Exhibit 99.1
EXECUTION COPY
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SECURITIES PURCHASE AGREEMENT
by and among
JEWELCOR MANAGEMENT, INC.,
XXXXXXX XXXXXXXX,
BARINGTON CAPITAL GROUP, L.P.,
XXXXX X. XXXXXXXXXXX
and
RAMIUS SECURITIES, LLC
Dated as of May 13, 2004
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS
Section 1.1. Definitions ................................................. 1
ARTICLE 2
PURCHASE AND SALE
Section 2.1. Purchase and Sale of the LQ Shares and DynaBazaar Shares .... 5
Section 2.2. Purchase and Sale of the MM Shares .......................... 5
Section 2.3. Closing ..................................................... 6
Section 2.4. Closing Deliveries by JMI ................................... 6
Section 2.5. Closing Deliveries by Barington ............................. 6
Section 2.6. Closing Deliveries by Ramius ................................ 7
Section 2.7. Adjustment upon Change in Capitalization or Merger .......... 7
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Section 3.1. Organization, Authority and Qualification ................... 8
Section 3.2. No Conflict ................................................. 8
Section 3.3. Valid Issuance; Ownership of the Securities ................. 9
Section 3.4. Absence of Litigation ....................................... 9
Section 3.5. Brokers ..................................................... 9
Section 3.6. Investment Representations .................................. 10
Section 3.7. Prospects, Plans or Proposals ............................... 11
ARTICLE 4
ADDITIONAL AGREEMENTS
Section 4.1. No Disposition or Encumbrance of the Securities ............. 11
Section 4.2. Notification of Certain Matters ............................. 12
Section 4.3. Further Action; Commercially Reasonable Efforts ............. 12
Section 4.4. Public Announcements ........................................ 12
Section 4.5. Investors' Rights Agreement ................................. 13
Section 4.6. Register .................................................... 13
Section 4.7. Standstill .................................................. 13
Section 4.8. Mutual Release .............................................. 14
Section 4.9. Certain Options, etc ........................................ 15
Section 4.10. Certain Barington Fees ...................................... 16
Section 4.11. Administrative Fees; Etc .................................... 16
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TABLE OF CONTENTS
(continued)
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Section 4.12. Non-Disparagement ........................................... 16
ARTICLE 5
CONDITIONS TO CLOSING
Section 5.1. Conditions to Obligations of each Party ..................... 17
Section 5.2. Conditions to Obligations of JMI and Xxxxxxxx ............... 17
Section 5.3. Conditions to Obligations of Barington, Xxxxxxxxxxx
and Ramius .................................................. 18
ARTICLE 6
TERMINATION AND WAIVER
Section 6.1. Termination ................................................. 18
Section 6.2. Effect Of Termination ....................................... 19
Section 6.3. Waiver ...................................................... 19
ARTICLE 7
INDEMNIFICATION
Section 7.1. Indemnification by JMI ...................................... 19
Section 7.2. Indemnification by Barington and Ramius ..................... 20
Section 7.3. Notice and Payment of Losses ................................ 20
Section 7.4. Defense of Third-Party Claims ............................... 20
Section 7.5. Survival of Representations and Warranties .................. 21
Section 7.6. Exclusive Remedy ............................................ 21
ARTICLE 8
GENERAL PROVISIONS
Section 8.1. Expenses .................................................... 21
Section 8.2. Notices ..................................................... 22
Section 8.3. Headings .................................................... 23
Section 8.4. Severability ................................................ 23
Section 8.5. Entire Agreement ............................................ 23
Section 8.6. Assignment .................................................. 23
Section 8.7. Parties In Interest ......................................... 23
Section 8.8. Governing Law ............................................... 23
Section 8.9. Waiver Of Jury Trial ........................................ 24
Section 8.10. Counterparts ................................................ 24
Section 8.11. Specific Performance ........................................ 24
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TABLE OF CONTENTS
(continued)
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Section 8.12. Further Assurances .......................................... 24
Section 8.13. Amendments; Waiver .......................................... 24
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SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of May 13, 2004
("Agreement Date"), by and among Jewelcor Management, Inc., a Nevada corporation
("JMI"), Xxxxxxx Xxxxxxxx ("Xxxxxxxx, and together with JMI and their respective
Affiliates (as such term is hereinafter defined), the "JMI Group"), Barington
Capital Group, L.P., a New York limited partnership ("Barington"), Xxxxx X.
Xxxxxxxxxxx ("Xxxxxxxxxxx, and together with Barington and their respective
Affiliates, the "Barington Group") and Ramius Securities, LLC , a Delaware
limited liability company ("Ramius," and together with its Affiliates, the
"Ramius Group").
RECITALS:
The JMI Group desires to sell to Barington and Ramius, and Barington and
Ramius desire to purchase and acquire, (i) 475,500 shares of common stock, par
value $0.001 per share, of LQ Corporation, Inc., a Delaware corporation ("LQ"),
as set forth on Schedule 2.1A (such shares are referred to herein as the "LQ
Shares"), (ii) 631,390 shares of common stock, par value $0.001 per share, of
DynaBazaar, Inc., a Delaware corporation ("DynaBazaar"), as set forth on
Schedule 2 (such shares are referred to herein as the "DynaBazaar Shares"), and
(iii) 326,360 shares of common stock, par value $0.0001 per share, of
Xxxxxxxx.xxx, Inc. a Delaware corporation ("Register"), as set forth on Schedule
2.1B (such shares are referred to herein as the "Register Shares").
The Barington Group and the Ramius Group desire to sell to JMI, and JMI
desires to purchase and acquire, 151,668 shares of common stock, par value $0.01
per share, of MM Companies, Inc. (the "MM Common Stock"), a Delaware corporation
("MM"), as set forth on Schedule 2.2(a) (such shares, together with the shares
of MM common stock transferred to JMI pursuant to the next succeeding paragraph,
are referred to herein as the "MM Shares").
The Barington Group and the JMI Group desire to cause BCG Strategic
Investors, LLC, a Delaware limited liability company ("BCG"), (i) to redeem all
of the JMI Group's interest in BCG (which is held by its wholly-owned
subsidiary, dot com Investment Corporation) in exchange for one-half of the MM
Shares owned by BCG, or 604,933 MM shares, and (ii) to sell the remaining MM
Shares owned by BCG, or 604,933 MM shares, to JMI on the same terms and
conditions upon which the members of the Barington Group are selling MM Shares
to JMI.
The Parties to this Agreement desire to enter into certain other
agreements, all set forth herein, concerning their ownership of securities of
LQ, MM, DynaBazaar, Register and certain related matters upon the terms and
subject to the conditions as set forth herein.
Accordingly, in consideration of the premises and the mutual agreements
and covenants hereinafter set forth, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1. Definitions. For purposes of this Agreement:
"Affiliate" means, with respect to any person, any person or entity which
is controlling, controlled by, or under common control with, directly or
indirectly through any person or entity,
the person referred to, and, if the person referred to is a natural person, any
member of such person's immediate family residing in such person's household.
The term "control" (including, with correlative meaning, the terms "controlled
by" and "under common control with") as used with respect to any person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of voting securities, by contract or otherwise.
"Action" means any claim, suit, action, arbitration, inquiry,
investigation or other proceeding of any nature (whether criminal, civil,
legislative, administrative, regulatory, prosecutorial or otherwise) by or
before any arbitrator or Governmental Entity.
"Agreement" has the meaning set forth in the preamble hereto, as such
agreement may be amended, amended and restated and/or supplemented from time to
time in accordance with its terms.
"Agreement Date" has the meaning set forth in the preamble to this
Agreement.
"Associate" has the meaning set forth in Rule 12b-2 under the Securities
Exchange Act.
"Barington" has the meaning set forth in the preamble to this Agreement.
"Barington Bank Account" means a bank account to be designated by
Barington in a written notice to JMI at least two Business Days before the
Closing.
"Barington Group" has the meaning set forth in the preamble to this
Agreement.
"BCG" has the meaning set forth in the recitals to this Agreement.
"BCG Bank Account" means a bank account to be designated by BCG in a
written notice to JMI at least two Business Days before the Closing.
"Barington Bank Account" means a bank account to be designated by
Barington in a written notice to JMI at least two Business Days before the
Closing.
"B-R Party" has the meaning set forth in Section 7.1.
"Business Day" means any day on which banks are not required or authorized
to close in New York, New York.
