Exhibit 10.52

 

 

 

 

TRANSITION SERVICES AGREEMENT

 

between

 

TCC CM Subco I, Inc.,

 

NUTRICAP LABS, LLC

 

and

 

VITACAP LABS, LLC

 

 

February 6, 2015

 

 

 

 

 

 

 

TRANSITION SERVICES AGREEMENT

 

This Transition Services Agreement (this “Agreement”) is made and entered into
as of February 6, 2015, by and between TCC CM Subco I, Inc., a Delaware
corporation (“Buyer”), Nutricap Labs, LLC, a New York limited liability company
(“NC”), and Vitacap Labs, LLC, a New York limited liability company (“Vita”).

 

BACKGROUND

 

NC, Vita and Buyer are parties to that certain Asset Purchase Agreement (the
“Purchase Agreement”), dated February 4, 2015 and effective as of the Option
Exercise Date (as defined in the Purchase Agreement), pursuant to which NC and
Vita have agreed to sell, and Buyer has agreed to purchase, NC and Vita’s
Customer (as defined in the Purchase Agreement) relationships, as well as
certain additional assets as set forth therein. Capitalized terms used but not
defined in this Agreement shall have the meanings given to them in the Purchase
Agreement. “Commencement Date” shall mean the “Closing Date” as such term is
defined in the Purchase Agreement.

 

Because Buyer is acquiring Customer relationships and not an ongoing business,
and Buyer does not, and will not, have the ability to transition all aspects of
the Customer relationships into its own business immediately upon the Closing
Date, Buyer has requested that NC provide certain transitional services after
the Closing Date to assist Buyer to transfer the acquired Customer relationships
in a commercially reasonable manner. In order to induce Buyer to enter into the
Purchase Agreement, NC has agreed to provide to Buyer after the Closing access
to the premises described in Exhibit A (the “Premises”) and certain services
relating to the servicing of Customers by Buyer after the Closing on the terms
and conditions contained in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing premises and the consummation
of the transactions contemplated by the Purchase Agreement, the mutual covenants
contained herein, and intending to be legally bound, the parties hereby agree as
follows:

 

1. Engagement of NC Personnel.

 

(a) On and after the Commencement Date, NC will provide the services (the
“Transition Services”) typically performed in the ordinary course of business
for or on behalf of NC and Vita in respect of the Business as of immediately
prior to the Commencement Date by the personnel set forth on Exhibit B (the
“Personnel”) in support of Buyer’s servicing and transition of Customers until
August 6, 2015 (as the same may be extended pursuant to this Agreement, the
“Transition Period”). For the avoidance of doubt, in the event that any
Personnel voluntarily terminate their employment with NC prior to the expiration
of the Transition Period, NC may, but shall not be obligated to, hire
replacement persons to perform the Transition Services for which such terminated
Personnel were responsible (and any such hired replacements shall be deemed
Personnel hereunder); provided, however, the performance of Transition Services
shall not be excused as a result of any such terminated Personnel. Unless
otherwise agreed to in writing by Buyer, NC agrees that it shall only utilize
the Personnel in the provision of Transition Services hereunder at the Premises
and at any adjacent warehouse facility utilized by Buyer during the Transition
Period.

 

 

 

 

(b) Except for any additional fees specifically set forth herein or otherwise
agreed to in writing from time to time by the Parties, the consideration to be
paid by Buyer to NC for the Transition Services shall be as set forth on Exhibit
C. In the event NC determines that the aggregate amount payable to NC for the
Transition Services in any month (other than amounts in respect of the right to
use the Premises) is reasonably likely to exceed in any material respect the
historical amount of monthly expenses incurred by NC in the operation of its
Business during the year preceding the Commencement Date, NC shall provide
notice of such determination to Buyer and enter into good faith negotiations
with Buyer to reduce such expenses to a historical level.

 

(c) At all times during the Transition Period, to the extent such Personnel
remain employed by NC, such Personnel shall be deemed employees of NC or one or
more of its Affiliates (and not of Buyer).

 

(d) During the Transition Period, NC shall cause the Personnel to devote such
time as is reasonably sufficient to perform the Transition Services.

