Document:

exv10w3

 

Exhibit 10.3

 

TAX ALLOCATION AGREEMENT

by and between

FORTUNE BRANDS, INC.

and

ACCO WORLD CORPORATION

 

______________, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE I	 	DEFINITIONS	 	 	2	 
	 

	 	Section 1.01
	 	General
	 	 	2	 
	 

	 	Section 1.02
	 	Schedules, etc
	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II	 	FILING OF TAX RETURNS; PAYMENT OF TAXES; REFUNDS	 	 	7	 
	 

	 	Section 2.01
	 	Preparation of Tax Returns
	 	 	7	 
	 

	 	Section 2.02
	 	Payment of Income Taxes
	 	 	9	 
	 

	 	Section 2.03
	 	Tax Refunds and Carrybacks
	 	 	10	 
	 

	 	Section 2.04
	 	Straddle Period Taxes
	 	 	11	 
	 

	 	Section 2.05
	 	Tax Audit Adjustments
	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III	 	TAX INDEMNIFICATION; TAX CONTESTS	 	 	13	 
	 

	 	Section 3.01
	 	Indemnification
	 	 	13	 
	 

	 	Section 3.02
	 	Distribution Taxes
	 	 	15	 
	 

	 	Section 3.03
	 	Notice of Indemnity
	 	 	16	 
	 

	 	Section 3.04
	 	Payments
	 	 	16	 
	 

	 	Section 3.05
	 	Tax Contests
	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV	 	OPTIONS; COMPENSATION PAYMENTS; FOREIGN NET OPERATING LOSSES;
SEPARATE TAX RETURN FOR 2005; INTEREST CHARGE FOR LATE PAYMENTS	 	 	19	 
	 

	 	Section 4.01
	 	Stock Options
	 	 	19	 
	 

	 	Section 4.02
	 	Compensation Payments
	 	 	20	 
	 

	 	Section 4.03
	 	Foreign Net Operating Losses
	 	 	21	 
	 

	 	Section 4.04
	 	Separate Tax Return Liability for 2005
	 	 	21	 
	 

	 	Section 4.05
	 	Change in Law
	 	 	22	 
	 

	 	Section 4.06
	 	Interest Charge for Late Payments
	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V	 	COOPERATION AND EXCHANGE OF INFORMATION	 	 	22	 
	 

	 	Section 5.01
	 	Inconsistent Actions
	 	 	22	 
	 

	 	Section 5.02
	 	Cooperation and Exchange of Information
	 	 	23	 
	 

	 	Section 5.03
	 	Tax Records
	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI	 	MISCELLANEOUS	 	 	24	 
	 

	 	Section 6.01
	 	Entire Agreement; Construction
	 	 	24	 
	 

	 	Section 6.02
	 	Effectiveness
	 	 	25	 
	 

	 	Section 6.03
	 	Survival of Agreements
	 	 	25	 
	 

	 	Section 6.04
	 	Governing Law
	 	 	25	 
	 

	 	Section 6.05
	 	Notices
	 	 	25	 
	 

	 	Section 6.06
	 	Consent to Jurisdiction
	 	 	26	 
	 

	 	Section 6.07
	 	Amendments
	 	 	27	 
	 

	 	Section 6.08
	 	Assignment
	 	 	27	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 

	 	Section 6.09
	 	Captions; Currency
	 	 	27	 
	 

	 	Section 6.10
	 	Severability
	 	 	27	 
	 

	 	Section 6.11
	 	Parties in Interest
	 	 	27	 
	 

	 	Section 6.12
	 	Schedules
	 	 	28	 
	 

	 	Section 6.13
	 	Waivers; Remedies
	 	 	28	 
	 

	 	Section 6.14
	 	Counterparts
	 	 	28	 
	 

	 	Section 6.15
	 	Performance
	 	 	28	 
	 

	 	Section 6.16
	 	Interpretation
	 	 	28	 

	 	 	 
	SCHEDULE 3.02(b)

	 	ACCO TAX ACT
	 
	SCHEDULE 3.02(c)

	 	ACCO TAX REPRESENTATION LETTER
	 
	SCHEDULE 3.02(d)

	 	FORTUNE TAX REPRESENTATION LETTER
	 
	SCHEDULE 4.04(b)

	 	CERTAIN FOREIGN DIVIDENDS

ii

 

TAX ALLOCATION AGREEMENT

               TAX ALLOCATION AGREEMENT (this “Agreement”) dated as of ___, 2005, by and between
FORTUNE BRANDS, INC., a Delaware corporation (“Fortune”), and ACCO WORLD CORPORATION, a Delaware
corporation and a wholly-owned subsidiary of Fortune (“ACCO”).

               WHEREAS, Fortune and ACCO have entered into a distribution agreement (the “Distribution
Agreement”), pursuant to which all of the issued and outstanding shares of common stock, par value
$1.00 per share, of ACCO (the “ACCO Common Stock”) will be distributed on a pro rata basis to
Fortune’s stockholders as provided in the Distribution Agreement (the “Distribution”);

               WHEREAS, the Boards of Directors of Fortune, ACCO, GENERAL BINDING CORPORATION, a Delaware
corporation (“GBC”) and GEMINI ACQUISITION SUB, INC., a Delaware corporation and a wholly-owned
subsidiary of ACCO (“Acquisition Sub”) have approved an agreement and plan of merger (the “Merger
Agreement”) pursuant to which Acquisition Sub and GBC will enter into a merger transaction in order
to advance the long-term strategic business interests of Fortune, ACCO, GBC and Acquisition Sub;

               WHEREAS, the Boards of Directors of Fortune, ACCO, GBC and Acquisition Sub have determined to
consummate such merger transaction by means of a business combination transaction in which,
immediately following the Distribution Acquisition Sub will merge with and into GBC (the “Merger”),
with GBC being the surviving corporation;

               WHEREAS, the parties to this Agreement intend that the Distribution qualify under Section 355
of the Code (as defined herein) as a spin-off, that the Merger qualify under Section 368 of the
Code as a reorganization and that the Merger Agreement shall constitute a “plan or reorganization”
for purposes of Sections 354 and 361 of the Code; and

               WHEREAS, Fortune and ACCO wish to provide for and agree upon the allocation between the
Fortune Tax Group (as defined herein) and the ACCO Tax Group (as defined herein) of all
responsibilities, liabilities and benefits relating to or affecting Taxes (as defined herein) paid
or payable by either of them for all taxable periods, whether beginning before, on or after the
Distribution Date (as defined herein).

 

 

               NOW, THEREFORE, in consideration of the premises and of the respective agreements contained in
this Agreement, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

               Section 1.01 General. As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular and plural forms of
the terms defined). Any capitalized term not otherwise defined in this Agreement shall have the
meaning ascribed to it in the Distribution Agreement.

               “Actually Realized” shall mean, for purposes of determining the timing of any Taxes (or
related Tax cost or benefit) relating to any payment, transaction, occurrence or event, the time at
which the amount of Taxes (including estimated Taxes) payable by any person is increased above or
reduced below, as the case may be, the amount of Taxes that such person would be required to pay
but for the payment, transaction, occurrence or event.

               “ACCO” shall have the meaning ascribed thereto in the preamble.

               “ACCO Foreign NOLs” shall have the meaning set forth in Section 4.03.

               “ACCO Group Employees and Former Employees” shall mean individuals (i) who are employees of
any member of the ACCO Tax Group on the date of the event giving rise to a deduction in respect of
any Stock Options held by such individuals or (ii) who were employees of any member of the ACCO Tax
Group and were not thereafter employees of any member of the Fortune Tax Group.

               “ACCO Post-Distribution Tax Act” shall have the meaning set forth in Section 3.01(a).

               “ACCO Tax Act” shall have the meaning set forth in Section 3.02(b).

               “ACCO Tax Group” shall mean (i) ACCO and (ii) any corporation or other legal entity which ACCO
directly or indirectly (a) owns immediately after the Distribution, or (b) owned prior to the
Distribution but did not own at the time of the Distribution, but only if such entity was disposed
of directly or indirectly by ACCO to an entity other than a member of the Fortune Tax Group.

2

 

               “ACCO Tax Representation Letter” shall mean the letter delivered by ACCO to Fortune on the
Distribution Date, substantially in the form set forth in Schedule 3.02(c) attached hereto.

               “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor legislation.

               “Compensation Payments” shall mean all compensation payments made by or at the direction of
Fortune to employees of the ACCO Tax Group which are paid or accrued under the ACCO Senior
Management Incentive Plan or the Day-Timers Special Incentive Plan.

               “Distribution” shall mean the distribution of the ACCO Common Stock on a pro rata basis to
holders of Fortune Common Stock on the Distribution Date pursuant to the Distribution Agreement.

               “Distribution Agreement” shall have the meaning ascribed thereto in the preamble.

               “Distribution Date” shall mean the date on which the Distribution occurs (or, if different,
the date on which the Distribution is deemed to occur for U.S. federal Income Tax purposes). For
purposes of this Agreement, the Distribution shall be deemed effective as of the end of the day on
the Distribution Date.

               “Distribution Taxes” shall mean any Taxes resulting from (a) the failure of the Distribution
to qualify as a spin-off under Section 355 of the Code or (b) the failure of the Distribution to
qualify as tax-free to Fortune or any member of the Fortune Tax Group under Section 355(c) of the
Code.

               “Expenses” shall mean any and all expenses incurred in connection with investigating,
defending or asserting any claim, action, suit or proceeding incident to any matter indemnified
against hereunder (including court filing fees, court costs, arbitration fees or costs, witness
fees, and reasonable fees and disbursements of legal counsel, investigators, expert witnesses,
consultants, accountants and other professionals).

               “Foreign Income Tax” shall mean any Income Tax other than a U.S. federal, state or local
Income Tax.

               “Foreign Income Tax Returns” shall mean any Income Tax Return which is not a U.S. federal,
state or local Income Tax Return.

               “Fortune” shall have the meaning ascribed thereto in the preamble.

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               “Fortune Board” shall mean the Board of Directors of Fortune or a duly authorized committee
thereof.

               “Fortune Common Stock” shall mean the Common Stock, par value of $3.125 per share, of Fortune.

               “Fortune Common Stock Options” shall mean options to acquire Fortune Common Stock.

               “Fortune Credited Cash” shall have the meaning ascribed thereto in the Distribution Agreement.

               “Fortune Tax Group” shall mean (i) Fortune, (ii) any corporation or other legal entity which
Fortune directly or indirectly owns on the Distribution Date at any time after the Distribution,
and (iii) any other corporation or other legal entity which Fortune directly or indirectly owned at
any time prior to the Distribution Date other than a member of the ACCO Tax Group.

               “Fortune Tax Representation Letter” shall mean the letter delivered by Fortune to ACCO on the
Distribution Date, substantially in the form set forth in Schedule 3.02(d) attached hereto.

               “Fortune/ACCO Tax Group” shall mean any corporation or other legal entity which is a member of
the Fortune Tax Group or the ACCO Tax Group but only with respect to taxable periods (or portions
thereof) ending on or before the Distribution Date.

               “GBC” shall have the meaning ascribed thereto in the preamble.

               “Income Tax” shall mean (a) any Tax based upon, measured by, or calculated with respect to (i)
net income or profits (including, but not limited to, any capital gains, minimum Tax and any Tax on
items of Tax preference, but not including sales, use, real or personal property, gross or net
receipts, transfer or similar Taxes) or (ii) multiple bases (including, but not limited to,
corporate franchise, doing business or occupation Taxes) if one or more of the bases upon which
such Tax may be based, measured by, or calculated with respect to, is described in clause (i)
above, or (b) any U.S. state or local franchise Tax; including in the case of each of (a) and (b)
any related interest and any penalties, additions to such Tax or additional amounts imposed with
respect thereto by any Tax Authority.

               “Income Tax Benefit” shall mean for any taxable period the excess of (i) the hypothetical
Income Tax liability of the taxpayer for the taxable period

4

 

calculated as if the Timing Difference or Reverse Timing Difference, as the case may be, had
not occurred but with all other facts unchanged, over (ii) the actual Income Tax liability of the
taxpayer for the taxable period, calculated taking into account the Timing Difference or Reverse
Timing Difference, as the case may be (treating an Income Tax refund or credit as a negative Income
Tax liability for purposes of such calculation).

               “Income Tax Detriment” shall mean for any taxable period the excess of (i) the actual Income
Tax liability of the taxpayer for the taxable period, calculated taking into account the Timing
Difference or Reverse Timing Difference, as the case may be, over (ii) the hypothetical Income Tax
liability of the taxpayer for the taxable period, calculated as if the Timing Difference or Reverse
Timing Difference, as the case may be, had not occurred but with all other facts unchanged
(treating an Income Tax refund or credit as a negative Income Tax liability for purposes of such
calculation).

               “Income Tax Return” shall mean any Tax Return that relates to Income Taxes.

               “Indemnitee” shall have the meaning set forth in Section 3.03.

               “Indemnitor” shall have the meaning set forth in Section 3.03.

               “Indemnity Issue” shall have the meaning set forth in Section 3.03.

               “IRS” shall mean the Internal Revenue Service.

               “Losses” shall mean any and all losses, costs, obligations, liabilities, settlement payments,
awards, judgments, fines, penalties, damages, expenses, deficiencies or other charges.

               “Non-Income Tax” shall mean any Tax other than an Income Tax.

               “Person” shall mean any individual, partnership, joint venture, corporation, limited liability
entity, trust, unincorporated organization or other entity (including a governmental entity).

               “Post-Distribution Taxable Period” shall mean a taxable period beginning after the
Distribution Date.

               “Post-Tax Indemnification Period” shall mean any Post-Distribution Taxable Period and that
portion of any Straddle Period that begins on the day after the Distribution Date.

5

 

               “Pre-Distribution Taxable Period” shall mean a taxable period ending on or before the
Distribution Date.

               “Representative” shall mean, with respect to any Person, any of such Person’s directors,
officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.

               “Reverse Timing Difference” shall mean an increase in income, gain or recapture, or a decrease
in deduction, loss or credit, as calculated for Income Tax purposes, of the taxpayer for any
taxable period coupled with an increase in deduction, loss or credit, or a decrease in income, gain
or recapture, of the taxpayer or a related taxpayer for the same or a subsequent taxable period.

               “Stock Options” shall mean ACCO Common Stock Options or Fortune Common Stock Options.

               “Straddle Period” shall mean a taxable period that includes but does not end on the
Distribution Date.

               “Tax” and “Taxes” shall mean all forms of taxation, whenever created or imposed, and whether
of the United States or elsewhere, and whether imposed by a federal, state, municipal,
governmental, territorial, local, foreign or other body, and without limiting the generality of the
foregoing, shall include net income, gross income, gross receipts, sales, use, value added, ad
valorem, transfer, recording, franchise, profits, license, lease, service, service use, payroll,
wage, withholding, employment, unemployment insurance, workers compensation, social security,
excise, severance, stamp, business license, business organization, occupation, premium, property,
environmental, windfall profits, customs, duties, alternative minimum, estimated or other taxes,
fees, premiums, assessments or charges of any kind whatever imposed or collected by any
governmental entity or political subdivision thereof, together with any related interest and any
penalties, additions to such tax or additional amounts imposed with respect thereto by any Tax
Authority.

               “Tax Authority” shall mean, with respect to any Tax, any governmental entity,
quasi-governmental body or political subdivision thereof that imposes such Tax and the agency (if
any) charged with the determination or collection of such Tax for such entity, body or subdivision.

               “Tax Group” shall mean the Fortune Tax Group or the ACCO Tax Group, as the case may be.

6

 

               “Tax Indemnification Period” shall mean any Pre-Distribution Taxable Period and that portion
of any Straddle Period that ends on the Distribution Date.

               “Tax Return” shall mean any return, filing, questionnaire, information return, election or
other document required or permitted to be filed, including requests for extensions of time,
filings made with respect to estimated tax payments, claims for refund and amended returns that may
be filed, for any period with any Tax Authority (whether domestic or foreign) in connection with
any Tax (whether or not a payment is required to be made with respect to such filing).

               “Timing Difference” shall mean a decrease in income, gain or recapture, or an increase in
deduction, loss or credit, as calculated for Income Tax purposes, of the taxpayer for any taxable
period coupled with a decrease in deduction, loss or credit, or an increase in income, gain or
recapture, of the taxpayer or a related taxpayer for the same or a subsequent taxable period.

               “Transaction Agreements” shall have the meaning ascribed thereto in the Distribution
Agreement.

               “Transfer Taxes” shall mean any sales Taxes, use Taxes, real property transfer or gains Taxes,
asset transfer documentary stamp Taxes or similar Taxes. For the avoidance of doubt, Transfer
Taxes shall not include any Income Taxes.

               Section 1.02 Schedules, etc. References to a “Schedule” are, unless otherwise
specified, to a Schedule attached to this Agreement; references to “Section” or “Article” are,
unless otherwise specified, to one of the Sections or Articles of this Agreement; references to
"sub-section” are, unless the context otherwise requires, references to the section in which the
reference appears; and references to this Agreement include the Schedules.

ARTICLE II

FILING OF TAX RETURNS; PAYMENT OF TAXES; REFUNDS

               Section 2.01 Preparation of Tax Returns.