"Closing" has the meaning set forth in Section 2.3.
"Closing Date" has the meaning set forth in Section 2.3.
"DynaBazaar" has the meaning set forth in the recitals to this Agreement.
"DynaBazaar Purchase Price" has the meaning set forth in Section 2.3.
"DynaBazaar Shares" has the meaning set forth in the recitals to this
Agreement.
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"Governmental Entity" means any government or any state, department or
other political subdivision thereof, or any governmental body, agency, authority
(including, but not limited to, any central bank or taxing authority) or
instrumentality (including, but not limited to, any court, tribunal or grand
jury) exercising executive, prosecutorial, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Xxxxxxxx" has the meaning set forth in the preamble to this Agreement.
"Indemnifying Party" has the meaning set forth in Section 7.3.
"Injured Party" has the meaning set forth in Section 7.3.
"Investors' Rights Agreement" has the meaning set forth in Section 4.5.
"JMI" has the meaning set forth in the preamble to this Agreement.
"JMI Bank Account" means a bank account designated by JMI in a written
notice to Barington and Ramius at least two Business Days before the Closing.
"JMI Group" has the meaning set forth in the preamble to this Agreement.
"JMI Party" has the meaning set forth in Section 7.2.
"Law" means any United States federal, state, local or foreign law,
statute, regulation, ordinance, order, judgment, decree, rule or other
applicable governmental or judicial restriction or requirement, and any judicial
or administrative interpretation or determination with respect thereto.
"Lien" means any lien, mortgage, deed of trust, pledge, hypothecation,
security interest, encumbrance, restriction (including any restriction or
limitation affecting voting rights of securities), claim or charge of any kind,
or any conditional sale agreement or other agreement to create any of the
foregoing.
"Losses" has the meaning set forth in Section 7.1.
"LQ" has the meaning set forth in the recitals to this Agreement.
"LQ Purchase Price" has the meaning set forth in Section 2.2.
"LQ Shares" has the meaning set forth in the recitals to this Agreement.
"Xxxxxxxxxxx" has the meaning set forth in the preamble to this Agreement.
"MM" has the meaning set forth in the recitals to this Agreement.
"MM Purchase Price" has the meaning set forth in Section 2.2.
"MM Shares" has the meaning set forth in the recitals to this Agreement.
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"Notice of Claim" has the meaning set forth in Section 7.3.
"Party" and "Parties" means a party or parties to this Agreement, as the
context shall require.
"Person" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including, without
limitation, a "person" as defined in Section 13(d)(3) of the Securities Exchange
Act), trust, association, entity or Governmental Entity.
"Ramius" has the meaning set forth in the preamble to this Agreement.
"Ramius Bank Account" means a bank account to be designated by Ramius in a
written notice to JMI at least two Business Days before the Closing.
"Ramius Group" has the meaning set forth in the preamble to this
Agreement.
"Register" has the meaning set forth in the recitals of this Agreement.
"Register Purchase Price" has the meaning set forth in Section 2.1.
"Register Shares" has the meaning set forth in the recitals of this
Agreement.
"Regulation D" means Regulation D promulgated under the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"Securities" means the DynaBazaar Shares, LQ Shares, MM Shares and
Register Shares as the context may require.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute.
"Specified Activities" means, collectively, all investments made jointly
by the JMI Group and the Barington Group, any investment knowingly made by the
JMI Group, on the one hand, and/or the Barington Group, on the other hand, in
the same entity but not held through a jointly owned or controlled entity, any
solicitation of proxies or shareholder proposals made by the JMI Group and the
Barington Group (including any nomination of any member of the JMI Group or
Barington Group, as the case may be, to serve as a director of any entity whose
securityholders were subject to any such solicitation or shareholder proposal),
including, in each case, investments in the following entities: Thistle Group
Holdings Co., Clarus Corporation, Stride Rite Corp., Infospace, Inc.,
ValueClick, Inc., Vans, Inc., Keymote Systems, Inc., Nautica Enterprises, Inc.,
Fab Industries Corp., Gencorp, Inc., Xxxxxxx Shoe Co. Inc., The Warnaco Group,
Inc., Barington Companies Equity Partners, LP, Register, LQ, BCG, JHC Investment
Partners, LLC, MM and DynaBazaar, and, in each case, any management activities
with respect
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to any of the foregoing, whether by virtue of any management agreement or
arrangement, in a Person's (or such Person's Affiliate's) capacity as an officer
or director or otherwise.
"Standstill Period" has the meaning set forth in Section 4.7.
"Transaction Proposal" means any proposal, inquiry or offer from any
Person relating to the acquisition of all or substantially all of the capital
stock or assets of any issuer of Securities (including any acquisition
structured as a merger, consolidation, share exchange or similar transaction).
ARTICLE 2
PURCHASE AND SALE
Section 2.1. Purchase and Sale of the LQ Shares and DynaBazaar Shares.
Upon the terms and subject to the conditions contained in this Agreement, at the
Closing, JMI and Xxxxxxxx shall sell or cause to be sold to Barington and/or
Ramius or their respective designees, and Barington and/or Ramius or their
respective designees, severally and not jointly, shall purchase from JMI and
Xxxxxxxx (or, if applicable, another member of the JMI Group), (i) the LQ
Shares, for a purchase price (the "LQ Purchase Price") of $0.43 per LQ Share, or
an aggregate of two hundred four thousand four hundred sixty five dollars
($204,465), (ii) the DynaBazaar Shares, for a purchase price (the "DynaBazaar
Purchase Price") of $0.36 per DynaBazaar Share, or an aggregate of two hundred
twenty seven thousand three hundred dollars ($227,300), and (iii) the Register
Shares for a purchase price (the "Register Purchase Price") of $5.78 per
Register Share, or an aggregate of one million eight hundred eighty six thousand
three hundred sixty one dollars ($1,886,361), in each case in immediately
available United States dollars. The number of LQ Shares, DynaBazaar Shares and
Register Shares to be purchased by each of Barington and/or Ramius or their
respective designees and the portion of the LQ Purchase Price, DynaBazaar
Purchase Price and Register Purchase Price for which each of Barington and/or
Ramius or their respective designees shall be responsible is set forth on
Schedule 2.1C.
Section 2.2. Purchase and Sale of the MM Shares. (a) Upon the terms and
subject to the conditions contained in this Agreement, at the Closing,
Barington, Xxxxxxxxxxx and Ramius, severally and not jointly, shall sell or
cause to be sold to JMI or its designee, and JMI or its designee shall purchase
from Barington, Xxxxxxxxxxx and Ramius (or, if applicable, another member of the
Barington Group or the Ramius Group, as the case may be), 151,668 MM Shares, for
a purchase price (the "MM Purchase Price") of $1.50 per MM Share, or an
aggregate of two hundred twenty seven thousand five hundred two dollars
($227,502), in immediately available United States dollars. The number of MM
Shares to be sold by each member of the Barington Group and the Ramius Group and
the portion of the MM Purchase Price that each member of the Barington Group and
the Ramius Group shall be paid is set forth on Schedule 2.2(a).
(b) Simultaneously with, and as a condition to the Closing, BCG shall be
required to, and the JMI Group and the Barington Group shall cause BCG to (i)
redeem the interests in BCG held by all of the members of the JMI Group in BCG
in exchange for one-half of the MM Shares owned by BCG and (ii) sell to JMI the
remaining 604,933 MM Shares owned by BCG for the MM Purchase Price, or an
aggregate of $907,400 as set forth on Schedule 2.2(a).
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Section 2.3. Closing. Upon the terms and subject to the conditions of this
Agreement, the sale and purchase of the Securities contemplated by this
Agreement shall take place at a closing (the "Closing") to be held at the
offices of Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 as soon as practicable following satisfaction or waiver of all
conditions to the obligations of the Parties set forth in Article 5, or at such
other place or at such other time or on such other date as the Parties may
mutually agree in writing, but in no event later than May 18, 2004. The date on
which the Closing takes place is referred to herein as the "Closing Date."
