Exhibit 10(y)
TRANSACTION ADVISORY AGREEMENT
THIS TRANSACTION ADVISORY AGREEMENT ("Agreement"), is executed as
of the 10th day of August, 2001 by, between and among JII, Inc., a Delaware
corporation (the "Consultant") and each of the other parties a signatory
hereto (hereinafter collectively referred to as the "Company").
WITNESSETH
WHEREAS, the Consultant has and/or has access to personnel who are
highly skilled in the field of rendering advice, financial and otherwise,
to the Company;
WHEREAS, the Board of Directors of the Company has been made fully
aware of the relationships of certain members of the Company's Board of
Directors to the Consultant;
WHEREAS, the Company's Board of Directors has reviewed in detail
and discussed the terms and provisions of this Agreement and the fairness
of this Agreement and whether more favorable agreements for the Company
could be obtained from unaffiliated third parties; and
WHEREAS, on the basis of its review of this Agreement, the Board
of Directors of the Company deemed it advisable and in the best interests
of the Company and necessary to the conduct, promotion, and attainment of
the business objectives of the Company that the Company retain Consultant
to provide business and financial advice to the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto do hereby
agree as follows:
1. The Company hereby retains the Consultant, through the Consultant's
own personnel or through personnel available to the Consultant, to render
consulting services from time to time to the Company and its direct and
indirect subsidiaries, (whether now existing or hereafter acquired) in
connection with their acquisitions, divestitures and investments, their
financial and business affairs, their relationships with their lenders,
stockholders and other third-party associates or affiliates, and the
expansion of their businesses. Consultant shall render such services to the
Company and/or its direct and indirect subsidiaries in good faith and in
accordance with professional standards and applicable law. The term of this
Agreement shall commence the date hereof and continue until December 31,
2011, unless extended, or sooner terminated, as provided in Section 5
below. The Consultant's personnel shall be reasonably available to the
Company's managers, auditors and other personnel for consultation and
advice pursuant to this Agreement, subject to Consultant's reasonable
convenience and scheduling. Services may be rendered at the Consultant's
offices or at such other locations selected by the Consultant as the
Company and the Consultant shall from time to time agree.
2. Subject to Section 4 hereof, the Company shall pay to the
Consultant, in the aggregate, (i) an investment banking and sponsorship fee
of up to two percent (2%) of the aggregate consideration paid (including
non-competition, earnout, contingent purchase price, incentive arrangements
and similar payments) (A) by the Company and/or its direct and indirect
subsidiaries in connection with the acquisition by the Company and/or its
direct and indirect subsidiaries of all or substantially all of the
outstanding capital stock, warrants, options or other rights to acquire or
sell capital stock, or all or substantially all of the business or assets
of another individual, corporation, partnership or other business entity,
(B) by the Company and/or its direct and indirect subsidiaries in
connection with any joint venture or other minority investment, or (C) to
the Company in connection with the sale by the Company of all or
substantially all of the Company's and/or its direct and indirect
subsidiaries outstanding capital stock, warrants, options, or other rights
to acquire or sell stock, or all or substantially all of the business or
assets of the Company and/or its direct and indirect subsidiaries (each of
the transactions described in clauses (A), (B) and (C), a "Transaction"),
including, but not limited to, any Transaction negotiated for the Company
involving any affiliate of the Company or the Consultant, including, but
not limited to, any Transaction involving the Consultant, Jordan
Industries, Inc., JII Partners Limited Partnership, The Jordan Company, TJC
Management Corp., JZ Equity Partners, PLC, Jordan/Zalaznick Capital
Company, Leucadia National Corporation or any affiliates of any of the
foregoing (collectively, the "Jordan Affiliates"); and (ii) a financial
consulting fee of up to one percent (1%) of the amount obtained or made
available pursuant to any debt, equity or other financing (including
without limitation, any refinancing) by the Company and/or its direct and
indirect subsidiaries with the assistance of Consultant, including, but not
limited to, any financing obtained for the Company and/or its subsidiaries
from one or more of the Jordan Affiliates. However, the amount of such fees
payable in each such Transaction will be no less favorable to the Company
than those that could be obtained from comparable, unaffiliated third
parties, and will be subject to separate discussion and approval, in
connection with each such Transaction, by each of a majority of the Board
of Directors and a majority of the directors who are disinterested
directors in relation to Consultant and its affiliates. Notwithstanding and
in addition to the foregoing, if the Consultant renders services to the
Company outside the ordinary course of business, the Company shall pay an
additional amount equal to the value of such extraordinary services
rendered by the Consultant as may be separately agreed to between the
Consultant and the Company.
