EXHIBIT 10.4
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FORM OF
ADMINISTRATIVE SERVICES AGREEMENT
This ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement") is made and
entered into as of this ___ day of ____________, 2002, between CASUAL MALE
RETAIL GROUP, INC., a Delaware corporation ("CMRG"), and LP INNOVATIONS, INC., a
Nevada corporation ("LPI").
WHEREAS, CMRG owns 100% of the outstanding common stock of LPI prior to
the spin-off (the "Spin-Off") of LPI to stockholders of CMRG;
WHEREAS, CMRG will no longer own any of the outstanding common stock of
LPI after consummation of the Spin-Off; and
WHEREAS, CMRG has heretofore directly or indirectly provided certain
administrative, operational, financial, management and other services to LPI;
and
WHEREAS, LPI has an ongoing and continuing need for such services after
the Spin-Off; and
WHEREAS, CMRG proposes to provide various services to LPI, including, but
not limited to, accounting, payroll and finance, computer/MIS,
telecommunications, legal, administrative support, human resources, employee
benefits and related services, as more particularly described on Schedule 1
attached hereto (the "Services"); and
WHEREAS, LPI desires that CMRG provide and CMRG desires to provide to LPI
the Services upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and for other good and valuable consideration, the receipt and legal sufficiency
of which are hereby expressly acknowledged, CMRG and LPI, for themselves, their
successors and assigns, hereby agree as follows:
1. TERM/TERMINATION. The term of this Agreement shall begin as of the date of
the Spin-Off (the "Effective Date") and, unless sooner terminated in accordance
with subsections (a), (b) or (c) hereof or any other provision of this
Agreement, shall continue for a period of one (1) year thereafter (the "Initial
Term"). Following the Initial Term, this Agreement will automatically renew for
succeeding one (1) year terms unless either party provides the other with
written notice of its intent not to renew at least thirty (30) days prior to
expiration of the Initial Term or the then current renewal term, as applicable.
Notwithstanding the foregoing, this Agreement may be terminated at any time in
the following circumstances:
(a) LPI, in its sole and absolute discretion, may at any time cancel
this Agreement upon thirty (30) days prior written notice to CMRG;
(b) If either party commits a material breach of this Agreement, and
such material breach is either not curable or is curable but remains
uncured for thirty (30) days after written notice of such material
breach is delivered to the breaching party, then the non-breaching
party may immediately terminate this Agreement by
providing the breaching party with written notice of such
termination. The right of termination provided in this subsection
1(b) is not exclusive of any remedies to which either party may
otherwise be entitled at law or in equity in the event of a breach
of this Agreement.
(c) In the event that either party hereto (i) becomes insolvent or shall
cease to pay its debts when due; or (ii) is found bankrupt by any
judicial, administrative or other appropriate agency having
jurisdiction, whether voluntary or involuntary, and such insolvency
is not corrected or such bankruptcy declaration is not vacated
within thirty (30) days, then the other party shall have the right
to immediately terminate this Agreement by providing the
bankrupt/insolvent party written notice of such termination.
2. ENGAGEMENT. LPI hereby engages CMRG as an independent contractor to
perform the Services, and CMRG accepts such engagement.
3. COMPENSATION.
(a) In consideration for the Services, during the term of this
Agreement, LPI shall pay CMRG an aggregate fee of $25,000 per month
(the "Monthly Services Fee") plus actual out-of-pocket expenses
("Out-of-Pocket Expenses") incurred by CMRG in connection with
providing the Services, such Out-of-Pocket Expenses as shall be
separately stated. Each statement for Out-of-Pocket Expenses shall
set forth a reasonable explanation of the Out-of-Pocket Expenses
incurred during such month and, if requested by LPI, supporting
documentation in reasonable detail. LPI will pay (i) the Monthly
Services Fee in full at the beginning of each month, no later than
the 1st day of the month and (ii) the amount of each statement for
Out-of-Pocket Expenses within thirty (30) days from the date of the
statement. Each party shall be responsible for paying all taxes, if
any, imposed upon it by applicable law in connection with this
Agreement.
(b) There shall be no other charge for the Services rendered to LPI
hereunder, except as provided herein. In the event that CMRG, at the
request of LPI, provides additional or special services beyond the
Services ("Additional Services"), CMRG shall be entitled to
compensation for such Additional Services based upon a compensation
plan agreed to by the parties. CMRG shall invoice LPI for the
Additional Services upon completion or as the parties may otherwise
agree. Payment is due within thirty (30) days from the date of the
invoice.