               (a) Fortune shall prepare and file or cause to be prepared and filed all Tax Returns
(including amendments thereto) which are required to be filed in respect of (A) a member of the
ACCO Tax Group for any Pre-Distribution Taxable

7

 

Period or Straddle Period in which such ACCO Tax Group member is required to file a
consolidated, combined or unitary Tax Return with a member of the Fortune Tax Group or (B) a member
of the Fortune Tax Group for any taxable period.

               (b) ACCO shall prepare and file or cause to be prepared and filed all Tax Returns (including
amendments thereto) which are required to be filed in respect of (A) a member of the ACCO Tax Group
for any Pre-Distribution Taxable Period or Straddle Period in which such ACCO Tax Group member is
not required to file a consolidated, combined or unitary Tax Return with a member of the Fortune
Tax Group and (B) a member of the ACCO Tax Group for Post-Distribution Taxable Periods.

               (c) Unless Fortune and ACCO otherwise agree in writing, all Tax Returns (including amendments
thereto) described in this Section 2.01 filed after the date of this Agreement for Pre-Distribution
Taxable Periods or Straddle Periods, in the absence of a controlling change in law or
circumstances, shall be prepared on a basis consistent with the elections, accounting methods,
conventions and principles of taxation used for the most recent taxable periods for which Tax
Returns involving similar matters have been filed.

               (d) The Fortune Tax Group and the ACCO Tax Group will be included in the consolidated federal
Income Tax Returns of the Fortune Tax Group for the calendar year 2004 and the portion of the
calendar year 2005 ending on the Distribution Date. If the Distribution occurs, ACCO shall provide
complete packages of information and such other information as Fortune may reasonably request, to
enable Fortune to include the ACCO Tax Group in such consolidated federal Income Tax Returns (to
the extent information was not previously provided to Fortune). Such information packages shall be
prepared in accordance with instructions and procedures furnished by Fortune. In the case of the
2004 consolidated federal Income Tax Return, such information package was furnished by Fortune on
or about May 1, 2005 and the responses to such information package shall be delivered to Fortune
not later than August 1, 2005 (unless otherwise agreed by the parties hereto). In the case of the
2005 consolidated federal Income Tax Return, such information package shall be furnished by Fortune
not later than one month after the Distribution Date (unless otherwise agreed by the parties
hereto) and the responses to such information package shall be delivered to Fortune not later than
three months after receipt of such information package (unless otherwise agreed by the parties
hereto). Promptly after completion thereof, Fortune shall furnish to ACCO a copy of the pro forma
separate federal Income Tax Returns of the ACCO Tax Group, or similar data, used in the preparation
and filing of the consolidated federal Income Tax Returns of the Fortune Tax Group for the 2004 and
2005 tax periods, as the case may be. In the case of the 2004 and 2005 combined Illinois and
Kentucky Income Tax Returns, ACCO shall

8

 

provide pro forma separate Illinois and Kentucky Income Tax Returns of the ACCO Tax Group to
Fortune on the same dates as it provides responses to the corresponding federal Income Tax Return
information packages.

               (e) At least twenty (20) days prior to the due date (or filing date in the case of an amended
Tax Return) for filing any Tax Return which Fortune is responsible for filing under Section 2.01(a)
and, upon the request of Fortune, at least twenty (20) days prior to the due date (or filing date
in the case of any amended Tax Return) for filing any Tax Return for which ACCO is responsible for
filing under Section 2.01(a), the party responsible under this Section 2.01 for preparation of a
particular Tax Return for Pre-Distribution Taxable Periods or Straddle Periods shall make available
a draft of such Tax Return (or relevant portions thereof) for review and comment by such
non-responsible party. [Subject to the provisions of this Agreement, all decisions relating to the
preparation of Tax Returns shall be made in the sole discretion of the party responsible under this
Agreement for such preparation.]

               Section 2.02 Payment of Income Taxes.

               Except as otherwise provided in this Agreement:

               (a) Fortune shall pay or cause to be paid, on a timely basis, all Income Taxes shown as due on
Income Tax Returns for (A) any member of the ACCO Tax Group for any Pre-Distribution Taxable Period
or Straddle Period in which such ACCO Tax Group member is required to file a consolidated, combined
or unitary Income Tax Return with a member of the Fortune Tax Group and (B) any member of the
Fortune Tax Group for any taxable period; provided, however, that ACCO, on behalf
of the ACCO Tax Group, hereby assumes and agrees to pay directly to or at the direction of Fortune,
at times consistent with past practice, the portion of such Income Taxes shown as due on such
Income Tax Returns for any 2004 or 2005 Pre-Distribution Taxable Period or Straddle Period which
relates to a member of the ACCO Tax Group or its business, assets or activities determined in
accordance with Section 2.04. After the date of this Agreement, Fortune will provide a written
notice to ACCO of the ACCO Tax Group’s unpaid share of any consolidated, combined or unitary Income
Tax liability for 2004 and 2005, as applicable, after taking into account all estimated Income Tax
payments received by Fortune from ACCO. Such written notice shall include such computations and
descriptions as may be necessary to identify and support the basis for the determination of the
amount requested in the notice. ACCO shall pay any such amount to Fortune within ten days of
ACCO’s receipt of such written notice; provided however, that ACCO shall have the right to dispute
the amount and/or method of determining the amount requested in the notice, and, to the extent of
the amount

9

 

disputed, ACCO shall pay any disputed amount (as it may be revised pursuant to the resolution
of any dispute) to Fortune within the later of (i) ten days of ACCO’s receipt of such written
notice and (ii) ten days of ACCO’s receipt of such written notice as revised pursuant to the
resolution of any dispute.

               (b) ACCO shall pay or cause to be paid, on a timely basis, all U.S. state and local and all
foreign Income Taxes shown as due on Income Tax Returns for (A) any member of the ACCO Tax Group
for any Pre-Distribution Taxable Period or Straddle Period in which such ACCO Tax Group member is
not required to file a consolidated, combined or unitary Tax Return with a member of the Fortune
Tax Group and (B) any member of the ACCO Tax Group for any Post-Distribution Taxable Period.

               (c) Notwithstanding any other provision of this Agreement, all Transfer Taxes incurred in
connection with the Distribution and/or the Merger shall be paid by the ACCO Tax Group.

               (d) Prior to the determination under the Distribution Agreement of the Fortune Credited Cash,
a payment has been made by ACCO to Fortune (by means of an adjustment to intercompany accounts) in
respect of U.S. federal, state and local consolidated, combined and unitary Income Taxes due on or
about March 15, 2005 from ACCO to Fortune in respect of the 2004 tax year and for the period
through March 15, 2005 in respect of the 2005 tax year based on a good faith estimate by Fortune
and ACCO of such Taxes. It is intended that the Fortune Credited Cash shall reflect a reduction
for such amount of U.S. federal, state and local consolidated, combined and unitary Income Taxes so
paid. Notwithstanding any other provision of this Agreement, or any other Transaction Agreement,
in the event that the computation of Fortune Credited Cash does not reflect a reduction for such
payment, Fortune (and not ACCO) shall be liable for such amount of Income Taxes.

               Section 2.03 Tax Refunds and Carrybacks.

               (a) Retention and Payment of Tax Refunds.

               (i) Except as otherwise provided in this Agreement, Fortune shall be entitled to retain, and
to receive within ten days after Actually Realized by the ACCO Tax Group, the portion of all
refunds or credits of Taxes for which the Fortune Tax Group is liable pursuant to Section 2.02 or
Section 3.01(a), and ACCO shall be entitled to retain, and to receive within ten days after
Actually Realized by the Fortune Tax Group, the portion of all refunds or credits of Taxes for
which the ACCO Tax Group is liable pursuant to Section 2.02 or Section 3.01(b). For the avoidance
of doubt, the Fortune Tax Group (and not the ACCO Tax Group) shall be deemed the

10

 

party liable for (and therefore entitled to the refund or credit of) all Income Taxes paid by
the ACCO Tax Group on or before March 15, 2005. The amount of any refund or credit of Taxes to
which Fortune or ACCO is entitled to retain or receive pursuant to the foregoing sentence shall be
reduced to take account of any Taxes incurred by the ACCO Tax Group, in the case of a refund or
credit to which Fortune is entitled, or the Fortune Tax Group, in the case of a refund or credit to
which ACCO is entitled, upon the receipt of such refund or credit.

               (ii) [UK Tax refund claims already in progress to be addressed.]

               (b) Carrybacks. Unless the parties otherwise agree in writing, ACCO shall elect and
shall cause each member of the ACCO Tax Group to elect, where permitted by law, to carry forward
any net operating loss, net capital loss, charitable contribution or other item arising after the
Distribution Date that could, in the absence of such election, be carried back to a
Pre-Distribution Taxable Period. Except as otherwise provided in this Agreement, notwithstanding
the provisions of Section 2.03(a), (i) any refund or credit of Taxes resulting from the carryback
of any item of loss, deduction or credit attributable to the ACCO Tax Group arising in a Post-Tax
Indemnification Period to a Tax Indemnification Period shall be for the account and benefit of the
ACCO Tax Group, and (ii) any refund or credit of Taxes resulting from the carryback of any item of
loss, deduction or credit attributable to the Fortune Tax Group arising in a Post-Tax
Indemnification Period to a Tax Indemnification Period shall be for the account and benefit of the
Fortune Tax Group.

               (c) Refund Claims. Fortune shall be permitted to file at Fortune’s sole expense, and
ACCO shall reasonably cooperate with Fortune in connection with, any claims for refund of Taxes to
which Fortune is entitled pursuant to this Section 2.03 or any other provision of this Agreement.
Fortune shall reimburse ACCO for any reasonable out-of-pocket costs and expenses incurred by any
member of the ACCO Tax Group in connection with such cooperation. ACCO shall be permitted to file
at ACCO’s sole expense, and Fortune shall reasonably cooperate with ACCO in connection with, any
claims for refunds of Taxes to which ACCO is entitled pursuant to this Section 2.03 or any other
provision of this Agreement. ACCO shall reimburse Fortune for any reasonable out-of-pocket costs
and expenses incurred by any member of the Fortune Tax Group in connection with such cooperation.

               Section 2.04 Straddle Period Taxes. It is anticipated that, in the case of any member
of the ACCO Tax Group which files a consolidated, combined or unitary Income Tax Return with a
member of the Fortune Tax Group during all or a portion of 2005, (i) the relevant taxable year of
such ACCO Tax Group member beginning on January 1, 2005 will end on the Distribution Date, and
items of income,

11

 

gain, loss, deduction and credit with respect to such short taxable year shall be included in
the Fortune Tax Group consolidated, combined or unitary Income Tax Return for 2005 and (ii) items
of income, gain, loss, deduction and credit with respect to the short taxable year of such ACCO Tax
Group member beginning on the day after the Distribution Date will not be included in any Fortune
Tax Group Income Tax Return. Accordingly, it is not anticipated that any Straddle Period will
exist with respect to a consolidated, combined or unitary Income Tax Return. If a Straddle Period
exists and all or a portion of such Straddle Period is included in a consolidated, combined or
unitary Income Tax Return of the Fortune Tax Group, the Taxes of any member of the ACCO Tax Group
or its business, assets or activities for that portion of any Straddle Period ending on the
Distribution Date shall be computed on a “closing-of-the-books” basis as if such taxable period
ended as of the close of business on the Distribution Date, and the Taxes of any member of the ACCO
Tax Group or its business, assets or activities for that portion of any Straddle Period beginning
after the Distribution Date shall be computed on a “closing-of-the-books” basis as if such taxable
period began on the day after the Distribution Date. The Taxes of the Fortune Tax Group and the
ACCO Tax Group with respect to any Tax Return for a Pre-Distribution Period or a Straddle Period
which includes a member of each of the Fortune Tax Group and the ACCO Tax Group or their respective
businesses, assets or activities shall be allocated between the Fortune Tax Group, on the one hand,
and the ACCO Tax Group, on the other hand, determined in a manner analogous to that set forth in
Treasury Regulation Section 1.1552-1(a)(2).

               Section 2.05 Tax Audit Adjustments

               (a) U.S. Federal Consolidated Income Tax Audit Adjustments. In the event of a U.S.
federal Income Tax audit proceeding affecting U.S. federal Income Taxes due from a member of the
ACCO Tax Group for any Pre-Distribution Taxable Period, Fortune shall be responsible for payment of
any additional U.S. federal Income Taxes determined to be due as a result of such Tax audit
proceeding (by settlement or otherwise) for any such period.

               (b) State, Local and Foreign Income Tax Audit Adjustments. In the event of a Tax
audit proceeding affecting state, local or foreign Income Taxes due from a member of the ACCO Tax
Group for any Pre-Distribution Taxable Period or the portion of any Straddle Period ending on the
Distribution Date, Fortune shall be responsible for payment of any net additional state, local or
foreign Income Taxes determined to be due for such periods as a result of such Tax audit proceeding
(by settlement or otherwise) to the extent the total of such net additional Taxes due for all such
Tax audit proceedings exceed $1 million, but only to the extent of such excess. For the avoidance
of doubt, ACCO shall be responsible for payment of any net additional state, local or foreign
Income Taxes determined to be due as a result of any

12

 

such Tax audit proceeding to the extent the total of such net additional Taxes due for all
such Tax audit proceedings equals $1 million or less, and ACCO shall pay any such net additional
Taxes up to and including $1 million. In determining whether the amount of net additional Taxes
due for all such Tax audit proceedings equals $1 million or less, the amount of any increases in
such state, local or foreign Income Taxes due shall be decreased by the amount of any reduction in
U.S. federal, state, local or foreign Income Taxes for any Tax period attributable to such Tax
audit proceedings.

ARTICLE III

TAX INDEMNIFICATION; TAX CONTESTS

               Section 3.01 Indemnification.

               (a) Fortune Indemnification. Subject to Section 3.02, Fortune shall indemnify, defend
and hold harmless each member of the ACCO Tax Group and each of their respective Representatives
and each of the heirs, executors, successors and assigns of any of the foregoing from and against
any and all Losses and Expenses arising as a result of or in connection with:

               (i) all Taxes of the Fortune Tax Group;

               (ii) all Taxes for which Fortune is liable pursuant to Section 2.02, 2.05 or 3.02;

               (iii) all liability as a result of Treasury Regulation Section 1.1502-6 or any comparable U.S.
state, local or foreign provision for Income Taxes of any person which is or has ever been
affiliated with any member of the Fortune Tax Group or with which any member of the Fortune Tax
Group joins or has ever joined (or is or has ever been required to join) in filing any
consolidated, combined or unitary Income Tax Return for any Tax period ending on or before or
including the Distribution Date except to the extent the ACCO Tax Group is liable for such Taxes
pursuant to Section 2.05 or 3.02;

               (iv) all Taxes and all liability for any Tax period (whether beginning before, on or after the
Distribution Date) attributable to the breach by any member of the Fortune Tax Group of any
representation, warranty, covenant or obligation under this Agreement;

13

 

               (v) all Taxes imposed in connection with the transactions contemplated by the Distribution
Agreement or other Transaction Agreements, in each case undertaken to carry out the Distribution;
and

               (vi) all liability for any reasonable legal, accounting, appraisal, consulting or similar fees
and expenses relating to the foregoing.

Notwithstanding the foregoing, Fortune shall not indemnify, defend or hold harmless any member of
the ACCO Tax Group nor any of their respective Representatives or heirs, executors, successors and
assigns of any of them from any liability for Taxes (other than with respect to Distribution Taxes)
attributable to (I) any Transfer Taxes incurred in connection with the Distribution and/or the
Merger (which shall be paid by the ACCO Tax Group) or (II) any ACCO Post-Distribution Tax Act. An
“ACCO Post-Distribution Tax Act” shall mean any action taken by any member of the ACCO Tax Group
that is not contemplated by this Agreement, the Merger Agreement or any other Transaction Agreement
(x) after the Distribution or (y) that occurs after March 15, 2005 and is a [restructuring
transaction].

               (b) ACCO Indemnification. Subject to Section 3.02, ACCO shall be liable for, and
shall indemnify, defend and hold harmless each member of the Fortune Tax Group and each of the
respective Representatives and each of the heirs, executors, successors and assigns of any of the
foregoing from and against any and all Losses and Expenses arising as a result of or in connection
with:

               (i) all Taxes of any member of the ACCO Tax Group for any Post-Distribution Taxable Period;

               (ii) all Taxes for which ACCO is liable pursuant to Sections 2.02, 2.05 or 3.02;

               (iii) all Taxes and all liability for any Tax period (whether beginning before, on or after
the Distribution Date) attributable to the breach by any member of the ACCO Tax Group of any
representation, warranty, covenant or obligation under this Agreement;

               (iv) all Non-Income Taxes of any member of the ACCO Tax Group (whether attributable to any Tax
period beginning before, on or after the Distribution Date);

               (v) all Taxes attributable to an ACCO Post-Distribution Tax Act; and

14

 

               (vi) all liability for any reasonable legal, accounting, appraisal, consulting or similar fees
and expenses relating to the foregoing.

               Section 3.02 Distribution Taxes.

