8 — Additional Services
(a) Recipient may from time to time request that Provider provide additional transition services not listed in the Service Schedules (each, an "Additional Service"). Any such request shall be made in writing and shall specify the nature, scope, and desired duration of the requested Additional Service.
(b) Provider may agree or decline to provide any requested Additional Service in its sole and absolute discretion. Provider shall not be required to provide any Additional Service that would, in Provider's reasonable judgment, materially interfere with Provider's retained business operations, require the hiring of additional personnel, or require material capital expenditure.
(c) If Provider agrees to provide an Additional Service, the terms of such Additional Service, including the scope, duration, Service Level, and pricing, shall be documented in a written amendment or supplement to Exhibit A, signed by both Parties' Service Coordinators (or such other authorized representatives as the Parties may designate). No Additional Service shall be deemed to be included within the scope of this Agreement unless and until such written amendment or supplement has been duly executed.
(d) Unless otherwise agreed by the Parties in the applicable written amendment or supplement, all Additional Services shall be priced at Provider's actual cost plus a markup of five percent (5%) during the Initial Term and actual cost plus a markup of ten percent (10%) during any Extension Period, in each case consistent with the fee structure set forth in Section 5.1.
ARTICLE III — TERM AND TERMINATION
Section 3.1 — Initial Term
The Initial Term of this Agreement shall commence on the Effective Date (the Closing Date; target: June 16, 2025) and shall expire on the date that is twelve (12) months after the Effective Date (the "Initial Term Expiration Date"), unless earlier terminated in accordance with this Article III. For the avoidance of doubt, if the Closing Date occurs on June 16, 2025, the Initial Term Expiration Date shall be June 16, 2026.
Section 3.2 — Extension Options
(a) Recipient shall have the right to extend the Service Term beyond the Initial Term Expiration Date for up to two (2) additional periods of three (3) months each (each, an "Extension Period"), for a maximum aggregate Service Term of eighteen (18) months from the Effective Date.
(b) To exercise an extension option, Recipient shall deliver written notice of extension to Provider no later than sixty (60) days prior to the expiration of the then-current Service Term (or Extension Period, as applicable). Failure to deliver timely written notice shall result in the lapse of Recipient's extension option for the applicable Extension Period.
(c) Unless Recipient specifies particular Service Categories in its extension notice, each extension shall apply to all Services that remain in effect as of the date of the extension notice. Recipient may elect to extend only specified Service Categories by identifying such Service Categories in its extension notice, in which case the remaining Service Categories shall terminate at the expiration of the then-current Service Term (or Extension Period).
(d) To incentivize timely migration, Service Charges during any Extension Period shall be calculated at Provider's actual cost plus a markup of ten percent (10%) ("Cost-Plus 10%"), in lieu of the Cost-Plus 5% markup applicable during the Initial Term. The increased markup shall apply only to the Service Categories that are extended into the applicable Extension Period.
Section 3.3 — Early Termination of Individual Services
(a) Recipient may terminate any individual Service or Service Category, in whole or in part, upon not less than thirty (30) days' prior written notice to Provider. Such notice shall specify the Service or Service Category (or portion thereof) to be terminated and the effective date of termination.
(b) Upon the effective date of termination of an individual Service or Service Category, the applicable Service Charges for such Service or Service Category shall cease to accrue, subject to Section 3.3(c).
(c) There shall be no partial-month credits for early termination of any Service. Recipient shall be responsible for the full month's Service Charge for the calendar month in which the termination of any individual Service becomes effective, regardless of the day of the month on which termination occurs.
(d) Termination of an individual Service or Service Category shall not affect the continued provision of, or Recipient's obligations with respect to, any other Services that have not been terminated.
Section 3.4 — Termination for Cause
(a) Either Party may terminate this Agreement in its entirety upon written notice to the other Party if:
(i) the other Party materially breaches any provision of this Agreement and such breach remains uncured for a period of thirty (30) days after the breaching Party's receipt of written notice from the non-breaching Party specifying the nature of such breach in reasonable detail; or
(ii) the other Party (A) files a voluntary petition in bankruptcy or is adjudicated as bankrupt or insolvent, (B) has filed against it an involuntary petition in bankruptcy that is not dismissed within sixty (60) days, (C) makes a general assignment for the benefit of creditors, (D) has a receiver, trustee, or liquidator appointed for all or a substantial portion of its assets, or (E) commences or has commenced against it any proceeding for reorganization, dissolution, or liquidation pursuant to any applicable federal or state law.
