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EXHIBIT 10.4
BARINGTON CAPITAL GROUP, L.P
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
_________, 1997
Objective Communications, Inc.
00000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
Gentlemen:
This letter, when executed by the parties hereto, will constitute an
agreement between Objective Communications, Inc. (the "Company") and Barington
Capital Group, L.P. ("Barington"), pursuant to which the Company agrees to
retain Barington and Barington agrees to be retained by the Company under the
terms and conditions set forth below:
1. The Company hereby retains Barington to perform consulting
services related to corporate finance and other financial services matters, and
Barington hereby accepts such retention, for a term commencing on the date
hereof and ending on __________, 1999. In this regard, subject to the terms
set forth below, Barington shall furnish to the Company advice and
recommendations with respect to such aspects of the business and affairs of the
Company as the Company shall, from time to time, reasonably request upon
reasonable notice.
2. As compensation for the services described in paragraph 1
above, the Company shall pay to Barington (i) a fee of $80,000 (exclusive of
any accountable out of pocket expenses) payable on the date hereof and (ii) a
fee equal to five percent of the first one million dollars of the consideration
paid or received by the Company (or any stockholder, subsidiary or affiliate)
in any Transaction (as hereinafter defined), four percent of the next million
dollars of consideration so paid or received, three percent of the next million
dollars of consideration so paid or received, two percent of the next million
dollars so paid or received and one percent of any consideration so paid or
received in excess of four million dollars. Except as provided in the
penultimate sentence of this Section 2, such fee shall be paid in cash or in
the same form as the consideration received by the Company in the Transaction,
if other than cash, at the closing of the Transaction to which it relates. The
amount of consideration paid in a Transaction
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_______________, 1997
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shall include, for purposes of calculating such fee, all forms of consideration
paid by the Company or any subsidiary or affiliate, or received by the Company,
its stockholders, or any subsidiary or affiliate of the Company, including, but
not limited to, cash, stock or evidence of indebtedness, or any combination
thereof. In addition, if within two years immediately following the
termination or expiration of this Agreement, the Company consummates a
Transaction with any party introduced by Barington to the Company prior to such
termination or expiration, the Company shall pay to Barington a fee with
respect to such Transaction calculated in accordance with this paragraph.
Notwithstanding the foregoing, Barington shall not be entitled to receive a fee
pursuant to this Section 2 for any Transaction which is identified, negotiated
and consummated by the Company without the assistance or participation of
Barington or any other investment banking firm or other intermediary. A
"Transaction" shall mean any transaction in which the Company or any subsidiary
or affiliate of the Company may be involved, including, but not limited to,
mergers, acquisitions, joint ventures, sales of securities of the Company or
its subsidiaries or affiliates or sales of all or substantially all of the
assets of the Company or any subsidiary or affiliate of the Company, sales or
other issuances of any securities in connection with an acquisition or
disposition or other business combination transaction, to which the provisions
of Section 5 do not apply.
3. In addition, Barington shall hold itself ready to assist the
Company in evaluating and negotiating particular contracts or projects, if
requested to do so by the Company, upon reasonable notice, and will undertake
such evaluations and negotiations under prior written agreement as to
additional compensation to be paid by the Company to Barington with respect to
such evaluations and negotiations.
4. All obligations of Barington contained herein shall be subject
to Barington's reasonable availability for such performance, in view of the
nature of the requested service and the amount of notice received. Barington
shall devote such time and effort to the performance of its duties hereunder as
Barington shall determine is reasonably necessary for such performance.
Barington may look to such others for such factual information, investment
recommendations, economic advice and/or research, upon which to base its advice
to the Company hereunder, as it shall deem appropriate. The Company shall
furnish to Barington all information relevant to the performance by Barington
of its obligations under this Agreement, or particular projects as to which
Barington is acting as advisor, which will permit Barington to know all facts
material to the advice to be rendered, and all materials or information
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_______________, 1997
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reasonably requested by Barington. In the event that the Company fails or
refuses to furnish any such material or information reasonably requested by
Barington, and thus prevents or impedes Barington's performance hereunder, any
inability of Barington to perform shall not be a breach of its obligations
hereunder.