 

2. Transition Services. The Transition Services shall include the following, and
any other services that the parties agree shall be covered by this Agreement:

 

(a) Right to use the Premises. From and after the Commencement Date until the
end of the Transition Period, NC hereby grants to Buyer the right to occupy the
Premises and to use all of the furniture, fixtures, equipment and services
(including parking) currently existing at the Premises as may be necessary in
order that the employees of Buyer, including the Transferred Employees
(collectively, the “Buyer Employees”) may execute their designated
responsibilities; provided that Buyer shall cause the use and occupation of the
Premises by Buyer Employees to be conducted in compliance with that certain
Agreement of Lease, dated as of May 11, 2010, by and between NC and Carolyn
Holdings, LLC (the “Lease”). Buyer will give NC a list of Buyer Employees who
will be situated at the Premises and such Buyer Employees shall be granted such
space as is consistent with the historical usage by them or similarly-situated
employees of Sellers, as well as such additional space within the Premises as is
reasonably necessary to accommodate any additional Buyer Employees assigned to
work at the Premises during the Transition Period. Buyer shall pay to NC a
monthly charge for the use of the Premises and other property of NC as set forth
on Exhibit C. Other than the occupancy and use of the Premises by one (1)
employee of an Affiliate of Jonathan Greenhut (the “Greenhut Employee”) subject
to Section 11, neither NC nor Vita nor any of their Affiliates shall be entitled
to occupy or use the Premises during the Transition Period, except in connection
with (i) their performance of the Transition Services, (ii) the sale of
Inventory to Customers during the Selloff Period pursuant to Section 3 of this
Agreement, (iii) the fulfillment of orders underlying Non-Novation Events as
contemplated by Sections 2.06 and 6.14 of the Purchase Agreement, and (iii)
actions reasonably necessary to wind down the Business; provided, in the case of
the foregoing clause (iv), that such actions do not interfere in any material
respect with Buyer’s use of the Premises as contemplated hereby.

 

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(b) Information Services.

 

(i) General. NC hereby grants, and Buyer hereby accepts, the right to use and
obtain the Information Services in connection with Buyer’s servicing of
Customers during the Transition Period. For purposes of this Agreement,
“Information Services” means all of the information services, systems and
maintenance currently being provided by NC to the Business, as such Information
Services were provided to the Business and supported immediately prior to the
Commencement Date, in each case only to the extent related to and necessary to
provide service to the Customer relationships acquired by Buyer. During the
Transition Period, NC shall not change, in any material respect, the manner in
which the Information Services are made available to Buyer. During the
Transition Period, NC shall provide the services of its Information Technology
personnel to support Buyer in servicing the Customer relationship in
substantially the same manner that such Information Technology personnel
provided support to the Business prior to the Commencement Date.

 

(ii) Scope of Services. Buyer may only access and use the Information Services
(A) in a manner consistent with the use of such Information Services by the
Business prior to the Commencement Date and (B) for the internal information
processing needs of Buyer in connection with Buyer’s sales to Customers during
the Transition Period.

 

(iii) Data Integrity Measures. In connection with the Information Services made
available to Buyer under this Agreement, NC and Buyer shall cooperate and
implement reasonable firewalls (including as contemplated by Section 11),
including, but not limited to, utilizing appropriate hardware and software
necessary to maintain and ensure the integrity of Buyer’s data (including any
Affiliate of Buyer) and NC’s or any of its contracting parties’ data (including
any Affiliate of NC). NC acknowledges that it has provided Buyer with true,
correct and complete copies of its systems security policies as of the date
hereof. Buyer acknowledges that it has read and shall comply with such systems
security policies.

 

(c) Customer and Supplier Transition Assistance Services. During the Transition
Period, the Personnel shall, pursuant to a process agreed upon by the parties
from time to time, (i) inform Customers, as well as any other Persons that
contact NC or Vita regarding the purchase of vitamins, minerals or dietary
supplement products, that all futures sales and purchases shall be made through
Buyer, (ii) provide such Customers or other Persons with such telephone
number(s) or other adddress(es) as Buyer may from time to time provide to NC and
Vita in writing for such purpose and (iii) assist Buyer in securing an agreement
with any third party that provided goods or services to NC or Vita prior to the
Closing Date, upon the request of Buyer. Without limiting the foregoing, during
the Transition Period, Personnel, including Jonathan Greenhut in particular,
shall, upon reasonable request and during regular business hours, join Buyer in
contacting Customers or suppliers, whether by telephone, video conference or in
person, to assist with the transition of such Customer relationships or supplier
relationships to Buyer on terms that are acceptable to Buyer. Any travel
expenses incurred by Personnel, including but not limited to Mr. Greenhut, to
attend any such meetings shall be borne by Buyer, subject to Buyer’s standard
travel policy (a copy of which will be made available to all Personnel promptly
following the Commencement Date) or as otherwise pre-approved in writing by
Buyer; provided, however, that notwithstanding the foregoing or anything
contained in Buyer’s standard travel policy to the contrary, in no event shall
Mr. Greenhut be required to travel by air in excess of three (3) hours unless
Buyer pre-approves the reimbursement or payment of such travel expenses for
business class airfare in respect of such flight.

