TRANSACTION ADVISORY AGREEMENT
THIS TRANSACTION ADVISORY AGREEMENT (this "Agreement"),
dated as of April 21, 1998, is entered into by and between
DIAMOND BRANDS INCORPORATED, a Minnesota corporation ("DBI") and
XXXXXX XXXX & COMPANY LLC ("SKC").
DBI and SKC agrees as follows:
1. Recapitalization Fee. In consideration for the advisory
services rendered by SKC to DBI in connection with the
Recapitalization Agreement, dated March 3, 1998, among Xxxxxx
Xxxx-TPG Partners L.P. and Xxxxxx Xxxx I Parallel, L.P., DBI and
the shareholders of DBI listed on Exhibit A thereto (the
"Recapitalization Agreement"), DBI shall pay to SKC or its
designees, upon the consummation of the transactions contemplated
by the Recapitalization Agreement, a fee of $2,750,000 in cash.
2. Future Transactions. DBI shall request that SKC render
to it financial advisory services in connection with any
acquisition of the assets or capital stock or other ownership
interests of or in any other entity or person or any merger or
combination therewith (a "Transaction"). SKC shall have the
option of accepting an engagement by DBI to render advisory
services in connection with any Transaction. If SKC accepts such
engagement, DBI shall pay to SKC, as compensation for such
services, advisory fees, payable in cash upon consummation of the
Transaction, in an amount equal to 1.5% of the "transaction
value" of the Transaction. For these purposes the "transaction
value" shall be equal to the aggregate amount of consideration
paid in the Transaction, including, without limitation, the
aggregate amount of funds needed to complete the Transaction,
whether to be paid in the form of consideration, to refinance
debt, debt, preferred stock, options or similar items assumed or
to pay costs or expenses (excluding any fees payable pursuant to
this Agreement and any fees, if any, paid to any other person or
entity for financial advisory investment banking, brokerage or
similar services in connection with the Transaction).
SKC may, in its sole discretion, waive all or any portion
of the fees related to any Transaction or agree to a fee in a
different amount or on a different basis.
DBI shall make available to SKC all financial and other
information concerning its business and operations that SKC
reasonably requests as well as any other information relating to
any Transaction prepared by DBI or any of its other advisors. In
performing its services hereunder SKC shall be entitled to rely
without investigation upon all information that is available from
public sources as well as all other information supplied to it by
or on behalf of DBI or its advisors or an acquisition target or
potential acquisition target or its advisors and shall not in any
respect be responsible for the accuracy or completeness of, or
have any obligation to verify, the same.
3. Term of Agreement. This Agreement shall remain in
effect until the tenth anniversary of the date of this Agreement;
provided, however, that SKC may elect to terminate this Agreement
at any time hereafter and for any reason upon 30 days' written
notice to DBI.
4. Indemnification. DBI shall indemnify SKC and its
respective partners, principals, members, employees, directors,
officers, representatives and consultants (collectively,
"Agents") against, and shall defend against, save and hold each
of them harmless from, all claims, actions, proceedings, demands,
liabilities, damages, judgments, assessments, losses and costs,
including fees and expenses (including all legal costs and
expenses relating thereto) arising out of or in connection with,
this Agreement or any act performed or omitted to be performed by
SKC or any Agent under or pursuant to this Agreement. When acting
within the scope of this Agreement, SKC and each Agent shall be
deemed an agent of DBI solely for purposes of indemnification
under the Certificate of Incorporation and Bylaws of Cascade.
5. Assignment. No party may assign its rights or
obligations under this Agreement without the prior written
consent of the other.
6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California
without giving effect to the principles of conflicts of laws
thereunder.
7. Amendment. This Agreement can be modified or amended
only by a writing signed by the parties hereto.
2
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed as of the date first above written.
DIAMOND BRANDS INCORPORATED
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXX XXXX & COMPANY, LLC
By: /s/ Xxxxxxx X. Xxxx
--------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Member
3
