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September 28, 2005
American Italian Pasta Company
0000 X. Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, XX 00000
Dear Sirs:
This letter confirms and sets forth the terms and conditions of the engagement
between Xxxxxxx & Marsal, LLC ("A&M") and American Italian Pasta Company (the
"Company"), including the scope of the services to be performed and the basis of
compensation for those services. Upon execution of this letter by each of the
parties below and receipt of the retainer described below, this letter will
constitute an agreement between the Company and A&M.
1. Description of Services
A&M shall provide the services described below. A&M shall report
directly to the Board of Directors of the Company (the "Board") or any
person or persons designated by the Board (the "Designees"). The
services to be provided by A&M are:
a. Officers and Additional Personnel. In connection with this
engagement, A&M shall make available to the Company:
(i) Xxx Xxxxxxx to serve as the Co-Chief Executive Officer (the
"Co-CEO"); and
(ii) Such additional personnel as are necessary to assist in the
performance of the duties set forth in clause 1.b below (the
"Additional Personnel"). Such Additional Personnel shall be
designated by the Company as officers. The Co-CEO and the
Additional Personnel shall perform services for the Company
according to the terms of paragraph 1(d) below.
(iii) During the first ninety to one-hundred-twenty days
following the date hereof (the "Phase One Review"),
Additional Personnel will include Xxxxx Xxxx, Xxxxxxx
Xxxxxx, and Xxxx Xxxxxx, who will serve in the Office
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NORTH AMERICA - EUPROPE - LATIN AMERICA - ASIA | Xxxxxxx & Marsal, LLC
of the Co-CEO, with responsibilities for supply chain, sales
and marketing, and finance, respectively. After the Phase
One Review, staffing levels will be agreed with the Board or
its Designees.
b. Duties of A&M.
The following services shall be performed and completed during
the Phase One Review:
(i) The Co-CEO and the Additional Personnel shall perform a
comprehensive study and analysis of the business,
operations, capital structure, financial condition,
projections (including cash flow and liquidity), and short
and long-term prospects of the Company, including but not
limited to a review and assessment of financial information
that has been and that will be, provided by the Company to
its creditors;
(ii) The Co-CEO and the Additional Personnel shall assess:
> Liquidity
> Management Team
> Meet and assess key accounts and needs
> Financial controls/ SEC Filings
action plan
> Business Plans, including strategic direction,
rationalization opportunities, sales and marketing
plans, pricing strategies, supply chain opportunities,
and cost structure opportunities
(iii) The Co-CEO and the Additional Personnel shall assist in the
identification of opportunities in the following areas: cost
reductions, operational improvements, manufacturing plant
capacity rationalization, working capital improvements,
revenue improvements, strategic direction, and management
personnel upgrades. We expect that during the Phase One
Review, A&M shall both identify opportunities for the
Company and assist the Company in executing such
opportunities;
(iv) The Co-CEO and the Additional Personnel shall develop for
the Board's review possible strategic alternatives for
maximizing the enterprise value of the Company;
(v) The Co-CEO and the Additional Personnel shall perform such
other services as reasonably requested or directed by
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the Board relating to the services described herein or as
agreed to by A&M.
The Phase One Review shall be completed within ninety to
one-hundred-twenty days from the date hereof. A comprehensive
presentation of findings shall be made to the Board or its
Designees at such time.
c. Reporting. The Co-CEO and the Company's current CEO shall jointly
report to the Board and will work closely together to manage the
affairs of the Company.
d. Employment by A&M. The Co-CEO and any Additional Personnel will
continue to be employed by A&M and, except as set forth below,
while rendering services to the Company will continue to work
with other personnel at A&M in connection with other unrelated
matters, which will not unduly interfere with services pursuant
to this engagement. With respect to the Company, however, the
Co-CEO and any Additional Personnel shall operate under the
direction of the Board, and A&M shall have no liability to the
Company for any acts or omissions of such officers, other than in
connection with any act or omission constituting gross negligence
or intentional misconduct. The Co-CEO will devote substantially
all of his working time to the affairs of the Company, subject to
his responsibilities with respect to the internal governance of
A&M.
