Interim Services Agreement
EXHIBIT 10.3
October 5, 2012
Xxxxxxx Hygiene Inc.
Attn. Xxxxxx X. Xxxxx
Suite 400
0000 Xxxxxxxx Xxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Xx. Xxxxx:
The SCA Group, LLC (“SCA,” “we,” “us” or “our”) is pleased that Xxxxxxx Hygiene Inc. (“Company,” “you” or “your”) has selected us to provide you with outsourced interim services. The services (the “Services”) and fees will be more particularly described on the Schedule attached hereto and will be provided by the individual professional (the “SCA Professional”) identified on such Schedule. Schedules for additional SCA Professionals may be added from time to time upon the mutual written agreement of the parties. In addition, upon the request of the Company and the execution of an additional Schedule to this agreement, SCA will provide search Services to the Company, all as more particularly described on such Schedule.
Engagement. The SCA Professional will be one of SCA’s professionals, and we will be solely responsible for determining the conditions, terms and payment of compensation and benefits for the SCA Professional. You will be solely responsible for providing the SCA Professional day-to-day guidance, supervision, direction, assistance and other information necessary for the successful and timely completion of the Services. SCA will have no oversight, control, or authority over the SCA Professional with respect to the Services. The Company acknowledges that it is solely responsible for the sufficiency of the Services for its purposes. The Company will designate a management-level individual to be responsible for overseeing the Services, and the SCA Professional will report directly to such individual with respect to the provision of the Services. Unless the SCA Professional is acting as an executive officer of the Company and is authorized by the Company to make such decision, the Company will not permit or require the SCA Professional to be the ultimate decision making authority for any material decision relating to your business, including, without limitation, any proposed merger, acquisition, recapitalization, financial strategy or restructuring.
Fees and Expenses. You will pay us the fees set forth on the applicable Schedule. In addition, you will reimburse the SCA Professional directly for all reasonable travel and reasonable out-of-pocket expenses incurred in connection with this agreement (including any Schedules).
Payment Terms. Payments to SCA should be made within 10 days of receipt of invoice by electronic transfer in accordance with the instructions set forth below or such alternative instructions as provided by us from time to time. Any amounts not paid when due may be subject to a periodic service charge equal to the lesser of 1.5% per month and the maximum amount allowed under applicable law, until such amounts are paid in full, including assessed service charges. In lieu of terminating this agreement, we may suspend the provision of any Services if amounts owed are not paid in accordance with the terms of this agreement.
Bank Name: Bank of America, N.A.
Beneficiary: The SCA Group, LLC
Beneficiary Account Number: 898047947134
ABA Transit/Routing Number: 000000000
Please reference the Company name in the body of the payment.
The SCA Group, LLC 00000 Xxxxxxxxx 0xx Xxxxxx Xxxxxxxxxx, Xxxxxxx 00000-0000 (000) 000-0000
Effective Date and Termination. This agreement will be effective as of the earlier of (i) the date SCA begins providing Services to the Company, and (ii) the date of the last signature to this agreement as indicated on the signature page. In the event that a party commits a breach of this agreement (including any Schedule) and fails to cure the same within 10 days following delivery by the non-breaching party of written notice specifying the nature of the breach, the non-breaching party may terminate this agreement or the applicable Schedule effective upon written notice of such termination. The termination rights set forth in this Section are in addition to and not in lieu of the termination rights set forth in each of the Schedules.
Hiring the SCA Professional Outside of a SCA Agreement. If, at any time during the time frame in which a SCA Professional is providing Services to the Company and for a period of 12-months thereafter, other than in connection with this agreement or another SCA agreement, the Company or any of its subsidiaries or affiliates employs such SCA Professional, or engages such SCA Professional as an independent contractor, the Company will pay SCA a placement fee in an amount equal to 35% of the Annualized Compensation (as defined below). “Annualized Compensation” is defined as salary, incentive, signing and other bonuses, equity compensation, and any other compensation that may be earned by the SCA Professional during the first 12 months of service with the Company (or its subsidiary or affiliate) regardless of when or if such compensation is actually paid. The placement fee shall be due upon the commencement of the SCA Professional’s employment or engagement with the Company (or its subsidiary or affiliate).