Section 2.4. Closing Deliveries by JMI. At the Closing, the JMI Group
shall deliver or cause to be delivered to Barington and Ramius:
(a) stock certificates evidencing the LQ Shares, the DynaBazaar Shares and
the Register Shares duly endorsed in blank, or accompanied by stock powers duly
executed in blank, in form reasonably satisfactory to Barington and Ramius and
with all required stock transfer tax stamps affixed; provided that, to the
extent the JMI Group does not maintain physical possession of any such
securities, the JMI Group may effect delivery thereof through customary
book-entry transfers through one or more brokers;
(b) evidence satisfactory to the Barington Group of the relinquishment by
each member of the JMI Group who is a member of BCG of his or its interests in
BCG in exchange for one-half of the MM Shares owned by BCG, in the aggregate;
(c) the MM Purchase Price by wire transfer of immediately available funds
to the Barington Bank Account and the Ramius Bank Account in the proportions set
forth on Schedule 2.2(a), respectively, or an aggregate of $227,502;
(d) the MM Purchase Price by wire transfer immediately available funds to
the BCG Bank Account in respect of the MM Shares to be purchased by JMI from
BCG, or an aggregate of $907,400 as set forth on Schedule 2.2(a);
(e) the officer's certificates required to be delivered pursuant to
Section 5.3(a) and Section 5.3(b);
(f) copies of (i) all organizational documents, governing instruments,
agreements, contracts, instruments and/or undertakings in the possession or
control of JMI or Xxxxxxxx with respect to or binding upon LQ, DynaBazaar,
Register or BCG; and
(g) the payment required by Section 4.10, and shall use their best efforts
to cause MM to make the payments pursuant to Section 4.11, in each case by wire
transfer of immediately available funds to the Barington Bank Account.
Section 2.5. Closing Deliveries by Barington. At the Closing, Barington
and Xxxxxxxxxxx shall deliver or cause to be delivered to JMI:
(a) the Barington Group's portion of the LQ Purchase Price and the
DynaBazaar Purchase Price and the Register Purchase Price (as set forth on
Schedule 2.1C) by wire transfer of immediately available funds to the JMI Bank
Account;
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(b) stock certificates evidencing the MM Shares to be sold by it or any
other member of the Barington Group (as set forth on Schedule 2.2(a)) duly
endorsed in blank, or accompanied by stock powers duly executed in blank, in
form reasonably satisfactory to JMI and with all required stock transfer tax
stamps affixed; provided that to the extent the Barington Group does not
maintain physical possession of any such securities, the Barington Group may
effect delivery thereof through customary book-entry transfers through one or
more brokers;
(c) the officer's certificates required to be delivered pursuant to
Section 5.2(a) and Section 5.2(b); and
(d) copies of all (i) organizational documents, governing instruments,
agreements, contracts, instruments and/or undertakings in the possession or
control of Barington and/or Xxxxxxxxxxx with respect to, or binding upon, MM.
Section 2.6. Closing Deliveries by Ramius. At the Closing, Ramius shall
deliver to JMI:
(a) the Ramius Group's portion of the LQ Purchase Price, the DynaBazaar
Purchase Price and the Register Purchase Price (as set forth on Schedule 2.1C)
by wire transfer of immediately available funds to the JMI Bank Account;
(b) stock certificates evidencing the MM Shares to be sold by it or any
other member of the Ramius Group (as set forth on Schedule 2.2(a)) duly endorsed
in blank, or accompanied by stock powers duly executed in blank, in form
reasonably satisfactory to JMI and with all required stock transfer tax stamps
affixed; provided that, to the extent the Ramius Group does not maintain
physical possession of any such securities, the Ramius Group may effect delivery
thereof through customary book-entry transfers through one or more brokers; and
(c) the officer's certificates required to be delivered pursuant to
Section 5.2(a) and Section 5.2(b).
Section 2.7. Adjustment upon Change in Capitalization or Merger. In the
event of any change in the capital stock of LQ, MM, DynaBazaar or Register by
reason of a stock dividend, stock split, merger, consolidation,
recapitalization, combination, conversion, exchanges of shares, extraordinary or
liquidating dividend or other change in the corporate or capital structure of
any such company which would have the effect of diluting or changing JMI
Group's, Barington Group's or Ramius Group's rights hereunder, the number and
kind of shares subject to this Agreement shall be appropriately and equitably
adjusted so that the Parties shall receive at the Closing the equivalent number
of shares or other securities or property that they would have received in
respect of the Securities had the Securities been purchased by them immediately
prior to such event. In their capacity as stockholders of LQ, MM, DynaBazaar, or
Register as applicable, each Party shall, and shall cause their respective
Affiliates and Associates to, vote against any action described in the preceding
sentence (such actions and the requirement to vote against same are hereinafter
collectively referred to as the "Section 2.7 Voting Requirement") if submitted
for any vote of stockholders prior to the Closing.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
As an inducement to the Parties to enter into this Agreement, JMI
represents and warrants to Barington and Ramius (with respect to itself as set
forth in Sections 3.1 through 3.7 and with respect to each member of the JMI
Group that is selling Securities pursuant to this Agreement, solely as set forth
in Sections 3.2 and 3.3, or purchasing Securities pursuant to this Agreement,
solely as set forth in Section 3.6), and each of Barington and Ramius, severally
and not jointly, represents to JMI (with respect to itself as set forth in
Sections 3.1 through 3.7 and with respect to each member of the Barington Group
(in the case of Barington) and each member of the Ramius Group (in the case of
Ramius) that is selling Securities pursuant to this Agreement, solely as set
forth in Sections 3.2 and 3.3, or purchasing Securities pursuant to this
Agreement, solely as set forth in Section 3.6), as of the date hereof and as of
the Closing Date, as follows:
Section 3.1. Organization, Authority and Qualification. It is a
corporation, partnership or limited liability company, as the case may be, duly
organized, validly existing and in good standing under the laws of the State of
its formation and has all necessary power and authority to enter into this
Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by it, the performance by it of its obligations hereunder and the consummation
by it of the transactions contemplated hereby have been duly authorized by all
requisite action. This Agreement has been duly executed and delivered by it, and
(assuming due authorization, execution and delivery by the other Parties) this
Agreement constitutes a legal, valid and binding obligation of it enforceable
against it in accordance with its terms.
Section 3.2. No Conflict. (a) The execution, delivery and performance of
this Agreement by it do not and will not (i) contravene, conflict with or
violate its organizational documents (or the organizational documents of such
other selling member of the JMI Group, Barington Group or Ramius Group, as the
case may be), (ii) contravene, conflict with or violate any Law applicable to it
(or applicable to such other selling member of the JMI Group, Barington Group or
Ramius Group, as the case may be) or by which any of its properties or assets is
bound or affected (or the properties or assets of such other selling member of
the JMI Group, Barington Group or Ramius Group, as the case may be) or (iii)
result in any breach of, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a Lien on any of its properties or assets (or the properties or
assets of such other selling member of the JMI Group, Barington Group or Ramius
Group, as the case may be) pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation, except for any such conflicts, violations, breaches, defaults or
other occurrences that would not adversely affect or materially delay its
ability (or the ability of such other selling member of the JMI Group, Barington
Group or Ramius Group, as the case may be) to carry out its obligations under,
and to consummate the transactions contemplated by, this Agreement.
(b) The execution, delivery and performance of this Agreement by it (or
the performance of this Agreement by such other selling member of the JMI Group,
Barington Group or Ramius Group, as the case may be) do not and will not require
any consent, approval,
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authorization or permit of, or filing with or notification to, any Governmental
Entity, except (i) those filings required to amend the Parties' existing filing
on Form 4 or Schedule 13D, as the case may be, and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filing or notifications, would not adversely affect or materially delay its
ability (or the ability of such other selling member of the JMI Group, Barington
Group or Ramius Group, as the case may be) to carry out its obligations under,
and to consummate the transactions contemplated by, this Agreement.
Section 3.3. Valid Issuance; Ownership of the Securities. (a) It (or such
other selling member of the JMI Group, Barington Group or Ramius Group, as the
case may be) is the sole beneficial owner of, and has good and marketable title
to, the Securities to be sold by it (or such other selling member of the JMI
Group, Barington Group or Ramius Group, as the case may be) pursuant to this
Agreement. The Securities to be sold by it (or such other selling member of the
JMI Group, Barington Group or Ramius Group, as the case may be) pursuant to this
Agreement are owned by it (or such other selling member of the JMI Group,
Barington Group or Ramius Group, as the case may be) free and clear of all Liens
(other than Liens on securities held in margin accounts to be terminated on or
prior to the Closing Date) and at the Closing will not be subject to any Liens
or pre-emptive rights or similar rights. Upon the delivery and payment for the
Securities to be sold by it (or such other selling member of the JMI Group,
Barington Group or Ramius Group, as the case may be) pursuant to this Agreement,
the purchaser(s) of such Securities pursuant to this Agreement will acquire
good, valid and marketable title to such Securities free and clear of any Liens
(other than Liens arising under federal and state securities laws).