 

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(d) Supplies. During the Transition Period, NC will use commercially reasonable
efforts to assist Buyer in meeting its needs for generic office supplies at the
Premises, as such needs are conveyed to NC from time to time.

 

(e) Accounting Services. During the Transition Period, NC hereby agrees to
provide accounting support services to Buyer in connection with its servicing of
Customers, including but not limited to, the preparation of monthly center-level
financial statements, assistance with journal entries, accounts payable
processing, preparation and filing of sales and use tax returns, and other
bookkeeping support services consistent with operation of the Business prior to
the Commencement Date.

 

(f) Existing Services. NC represents and warrants that the Personnel, for so
long as such Personnel remain employed by NC, will be available to perform
services hereunder that are substantially similar to the services performed by
such Personnel to the Business during the six (6) month period prior to the
Closing Date.

 

(g) Access to Information. In addition to performing the Transition Services and
its other obligations hereunder, NC and Vita shall provide Buyer and its
Affiliates and third-party suppliers, as reasonably requested, with reasonable
access, upon reasonable notice, to employees of NC and its Affiliates having
knowledge of the Business as conducted prior to the Commencement Date, to
respond to questions or provide data and general knowledge about the servicing
of the Customer relationships prior to the Closing Date.

 

(h) Additional Services. Any additional services requested by Buyer that are not
included in the Transition Services shall be negotiated in good faith (including
the service fees with respect thereto), and, if mutually agreed upon by the
parties hereto, shall be included in this Agreement through amendments to the
Exhibits hereto.

 

(i) Termination of Services. Notwithstanding anything to the contrary contained
herein, Buyer may discontinue any of the Transition Services (other than the
right to use the Premises), in whole or in part, at any time and from time to
time, in which case the modified fee arrangements, if any, described on Exhibit
C will apply.

 

3. Liquidation of Existing Inventory. For a period of six (6) months following
the Commencement Date (the “Selloff Period”), NC and Vita shall, notwithstanding
anything herein or in the Purchase Agreement to the Contrary, be permitted to
sell the Inventory as set forth on Section 4.12 of the Disclosure Schedules (as
such disclosure is updated as of Closing). Within a reasonable period not to
exceed ten (10) Business Days after the termination of the Selloff Period, NC
shall deliver to Buyer certificates from an executive officer of each of NC and
Vita, as applicable, (i) certifying that NC and Vita, as applicable, have ceased
all sales of Inventory upon the termination of the Selloff Period,
(ii) providing a reasonable description of all Inventory remaining in the
possession of NC or Vita as of the Business Day immediately following the
termination of the Selloff Period, if any (the “Remaining Inventory”), and (iii)
certifying that the Remaining Inventory, if any, has been destroyed (which
destruction shall be at the sole cost and expense of NC and Vita and shall occur
no later than within five (5) Business Days following the termination of the
Selloff Period).

 

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4. Service Managers; Governance.

 

(a) Each party will designate a services manager (that party’s “Services
Manager”) who will be directly responsible for coordinating and managing the
delivery or receipt of the Transition Services and have the authority to act on
such party’s behalf with respect to matters relating to this Agreement. Each
party’s designated Services Manager shall possess sufficient knowledge,
experience and expertise to qualify him or her to manage the delivery or receipt
of the Transition Services. The Services Managers will work with each other to
address issues and to manage the parties’ relationship under this Agreement.

 

(b) NC hereby designates Michael Scagluso as its Services Manager, and Buyer
hereby designates Steve Rolfes as its Services Manager (to the extent such
Person is an employee of NC or Buyer or any of their respective Affiliates, as
applicable). Each party shall have the right, upon prior written notice to the
other party, to replace its respective Services Manager from time to time with a
substitute manager with comparable job scope, knowledge, expertise and
decision-making authority.

