NEW SUBSIDIARY CONSULTING AGREEMENT
THIS NEW SUBSIDIARY CONSULTING AGREEMENT ("Agreement"), is executed
as of the 25th day of July 1997 by and among JORDAN INDUSTRIES, INC., an
Illinois corporation (hereinafter referred to as the "Consultant"), JII, Inc.,
a Delaware corporation and each of the other parties a signatory hereto
(hereinafter collectively referred to as the "Company").
W I T N E S E T H:
- - - - - - - - -
WHEREAS, the Consultant has and/or has access to personnel who are
highly skilled in the field of rendering advice to businesses and financial
advice 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 business affairs. 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, 2007,
unless extended, or sooner terminated, as provided in Section 6 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. Consultant shall be obligated to present to the Company all
acquisition, business and investment opportunities identified by the
Consultant that relate to manufacturing, assembly, distribution or marketing
of products and services in the telecommunications and data communications
industry, and will not permitted to purse such opportunities or present such
opportunities to third parties unless the Company determines not to pursue
such opportunities or consents thereto, provided that this obligation will
apply only to Consultant, and will not apply to any stockholders of affiliates
of the Consultant, including The Jordan Company. This Agreement will not
prohibit, and Consultant's stockholders and affiliates will not be prohibited
from, pursuing such opportunities or offering them to third parties without
the Company's consent.
3. Subject to Section 5 hereof, the Company shall pay to the
Consultant a consulting services fee of one percent (1%) of the net sales of
the Company and its subsidiaries, without duplication, payable quarterly in
arrears on the March 31, June 30, September 30 and December 31 of each year,
starting with a pro rata payment on September 30, 1997 for the period from the
date hereof through September 30, 1997. 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.
4. 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 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 such supporting data as the Company shall reasonably require.
5. Notwithstanding the foregoing, the Company shall not be required
to pay the fees under Section 3, (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 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 5 will
not, in any event, restrict or limit the Company's obligations under Sections
4, 9 and 10, which will be absolute and not subject to set-off.
6. This Agreement shall be automatically renewed for successive
one-year terms starting December 31, 2007 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, the Agreement will not
be terminated as a result of any Company ceasing to be a subsidiary of Jordan
Industries, Inc. for financial reporting or other purposes.
7. The Consultant shall have no liability to the Company on account
of (a) 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 (b) 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
(c) the failure of any acquisition, divestiture, financing or business plan to
meet the financial, operating, or other expectations of the Company or any of
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.
8. Notwithstanding anything contained in this Agreement to the
contrary, but subject to Section 2, the Company agrees and acknowledges for
itself and on behalf of its direct and indirect subsidiaries that the
Consultant, TJC Management Corporation, The Jordan Company, MCIT PLC,
Jordan/Zalaznick Capital Company, Leucadia National Corporation or any
affiliates of any of the foregoing (collectively, 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.
9. 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 subsidiaries.
10. 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.
11. (a) 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 either party hereto without
the consent of the other party, 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 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.
(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) Except as provided by that certain Termination Agreement, of
even date herewith, by and among certain of the parties hereto, this Agreement
sets forth the entire understanding of the Company and the Consultant, and
supersedes all prior agreements, arrangements and communications, whether oral
or written, with respect to the subject matter hereof.
(i) The Consultant and its personnel shall, for purposes of this
Agreement, be independent contractors with respect to the Company.
(j) This Agreement shall be governed by the internal laws (and not
the law of conflicts) of the State of Illinois.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
JORDAN INDUSTRIES, INC.
By:
------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Senior Vice President
TJC MANAGEMENT CORPORATION
By:
------------------------------------
Name: G. Xxxxxx Xxxxxx
Secretary
JII, INC.
JI PROPERTIES, INC.
J.I. FINANCE COMPANY
CAPE CRAFTSMAN, INC.
WELCOME HOME, INC.
HOME AGAIN STORES, INC.
SPL HOLDINGS, INC.
VALMARK INDUSTRIES, INC.
PAMCO PRINTED TAPE & LABEL CO., INC.
SALES PROMOTION ASSOCIATES, INC.
SEABOARD FOLDING BOX CORPORATION
BEEMAK PLASTICS, INC.
JII/SALES PROMOTION ASSOCIATES, INC.
THE OLD IMPERIAL ELECTRIC COMPANY
THE OLD XXXXX MOTORS COMPANY
OLD GEAR RESEARCH, INC.
DACCO, INCORPORATED
DETROIT TRANSMISSION PRODUCTS CO.
DACCO/DETROIT OF OHIO, INC.
ABC TRANSMISSION PARTS
WAREHOUSE, INC.
DACCO/DETROIT OF MINNESOTA, INC
DACCO/DETROIT OF INDIANA, INC.