               (a) Except as otherwise provided in this Section 3.02, Fortune agrees to indemnify, defend and
hold harmless each member of the ACCO Tax Group and each of their respective Representatives and
each of the heirs, executors, successors and assigns of any of the foregoing from and against any
Distribution Taxes. For purposes of this Agreement, in determining the amount of any such
Distribution Taxes, any net operating losses of any member of the ACCO Tax Group which would
otherwise have been taken into account in determining the amount of such liability shall be
ignored.

               (b) ACCO agrees to indemnify, defend and hold harmless each member of the Fortune Tax Group
and each of their respective Representatives and each of the heirs, executors, successors and
assigns of any of the foregoing from and against any Distribution Taxes resulting from any ACCO Tax
Act. For purposes of this Agreement, in determining the amount of any such Taxes resulting from an
ACCO Tax Act for which ACCO shall be liable, any net operating losses of any member of the Fortune
Tax Group which would otherwise be taken into account in determining the amount of such liability
shall be ignored. An “ACCO Tax Act” shall be as specified on Schedule 3.02(b) attached hereto.

               (c) ACCO shall, and shall cause each member of the ACCO Tax Group to, comply with and take no
action inconsistent with the ACCO Tax Representation Letter, unless, pursuant to a favorable ruling
letter obtained from the IRS which is satisfactory to Fortune or the advice of nationally
recognized Tax counsel to Fortune, which advice shall be reasonably satisfactory to Fortune, such
act or omission would not adversely affect the U.S. federal Income Tax consequences of the
Distribution to Fortune or the shareowners of Fortune. Notwithstanding Section 3.01(b)(iii), the
parties intend that the sole remedy for breach of the covenants contained in this Section 3.02(c)
resulting in the imposition of any Distribution Taxes shall be as set forth in Section 3.02(b).

               (d) Fortune shall, and shall cause each member of the Fortune Tax Group to, comply with and
take no action inconsistent with the Fortune Tax Representation Letter, unless, pursuant to a
favorable ruling letter obtained from the IRS which is satisfactory to ACCO or the advice of
nationally recognized Tax counsel to ACCO, which advice shall be reasonably satisfactory to ACCO,
such act or omission would not adversely affect the U.S. federal Income Tax consequences of the
Distribution to Fortune or the shareowners of Fortune. Notwithstanding

15

 

Section 3.01(a)(iv), the parties intend that the sole remedy for breach of the covenants
contained in this Section 3.02(d) resulting in the imposition of any Distribution Taxes shall be as
set forth in Section 3.02(a).

               (e) Notwithstanding the foregoing, an ACCO Tax Act shall not include any transaction or action
specifically disclosed or specifically described in any of the Transaction Agreements or the Merger
Agreement or any action taken on or prior to the Distribution Date. An ACCO Tax Act shall not
include any action on the part of any member of the Fortune Tax Group.

               Section 3.03 Notice of Indemnity. Whenever a party hereto (hereinafter an
“Indemnitee”) becomes aware of the existence of an issue raised by any Tax Authority which could
reasonably be expected to result in a determination that would increase the liability for any Tax
of the other party hereto or any member of its Tax Group for any Tax period or require a payment
hereunder by the other party (hereinafter an “Indemnity Issue”), the Indemnitee shall in good faith
promptly give notice to such other party (hereinafter the “Indemnitor”) of such Indemnity Issue.
The failure of the Indemnitee to give such notice shall not relieve the Indemnitor of its
obligations under this Agreement, except to the extent such Indemnitor or a member of its Tax Group
is actually prejudiced by such failure to give notice.

               Section 3.04 Payments.

               (a) Timing Adjustments.

               (i) Timing Differences. If a Tax audit proceeding or an amendment of a Tax Return
results in a Timing Difference, and such Timing Difference results in a decrease in an indemnity
obligation Fortune has or would otherwise have under Section 3.01(a) and/or an increase in the
amount of a Tax refund or credit to which Fortune is entitled under Section 2.03 for one taxable
period then in each subsequent taxable period in which the ACCO Tax Group Actually Realizes an
Income Tax Detriment, Fortune shall pay to ACCO an amount equal to such Income Tax Detriment;
provided, however, that the aggregate payments which Fortune shall be required to
make under this Section 3.04(a)(i) with respect to any Timing Difference shall not exceed the
aggregate amount of the Income Tax Benefits realized by the Fortune Tax Group and the ACCO Tax
Group for such initial taxable period as a result of such Timing Difference. Fortune shall make
all such payments within ten days after ACCO notifies Fortune that the relevant Income Tax
Detriment has been Actually Realized.

               (ii) Reverse Timing Differences. If a Tax audit proceeding or an amendment to a Tax
Return results in a Reverse Timing Difference, and such Reverse

16

 

Timing Difference results in an increase in an indemnity payment obligation of Fortune under
Section 3.01(a) (or Fortune otherwise bears or has borne such increase in Taxes without
reimbursement by ACCO), and/or a decrease in the amount of a Tax refund or credit to which Fortune
is or would otherwise be entitled under Section 2.03 for one taxable period, then in each
subsequent taxable period in which the ACCO Tax Group Actually Realizes an Income Tax Benefit, ACCO
shall pay to Fortune within ten days after ACCO has Actually Realized such Income Tax Benefit an
amount equal to such Income Tax Benefit; provided, however, that the aggregate
payments which ACCO shall be required to make under this Section 3.04(a)(ii) with respect to
Reverse Timing Differences shall not exceed the aggregate amount of the Income Tax Detriments
realized by the ACCO Tax Group and the Fortune Tax Group for such initial taxable period as a
result of such Reverse Timing Difference.

               (iii) Offsetting Liabilities. If a Tax audit proceeding or an amendment to a Tax
Return results in an increase in state, local or foreign Income Tax liability that results in an
increase in an indemnity payment obligation of Fortune under Section 3.01(a) (or Fortune otherwise
bears or has borne such increase in Taxes without reimbursement by ACCO), coupled with a reduction
in U.S. federal, state, local or foreign Income Tax liability attributable to such Tax audit
proceeding or amendment to a Tax Return for the same taxable year, then to the extent the ACCO Tax
Group Actually Realizes an Income Tax Benefit, ACCO shall pay to Fortune within ten days after ACCO
has Actually Realized such Income Tax Benefit an amount equal to such Income Tax Benefit;
provided, however, that the aggregate payments which ACCO shall be required to make
under this Section 3.04(a)(iii) shall not exceed the aggregate amount of the Income Tax Benefit
arising in respect of such increase in state, local or foreign Income Tax liability for which
Fortune is liable under Section 3.01(a) (or for which Fortune otherwise bears or has borne without
reimbursement by ACCO).

               (b) Time for Payment. Except as otherwise provided in this Section 3.04(a), any
indemnity payment required to be made pursuant to this Agreement shall be paid within thirty days
after the indemnified party makes written demand (which written demand shall set forth such
computations and descriptions as may be necessary to identify and support the basis for the
determination of the indemnity payment amount) upon the indemnifying party, provided that in no
event shall such payment be required to be made earlier than five business days prior to the date
on which the relevant Taxes (including estimated Taxes) are required to be paid (or would be
required to be paid if no such Taxes are due) to the relevant Tax Authority. Notwithstanding any
other provision in this Agreement, to simplify the administration of this Agreement, the payment of
any amount less than $100,000 required to be made pursuant to this Agreement by one party hereto to
another party hereto need not be made to such other party prior to thirty days following the later
of

17

 

(i) the close of the calendar quarter during which such payment obligation arose and (ii) the
day during such calendar quarter when the aggregate amount of all such less than $100,000 payment
obligations arising during such calendar quarter exceeds $250,000.

               (c) Payments Net of Taxes and Tax Benefits. The amount of any payment under this
Agreement shall be (i) reduced to take into account any net Tax benefit realized by the recipient’s
Tax Group arising from the incurrence or payment by such recipient’s Tax Group of any amount in
respect of which such payment is made and (ii) increased to take into account any net Tax cost
incurred by the recipient’s Tax Group as a result of the receipt or accrual of payments hereunder
(grossed-up for such increase), in each case determined by treating the recipient as recognizing
all other items of income, gain, loss, deduction or credit before recognizing any item arising from
the receipt of accrual of any payment hereunder; provided, that the parties hereto acknowledge that
the Tax items giving rise to payments hereunder, and the payments hereunder, may affect
computations of earnings and profits and stock basis and that no such effects on earnings and
profits or stock basis shall be taken into account in computing the amount of any payment due under
this Agreement. In determining the amount of any such Tax benefit or Tax cost, (I) if the
recipient’s Tax Group’s taxable income for the year, after taking into account tax loss carryovers,
is negative or zero, the recipient’s Tax Group shall be deemed not subject to Tax for such purpose,
and (II) in all other cases, the recipient’s Tax Group shall be deemed to be subject to Tax as
follows: (A) U.S. federal Income Taxes and foreign Income Taxes at the maximum statutory rate then
in effect and (B) U.S. state and local Income Taxes at an assumed rate of five percent net of U.S.
federal Income Tax benefits. Except as otherwise provided in this Agreement or unless the parties
otherwise agree to an alternative method for determining the present value of any such anticipated
Tax benefit or Tax cost, any payment hereunder shall initially be made without regard to this
section and shall be increased or reduced to reflect any such net Tax cost (including gross-up) or
net Tax benefit only after the recipient’s Tax Group has Actually Realized such Tax cost or Tax
benefit.

               (d) Right to Offset. Any party making a payment under this Agreement shall have the
right to reduce any such payment by any undisputed amounts owed to it by the other party to this
Agreement.

               (e) Characterization of Payments. It is the intention of the parties to this
Agreement that payments made pursuant to this Agreement are to be treated as relating back to the
Distribution as an adjustment to capital (i.e., capital contribution or
distribution), and the parties shall not take any position inconsistent with such intention before
any Tax Authority, except to the extent that a final

18

 

determination (as defined in Section 1313 of the Code) with respect to the recipient party
causes any such payment not to be so treated.

               Section 3.05 Tax Contests. The Indemnitor and its representatives, at the
Indemnitor’s expense, shall be entitled to participate (a) in all conferences, meetings and
proceedings with any Tax Authority, the subject matter of which is or includes an Indemnity Issue
and (b) in all appearances before any court, the subject matter of which is or includes an
Indemnity Issue. The party who has economic responsibility under this Agreement for the Tax issue
that is the subject of the contest (the “Responsible Party”) with respect to which there could be
an increase in liability for any Tax or with respect to which a payment could be required hereunder
shall have the right to decide as between the parties hereto how such matter is to be dealt with
and finally resolved with the appropriate Tax Authority and shall control all audits and similar
proceedings, provided, however, that if the amount of any adjustment would have a material impact
on the earnings or financial condition of the non-Responsible Party, then that party must consent
to any such adjustment. The Responsible Party agrees to cooperate in the settlement of any
Indemnity Issue with the other party and to take such other party’s interests into account.

ARTICLE IV

OPTIONS; COMPENSATION PAYMENTS; FOREIGN NET OPERATING

LOSSES; SEPARATE TAX RETURN FOR 2005; INTEREST CHARGE FOR LATE PAYMENTS

               Section 4.01 Stock Options.

               (a) Stock Option Adjustments. Fortune Common Stock Options outstanding at the time of
the Distribution will be adjusted in accordance with the terms of the Employee Matters Agreement.

               (b) Tax Deductions. Notwithstanding anything to the contrary in this Agreement,
unless the IRS issues a contrary private letter ruling to Fortune or ACCO, or Fortune and ACCO
otherwise agree in writing, (i) the ACCO Tax Group (and not the Fortune Tax Group) shall claim any
post-Distribution Date Tax deductions in respect of Fortune Common Stock Options exercised by ACCO
Group Employees and Former Employees and ACCO shall pay to Fortune the amount of any Tax benefit in
respect of such Tax deductions within ten days after such amount is Actually Realized by ACCO, and
(ii) the ACCO Tax Group (and not the Fortune Tax Group) shall claim any post-Distribution Date Tax
deductions in respect of ACCO

19

 

Common Stock Options exercised by ACCO Group Employees and Former Employees.

               (c) Notices, Withholding, Reporting. Fortune shall promptly notify ACCO of any
post-Distribution Date event giving rise to income to any ACCO Group Employees and Former Employees
in connection with Fortune Common Stock Options and, if required by law, ACCO shall withhold
applicable Taxes and satisfy applicable Tax reporting obligations in connection therewith. Fortune
shall within ten days of demand thereof reimburse ACCO for all reasonable out-of-pocket expenses
incurred in connection with the Fortune Common Stock Options, including with respect to incremental
Tax reporting obligations and any incremental employment Tax obligations; provided that ACCO shall
use reasonable efforts to collect any such amounts required to be paid by ACCO Group Employees and
Former Employees from such ACCO Group Employees and Former Employees.

               (d) Tax Audit Adjustments. Notwithstanding the provisions of Section 4.01(b), in the
event a Tax audit proceeding shall determine (by settlement or otherwise), or the parties otherwise
determine pursuant to Section 4.05, (i) that all or a portion of the post-Distribution Date Tax
deductions in respect of Fortune Common Stock Options should have been claimed by the Fortune Tax
Group, the Fortune Tax Group shall claim such Tax deductions (by an amended Tax Return or
otherwise) and shall repay to ACCO the amount of any payments made by ACCO to Fortune in respect of
such deductions pursuant to Section 4.01(b)(i) within ten days after such determination and (ii)
that all or a portion of any post-Distribution Date Tax deductions in respect of ACCO Common Stock
Options should have been claimed by the Fortune Tax Group, the Fortune Tax Group shall claim such
Tax deductions (by an amended Tax Return or otherwise) and shall pay to ACCO the amount of any Tax
refund or credit arising in respect of such Tax deductions within ten days after such Tax refund or
credit is Actually Realized by the Fortune Tax Group.

               Section 4.02 Compensation Payments.

               (a) Tax Deductions. Notwithstanding anything to the contrary in this Agreement,
unless Fortune and ACCO otherwise agree in writing, the ACCO Tax Group (and not the Fortune Tax
Group) shall claim the Post-Distribution Date Tax deductions in respect of Compensation Payments
and ACCO shall pay to Fortune the amount of any Tax benefit in respect of such Tax deductions
within ten days after such amount is Actually Realized by ACCO.

               (b) Notices, Withholding, Reporting. Fortune shall withhold and remit to ACCO
applicable Taxes and shall provide ACCO with the information necessary for ACCO to satisfy
applicable Tax reporting obligations in connection

20

 

with the Compensation Payments made to all ACCO Group Employees and Former Employees.

               (c) Tax Audit Adjustments. Notwithstanding the provisions of Section 4.02(a), in the
event a Tax audit proceeding shall determine (by settlement or otherwise), or the parties otherwise
determine pursuant to Section 4.05, that all or a portion of the Tax deductions in respect of
Compensation Payments was not available to ACCO, then Fortune shall claim such Tax deductions (by
an amended Tax Return or otherwise) and shall pay to ACCO, within ten days after such Tax deduction
has been Actually Realized by Fortune, the amount of the resulting Tax benefit.

               Section 4.03 Foreign Net Operating Losses. As of the date of this Agreement, certain
foreign members of the ACCO Tax Group will have net operating loss carryforwards determined on a
separate return basis (“ACCO Foreign NOLs”). In the event that the foreign Income Tax liability of
any member of the Fortune Tax Group shall be reduced in respect of the years 2004 or 2005 as a
result of the use by such Fortune Tax Group member of any ACCO Foreign NOLs, Fortune shall pay to
ACCO the amount of the net Tax cost to the ACCO Tax Group resulting from the reduction in such ACCO
Foreign NOLs from such use by a member of the Fortune Tax Group within ten days after such Tax cost
has been Actually Realized by the ACCO Tax Group. For purposes of determining such net Tax cost,
the ACCO Tax Group will be deemed to be subject to Taxes at a combined federal, state, local and
foreign rate of 35 percent.

               Section 4.04 Separate Tax Return Liability for 2005.

               (a) Stock Option and Compensation Payment Tax Deductions. Notwithstanding any other
provisions of this Agreement, (i) in determining the separate Income Tax liability of the ACCO Tax
Group pursuant to Section 2.02(a) for 2005, the ACCO Tax deductions in respect of Fortune Common
Stock Options and Compensation Payments shall not be taken into account and (ii) ACCO shall pay to
Fortune the amount Actually Realized by a member of the ACCO Tax Group as a result of any Tax
benefit in respect of any Tax deductions in respect of any Compensation Payments with respect to
any foreign Income Tax Return of a member of the ACCO Tax Group in which such ACCO Tax Group member
is not required to file a consolidated, combined or unitary foreign Income Tax Return with a member
of the Fortune Tax Group. Any such payment shall be made within ten days after such Tax deduction
has been Actually Realized by a member of the ACCO Tax Group.