 

5. Standards of Performance. NC shall perform the Transition Services in (i) a
professional, workmanlike and timely manner and otherwise in a manner and with
substantially the same degree of care, skill and prudence customarily exercised
in its own operations, and (ii) compliance in all material respects with all
applicable Laws. NC DISCLAIMS ALL OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO THE TRANSITION SERVICES.

 

6. Invoice and Payment Procedures.

 

(a) Buyer shall pay NC for the Transition Services provided hereunder by means
of direct funds transfer from Buyer’s account to NC’s designated account. Each
month during the Term, NC shall submit to Buyer for payment an invoice,
accompanied by a monthly income statement with respect thereto, reasonably
detailing the amounts due under this Agreement with respect to the Transition
Services for the immediately preceding month, as such amounts are set forth in
more detail in Exhibit C. NC shall, in determining the invoiced amounts and
preparing the accompanying income statement, account for the provision of the
Transition Services using methods, policies and procedures consistent with those
used historically by NC in the preparation of its financial statements. Such
invoice shall be payable by Buyer within thirty (30) days from the date of
receipt of such invoice (the “Payment Period”) unless Buyer delivers a Notice of
Dispute (as defined below) during the Payment Period, in which case Buyer shall
pay during the Payment Period all amounts not identified as disputed in such
Notice of Dispute. The parties agree and acknowledge that the failure to pay any
amount disputed in good faith in accordance with this Agreement shall not be
considered a breach of this Agreement unless and until such dispute is resolved
and any amounts owed have not been promptly paid, and NC shall continue to
perform its obligations under this Agreement to provide Transition Services
notwithstanding the existence of such dispute. During the Payment Period, as
soon as reasonably practicable after receipt of any reasonable written request
by Buyer, NC shall provide Buyer with data and documentation supporting the
calculation of a particular fee for the purpose of verifying the accuracy of
such calculation.

 

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(b) If Buyer disputes, in good faith, any amounts owed by Buyer to NC set forth
in any invoice delivered pursuant to Section 6(a): (x) Buyer shall pay to NC the
undisputed portion of such amounts within the Payment Period; (y) Buyer shall
provide a written explanation to NC of what amounts are in dispute, and why such
amounts are in dispute (the “Notice of Dispute”), together with reasonable
supporting documentation in respect thereof; and (z) Buyer and NC shall
thereafter use commercially reasonable good faith efforts to resolve the
disputed amounts within ten (10) Business Days. If Buyer and NC are unable to
resolve all matters specified in a Notice of Dispute within ten (10) Business
Days following the delivery of such Notice of Dispute, such dispute Buyer and NC
shall cause direct negotiations between Jonathan Greenhut, on behalf of NC, and
Steve Rolfes, on behalf of Buyer (to the extent such Person is an employee of NC
or Buyer or any of their respective Affiliates, as applicable) to occur with
respect thereto.

 

(c) If any matter set forth in a Notice of Dispute is still unresolved after
thirty (30) days following delivery thereof (the “Consultation Period”), the
parties shall submit all matters that remain in dispute with respect to the
Notice of Dispute to (i) an independent certified public accounting firm in the
United States of national recognition mutually acceptable to Buyer and NC (the
“Independent Accounting Firm”) or (ii) if Buyer and NC are unable to agree upon
such a firm within ten (10) Business Days after the end of the Consultation
Period, then within an additional ten (10) Business Days, Buyer and NC shall
each select one such firm and those two firms shall select a third such firm, in
which event “Independent Accounting Firm” shall mean such third firm. Buyer and
NC shall use commercially reasonable best efforts to cause the Independent
Accounting Firm to reach a determination of the amount due in respect of the
portion of the applicable invoice identified in the Notice of Dispute, not more
than thirty (30) day after such referral. Such determination shall be made by
the Independent Accounting Firm based solely on the terms contained in this
Agreement and presentations made by each of the parties hereto. Nothing herein
shall be construed to authorize or permit the Independent Accounting Firm to
resolve or otherwise review any items which are not specifically disputed in the
Notice of Dispute. With respect to each disputed matter, such determination, if
not in accordance with the position of either Buyer or NC, shall not be in
excess of the amount, as included in the invoice by NC, nor less than the
amount, as advocated by Buyer in the Notice of Dispute with respect to such
disputed matter, respectively. The action of the Independent Accounting Firm
pursuant to this Section 6(c) with respect to each items which is specifically
disputed in the Notice of Dispute shall be final and binding on the parties,
absent manifest error.