(b) The Securities to be sold by it (or such other selling member of the
JMI Group, Barington Group or Ramius Group, as the case may be) pursuant to this
Agreement have been validly issued to it (or such other selling member of the
JMI Group, Barington Group or Ramius Group, as the case may be), and are fully
paid and nonassessable. The Securities to be sold by it (or such other selling
member of the JMI Group, Barington Group or Ramius Group, as the case may be)
pursuant to this Agreement are all the equity securities of LQ, DynaBazaar and
Register (in the case of JMI) and MM (in the case of Barington and Ramius),
beneficially owned by it or any of its Affiliates or Associates, and neither it
nor any of its Affiliates or Associates has any option or other right to acquire
any other securities of the entity that issued the Securities to be sold by it
pursuant to this Agreement. Neither it nor any of its Affiliates or Associates
has appointed or granted any proxy, which appointment or grant is still
effective, with respect to the Securities to be sold by it (or such other
selling member of the JMI Group, Barington Group or Ramius Group, as the case
may be) pursuant to this Agreement.
Section 3.4. Absence of Litigation. As of the date of this Agreement,
there is no Action pending or, to its knowledge, threatened, that seeks to delay
or prevent the consummation of the transactions contemplated by this Agreement.
Section 3.5. Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by it
or on its behalf.
9
Section 3.6. Investment Representations.
(a) It is purchasing the Securities provided to be purchased by it
hereunder for its own account, for investment purposes only and not with a view
to, or for sale in connection with, a distribution of such Securities in
violation of the Securities Act.
(b) It has had access to all information regarding each of DynaBazaar, LQ,
MM and Register and such company's present and prospective business, assets,
liabilities and financial condition that it reasonably considers important in
making the decision to acquire or dispose of the Securities, and it has had
ample opportunity to ask questions of the appropriate persons concerning such
matters.
(c) It is fully aware of: (a) the highly speculative nature of the
Securities; (b) the financial hazards involved; (c) the restrictions on
transferability of the Securities imposed by the Securities Act and the
agreement referred to in Section 4.5 hereof; and (d) the tax consequences of
purchase or sale of its investment in the Securities.
(d) It has a preexisting personal or business relationship with each of
DynaBazaar, LQ, MM and Register and/or certain of its officers and/or directors
of a nature and duration sufficient to make it aware of the business and
financial circumstances of each of DynaBazaar, LQ, MM and Register. By reason of
its business or financial experience, it is capable of evaluating the merits and
risks of the purchase or sale of Securities, has the ability to protect its own
interests in this transaction and is financially capable of bearing a total loss
of its investment in the Securities it is purchasing.
(e) At no time was it presented with or solicited by any publicly issued
or circulated newspaper, mail, radio, television or other form of general
advertising or solicitation in connection with the its investment in Securities.
(f) It understands and acknowledges that, in reliance upon the
representations and warranties made by it herein, the Securities are not being
registered with the SEC under the Securities Act or being qualified under any
applicable state securities laws, but instead are intended to be transferred
under an exemption or exemptions from the registration and qualification
requirements of the Securities Act and any applicable state securities laws,
which impose certain restrictions on its ability to transfer the Securities.
(g) It understands that it may not transfer any Securities unless such
transfer is registered under the Securities Act or qualified under any
applicable state securities laws or unless exemptions from such registration and
qualification requirements are available. It understands that only the issuer of
Securities may file a registration statement with the SEC or applicable state
securities commissioners and that the issuer is under no obligation to do so
with respect to the Securities except that a registration statement may have
been filed by DynaBazaar including the DynaBazaar Shares. It has also been
advised that exemptions from registration and qualification may not be available
or may not permit it to transfer all or any of the Securities in the amounts or
at the times proposed by it.
(h) It has been advised that SEC Rule 144 promulgated under the Securities
Act, which permits certain limited sales of unregistered securities, may not be
presently available with
10
respect to sales of the Securities and, in any event, requires that the
Securities be held for a minimum of one (1) year, and in certain cases two (2)
years, after they have been purchased and paid for (within the meaning of SEC
Rule 144) from the issuer or an affiliate of the issuer, if applicable, before
they may be resold under SEC Rule 144, and that under certain circumstances
where the seller is not an "affiliate" as defined under the Securities Act, the
holding period of the seller will carry over to purchaser.
(i) It acknowledges that (i) the other Parties that are selling Securities
to it pursuant to this Agreement currently may have, and later may come into
possession of, information with respect to the company or companies whose
Securities such other Parties are selling pursuant to this Agreement or any of
their Affiliates that is not known to it and that may be material to a decision
to acquire the Securities being purchased by it hereunder ("Excluded
Information"), (ii) it has determined to purchase the Securities notwithstanding
its lack of knowledge of the Excluded Information, if any, and (iii) the other
Parties that are selling Securities to it pursuant to this Agreement shall have
no liability to it, and it waives and releases any claims that it might have
against the other Parties that are selling Securities to it pursuant to this
Agreement, whether under applicable securities laws or otherwise, with respect
to the nondisclosure of the Excluded Information, if any, in connection with the
transactions contemplated hereby; provided, however, that the Excluded
Information, if any, shall not and does not affect the truth or accuracy of the
representative or warranties of any Party in this Agreement (including, without
limitation, Section 3.7 hereof).
Section 3.7. Prospects, Plans or Proposals. It is fully aware that other
Parties may have under consideration prospective acquisition opportunities or
other plans or proposals with respect to one or more of DynaBazaar, LQ, MM or
Register, which prospects, plans or proposals have not been, and may not be,
disclosed to it, either prior to the Closing or thereafter; and it understands
and agrees that no Party shall have any obligation, express or implied, to
inform any other Party of any such matters. Notwithstanding anything in this
Section 3.7 to the contrary, JMI represents and warrants to Barington and Ramius
, and each of Barington and Ramius, severally and not jointly, represents to
JMI, that such Party has no actual knowledge of an existing Transaction Proposal
as of the date hereof.
ARTICLE 4
ADDITIONAL AGREEMENTS
Section 4.1. No Disposition or Encumbrance of the Securities. Each Party
agrees that prior to the Closing, except as contemplated by this Agreement, such
Party shall not (i) sell, transfer, tender, pledge, assign, contribute to the
capital of any entity, hypothecate, give or otherwise dispose of, grant a proxy
or power of attorney with respect to, deposit into any voting trust, enter into
any voting agreement with respect to, or create or permit to exist any Liens
(other than Liens on securities held in margin accounts to be terminated on or
prior to the Closing Date) of any nature whatsoever with respect to, any of the
Securities (or agree or consent to, or offer to do, any of the foregoing), (ii)
take any action that would make any representation or warranty of such Party or
any Affiliate of such Party herein untrue or incorrect in any material respect
or have the effect of preventing or disabling any Party from performing such
Party's obligations hereunder or (iii) directly or indirectly, initiate, solicit
or encourage any Person to take actions that could reasonably be expected to
lead to the occurrence of any of the foregoing.
11
Section 4.2. Notification of Certain Matters. Each Party shall give prompt
notice to the other Parties of (a) the occurrence, or non-occurrence, of any
event the occurrence, or non-occurrence, of which reasonably could be expected
to cause any representation or warranty of it contained in this Agreement to be
untrue or inaccurate in any material respect and (b) any failure of it to comply
with or satisfy any covenant or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 4.2 shall not limit or otherwise affect the remedies available hereunder
to the Party receiving such notice.
Section 4.3. Further Action; Commercially Reasonable Efforts. (a) Upon the
terms and subject to the conditions hereof, each Party shall use commercially
reasonable efforts to take, or cause to be taken, all appropriate action, and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
using commercially reasonable efforts to obtain all permits, consents,
approvals, authorizations, qualifications and orders of Governmental Entities as
are necessary for the consummation of the transactions contemplated by this
Agreement; provided that no Party will be required by this Section 4.3 to take
any action that would materially delay or prevent the consummation of the
transactions contemplated by this Agreement by it, including, without
limitation, entering into any consent decree, hold separate orders or other
arrangements. In case, at any time after the Closing Date, any further action is
necessary or desirable to carry out the purposes of this Agreement, each Party
to this Agreement shall use commercially reasonable efforts to take all such
action at the expense of the Party to this Agreement requesting such action to
be taken. Without limitation of the foregoing, upon the request of JMI, the
Barington Group agrees that it shall make available Xxx Xxxxx to JMI for
reasonable periods of time for up to 90 days after the Closing (the "Service
Period") to assist JMI by performing the same services that he currently renders
on behalf of MM. JMI agrees to pay the Barington Group for such services at the
rate of $10,000 per month (or pro rated amount for any portion thereof) and to
reimburse the Barington Group for its actual out-of-pocket costs incurred in
providing such services upon presentation of appropriate documentation thereof.