The Co-CEO and any Additional Personnel will at all times remain
employees of A&M, which will be responsible for the payment of
all wages, and federal, state and local payroll, social security,
unemployment, insurance and similar taxes on their behalf. None
of the Co-CEO, the Additional Personnel or A&M shall be entitled
to receive any compensation or benefits from the Company or to
participate in any Company compensation, benefits, incentive,
insurance or other plan or program, other than as specifically
set forth herein.
e. Projections; Reliance; Limitation of Duties. You understand that
the services to be rendered by the Co-CEO and the Additional
Personnel may include the preparation of projections and other
forward-looking statements, and that numerous factors can affect
the actual results of the Company's operations, which may
materially and adversely differ from those projections and other
forward-looking statements. In addition, the Co-CEO and the
Additional Personnel will be relying on information provided by
other members of the Company's management in the preparation
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of those projections and other forward-looking statements.
Neither the Co-CEO, the Additional Personnel nor A&M makes any
representation or guarantee that an appropriate restructuring
proposal or strategic alternative can be formulated for the
Company, that any restructuring proposal or strategic alternative
presented to the Board will be more successful than all other
possible restructuring proposals or strategic alternatives, that
restructuring is the best course of action for the Company or, if
formulated, that any proposed restructuring plan or strategic
alternative will be accepted by any of the Company's creditors,
shareholders and other constituents. Further, neither the CO-CEO,
the Additional Personnel nor A&M assumes responsibility for the
selection of any restructuring proposal or strategic alternative
that any such officer assists in formulating and presenting to
the Board.
f. Additional Responsibilities. Upon the mutual agreement of the
Company and A&M, A&M may provide such additional personnel as the
Company may request to assist in performing the services
described above and such other services as may be agreed to, on
such terms and conditions and for such compensation as the
Company and A&M shall agree.
2. Compensation
a. A&M will be paid by the Company for the services of the Co-CEO
and the Additional Personnel. Xx. Xxxxxxx'x current billing rate
is $600 per hour. Xx. Xxxxxxx will bill monthly the lesser of
hours worked and 200 hours. The current billing rate for Messrs.
Xxxx, Xxxxxx and Xxxxxx is $475 per hour. The current hourly
billing rates for other A&M personnel, based on the position held
by such A&M personnel in A&M, are:
i. Director $375 - $500
ii. Associate $275 - $375
iii. Analyst $200 - $275
Such rates shall be subject to adjustment annually on January 1,
to the extent that the Company and A&M agree.
b. In addition, A&M will be reimbursed by the Company for the
reasonable documented out-of-pocket expenses of the Co-CEO and
the Additional Personnel, incurred in connection with this
assignment, such as travel, lodging, duplications, computer
research, messenger and telephone charges. Out-of-pocket expenses
for the Co-CEO may include appropriate relocation and temporary
residence for Xx. Xxxxxxx and his family in Kansas City.
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All fees and expenses due to A&M will be billed on a monthly
basis or, at A&M's discretion, more frequently.
c. The Company shall promptly remit to A&M a retainer in the amount
of $500,000, which shall be deposited in an interest-bearing
account and credited, together with accrued interest, against any
amounts due at the termination of this engagement with any excess
returned to the Company at such time.
d. The Company and A&M recognize that it is appropriate that A&M
receive performance based Incentive Compensation ("the Incentive
Compensation"). Incentive Compensation will include two
components:
i) A&M shall be eligible to receive objectives based Incentive
Compensation of $2.0 million upon satisfactory completion
of the following targets:
1. $1.0 million for achieving such FY 2006 EBITDAR target
as is established by the Board during Calendar 2005,
and
2. $1.0 million for achieving such FY 2006 cash flow
target as is established by the Board during Calendar
2005.