Warranties and Disclaimers. WE DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF QUALITY, PERFORMANCE, MERCHANTABILITY, OR FITNESS OF USE OR PURPOSE. WITHOUT LIMITING THE FOREGOING, WE MAKE NO REPRESENTATION OR WARRANTY WITH RESPECT TO THE SCA PROFESSIONAL OR THE SERVICES PROVIDED HEREUNDER, AND WE WILL NOT BE RESPONSIBLE FOR ANY ACTION TAKEN BY YOU IN FOLLOWING OR DECLINING TO FOLLOW ANY OF THE SCA PROFESSIONAL’S ADVICE OR RECOMMENDATIONS. THE SERVICES PROVIDED BY SCA AND THE SCA PROFESSIONAL HEREUNDER ARE FOR THE SOLE BENEFIT OF THE COMPANY AND NOT ANY UNNAMED THIRD PARTIES. THE SERVICES WILL NOT CONSTITUTE AN AUDIT, REVIEW, OPINION, OR COMPILATION, OR ANY OTHER TYPE OF FINANCIAL STATEMENT REPORTING OR ATTESTATION ENGAGEMENT THAT IS SUBJECT TO THE RULES OF THE AICPA OR OTHER SIMILAR STATE OR NATIONAL PROFESSIONAL BODIES OR LAWS AND WILL NOT RESULT IN AN OPINION OR ANY FORM OF ASSURANCE ON INTERNAL CONTROLS.
Limitation of Liability; Indemnity.
(a) SCA’S LIABILITY IN ANY AND ALL CATEGORIES AND FOR ANY AND ALL CAUSES ARISING UNDER THIS AGREEMENT, WHETHER BASED IN CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, WILL, IN THE AGGREGATE, NOT EXCEED THE ACTUAL FEES PAID BY YOU TO US OVER THE PREVIOUS TWO MONTHS’ OF THE AGREEMENT WITH RESPECT TO THE SCA PROFESSIONAL FROM WHOM THE LIABILITY ARISES. IN NO EVENT WILL WE BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, PUNITIVE, INDIRECT OR SPECIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, INTERRUPTION OR LOSS OF BUSINESS, PROFIT OR GOODWILL. AS A CONDITION FOR RECOVERY OF ANY LIABILITY, YOU MUST ASSERT ANY CLAIM AGAINST US WITHIN THREE MONTHS AFTER DISCOVERY OR 60 DAYS AFTER THE TERMINATION OR EXPIRATION OF THE APPLICABLE SCHEDULE UNDER WHICH THE LIABILITY ARISES, WHICHEVER IS EARLIER.
(b) YOU AGREE TO INDEMNIFY US AND THE SCA PROFESSIONAL TO THE FULL EXTENT PERMITTED BY LAW FOR ANY LOSSES, COSTS, DAMAGES, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES), AS THEY ARE INCURRED, IN CONNECTION WITH ANY CAUSE OF ACTION, SUIT, OR OTHER PROCEEDING ARISING IN CONNECTION WITH THE SCA PROFESSIONAL’S SERVICES TO YOU.
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Insurance. If the SCA Professional is serving as an officer or executive of the Company, the Company will maintain directors and officers insurance covering the SCA Professional in the same manner and amount applicable to the Company’s other directors and officers at no additional cost to SCA or the SCA Professional, and the Company will maintain such insurance at all times while this agreement remains in effect. Furthermore, the Company will maintain such insurance coverage with respect to occurrences arising during the term of this agreement following the termination or expiration of the applicable Schedule in the same manner and amount applicable to the Company’s other directors and officers. The Company’s directors and officers insurance must be primary and non-contributory. Upon the execution of this agreement and at any other time requested by SCA, the Company will provide SCA a certificate of insurance evidencing that the Company is in compliance with the requirements of this Section with a note in the Description of Operations section of the certificate indicating that the coverage is extended to the SCA Professional, only while performing the duties as an officer or executive of the Company.