Barington shall have no liability whatsoever for any services performed by Xx.
Xxxxx, and Xx. Xxxxx'x liability shall be limited to actual damages incurred by
MM as a direct result of any action by him which is determined by a court of
competent jurisdiction to have been attributable to his bad faith, gross
negligence or willful misconduct. Notwithstanding anything herein to the
contrary, if following the Service Period, MM requires the assistance of Xx.
Xxxxx with respect to any inquiries or otherwise and Xx. Xxxxx is then an
employee of the Barington Group, then the Barington Group agrees to make Xx.
Xxxxx reasonably available to MM upon such terms and conditions as MM and the
Barington Group shall determine in good faith based upon the scope of MM's
request for assistance.
(b) Each Party agrees to cooperate and use its commercially reasonable
efforts to contest and resist any Action, including administrative or judicial
Action, and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and that restricts, prevents or prohibits
consummation of the transactions contemplated by this Agreement.
Section 4.4. Public Announcements. The Parties agree that no public
release or announcement concerning the transactions contemplated by this
Agreement shall be issued by any Party without the prior consent (which consent
shall not be unreasonably withheld) of the
12
other Parties, except as, and to the extent that, such release or announcement
may be required by Law (including any Form 4 or amendment to statement on
Schedule 13D required under the Securities Exchange Act and the SEC's rules and
regulations thereunder) or the rules or regulations of any quotation system on
which the Securities are listed or quoted for trading, in which case the Party
required to make the release or announcement shall use its reasonable best
efforts to allow the other Party reasonable time to comment on such release or
announcement in advance of such issuance. The Parties shall mutually agree upon
the language describing the transactions contemplated by this Agreement to be
included in any amendment to any Schedule 13D filed jointly by the parties;
provided, however that nothing herein shall restrict any Party from complying
with the applicable Law.
Section 4.5. Investors' Rights Agreement. At the Closing, JMI shall assign
to Barington and Ramius in proportion to the number of DynaBazaar Shares
purchased by them hereunder all of JMI's rights and obligations, and Barington
and Ramius shall assume all of JMI's obligations, under that certain Investors'
Rights Agreement dated February 25, 1999 by and among FairMarket, Inc. (now
known as DynaBazaar) and the investors identified therein, as amended on August
23, 1999 (the "Investors' Rights Agreement"). Pursuant to Section 1.11 of the
Investors' Rights Agreement, each of Barington and Ramius hereby undertakes to
be bound by and subject to the provisions of the Investors' Rights Agreement in
respect of the DynaBazaar Shares.
Section 4.6. Register. Barington and Ramius, on one hand, and JMI, on the
other hand, each acknowledge and agree that they do not, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise
share (1) voting power, which includes the power to vote, or to direct the
voting of, or (2) investment power, which includes the power to dispose, or to
direct the disposition of, the common stock of Register and are not currently
members of any group which includes the others, for the purpose of acquiring,
holding or disposing of the common stock of Register within the meaning of
Section 13(d) of the Securities Exchange Act.
Section 4.7. Standstill. JMI and Xxxxxxxx agree, with respect to LQ,
DynaBazaar and Register, Barington, Mitarotonda, and Ramius agree, with respect
to MM, that, from the date of this Agreement and continuing for a period of two
years thereafter (such period, the "Standstill Period"), neither such Party nor
any of such Party's Affiliates or Associates will in any manner, directly or
indirectly: (a) effect or seek (including, without limitation, entering into any
discussions, negotiations, agreements or understandings with any third person),
offer or propose (whether publicly or otherwise) to effect, or cause or
participate in, or in any way assist or facilitate any other person to effect or
seek, offer or propose (whether publicly or otherwise) to effect or participate
in, (i) any acquisition of any securities (or beneficial ownership thereof), or
rights or options to acquire any securities (or beneficial ownership thereof),
or any assets or businesses, of such company or companies, as the case may be,
or any of their respective subsidiaries, (ii) any tender offer or exchange
offer, merger, acquisition or other business combination involving such company
or companies, as the case may be, (iii) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to the
such company or companies, as the case may be, or (iv) any solicitation of
proxies or consents to vote any voting securities of such company or companies,
as the case may be (including, for this purpose, any proposal or submission to
stockholders of any shareholder vote or otherwise); (b) form, join or in any way
participate in a "group" (as defined under the Securities Exchange
13
Act) with respect to the such company or companies, as the case may be; (c)
otherwise act, alone or in concert with others, to seek to control or influence
the management, board of directors or policies of such company or companies, as
the case may be, or initiate or take any action to obtain representation on the
board of directors of such company or companies, as the case may be; (d) take
any action which would, or would reasonably be expected to, force such company
or companies, as the case may be, to make a public announcement regarding any of
the types of matters set forth in (a) above; or (e) enter into any discussions
or arrangements with any third party with respect to any of the foregoing. Each
Party further agrees during the Standstill Period not to request, directly or
indirectly, any amendment or waiver of any provision of this Section 4.7
(including this sentence) by such company or companies, as the case may be, or
by any other Party or by any of their respective Associates, Affiliates, agents
or representatives.
Section 4.8. Mutual Release.
(a) JMI and Xxxxxxxx Release. Except with respect to the matters referred
to in Schedule 4.8(a), each of JMI and Xxxxxxxx, by and on behalf of itself or
himself and its or his respective Affiliates, Associates, officers, directors,
assigns, transferees, successors, agents, attorneys and representatives, and
each of them, releases and forever discharges Barington, Mitarotonda, Ramius,
each other member of the Barington Group and the Ramius Group and (as
applicable) their respective Affiliates, Associates, officers, directors,
assigns, transferees, employees, successors, agents, attorneys and
representatives from any and all claims, demands, damages, debts, liabilities,
actions, causes of action, suits, contracts, controversies, agreements,
accounts, reckonings, obligations and judgments, whether in law or equity, which
any of JMI, Xxxxxxxx or any of their respective Affiliates or Associates now
has, owns or holds, or at any time previously ever had, owned or held, or could,
shall, or may later have, own or hold, whether personal or otherwise, based
upon, related to, or by reason of any action, contract (express, implied in
fact, implied in law, or otherwise), Lien, liability, law, matter, cause,
action, lawsuit, fact, thing, act, omission or whatever occurring or existing at
any time from and after January 1, 1998 and to and including the date of this
Agreement, in each case, solely to the extent arising from or as a result of or
in connection with, any act, matter, cause or thing relating to the Specified
Activities. Notwithstanding the foregoing, this subsection shall not release or
limit JMI's or Xxxxxxxx'x right to (i) enforce this Agreement or to bring any
claims for breach thereof or (ii) in the case of Xxxxxxxx or any other member of
the JMI Group, seek indemnification in his capacity as an officer and/or
director of LQ.
(b) Barington and Ramius Release. Except with respect to the matters
referred to in Schedule 4.8(b), each of Barington, Xxxxxxxxxxx and Ramius, by
and on behalf of itself or himself and (as applicable) its or his respective
Affiliates, Associates, officers, directors, assigns, transferees, directors,
officers, employees, successors, agents, attorneys and representatives, and each
of them, releases and forever discharges JMI, Xxxxxxxx, each other member of the
JMI Group and (as applicable) their respective Affiliates, Associates, officers,
directors, assigns, transferees, employees, successors, agents, attorneys and
representatives of and from any and all claims, demands, damages, debts,
liabilities, actions, causes of action, suits, contracts, controversies,
agreements, accounts, reckonings, obligations and judgments, whether in law or
equity, which any of Barington, Mitarotonda, Ramius or their respective
Affiliates or Associates now has, owns or holds, or at any time previously ever
had, owned or held, or could, shall, or may later have, own or hold, whether
personal or otherwise, based upon, related to, or by reason
14
of any action, contract (express, implied in fact, implied in law, or
otherwise), Lien, liability, law, matter, cause, action, lawsuit, fact, thing,
act, omission or whatever occurring or existing at any time from and after
January 1, 1998 and to and including the date of this Agreement, in each case,
solely to the extent arising from or as a result of or in connection with, any
act, matter, cause or thing relating to the Specified Activities.