3. In the event that either of the targets is not achieved
but that the targets are collectively and individually
substantially achieved the parties agree to meet and
discuss an appropriate amount for the Incentive
Compensation that fairly reflects the level of
performance that is achieved.
ii) Warrants, in such form as is mutually agreed by the Company
and A&M (which form shall include anti-dilution provisions),
to purchase, at the Current Market Price, 472,671 shares of
the Company (the "Warrants"). Current Market Price for this
purpose shall be the forty-six day average of the five
trading days preceding the first public announcement or
other report of our engagement, the day of such announcement
or report, and the forty trading days subsequent to the
first public announcement or other report of our engagement.
The parties hereby agree to adjust the definition of Current
Market Price if the parties mutually agree that the
calculation does not reflect the Parties' intent. The
Warrants shall have a term of five years from the date
hereof. The Warrants shall vest upon the completion of the
Phase One Review period.
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3. Term
The engagement will commence as of the date hereof and may be
terminated by either party without cause by giving 30 days' written
notice to the other party.
If the Company terminates this engagement without Cause or if A&M
terminates this engagement for Good Reason, in each case before
completion of the Phase One Review, the Warrants shall terminate and
the Company shall not be required to pay any Incentive Compensation
and shall otherwise be relieved of all of its payment obligations
under this Agreement, except for the payment of non-Incentive fees and
expenses through the effective date of termination (including fees and
expenses that accrued prior to but were invoiced subsequent to such
termination) and its obligations under paragraph 8.
If the Company terminates this engagement without Cause or if A&M
terminates this engagement for Good Reason, in each case after
completion of the Phase One Review but prior to June 30, 2006, A&M
shall be entitled to retain the Warrants and shall be entitled to
receive its pro rata share of the Incentive Compensation upon the
completion of the above enumerated targets, and shall otherwise be
relieved of all of its payment obligations under this Agreement,
except for the payment of non-Incentive fees and expenses through the
effective date of termination (including fees and expenses that
accrued prior to but were invoiced subsequent to such termination) and
its obligations under paragraph 8. For purposes of this paragraph,
"pro rata" shall refer to the number of days from the date hereof to
any such termination divided by the number of days between the date
hereof and September 30, 2006.
If the Company terminates this engagement without Cause or if A&M
terminates this engagement for Good Reason, in each case after June
30, 2006, A&M shall be entitled to receive the Incentive Compensation
upon the completion of the above enumerated targets, and to retain the
Warrants previously granted. The Company will also be required to
comply with all of its obligation to pay non-Incentive fees and
expenses through the effective date of termination (including fees and
expenses that accrued prior to but were invoiced subsequent to such
termination) and its obligations under paragraph 8
The Company may immediately terminate A&M's services hereunder at any
time for Cause by giving written notice to A&M. Upon any such
termination and upon any termination by A&M other than for Good
Reason, the Warrants shall terminate and the Company shall be relieved
of all of its payment obligations under this Agreement, except for the
payment of non-Incentive fees and expenses through the effective date
of termination (including fees and expenses that accrued prior to but
were invoiced subsequent to such termination) and its obligations
under paragraph 8.