               (b) Taxes Attributable to Certain Foreign Dividends. Notwithstanding anything in this
Agreement to the contrary, the Fortune Tax Group shall pay all Taxes of any member of the ACCO Tax
Group associated with the

21

 

payment of any dividend set forth on Schedule 4.04(b), and in determining the separate Income
Tax liability of the ACCO Tax Group pursuant to Section 2.02(a) for 2005, any such dividends and
the ACCO Tax credits in respect of such dividends shall not be taken into account. For the
avoidance of doubt, the Fortune Tax Group’s liability for Taxes pursuant to this Section 4.04(b)
shall include Taxes imposed on the ACCO Tax Group as a result of an inclusion in the income of the
ACCO Tax Group of an amount of Subpart F income that is attributable to any such dividends,
regardless of whether such inclusion occurs in a Pre-Distribution Taxable Period or a
Post-Distribution Taxable Period.

               Section 4.05 Change in Law. Notwithstanding the agreement with respect to reporting
of Tax items and the claiming of the deductions set forth in Article 4 of this Agreement, neither
the ACCO Tax Group nor the Fortune Tax Group shall have any obligation to report any such Tax items
or claim such deductions as set forth in such Article in the event that either such party
determines, based on an opinion of nationally recognized tax counsel, which opinion shall be
reasonably satisfactory to the other party, that there is no substantial authority to support
reporting such Tax items or claiming such deductions on a Tax Return filed by such party as a
result of a change in or amendment to any law or regulation, or any change in the official
interpretation thereof, effective or occurring after the date of this Agreement, and such Tax Group
provides prompt notice to the other Tax Group of any such determination.

               Section 4.06 Interest Charge for Late Payments. Any amount due and owing by one party
to the other party pursuant to this Agreement that is not paid when due shall bear interest from
the due date thereof until paid at a rate per annum equal to the six month LIBOR rate published in
the Wall Street Journal, Eastern Edition, in effect on the date such payment was required to be
made (calculated based on actual days elapsed in a 365-day year).

ARTICLE V

COOPERATION AND EXCHANGE OF INFORMATION

               Section 5.01 Inconsistent Actions. Each party to this Agreement agrees (i) to, and to
cause each of the relevant members of its Tax Group to, report the Distribution as a spin-off under
Section 355 of the Code and the Merger as a reorganization described in Section 368 of the Code on
all Tax Returns and other filings, (ii) to use its best efforts to ensure that the Distribution and
the Merger receive such treatment for U.S. federal Income Tax purposes and (iii) that, unless it
has obtained the prior written consent of the other party, it (and the members of its Tax

22

 

Group) shall not take any action inconsistent with, or fail to take any action required by,
the Transaction Agreements and the Merger Agreement. For all Post-Distribution Taxable Periods,
each party to this Agreement agrees to, and to cause each of the relevant members of its Tax Group
to, in the absence of a controlling change in law or circumstances, report on all Tax Returns the
tax consequences of the transactions undertaken pursuant to the Transaction Agreements and the
Merger Agreement in accordance with the positions taken with respect to such transactions to the
extent reported on Tax Returns filed with respect to all Pre-Distribution Taxable Periods and
Straddle Periods in respect of such transactions.

               Section 5.02 Cooperation and Exchange of Information. Each party hereto agrees to
provide, and to cause each member of its Tax Group to provide, such cooperation and information as
such other party shall reasonably request, on a timely basis, in connection with the preparation or
filing of any Tax Return or claim for Tax refund not inconsistent with this Agreement or in
conducting any Tax audit, Tax dispute, or otherwise in respect of Taxes or to carry out the
provisions of this Agreement (including any cooperation required to carry out the intentions of the
parties as set forth in the preamble), provided, however, that neither party shall be obligated to
provide the other party Tax Returns, documentation or other information of a proprietary or
confidential nature for purposes of verifying any calculation, and provided further, that in any
such case where one party does not provide the other party with Tax Returns, documentation or
information because it is proprietary or confidential, both parties shall cooperate in developing
mutually acceptable procedures including retaining a mutually agreeable accounting firm to review
such Tax Returns, documentation or information for purposes of verifying such calculation. To the
extent necessary to carry out the purposes of this Agreement and subject to the other provisions of
this Agreement, such cooperation and information shall include without limitation the non-exclusive
designation of an officer of Fortune as an officer of ACCO and each of its affiliates for the
purpose of signing Tax Returns, cashing refund checks, pursuing refund claims, dealing with Tax
Authorities and defending audits as well as promptly forwarding copies of appropriate notices and
forms or other communications received from or sent to any Tax Authority which relate to the ACCO
Tax Group for the Tax Indemnification Period and providing copies of all relevant Tax Returns for
the Tax Indemnification Period, together with accompanying schedules and related workpapers,
documents relating to rulings or other determinations by Tax Authorities, including without
limitation, foreign Tax Authorities, and records concerning the ownership and Tax basis of
property, which either party may possess. Subject to the rights of the ACCO Tax Group under the
other provisions of this Agreement, such officer shall have the authority to execute powers of
attorney (including Form 2848) on behalf of each member of the ACCO Tax Group with respect to Tax
Returns for the Tax Indemnification Period. Each

23

 

party to this Agreement shall make, or shall cause its affiliates to make, its employees and
facilities available on a mutually convenient basis to provide an explanation of any documents or
information provided hereunder.

               Section 5.03 Tax Records.

               (a) Fortune and ACCO agree to (and to cause each member of their respective Tax Group to) (i)
retain all Tax Returns, related schedules and workpapers, and all material records and other
documents as required under Section 6001 of the Code and the regulations promulgated thereunder
relating thereto existing on the date hereof or created through the Distribution Date, for a period
of at least ten years following the Distribution Date and (ii) allow the party to this Agreement,
at times and dates reasonably acceptable to the retaining party, to inspect, review and make copies
of such records, as Fortune and ACCO may reasonably deem necessary or appropriate from time to
time. In addition, after the expiration of such ten-year period, such Tax Returns, related
schedules and workpapers, and material records shall not be destroyed or otherwise disposed of at
any time, unless, prior to such destruction or disposal, (A) the party proposing to destroy or
otherwise dispose of such records shall provide no less than 30 days’ prior written notice to the
other party, specifying in reasonable detail the records proposed to be destroyed or disposed of
and (B) if a recipient of such notice shall request in writing prior to the scheduled date for such
destruction or disposal that any of the records proposed to be destroyed or disposed of be
delivered to such requesting party, the party proposing the destruction or disposal shall promptly
arrange for the delivery of such requested records at the expense of the party requesting such
records.

               (b) Notwithstanding anything in this Agreement to the contrary, if any party fails to comply
with the requirements of Section 5.03(a) hereof, the party failing so to comply shall be liable
for, and shall hold the other party, harmless from, any Taxes (including without limitation,
penalties for failure to comply with the record retention requirements of the Code) and other costs
resulting from such party’s failure to comply.

ARTICLE VI

MISCELLANEOUS

               Section 6.01 Entire Agreement; Construction. This Agreement, the Distribution
Agreement, all other Ancillary Agreements and the Merger Agreement, including any annexes,
schedules and exhibits hereto or thereto, and other agreements and documents referred to herein and
therein, will together constitute the

24

 

entire agreement between the parties with respect to the subject matter hereof and thereof and
will supersede all prior negotiations, agreements and understandings of the parties of any nature,
whether oral or written, with respect to such subject matter. Notwithstanding any other provisions
in this Agreement to the contrary, in the event and to the extent that there is a conflict relating
to Taxes between the provisions of this Agreement and the provisions of the Distribution Agreement,
any other Ancillary Agreement or the Merger Agreement, the provisions of this Agreement will
control.

               Section 6.02 Effectiveness. All covenants and agreements of the parties contained in
this Agreement shall be subject to and conditioned upon the Distribution becoming effective.

               Section 6.03 Survival of Agreements. Except as otherwise contemplated by this
Agreement, all covenants and agreements of the parties contained in this Agreement will remain in
full force and effect and survive the Time of Distribution.

               Section 6.04 Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of Delaware applicable to contracts made and to be
performed entirely within such State, without regard to the conflicts of law principles of such
State.

               Section 6.05 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (i) on the date of delivery if delivered personally, (ii)
upon confirmation of receipt if delivered by telecopy or telefacsimile, (iii) on the first Business
Day following the date of dispatch if delivered by a recognized next-day courier service or (iv) on
the fifth Business Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth
below, or pursuant to such other instructions as may be designated in writing by the party to
receive such notice:

	 	 	 	 	 	 	 
	 	 	(a)	 	If to Fortune to
	 
	 	 	 	 	 	 
	 	 	 	 	Fortune Brands, Inc.
	 	 	 	 	300 Tower Parkway
	 	 	 	 	Lincolnshire, Illinois 60069
	 

	 	 	 	Fax:
	 	(847) 484-4490
	 

	 	 	 	Attention:
	 	Mark A. Roche, Esq.

25

 

	 	 	 	 	 	 	 
	 	 	 	 	with a copy to
	 
	 	 	 	 	 	 
	 	 	 	 	Chadbourne & Parke LLP
	 	 	 	 	30 Rockefeller Plaza
	 	 	 	 	New York, New York 10112
	 

	 	 	 	Fax:
	 	(212) 541-5369
	 

	 	 	 	Attention:
	 	Edward P. Smith, Esq.
	 

	 	 	 	 	 	A. Robert Colby, Esq.
	 
	 	 	 	 	 	 
	 	 	(b)	 	If to ACCO to
	 
	 	 	 	 	 	 
	 	 	 	 	ACCO World Corporation
	 	 	 	 	300 Tower Parkway
	 	 	 	 	Lincolnshire, Illinois 60069
	 

	 	 	 	Fax:
	 	(847) 484-4495
	 

	 	 	 	Attention:
	 	President

               Section 6.06 Consent to Jurisdiction. Each of Fortune and ACCO irrevocably agrees
that any legal action or proceeding with respect to this Agreement, the transactions contemplated
hereby, any provision hereof, the breach, performance, validity or invalidity hereof or for
recognition and enforcement of any judgment in respect hereof brought by another party hereto or
its successors or permitted assigns may be brought and determined in any federal or state court
located in the State of Delaware, and each of Fortune and ACCO hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of Fortune and ACCO
hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim
or otherwise, in any action or proceeding with respect to this Agreement, the transactions
contemplated hereby, any provision hereof or the breach, performance, enforcement, validity or
invalidity hereof, (a) any claim that it is not personally subject to the jurisdiction of the
above-named courts for any reason other than the failure to lawfully serve process, (b) that it or
its property is exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the
fullest extent permitted by Applicable Laws, that (i) the suit, action or proceeding in any such
court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is
improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.

26

 

               Section 6.07 Amendments. This Agreement cannot be amended, modified or supplemented
except by a written agreement executed by Fortune and ACCO.

               Section 6.08 Assignment. Neither party to this Agreement will convey, assign or
otherwise transfer any of its rights or obligations under this Agreement, in whole or in part,
without the prior written consent of the other party in its sole and absolute discretion. Any
conveyance, assignment or transfer requiring the prior written consent of the other party pursuant
to this Section 6.08 which is made without such consent will be void ab initio. No
assignment of this Agreement will relieve the assigning party of its obligations hereunder.

               Section 6.09 Captions; Currency. The article, section and paragraph captions herein
and the table of contents hereto are for convenience of reference only, do not constitute part of
this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
Unless otherwise specified, all references herein to numbered articles or sections are to articles
and sections of this Agreement and all references herein to schedules are to schedules to this
Agreement. Unless otherwise specified, all references contained in this Agreement, in any schedule
referred to herein or in any instrument or document delivered pursuant hereto to dollars or “$”
shall mean U.S. dollars.

               Section 6.10 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions hereof, or the application of such
provision to Persons or circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be affected, impaired or
invalidated thereby. If the economic or legal substance of the transactions contemplated hereby is
affected in any manner adverse to any party as a result thereof, the parties will negotiate in good
faith in an effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.

               Section 6.11 Parties in Interest. Except for the provisions of Article III relating
to Tax Indemnification, this Agreement is solely for the benefit of the parties hereto and the
respective members of their Tax Group, and their respective successors and permitted assigns and
should not be deemed to confer upon third parties (including any employee of Fortune or ACCO or of
any Fortune or ACCO subsidiary) any remedy, claim, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement.

27

 

               Section 6.12 Schedules. All schedules attached hereto are hereby incorporated in and
made a part of this Agreement as if set forth in full herein. Capitalized terms used in the
schedules hereto but not otherwise defined therein will have the respective meanings assigned to
such terms in this Agreement.

               Section 6.13 Waivers; Remedies. Any agreement on the part of a party hereto to any
waiver of any provision of this Agreement shall be valid only if set forth in a written instrument
signed on behalf of such party. No failure or delay by any party hereto in exercising any right,
power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of
any party hereto of any right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder, nor will any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies which the parties may otherwise have at law or in
equity.

               Section 6.14 Counterparts. This Agreement may be executed in separate counterparts,
each such counterpart being deemed to be an original instrument, and all such counterparts will
together constitute the same agreement.

               Section 6.15 Performance. Each party hereto will cause to be performed, and hereby
guarantees the performance of all actions, agreements and obligations set forth herein to be
performed by any subsidiary or any member of such party’s Tax Group.

               Section 6.16 Interpretation. Any reference to any Federal, state, local, or foreign
Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. For the purposes of this Agreement, (i) words in the singular shall be
held to include the plural and vice versa and words of one gender shall be held to include the
other gender as the context requires, (ii) the terms “hereof “, “herein”, and “herewith” and words
of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement and (iii) the word “including” and
words of similar import when used in this Agreement shall mean “including, without limitation”.

28

 

               IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized
officers of the parties as of the date first hereinabove written.

	 	 	 	 	 
	 	 	FORTUNE BRANDS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	ACCO WORLD CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

29exv10w4

 

Exhibit H to

Agreement and Plan of Merger

dated March 15, 2005

Exhibit 10.4

 

 

TAX ALLOCATION AGREEMENT

by and among

LANE INDUSTRIES, INC.,

GENERAL BINDING CORPORATION,

and

ACCO WORLD CORPORATION

 

 

______________, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE I	 	DEFINITIONS	 	 	2	 
	 

	 	Section 1.01
	 	General
	 	 	2	 
	 

	 	Section 1.02
	 	Schedules, etc.
	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II	 	TERMINATION OF RIGHTS AND OBLIGATIONS UNDER THE PRIOR TAX ALLOCATION AGREEMENTS	 	 	8	 
	 

	 	Section 2.01
	 	Termination of Rights and Obligations Under the Prior Tax Allocation Agreements
	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III	 	FILING OF TAX RETURNS; REMITTANCE OF TAXES; REFUNDS	 	 	8	 
	 

	 	Section 3.01
	 	Preparation of Tax Returns
	 	 	8	 
	 

	 	Section 3.02
	 	Remittance of Taxes	 	 	10	 
	 

	 	Section 3.03
	 	Tax Refunds and Carrybacks	 	 	11	 
	 

	 	Section 3.04
	 	Allocation of Taxes	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV	 	TAX INDEMNIFICATION; TAX CONTESTS	 	 	14	 
	 

	 	Section 4.01
	 	Indemnification	 	 	14	 
	 

	 	Section 4.02
	 	Notice of Indemnity	 	 	15	 
	 

	 	Section 4.03
	 	Payments	 	 	15	 
	 

	 	Section 4.04
	 	Tax Contests	 	 	16	 
	 

	 	Section 4.05
	 	Change in Law	 	 	17	 
	 

	 	Section 4.06
	 	Interest Charge for Late Payments	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V	 	LOSSES; AMT CREDITS	 	 	17	 
	 

	 	Section 5.01
	 	Net Operating Losses — Pre-2005	 	 	17	 
	 

	 	Section 5.02
	 	2005 Tax Savings; Net Operating Losses — 2005	 	 	17	 
	 

	 	Section 5.03
	 	AMT Credit Carryforwards	 	 	18	 
	 

	 	Section 5.04
	 	Recomputed Payments	 	 	18	 
	 

	 	Section 5.05
	 	Verification	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI	 	COOPERATION AND EXCHANGE OF INFORMATION	 	 	19	 
	 

	 	Section 6.01
	 	Inconsistent Actions
	 	 	19	 
	 

	 	Section 6.02
	 	Cooperation and Exchange of Information
	 	 	19	 
	 

	 	Section 6.03
	 	Tax Records
	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII	 	MISCELLANEOUS	 	 	21	 
	 

	 	Section 7.01
	 	Entire Agreement; Construction
	 	 	21	 
	 

	 	Section 7.02
	 	Effectiveness
	 	 	21	 
	 

	 	Section 7.03
	 	Survival of Agreements
	 	 	21	 
	 

	 	Section 7.04
	 	ACCO
	 	 	21	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Section 7.05
	 	Dual Consolidated Losses
	 	 	21	 
	 

	 	Section 7.06
	 	Governing Law
	 	 	22	 
	 

	 	Section 7.07
	 	Notices
	 	 	22	 
	 

	 	Section 7.08
	 	Consent to Jurisdiction
	 	 	23	 
	 

	 	Section 7.09
	 	Amendments
	 	 	23	 
	 

	 	Section 7.10
	 	Assignment
	 	 	23	 
	 

	 	Section 7.11
	 	Captions; Currency
	 	 	24	 
	 

	 	Section 7.12
	 	Severability
	 	 	24	 
	 

	 	Section 7.13
	 	Parties in Interest
	 	 	24	 
	 

	 	Section 7.14
	 	Schedules
	 	 	24	 
	 

	 	Section 7.15
	 	Waivers; Remedies
	 	 	24	 
	 

	 	Section 7.16
	 	Counterparts
	 	 	25	 
	 

	 	Section 7.17
	 	Performance
	 	 	25	 
	 

	 	Section 7.18
	 	Interpretation
	 	 	25	 

EXHIBIT A — Prior Tax Allocation Agreements Side Agreement

ii

 

TAX ALLOCATION AGREEMENT

     TAX ALLOCATION AGREEMENT (this “Agreement”) dated as of ___, 2005, by and between LANE
INDUSTRIES, INC., a Delaware corporation (“Lane”), GENERAL BINDING CORPORATION, a Delaware
corporation and a majority owned subsidiary of Lane (“GBC”), and, solely for purposes of Sections
7.04 and 7.05, ACCO WORLD CORPORATION, a Delaware corporation (“ACCO”).