(c) CMRG agrees that from time to time, it shall review the Monthly
Service Fee in respect of the level of services that CMRG is
providing to LPI, and shall make a good faith determination of
whether an adjustment to such fee is appropriate; such adjustment to
be mutually agreed upon by the parties.
4. CONFIDENTIAL INFORMATION. CMRG acknowledges that the information,
observations and data relating to the business of LPI and the Services performed
hereunder ("Confidential Information") are the property of LPI, regardless of
how, when or in what
capacity CMRG obtained any such Confidential Information, and shall use such
Confidential Information only for the purposes set forth in this Agreement, and
shall not knowingly disclose such Confidential Information to any other person,
firm, or corporation without the prior written consent of LPI, unless and to the
extent that such Confidential Information: (i) shall have otherwise become
publicly available other than as the result of a disclosure by CMRG in breach
hereof, (ii) becomes available to CMRG on a nonconfidential basis from a source
other than LPI which CMRG believes is not prohibited from disclosing such
information to CMRG by obligation to LPI, (iv) is known by CMRG prior to its
receipt from LPI without any obligation of confidentiality with respect thereto,
or (v) is developed by CMRG independently of any disclosures made by LPI to CMRG
of such information. The parties agree that the covenant described above
regarding Confidential Information shall survive the termination of this
Agreement for a period of five (5) years.
5. WARRANTY. As an inducement for LPI to enter into this Agreement, CMRG
represents and warrants to LPI that all Services to be performed hereunder shall
be performed by qualified personnel in a professional and workmanlike manner
consistent with the past practices of the employees performing such Services and
shall generally be of no lesser quality than similar Services which CMRG
provides to itself. IT IS UNDERSTOOD AND AGREED THAT CM SHALL NOT BE OBLIGATED
TO PROVIDE A GREATER LEVEL OF SERVICE THAN CMRG PROVIDES AS OF DATE HEREOF. CMRG
MAKES NO OTHER WARRANTY OR REPRESENTATION WITH RESPECT TO THE SERVICES, WHETHER
STATUTORY, EXPRESS OR IMPLIED. THE SOLE LIABILITY OF CMRG ARISING OUT OF OR
RELATING TO THE SERVICES SHALL BE LIMITED TO COMPLETING OR REPERFORMING SUCH
SERVICES AT CMRG'S EXPENSE; PROVIDED, THAT ANY CLAIM THEREFOR IS REPORTED TO
CMRG WITHIN 90 DAYS FOLLOWING THE DATE ON WHICH SUCH SERVICES WERE PROVIDED. IN
THE EVENT CMRG IS UNABLE TO REPERFORM ANY SERVICES FOR WHICH A CLAIM IS MADE
UNDER THIS WARRANTY PRIOR TO THE EXPIRATION OF SUCH 90 DAY PERIOD, CMRG SHALL
USE ITS REASONABLE BEST EFFORTS TO PURSUE SUCH REMEDY TO COMPLETION FOLLOWING
SUCH PERIOD. THE FOREGOING REMEDY SHALL BE THE SOLE REMEDY AVAILABLE TO LPI FOR
ANY FAILURE OF CMRG TO COMPLY WITH ITS WARRANTY OBLIGATIONS. IN NO EVENT SHALL
CMRG BE LIABLE FOR ANY DAMAGES (INCLUDING CONSEQUENTIAL, SPECIAL, INDIRECT OR
INCIDENTAL DAMAGES), WHETHER BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE OR
STRICT LIABILITY), OR ANY OTHER LEGAL THEORY UNDER ANY WARRANTY OR OTHERWISE
ARISING OUT OF OR RELATING TO THE SERVICES. The parties acknowledge and agree
that due to the circumstances from which this Agreement arises, the rights and
remedies set forth herein adequately protect each party's interests. The
provisions of this Section shall survive the termination or cancellation of this
Agreement for any reason.
6. INSPECTION. Subject to CMRG's reasonable confidentiality requirements,
CMRG agrees that LPI shall have the right to enter CMRG's facilities at
reasonable times to inspect the facilities, the performance of the Services and
any property of LPI covered by this Agreement.
7. AUDIT RIGHTS. LPI shall have the right to inspect and audit CMRG's records
as they relate to Services performed by CMRG hereunder for which LPI is making
payment to CMRG. The rights provided in this Section 7 and Section 6 above
shall, however, only be exercised by LPI (i) during CMRG's normal business hours
and only following reasonable prior notice (two (2) business days prior notice
being presumptively reasonable) and (ii) with regard to the specific Services
for which LPI is making payment to CMRG.