  

(d) The cost of the Independent Accounting Firm’s review and determination shall
be shared equally by Buyer and NC. During the review by the Independent
Accounting Firm, the Buyer and NC and their respective accountants will each
make available to the Independent Accounting Firm interviews with such
individuals, and such information, books and records and work papers, as may be
reasonably requested by the Independent Accounting Firm to fulfill its
obligations under Section 6(c). In acting under this Agreement, the Independent
Accounting Firm will be entitled to the privileges and immunities of an
arbitrator.

  

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7. Term; Termination. NC’s obligations hereunder with respect to any Transition
Service will expire on the earliest of (i) the date Buyer terminates such
Transition Service as contemplated below, (ii) the expiration of the Transition
Period; provided, however, that in the event that Buyer determines, in its sole
discretion, that it requires NC to continue to provide any of the Transition
Services after the expiration of the Transition Period (a “Further Term”), it
shall notify NC in writing, which notice shall be delivered no less than thirty
days prior to the expiration of the Transition Period, indicating is electing to
make an extension to the Transition Period, which extension shall not extend
beyond twelve (12) months from the Commencement Date (the “Final Termination
Date”). For the avoidance of doubt, unless otherwise agreed to the parties in
writing, the terms and conditions of this Agreement applicable to the Transition
Services shall continue to apply for the Further Term. If Buyer elects to have a
Further Term in accordance with the foregoing, then any reference to the
Transition Period referred to in this Agreement shall automatically be extended
until the expiration of the Further Term in accordance with foregoing,
notwithstanding any finite period referred to elsewhere in this Agreement. Buyer
may terminate the provision of Transition Services hereunder by any specified
Personnel or NC as a whole, prior to the Final Termination Date, at any time
upon at least thirty (30) days’ prior written notice to NC. Buyer shall, as of
expiration or earlier termination of the Transition Period or, if applicable,
Further Term, and no termination of this Agreement prior to the Final
Termination Date shall relieve Buyer of its obligation to, pay to NC all sums
owed to NC for the provision of such terminated Transition Service(s) through
the date of termination thereof, including without limitation, the amount of
retention bonuses paid by NC to Personnel that maintained their employment
through the date of such expiration or termination, in amounts not to exceed the
retention bonus amount in respect of such Personnel as set forth in Exhibit D.
In addition, notwithstanding the earlier termination of this Agreement in
accordance herewith, Buyer shall pay the amounts described in Item 1 of Exhibit
C hereto with respect to use of the Premises through the Final Termination Date.
NC shall have the right, at its option, to terminate this Agreement upon thirty
(30) days advance written notice in the event that Buyer defaults in the
performance of any covenant, agreement, term or provision of this Agreement to
be performed by Buyer and such default is not remedied during such 30-day
period, provided that the notice and cure period applicable to Buyer’s failure
to pay when due any NC invoice in respect of Transition Services shall be five
(5) Business Days. Buyer shall use commercially reasonable efforts to transition
the Transition Services provided under this Agreement to its own operations as
promptly as practical and prior to the Final Termination Date. No provision of
this Agreement shall affect, be construed as, or operate as a waiver of the
right of the party aggrieved by any breach of this Agreement to be compensated
for any injury or damage resulting therefrom which is incurred either before or
after termination of this Agreement.

 

8. Proprietary Material. All books, records, data, work product and other
documents relating to the businesses of each party and their respective
Affiliates (the “Owner”) including, without limitation, all employee records,
medical records, data, information, software, and manuals (collectively, the
“Proprietary Material”), whether or not prepared by such party or otherwise
coming into the possession or control of such party or of the other party as a
result of or in connection with the performance of the Transition Services,
shall be and remain the exclusive property of the Owner, and the other party
shall not at any time, directly or indirectly, assert any interest or property
rights therein. Such Proprietary Material shall not be used for any purpose
other than in connection with the provision of Transition Services.
Determination of ownership of Proprietary Material shall take into account the
transfer of the Purchased Assets pursuant to the Purchase Agreement. Each party
shall establish and maintain reasonable precautions against the destruction or
loss of any such Proprietary Materials. Upon the expiration or termination of
this Agreement, and without any further action, each party shall cause all such
materials and all copies of the Proprietary Materials to be destroyed or, upon
the request of the Owner thereof, returned to the Owner thereof in such format,
electronic or otherwise, as the Owner may reasonably request as soon as
reasonably possible following the effective date of the expiration or
termination.