     WHEREAS, the Boards of Directors of FORTUNE BRANDS, INC., a Delaware corporation (“Fortune”),
ACCO, a wholly-owned subsidiary of Fortune, GBC and GEMINI ACQUISITION SUB, INC. a Delaware
corporation and a wholly-owned subsidiary of ACCO (“Acquisition Sub”), have approved an agreement
and plan of merger (the “Merger Agreement”) pursuant to which ACCO, Acquisition Sub and GBC will
enter into a merger transaction in order to advance the long-term strategic business interests of
Freedom, ACCO, GBC and Acquisition Sub;

     WHEREAS, the Boards of Directors of Freedom, ACCO, GBC and Acquisition Sub have determined to
consummate such merger transaction by means of a business combination transaction in which
Acquisition Sub will merge with and into GBC (the “Merger”), with GBC being the surviving
corporation;

     WHEREAS, the parties to this Agreement intend that the Merger qualify under Section 368 of the
Code (as defined herein) as a reorganization and that the Merger Agreement shall constitute a “plan
of reorganization” for purposes of Sections 354, 368 and 361 of the Code;

     WHEREAS, (i) Lane, GBC and others entered into that certain Tax Allocation Agreement dated
June 1, 1978, as amended, relating to U.S. federal income taxes (the “1978 Agreement”), (ii) Lane
and GBC entered into that certain agreement dated January 1, 1991 (amending the 1978 agreement to
provide for the allocation of foreign tax credits) (the “1991 Agreement”) and that certain letter
agreement dated May 8, 2003 (providing for the allocation of the consolidated alternative minimum
tax for the tax year ended December 31, 1997) (the “CAMT Agreement”), and (iii) Lane, GBC and
others entered into that certain State Tax Allocation Agreement dated May 31, 1985 (the “State
Agreement” and, together with the 1978 Agreement, the 1991 Agreement and the CAMT Agreement, the
“Prior Tax Allocation Agreements”), and;

     WHEREAS, effective as of the Merger Date (as defined herein), Lane, GBC and the other parties
thereto wish to terminate their rights and obligations under the Prior Tax Allocation Agreements,
and Lane and GBC wish to enter into a new agreement to provide for and agree upon the allocation
between the Lane Entities (as defined herein) and the GBC Entities (as defined herein) of all
responsibilities, liabilities and benefits relating to or affecting Taxes (as

 

 

defined herein) paid or payable by either of them for all taxable periods, whether beginning
before, on or after the Merger Date.

     NOW, THEREFORE, in consideration of the premises and of the respective agreements contained in
this Agreement, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.01 General. As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular and plural forms of
the terms defined). Any capitalized term not otherwise defined in this Agreement shall have the
meaning ascribed to it in the Merger Agreement.

     “1999 Audit” shall have the meaning set forth in Section 4.01(a).

     “2005 Combined Group Hypothetical Tax Liability” shall mean, the Combined Group Tax Liability
for the 2005 taxable year; provided, however, that (i) in no event shall any NOL
carryover items from any prior taxable year be taken into account in computing 2005 Combined Group
Hypothetical Tax Liability (it being understood that, for the avoidance of doubt, any net capital
losses that may be carried forward to 2005 shall be taken into account and treated as if realized
in 2005), and (ii) any item of loss, deduction or credit shall be taken into account only to the
extent that such item is taken into account in computing Combined Group Tax Liability for the 2005
taxable year.

     “2005 Subgroup Hypothetical Taxable Income” (and “2005 Subgroup Hypothetical Taxable Loss”)
shall mean, with respect to a Subgroup, and with respect to its taxable year ending on the Merger
Date (in the case of the GBC Subgroup) or with respect to its 2005 taxable year (in the case of the
Lane Subgroup), the U.S. federal taxable income (or loss) determined for such Subgroup in computing
the 2005 Subgroup Hypothetical Tax Liability for such Subgroup for such taxable year.

     “2005 Subgroup Hypothetical Tax Liability” shall mean with respect to a Subgroup, and with
respect to its taxable year ending on the Merger Date (in the case of the GBC Subgroup) or with
respect to its 2005 taxable year (in the case of the Lane Subgroup), the Tax liability of a
Subgroup computed as if the members of such Subgroup filed a consolidated, combined or unitary Tax
Return for such year without regard to items of income, gain, loss, deduction or credit of the
members of the other Subgroup for such year; provided, however, that NOL carryover
items (including Pre-2005 Subgroup NOLs) shall not be taken into account (it being understood that,
for the avoidance of doubt, any net capital losses that may be carried forward to 2005 shall be
taken into account and treated as if realized in 2005). In making such computation, for a taxable
year, (i) the modifications set forth in Treas. Reg. § 1.1552-1(a)(2)(ii) shall be reflected as
between the Subgroups, (ii) any item of loss, deduction or credit shall be taken into account only
to the extent that such item is taken into account in computing Combined Group Tax Liability for
the 2005 taxable year, (iii) carryback items shall not be taken into

2

 

account, and (iv) any elections which would be available to the Subgroup for such year,
including elections as to whether to claim an item as a deduction or credit, or as a carryback,
shall be made on a basis consistent with any elections actually made by the Combined Group for such
year; provided, however, that if no election has been made or is available to the
Combined Group in respect of such item, the Subgroup to which such item is available shall make its
election with respect to such item in writing and shall give notice of such election to the parent
member of the other Subgroup. Any such hypothetical election shall be effective to the same extent
as if made in an actual return by such Subgroup.

     “2005 Tax Savings” shall have the meaning given to such term in Section 5.02(b).

     “ACCO” shall have the meaning ascribed thereto in the preamble.

     “Actually Realized” shall mean, for purposes of determining the timing of any Taxes (or
related Tax cost or benefit) relating to any payment, transaction, occurrence or event, the time at
which the amount of Taxes (including estimated Taxes) payable by any person is increased above or
reduced below, as the case may be, the amount of Taxes that such person would be required to pay
but for the payment, transaction, occurrence or event.

     “Adjustment Event” shall mean, with respect to a member of a Subgroup, (i) the initial filing
by a Combined Group of a 2004 U.S. federal income Tax Return including Tax information of such
member, (ii) an adjustment to any item of income, gain, loss or deduction with respect to such
member as initially reported for U.S. federal income Tax purposes, and (iii) the filing of an
amendment to any filed U.S. federal income Tax Return of a Combined Group made to reflect any
changed Tax information relating to such member.

     “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor legislation.

     “Combined Group” shall mean a group of corporations that files Tax Returns on a consolidated,
combined or unitary basis and that includes one or more Lane Entities and one or more GBC Entities.
Unless otherwise specified, references to “the” Combined Group shall mean the Combined Group that
files consolidated U.S. federal income Tax Returns.

     “Combined Group Tax Liability” shall mean, with respect to any taxable year, (i) the
consolidated U.S. federal income Tax liability determined under Treas. Reg. § 1.1502-2 and Chapter
6 of Subtitle A of the Code for the Combined Group and (ii) the consolidated, combined or unitary
Tax liability for a Combined Group determined under the laws of the jurisdiction for which a
consolidated, combined or unitary state Tax Return is filed, including in each case any
recomputations of such liability as may be required on account of items which may be carried back
or over to the taxable year and adjustments to items reported or reportable in such taxable year;
provided that in no event shall any carryback items be taken into account in computing Combined
Group Tax Liability.

     “Entity” shall mean either a GBC Entity or an Lane Entity, as the case may be.

3

 

     “Expenses” shall mean any and all expenses incurred in connection with investigating,
defending or asserting any claim, action, suit or proceeding incident to any matter indemnified
against hereunder (including court filing fees, court costs, arbitration fees or costs, witness
fees, and reasonable fees and disbursements of legal counsel, investigators, expert witnesses,
consultants, accountants and other professionals).

     “GBC” shall have the meaning ascribed thereto in the preamble.

     “GBC Subgroup” shall mean the group of corporations consisting of all GBC Entities that are
members of a Combined Group.

     “GBC Entity” shall mean GBC and any corporation or other Person which GBC directly or
indirectly (a) owns 50% or more (by value) of the equity interests at any time on or following the
Merger Date or (b) owned 50% or more (by value) of the equity interests at any time prior to the
Merger Date but did not own 50% or more (by value) of the equity interests at the time of the
Merger, but only if such entity was disposed of by GBC to a Person other than a Lane Entity.

     “Impaired Subgroup” shall have the meaning set forth in Section 5.01(a).

     “Indemnifying Subgroup” shall have the meaning set forth in Section 5.01(a).

     “Indemnitee” shall have the meaning set forth in Section 4.02.

     “Indemnitor” shall have the meaning set forth in Section 4.02.

     “Indemnity Issue” shall have the meaning set forth in Section 4.02.

     “IRS” shall mean the Internal Revenue Service.

     “Lane” shall have the meaning ascribed thereto in the preamble.

     “Lane Subgroup” shall mean the group of corporations consisting of all Lane Entities that are
members of a Combined Group.

     “Lane Entity” shall mean Lane and any corporation or other Person which Lane directly or
indirectly owned or owns 50% or more (by value) of the equity interests at any time prior to, on or
following the Merger Date, in all cases other than (i) a GBC Entity and (ii) for the avoidance of
doubt, ACCO and any corporation or other Person which ACCO directly or indirectly owned or owns at
any time prior to, on or following the Merger Date.

     “Losses” shall mean any and all losses, costs, obligations, liabilities, settlement payments,
awards, judgments, fines, penalties, damages, expenses, deficiencies or other charges.

     “Measurement Date” shall mean, with respect to a U.S. federal income taxable year of a
Combined Group, (i) the date thirty (30) days following the filing of a U.S. federal income Tax
Return by such Combined Group for such taxable year, (ii) the date thirty (30) days

4

 

following the earlier of (A) the date there is a “determination” (within the meaning of
Section 1313(a) of the Code) with respect to all potential issues relating to the Combined Group’s
U.S. federal income Tax Return for such taxable year or (B) the end of the statutory period for
assessment, taking into account any extensions thereof, with respect to all potential issues
relating to the Combined Group’s U.S. federal income Tax Return for such taxable year, (iii) the
date thirty (30) days following any other event that the parties reasonably agree has the effect of
terminating the IRS’s right to adjust any item of income, gain, loss or deduction as reported on
the Combined Group’s U.S. federal income Tax Return for such taxable year, (iv) the date thirty
(30) days following the filing of any Tax Return carrying back an NOL, net capital loss, or other
item of deduction, loss, expense or credit to such taxable year, (v) the date thirty (30) days
following a date described in clause (ii) or (iii) with respect to a Tax Return described in clause
(iv), and (vi) if, as a result of an audit, examination or similar proceeding with respect to a
U.S. federal income Tax Return of a Combined Group for a taxable year, there is an adjustment to
NOLs that affects the payment of Taxes in a subsequent taxable year, the date thirty (30) days
following such payment of Taxes (other than estimated Taxes) to a Tax Authority by any member of a
Subgroup (and any corporation included with such member in a consolidated U.S. federal income Tax
Return or a consolidated, combined or unitary state Tax Return).

     “Merger” shall have the meaning ascribed thereto in the preamble.

     “Merger Agreement” shall have the meaning ascribed thereto in the preamble.

     “Merger Date” shall mean the date on which the Merger occurs (or, if different, the date on
which the Merger is deemed to occur for U.S. federal income Tax purposes). For purposes of this
Agreement, the Merger shall be deemed effective as of the end of the day on the Merger Date.

     “NOL” shall mean a “net operating loss,” as defined in Section 172 of the Code, as computed
for U.S. federal income Tax purposes.

     “Person” shall mean any individual, partnership, joint venture, corporation, limited liability
entity, trust, unincorporated organization or other entity (including a governmental entity).

     “Post-Merger Taxable Period” shall mean (i) in the case of a member of the GBC Subgroup, a
taxable period beginning after the Merger Date and that portion of any Straddle Period that begins
on the date after the Merger Date and (ii) in the case of a member of the Lane Subgroup, a taxable
period beginning after December 31, 2005.

     “Pre-2005 Subgroup NOL Overage” shall mean, with respect to a Subgroup and the Measurement
Date occurring in connection with filing the Combined Group’s 2004 U.S. federal income Tax Return,
the amount (if any) by which such Subgroup’s Pre-2005 Subgroup NOLs exceed such Subgroup’s Pre-2005
Subgroup Assumed NOLs; provided, however, that a Pre-2005 Subgroup NOL Overage
shall be deemed to exist with respect to a Subgroup only to the extent the amount of such excess is
greater than 10% of the Pre-2005 Subgroup Assumed NOLs of such Subgroup at the time of such
Measurement Date, and only to the extent that such

5

 

excess is caused by an Adjustment Event occurring with respect to any member of the other
Subgroup.

     “Pre-2005 Subgroup NOLs” shall mean, with respect to a Subgroup and a Measurement Date, the
aggregate amounts of the consolidated NOLs of the Combined Group that, under the Code and
applicable Treasury Regulations, are actually attributable to members of that Subgroup and that,
assuming the Merger had occurred on December 31, 2004, could be carried over to such Subgroup’s
2005 taxable year, determined after taking into account all Adjustment Events occurring on or prior
to such Measurement Date.

     “Pre-2005 Subgroup Assumed NOLs” shall mean, with respect to a Subgroup, (i) at and prior to
the Measurement Date occurring in connection with the initial filing of the Combined Group’s 2004
U.S. federal income Tax Return, $20.2 million with respect to the GBC Subgroup and $[12.6
million]1 with respect to the Lane Subgroup and (ii) after such Measurement Date, the
lesser of (x) the amount described in clause (i) of this definition or (y) the Pre-2005 Subgroup
NOLs with respect to such Subgroup determined based on the information reported on such Tax Return.

     “Pre-Merger Taxable Period” shall mean (i) in the case of a member of the GBC Subgroup, a
taxable period ending on or before the Merger Date and that portion of any Straddle Period that
ends on and includes the Merger Date, and (ii) in the case of a member of the Lane Subgroup, a
taxable period ending on or before December 31, 2005.

     “Prior Tax Allocation Agreements” shall have the meaning ascribed thereto in the preamble.

     “Prior Tax Allocation Agreements Side Agreement” shall mean the agreement between the parties
to certain of the Prior Tax Allocation Agreements that is attached as Exhibit A hereto.

     “Representative” shall mean, with respect to any Person, any of such Person’s directors,
officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.

     “Responsible Party” have the meaning set forth in Section 4.04(a).

     “Straddle Period” shall mean a taxable period of a member of a GBC Subgroup that includes but
does not end on the Merger Date.

     “Subgroup” shall mean the Lane Subgroup or the GBC Subgroup, as the case may be.

 

	1	 	To be finalized at the time of execution.

6

 

     “Subgroup Assumed Post-Merger NOLs” shall mean, with respect to a Subgroup and a Measurement
Date occurring with respect to 2005:

(i) the Pre-2005 Subgroup NOLs of such Subgroup minus the Pre-2005 Subgroup
NOL Overage of such Subgroup (if any), in each case taking into account the
determinations made in connection with the most recent Measurement Date occurring
with respect to each taxable year ending prior to 2005 and without giving effect to
any determination made in connection with any Measurement Date occurring with
respect to 2005,

(ii) and either:

(x) plus the 2005 Subgroup Hypothetical Taxable Loss of such
Subgroup (if any) to the extent it did not result in a 2005 Tax Savings
payment to such Subgroup, or

(y) minus the 2005 Subgroup Hypothetical Taxable Income of such
Subgroup (if any) to the extent it did not result in a 2005 Tax Savings
payment by such Subgroup.

     “Subgroup Post-Merger NOLs” shall mean, with respect to a Subgroup, the aggregate amounts of
the consolidated NOLs of the Combined Group that, under the Code and applicable Treasury
Regulations, are attributable to members of that Subgroup and that can be carried over to the first
taxable year of such members beginning after the Merger Date.

     “Tax” and “Taxes” shall mean all forms of taxation, whenever created or imposed, and whether
of the United States or elsewhere, and whether imposed by a federal, state, municipal,
governmental, territorial, local, foreign or other body, and without limiting the generality of the
foregoing, shall include net income, gross income, gross receipts, sales, use, value added, ad
valorem, transfer, recording, franchise, profits, license, lease, service, service use, payroll,
wage, withholding, employment, unemployment insurance, workers compensation, social security,
excise, severance, stamp, business license, business organization, occupation, premium, property,
environmental, windfall profits, customs, duties, alternative minimum, estimated or other taxes,
fees, premiums, assessments or charges of any kind whatever imposed or collected by any
governmental entity or political subdivision thereof, together with any related interest and any
penalties, additions to such tax or additional amounts imposed with respect thereto by any Tax
Authority.