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For purposes of this Agreement, "Cause" shall mean if (i) the Co-CEO
or any of the Additional Personnel is convicted of, admits guilt in a
written document filed with a court of competent jurisdiction to, or
enters a plea of nolo contendere to, an allegation of fraud,
embezzlement, misappropriation or any other criminal conduct; (ii) the
Co-CEO or any of the Additional Personnel willfully disobeys a lawful
direction of the Board; (iii) any action or omission to act by the
Co-CEO or any Additional Personnel that, in the reasonable judgment of
the Board or the Designees, is materially detrimental to the Company,
other than any action or omission to act that has been approved or
otherwise ratified by the Board or the Designees, or (iv) a material
breach of any of A&M's or the Co-CEO's or any of the Additional
Personnel's material obligations under this Agreement which is not
cured within 30 days of the Company's written notice thereof to A&M
describing in reasonable detail the nature of the alleged breach. For
purposes of this Agreement, termination for "Good Reason" shall mean
either its resignation caused by a breach by the Company of any of its
material obligations under this Agreement that is not cured within 30
days of A&M having given written notice of such breach to the Company
describing in reasonable detail the nature of the alleged breach or a
filing of a petition under Chapter 11 of the United States Bankruptcy
Code in respect of the Company unless within 45 days thereafter (or,
if sooner, prior to the date on which a plan of reorganization is
confirmed or the case is converted to one under Chapter 7), the
Company has obtained judicial authorization to continue the engagement
on the terms herein pursuant to an order which has become a final,
nonappealable order.
4. No Audit, Duty to Update.
It is understood that the Co-CEO, any Additional Personnel and
A&M are not being requested to perform an audit, review or
compilation, or any other type of financial statement reporting
engagement that is subject to the rules of the AICPA, SEC or
other state or national professional or regulatory body. They are
entitled to rely on the accuracy and validity of the data
disclosed to them or supplied to them by employees and
representatives of the Company. The Co-CEO, any Additional
Personnel and A&M are under no obligation to update data
submitted to them or review any other areas unless specifically
requested by the Board to do so.
5. No Third Party Beneficiary.
The Company acknowledges that all advice (written or oral) given
by A&M to the Company in connection with this engagement is
intended solely for the benefit and use of the Company (limited
to its Board and management), its counsel and advisors (including
counsel to its advisors) in considering the matters to which this
engagement relates. The Company agrees that no such advice shall
be used for any other purpose or
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reproduced, disseminated, quoted or referred to at any time in
any manner or for any purpose other than accomplishing the tasks
referred to herein without A&M's prior approval (which shall not
be unreasonably withheld), except as required by law, regulation
or request of any regulatory law enforcement authority; provided,
however, that the Company may disclose such advice to any
regulatory or law enforcement authority if the Company determines
it is in the Company's best interest to do so.
6. Conflicts.
A&M is not currently aware of any relationship that would create
a conflict of interest with the Company or those
parties-in-interest of which you have made us aware, - but we
note the following - (i) we note that we are currently
representing various members of the Bank Group, including Bank of
America, in wholly unrelated matters, and (ii) we note that Ernst
& Xxxxx commenced an action against Xxxxxxx & Xxxxxx in
connection with the hiring of certain tax and real estate
personnel. Because A&M is a consulting firm that serves clients
on an international basis in numerous cases, both in and out of
court, it is possible that A&M may have rendered services to or
have business associations with other entities or people which
had or have or may have relationships with the Company, including
creditors of the Company. In the event you accept the terms of
this engagement, with the exception of the aforementioned
matters, A&M will not represent, and A&M has not represented, the
interests of any such entities or people in connection with the
Company.
7. Confidentiality / Non-Solicitation.
The Co-CEO, and Additional Personnel and A&M shall keep as
confidential all non-public information received from the Company
in conjunction with this engagement, and will use such
information for no purpose other than this engagement except (i)
as requested by the Company or its legal counsel; (ii) as
required by legal proceedings or (iii) as reasonably required in
the performance of this engagement. All obligations as to
non-disclosure shall cease as to any part of such information to
the extent that such information is or becomes public other than
as a result of a breach of this provision. In the event that A&M
becomes legally compelled (by deposition, interrogatory, request
for documents, subpoena, civil investigative demand or similar
process) to disclose any of the confidential information, A&M
shall give the Company prompt prior written notice of such
requirement so that the Company may seek a protective order or
other appropriate remedy. In the event that such protective order
or other remedy is not obtained, A&M
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agrees to provide only that limited portion of the confidential
information that it is legally required and to exercise
reasonable efforts to obtain assurance that confidential
treatment will be accorded such confidential information. A&M and
the Company agree that in the event of a breach of this
confidentiality provision, the Company shall be entitled to
equitable relief, including injunction and specific performance,
in addition to all other remedies available at law or equity.
