EXHIBIT 10.80
SERVICES AGREEMENT
This SERVICES AGREEMENT ("Agreement") is entered into as of November
18, 2004, by and between Barington Capital Group, L.P., a New York limited
partnership with an address at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 ("BCG"), and L Q Corporation, Inc., a Delaware corporation with an
address at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Company").
RECITALS:
WHEREAS, the Company desires to engage BCG to provide to the Company
with certain administrative, legal, mergers & acquisition and financial
consulting services (collectively, the "Services") on the terms and conditions
set forth herein; and
WHEREAS, BCG desires to provide such Services on the terms and
conditions as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants expressed
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Services.
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A. Administrative Services
Subject to the terms and conditions contained herein, BCG will
use commercially reasonable efforts to provide to the Company with the
following administrative services, which shall be provided on a
continuous basis without specific request:
(i) maintenance of Company books and records, maintenance of
separate Company bank accounts and preparation of financial
statements;
(ii) treasury services, including cash management services and
cashier, payroll and payment services;
(iii) human resource services and employee benefits
administration, including, without limitation, workers
compensation, health, dental, disability and life insurance
programs and 401(k) programs (it being understood that it is
the current intention of the Company to terminate all such
benefits);
(iv) preparation of tax returns and other reports and documents
required to be filed with any Federal, state or local
governmental taxing authority; and
(v) administrative services, including secretarial services and
telephone, telecopy and photocopy services.
B. Legal Services
Subject to the terms and conditions contained herein, BCG may,
from time to time at the request of the Company, perform legal services
for the Company, including, the preparation of filings with the
Securities and Exchange Commission, the drafting and review of
contracts, and such other legal services as the Company may require.
C. M&A and Financial Consulting Services
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Subject to the terms and conditions contained herein, BCG may,
from time to time at the request of the Company, act as a finder and/or
as financial consultant in various business transactions in which the
Company or any subsidiary or affiliate of the Company may be involved,
including, but not limited to, mergers, acquisitions or joint ventures
(any of the foregoing, a "Transaction").
In performing the Services set forth above, BCG shall be entitled to
rely upon the opinions or advice of outside experts, including, without
limitation, legal counsel and accountants retained by or on behalf of the
Company, and shall have no liability to the Company with respect to any action
or omission taken or suffered in reliance thereon. Furthermore, the foregoing
shall in no way limit the effect of Section 6 hereof.
2. Information.
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In connection with BCG's activities on the Company's behalf, the
Company will furnish BCG with all information and data concerning the Company
(the "Information") which BCG may request, will provide BCG with access to the
Company's officers, directors, employees, independent accountants and legal
counsel, and will otherwise cooperate fully with BCG in order to facilitate
BCG's performance of the Services. The Company represents and warrants that all
Information made available to BCG by the Company will, at all times during the
period of the engagement of BCG hereunder, be complete and correct in all
material respects and will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances under which such statements are
made. The Company acknowledges and agrees that, in rendering its services
hereunder, BCG will be using and relying on the Information (and information
available from public sources and other sources deemed reliable by BCG) without
independent verification thereof. BCG does not assume responsibility for the
accuracy or completeness of the Information or any other information regarding
the Company.
3. Compensation for Services; Expenses.
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A. In consideration of the performance of the Services by BCG set
forth in Section 1(A) above, the Company shall pay to BCG a
monthly fee of $8,000, payable monthly in advance on the 1st
of each month.
B. As additional consideration for the Services set forth in
Section 1(A) above, the Company hereby grants and delivers to
BCG (or its designated nominees) stock options (the "Options")
to purchase 56,000 shares of the Company's common stock under
the Company's 1996 Equity Incentive Plan. The stock options
are exerciseable at any time during the five-year period
commencing on the date hereof at an exercise price of $1.82
per share.
C. In addition to the fees described in Section 2(a) above and
the Warrants, the Company agrees to reimburse BCG, upon
request from time to time, for all reasonable out-of-pocket
expenses incurred by BCG (including fees and disbursements of
counsel and of other consultants and advisors retained by or
on behalf of the Company) in connection with the matters
contemplated by this Agreement.