 

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9. Assignment. This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their heirs, successors
and permitted assigns, and shall not confer upon any other person any rights or
remedies hereunder. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other party, except that Buyer may assign all or any
portion of its rights and obligations hereunder to any Affiliate of Buyer and
Buyer may, without such consent, assign all such rights to any Person providing
financing to Buyer as collateral security for such financing; provided that no
such assignment shall relieve Buyer of any of its obligations hereunder.

 

10. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a) This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without giving effect to any choice or
conflict of law provision or rule (whether of the State of New York or any other
jurisdiction).

 

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE INSTITUTED IN THE
FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW
YORK IN EACH CASE LOCATED IN THE CITY OF NEW YORK AND COUNTY OF NEW YORK, AND
EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN
ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR
OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH IN THE PURCHASE
AGREEMENT SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER
PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION
OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

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(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND,
THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B)
SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES
THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 10(C).

 

(d) Notwithstanding anything to contrary herein, the Parties agree to generally
use their commercially reasonable, good faith efforts to resolve any
disagreement with respect to the operation of this Agreement or the provision of
the Transition Services prior to seeking a claim or other relief under this
Section 10 or Section 16.

 

11. Confidentiality.

 

(a) Each party acknowledges that, in the course of this business relationship,
it may become aware of or come into possession of certain confidential or
proprietary information of the other party including but not limited to the
Proprietary Material (as defined in Section 8). Each party agrees to maintain
the confidentiality of such confidential and proprietary information (including
the Proprietary Material) and agrees not to disclose such confidential and
proprietary information to third parties, make copies, or use the information
for any purpose other than as necessary in connection with the performance of
the Transition Services, without the prior written permission of the Owner of
the information. Each party agrees to either return all copies of any such
information when all services to be performed under this Agreement have been
performed or shall destroy such copies and an authorized officer shall certify
to such destruction. Each party agrees that it will comply with applicable state
and federal privacy law with respect to the handling of information pursuant to
this Agreement. This Section 11 shall survive any termination or expiration of
this Agreement.

 

(b) NC and Vita agree to (i) inform the Greenhut Employee of the restrictions
contained in Section 11(a) and the Greenhut Employee shall agree to be bound by
the Section 11(a) to the same extent as if he or she was a party to this
Agreement and (ii) be responsible for any breaches of any of the provisions of
this Section 11 by the Greenhut Employee (it being understood that such
responsibility shall be in addition to and not by way of limitation of any right
or remedy the Buyer may have against the Greenhut Employee with respect to such
breach).

 

12. Indemnification.

 

(a) Indemnification By NC. NC agrees to hold harmless and indemnify Buyer and
its Affiliates, directors, managers, officers, employees, agents,
Representatives and permitted assignees (hereinafter collectively referred to as
“Buyer Indemnitees”) from and against any and all liabilities, losses and
expenses (including, but not limited to, reasonable attorneys’ fees) incurred by
any such Buyer Indemnitee in connection with claims, demands, lawsuits,
judgments, penalties or actions, arising from, related to or based upon (i) a
material breach of this Agreement by, or the gross negligence or willful
misconduct under this Agreement of, NC, its Representatives or permitted
subcontractors, and (ii) any infringement, violation or misappropriation of the
Intellectual Property Rights of any third party with respect to any of the
Transition Services.

 

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(b) Indemnification By Buyer. Buyer agrees to hold harmless and indemnify NC and
its Affiliates, directors, managers, officers, employees, agents,
Representatives and permitted assigns (hereinafter collectively referred to as
“NC Indemnitees”) from and against any and all liabilities, losses and expenses
(including, but not limited to, reasonable attorneys’ fees) incurred by any such
NC Indemnitee in connection with claims, demands, lawsuits, judgments, penalties
or actions, arising from, related to or based upon (i) the performance of the
Transition Services hereunder, except to the extent resulting from a material
breach by, or gross negligence or willful misconduct of, NC or the Personnel,
(ii) a material breach of this Agreement by Buyer, its Representatives or its
permitted assigns, (iii) the gross negligence or willful misconduct under this
Agreement of Buyer, its Representatives or its permitted assigns and (iv) the
occupation of the Premises by Buyer Employees.

