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July 18, 1996
Xx. Xxxxx X. Xxxxxxxx
President
Hellmold Associates, Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xxxxx:
Further to the Agreement between RYMAC Mortgage Investment Corporation ("RYMAC")
and Hellmold Associates, Inc. ("Hellmold") of November 1, 1995 (the "Engagement
Agreement"), and the Letter Agreement between RYMAC and Hellmold of April 10,
1996 in which RYMAC exercises its option under paragraph 5(b) of the Engagement
Agreement to make remaining fee payments to Hellmold in the form of RYMAC Common
Stock.
Hellmold and RYMAC agree, in the best interests of the acquisition transaction
of Navistar's Columbus Plastics Operation, to rescind the Letter Agreement of
April 10, 1996 and further agree that fees payable under paragraph 5(b) of the
November 1, 1995 Engagement Agreement between the parties will be payable in
cash.
If the terms of this letter are agreeable to you, please sign one of the two
originals of this letter and return it to us as soon as possible, keeping the
second original for your own file.
We continue to look forward to a successful conclusion of the Columbus Plastics
asset purchase.
Sincerely
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Chief Executive Officer
ACCEPTED THIS 29th DAY OF JULY, 1996
/s/ Xxxxx X. Xxxxxxxx
-----------------------------
Xxxxx X. Xxxxxxxx, President
Hellmold Associates, Inc.
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April 10, 1996
Xx. Xxxxxxx X. Xxxxx
Chairman & Chief Executive Officer
RYMAC Mortgage Investment Corporation
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000
Dear Rich:
Further pursuant to our discussions on April 3, 1996 regarding
compensation payable to Hellmold Associates in the event of a successful
transaction with the Columbus Plastics Division of Navistar International, based
upon your offer of $60.60 million and the fee schedule in paragraph 5(b) of our
Agreement dated November 1, 1995, RYMAC would owe Hellmold Associates a
transaction fee of $841,950.00, against which the initial $75,000.00 retainer is
creditable. This would leave a remaining balance of $766,950.00.
Pursuant to paragraph 5(d) of our Agreement RYMAC has the right to pay
all or part of the remaining transaction fee in RYMAC stock "at a valuation to
be mutually agreed upon." Hellmold Associates is prepared to accept payment in
RYMAC common stock valued at the HIGHER OF: (i) $1.875 per share (a 50% premium
over RYMAC's closing price of $1.25 on April 3, 1996), or (ii) the average
trading price of RYMAC common stock for the 30 days prior to the announcement of
an agreement in principle to acquire Columbus Plastics.
If RYMAC wishes to exercise its right to pay Hellmold Associates in
RYMAC stock valued on the terms outlined above if the Columbus Plastics
transaction closes, please indicate by signing below.
We look forward to working with you to bring this transaction to a
successful conclusion.
Sincerely,
/s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
President
Accepted this 11th day of April, 1996
/s/ Xxxxxxx X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx
Chief Executive Officer
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As of
November 1, 1995
RYMAC Mortgage Investment Corporation
000 Xxxxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000
Dear Sirs:
This will confirm the understanding and agreement (the "Agreement")
between Hellmold Associates, Inc. ("Hellmold Associates") and RYMAC Mortgage
Investment Corporation (RYMAC or the "Company") as follows:
1. The Company hereby engages Hellmold Associates as the
Company's sole and exclusive agent for the purpose of (a)
identifying opportunities for a merger transaction for the
Company, (b) actively soliciting owners of private businesses
for a prospective transaction, and (c) as requested by the
Company, participating on the Company's behalf in negotiations
concerning such transaction or assisting the Company in
structuring such transaction.
2. Hellmold Associates hereby accepts the engagement described in
paragraph 1 and, in that connection, agrees to:
(a) prepare, in consultation with the Company
and its counsel, a memorandum describing the
merits of a potential merger transaction
with RYMAC;
(b) develop a list of leveraged buyout ("LBO")
and venture capital firms which might own
businesses which could be attractive merger
partners for RYMAC;
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(c) contact such firms on behalf of RYMAC;
(d) develop, update and review with the Company
on an ongoing basis a list of potential
transaction candidates (including ones
identified by the Company);
(e) develop in consultation with the Company and
its other advisors a strategy to best
effectuate a transaction;
(f) assist in negotiations to effectuate a
transaction, and
(g) be available on request to meet with the
Company's Board of Directors to discuss
strategic alternatives and their financial
implications.