     “Tax Authority” shall mean, with respect to any Tax, any governmental entity,
quasi-governmental body or political subdivision thereof that imposes such Tax and the agency (if
any) charged with the determination or collection of such Tax for such entity, body or subdivision.

     “Tax Return” shall mean any return, filing, questionnaire, information return, election or
other document required or permitted to be filed, including requests for extensions of time,
filings made with respect to estimated tax payments, claims for refund and amended returns that may
be filed, for any period with any Tax Authority (whether domestic or foreign) in

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connection with any Tax (whether or not a payment is required to be made with respect to such
filing).

     “Transfer Tax” shall mean any sales Tax, use Tax, real property transfer or gains Tax, asset
transfer documentary stamp Tax or similar Tax.

     “Treasury Regulations” and “Treas. Reg.” shall mean the regulations promulgated by the U.S.
Treasury Department pursuant to the Code.

     Section 1.02 Schedules, etc. References to a “Schedule” are, unless otherwise
specified, to a Schedule attached to this Agreement; references to “Section” or “Article” are,
unless otherwise specified, to one of the Sections or Articles of this Agreement; references to
“sub-section” are, unless the context otherwise requires, references to the section in which the
reference appears; and references to this Agreement include the Schedules.

ARTICLE II

TERMINATION OF RIGHTS AND OBLIGATIONS UNDER THE PRIOR TAX ALLOCATION AGREEMENTS

     Section 2.01 Termination of Rights and Obligations Under the Prior Tax Allocation
Agreements. Lane and GBC agree, and each of the other parties to the Prior Tax Allocation
Agreements agrees by means of the Prior Tax Allocation Agreements Side Agreement attached as
Exhibit A hereto, that from and after the Merger Date, the rights and obligations of the parties
under the Prior Tax Allocation Agreements shall be terminated and shall have no further force or
effect.

ARTICLE III

FILING OF TAX RETURNS; REMITTANCE OF TAXES; REFUNDS

     Section 3.01 Preparation of Tax Returns.

     (a) Lane. Lane shall prepare and file or cause to be prepared and filed all Tax
Returns (including amendments thereto) which are required to be filed in respect of (A) a Combined
Group (other than 2004 state Tax Returns required to be filed in respect of a Combined Group) and
(B) any Lane Entity (other than as a member of a Combined Group) for any taxable period.

     (b) GBC. GBC shall prepare and file or cause to be prepared and filed (A) all 2004
state Tax Returns (including amendments thereto) which are required to be filed in respect of a
Combined Group and (B) all Tax Returns (including amendments thereto) which are required to be
filed in respect of any GBC Entity (other than as a member of a Combined Group) for any taxable
period.

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     (c) Consistent with Past Practice. Unless Lane and GBC otherwise agree in writing,
all Tax Returns (including amendments thereto) described in this Section 3.01 filed after the date
of this Agreement for Pre-Merger Taxable Periods or Straddle Periods, in the absence of a
controlling change in law or circumstances, shall be prepared on a basis consistent with the
elections, accounting methods, conventions and principles of taxation used for the most recent
taxable periods for which Tax Returns involving similar matters have been filed. Notwithstanding
the foregoing, the parties agree that GBC will elect to credit any foreign Taxes paid by any GBC
Entity on any Combined Return filed after the date hereof; provided, however, that
GBC may elect to expense foreign Taxes paid by any GBC Entity on a Combined Return filed after the
date hereof if (i) GBC provides written notice to Lane of its intention to make such an election
and (ii) Lane consents to such an election, which consent shall not be unreasonably withheld or
delayed.

     (d) Access to Information and Personnel.

     (i) General. The Lane Subgroup and the GBC Subgroup will be included in the
consolidated U.S. federal income Tax Returns of the Combined Group of which Lane is the common
parent for the calendar years 2004 and 2005. In the case of such 2005 Tax Return, however, the GBC
Subgroup will be included only for the portion of such year ending on the Merger Date. To the
extent it is permitted to do so, with respect to state income Tax Returns: (i) GBC and other GBC
Entities that otherwise would be included in a Combined Group for state income Tax purposes for all
or a portion of 2005 will begin filing state income Tax Returns on a separate basis (i.e., not part
of a Combined Group) as of January 1, 2005 and (ii) to the extent that any GBC Entity it is not
permitted to do the foregoing, such GBC Entity will cause its taxable year beginning on January 1,
2005 to end on the Merger Date and will begin filing state income Tax Returns on a separate basis
(or as part of a group other than a Combined Group) as of the day following the Merger Date.

     (ii) Access to Software and Personnel. To the extent practicable, Lane and GBC shall
make available to the other party software previously used in the preparation of prior Combined
Group Tax Returns, or if such software is not available or is impracticable to use, software
reasonably acceptable to the parties for such purpose. Any such software shall be provided as
promptly as possible upon the request of the party responsible for filing the Tax Return in
question (it being understood that no such software needs to be provided prior to the time such
software is available). Each of Lane and GBC shall make available such personnel as may be
necessary to facilitate the use of such software.

     (iii) Additional Information. Lane and GBC shall provide complete packages of
information and such other information as GBC and Lane, respectively, may reasonably request to
enable GBC and Lane to prepare and file the Combined Group Tax Returns for which it is responsible
under this Section 3.01 (to the extent information was not previously provided). Such information
packages shall be prepared in accordance with instructions and procedures furnished by the party
requesting the information packages and shall be furnished as promptly as practicable after such
other party receives the request, but in no event shall such information packages be furnished
later than (i) July 31, 2005, in the case of any 2004 consolidated, combined or unitary income Tax
Return or (ii) 120 days following the Merger Date, in the case

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of any 2005 consolidated, combined or unitary income Tax Return, in each case unless otherwise
mutually agreed upon by the parties.

     (iv) Review and Approval. The party responsible under this Section 3.01 for
preparation of a particular Combined Group Tax Return shall make available to the other party, for
review and approval by such other party, a draft of the portions of such Tax Return that relate to
any Entities of such other party, but in no event shall such draft be furnished later than ten
business days prior to the due date for filing such Tax Return. Promptly after completion thereof,
the party responsible for preparing a Tax Return under this Section 3.01 shall furnish to the other
party a copy of the pro forma separate income Tax Returns of the such other Subgroup, or similar
data, used in the preparation and filing of such Tax Return.

     Section 3.02 Remittance of Taxes.

     Except as otherwise provided in this Agreement:

     (a) Lane. Lane shall remit or cause to be remitted, on a timely basis, all Taxes due
with respect to the Tax liability for (A) a Combined Group (other than the state Tax liability for
a Combined Group for 2004) and (B) any Lane Entity (other than as a member of a Combined Group) for
any taxable period; provided, however, that GBC, on behalf of the GBC Entities,
hereby assumes and agrees to pay directly to or at the direction of Lane, at times consistent with
past practice, the portion of such Tax liability which relates to each GBC Entity or its business,
assets or activities as determined in accordance with Section 3.04. After the date of this
Agreement, Lane will provide a written notice to GBC of the GBC Entities’ unpaid share of any
consolidated, combined or unitary Tax liability described in (A), after taking into account all
estimated Tax payments received by Lane from GBC. Such written notice shall include such
computations and descriptions as may be necessary to identify and support the basis for the
determination of the amount requested in the notice. GBC shall pay any such amount to Lane within
ten days of GBC’s receipt of such written notice; provided, however, that GBC shall
have the right to dispute the amount and/or method of determining the amount requested in the
notice, and, to the extent of the amount disputed, GBC shall pay any disputed amount (as it may be
revised pursuant to the resolution of the dispute) to Lane within the later of (i) ten days of
GBC’s receipt of such written notice and (ii) ten days of GBC’s receipt of such written notice as
revised pursuant to the resolution of the dispute.

     (b) GBC. GBC shall remit or cause to be remitted, on a timely basis, all Taxes due
with respect to (A) the state Tax liability for a Combined Group for 2004 and (B) the Tax liability
for any GBC Entity (other than as a member of a Combined Group); provided, however,
that Lane, on behalf of the Lane Entities, hereby assumes and agrees to pay directly to or at the
direction of GBC, at times consistent with past practice, the portion of such Tax liability
described in (A) which relates to each Lane Entity or its business, assets or activities determined
in accordance with section 3.04. After the date of this Agreement, GBC will provide a written
notice to Lane of the Lane Entities’ unpaid share of any consolidated, combined or unitary Tax
liability described in (A) after taking into account all estimated Tax payments received by GBC
from Lane. Lane shall pay any such amount to GBC within ten days of Lane’s receipt of such written
notice; provided, however, that Lane shall have the right to dispute the amount
and/or

10

 

method of determining the amount requested in the notice, and, to the extent of the amount
disputed, Lane shall pay any disputed amount (as it may be revised pursuant to the resolution of
the dispute) to GBC within the later of (i) ten days of Lane’s receipt of such written notice and
(ii) ten days of Lane’s receipt of such written notice as revised pursuant to the resolution of the
dispute.

     (c) Transfer Taxes. Notwithstanding any other provision of this Agreement, all
Transfer Taxes incurred in connection with the Merger shall be paid by GBC.

     (d) Taxes Already Paid. To the extent any Person has made a payment of Taxes
(including estimated Taxes) on or before the Merger Date, the party liable for paying such Taxes
under this Agreement shall be entitled to treat the payment as having been paid or caused to have
been paid by such party, and such party shall not be required to reimburse the party which actually
paid such Taxes.

     (e) Reimbursement. Any Taxes required to be remitted by one party, to the extent such
Taxes are the responsibility of the other party under Section 3.04 or Section 4.01, shall be paid
to such remitting party by the party responsible for such Taxes within ten days of receipt of
written notice given by the party requesting reimbursement.

     Section 3.03 Tax Refunds and Carrybacks.

     (a) Non-Combined Group Taxes.

     (i) Refunds and credits. Except as otherwise provided in this Agreement, in the case
of any Tax refund or credit relating to any Tax that is not computed or payable on a consolidated,
combined or unitary basis by a Combined Group, Lane shall be entitled to retain, and to receive
within ten days after Actually Realized by any GBC Entity, the portion of any such Tax refund or
credit to the extent related to Taxes for which the Lane is liable pursuant to Section 4.01(a), and
GBC shall be entitled to retain, and to receive within ten days after Actually Realized by any Lane
Entity, the portion of any such Tax refund or credit to the extent related to Taxes for which GBC
is liable pursuant to Section 4.01(b). The amount of any refund or credit of Taxes which Lane or
GBC is entitled to retain or receive pursuant to the foregoing sentence shall be reduced to take
account of any excess of (A) Taxes incurred by GBC, in the case of a refund or credit to which Lane
is entitled, or by Lane, in the case of a refund or credit to which GBC is entitled, upon the
receipt of such refund or credit, over (B) Taxes saved by GBC or Lane, respectively, as a
result of the payment to the other party pursuant to this Section 3.03(a) with respect to such
refund or credit.

     (ii) Carrybacks. Notwithstanding Section 3.03(a)(i) but otherwise except as otherwise
provided in this Agreement, in the case of any carryback relating to any Tax that is not computed
or payable on a consolidated, combined or unitary basis by a Combined Group, (A) any refund or
credit of such Taxes resulting from such a carryback attributable to a GBC Entity arising in a
Post-Merger Taxable Period to a Pre-Merger Taxable Period shall be for the account and benefit of
GBC and (B) any refund or credit of Taxes resulting from a carryback attributable to an Lane Entity
arising in a Post-Merger Taxable Period to a Pre-Merger Taxable Period shall be for the account and
benefit of Lane.

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     (iii) Refund Claims. In the case of any refund claim relating to any Tax that is not
computed or payable on a consolidated, combined or unitary basis by a Combined Group, Lane shall be
permitted to file at Lane’s sole expense, and GBC shall reasonably cooperate with Lane in
connection with, any claims for refund of such Taxes to which Lane is entitled pursuant to this
Section 3.03(a). Lane shall reimburse GBC for any reasonable out-of-pocket costs and expenses
incurred by any GBC Entity in connection with such cooperation. GBC shall be permitted to file at
GBC’s sole expense, and Lane shall reasonably cooperate with GBC in connection with, any claims for
refunds of such Taxes to which GBC is entitled pursuant to this Section 3.03(a). GBC shall
reimburse Lane for any reasonable out-of-pocket costs and expenses incurred by any Lane Entity in
connection with such cooperation.

     (b) Combined Group Taxes.

     (i) Refunds and Credits. Except with respect to alternative minimum tax credit
carryforwards (which are governed by Section 5.03) and items governed by Section 3.03(b)(ii), in
the case of a refund or credit of any Tax that is computed or payable on a consolidated, combined
or unitary basis by a Combined Group, amounts owing under this Agreement (including, without
limitation, under Section 3.01, 4.01 or Article V) shall be recomputed in accordance with the terms
of this Agreement and the provisions of this Agreement shall govern the determination of which
party is entitled to retain such refund or credit.

     (ii) Carrybacks. In the case of any Tax that is computed or payable on a
consolidated, combined or unitary basis by a Combined Group, each party shall elect and shall cause
each of its Entities to elect, where permitted by law, (A) to carry forward and (B) to relinquish
or forego all carryback periods with respect to, any NOL or other net operating loss, net capital
loss, charitable contribution or other item arising after the Merger Date that could, or would, in
the absence of such election, be carried back to a Pre-Merger Taxable Period. If, notwithstanding
the foregoing, any item of deduction, loss or credit relating to such a Tax and attributable to a
party (or any Person affiliated with such party) is carried back from a Post-Merger Taxable Period
to a Combined Group taxable year, the party whose Subgroup is the source of the carryback item
shall be entitled to any and all benefits resulting from such carryback, including, without
limitation, (A) any refund or credit of Taxes resulting from such carryback and (B) any increase in
NOLs or other beneficial Tax attributes available for utilization or carryforward as a result of
such carryback. If a party (other than the party which is the source of the carryback item)
realizes an increase described in clause (B) of the foregoing sentence, the party realizing the
increase shall pay to such other party an amount equal to the Tax benefit resulting from such
increase in NOLs or other beneficial Tax attributes, and by way of example, the party obligated to
make payment as a result of realizing an increase in NOLs shall pay to the other party an amount
equal to 35% of the amount of such increase. Any amount payable under this Section 3.03(b)(ii)
shall be payable upon written request of the party entitled to payment providing reasonable detail
of the calculation of the amount payable, but in no event earlier than thirty (30) days following
the date on which the Tax Return providing for such carryback was filed. It is understood and
agreed that any amount owing under this section shall be calculated by assuming that the Tax
benefit resulting from such carryback will be currently realized by the payor party and shall be
payable without regard to when such Tax benefit actually would have been realized by such party.

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     Section 3.04 Allocation of Taxes.

     (a) Straddle Periods. It is anticipated that, in the case of any GBC Entity that is a
member of a Combined Group during all or a portion of 2005, (i) the relevant taxable year of such
GBC Entity beginning on January 1, 2005 will end on the Merger Date, and items of income, gain,
loss, deduction and credit with respect to such short taxable year shall be included in the Tax
Return for the relevant Combined Group for 2005 and (ii) items of income, gain, loss, deduction and
credit with respect to the short taxable year of such GBC Entity beginning on the day after the
Merger Date will not be included in any Tax Return for any Combined Group. Accordingly, it is not
anticipated that any Straddle Period will exist. If, notwithstanding such anticipated treatment, a
Straddle Period exists and all or a portion of such Straddle Period is included in the Tax Return
for a Combined Group, the Taxes of any GBC Entity or its business, assets or activities for that
portion of any Straddle Period ending on the Merger Date shall be computed on a
“closing-of-the-books” basis as if such taxable period ended as of the close of business on the
Merger Date, and, the Taxes of any GBC Entity or its business, assets or activities for that
portion of any Straddle Period beginning after the Merger Date shall be computed on a
“closing-of-the-books” basis as if such taxable period began on the day after the Merger Date.

     (b) Combined Group Tax Liability; Special 2005 Rule.

     (i) General. The Combined Group Tax Liability with respect to any Tax Return of a
Combined Group shall be allocated among the members of the GBC Subgroup and the Lane Subgroup in a
manner analogous to that set forth in Treas. Reg. § 1.1552-1(a)(2), and GBC shall be liable for the
Taxes of a Combined Group allocated to any GBC Entity, and Lane shall be liable for the Taxes of a
Combined Group allocated to any Lane Entity; provided, that in applying the foregoing with respect
to any Straddle Period, (i) only the items of income, gain, loss, deduction and credit attributable
(under Section 3.04(a)) to the portion of such Straddle Period that ends on the Merger Date shall
be taken into account and (ii) GBC shall be solely liable for the Taxes attributable to items of
income, gain, loss, deduction and credit attributable (under Section 3.04(a)) to the portion of
such Straddle Period that begins after the Merger Date.