3. The Company shall promptly reimburse Consultant for out-of-pocket
expenses (including, without limitation, an allocable amount of the
Consultant's overhead expenses, attributable to the Company and its direct
and indirect subsidiaries, determined on actual usage, percentage or
revenue or such other basis as Consultant may determine), incurred by the
Consultant and its personnel in performing services hereunder to the
Company and its direct and indirect subsidiaries upon the Consultant
rendering a statement therefor, together with supporting data as the
Company shall reasonably require.
4. Notwithstanding the foregoing, the Company shall not be required to
pay the fees under Section 2, (a) if and to the extent expressly prohibited
by the provisions of any credit, stock, financing or other agreements or
instruments binding upon the Company, its subsidiaries or properties, (b)
if the Company has not paid cash interest on any interest payment date or
has postponed or not made any principal payments with respect to any of
their indebtedness on any scheduled payment dates, or (c) if the Company
has not paid cash dividends on any dividend payment date as set forth in
its certificate of incorporation or as declared by its Board of Directors,
or has postponed or not made any redemptions on any redemption date as set
forth in its certificate of incorporation or any certificate of designation
with respect to its preferred stock, if any. Any payments otherwise owed
hereunder, which are not made for any of the above-mentioned reasons, shall
not be canceled but rather accrue, and shall be payable by the Company
promptly when, and to the extent, that the Company is no longer prohibited
from making such payments and when the Company has become current with
respect to such principal or interest payments, has become current with
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respect to such dividends and has made such redemptions with respect to
such preferred stock, if any. Any payment required hereunder which is not
paid when due shall bear interest at the rate of ten percent (10%) per
annum. This Section 4 will not, in any event, restrict or limit the
Company's obligations under Sections 3, 8 and 9, which will be absolute and
not subject to set-off.
5. This Agreement shall be automatically renewed for successive
one-year terms starting December 31, 2011 unless either party hereto,
within sixty (60) days prior to the scheduled renewal date, notifies the
other party as to its election to terminate this Agreement. Notwithstanding
the foregoing, this Agreement may be terminated by not less than ninety
(90) days' prior written notice from the Company to the Consultant at any
time after (a) substantially all of the stock or substantially all of the
assets of the Company or all of its subsidiaries are sold to an entity
unaffiliated with the Consultant and/or a majority of the Company
stockholders immediately prior to the sale or (b) the Company is merged or
consolidated into another entity unaffiliated with the Consultant and/or a
majority of the Company's stockholders immediately prior to such merger and
the Company is not the survivor of such transaction. Subject to the
foregoing, this Agreement will not be terminated as a result of any
subsidiary of the Company ceasing to be a subsidiary of the Company for
financial reporting or other purposes.
6. The Consultant shall have no liability to the Company on account of
(i) any advice which it renders to the Company or any of its direct or
indirect subsidiaries, provided the Consultant believed in good faith that
such advice was useful or beneficial to the Company or any of its direct or
indirect subsidiaries at the time it was rendered, or (ii) the Consultant's
inability to obtain financing or achieve other results desired by the
Company (or any of its direct or indirect subsidiaries) or Consultant's
failure to render services to the Company at any particular time or from
time to time, or (iii) the failure of any Transaction to meet the
financial, operating, or other expectations of the Company or any of its
direct or indirect subsidiaries. The Company's and any of its direct or
indirect subsidiaries' sole remedy for any claim under this Agreement shall
be termination of this Agreement.
7. Notwithstanding anything contained in this Agreement to the
contrary, the Company agrees and acknowledges for itself and on behalf of
its direct and indirect subsidiaries that the Consultant, the Jordan
Affiliates and their respective shareholders, partners, employees,
directors and agents intend to engage and participate in acquisitions and
business transactions outside of the scope of the relationship created by
this Agreement and neither the Consultant, any of the Jordan Affiliates nor
any of their respective shareholders, partners, employees, directors or
agents shall be under any obligation whatsoever to make such acquisitions
or business transactions through the Company or any of its direct or
indirect subsidiaries or offer such acquisitions or business transactions
to the Company or any of its direct or indirect subsidiaries.
8. The Company will, and will cause each of its direct and indirect
subsidiaries to, indemnify and hold harmless to the fullest extent
permitted by applicable law, the Consultant, its affiliates and associates,
each of the Jordan Affiliates, and each of the respective owners, partners,
officers, directors, employees and agents of each of the foregoing, from
and against any loss, liability, damage, claim or expenses (including the
fees and expenses of counsel) arising as a result or in connection with
this Agreement, the Consultant's services hereunder or other activities on
behalf of the Company and its direct and indirect subsidiaries.
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9. Any payments paid by the Company under this Agreement shall not be
subject to set-off and shall be increased by the amount, if any, of any
taxes (other than income taxes) or other governmental charges levied in
respect of such payments, so that the Consultant is made whole for such
taxes or charges.