Change in Company Circumstances. In the event that the Company’s financial condition or liquidity significantly deteriorates or the Company enters into discussions with restructuring or bankruptcy advisors, SCA and the Company will review the current fee structure and payment terms under this agreement (including any Schedule) and agree on appropriate modifications. In addition, SCA and the Company will discuss the need for additional SCA professionals with specialized skills in working with companies undergoing significant debt and equity restructuring, and as needed, SCA professionals with experience helping companies seeking or operating under bankruptcy protection. The agreed upon additional professionals will be engaged under terms and fees commensurate to the expertise and services to be provided. In the event that SCA and the Company cannot agree on appropriate modifications to this agreement (including any Schedule) or the need for additional SCA professionals, SCA may immediately terminate this agreement or any Schedule upon notice to the Company.
Governing Law, Arbitration and Witness Fees.
(a) This agreement will be governed by and construed in accordance with the laws of the State of Florida, without regard to conflicts of laws provisions.
(b) If the parties are unable to resolve any dispute arising out of or in connection with this agreement, the parties agree and stipulate that any such disputes will be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”). The arbitration will be conducted in the Fort Lauderdale, Florida office of the AAA by a single arbitrator selected by the parties according to the rules of the AAA, and the decision of the arbitrator will be final and binding on both parties. In the event that the parties fail to agree on the selection of the arbitrator within 30 days after either party’s request for arbitration under this Section, the arbitrator will be chosen by the AAA. The arbitrator may in his or her discretion order documentary discovery but will not allow depositions without a showing of compelling need. The arbitrator will render his or her decision within 90 days after the call for arbitration. Judgment on the award of the arbitrator may be entered in and enforced by any court of competent jurisdiction. The arbitrator will have no authority to award damages in excess or in contravention of this agreement and may not amend or disregard any provision of this agreement, including this section. Notwithstanding the foregoing, either party may seek appropriate injunctive relief from any court of competent jurisdiction, and SCA may pursue payment of any unpaid amounts due under this agreement through any court of competent jurisdiction.
(c) In the event any professional of SCA (including, without limitation, any SCA Professional) is requested or authorized by you or is required by government regulation, subpoena, or other legal process to produce documents or appear as witnesses in connection with any action, suit or other proceeding initiated by a third party against you or by you against a third party, you will, so long as SCA is not a party to the proceeding in which the information is sought, reimburse SCA for its professional’s time (based on customary rates) and reasonable expenses, as well as the fees and reasonable expenses of its counsel, incurred in responding to such requests. This provision is in addition to and not in lieu of any indemnification obligations the Company may have under this agreement.
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Miscellaneous.
(a) This agreement together with all Schedules constitutes the entire agreement between the parties with regard to the subject matter hereof and supersedes any and all agreements, whether oral or written, between the parties with respect to its subject matter. No amendment or modification to this agreement will be valid unless in writing and signed by both parties.
(b) If any portion of this agreement is found to be invalid or unenforceable, such provision will be deemed severable from the remainder of this agreement and will not cause the invalidity or unenforceability of the remainder of this agreement, except to the extent that the severed provision deprives either party of a substantial portion of its bargain.
(c) Neither party will be deemed to have waived any rights or remedies accruing under this agreement unless such waiver is in writing and signed by the party electing to waive the right or remedy. The waiver by any party of a breach or violation of any provision of this agreement will not operate or be construed as a waiver of any subsequent breach of such provision or any other provision of this agreement.
(d) Neither party will be liable for any delay or failure to perform under this agreement (other than with respect to payment obligations) to the extent such delay or failure is a result of an act of God, war, earthquake, civil disobedience, court order, labor dispute, or other cause beyond such party’s reasonable control.
(e) Neither party may assign rights or obligations under this agreement without the express written consent of the other party. Nothing in this agreement will confer any rights upon any person or entity other than the parties hereto and their respective successors and permitted assigns and the SCA Professionals.
(f) The expiration or termination of this agreement or any Schedule will not destroy or diminish the binding force and effect of any of the provisions of this agreement or any Schedule that expressly, or by reasonable implication, come into or continue in effect on or after such expiration or termination, including, without limitation, provisions relating to payment of fees and expenses (including witness fees and expenses), hiring the SCA Professionals, governing law, arbitration, limitation of liability and indemnity.
(g) You agree to reimburse SCA for all costs and reasonable expenses (including, without limitation, reasonable attorneys’ fees, court costs and arbitration fees) incurred by SCA in enforcing collection of any monies due under this agreement.