3. For the purposes of this Agreement:
(a) A "transaction" shall mean: any transaction
or series or combination of transactions,
other than in the ordinary course of trade
or business, whereby, directly or
indirectly, control of, or a material
interest in, a company or any of its
businesses, assets or properties, is
purchased, leased or otherwise acquired,
including, without limitation, a sale or
exchange of capital stock or assets, a lease
of assets with or without a purchase option,
a merger or consolidation, a tender or
exchange offer, or a leveraged buy-out; a
restructuring, a repurchase of capital
stock, a recapitalization, an extraordinary
dividend or distribution (whether cash,
property, securities or a combination
thereof), a liquidation, the formation of a
joint venture or partnership, a minority
investment or any other similar transaction.
In the case of a tender or exchange offer or
a multi-step transaction which contemplates
the acquisition of more than 50% of an
entity's outstanding voting stock, a
transaction shall be deemed to have been
consummated upon the acquisition of 50% or
more of such entity's outstanding voting
power or the ability to elect a majority of
the Board of Directors.
(b) "Consideration" shall mean the total value
of all cash, securities, other property and
any other consideration, including, without
limitation, any contingent, earned or other
consideration, paid or payable, directly or
indirectly, to a company or the holders of
its securities in connection with a
transaction. The value of any such
securities (whether debt or equity) or other
property shall be determined as follows: (1)
the value of securities that are freely
tradeable in an established public market
shall be the last closing market price of
such securities prior to the public
announcement of
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the acquisition; and (2) the value of
securities which are not freely tradeable or
which have no established public market, or
if the consideration consists of property
other than securities, the value of such
securities or other property shall be the
fair market value thereof as mutually agreed
by the Company and Hellmold Associates.
Consideration shall also be deemed to
include any indebtedness, including, without
limitation, unfunded pension liabilities,
retiree medical benefits liabilities,
guarantees and other obligations, assumed in
connection with an acquisition.
4. The term of Hellmold Associates' engagement hereunder shall
extend from the date hereof through November 1, 1996. Either
party may terminate Hellmold Associates' engagement hereunder
at any time, with or without cause, by giving the other party
at least 10 days' prior written notice, subject to the
provisions of paragraphs 4 through 8, and 10 through 13, which
shall survive any termination of this Agreement. Beginning
December 1, 1995, every 60 days thereafter during the term of
this Agreement (February 1, 1996, April 1, 1996, June 1, 1996,
August 1, 1996 and October 1, 1996) and within 30 days after
the effective date of any termination of this Agreement,
Hellmold Associates will deliver to the Company a list (the
"List") of all parties contacted by Hellmold Associates,
identified to the Company by Hellmold Associates or reviewed
by Hellmold Associates at the Company's written request prior
to such termination.
5. As compensation for the services rendered by Hellmold
Associates hereunder, the Company shall pay Hellmold
Associates as follows:
(a) A retainer of $75,000 payable upon the
signing of this Agreement, which fee shall
be credited against any compensation payable
pursuant to paragraph 5(b) below.
(b) If the Company announces a transaction
either:
(i) during the term of Hellmold
Associates' engagement hereunder or
at any time during a period of 12
months following the effective date
of termination of Hellmold
Associates hereunder, regardless of
whether the party or parties to the
transaction were identified by
Hellmold Associates or whether
Hellmold Associates rendered advice
concerning the transaction, or
(ii) at any time during a period of 24
months following the effective date
of termination of Hellmold
Associates hereunder, and the
transaction involves a party or
parties named on the List,
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and such a transaction is thereafter
consummated, then the Company shall pay to
Hellmold Associates the following
percentages of the total consideration paid
in such transaction:
TOTAL CONSOLIDATION PERCENTAGE
------------------- ----------
On first $15 million 3.33%
Plus on amounts over $15 million 0.75%
(c) Compensation which is payable to Hellmold
Associates pursuant to subparagraph 5(b)
shall be paid by the Company to Hellmold
Associates upon the consummation of a
transaction, provided that compensation paid
or payable to Hellmold Associates in respect
of consideration which is contingent upon
the occurrence of some future event (e.g.,
the realization of earnings projections) or
pursuant to the agreement relating to the
transaction is to be paid following the
closing of such transaction shall be paid by
the Company to Hellmold Associates at the
earlier of (i) the payment of such
consideration or (ii) the time that the
amount of such consideration can be
determined.