This confidentiality provision shall survive for three years
following the termination of this Agreement.
Except as specifically provided for in this letter, the Company
agrees not to solicit, recruit or hire any employees of A&M, and
A&M agrees not to solicit, recruit or hire any employee of the
Company, effective from the date of this Agreement and continuing
for a period of two years subsequent to the termination of this
engagement. Should the Company extend offers of employment to any
A&M employee (other than as specifically provided for in this
Agreement) and should such an offer be accepted, A&M will be
entitled to a fee based upon such individual's hourly rates
multiplied by an assumed annual billing of 2,000 hours for the
period from such employment's commencement until the two-year
anniversary of the termination of this engagement. This fee would
be payable at the time of the individual's acceptance of
employment from the Company. Should A&M extend an offer of
employment to any Company employee and should such an offer be
accepted, the Company will be entitled to a fee based upon such
individual's annual salary and full bonus for the period from
such employment's commencement until the two year anniversary of
the termination of this engagement. This fee would be payable at
the time of the individual's acceptance of employment from A&M.
8. Indemnification.
The Company shall indemnify the Co-CEO and all Additional
Personnel to the same extent as the most favorable
indemnification it extends to its officers or directors, whether
under the Company's bylaws, its certificate of incorporation, by
contract or otherwise, and no subsequent reduction or termination
in any of the benefits provided under any such indemnities shall
affect the benefits provided to the Co-CEO or Additional
Personnel. The Company will use reasonable efforts to cause the
Co-CEO and each Additional Personnel to be covered as an officer
under the Company's existing director and officer liability
insurance policy to the extent that such coverage can be obtained
without materially increasing the cost of the Company's D&O
liability insurance or materially adversely affecting the terms
of such insurance. The Company shall also use reasonable efforts
to maintain any such insurance coverage for the Co-CEO and each
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Additional Personnel for a period of not less than two years
following the date of the termination of such officer's services
hereunder to the extent that such coverage can be obtained
without materially increasing the cost of the Company's D&O
liability insurance or materially adversely affecting the terms
of such insurance. Such coverage shall relate solely to losses
arising from the officer's services hereunder. The provisions of
this section 8 are in the nature of contractual obligations and
no change in applicable law or the Company's charter, bylaws or
other organizational documents or policies shall affect the
Co-CEO's or any Additional Personnel's rights hereunder. The
attached indemnity provisions are incorporated herein and the
termination of this agreement or the engagement shall not affect
those provisions, which shall survive termination.
9. Notices.
Any notices under sections 3 or 8 of this Agreement shall be
documented and delivered in writing, by mail, courier delivery,
or e-mail addressed to these addresses:
If to A&M:
Xxxxx X. Xxxxxxx
Managing Director
Xxxxxxx & Marsal, LLC
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
If to the Company:
American Italian Pasta Company
Office of the General Counsel
0000 X. Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, XX 00000
and
Xxxxxx Xxxxxxx
Lead Director
American Italian Pasta Company
c/o Greenhill Capital Partners, LLC
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
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10. Miscellaneous.
This Agreement shall (together with the attached indemnity
provisions) be: (a) governed and construed in accordance with the
laws of the State of New York, regardless of the laws that might
otherwise govern under applicable principles of conflict of laws
thereof; (b) incorporates the entire understanding of the parties
with respect to the subject matter thereof; and (c) may not be
amended or modified except in writing executed by each of the
signatories hereto. The Company and A&M agree to waive trial by
jury in any action, proceeding or counterclaim brought by or on
behalf of the parties hereto with respect to any matter relating
to or arising out of the performance or non-performance of the
Company or A&M hereunder. Should the Company file for bankruptcy,
the Company and A&M agree that the Bankruptcy Court having
jurisdiction over the Company's Chapter 11 case (or any case into
which it may be converted) shall have exclusive jurisdiction over
any and all matters arising under or in connection with their
obligations hereunder.