(b) Notwithstanding Section 3.4(a), Provider may suspend the provision of Services (without terminating this Agreement) if Recipient fails to pay any undisputed Service Charges within fifteen (15) days after the applicable due date, provided that Provider shall first deliver five (5) business days' prior written notice to Recipient of Provider's intention to suspend Services. Provider shall promptly resume the provision of suspended Services following Recipient's payment in full of all undisputed past-due Service Charges.
Section 3.5 — Effect of Termination or Expiration
(a) Upon the expiration or termination of this Agreement (whether in whole or as to any individual Service), Provider shall have no further obligation to provide the terminated or expired Services, except as expressly set forth in this Section 3.5.
(b) Notwithstanding Section 3.5(a), upon expiration or termination:
(i) Wind-Down Cooperation. Provider shall cooperate with Recipient in the orderly wind-down and transition of any terminated or expired Services for a period of thirty (30) days following the effective date of such termination or expiration (the "Wind-Down Period"). During the Wind-Down Period, Provider shall continue to provide such transitional assistance as is reasonably necessary to facilitate Recipient's migration to its own systems and resources, and Recipient shall pay for such assistance at the applicable Service Charge rates.
(ii) Data Delivery. Provider shall deliver to Recipient (or, at Recipient's written election, destroy) all Recipient data, PureGlow-related records, files, and documentation in Provider's possession or control within sixty (60) days following the effective date of termination or expiration, in a format reasonably requested by Recipient. Provider shall certify in writing its compliance with any destruction request.
(iii) Survival. The following provisions shall survive the expiration or termination of this Agreement: Article I (Definitions and Interpretation), Section 3.5 (Effect of Termination or Expiration), Article V (Service Charges and Payment) (solely with respect to accrued but unpaid obligations), Article VI (Intellectual Property) (solely with respect to ownership provisions), Article VII (Confidentiality), Article VIII (Representations and Warranties), Article IX (Indemnification and Limitation of Liability), Article XI (Dispute Resolution), and Article XII (General Provisions).
(c) Recipient shall pay all accrued but unpaid Service Charges through the effective date of termination or expiration within thirty (30) days after the date of Provider's final invoice for such charges.
ARTICLE IV — SERVICE STANDARDS AND COORDINATION
Section 4.1 — Service Coordinators
(a) Each Party shall designate a Service Coordinator to serve as the primary point of contact for the day-to-day management, coordination, and oversight of the Services. The Service Coordinators shall be responsible for facilitating communication between the Parties, managing operational issues, coordinating the development and implementation of the Migration Plan, and addressing any questions or concerns arising in connection with the provision of the Services.
(b) Provider's initial Service Coordinator shall be:
Diane Choi Vice President, Business Development Meridian Consumer Brands LLC 450 Park Avenue South, 14th Floor New York, NY 10016
Email: dchoi@meridiancb.com
Phone: (212) 555-7420
(c) Recipient's initial Service Coordinator shall be:
Philip Kowalski Vice President, Corporate Development Lakebridge Home & Personal Care, Inc. 7100 Rockside Road, Suite 400 Independence, OH 44131
Email: pkowalski@lakebridgehpc.com
Phone: (216) 555-3800
(d) Either Party may change its Service Coordinator at any time by delivering written notice to the other Party, provided that the replacement Service Coordinator shall be a person of sufficient seniority and authority to fulfill the responsibilities described in this Agreement. Any change shall become effective upon the other Party's receipt of such notice.
Section 4.2 — Governance; Steering Committee
(a) The Parties shall establish a Transition Steering Committee (the "Steering Committee") consisting of each Party's Service Coordinator and one additional senior representative designated by each Party. Each Party may designate alternate attendees to participate in Steering Committee meetings, provided that such alternates have sufficient authority to make decisions on behalf of their respective Party.
(b) The Steering Committee shall meet (in person at a mutually agreed location, or via videoconference) no less frequently than bi-weekly during the first six (6) months of the Service Term, and monthly thereafter, unless the Parties mutually agree to a different meeting frequency. Additional meetings may be called by either Party's Service Coordinator upon reasonable notice to the other Party.