(d) Hellmold Associates agrees, upon the request
of the Company, to accept its entire
compensation payable pursuant to
subparagraph 5(b) in RYMAC stock at a
valuation to be mutually agreed upon.
6. The Company shall reimburse Hellmold for its out-of-pocket
expenses promptly as requested, including the fees and
expenses of its legal counsel and those of any advisor
retained by Hellmold Associates with the prior approval of the
Company, incurred in connection with the engagement hereunder.
7. In connection with Hellmold Associates' engagement, the
Company will furnish Hellmold Associates with all information
concerning the Company which Hellmold Associates reasonably
deems appropriate (the "Information") and will provide
Hellmold Associates with access to the Company's officers
directors, accountants, counsel and other advisors. The
Company represents and warrants to Hellmold Associates that
all such Information concerning the Company will be true and
accurate in all material respects and will not contain any
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein not misleading in light of the circumstances under
which such statements are made. The Company acknowledges and
agrees that Hellmold Associates (a) will be using and relying
upon the information supplied by the Company and its officers,
agents and others and any other publicly available Information
concerning the Company without any independent investigation
or verification thereof; (b) will not make an independent
appraisal of the Company, or its business or assets; and (c)
does not assume responsibility for the accuracy or
completeness of the Information. All non-public Information
concerning the
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Company which is given to Hellmold Associates will be used
solely in the course of the performance of its services
hereunder and will be treated confidentially by Hellmold
Associates for so long as it remains nonpublic. Hellmold
Associates will not disclose this Information to any third
party without the Company's consent, except as otherwise
required by law or as required by a regulatory authority and
after notification to the Company.
8. Because Hellmold Associates will be acting on behalf of the
Company in connection with this engagement, the Company agrees
to indemnify Hellmold Associates and its affiliates and their
respective directors, officers, employees, agents and
controlling persons (Hellmold Associates and each such person
being an "Indemnified Party") from and against any and all
losses, claims, damages and liabilities, joint or several, to
which such Indemnified Party may become subject under any
applicable federal or state law, or otherwise, related to or
arising out of any transaction contemplated by this Agreement
or the engagement of Hellmold Associates pursuant to, and the
performance by Hellmold Associates of the services
contemplated by, this Agreement and will reimburse any
Indemnified Party for all expenses (including reasonable
counsel fees and expenses) as they are incurred in connection
with the investigation of, preparation for or defense of any
pending or threatened claim or any action or proceeding
arising therefrom, whether or not such Indemnified Party is a
party and whether or not such claim, action or proceeding is
initiated or brought by or on behalf of the Company. The
Company will not be liable under the foregoing indemnification
provision to the extent that any loss, claim, damage,
liability or expense is found in a final judgment by a court
to have resulted from Hellmold Associates' bad faith or
negligence. The Company also agrees that no Indemnified Party
shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to the Company or its security
holders or creditors related to or arising out of the
engagement of Hellmold Associates pursuant to, or the
performance by Hellmold Associates of the services
contemplated by, this Agreement except to the extent that
loss, claim, damage or liability is found in a final judgment
by a court to have resulted from Hellmold Associates' bad
faith or negligence.
In order to provide for just and equitable contribution, if a
claim for indemnification is made pursuant to this Agreement
but it is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) that such
indemnification is not available for any reason (other than in
accordance with the terms hereof), then the Company, on the
one hand, and Hellmold Associates, on the other hand, shall
contribute to such claim, liability, loss, damage or expense
for which such indemnification or reimbursement is held
unavailable (1) in such proportion as is appropriate to
reflect the relative benefits to the Company on the one hand,
and Hellmold Associates on the other hand, of this transaction
as contemplated (whether or not the transaction is
consummated) or (ii) if (but only if) the allocation provided
for in clause (i) is for any reason held unenforceable, in
such proportion as is appropriate to reflect not only the
relative benefits referred to
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in clause (i) but also the relative fault of the Company, on
the one hand, and Hellmold Associates, on the other hand, as
well as any other relevant equitable considerations. The
Company agrees that for the purposes of this paragraph the
relative benefits to the Company and Hellmold Associates of
the transaction as contemplated shall be deemed to be in the
same proportion that the total value received or contemplated
to be received by the Company or its security holders, as the
case may be, as a result of or in connection with the
transaction bears to the fees paid or to be paid to Hellmold
Associates under this Agreement; PROVIDED, HOWEVER, that, to
the extent permitted by applicable law, in no event shall the
Indemnified Parties be required to contribute an aggregate
amount in excess of the aggregate fees actually received or to
be received by Hellmold Associates pursuant to this Agreement.