Notwithstanding the foregoing, this subsection shall not release or limit the
Barington's, Mitarotonda's, Ramius' right to (i) enforce this Agreement or to
bring any claims for breach thereof or (ii) in the case of Xxxxxxxxxxx or any
other member of the Barington Group, seek indemnification in his capacity as an
officer and/or director of MM.
(c) Except with respect to the matters set forth on Schedule 4.8(a) and
Schedule 4.8(b) (which obligations referred to therein shall continue in
accordance with the respective terms of the agreements among the Parties with
respect thereto) and the respective rights and obligations of the Parties set
forth in this Agreement, it is the intention of the Parties in executing this
Agreement that the release set forth in this Section 4.8 shall be effective as a
full and final accord and satisfactory release of each and every matter herein
specifically or generally referred to. Each Party waives and relinquishes any
rights and benefits which such Party has or may have under any statute or law
which limits the release of unknown claims, to the full extent that they may
lawfully waive all such rights and benefits. Each Party acknowledges that such
Party is aware that such Party may later discover facts in addition to or
different from those which they now know or believe to be true, but it is their
respective intention to settle and release any and all matters, disputes and
differences, known and unknown, which now exist, may later exist or may
previously have existed between them, in each case other than with respect to
the matters set forth on Schedule 4.8(a) or Schedule 4.8(b), and that in
furtherance of this intention, the releases given in this Agreement shall be and
remain in effect as full and complete general releases notwithstanding discovery
or existence of any such additional or different facts.
(d) Upon a finding by a court of competent jurisdiction or arbitrator that
a release provided for by this Section 4.8 is illegal, void or unenforceable,
each Party, as the case may be, may require the other Party or Parties to
promptly execute a release that is legal and enforceable, so long as said
release does not expand the scope of the initial release found to be
unenforceable.
(e) Each Party acknowledges and agrees that (a) such Party has had the
opportunity to consult with and be advised by the attorneys of such Party's
choice prior to executing this Agreement, (b) the signing of this Agreement by
such Party is voluntary, (c) such Party fully understands all of the provision
of this Agreement and (d) in executing this Agreement, such Party has not relied
on any representation or statement not set forth in this Agreement made by any
other Party.
(f) For the avoidance of doubt, each of JMI and Xxxxxxxx, on the one hand,
and Barington, Xxxxxxxxxxx and Ramius, severally and not jointly, on the other
hand, in each case, on behalf of such Party and its Affiliates and Associates,
agrees that it will not encourage, support or join with any other Person in
pursuing any action, cause or claim which would otherwise be barred by the terms
of the releases included in this Section 4.8.
Section 4.9. Certain Options, etc. At the Closing, (i) Xxxxxxxx shall
transfer and assign to Xxxxxxxxxxx, and Xxxxxxxxxxx shall purchase and acquire
from Xxxxxxxx, those certain
15
options to acquire 30,000 shares of the common stock, par value $0.001 per
share, of LQ granted to Xxxxxxxx on or about March 18, 2003 at an aggregate cash
purchase price of $5,400, (ii) Xxxxxxxx shall transfer and assign to
Xxxxxxxxxxx, and Xxxxxxxxxxx shall purchase and acquire from Xxxxxxxx, those
certain options to acquire 420,000 shares of the common stock, par value $0.001
per share, of LQ granted to Xxxxxxxx on or about April 15, 2003 solely in
exchange for the stock appreciation rights described in the succeeding clause
(iii) and (iii) Xxxxxxxxxxx shall transfer and assign to Xxxxxxxx, and Xxxxxxxx
shall purchase and acquire from Xxxxxxxxxxx, those certain stock appreciation
rights in respect of shares of MM granted to Xxxxxxxxxxx on or about December
31, 2002 solely in exchange for the options described in the succeeding clause
(ii). The foregoing transfers shall in each case be in form reasonably
satisfactory to Xxxxxxxx and Xxxxxxxxxxx, respectively.
Section 4.10. Certain Barington Fees. At the Closing, JMI shall pay to
Barington the amounts specified on Schedule 4.10, representing payment in full
of any and all amounts due to Barington from JMI or any of its Affiliates
relating to their respective investments in shares of common stock of
DynaBazaar, MM and The Warnaco Group, Inc. up to and including the Closing Date.
JMI hereby represents to Barington that as of the Closing Date, the JMI Group
owns no shares of Clarus Corporation, Fab Industries Corp., Gencorp, Inc.,
Infospace, Inc., Keymote Systems, Inc., Xxxxxxx Shoe Co. Inc., Nautica
Enterprises, Inc., ValueClick, Inc., Vans, Inc. or The Warnaco Group, Inc.
Section 4.11. Administrative Fees; Etc. (a) At the Closing, JMI and
Xxxxxxxx shall cause MM to pay (i) Barington an aggregate of $54,790.35,
representing administrative service fees and related expenses owed to Barington
for the months of March and April 2004 and the period of May 1 - May 17, 2004,
(ii) JMI an aggregate of $17,838.60, representing administrative service fees
and related expenses owed to JMI for the months of March and April 2004 and the
period of May 1 - 17, 2004, (iii) Xxxxxxxxxxx an aggregate of $12,737,
representing administrative services fees for the months of March and April 2004
and the period of May 1 - 17, 2004, (iv) Xxxxxxxx an aggregate of $12,737,
representing administrative service fees for the months of March and April 2004
and the period of May 1 - 17, 2004 and (v) Xxx Xxxxx an aggregate of $7,500 as a
bonus.
(b) At the Closing, Barington and Xxxxxxxxxxx shall cause LQ to pay (i)
BCG an aggregate of $18,575, representing administrative services fees and
related expenses owed to BCG for the months of March and April 2004 and the
period of May 1 - 17, 2004, (ii) JMI an aggregate of $25,491, representing
administrative services fees and related expenses owed to JMI for the months of
March and April 2004 and the period of May 1 - 17, 2004 and (iii) Xxxxxxxxxxx an
aggregate of $12,737, representing administrative services fees and related
expenses owed to Xxxxxxxxxxx for the months of March and April 2004 and the
period of May 1 - 17, 2004.
Section 4.12. Non-Disparagement. Prior to and following the Closing Date,
each Party agrees to refrain from taking actions or making any private or public
statement, written or oral, which denigrates, disparages or defames (whether or
not such disparagement legally constitutes libel or slander) the goodwill or
reputation of any other Party or any known Associate or Affiliate of such Party
or LQ, DynaBazaar, MM, BCG, or their respective Associates, Affiliates, officers
or directors or any aspect of their respective businesses. Each Party further
agrees
16
(a) not to make any disparaging statements to third parties relating to the
circumstances of this Agreement and (b) to use such Party's best efforts to
cause such Party's employees, agents, and consultants to adhere to the foregoing
restrictions and obligations. The Parties agree that the requirement set forth
in clause (b) of the preceding sentence shall be satisfied if they send their
respective employees, agents and consultants a memorandum stating that they
should not make any public or private statement that disparages any other Party
or other Person identified above. Notwithstanding the foregoing, nothing
contained in this Section 4.12 shall restrict any Party from making any accurate
statements or disclosures that such Party reasonably believes to be necessary in
any arbitration, judicial or administrative Action or proceeding or as may be
required by applicable Law (including any statement on an amendment to the
Schedule 13D previously filed by the Parties or any statement made on a Form 4).
The parties shall mutually agree upon the language describing the transactions
contemplated by this Agreement to be included in any amendment to any Schedule
13D filed jointly by the parties.
ARTICLE 5
CONDITIONS TO CLOSING
Section 5.1. Conditions to Obligations of each Party. The obligations of
each Party to consummate the transactions contemplated by this Agreement, and
the effectiveness of the agreements set forth in Section 4.7 and 4.8, shall be
subject to the satisfaction, at or prior to the Closing, of the following
conditions:
(a) No Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any Law (whether temporary, preliminary or permanent) which
is then in effect and has the effect of making the acquisition of Securities
contemplated by this Agreement illegal or otherwise restricting, prohibiting or
imposing material conditions upon consummation of the transactions contemplated
by this Agreement.