(c) The Steering Committee shall be responsible for:
(i) monitoring progress against the Migration Plan and identifying any deviations from planned timelines or milestones;
(ii) resolving operational issues, service quality concerns, and coordination matters arising in connection with the provision of the Services;
(iii) reviewing and approving any proposed changes to the scope, duration, or pricing of the Services;
(iv) reviewing and approving monthly invoices and addressing any billing disputes;
(v) overseeing the development and implementation of contingency plans in the event of delays or disruptions; and
(vi) such other matters as the Parties may mutually agree.
(d) The Steering Committee shall not have the authority to amend or modify this Agreement, except to the extent expressly permitted under Section 2.8 (Additional Services) with respect to supplements to Exhibit A.
Section 4.3 — Service Levels
(a) Provider shall provide each Service at a level of quality, quantity, timeliness, and responsiveness that is substantially consistent with the level at which such service was provided to the PureGlow product line during the twelve (12) month period immediately preceding the Closing Date (the "Historical Service Level"). The Historical Service Level shall serve as the benchmark for evaluating Provider's performance of the Services.
(b) Provider shall use commercially reasonable efforts to maintain adequate staffing, resources, and systems capacity to perform the Services at the Historical Service Level throughout the Service Term.
(c) Provider shall not be required to provide any Service at a level that exceeds the Historical Service Level or to implement improvements, enhancements, or upgrades to the Services beyond those that would have been implemented in the ordinary course of Provider's business for the PureGlow product line absent the transactions contemplated by the APA.
(d) In the event that the volume of any Service materially increases as compared to the Historical Service Level due to changes in Recipient's business operations following the Closing Date, the Parties shall negotiate in good faith an appropriate adjustment to the Service Charges for such Service.
Section 4.4 — Provider Personnel
(a) Provider shall assign qualified personnel with appropriate skills, training, and experience to perform the Services. Provider shall retain sole discretion over the hiring, assignment, reassignment, supervision, compensation, discipline, and termination of Provider Personnel assigned to perform the Services.
(b) Provider Personnel shall at all times remain employees or independent contractors of Provider (or Provider's affiliates) and shall not, for any purpose, be deemed to be employees, agents, or representatives of Recipient. Nothing in this Agreement shall create an employment, agency, or joint employment relationship between Recipient and any Provider Personnel.
(c) Provider may use qualified third-party subcontractors to perform all or any portion of the Services, provided that: (i) Provider shall remain responsible for such subcontractors' performance of the Services and compliance with the terms of this Agreement; (ii) such subcontractors shall be bound by confidentiality obligations at least as protective as those set forth in Article VII; and (iii) Provider shall give Recipient reasonable advance notice of any engagement of subcontractors to perform material Service functions.
Section 4.5 — Migration Plan
(a) Within thirty (30) days after the Effective Date, the Service Coordinators shall jointly develop a written Migration Plan for each Service Category, using the template attached as Exhibit B as a starting point. The Migration Plan for each Service Category shall set forth:
(i) the current state description of the applicable Service as provided by Provider;
(ii) the target state description of the applicable Service as to be provided by Recipient's own systems and resources;
(iii) the target completion date for Recipient's migration to its own systems and resources for such Service Category;
(iv) key milestones, deliverables, and intermediate deadlines;
(v) dependencies and prerequisites, including any Third-Party Consents, system procurement requirements, or other conditions that must be satisfied before migration can proceed;
(vi) responsible personnel from each Party;
(vii) testing and validation procedures, including user acceptance testing criteria and parallel-run requirements; and
(viii) contingency plans in the event of delays or disruptions.
(b) The Parties shall use commercially reasonable efforts to complete migration of each Service Category in accordance with the applicable Migration Plan. Each Party shall promptly notify the other Party's Service Coordinator of any circumstances that may materially delay or impede completion of any milestone or target date set forth in the Migration Plan.
(c) The Migration Plan may be updated from time to time by mutual agreement of the Service Coordinators. Any material changes to the Migration Plan shall be reviewed and approved by the Steering Committee.
Section 4.6 — Cooperation; Access
(a) Recipient shall cooperate with Provider and provide all information, access, data, and assistance reasonably necessary for Provider to perform the Services in accordance with this Agreement. Without limiting the generality of the foregoing, Recipient shall promptly respond to Provider's reasonable requests for information, provide timely approvals and decisions, and make Recipient Personnel available for meetings, training, and knowledge transfer as reasonably requested by Provider.