D. The Company acknowledges and agrees that in return for any
legal services provided to the Company by BCG pursuant to
Section 1(B) above, the Company will pay to BCG a fee equal to
$125 per hour.
E. The Company acknowledges and agrees that in return for any
services BCG provides to the Company pursuant to Section 1(C)
above, the Company shall pay to BCG a fee equal to two percent
(2%) of the amount of the consideration paid in any
Transaction as compensation for such services, such fee to be
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paid in cash at the closing of the Transaction to which it
relates. The amount of consideration paid in a Transaction
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, cash equivalents, securities, notes,
assumption of indebtedness, earnouts (it being understood that
BCG's fee pertaining to such compensation is payable when and
if any earnout is paid), compensation paid in connection with
non-competition agreements, or any combination thereof. In
addition, if the Company shall within eighteen (18) months
immediately following the termination of this Agreement
consummate a Transaction with any party introduced by BCG to
the Company prior to such termination, the Company shall pay
to BCG a fee with respect to such Transaction calculated in
accordance with this Section 3(E).
4. Term and Termination.
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This Agreement shall take effect on and cover all Services provided by
BCG to the Company from May 18, 2004 until June 30, 2006. Notwithstanding the
foregoing, BCG may terminate this Agreement at any time upon thirty (30) days'
prior written notice to the Company.
5. Independent Contractor; Relationship of the Parties.
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A. Nothing herein shall be deemed to constitute BCG (or any of
BCG's, employees or agents in their capacities as such) to be
the employee or agent of the Company. BCG shall be an
independent contractor and shall have responsibility for and
control over the details and means of performing the Services.
The parties acknowledge that certain employees of BCG may be
appointed as officers of the Company. The Company acknowledges
and agrees that, in such capacities, they shall be acting in
their individual capacities and not as employees, agents or
representatives of BCG.
B. Nothing herein shall be construed as: (i) an assumption by BCG
of responsibility for the operations of the Company except as
expressly set forth in this Agreement; (ii) an assumption by
BCG of any financial obligation of the Company; or (iii) the
assumption by BCG of any responsibility for work performed by
outside suppliers employed directly by the Company at the
suggestion or recommendation of BCG.
6. Indemnification; Exculpation.
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The Company agrees to indemnify and hold harmless BCG, its partners,
employees, agents, representatives and affiliates, and their respective
officers, directors, partners, members, employees, stockholders, agents,
representatives and affiliates (collectively, "Indemnified Parties") 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 reasonable
legal and other costs, expenses and disbursements in giving testimony or
furnishing documents in response to a subpoena or otherwise), including, without
limitation, the reasonable 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 any Indemnified Party is a party), directly or indirectly, caused by,
relating to, based upon, arising out of, or in connection with BCG's acting for
the Company, including, without limitation, any act or omission by BCG or any
Indemnified Party in connection with its acceptance of or the performance or
non-performance of its obligations under this 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 BCG's gross negligence or willful misconduct. The Company also
agrees that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Company for or in connection
with the engagement of BCG, 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 BCG's gross
negligence or willful misconduct. The provisions of this Section 6 shall survive
termination of this Agreement.
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7. Force Majeure.
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BCG shall not be liable for failure of or delay in performing
obligations set forth in this Agreement, and shall not be deemed in breach of
its obligations, if such failure or delay results from causes beyond its
reasonable control, including but not limited to any strikes, lock-outs or other
labor difficulties, acts of any government, war, riot, insurrection or other
hostilities, embargo, fuel or energy shortage, fire, flood, acts of God, wrecks
or transportation delays, or inability to obtain necessary labor, materials or
utilities. In event of such force majeure, BCG shall advise the Company of the
beginning and end of the circumstances constituting the force majeure, and shall
use reasonable efforts to cure or overcome the same and resume performance of
its obligations hereunder as soon as reasonably practicable.