     (ii) 2005. In applying the foregoing rule for purposes of allocating the U.S. federal
Combined Group Tax Liability for 2005, Treas. Reg. § 1.1552-1(a)(2) shall be applied as if the
Combined Group were comprised of only two members, namely, the GBC Subgroup and the Lane Subgroup,
and as if the respective separate return tax liability of each Subgroup for 2005 equaled (i) its
2005 Subgroup Hypothetical Tax Liability minus (ii) any payments made by such Subgroup to
the other Subgroup in respect of 2005 Tax Savings and minus (iii) the reduction in Taxes
attributable to the aggregate amount of consolidated pre-2005 NOLs absorbed by members of such
Subgroup in determining the U.S. federal Combined Group Tax Liability for 2005, as determined in
accordance with applicable Treasury Regulations.

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ARTICLE IV

TAX INDEMNIFICATION; TAX CONTESTS

     Section 4.01 Indemnification.

     (a) Lane Indemnification. Lane shall be liable for, and shall indemnify, defend and
hold harmless GBC, each other GBC Entity, each of their respective Representatives, and each of the
heirs, executors, successors and assigns of any of the foregoing, from and against any and all
Losses and Expenses arising as a result of or in connection with:

     (i) all Taxes imposed on any Lane Entity (other than Taxes imposed with respect to any
Combined Group);

     (ii) all Taxes imposed with respect to any Combined Group, to the extent such Taxes are
allocable to an Lane Entity under Section 3.04;

     (iii) the breach by Lane, or any other Lane Entity, of any representation, warranty, covenant
or obligation under this Agreement;

     (iv) all Taxes attributable to the proposed unagreed audit adjustments for the 1999 taxable
year of the Combined Group that are the subject of that certain “Appeal and Protest of Proposed
Examination Changes” filed with the IRS on December 19, 2003 (the “1999 Audit”) (it being
understood and agreed by the parties that, in determining any Taxes attributable to the 1999 Audit,
Lane shall receive the full benefit of any reduction in U.S. federal alternative minimum Tax for
any year arising in connection with the resolution of the 1999 Audit); and

     (v) all liability for any reasonable legal, accounting, appraisal, consulting or similar fees
and expenses relating to the foregoing.

     Notwithstanding the foregoing, Lane shall not indemnify, defend or hold harmless any GBC Entity,
any of their respective Representatives, nor any of the heirs, executors, successors and assigns of
any of the foregoing from any liability for Transfer Taxes incurred in connection with the Merger.

     (b) GBC Indemnification. GBC shall be liable for, and shall indemnify, defend and
hold harmless Lane, each other Lane Entity, each of their respective Representatives, and each of
the heirs, executors, successors and assigns of any of the foregoing, from and against any and all
Losses and Expenses arising as a result of or in connection with:

     (i) all Taxes imposed on any GBC Entity (other than Taxes imposed with respect to any Combined
Group);

     (ii) all Taxes imposed with respect to any Combined Group, to the extent such Taxes are
allocable to a GBC Entity under Section 3.04;

14

 

     (iii) without duplication of any liability GBC otherwise has under this Agreement, any
recapture of dual consolidated losses (within the meaning of Section 1503 of the Code and
applicable Treasury Regulations), including any associated interest charge, relating to GBC or any
Person in which GBC directly or indirectly owned or owns an interest (including any actual or
deemed branch or unit thereof or relating thereto) (including any Losses or reasonable Expenses
arising as a result of or in connection with any closing or other agreement entered into in
connection therewith);

     (iv) the breach by GBC, or any other GBC Entity, of any representation, warranty, covenant or
obligation under this Agreement;

     (v) all Transfer Taxes incurred in connection with the Merger; and

     (vi) all liability for any reasonable legal, accounting, appraisal, consulting or similar fees
and expenses relating to the foregoing.

For the avoidance of doubt, it is understood and agreed that GBC shall be liable for, and shall
indemnify, defend and hold harmless Lane, each other Lane Entity, each of their respective
Representatives, and each of the heirs, executors, successors and assigns of any of the foregoing,
from and against the imposition of Taxes or the reduction or impairment of net operating losses or
other Tax attributes (and any and all Losses and Expenses relating thereto) arising as a result of
or in connection with any distributions from non-U.S. GBC Entities.

     Section 4.02 Notice of Indemnity. Whenever a party hereto (hereinafter an
“Indemnitee”) becomes aware of the existence of an issue raised by any Tax Authority which could
reasonably be expected to result in a determination that would require a payment hereunder by the
other party (hereinafter an “Indemnity Issue”), the Indemnitee shall in good faith promptly give
notice to such other party (hereinafter the “Indemnitor”) of such Indemnity Issue. The failure of
the Indemnitee to give such notice shall not relieve the Indemnitor of its obligations under this
Agreement, except to the extent such Indemnitor or any of its Entities is actually prejudiced by
such failure to give notice.

     Section 4.03 Payments.

     (a) Time for Payment. Except as otherwise provided in this Section 4.03, any
indemnity payment required to be made pursuant to this Agreement shall be paid within thirty days
after the indemnified party makes written demand upon the indemnifying party, provided that, in the
case of any indemnity payment relating to Taxes required to be paid, in no event shall such payment
be required to be made earlier than five business days prior to the date on which the relevant
Taxes (including estimated Taxes) are required to be paid (or would be required to be paid if no
such Taxes are due) to the relevant Tax Authority.

     (b) Deductible. Notwithstanding the foregoing, an indemnifying party shall be
required to make indemnity payments due pursuant to this Agreement only if the aggregate amount of
indemnity payments due from the indemnifying party exceeds $100,000, but if the aggregate amount of
all such payments exceeds that amount, then the indemnifying party shall make a payment of the
entire amount of indemnity payments due hereunder.

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     (c) Payments Net of Taxes and Tax Benefits. The amount of any payment under this
Agreement shall be (i) reduced to take into account any net Tax benefit realized by the recipient’s
Entities arising from the incurrence or payment by any of such recipient’s Entities of any amount
in respect of which such payment is made and (ii) increased to take into account any net Tax cost
incurred by the recipient’s Entities as a result of the receipt or accrual of payments hereunder
(grossed-up for such increase), in each case determined by treating the recipient as recognizing
all other items of income, gain, loss, deduction or credit before recognizing any item arising from
the receipt or accrual of any payment hereunder; provided, that the parties hereto acknowledge that
the tax items giving rise to payments hereunder, and the payments hereunder, may affect
computations of earnings and profits and stock basis and that no such effects on earnings and
profits or stock basis shall be taken into account in computing the amount of any payment due under
this Agreement.

     (d) Right to Offset. Any party making a payment under this Agreement shall have the
right to reduce any such payment by any undisputed amounts owed to it by the other party to this
Agreement.

     (e) Characterization of Payments. It is the intention of the parties to this
Agreement that payments made pursuant to this Agreement are to be treated as relating back to the
time immediately prior to the Merger as an adjustment to capital (i.e., capital
contribution or distribution), and the parties shall not take any position inconsistent with such
intention before any Tax Authority, except to the extent that a final determination (as defined in
Section 1313 of the Code) with respect to the recipient party causes any such payment not to be so
treated.

     Section 4.04 Tax Contests.

     (a) General. The Indemnitor and its Representatives, at the Indemnitor’s expense,
shall be entitled to participate (a) in all conferences, meetings and proceedings with any Tax
Authority, the subject matter of which is or includes an Indemnity Issue and (b) in all appearances
before any court, the subject matter of which is or includes an Indemnity Issue. The party who has
economic responsibility under this Agreement for the Tax issue that is the subject of the contest
(the “Responsible Party”) with respect to which there could be an increase in liability for any Tax
or with respect to which a payment could be required hereunder shall have the right to decide as
between the parties hereto how such matter is to be dealt with and finally resolved with the
appropriate Tax Authority and shall control all audits and similar proceedings; provided,
however, that if the amount of the increase of any adjustment would have a material impact
on the earnings or financial condition of the non-Responsible Party, then the non-Responsible Party
must consent to any such adjustment, which consent shall not be unreasonably withheld or delayed.
The Responsible Party agrees to cooperate in the settlement of any Indemnity Issue with the other
party and to take such other party’s interests into account.

     (b) 1999 Audit. Notwithstanding Section 4.04(a), Lane shall have the sole right, at
its expense, to conduct any and all proceedings relating to the 1999 Audit and shall have the sole
right to decide as between the parties hereto how the 1999 Audit shall be dealt with and finally
resolved and shall control all proceedings with respect thereto.

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     Section 4.05 Change in Law. Notwithstanding the agreement with respect to reporting
of Tax items and the claiming of the deductions set forth in Article 4 of this Agreement, none of
the GBC Entities nor any of the Lane Entities shall have any obligation to report any such Tax
items or claim such deductions as set forth in such Article in the event that either such party
determines, based on an opinion of nationally recognized tax counsel, which opinion shall be
reasonably satisfactory to the other party, that there is no substantial authority to support
reporting such Tax items or claiming such deductions on a Tax Return filed by such party as a
result of a change in or amendment to any law or regulation, or any change in the official
interpretation thereof, effective or occurring after the date of this Agreement, and such Entities
provide prompt notice to the other Entities of any such determination.

     Section 4.06 Interest Charge for Late Payments. Any amount due and owing by one party
to the other party pursuant to this Agreement that is not paid when due shall bear interest from
the due date thereof until paid at a rate equal to the short-term applicable federal rate in effect
on the date such payment was required to be made.

ARTICLE V

LOSSES; AMT CREDITS

     Section 5.01 Net Operating Losses — Pre-2005. At the time of each Measurement Date
occurring after the Merger Date with respect to each U.S. federal income taxable year for the
Combined Group ending on or before December 31, 2004, a determination shall be made for each
Subgroup of the amount (if any) by which such Subgroup’s Pre-2005 Subgroup Assumed NOLs exceed such
Subgroup’s Pre-2005 Subgroup NOLs (any such excess, an “NOL Shortfall”, and the Subgroup with
respect to which such NOL Shortfall exists, the “Impaired Subgroup”). If with respect to a
Measurement Date there is an NOL Shortfall, the Impaired Subgroup shall be entitled to an
indemnification payment from the other Subgroup (the “Indemnifying Subgroup”), if and to the extent
that such NOL Shortfall was caused by an Adjustment Event occurring with respect to a member of the
Indemnifying Subgroup; provided, however, that in the case of the Measurement Date
occurring in connection with filing the Combined Group’s 2004 U.S. federal income Tax Return, an
NOL Shortfall shall be deemed to exist with respect to a Subgroup only to the extent the NOL
Shortfall exceeds 10% of the Pre-2005 Subgroup Assumed NOLs of the Impaired Subgroup at the time of
such Measurement Date. Indemnification pursuant to this Section 5.01 shall equal 35% of the NOL
Shortfall and shall be payable upon written request of the Impaired Subgroup to the Indemnifying
Subgroup providing reasonable detail of the calculation of the NOL Shortfall, but in no event
earlier than thirty (30) days following the relevant Measurement Date. It is understood and agreed
that any amount owing under this section shall be payable without regard to when the NOLs impaired
actually would have been utilized.

     Section 5.02 2005 Tax Savings; Net Operating Losses — 2005.

     (a) General. At the time of each Measurement Date occurring in connection with the
2005 U.S. federal income taxable year for a Combined Group, (i) the 2005 Subgroup

17

 

Hypothetical Tax Liability will be calculated for the GBC Subgroup’s taxable year ending on
the Merger Date and for the Lane Subgroup’s 2005 taxable year and (ii) the 2005 Combined Group
Hypothetical Tax Liability will be calculated for a Combined Group’s 2005 taxable year.

     (b) 2005 Tax Savings. The “2005 Tax Savings” with respect to a 2005 Tax Return filed
by a Combined Group shall equal the excess, if any, of (x) the sum of the 2005 Subgroup
Hypothetical Tax Liabilities for each of the Subgroups, over (y) the 2005 Combined Group
Hypothetical Tax Liability with respect to such Tax Return. If there exists 2005 Tax Savings with
respect to such Tax Return, the Subgroup which realizes the benefit of such Tax Savings shall pay
an amount equal to 100% of such Tax Savings to the Subgroup generating the items of loss, deduction
or credit which produced such Tax Savings. Any amount payable under this Section 5.02(b) shall be
payable upon written request of the party entitled to payment providing reasonable detail of the
calculation of the 2005 Tax Savings, but in no event earlier than thirty (30) days following the
relevant Measurement Date occurring in connection with the Combined Group’s 2005 U.S. federal
income Tax Return.

     (c) Subgroup Post-Merger NOLs. At the time of each Measurement Date occurring in
connection with the 2005 U.S. federal income taxable year for the Combined Group, a determination
shall be made for each Subgroup of the amount (if any) by which the Subgroup Assumed Post-Merger
NOLs of such Subgroup exceed its Subgroup Post-Merger NOLs. If, with respect to a Subgroup, any
such excess exists, the other Subgroup shall pay to such Subgroup having such excess an amount
equal to 35% of the amount of such excess; provided, however, that payments made
under this Section 5.02(c) shall be reduced to take into account any payments previously made with
respect to any prior Measurement Date occurring in connection with the 2005 U.S. federal income
taxable year for the Combined Group. Any amount payable under this Section 5.02(c) shall be
payable upon written request of the party entitled to payment providing reasonable detail of the
calculation of the amount owing, but in no event earlier than thirty (30) days following the
relevant Measurement Date occurring in connection with the 2005 U.S. federal income taxable year
for the Combined Group. It is understood and agreed that any amount owing under this section shall
be payable without regard to when the NOLs impaired actually would have been utilized.

     Section 5.03 AMT Credit Carryforwards. It is the intention of the parties that any
U.S. federal alternative minimum tax credit carryforwards of the Combined Group existing on the
Merger Date shall be one-half for the benefit of GBC Entities and one half for the benefit of Lane
Entities, and each party agrees to indemnify the other party if, pursuant to the Code and Treasury
Regulations, such other party receives less than its share of such credit.

     Section 5.04 Recomputed Payments. Upon a Measurement Date occurring in connection
with a taxable year, the amounts payable by a party under this Agreement shall be recomputed take
into account all relevant factors, including any (i) adjustment or amendment to items of income,
gain, loss or deduction with respect to such taxable year or any preceding taxable year and (ii)
prior payments made by each party pursuant to this Agreement. If, taking into account such
recomputation, the net amount payable by a party differs from the net amount paid by such party as
of such Measurement Date, one party shall reimburse the other party to the extent necessary to
eliminate such difference.

18

 

     Section 5.05 Verification. Any question relating to the determination of any amount
payable under this Article V shall be submitted, in writing, for resolution by the firm or firms of
independent certified public accountants regularly engaged by the parties. If such firm or firms
are unable to resolve such question within 60 days of its submission, such question shall be
submitted, in writing, to another firm of independent certified public accountants selected by the
parties for such purpose, and the opinion of such other firm shall be binding on all parties
concerned. The costs of such procedure shall be divided equally among the parties presenting the
question.

ARTICLE VI

COOPERATION AND EXCHANGE OF INFORMATION

     Section 6.01 Inconsistent Actions. Each party to this Agreement agrees to, and to
cause each of its relevant Entities to, in the absence of a controlling change in law or
circumstances, report the Merger as a reorganization described in Section 368 of the Code on all
Tax Returns and other filings. GBC agrees to, and to cause each of its relevant Entities to, use
its best efforts to ensure that the Merger receives such treatment for U.S. federal income Tax
purposes and that, unless it has obtained the prior written consent of the other party, it (and its
Entities) shall not take any action inconsistent with, or fail to take any action required by, the
Merger Agreement.

     Section 6.02 Cooperation and Exchange of Information.

     (a) General. Each party hereto agrees to provide, and to cause each of its Entities
to provide, such cooperation and information as such other party shall request, on a timely basis,
in connection with the preparation or filing of any Tax Return or claim for Tax refund not
inconsistent with this Agreement or in conducting any Tax audit, Tax dispute, or otherwise in
respect of Taxes or to carry out the provisions of this Agreement (including any cooperation
required to carry out the intentions of the parties as set forth in the preamble);
provided, however, that, subject to Section 6.02(b), neither party shall be
obligated to provide the other party Tax Returns, documentation or other information of a
proprietary or confidential nature for purposes of verifying any calculation, and provided further,
that in any such case where one party does not provide the other party with Tax Returns,
documentation or information because it is proprietary or confidential, both parties shall
cooperate in developing mutually acceptable procedures including retaining a mutually agreeable
accounting firm to review such Tax Returns, documentation or information for purposes of verifying
such calculation. To the extent necessary to carry out the purposes of this Agreement and subject
to the other provisions of this Agreement, such cooperation and information shall include the
non-exclusive designation of an officer of Lane as an officer of GBC and each of its affiliates for
the purpose of signing Tax Returns, cashing refund checks, pursuing refund claims, dealing with Tax
Authorities and defending audits, as well as promptly forwarding copies of appropriate notices and
forms or other communications received from or sent to any Tax Authority which relate to the GBC
Entities for the Pre-Merger Taxable Period and providing copies of all relevant Tax Returns for the
Pre-Merger Taxable Period, together with accompanying schedules and

19

 

related workpapers, documents relating to rulings or other determinations by Tax Authorities,
including foreign Tax Authorities, and records concerning the ownership and Tax basis of property,
which either party may possess. Subject to the rights of the GBC Entities under the other
provisions of this Agreement, such officer shall have the authority to execute powers of attorney
(including Form 2848) on behalf of each of the GBC Entities with respect to Tax Returns for the
Pre-Merger Taxable Period. Each party to this Agreement shall make, or shall cause its affiliates
to make, its employees and facilities available on a mutually convenient basis to provide an
explanation of any documents or information provided hereunder.