(b) Provider shall provide Recipient and its authorized representatives with reasonable access to Provider Personnel and facilities as necessary to monitor the provision of the Services, implement the Migration Plan, conduct knowledge transfer activities, and perform audits in accordance with Section 5.6. Such access shall be provided during normal business hours and upon reasonable advance notice, and shall be subject to Provider's reasonable security protocols and workplace policies.
(c) Each Party shall be responsible for obtaining, at its own cost, any internal approvals or Third-Party Consents required for such Party's performance of its obligations under this Agreement. The Parties shall cooperate in good faith and provide reasonable assistance to each other in obtaining any Third-Party Consents that require the cooperation of both Parties.
ARTICLE V — SERVICE CHARGES AND PAYMENT
Section 5.1 — Fee Structure
(a) Initial Term Pricing. All Services provided during the Initial Term shall be charged at Provider's actual cost of providing such Services, plus a markup of five percent (5%) ("Cost-Plus 5%").
(b) Actual Cost Definition. For purposes of this Agreement, "actual cost" means the fully loaded cost incurred by Provider in providing the applicable Service, including:
(i) direct labor costs, consisting of salaries, wages, and employee benefits (including health insurance, retirement plan contributions, and payroll taxes) of Provider Personnel allocated to the Services, prorated on a time-spent basis using Provider's standard time-tracking methodology;
(ii) allocated overhead costs, including facilities costs, utilities, IT infrastructure costs, and general and administrative expenses, in each case allocated to the Services on a reasonable and consistent basis using Provider's standard cost allocation methodology;
(iii) third-party vendor and subcontractor costs incurred directly in connection with the provision of the Services, including software license fees, hosting charges, and professional services fees;
(iv) materials and supplies consumed in connection with the provision of the Services; and
(v) out-of-pocket expenses directly attributable to the Services, including travel expenses (subject to Provider's standard travel and expense policy) and shipping costs.
(c) Estimated Charges. Based on Provider's good-faith estimate of costs as of the date hereof, the estimated aggregate monthly Service Charge for all Service Categories is approximately One Hundred Eighty-Five Thousand Dollars ($185,000) per month (annualized: approximately Two Million Two Hundred Twenty Thousand Dollars ($2,220,000)). The foregoing estimate is provided for informational and budgeting purposes only, and actual charges may vary based on the Services utilized, the volume of activity, and other factors. A breakdown of estimated monthly Service Charges by Service Category is set forth in the Summary Table in Exhibit A.
(d) Extension Period Pricing. During any Extension Period, the markup applied to actual costs shall increase from five percent (5%) to ten percent (10%) ("Cost-Plus 10%"). The increased markup shall apply to all Services provided during the Extension Period.
Section 5.2 — Invoicing
(a) Provider shall deliver to Recipient a monthly invoice for the Service Charges within fifteen (15) business days after the end of each calendar month during the Service Term, using the invoice format set forth in Exhibit C or such other format as the Parties may mutually agree.
(b) Each invoice shall contain reasonable detail sufficient to enable Recipient to verify the accuracy of the Service Charges, including:
(i) a breakdown of charges by Service Category;
(ii) hours of Provider Personnel time by Service Category, with identification of the functional roles and billing rates of such personnel;
(iii) a summary of third-party vendor and subcontractor costs by Service Category;
(iv) the cost-plus markup calculation, showing subtotal actual costs and the applicable markup percentage and amount; and
(v) the total Service Charges for the applicable billing period and cumulative charges to date.
(c) Provider shall maintain complete and accurate books and records supporting all invoices issued under this Agreement for a period of not less than three (3) years following the expiration or termination of this Agreement. Such books and records shall be maintained in accordance with generally accepted accounting principles and shall be available for inspection and audit in accordance with Section 5.6.
Section 5.3 — Payment Terms
(a) Recipient shall pay each invoice within thirty (30) calendar days after Recipient's receipt of a valid and undisputed invoice (the "Payment Due Date"). For purposes of this Section, an invoice shall be deemed received on the date it is delivered to Recipient's Service Coordinator by email or other agreed method of delivery.
(b) All payments shall be made by wire transfer of immediately available funds to the following account designated by Provider, or such other account as Provider may designate from time to time by written notice to Recipient:
Bank Name: Greaves Bancorp ABA Routing Number: [●] Account Number: [●] Account Name: Meridian Consumer Brands LLC Reference: PureGlow TSA — [Invoice Number]
(c) Late payments (other than amounts subject to a bona fide dispute in accordance with Section 5.5) shall bear interest at the rate of one and one-half percent (1.5%) per month (or, if less, the maximum rate permitted by applicable law), calculated from the Payment Due Date through the date of actual payment in full. The accrual of interest on late payments shall be in addition to, and not in lieu of, Provider's other rights and remedies under this Agreement, including the right to suspend Services under Section 3.4(b).