8. Amendments, Etc.
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No amendment, modification, waiver, termination or discharge of any
provision of this Agreement nor consent to any departure by a party therefrom,
shall in any event be effective unless the same shall be in writing specifically
identifying this Agreement and the provision intended to be amended, modified,
waived, terminated or discharged (a) in the case of a waiver or modification,
signed by the parties, and (b) in case of a waiver, termination or discharge,
signed by the party granting or effecting the same. Each amendment,
modification, waiver, termination or discharge shall be effective only in the
specific instance and for the specific purpose for which given. No provision of
this Agreement shall be varied, contradicted or explained by any oral agreement,
course of dealing or performance or any other matter not set forth in an
agreement in writing and signed by the parties.
9. Consequential Damages.
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No party hereto shall be liable to any other party hereto, whether in
contract, in tort (including negligence and strict liability), or otherwise, for
any special, indirect, incidental, consequential, exemplary or punitive damages
whatsoever (including lost or anticipated revenues or profits, business
interruption costs or claims of customers relating to the same), which in any
way arise out of, relate to, or are a consequence of, its performance or
nonperformance hereunder, or the provision of or failure to provide any
Administrative Service hereunder, even if an authorized representative of such
party is advised of the possibility or likelihood of the same.
10. Notices.
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All notices, requests, consents and other communications hereunder
shall be in writing, shall be addressed to the receiving party's address set
forth above or to such other address as a party may designate by notice
hereunder, and shall be either (a) delivered by hand, (b) made by telex,
telecopy or facsimile transmission, (c) sent by recognized overnight courier, or
(d) sent by registered or certified mail, return receipt requested, postage
prepaid. All notices, requests, consents and other communications hereunder
shall be deemed to be effective (i) if delivered by hand, at the time of the
delivery thereof to the receiving party at the address of such party set forth
above, (ii) if made by telex, telecopy or facsimile transmission, at the time
that receipt thereof has been acknowledged by electronic confirmation or
otherwise, (iii) if sent by overnight courier, on the next business day
following the day such notice is delivered to the courier service, or (iv) if
sent by registered or certified mail, on the third business day following the
day such mailing is made.
11. Further Assurances.
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Each of the parties hereto agrees to duly execute and deliver, or cause
to be duly executed and delivered, such further instruments and do and cause to
be done such further acts and things, including, without limitation, the filing
of such additional assignments, agreements, documents and instruments, that may
be necessary or as the other party hereto may at any time and from time to time
reasonably request in connection with this Agreement to carry out more
effectively the provisions and purposes of, or to better assure and confirm unto
such other party its rights and remedies under, this Agreement.
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12. Severability.
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If any provision hereof should be held invalid, illegal or
unenforceable in any respect in any jurisdictions then, to the fullest extent
permitted by law, (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intentions of the parties hereto as nearly as may be possible, and (b)
such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of such provision in any other jurisdiction.
13. No Third Party Beneficiaries.
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Nothing contained in this Agreement shall create any rights in, or be
deemed to have been executed for the benefit of, any person or entity that is
not a party hereto; provided that the provisions of Section 6 are intended for
the benefit of the Indemnified Parties.
14. Governing Law; Jurisdiction.
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This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to principles of
conflicts of law. Each of the parties irrevocably submits to the exclusive
jurisdiction of any courts of the State of New York or the United States
District Court for the Southern District of the State of New York for the
purpose of any suit, action or other proceeding arising out of this Agreement,
or any of the agreements or transactions contemplated hereby, which is brought
by or against it.
15. Entire Agreement.
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This Agreement constitutes, on and as of the date hereof, the entire
agreement of the parties with respect to the subject matter hereof, an all prior
or contemporaneous understandings or agreements, whether written or oral,
between the parties with respect to such subject matter are hereby superseded in
their entirety.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized representative as of the date set forth above.
BARINGTON CAPITAL GROUP, L.P.
By: LNA Capital Corp., General Partner
By:
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Xxxxx X. Xxxxxxxxxxx
Chairman
L Q CORPORATION, INC.
By:
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Name:
Title:
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