8. INDEMNIFICATION. If CMRG performs any work on LPI's premises or utilizes
the property of LPI, whether on or off LPI's premises, CMRG shall indemnify and
hold LPI harmless from and against any and all liabilities, losses, damages,
costs and expenses, including reasonable attorneys' fees, expert fees and costs
of litigation for damages to the property of or injuries (including death) to
LPI, its employees or any other person arising from or in connection with CMRG's
performance of work or use of LPI's property except if such liability, claim, or
demand arises solely out of the negligence of LPI. To the extent permitted by
law, CMRG hereby knowingly, intentionally and voluntarily agrees to waive any
immunity from suit which it may enjoy under applicable worker's compensation
laws or the constitution of any state or otherwise, to the extent necessary to
permit LPI to be fully indemnified and held harmless hereunder. CMRG further
agrees that LPI shall not be liable for and hereby knowingly, intentionally and
voluntarily releases LPI from all liability to CMRG's insurance carrier or
carriers or to anyone claiming under or through CMRG by reason of subrogation or
otherwise. This Section 8 shall survive termination of this Agreement for any
reason whatsoever.
9. NON-SOLICITATION. LPI agrees during the term of this Agreement and for the
period of one (1) year thereafter, regardless of the reason for the expiration
or termination of this Agreement, LPI will not hire or engage in any manner (or
assist any company or business organization with whom CMRG is affiliated or
which is directly or indirectly controlled by CMRG to hire or engage in any
manner) any person who is or was employed by CMRG at any time during the term of
this Agreement or any person who is or was an agent, representative,
subcontractor, contractor or consultant of CMRG at any time during the term of
this Agreement.
10. FORCE MAJEURE.
(a) Neither party will be responsible for any failure or delay in the
performance of all or any part of this Agreement caused by acts of
God and nature, intervention of government, war or threat of war,
conditions similar to war, acts of terrorism, sanctions, blockades,
embargoes, strikes, lockouts or other similar causes or
circumstances which cannot reasonably be prevented by the party
whose performance is delayed. However, the party so affected shall
promptly give written notice to the other party whenever such
contingency or other act becomes reasonably foreseeable, and shall
use commercially reasonable efforts to overcome the effects of the
contingency as promptly as possible, and shall promptly give written
notice to the other party of the cessation of such contingency.
Neither party, however, shall be required to resolve a strike,
lockout or other labor problem in a manner which it alone in its
sole discretion does not deem reasonably proper and advisable.
(b) Non-performance by a party due to an event listed in Section 10(a)
above, for a period of thirty (30) or more consecutive days, shall
entitle the other party, in
addition to any other rights and remedies it may have hereunder or
by law, to terminate this Agreement upon written notice to the
non-performing party.
11. ARBITRATION. Any dispute or controversy between the parties arising out of
or relating to this Agreement including, without limitation, a dispute or
controversy relating to the construction of any provision or the validity or
enforceability of any term or condition (including this provision), or of the
entire Agreement, or any claim that all or any part of this Agreement (including
this provision) is void or voidable, shall be submitted to arbitration before a
three arbitrator panel in accordance with the Commercial Rules of the American
Arbitration Association then in effect. Any arbitration under this provision
shall be conducted in the Commonwealth of Massachusetts. Each party shall bear
its own costs and expenses in any such proceeding. The decision of the
arbitrators shall be final and binding upon the parties and may be enforced in
any court of competent jurisdiction. To the fullest extent permitted by law,
each of the parties irrevocably submit to the jurisdiction of such forum and
waive any objection it may have to either the jurisdiction or the venue of such
forum.
12. COMPLIANCE WITH LAWS. Both parties shall comply with all federal, state
and local laws, statutes, rules, regulations and ordinances in any way related
to this Agreement.
13. TRADEMARKS. No right or license to any name, trade name, trademark or
service xxxx or other identity owned by either of the parties hereto shall be
deemed to be granted to the other by any provision hereof or construed from the
performance of this Agreement by either party.
14. FURTHER ASSURANCES. Each of the parties covenants and agrees to execute
and deliver such additional instruments and other documents and shall take such
reasonable further actions as may be necessary or appropriate to effectuate,
carry out and comply with all of the terms of this Agreement.
15. NON-ASSIGNMENT; SUCCESSORS. This Agreement shall be binding upon and shall
inure to the benefit of LPI and its successors and permitted assigns and shall
be binding upon and shall inure to the benefit of the CMRG and its successors
and permitted assigns. Neither party may assign its rights or delegate its
obligations hereunder without the prior written consent of the other party.
16. SEVERABILITY. If any provision of this Agreement is deemed invalid or
unenforceable by any court of competent jurisdiction or under any statute,
regulation, ordinance, or other rule of law, such provision shall be deleted or
modified, at the election of the parties, but only to the extent necessary to
comply with such ruling, statute, regulation, ordinance or rule, and the
remaining provisions of this Agreement shall remain in full force and effect.