If the foregoing is acceptable to you, kindly sign the enclosed
copy to acknowledge your agreement with its terms.
Very truly yours,
Xxxxxxx & Marsal, LLC
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Managing Director
Accepted and Agreed:
American Italian Pasta Company
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Lead Director
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INDEMNIFICATION AGREEMENT
This indemnity is made part of an agreement, dated September 28, 2005 (which
together with any renewals, modifications or extensions thereof, is herein
referred to as the "Agreement") by and between Xxxxxxx & Marsal, LLC ("A&M") and
American Italian Pasta Company (the "Company"), for services to be rendered to
the Company by A&M.
A. The Company agrees to indemnify and hold harmless each of A&M, its
shareholders, employees, agents, representatives and subcontractors (each, an
"Indemnified Party" and collectively, the "Indemnified Parties") against any and
all losses, claims, damages, liabilities, penalties, obligations and expenses,
including reasonable costs for counsel in investigating, preparing or defending
any action or claim, whether or not in connection with litigation in which any
Indemnified Party is a party, or enforcing the Agreement (including these
indemnity provisions), to the extent caused by, relating to, based upon or
arising out of (directly or indirectly) the Indemnified Parties' acceptance of
or the performance or nonperformance of their obligations under the Agreement;
provided, however, such indemnity shall not apply to any such loss, claim,
damage, liability or expense to the extent it is found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) to have resulted
from such Indemnified Party's gross negligence or willful misconduct. 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 for or in
connection with the engagement of A&M, except to the extent that any such
liability for losses, claims, damages, liabilities or expenses that are found in
a final judgment by a court of competent jurisdiction (not subject to further
appeal) to have resulted from such Indemnified Party's gross negligence or
willful misconduct. The Company further agrees that it will not, without the
prior consent of an Indemnified Party, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which such Indemnified Party seeks indemnification
hereunder (whether or not such Indemnified Party is an actual party to such
claim, action, suit or proceedings) unless such settlement, compromise or
consent includes an unconditional release of such Indemnified Party from all
liabilities arising out of such claim, action, suit or proceeding; provided,
however, that the Company may settle, compromise or consent to the entry of a
judgement in any pending or threatened claim, action proceeding or
investigation, without A&M's consent, if such settlement, compromise or consent
does not include any payment by A&M or any admission or statement regarding
A&M's culpability or fault.
B. These indemnification provisions shall be in addition to any liability which
the Company may otherwise have to the Indemnified Parties provided that the
Company shall have no obligation to indemnify or otherwise compensate an
indemnified party more than 100% of any loss, claim, damage, liability, penalty,
obligation or expense. In the event that, at any time whether before or after
termination of the engagement or the Agreement, as a result of or in connection
with the Agreement or A&M's and its personnel's role under the Agreement, A&M or
any Indemnified Party is required to
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produce any of its personnel (including former employees) for examination,
deposition or other written, recorded or oral presentation, or A&M or any of its
personnel (including former employees) or any other Indemnified Party is
required to produce or otherwise review, compile, submit, duplicate, search for,
organize or report on any material within such Indemnified Party's possession or
control pursuant to a subpoena or other legal (including administrative)
process, the Company will reimburse the Indemnified Party for its out of pocket
expenses, including the reasonable fees and expenses of its counsel.
C. If any action, proceeding or investigation is commenced to which any
Indemnified Party proposes to demand indemnification hereunder, such Indemnified
Party will notify the Company with reasonable promptness; provided, however,
that any failure by such Indemnified Party to notify the Company will not
relieve the Company from its obligations hereunder, except to the extent that
such failure shall have actually prejudiced the defense of such action. The
Company shall promptly pay expenses reasonably incurred by any Indemnified Party
in defending, participating in, or settling any action, proceeding or
investigation in which such Indemnified Party is a party or is threatened to be
made a party or otherwise is participating in by reason of the engagement under
the Agreement, upon submission of invoices therefor, whether in advance of the
final disposition of such action, proceeding, or investigation or otherwise.