 

(c) Procedure for Indemnity.

 

(i) Notice of Claims. If a claim (a “Claim”) is to be made by a party entitled
to indemnification hereunder against the indemnifying party, the party claiming
such indemnification shall, give written notice (a “Claim Notice”) to the
indemnifying party as soon as practicable after the party entitled to
indemnification becomes aware of any fact, condition or event which may give
rise to damages for which indemnification may be sought under this Section 12;
provided however, that the failure of any indemnified party to give timely
notice hereunder shall not affect rights to indemnification hereunder, except to
the extent that the indemnifying party demonstrates that the defense of such
claim is prejudiced by the indemnified party’s delay or failure to give such
notice.

 

(ii) Defense of Third-Party Claims. If any lawsuit or enforcement action is
filed by a third party against any party entitled to the benefit of indemnity
hereunder with respect thereto, a Claim Notice thereof shall be given to the
indemnifying party as promptly as practicable (and, in any event, within thirty
(30) days after the service of the citation or summons). The failure of any
indemnified party to give timely notice hereunder shall not affect rights to
indemnification hereunder, except to the extent that the indemnifying party
demonstrates that the defense of such claim is prejudiced by the indemnified
party’s delay or failure to give such notice. After such notice, if the
indemnifying party shall acknowledge, in writing, to the indemnified party that
the indemnifying party is obligated under the terms of its indemnity hereunder
in connection with such lawsuit or action, then the indemnifying party shall be
entitled, if it elects to do so, at its own cost, risk and expense, (i) to take
control of the defense and investigation of such lawsuit or action, (ii) to
employ and engage legal counsel of its own choice, but, in any event, reasonably
acceptable to the indemnified party, to handle and defend the same unless the
named parties to such action or proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and the
indemnified party has been advised by counsel that there may be one or more
legal defenses available to such indemnified party that are different from or
additional to those available to the indemnifying party, in which event, the
indemnified party shall be entitled, at the indemnifying party’s cost, risk and
expense, to separate counsel of its own choosing. The indemnifying party shall
not, without the written consent of the indemnified party, which shall not be
unreasonably withheld, conditioned or delayed, (i) settle or compromise any
Claim or consent to the entry of any judgment which does not include an
unconditional written release, by the claimant or plaintiff, of the indemnified
party, from all liability in respect of such Claim or (ii) settle or compromise
any Claim if the settlement imposes equitable remedies or material obligations
on the indemnified party other than financial obligations for which such
indemnified party will be indemnified hereunder. No Claim which is being
defended in good faith by the indemnifying party in accordance with the terms of
this Agreement shall be settled or compromised by the indemnified party without
the written consent of the indemnifying party, which consent shall not be
unreasonably withheld or delayed.

 

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(iii) If the indemnifying party fails to respond with respect to such lawsuit or
action within thirty (30) days after receipt of the Claim Notice, the
indemnified party against which such lawsuit or action has been asserted will
(upon delivering notice to such effect to the indemnifying party) have the right
to undertake, at the indemnifying party’s cost and expense, the defense,
compromise or settlement of such lawsuit or action on behalf of and for the
account and risk of the indemnifying party; provided, however, that such lawsuit
or action shall not be compromised or settled without the written consent of the
indemnifying party, which consent shall not be unreasonably withheld or delayed.
If the indemnified party settles or compromises such lawsuit or action without
the prior written consent of the indemnifying party, the indemnifying party will
bear no liability hereunder for or with respect to such lawsuit or action,
unless the indemnifying party unreasonably withheld consent. In the event either
party assumes the defense of a particular lawsuit or action in the manner
contemplated above, the party defense, compromise or settlement. The
indemnifying party shall be liable for any settlement of any action effected
pursuant to and in accordance with this Section 11 and for any final judgment
(subject to any right of appeal), and the indemnifying party agrees to indemnify
and hold harmless the indemnified party from and against any damages for which
indemnification may be sought under this Section 12 by reason of such settlement
or judgment.

 

(d) Limitation on Indemnity.

