Harbour Group Industries, Inc.
0000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
November 6, 1996
Attention: President
DT Industries, Inc.
Corporate Centre
0000 X. Xxxxxxxx, Xxxxx 0-000
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
President and Chief Executive Officer
Re: Corporate Development Consulting and Advisory Services
Gentlemen:
This letter sets forth the agreement among DT Industries, Inc., a
Delaware corporation (the "Company") and Harbour Group Industries, Inc., a
Missouri corporation ("HGI"), with respect to certain consulting and advisory
services to be provided by HGI to the Company from time to time, and by the
Company to HGI, for corporate development services.
HGI hereby agrees to provide to the Company from time to time
throughout the term of this agreement, corporate development services, including
the identification, evaluation and negotiation of acquisitions, strategic
planning, negotiation of dispositions of components of the Company and such
other similar services as the Company may require from time to time.
The fee for services rendered by HGI (the "Hourly Fee") will be based
on the hours actually worked for the Company and upon HGI's hourly rates for the
staff performing such work as set forth on Schedule 1 attached hereto and made a
part hereof. Such rates may be adjusted annually by written notice by HGI to the
Company, which adjustments shall take effect thirty (30) days after receipt of
such notice.
In addition to the Hourly Fee, HGI is to be reimbursed
by the Company for out-of-pocket expenses ("Expenses") incurred for
such matters as travel, printing and reproduction, outside computer
time charges, postage, secretarial overtime, delivery
DT Industries, Inc.
November 6, 1996
Page 2
services, facsimiles, outside expert and consultant fees, long-distance
telephone charges, local transportation and the like. Outstanding disbursements
will be identified and billed separately or upon billing for consulting and
advisory services. HGI in its discretion may require the advance payment of
Expenses.
HGI shall be entitled to a transaction fee (the "Transaction Fee") for
each completed acquisition or disposition by the Company for which HGI performs
services hereunder during the term of this agreement, based on the total amount
paid by the acquiring party (the "Purchase Price"), including payments for
covenants not to compete and debt assumed in connection therewith, and in the
case of stock transfers, debt of the acquired company. The Transaction Fee for
each transaction completed shall be equal to the greater of (A) one hundred
twenty-five thousand dollars ($125,000) or (B) the sum of (i) two and one-half
percent (2.5%) of the first one million dollars ($1,000,000) of the Purchase
Price, (ii) two percent (2%) of the portion of the Purchase Price in excess of
one million dollars ($1,000,000) up to and including two million dollars
($2,000,000) of the Purchase Price, (iii) one and one half percent (1.5%) of the
portion of the Purchase Price in excess of two million dollars ($2,000,000) up
to and including three million dollars ($3,000,000) of the Purchase Price, (iv)
one percent (1%) of the portion of the Purchase Price in excess of three million
dollars ($3,000,000) up to and including four million dollars ($4,000,000) of
the Purchase Price, and (v) one half of one percent (0.5%) of the portion of the
Purchase Price in excess of four million dollars ($4,000,000). Each Transaction
Fee shall be payable upon the closing of the transaction to which it relates.
The sum of the Hourly Fee and Transaction Fees within any year is herein
referred to as "Fees."
In the event that the Company performs corporate development services
for HGI, the Company shall be entitled to a transaction fee (the "DTII
Transaction Fee"), for each completed acquisition or disposition by HGI or any
of its affiliates for which the Company performs such corporate development
services during the term of this agreement, based on the Purchase Price,
including payments for covenants not to compete and interest bearing debt
assumed in connection therewith, and in the case of stock transfers, debt of the
acquired company. The DTII Transaction Fee for each transaction completed shall
be equal to the greater of (A) one hundred twenty-five thousand dollars
($125,000) or (B) the sum of (i) two and one-half percent (2.5%) of
the first one million dollars ($1,000,000) of the Purchase Price, (ii)
two percent (2%) of the portion of the Purchase Price in excess of
one million dollars ($1,000,000) up to and including two million dollars
($2,000,000) of the Purchase Price, (iii) one and one-half percent
(1.5%) of the portion of the Purchase Price in excess of two million dollars
($2,000,000) up to and including one percent (1%) of the portion of the Purchase
Price in excess of three million dollars ($3,000,000) up to and
DT Industries, Inc.
November 6, 1996
Page 3
including four million dollars ($4,000,000) of the Purchase Price, and (v)
one-half of one percent (0.5%) of the portion of the Purchase Price in excess of
four million dollars ($4,000,000). Each DTII Transaction Fee shall be payable
upon the closing of the transaction to which it relates.
In order to be entitled to receive a Transaction Fee or a DTII
Transaction Fee, the services performed by HGI or the Company, as appropriate,
shall consist of (at a minimum) an initial written submission, which shall
contain the name of the target (if an acquisition, or the purchaser, if a
disposition), the owner of the target, any broker arrangements, any intermediary
to be paid a fee by the target and a brief description of the target. HGI or the
Company, as appropriate, shall submit a written analysis of the acquisition,
including (A) preliminary calculations of any synergies, (B) financial
forecasts, (C) calculation of EPS effect (D) recommended valuation, and (E)
major risks of the acquisition. HGI or the Company, as appropriate, will attend
negotiating sessions and provide advice on strategy and tactics through the
signing of a letter of intent and as requested following the execution of such
letter of intent. In addition, HGI or the Company, as appropriate, shall visit
the seller (or prospective purchaser) with the buyer and provide financial
statements, product literature and/or a memorandum or other detailed description
of the business, containing such background and financial information with
respect to the target as the Company or HGI, as appropriate, shall deem
reasonably necessary or desirable to facilitate its investigation.
Prior to the completion of any transaction, the Transaction Fees or the
DTII Transaction Fees, payable by either party, may be modified by written
agreement of the parties. Unless otherwise specified therein, such modification
shall affect only the fees payable for that particular transaction and shall
have no effect on Transaction Fees or DTII Transaction Fees payable by either
party for subsequently completed transactions.
HGI and the Company each reserve the right to charge interest at the
rate of one and one-half percent (1.5%) per month from the invoice date if any
invoice is not paid within thirty (30) days.
The term of this agreement shall be one (1) year commencing on the date
hereof and shall continue thereafter from year to year until terminated by
either party upon the giving of thirty (30) days' written notice thereof to the
other.
This agreement is intended to amend and restate in its entirety that
certain letter agreement dated February 7, 1994, by and between HGI and the
Company.
DT Industries, Inc.
November 6, 1996
Page 4
This agreement shall be governed by and construed in accordance with
the laws of the State of Missouri, without giving effect to its conflicts orf
laws principles.
No provision of this agreement may be modified, amended or waived
except by a writing signed by each party hereto.
IN WITNESS WHEREOF, the undersigned has caused this letter to be duly
executed and delivered by its duly authorized officer, intending to be bound by
the terms and conditions hereof.
Harbour Group Industries, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President and
Chief Financial Officer
Accepted and agreed to this
11 day of November, 1996:
DT Industries, Inc.
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President and
Chief Executive Officer
The following page contains a list of Exhibits and Schedules which have
been intentionally omitted by the Registrant pursuant to Item 601(b)(2) of
Regulation S-K.
A copy of any omitted Exhibit or Schedule will be provided to the
Securities and Exchange Commission upon request.
Schedule 1 - Hourly Rates