Section 5.4 — Taxes
(a) All Service Charges set forth in this Agreement are exclusive of applicable sales taxes, use taxes, value-added taxes, goods and services taxes, and similar transaction-based Taxes imposed on the provision of the Services (collectively, "Transaction Taxes"). To the extent that any Transaction Taxes are imposed on the provision of the Services, Recipient shall be responsible for and shall pay or reimburse Provider for all such Transaction Taxes.
(b) Each Party shall be solely responsible for its own income taxes, franchise taxes, and similar Taxes (other than Transaction Taxes) arising from or related to its activities under this Agreement. Provider shall be responsible for all payroll taxes, withholding taxes, and employment-related taxes applicable to Provider Personnel.
(c) If Recipient is exempt from any Transaction Taxes, Recipient shall provide Provider with a valid exemption certificate or other documentation reasonably required by applicable law.
Section 5.5 — Disputed Charges
(a) If Recipient disputes any portion of an invoice, Recipient shall deliver written notice to Provider within twenty (20) business days after receipt of the applicable invoice (a "Dispute Notice"). Each Dispute Notice shall specify the disputed amount and the basis for the dispute in reasonable detail.
(b) Recipient shall pay all undisputed portions of each invoice by the applicable Payment Due Date, regardless of any dispute with respect to other portions of the same invoice. The failure of Recipient to timely deliver a Dispute Notice with respect to any invoice shall be deemed acceptance of such invoice; provided, however, that Recipient shall retain any rights it may have under Section 5.6 (Audit Rights) with respect to previously accepted invoices.
(c) Disputed amounts shall be subject to the following resolution process:
(i) The Service Coordinators shall attempt to resolve the dispute within fifteen (15) business days after Provider's receipt of the Dispute Notice.
(ii) If the dispute is not resolved by the Service Coordinators within such fifteen (15) business day period, the dispute shall be escalated to the Steering Committee for resolution within an additional fifteen (15) business days.
(iii) If the dispute is not resolved by the Steering Committee within such additional fifteen (15) business day period, the dispute shall be subject to the dispute resolution provisions of Article XI.
(d) If a dispute is resolved in Recipient's favor, Provider shall issue a credit to Recipient on the next monthly invoice (or, if this Agreement has expired or been terminated, refund the overcharge to Recipient within thirty (30) days). If a dispute is resolved in Provider's favor, Recipient shall pay the disputed amount within fifteen (15) business days after such resolution, together with interest on such amount at the rate specified in Section 5.3(c) from the original Payment Due Date through the date of payment.
Section 5.6 — Audit Rights
(a) Recipient shall have the right, upon not less than fifteen (15) business days' prior written notice to Provider and during normal business hours, to audit (or cause its independent auditors to audit) Provider's books and records relating to the Service Charges, including time records, cost allocation methodologies, third-party invoices, and supporting documentation. Such audit right may be exercised no more than once in any twelve (12) month period during the Service Term and for a period of twelve (12) months following the expiration or termination of this Agreement.
(b) Provider shall provide reasonable cooperation and access to Recipient (or Recipient's independent auditors) in connection with any such audit, including making relevant personnel available for interviews and providing copies of requested documents within a reasonable timeframe.
(c) If an audit reveals that Provider has overcharged Recipient by an amount exceeding five percent (5%) of the total Service Charges for any audited period, Provider shall (i) promptly refund the full amount of the overcharge to Recipient, together with interest thereon at the rate specified in Section 5.3(c) from the date of the overcharge through the date of refund, and (ii) reimburse Recipient for the reasonable, documented, out-of-pocket costs incurred by Recipient in conducting such audit.
(d) If an audit reveals that Provider has overcharged Recipient by an amount equal to or less than five percent (5%) of the total Service Charges for any audited period, Provider shall promptly refund the amount of the overcharge, but Recipient shall bear the cost of the audit.
(e) All information obtained by Recipient in connection with any audit under this Section shall be deemed Confidential Information of Provider and shall be subject to the confidentiality obligations set forth in Article VII.
ARTICLE VI — INTELLECTUAL PROP