(b) Consummation of the transactions contemplated by this Agreement shall
not conflict with or violate any provision of Law.
Section 5.2. Conditions to Obligations of JMI and Xxxxxxxx. The
obligations of JMI and Xxxxxxxx to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment, at or prior to the Closing,
of each of the following additional conditions:
(a) The representations and warranties of Barington and Ramius contained
in Article 3 in this Agreement (A) that are qualified by materiality shall be
true and correct as of the Closing with the same force and effect as if made as
of the Closing, other than such representations and warranties as are made as of
another date, which shall be true and correct as of such date, and (B) that are
not qualified by materiality shall be true and correct in all material respects
as of the Closing with the same force and effect as if made as of the Closing,
other than such representations and warranties as are made as of another date,
which shall be true and correct in all material respects as of such date, and
JMI and Xxxxxxxx shall have received a certificate to such effect signed by a
duly authorized officer of each of Barington and Ramius.
(b) The covenants and agreements contained in this Agreement to be
complied with or performed by Barington, Xxxxxxxxxxx or Ramius on or before the
Closing shall have been
17
complied with or performed by such Parties in all material respects, and JMI and
Xxxxxxxx shall have received a certificate to such effect signed by a duly
authorized officer of each of Barington and Ramius.
(c) Each of Xxxxxxxxxxx, Xxxxxxx Xxx, Xxxxxx Xxxxxx and Xxx Xxxxx shall
have resigned, effective as of the Closing, from any positions they hold as
directors, officers or employees of MM.
Section 5.3. Conditions to Obligations of Barington, Xxxxxxxxxxx and
Ramius. The obligations of Barington, Xxxxxxxxxxx and Ramius to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment,
at or prior to the Closing, of each of the following additional conditions:
(a) The representations and warranties of JMI contained in Article 3 of
this Agreement (A) that are qualified by materiality shall be true and correct
as of the Closing with the same force and effect as if made as of the Closing,
other than such representations and warranties as are made as of another date,
which shall be true and correct as of such date, and (B) that are not qualified
by materiality shall be true and correct in all material respects as of the
Closing with the same force and effect as if made as of the Closing, other than
such representations and warranties as are made as of another date, which shall
be true and correct in all material respects as of such date, and Barington and
Ramius shall have each received a certificate to such effect signed by a duly
authorized officer of JMI.
(b) The covenants and agreements contained in this Agreement to be
complied with or performed by JMI or Xxxxxxxx on or before the Closing shall
have been complied with or performed by JMI and Xxxxxxxx in all material
respects, and Barington and Ramius shall have received a certificate to such
effect signed by a duly authorized officer of JMI.
(c) Each of Xxxxxxxx and Xxxxx Xxxxxx shall have resigned, effective as of
the Closing, from any positions they hold as directors, officers or employees of
LQ.
(d) Effective upon Closing, MM shall sell to Barington and Ramius or their
respective designees in the proportion set forth on Schedule 2.1C all shares of
common stock, par value $0.001 per share, of LQ and shares of common stock, par
value $0.001 per share, of DynaBazaar beneficially owned by MM, at a purchase
price of $0.43 per share and $0.36 per share, respectively, and otherwise on
terms substantially the same as those set forth in this Agreement, and such sale
shall be approved by the disinterested directors of MM, to the extent required
by applicable Law.
ARTICLE 6
TERMINATION AND WAIVER
Section 6.1. Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by written consent of each of the Parties; or
(b) by any Party if:
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(i) the Closing shall not have occurred prior to May 18, 2004;
provided, however, that the right to terminate this Agreement under this
Section 6.1(b)(i) shall not be available to any Party whose failure to
fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before such date;
or
(ii) any Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any injunction, order, decree or ruling
(whether temporary, preliminary or permanent) which has become final and
nonappealable and has the effect of making the transactions contemplated
by this Agreement illegal or otherwise preventing or prohibiting
consummation of the transactions contemplated by this Agreement; or
(iii) any other Party materially breached any representation or
warranty (without giving effect to any materiality qualifications or
thresholds contained in such representation or warranty) or covenant
contained in this Agreement and such breach has continued without cure for
a period of ten days after such other Party has received written notice of
such breach.
Section 6.2. Effect Of Termination. In the event of termination of this
Agreement as provided in Section 6.1, this Agreement shall forthwith become void
and there shall be no liability on the part of any Party except (a) as set forth
in Section 8.1 and (b) that nothing herein shall relieve any Party from
liability for any breach of this Agreement.
Section 6.3. Waiver. At any time prior to the Closing, any Party may (a)
extend the time for the performance of any obligation or other act of any other
Party, (b) waive any inaccuracies in the representations and warranties of any
other Party contained herein or in any document delivered pursuant hereto and
(c) waive compliance with any agreement of any other Party or any condition to
its own obligations contained herein. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the Party or
Parties to be bound thereby.
ARTICLE 7
INDEMNIFICATION
Section 7.1. Indemnification by JMI. JMI shall indemnify and hold harmless
Barington, Mitarotonda, Ramius, each other member of the Barington Group and the
Ramius Group and (as applicable) their respective directors, managers, officers,
members, partners, employees and agents (each, a "B-R Party") against and in
respect of any and all losses, liabilities, obligations, claims, settlements,
court costs and reasonable attorneys' fees and costs of investigation
(collectively, "Losses") that any such B-R Party may suffer or incur as a result
of or relating to:
(a) any breach or violation of the covenants made in this Agreement by JMI
or Xxxxxxxx; or
(b) any misrepresentation, breach or inaccuracy of any of the
representations and warranties made by JMI or Xxxxxxxx in this Agreement.
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Section 7.2. Indemnification by Barington and Ramius. Each of Barington
and Ramius, severally and not jointly, shall indemnify and hold harmless JMI,
Xxxxxxxx, each other member of the JMI Group and (as applicable) their
respective directors, managers, officers, members, partners, employees and
agents (each, a "JMI Party") against and in respect of any and all Losses that
any such JMI Party may suffer or incur as a result of or relating to:
(a) any breach or violation of the covenants made in this Agreement by
Barington or Xxxxxxxxxxx, in the case of indemnification by Barington, or by
Ramius, in the case of indemnification by Ramius, as the case may be; or
(b) any misrepresentation, breach or inaccuracy of any of the
representations and warranties made by Barington or Xxxxxxxxxxx, in the case of
indemnification by Barington, or by Ramius, in the case of indemnification by
Ramius, as the case may be, in this Agreement.
Section 7.3. Notice and Payment of Losses. Upon obtaining actual knowledge
of any Loss, the Party entitled to indemnification (the "Injured Party") shall
promptly notify the Party liable for such indemnification (the "Indemnifying
Party") in writing of such Losses which the Injured Party has determined have
given or could give rise to a claim under Section 7.1 or 7.2 (such written
notice being hereinafter referred to as a "Notice of Claim"); provided, however,
that failure of an Injured Party timely to give a Notice of Claim to the
Indemnifying Party shall not release the Indemnifying Party from its indemnity
obligations set forth in this Article 7 except to the extent that such failure
adversely affects the ability of the Indemnifying Party to defend such claim or
materially increases the amount of indemnification which the Indemnifying Party
is obligated to pay hereunder, in which event the amount of indemnification
which the Injured Party shall be entitled to receive shall be reduced to an
amount which the Injured Party would have been entitled to receive had such
Notice of Claim been timely given. The Injured Party shall use commercially
reasonable efforts to mitigate any continuing Losses (including, without
limitation by using its commercially reasonable efforts to obtain any applicable
insurance proceeds). If the Injured Party settles or compromises any third party
claims prior to giving a Notice of Claim to the Indemnifying Party, the
Indemnifying Party shall be released from its indemnity obligation. A Notice of
Claim shall specify in reasonable detail, to the extent known by the Injured
Party, the nature and, to the extent reasonably calculable, estimated amount of
any such claim giving rise to a right of indemnification. The Indemnifying Party
shall satisfy its obligations under Section 7.1 or 7.2, as the case may be,
within sixty (60) days of its receipt of a Notice of Claim; provided, however,
that for so long as the Indemnifying Party is disputing its liability or
defending a third-party claim in good faith pursuant to Section 7.4, its
obligations to indemnify the Injured Party with respect thereto shall be
suspended until a final unappealable judgment of a court of competent
jurisdiction is given in relation to such claim. The Indemnifying Party shall
have thirty (30) business days (or such shorter period of time that the Injured
Party may be required to respond to any suit or governmental action) after
receipt of a Notice of Claim to notify the Injured Party (a) whether or not it
disputes its liability to the Injured Party with respect to such Notice of Claim
and (b) whether it elects to defend a third-party claim pursuant to Section 7.4.