 

(i) To the extent that any claim, action, demand or lawsuit that is subject to
indemnification under this Agreement is covered by insurance, the amount of any
indemnity payment shall be net of the Net Proceeds of any insurance policy paid
to the indemnified party with respect to such claim, action, demand or lawsuit.
For purposes of this Section 12(d), “Net Proceeds” shall mean the insurance
proceeds actually received, less any expenses of recovery, deductibles, and/or
co-payments. If any amounts are reimbursed under insurance coverage, (i)
concurrently with indemnification under this Section 12, the indemnified amount
shall be offset by an amount equal to the Net Proceeds received under insurance
coverage or (ii) subsequent to indemnification under this Section 12, the
indemnified party shall reimburse the indemnifying party in an amount equal to
the Net Proceeds subsequently received under insurance coverage.

 

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(ii) Amounts due to any indemnified party pursuant to this Section 12 shall be
determined after taking into account any indemnity, contribution or other
similar payment actually received by the indemnified party from any third party
with respect thereto.

 

(iii) The indemnification provided in this Section 12 shall be the sole and
exclusive remedy for any claims covered by Section 12(a) and Section 12(b)
hereof. Notwithstanding the foregoing, nothing herein shall prevent any of the
parties from bringing (i) an equitable action to enforce a covenant or
obligation or (b) an action based upon allegations of fraud with respect to the
other party in connection with this Agreement.

 

(e) Disclaimer of Certain Damages. Neither party shall be liable to the other
under this Agreement for any indirect, special, or consequential damages or lost
profits hereunder. In addition, in no event shall either party be liable for any
punitive or exemplary damages of any kind. For purposes of clarity only, and
without limiting the generality of the foregoing, the indemnifying party shall
be responsible for direct damages, including without limitation, reasonable
attorneys’ fees.

 

13. Independent Contractors. In its performance of this Agreement, NC will at
all times act in its own capacity and right as an independent contractor, and
nothing contained herein may be construed to make NC an agent, partner, or joint
venturer of Buyer.

 

14. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

15. Notices. All notices, consents, requests, demands and other communications
hereunder are to be in writing and given in the manner set forth in the Purchase
Agreement.

 

16. Specific Performance. NC acknowledges and agrees that Buyer would be damaged
irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms and that any breach of this
Agreement by NC could not be adequately compensated by monetary damages.
Accordingly, NC agrees that, in addition to any other right or remedy to which
Buyer, as applicable, may be entitled, at law or in equity, Buyer will be
entitled to seek to enforce any provision of this Agreement by a decree of
specific performance and to temporary, preliminary and permanent injunctive
relief to prevent breaches or threatened breaches of the provisions of this
Agreement, without posting any bond or other undertaking.

 

17. Force Majeure. NC shall not be considered in default in the performance of
its obligations under this Agreement to the extent that its performance of such
obligations is prevented or delayed by any cause beyond its control, including,
but not limited to, civil disturbances, rebellion, invasion, epidemic,
hostilities, war, acts of terrorism, embargo, natural disaster, acts of God,
fire, sabotage, loss and destruction of property, other events or situations
which NC was unable to prevent or overcome despite its exercise of reasonable
due diligence.

 

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18. Amendment and Modification. This Agreement (including the exhibits hereto),
the Purchase Agreement (including the exhibits and schedules thereto) and other
Transaction Agreements may not be modified, amended, supplemented or waived
except by a writing signed by each of NC, Vita and Buyer, and such writing must
refer specifically to this Agreement.

 

19. Entire Agreement. This Agreement, embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between the parties hereto with respect to the subject matter hereof.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement through
their duly authorized representatives to be effective as of the date first
written above.

  

NC:    

BUYER: 

         

NUTRICAP LABS, LLC 

  TCC CM SUBCO I, INC.           By:   /s/ Jonathan Greenhut  

By: 

/s/ Richard H. Neuwirth  

Name: 

Jonathan Greenhut     Name:   Richard H. Neuwirth   Title:   Manager    
Title:   Executive Vice President, Chief Legal Officer and Secretary            
   

  

VITA: 

     

VITACAP LABS, LLC 

      By:  

/s/ Jonathan Greenhut

    Name:  

Jonathan Greenhut 

    Title:   Manager  

 

 

[Signature Page to Transition Services Agreement]