5. For a period of three years from the date hereof, Barington
shall have an irrevocable preferential right of first refusal to purchase for
its account or to sell for the account of the Company or any subsidiary of or
successor to the Company, any securities of the Company or any such subsidiary
or successor of the Company which the Company, any such subsidiary or successor
may seek to sell, whether pursuant to registration under the Securities Act of
1933, as amended (the "Act") or otherwise. The Company and any such subsidiary
or successor will consult Barington with regard to any such offering and will
offer Barington the opportunity to purchase or sell any such securities on
terms not more favorable to the seller of such securities than it or he can
secure elsewhere. If Barington fails to accept such offer within 20 business
days after the mailing of a notice containing such offer by registered or
overnight mail addressed to Barington, then Barington shall have no further
claim or right with respect to the proposal contained in such notice. If,
however, the terms of such proposal are subsequently modified in any material
respect, the preferential right referred to herein shall apply to such modified
proposal as if the original proposal had not been made. Barington's failure to
exercise its preferential right with respect to any particular proposal shall
not affect its preferential rights relative to future proposals.
Notwithstanding the foregoing, in the event that such offer relates to an
underwritten public offering, private placement offering or offering pursuant
to Section 144A of the Act (and the rules and regulations promulgated
thereunder) of the Company's securities to be lead managed by an
institutionally- based major bracket or large regional underwriting firm, the
Company shall be deemed to have satisfied the right of first refusal contained
herein if Barington is given the right to participate in such offering as a
co-manager (right hand side) with at least 33% of the total economics and 33%
of the allocation of such offering.
6. Subject to Section 7, nothing contained in this Agreement
shall limit or restrict the right of Barington or of any partner, employee,
agent or representative of Barington, to be a partner, director, officer,
employee, agent or representative of, or to engage in, any other business,
whether or not of a similar nature to the Company's business, nor to limit or
restrict the right of Barington to render services of
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any kind to any other corporation, firm, individual or association.
7. Barington will hold, and will use its commercially reasonable
efforts to cause its officers, directors, employees, consultants, advisors, and
agents to hold, in confidence any confidential information which the Company
provides to Barington pursuant to this Agreement. Barington may disclose such
information to its officers, directors, employees, consultants, advisors and
agents, in connection with the services to be rendered as contemplated by this
Agreement, so long as such persons are informed by Barington of the
confidential nature of such information and are directed by Barington to treat
such information confidentially in accordance herewith. Notwithstanding the
foregoing, Barington shall not be required to maintain confidentiality with
respect to information (i) which is or becomes part of the public domain; (ii)
of which Barington had independent knowledge prior to disclosure to it by the
Company; (iii) which comes into the possession of Barington in the normal and
routine course of its own business from and through independent
non-confidential sources; or (iv) which is required to be disclosed by
Barington by governmental requirements. If Barington is requested or required
(by oral questions, interrogatories, requests for information or document
subpoenas, civil investigative demands, or similar process) to disclose any
confidential information supplied to it by the Company, or the existence of
other negotiations in the course of its dealings with the Company or its
representatives, Barington shall, unless prohibited by law, promptly notify the
Company of such request(s) so that the Company may seek an appropriate
protective order.
8. Because Barington will be acting on your behalf, it is its
practice to receive indemnification. A copy of Barington's standard
indemnification provisions (the "Indemnification Provisions") is attached to
this Agreement and is incorporated herein and made a part hereof.
9. This Agreement may not be transferred, assigned or delegated
by any of the parties hereto without the prior written consent of the other
party hereto.
10. The failure or neglect of the parties hereto to insist, in any
one or more instances, upon the strict performance of any of the terms or
conditions of this Agreement, or their waiver of strict performance of any of
the terms or conditions of this Agreement, shall not be construed as a waiver
or relinquishment in the future of such term or condition, but the same shall
continue in full force and effect.
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11. This Agreement may not be terminated by the Company. This
Agreement may be terminated by Barington at any time upon 30 days' written
notice, without liability or continuing obligation to you or to us (except for
any compensation earned by us up to the date of termination, including
compensation to be paid subsequent to such termination), except as set forth in
this Section 11. Neither termination nor completion of this assignment shall
affect the provision of Section 2 hereof or the Indemnification Provisions
which are incorporated herein, which shall remain operative and in full force
and effect.
12. Any notices hereunder shall be sent to the Company and to
Barington at their respective addresses set forth above. Any notice shall be
given by hand delivery, facsimile transmission or overnight delivery or courier
service, against receipt therefor, and shall be deemed to have been given when
received. Either party may designate any other address to which notice shall be
given, by giving written notice to the other of such change of address in the
manner herein provided.
13. This Agreement has been made in the State of New York and
shall be construed and governed in accordance with the laws thereof without
giving effect to principles governing conflicts of law.