     (b) 1999 Audit. Without limiting the generality of Section 6.02(a) and Section 6.03,
GBC agrees that it shall, and that it shall cause each GBC Entity to, provide such information and
cooperation as Lane reasonably determines shall be reasonably necessary to allow Lane to
effectively and fully contest any assertions made by the IRS, and to respond to any document
requests or other inquiries made by the IRS, in each case arising out of or relating to the 1999
Audit including, without limitation, upon reasonable notice by Lane: (i) providing on a timely
basis to Lane all documents, Tax Returns, appraisals, workpapers and other information as shall be
requested by Lane, (ii) affording to Lane and its Representatives all reasonable access, during
normal business hours, to all the properties, books, contracts, records and personnel of GBC and
each GBC Entity and making available to Lane or its designated Representatives all information
concerning the business and properties of GBC and each GBC Entity, in each case as may be
reasonably relevant to any of the issues raised in, or positions asserted by either party in
connection with, the 1999 Audit, (iii) granting to Lane and/or its designated Representatives any
powers of attorney reasonably requested by Lane in connection any proceeding relating to the 1999
Audit, and (iv) notifying Lane of any communication received from any Tax Authority relating
directly or indirectly to the 1999 Audit.

     Section 6.03 Tax Records.

     (a) General. Lane and GBC agree to (and to cause each of their respective Entities
to) (i) retain all Tax Returns, related schedules and workpapers, and all material records and
other documents as required under Section 6001 of the Code and the regulations promulgated
thereunder relating thereto existing on the date hereof or created through the Merger Date, for a
period of at least ten years following the Merger Date and (ii) allow the other party to this
Agreement, at times and dates reasonably acceptable to the retaining party, to inspect, review and
make copies of such records, as such other party may reasonably deem necessary or appropriate from
time to time. In addition, after the expiration of such ten-year period, such Tax Returns, related
schedules and workpapers, and material records shall not be destroyed or otherwise disposed of at
any time, unless, prior to such destruction or disposal, (A) the party proposing to destroy or
otherwise dispose of such records shall provide no less than 30 days’ prior written notice to the
other party, specifying in reasonable detail the records proposed to be destroyed or disposed of
and (B) if a recipient of such notice shall request in writing prior to the scheduled date for such
destruction or disposal that any of the records proposed to be destroyed or disposed of be
delivered to such requesting party, the party proposing the destruction or disposal shall promptly
arrange for the delivery of such requested records at the expense of the party requesting such
records.

20

 

     (b) Failure to Comply. Notwithstanding anything in this Agreement to the contrary, if
any party fails to comply with the requirements of Section 6.02(b) or Section 6.03(a) hereof, the
party failing so to comply shall be liable for, and shall hold the other party, harmless from, any
Taxes (including penalties for failure to comply with the record retention requirements of the
Code) and other costs resulting from such party’s failure to comply.

ARTICLE VII

MISCELLANEOUS

     Section 7.01 Entire Agreement; Construction. This Agreement and the Merger Agreement,
including any annexes, schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein and therein, will together constitute the entire agreement between the parties
with respect to the subject matter hereof and thereof and will supersede all prior negotiations,
agreements and understandings of the parties of any nature, whether oral or written, with respect
to such subject matter. Notwithstanding any other provisions in this Agreement to the contrary, in
the event and to the extent that there is a conflict relating to Taxes between the provisions of
this Agreement and the provisions of the Merger Agreement, the provisions of this Agreement will
control.

     Section 7.02 Effectiveness. All covenants and agreements of the parties contained in
this Agreement shall be subject to and conditioned upon the Merger becoming effective.

     Section 7.03 Survival of Agreements. Except as otherwise contemplated by this
Agreement, all covenants and agreements of the parties contained in this Agreement will remain in
full force and effect and survive the Merger Date.

     Section 7.04 ACCO. ACCO hereby absolutely, unconditionally and irrevocably guarantees
to Lane and its successors and assigns, the due and punctual payment and performance of all
obligations of GBC hereunder. The obligations of ACCO hereunder shall not be discharged, impaired
or otherwise affected by the failure of Lane to assert any claim or demand against GBC or enforce
any remedy hereunder. Notwithstanding the foregoing, nothing in this Section 7.04 shall create any
liabilities or obligations for ACCO to the extent that GBC would not have liability or otherwise be
responsible to Lane hereunder, and ACCO shall have the right to assert as a defense to any of its
obligations hereunder any defense that would be available to it had it duly authorized and entered
into the obligations hereunder directly.

     Section 7.05 Dual Consolidated Losses. Lane, GBC and ACCO acknowledge that GBC will
seek to qualify the Merger for the exception to “triggering event” status under Treas. Reg. §
1.1503-2(g)(2)(iv)(B)(1)(i). In connection with qualifying the Merger for such exception, Lane and
ACCO agree that, upon the request of GBC, each of them (i) shall enter into a “closing agreement”
(in customary form and substance) with the IRS pursuant to Treas. Reg. § 1.1503-2(g)(2)(iv)(B)(3)
and (ii) shall take such other actions reasonably requested by GBC, provided such other actions are
necessary to qualify the Merger for such exception and do not

21

 

have any adverse impact on Lane which is not fully indemnified by GBC and ACCO in a manner
reasonably acceptable to Lane.

     Section 7.06 Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of Delaware applicable to contracts made and to be
performed entirely within such State, without regard to the conflicts of law principles of such
State.

     Section 7.07 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (i) on the date of delivery if delivered personally, (ii)
upon confirmation of receipt if delivered by telecopy or telefacsimile, (iii) on the first Business
Day following the date of dispatch if delivered by a recognized next-day courier service or (iv) on
the fifth Business Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth
below, or pursuant to such other instructions as may be designated in writing by the party to
receive such notice:

	 	 	 	 	 	 	 	 
	 
	 	(a)	 	If to Lane to	 	 

	 
	 
	 	 	 	Lane Industries, Inc.	 	 

	 
	 	 	 	1200 Shermer Rd. 4th Fl.	 	 

	 
	 	 	 	Northbrook, IL 60062	 	 

	 

	 	 	 	Fax:
	 	(847) 498-2104
	 

	 	 	 	Attention:
	 	Richard Fabbrini
	 
	 	 	 	 	 	 
	 
	 	 	 	with a copy to: Tom Lowry	 	 

	 
	 	 	 	 	 	 
	 

	 	 	 	and	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Sidley Austin Brown & Wood LLP	 	 

	 
	 	 	 	10 South Dearborn	 	 

	 
	 	 	 	Chicago, Illinois 60603	 	 

	 

	 	 	 	Fax:
	 	(312) 853-7036
	 

	 	 	 	Attention:
	 	Larry A. Barden, Esq.
	 

	 	 	 	
	 	Sharp Sorensen, Esq.
	 
	 	(b)	 	If to GBC to	 	 

	 
	 
	 	 	 	GBC Corporation	 	 

	 
	 	 	 	One GBC Plaza	 	 

	 
	 	 	 	Northbrook, IL 60062	 	 

	 

	 	 	 	Fax:
	 	(847) 291-5900
	 

	 	 	 	Attention:
	 	Steven Rubin, Esq.

22

 

	 	 	 	 	 	 	 	 
	 

	 	 	 	with a copy to: Elizabeth Boos	
	 
	 	 	 	 	 	 
	 

	 	 	 	and	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates	 	 

	 
	 	 	 	333 West Wacker Drive	 	 

	 
	 	 	 	Chicago, Illinois 60606	 	 

	 

	 	 	 	Fax:
	 	(312) 407-0411
	 

	 	 	 	Attention:
	 	William Kunkel, Esq.
	 

	 	 	 	 	 	Maxwell Miller, Esq.
	 
	 	 	 	 	 	 
	 
	 

	 	(c)
	 	If to ACCO to
	 
	 
	 	 	 	ACCO World Corporation	 	 

	 
	 	 	 	300 Tower Parkway	 	 

	 
	 	 	 	Lincolnshire, Illinois 60069	 	 

	 

	 	 	 	Fax:
	 	(847) 484-4495
	 

	 	 	 	Attention:
	 	President

     Section 7.08 Consent to Jurisdiction. Each of Lane and GBC irrevocably agrees that
any legal action or proceeding with respect to this Agreement, the transactions contemplated
hereby, any provision hereof, the breach, performance, validity or invalidity hereof or for
recognition and enforcement of any judgment in respect hereof brought by another party hereto or
its successors or permitted assigns may be brought and determined in any federal or state court
located in the State of Delaware, and each of Lane and GBC hereby irrevocably submits with regard
to any such action or proceeding for itself and in respect to its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of Lane and GBC
hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim
or otherwise, in any action or proceeding with respect to this Agreement, the transactions
contemplated hereby, any provision hereof or the breach, performance, enforcement, validity or
invalidity hereof, (a) any claim that it is not personally subject to the jurisdiction of the
above-named courts for any reason other than the failure to lawfully serve process, (b) that it or
its property is exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the
fullest extent permitted by applicable laws, that (i) the suit, action or proceeding in any such
court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is
improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.

     Section 7.09 Amendments. This Agreement cannot be amended, modified or supplemented
except by a written agreement executed by Lane and GBC.

     Section 7.10 Assignment. Neither party to this Agreement will convey, assign or
otherwise transfer any of its rights or obligations under this Agreement, in whole or in part,

23

 

without the prior written consent of the other party in its sole and absolute discretion. Any
conveyance, assignment or transfer requiring the prior written consent of the other party pursuant
to this Section 6.08 which is made without such consent will be void ab initio. No
assignment of this Agreement will relieve the assigning party of its obligations hereunder.

     Section 7.11 Captions; Currency. The article, section and paragraph captions herein
and the table of contents hereto are for convenience of reference only, do not constitute part of
this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
Unless otherwise specified, all references herein to numbered articles or sections are to articles
and sections of this Agreement and all references herein to schedules are to schedules to this
Agreement. Unless otherwise specified, all references contained in this Agreement, in any schedule
referred to herein or in any instrument or document delivered pursuant hereto to dollars or “$”
shall mean U.S. dollars.

     Section 7.12 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions hereof, or the application of such
provision to Persons or circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be affected, impaired or
invalidated thereby. If the economic or legal substance of the transactions contemplated hereby is
affected in any manner adverse to any party as a result thereof, the parties will negotiate in good
faith in an effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.

     Section 7.13 Parties in Interest. Except for the provisions of Article IV relating to
Tax Indemnification, this Agreement is solely for the benefit of the parties hereto and their
respective Entities, and their respective successors and permitted assigns and should not be deemed
to confer upon third parties (including any employee of Lane or GBC or of any Lane or GBC
subsidiary) any remedy, claim, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.

     Section 7.14 Schedules. All schedules attached hereto are hereby incorporated in and
made a part of this Agreement as if set forth in full herein. Capitalized terms used in the
schedules hereto but not otherwise defined therein will have the respective meanings assigned to
such terms in this Agreement.

     Section 7.15 Waivers; Remedies. Any agreement on the part of a party hereto to any
waiver of any provision of this Agreement shall be valid only if set forth in a written instrument
signed on behalf of such party. No failure or delay by any party hereto in exercising any right,
power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of
any party hereto of any right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder, nor will any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies which the parties may otherwise have at law or in
equity.

24

 

     Section 7.16 Counterparts. This Agreement may be executed in separate counterparts,
each such counterpart being deemed to be an original instrument, and all such counterparts will
together constitute the same agreement.

     Section 7.17 Performance. Each party hereto will cause to be performed, and hereby
guarantees the performance of all actions, agreements and obligations set forth herein to be
performed by any subsidiary or any of such party’s Entities.

     Section 7.18 Interpretation. Any reference to any federal, state, local, or foreign
law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. For the purposes of this Agreement, (i) words in the singular shall be
held to include the plural and vice versa and words of one gender shall be held to include the
other gender as the context requires, (ii) the terms “hereof “, “herein”, and “herewith” and words
of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement and (iii) the word “including” and
words of similar import when used in this Agreement shall mean “including, without limitation”.

     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized
officers of the parties as of the date first hereinabove written.

	 	 	 	 	 
	 	LANE INDUSTRIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	GENERAL BINDING CORPORATION

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	ACCO WORLD CORPORATION

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

25

 

EXHIBIT A — Prior Tax Allocation Agreements Side Agreement

     THIS AGREEMENT is entered into this ___day of ___, 2005, by and among Lane Agrico, Inc.,
a Delaware corporation, Lane Land Operations, Inc., a New Mexico corporation, Hotel Lane Beaumont,
Inc., a Delaware corporation, Lane Cuyahoga, Inc., an Ohio corporation, Lane Hospitality, Inc., a
Delaware corporation, Lane Hotels, Inc., a Delaware corporation, Lane Hotel Properties, Inc., a
Delaware corporation, Lane Properties, Inc., a Delaware corporation, Lane Suites, Inc., a Delaware
corporation, Sunbelt Hotels, Inc., a Delaware corporation, Lane Toledo, Inc., an Ohio corporation,
Lane College Station, Inc., a Delaware corporation, Lane North Shore, Inc., a Delaware corporation,
KNE Beverages, Inc., a Texas corporation, GBC International, Inc., a Nevada corporation, and
VeloBind, Inc., a Delaware corporation. Any capitalized term not otherwise defined in this
Agreement shall have the meaning ascribed to it in the Tax Allocation Agreement, by and among Lane
Industries, Inc. and General Binding Corporation and ACCO World Corporation, to which this
Agreement is an exhibit (the “Tax Allocation Agreement”).

     WHEREAS, concurrently with the execution of this Agreement, Lane and GBC are entering into the
Tax Allocation Agreement to provide for and agree upon the allocation between the Lane Entities and
the GBC Entities of all responsibilities, liabilities and benefits relating to or affecting Taxes
paid or payable by either of them for all taxable periods, whether beginning before, on or after
the Merger Date.

     WHEREAS, effective as of the Merger Date, the parties hereto wish to terminate their rights
and obligations under (i) that certain Tax Allocation Agreement dated June 1, 1978, as amended,
relating to U.S. federal income taxes (the “1978 Agreement”), (ii) that certain agreement dated
January 1, 1991 (amending the 1978 agreement to provide for the allocation of foreign tax credits)
(the “1991 Agreement”), (iii) that certain letter agreement dated May 8, 2003 (providing for the
allocation of the consolidated alternative minimum tax for the tax year ended December 31, 1997)
(the “CAMT Agreement”), and (iv) that certain State Tax Allocation Agreement dated May 31, 1985
(the “State Agreement” and, together with the 1978 Agreement, the 1991 Agreement and the CAMT
Agreement, the “Prior Tax Allocation Agreements”).

     NOW, THEREFORE, in consideration of the premises and of the respective agreements contained in
this Agreement, each of the parties hereto hereby agrees as follows:

     1. From and after the Merger Date, the rights and obligations of the parties under the Prior Tax
Allocation Agreements shall be terminated and shall have no further force or effect.

     2. All covenants and agreements of the parties contained in this Agreement shall be subject to and
conditioned upon the Merger becoming effective.

     3. If the Merger Agreement terminates without the Merger becoming effective, this Agreement shall
terminate and the rights and obligations of the parties under the Prior Tax Allocation Agreements
shall not terminate and shall remain in full force and effect.

 

 

EXHIBIT A — Prior Tax Allocation Agreements Side Agreement

     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized
officers of the parties as of the date first hereinabove written.

	 	 	 	 	 	 	 
	[LANE AGRICO, INC.]	 	[LANE SUITES, INC.]
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:
	 
	 	 	 	 	 	 
	[LANE LAND OPERATIONS, INC.]	 	[SUNBELT HOTELS, INC.]
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:
	 
	 	 	 	 	 	 
	[HOTEL LANE BEAUMONT, INC.]	 	[LANE TOLEDO, INC.]
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:
	 
	 	 	 	 	 	 
	[LANE CUYAHOGA, INC.]	 	[LANE COLLEGE STATION, INC.]
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:
	 
	 	 	 	 	 	 
	[LANE HOSPITALITY, INC.]	 	[LANE NORTH SHORE, INC.]
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:

2

 

EXHIBIT A — Prior Tax Allocation Agreements Side Agreement

	 	 	 	 	 	 	 
	[LANE HOTELS, INC.]	 	[KNE BEVERAGES, INC.]
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:
	 
	 	 	 	 	 	 
	[LANE HOTEL PROPERTIES, INC.]	 	[GBC INTERNATIONAL, INC.]
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:
	 
	 	 	 	 	 	 
	[LANE PROPERTIES, INC.]	 	[VELOBIND, INC.]
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:

3

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