17. NOTICES. Any notice, request, demand or other communication given under
this Agreement shall be in writing and shall be deemed sufficiently given
either: (i) upon the date received by the intended recipient if delivered by
hand, overnight courier, or via facsimile, provided confirmation of receipt is
retained; or (ii) three (3) days following the date deposited in the United
States Mail, certified with return receipt requested, postage prepaid, in either
case addressed to the recipient as follows or at such other address as may be
provided by the recipient for the receipt of notices:
If to CMRG: Casual Male Retail Group, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Exec. VP, CFO
Fax: 000-000-0000
With a copy to: General Counsel
If to LPI: LP Innovations, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Chief Financial Officer
Fax: _______________________
18. RELATIONSHIP OF PARTIES. The relationship of the parties is solely that of
seller and purchaser. Nothing contained in this Agreement shall be construed as
constituting CMRG or LPI as the franchiser, franchisee, partner, broker, joint
venturer or agent of the other. Each party is an independent contractor and
neither has nor shall have any power, right or authorization to bind the other
or to assume or create any obligations or responsibilities, express or implied,
on behalf of the other or in the other's name.
19. CAPTIONS; INTERPRETATION. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The terms of this Agreement are the product of
negotiation between the parties and are not to be construed as being drafted
solely by one party, and no presumption is to arise therefrom in favor of either
party.
20. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to constitute one and the same instrument.
21. NO THIRD PARTY BENEFICIARIES. This Agreement is entered into solely
between and may only be enforced by the parties hereto. This Agreement shall not
be deemed to create any rights in any third parties, including any employees,
vendors or independent contractors of CMRG, or to create any obligations of a
party to any third parties.
22. ENTIRE AGREEMENT; NON-WAIVER. This Agreement sets forth the entire
understanding of the parties hereto and constitutes the entire Agreement between
the parties with respect to the matters contained herein, and supersedes all
prior oral or written representations, proposals, correspondence, discussions,
negotiations and agreements. No change, modification, waiver, agreement or
understanding, oral or written, in any way purporting to waive or modify the
terms hereof shall be binding on either party hereto unless contained in a
written document expressly described as an amendment to, waiver of or extension
of this Agreement and unless such document is duly executed by both parties. A
waiver by either party of any breach or failure to enforce any term or condition
of this Agreement shall not in any way affect, limit or waive such party's right
at any time to enforce strict compliance with that or any other term or
condition of this Agreement.
23. CHOICE OF LAW. This Agreement shall be construed according to the laws of
the Commonwealth of Massachusetts without regard to its conflict of laws
provisions or any other provision of the Commonwealth of Massachusetts law that
would require or permit the application of the substantive law of any other
jurisdiction to govern this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CASUAL MALE RETAIL GROUP, INC.
By:________________________________
Name:______________________________
Title:_____________________________
LP INNOVATIONS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
SCHEDULE 1
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ADMINISTRATIVE SERVICES
The following services are included in the Services:
(a) accounting, bookkeeping, internal auditing, and payroll services,
including advice related thereto, such services and advice to be provided
by, or under the supervision of, CMRG's internal accounting, auditing and
payroll staff;
(b) providing or supervising the provision of legal advice and services,
including, but not limited to, assistance with respect to claims that
become or may become the subject of litigation, supervising the
preparation and review of documents involving loans, financing
transactions, employment and employee benefits matters, real estate
matters, contractual documents, documents relating to any applicable
reporting requirements promulgated by any federal, state, local or foreign
government or other governmental authority, instrumentality or subdivision
thereof, consultation related to legal and administrative proceedings, and
consultation related to compliance with applicable laws and regulations;
provided, that all lawyers providing legal services to LPI shall do so as
counsel to LPI;
(c) providing or supervising the performance of accounting advice and services
relating to any income, real estate, sales, use, personal property or
other tax, including, but not limited to, the preparation or supervising
the preparation of any tax returns or other documents required or which
may be filed with any federal, state, local or foreign government or other
governmental authority, instrumentality or subdivision thereof;
(d) assistance in organizational matters, assistance in preparation of
financial reports related to the operation of LPI, employee compensation,
incentive and retirement plans;
(e) human resources and personnel advice and services, including, but not
limited to, providing or supervising the performance of the administration
of employee insurance plans, retirement plans, and other employee benefit
plans so long as same are substantially similar to those which are
provided by CMRG to its own employees;
(f) management information and data processing services, including, but not
limited to, providing or supervising software and hardware selection and
maintenance.