The Company agrees that, without Hellmold Associates' prior
written consent, which shall not be unreasonably withheld, it
will not settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action or
proceeding in request of which indemnification could be sought
under the indemnification provision of this Agreement (whether
or not Hellmold Associates or any other Indemnified Party is
an actual or potential party to such claim, action or
proceeding), unless such settlement, compromise or consent
includes an unconditional release of each Indemnified Party
from all liability arising out of such claim, action or
proceeding.
If multiple claims are brought against Hellmold Associates or
any Indemnified Party in an arbitration, with respect to at
least one of which indemnification is permitted under
applicable law and provided for under this Agreement, the
Company agrees that any arbitration award shall be
conclusively deemed to be based on claims as to which
indemnification is permitted and provided for, except to the
extent the arbitration award expressly states that the award,
or any portion thereof, is based solely on a claim as to which
indemnification is not available.
The Company acknowledges and agrees that Hellmold Associates
has been retained to act solely as financial advisor to the
Company. In such capacity, Hellmold Associates shall act as an
independent contractor, and any duties of Hellmold Associates
arising out of its engagement pursuant to this Agreement shall
be owed solely to the Company.
9. Hellmold Associates shall have the right to place
advertisements in financial and other newspapers and journals
at its own expense describing its services to the Company
hereunder if a transaction is completed. Hellmold Associates
will submit a copy of any such advertisements to the Company
for its approval prior to the first time such advertisement is
used, which approval shall not be unreasonably withheld or
delayed.
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10. The Company represents and warrants to Hellmold Associates
that there are no brokers, representatives or other persons
which have an interest in compensation due to Hellmold
Associates from any transaction contemplated herein.
11. The benefits of this Agreement shall inure to the respective
successors and assigns of the parties hereto and of the
Indemnified Parties hereunder and their successors and assigns
and representatives, and the obligations and liabilities
assumed in this Agreement by the parties hereto shall be
binding upon their respective successors and assigns.
12. This Agreement may not be amended or modified except in
writing and shall be governed by and construed in accordance
with the laws of the State of New York, without regard to
principles of conflicts of laws.
13. If any provision of this Agreement is, or may be, determined
to be unenforceable for any reason, the remaining provisions
of this Agreement shall be unaffected and shall remain in full
force and effect.
Hellmold Associates is delighted to accept this engagement and
looks forward to working with you on this assignment. Please confirm that the
foregoing correctly sets forth our agreement by signing the enclosed duplicate
of this letter in the space provided and returning it, whereupon this letter
shall constitute a binding agreement as of the date first above written.
HELLMOLD ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
President
AGREED:
RYMAC Mortgage Investment Corporation
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Title: CEO
---------------------
Date: November 14, 1995
----------------------------
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Addendum
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1. Beginning December 1, 1995, every 60 days thereafter during the term of this
Agreement (February 1, 1996, April 1, 1996, June 1, 1996, August 1, 1996 and
October 1, 1996) and within 30 days after the effective date of any termination
of this Agreement, Hellmold Associates will deliver to the Company a list (the
"List") of all parties contacted by Hellmold Associates, identified to the
Company by Hellmold Associates or reviewed by Hellmold Associates at the
Company's written request prior to such termination.
2. during the term of Hellmold Associates engagement hereunder or at any time
during a period of 12 months following the effective date of termination of
Hellmold Associates hereunder regardless of whether the party or parties to the
transaction were identified by Hellmold Associates or whether Hellmold
Associates rendered advice concerning the transaction, or
3. at any time during a period of 24 months following the effective date of
termination of Hellmold Associates hereunder and the transaction involves a
party or parties named on the List.
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