(h) You agree to allow us to use the Company’s logo and name on SCA’s website and other marketing materials for the sole purpose of identifying the Company as a client of SCA. SCA will not use the Company’s logo or name in any press release or general circulation advertisement without the Company’s prior written consent.
We appreciate the opportunity to serve you and believe this agreement accurately reflects our mutual understanding of the terms upon which the Services will be provided. We would be pleased to discuss this agreement with you at your convenience. If the foregoing is in accordance with your understanding, please sign a copy of this agreement and return it to my attention.
Sincerely,
The SCA Group, LLC
/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Partner
Accepted and agreed:
Xxxxxxx Hygiene Inc.
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Interim President and Chief Executive Officer
Date: 10/9/2012
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Schedule to Interim Services Agreement
This Schedule is entered into in connection with that certain Interim Services Agreement, dated September 24, 2012 (the “Agreement”), by and between The SCA Group, LLC (“SCA,” “we,” “us” or “our”) and Xxxxxxx Hygiene Inc. (“Company,” “you” or “your”) and will be governed by the terms and conditions of the Agreement.
SCA Professional Name: Xxxxxxx X. Xxxxxxxx
Service Description or Position: Interim Senior Vice President and Chief Financial Officer
Company Supervisor: Interim President and Chief Executive Officer
Start Date: September 24, 2012
Termination:
(a) Either party may terminate this Schedule by providing the other party a minimum of 30 days’ advance written notice and such termination will be effective as of the date specified in such notice, provided that such date is no earlier than 30 days after the date of delivery of the notice. SCA will continue to provide, and the Company will continue to pay for, the Services until the termination effective date.
(b) SCA may terminate this Schedule immediately upon written notice to the Company if: (i) the Company is engaged in or asks SCA or any SCA Professional to engage in or ignore any illegal or unethical activity; (ii) the SCA Professional ceases to be a professional of SCA for any reason; (iii) the SCA Professional becomes disabled; or (iv) the Company fails to pay any amounts due to us under the Agreement when due. For purposes of this Agreement, disability will be defined by the applicable policy of disability insurance or, in the absence of such insurance, by SCA’s management acting in good faith. Notwithstanding the foregoing, in lieu of terminating this Schedule under (ii) and (iii) above, upon the mutual agreement of the parties, the SCA Professional may be replaced by another SCA professional.
(c) The termination rights set forth in this section are in addition to and not in lieu of the termination rights set forth in the Agreement.
Fees: You will pay to SCA a fee of up to $50,000 a month for the SCA Professional. The fees will be prorated for the first and final fee period based on the number of days in such period. The monthly fee includes allowance for holidays, personal and sick days, and vacation for the SCA Professional consistent with the Company’s policy as it applies to similarly situated employees of the Company.
The fees set forth in this Schedule will automatically increase on an annual basis commencing with the first anniversary of this Schedule in an amount equal to 6% per year.
Xxxxxxxx: SCA will xxxx for Services in advance in accordance with the following billing schedule: up to $25,000 on the 1st and 16th of each month.
As a condition to providing the Services, we require a security deposit in the amount equal to $25,000 (the “Deposit”), which is due upon execution of this Schedule. If the Company breaches the Agreement (including any Schedule) or any other agreement between the Company and SCA or any SCA professional and fails to cure such breach as provided for herein or therein, SCA will be entitled to apply the Deposit to its or the SCA professional’s damages resulting from such breach. In the event the Deposit falls below the amount required, the Company will pay SCA an additional amount equal to the shortfall. Upon the expiration or termination of the Agreement, SCA will return to the Company the balance of the Deposit remaining under the Agreement after application of any amounts to damages as provided for herein, including, without limitation, your unfulfilled payment obligations of the Company to SCA or any SCA professional.
In the event of a conflict between the terms and conditions of this Schedule and the Agreement, the terms and conditions of the Agreement will control.
| The SCA Group, LLC | Xxxxxxx Hygiene Inc. | |||
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/s/ Xxxxxxx X. Xxxxxxxx
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/s/ Xxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxx
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Partner
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Interim President and Chief Executive Officer
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| Date: 10/9/2012 | Date: 10/9/2012 |
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