Section 7.4. Defense of Third-Party Claims. With respect to any action or
any claim set forth in a Notice of Claim relating to a third-party claim, the
Indemnifying Party may defend, in good faith and at its expense, any such claim
or demand, and the Injured Party, at its expense,
20
shall have the right, but not the obligation, to participate (but not control)
at its expense in the defense of any such third-party claim; provided that if
the Injured Party reasonably determines that the counsel selected by the
Indemnifying Party to defend such claim or demand is subject to an actual or
potential material conflict of interest which precludes such counsel from
adequately representing the interests of both the Indemnified Party and the
Injured Party in connection with such matter, the Injured Party shall be
entitled to retain its own counsel (the reasonable fees and expenses of which
shall be paid as incurred by the Indemnifying Party) to defend the interests of
the Injured Party with respect to such matter. So long as the Indemnifying Party
is defending any such third-party claim, the Injured Party shall not settle or
compromise such third-party claim without the consent of the Indemnifying Party,
which consent shall not be unreasonably withheld. If such claim is settled by
the Injured Party without the Indemnifying Party's reasonable consent, the
Injured Party shall be deemed to have waived all rights hereunder for money
damages arising out of such claim. The Indemnifying Party may settle or
compromise such third-party claim without the consent of the Injured Party,
unless there has not been a complete release of the Injured Party, in which case
the Indemnifying Party may not settle or compromise such third-party claim
without the consent of the Injured Party, which consent shall not be
unreasonably withheld. The Injured Party shall make available to the
Indemnifying Party or its representatives all records and other materials
reasonably required for use in contesting any third-party claim. The Injured
Party, at the expense of the Indemnifying Party, shall cooperate fully with the
Indemnifying Party in the defense of all such claims. If the Indemnifying Party
elects not to defend any such third-party claims, the Injured Party shall have
no obligation to do so, but may settle or compromise any such third-party claim
at the risk and expense of the Indemnifying Party. The Indemnifying Party will
not, however, be responsible for any Losses if and to the extent that they arise
from action taken or omitted to be taken by the Injured Party in bad faith,
fraudulently or as a result of a breach of this Agreement by the Injured Party.
Section 7.5. Survival of Representations and Warranties. All of the
representations and warranties made by any Party in Article 3 shall survive the
Closing.
Section 7.6. Exclusive Remedy. In the absence of fraud or the intentional
breach of this Agreement, the indemnification provisions set forth in this
Article 7 shall provide the exclusive remedy for breaches of any covenant,
agreement, representation or warranty set forth in this Agreement or any other
agreement ancillary hereto executed pursuant to this Agreement.
ARTICLE 8
GENERAL PROVISIONS
Section 8.1. Expenses. Except as otherwise specified in this Agreement
(including Article 7 hereof), all costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such costs and
expenses, whether or not the Closing shall have occurred. Further, Barington and
Ramius agree to support any request JMI may make, and JMI agrees to support any
request Barington and/or Ramius may make, for reimbursement from MM and/or LQ of
certain legal fees incurred by JMI in connection with certain corporate
governance matters referred to the Board of Directors of MM and LQ,
respectively, up to a maximum of $10,000 and certain legal fees incurred by
Barington and/or Ramius in connection with the same matter up to a maximum of
$10,000, provided,
21
however, that nothing in this Section 8.1 is intended to limit or restrict the
ability of any Party hereto to seek indemnification from MM or LQ in his
capacity as an officer and/or director of MM or LQ, respectively.
Section 8.2. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by reputable
overnight courier or by registered or certified mail (postage prepaid, return
receipt requested) to the respective Parties at the following addresses (or at
such other address for a Party as shall be specified in a notice given in
accordance with this Section 8.2):
(a) if to Barington or Xxxxxxxxxxx, to
Barington Capital Group, L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx
with copy to:
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
Chrysler Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx X. Xxxxxxx, Xx.
(b) if to Ramius, to
Ramius Securities, LLC
Chrysler Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
with a copy to:
Xxxxxxx Xxxxxxxx Xxxxxx Xxxxx & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
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(c) if to JMI or Xxxxxxxx, to:
Jewelcor Management Inc.
000 Xxxxx Xxxxxx-Xxxxx Xxxx.
Xxxxxx-Xxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx
Section 8.3. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 8.4. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the fullest extent possible.
Section 8.5. Entire Agreement. This Agreement constitutes the entire
agreement among the Parties with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the Parties or any of them, with respect to the subject matter hereof.
Section 8.6. Assignment. No Party may assign this Agreement or any rights
or obligations hereunder without the prior written consent of the other Parties;
provided, however, that any Party may assign all or any of its rights and
obligations under this Agreement to one or more of its Affiliates, so long as
the assigning Party agrees to continue to be bound by, and liable under, this
Agreement.
Section 8.7. Parties In Interest. This Agreement shall be binding upon and
inure solely to the benefit of each Party, along with its successors and
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than any Person entitled
to indemnification pursuant to Article 7.
Section 8.8. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts made and to be
23
performed in that State. Each of the Parties hereby (i) submits to the exclusive
jurisdiction of any state or federal court sitting in the Borough of Manhattan
of The City of New York in respect of any proceeding regarding the
interpretation or enforcement of the provisions of this Agreement brought by any
Party, and (ii) irrevocably waives, and agrees not to assert by way of motion,
defense, or otherwise, in any such Action, any claim that such Party is not
subject personally to the jurisdiction of the above-named courts, that such
Party's property is exempt or immune from attachment or execution, that the
Action is brought in an inconvenient forum, that the venue of the Action is
improper, or that this Agreement may not be enforced in or by any of the
above-named courts.
Section 8.9. Waiver Of Jury Trial. Each of the Parties hereby waives to
the fullest extent permitted by applicable law any right it may have to a trial
by jury with respect to any litigation directly or indirectly arising out of,
under or in connection with this Agreement. Each of the Parties (i) certifies
that no representative, agent or attorney of any other Party has represented,
expressly or otherwise, that such other Party would not, in the event of
litigation, seek to enforce that foregoing waiver and (ii) acknowledges that it
and the other Parties have been induced to enter into this Agreement by, among
other things, the mutual waivers and certifications in this Section 8.9.
Section 8.10. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different Parties in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
Section 8.11. Specific Performance. The Parties agree that irreparable
damage would occur in the event any provision of this Agreement were not
performed in accordance with the terms hereof and that the Parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
Section 8.12. Further Assurances. Except as otherwise expressly provided
for herein, each Party agrees, at its own cost and expense, to execute and
deliver, or cause to be executed and delivered, all such instruments, and to
take, or cause to be taken, all such action, as any other Party may reasonably
request to further perfect or reflect the transfer of the Securities hereunder
or otherwise effectuate the intent and purposes of this Agreement.
Section 8.13. Amendments; Waiver. No amendment to this Agreement shall be
effective unless it shall be in writing and signed by each Party. No waiver of
any term or condition in this Agreement shall be valid unless in writing and
signed by the Party against whom enforcement of such waiver is sought.
[SIGNATURE PAGE FOLLOWS]
24
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.
JEWELCOR MANAGEMENT, INC.
By: ____________________________________
Name:
Title:
____________________________________
Xxxxxxx Xxxxxxxx
BARINGTON CAPITAL GROUP, L.P.
By: ____________________________________
Name:
Title:
____________________________________
Xxxxx X. Xxxxxxxxxxx
RAMIUS SECURITIES, LLC
By: ____________________________________
Name:
Title:
AGREED TO AS MEMBERS OF
THE RAMIUS GROUP:
PARCHE, LLC
By: ____________________________________
Name:
Title:
STARBOARD VALUE AND
OPPORTUNITY FUND, LLC
By: ____________________________________
Name:
Title:
Solely with respect to the Section
2.7 Voting Requirement, Section 4.1,
4.8 and 4.12, each of the
undersigned agrees to be bound by
the terms thereof to the same extent
as a Party:
___________________________________
Xxxxxxx Xxx
___________________________________
Xxxxx Xxxxxx
___________________________________
Xxxxxx Xxxxxx