10. (a) This Agreement sets forth the entire understanding of the
parties with respect to the Consultant's rendering of transaction or
financial services to the Company. This Agreement may not be modified,
waived, terminated or amended except expressly by an instrument in writing
signed by the Consultant and the Company.
(b) This Agreement may be assigned by Consultant to any of
its subsidiaries or affiliates without the consent of the Company,
provided, however, such assignment shall not relieve such party from its
obligations hereunder. Any assignment of this Agreement shall be binding
upon and inure to the benefit of the parties and their respective
successors and assigns.
(c) In the event that any provision of this Agreement shall
be held to be void or unenforceable in whole or in part, the remaining
provisions of this Agreement and the remaining portion of any provision
held void or unenforceable in part shall continue in full force and effect.
(d) Except as otherwise specifically provided herein, notice
given hereunder shall be deemed sufficient if delivered personally or sent
by registered or certified mail to the address of the party for whom
intended at the principal executive offices of such party, or at such other
address as such party may hereinafter specify by written notice to the
other party.
(e) If at any time after the date upon which this Agreement
is executed, the Company acquires or creates one or more subsidiary
corporations (a "Subsequent Subsidiary"), the Company shall cause such
Subsequent Subsidiary to be subject to this Agreement and all references
herein to the Company's "direct and indirect subsidiaries" shall be
interpreted to include all Subsequent Subsidiaries.
(f) Each direct and indirect subsidiary of the Company shall
be jointly and severally liable and obligated hereunder with respect to
each obligation, responsibility and liability of the Company, as if a
direct obligation of such subsidiary. The Company will cause each direct
and indirect subsidiary of the Company to honor each obligation,
responsibility and liability of each subsidiary hereunder.
(g) No waiver by either party of any breach of any provision
of this Agreement shall be deemed a continuing waiver or a waiver of any
preceding or succeeding breach of such provision or of any other provision
herein contained.
(h) The Consultant and its personnel shall, for purposes of
this Agreement, be independent contractors with respect to the Company,
(i) This Agreement shall be governed by the internal laws
(and not the law of conflicts) of the State of Illinois.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
JII, INC.
By:
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Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
JORDAN AUTO AFTERMARKET, INC.
DACCO, INC.
ABC TRANSMISSION PARTS WAREHOUSE, INC.
BORG MANUFACTURING
DACCO/DETROIT OF GEORGIA, INC.
DACCO/DETROIT OF ALABAMA, INC.
DACCO/DETROIT OF ARIZONA, INC.
DACCO/DETROIT OF CHATTANOOGA, INC.
DACCO/DETROIT OF COLORADO, INC.
DACCO/DETROIT OF FLORIDA, INC.
DACCO/DETROIT OF INDIANA, INC.
DACCO/DETROIT OF KENTUCKY, INC.
DACCO/DETROIT OF MEMPHIS, INC.
DACCO/DETROIT OF MICHIGAN, INC.
DACCO/DETROIT OF MINNESOTA, INC.
DACCO/DETROIT OF MISSOURI, INC.
DACCO/DETROIT OF NEBRASKA, INC.
DACCO/DETROIT OF NEVADA, INC.
DACCO/DETROIT OF NEW JERSEY, INC.
DACCO/DETROIT OF NORTH CAROLINA, INC.
DACCO/DETROIT OF OHIO, INC.
DACCO/DETROIT OF OKLAHOMA, INC.
DACCO/DETROIT OF PENNSYLVANIA, INC.
DACCO/DETROIT OF SOUTH CAROLINA, INC.
DACCO/DETROIT OF TEXAS, INC.
DACCO/DETROIT OF VIRGINIA, INC.
DACCO/DETROIT OF WEST VIRGINIA, INC.
DETROIT TRANSMISSION PRODUCTS CO.
NASHVILLE TRANSMISSION PARTS, INC.
ATCO HOLDING CORP.
XXXX PRODUCTS I, INC.
WELCOME HOME, INC.
JORDAN SPECIALTY PLASTICS, INC.
DEFLECTO CORP.
YT HOLDINGS, INC.
YEARNTREE LTD. (U.K.)
DEFLECTO CANADA, LTD.
ROLITE PLASTICS, INC.
TELE-FLOW, INC.
INSTACHANGE DISPLAYS, LTD. (CANADA)
BEEMAK PLASTICS, INC.
SATE-LITE MANUFACTURING CO.
CAPE CRAFTSMEN, INC.
SPL HOLDINGS, INC.
VALMARK INDUSTRIES, INC.
PAMCO PRINTED TAPE & LABEL CO.
JII PROMOTIONS, INC.
SEABOARD FOLDING BOX CORP.
PIONEER PAPER HOLDINGS, INC.
By:
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Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
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