Each Indemnified Party hereby undertakes, and the Company hereby accepts its
undertaking, to repay any and all such amounts so advanced if it shall
ultimately be determined that such Indemnified Party is not entitled to be
indemnified therefor. If any such action, proceeding or investigation in which
an Indemnified Party is a party is also against the Company, the Company may, in
lieu of advancing the expenses of separate counsel for such Indemnified Party,
provide such Indemnified Party with legal representation by the same counsel who
represents the Company, provided such counsel is reasonably satisfactory to such
Indemnified Party, at no cost to such Indemnified Party; provided, however, that
if such counsel or counsel to the Indemnified Party shall determine that due to
the existence of actual or potential conflicts of interest between such
Indemnified Party and the Company such counsel is unable to represent both the
Indemnified Party and the Company, then the Indemnified Party shall be entitled
to use separate counsel of its own choice, and the Company shall promptly
advance its reasonable expenses of such separate counsel upon submission of
invoices therefor. Nothing herein shall prevent an Indemnified Party from using
separate counsel of its own choice at its own expense. The Company will be
liable for any settlement of any claim against an Indemnified Party made with
the Company's written consent, which consent shall not be unreasonably withheld.
D. In order to provide for just and equitable contribution if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification, then the
relative fault of the Company, on the one hand, and the Indemnified Parties, on
the other hand, in connection with the statements, acts or omissions which
resulted in the losses, claims, damages, liabilities and
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costs giving rise to the indemnification claim and other relevant equitable
considerations shall be considered; and further provided that in no event will
the Indemnified Parties' aggregate contribution for all losses, claims, damages,
liabilities and expenses with respect to which contribution is available
hereunder exceed the amount of fees actually received by the Indemnified Parties
pursuant to the Agreement. No person found liable for a fraudulent
misrepresentation shall be entitled to contribution hereunder from any person
who is not also found liable for such fraudulent misrepresentation.
E. In the event the Company and A&M seek judicial approval for the assumption of
the Agreement or authorization to enter into a new engagement agreement pursuant
to either of which A&M would continue to be engaged by the Company, the Company
shall promptly pay expenses reasonably incurred by the Indemnified Parties,
including reasonable attorneys' fees and expenses, in connection with any
motion, action or claim made either in support of or in opposition to any such
retention or authorization, whether in advance of or following any judicial
disposition of such motion, action or claim, promptly upon submission of
invoices therefor and regardless of whether such retention or authorization is
approved by any court. The Company will also promptly pay the Indemnified
Parties for any expenses reasonable incurred by them, including reasonable
attorneys' fees and expenses, in seeking payment of all amounts owed it under
the Agreement (or any new engagement agreement) whether through submission of a
fee application or in any other manner, without offset, recoupment or
counterclaim, whether as a secured claim, an administrative expense claim, an
unsecured claim, a prepetition claim or a postpetition claim.
X. Xxxxxxx termination of the Agreement nor termination of A&M's engagement nor
the filing of a petition under Chapter 7 or 11 of the United States Bankruptcy
Code (nor the conversion of an existing case to one under a different chapter)
shall affect these indemnification provisions, which shall hereafter remain
operative and in full force and effect.
G. The rights provided herein shall not be deemed exclusive of any other rights
to which the Indemnified Parties may be entitled under the certificate of
incorporation or bylaws of the Debtors, any other agreements, any vote of
stockholders or disinterested directors of the Debtors, any applicable law or
otherwise.
XXXXXXX & MARSAL, LLC
AMERICAN ITALIAN PASTA COMPANY
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
By: /s/ Xxxxxx Xxxxxxx Managing Director
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Lead Director
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