14. This Agreement contains the entire agreement between the
parties, may not be altered or modified, except in writing and signed by the
party to be charged thereby, and supersedes any and all previous agreements
between the parties relating to the subject matter hereof.
15. This Agreement shall be binding upon the parties hereto and
their respective heirs, administrators, successors and permitted assigns.
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Objective Communcations, Inc.
_______________, 1997
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If you are in agreement with the foregoing, please execute two copies
of this letter in the space provided below and return them to the undersigned.
Yours truly,
BARINGTON CAPITAL GROUP, L.P.
By: LNA CAPITAL CORP.,
General Partner
By:
-------------------------------
Xxxx Xxxxxx, Executive Vice
President
ACCEPTED AND AGREED
TO AS OF THE DATE FIRST
ABOVE WRITTEN:
Objective Communications, Inc.
By:
--------------------------------
Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
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INDEMNIFICATION PROVISIONS
Objective Communications, Inc. (the "Company") agrees to indemnify and
hold harmless Barington Capital Group, L.P. ("Barington") against any and all
losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements (and any and all actions, suits,
proceedings and investigations in respect thereof and any and all legal and
other costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise), including, without
limitation, the costs, expenses and disbursements, as and when incurred, of
investigating, preparing or defending any such action, suit, proceeding or
investigation (whether or not in connection with litigation in which Barington
is a party), directly or indirectly, caused by, relating to, based upon,
arising out of, or in connection with Barington's acting for the Company,
including, without limitation, any act or omission by Barington in connection
with its acceptance of or the performance or non performance of its obligations
under the Agreement, dated ___________, 1997, between the Company and Barington
to which these indemnification provisions are attached and form a part (the
"Agreement"), except to the extent that any such liability is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
to have resulted primarily and directly from Barington's gross negligence or
willful misconduct. The Company also agrees that Barington shall not have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with the engagement of Barington under the
Agreement, except to the extent that any such liability is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
to have resulted primarily and directly from Barington's gross negligence or
willful misconduct.
These indemnification provisions shall be in addition to any liability
which the Company may otherwise have to Barington or the persons indemnified
below in this sentence and shall extend to the following: Barington, its
affiliated entities, partners, employees, legal counsel, agents and controlling
persons (within the meaning of the federal securities laws), and the officers,
directors, employees, legal counsel, agents and controlling persons of any of
them. All references to Barington in these indemnification provisions shall be
understood to include any and all of the foregoing.
If any action, suit, proceeding or investigation is commenced, as to
which Barington proposes to demand indemnification, it shall notify the Company
with reasonable promptness; provided, however, that any failure by Barington to
notify the Company shall not relieve the Company from its obligations
hereunder. Barington shall have the right to retain counsel of its own choice
to represent it, and the Company shall
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pay the fees, expenses and disbursements of such counsel; and such counsel
shall, to the extent consistent with its professional responsibilities,
cooperate with the Company and any counsel designated by the Company. The
Company shall be liable for any settlement of any claim against Barington made
with the Company's written consent, which consent shall not be unreasonably
withheld. The Company shall not, without the prior written consent of
Barington, settle or compromise any claim, or permit a default or consent to
the entry of any judgment in respect thereof, unless such settlement,
compromise or consent includes, as a unconditional term thereof, the giving by
the claimant to Barington of an unconditional release from all liability in
respect of such claim. In order to provide for just and equitable
contribution, if a claim for indemnification pursuant to these indemnification
provisions is made but it is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) that such indemnification may not
be enforced in such case, even though the express provisions hereof provide for
indemnification in such case, then the Company, on the one hand, and Barington,
on the other hand, shall contribute to the losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs, expenses and
disbursements to which the indemnified persons may be subject in accordance
with the relative benefits received by the Company, on the one hand, and
Barington, on the other hand, and also the relative fault of the Company, on
the one hand, and Barington, on the other hand, in connection with the
statements, acts or omissions which resulted in such losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs, expenses or
disbursements and the relevant equitable considerations shall also be
considered. No person found liable for a fraudulent misrepresentation shall be
entitled to contribution from any person who is not also found liable for such
fraudulent misrepresentation. Notwithstanding the foregoing, Barington shall
not be obligated to contribute any amount hereunder that exceeds the amount of
fees previously received by Barington pursuant to the Agreement.
Neither termination nor completion of the engagement of Barington
referred to above shall affect these indemnification provisions which shall
then remain operative and in full force and effect.
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