DACCO/DETROIT OF
NORTH CAROLINA, INC.
DACCO/DETROIT OF MEMPHIS, INC.
DACCO/DETROIT OF ALABAMA, INC.
DACCO/DETROIT OF MICHIGAN, INC.
DACCO/DETROIT OF TEXAS, INC.
DACCO/DETROIT OF WEST VIRGINIA, INC.
BORG MANUFACTURING
NASHVILLE TRANSMISSION PARTS, INC.
DACCO/DETROIT OF FLORIDA, INC.
DACCO/DETROIT OF COLORADO, INC.
DACCO/DETROIT OF MISSOURI, INC.
DACCO/DETROIT OF ARIZONA, INC.
DACCO/DETROIT OF NEBRASKA, INC.
DACCO/DETROIT OF NEW JERSEY, INC.
DACCO/DETROIT OF OKLAHOMA, INC.
DACCO/DETROIT OF
SOUTH CAROLINA, INC.
DACCO INTERNATIONAL, INC.
XXXXXXX PRECISION PRODUCTS, INC.
SATE-LITE MANUFACTURING COMPANY
RIVERSIDE BOOK AND BIBLE HOUSE,
INCORPORATED
By:
------------------------------------
Name: Xxxxxx X. Xxxxx
Authorized Officer
Exhibit 10.19
NEW SUBSIDIARY CONSULTING AGREEMENT
THIS NEW SUBSIDIARY CONSULTING AGREEMENT ("Agreement"), is executed
as of the 25th day of July 1997 by and among JORDAN INDUSTRIES, INC., an
Illinois corporation (hereinafter referred to as the "Consultant"), JORDAN
TELECOMMUNICATION PRODUCTS, INC., a Delaware corporation and each of the other
parties a signatory hereto (hereinafter collectively referred to as the
"Company").
W I T N E S E T H:
- - - - - - - - -
WHEREAS, the Consultant has and/or has access to personnel who are
highly skilled in the field of rendering advice to businesses and financial
advice 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 business affairs. 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, 2007,
unless extended, or sooner terminated, as provided in Section 6 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. Consultant shall be obligated to present to the Company all
acquisition, business and investment opportunities identified by the
Consultant that relate to manufacturing, assembly, distribution or marketing
of products and services in the telecommunications and data communications
industry, and will not permitted to purse such opportunities or present such
opportunities to third parties unless the Company determines not to pursue
such opportunities or consents thereto, provided that this obligation will
apply only to Consultant, and will not apply to any stockholders of affiliates
of the Consultant, including The Jordan Company. This Agreement will not
prohibit, and Consultant's stockholders and affiliates will not be prohibited
from, pursuing such opportunities or offering them to third parties without
the Company's consent.
3. Subject to Section 5 hereof, the Company shall pay to the
Consultant a consulting services fee of one percent (1%) of the net sales of
the Company and its subsidiaries, without duplication, payable quarterly in
arrears on the March 31, June 30, September 30 and December 31 of each year,
starting with a pro rata payment on September 30, 1997 for the period from the
date hereof through September 30, 1997. 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.
4. 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 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 such supporting data as the Company shall reasonably require.
5. Notwithstanding the foregoing, the Company shall not be required
to pay the fees under Section 3, (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 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 5 will
not, in any event, restrict or limit the Company's obligations under Sections
4, 9 and 10, which will be absolute and not subject to set-off.
6. This Agreement shall be automatically renewed for successive
one-year terms starting December 31, 2007 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, the Agreement will not
be terminated as a result of any Company ceasing to be a subsidiary of Jordan
Industries, Inc. for financial reporting or other purposes.
7. The Consultant shall have no liability to the Company on account
of (a) 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 (b) 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
(c) the failure of any acquisition, divestiture, financing or business plan to
meet the financial, operating, or other expectations of the Company or any of
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.
8. Notwithstanding anything contained in this Agreement to the
contrary, but subject to Section 2, the Company agrees and acknowledges for
itself and on behalf of its direct and indirect subsidiaries that the
Consultant TJC Management Corporation, The Jordan Company, MCIT PLC,
Jordan/Zalaznick Capital Company, Leucadia National Corporation or any
affiliates of any of the foregoing (collectively, 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.
9. 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 subsidiaries.
10. 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.
11. (a) 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 either party hereto without
the consent of the other party, 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 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.
(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) Except as provided by that certain Termination Agreement, of
even date herewith, by and among certain of the parties hereto, this Agreement
sets forth the entire understanding of the Company and the Consultant, and
supersedes all prior agreements, arrangements and communications, whether oral
or written, with respect to the subject matter hereof.
(i) 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Senior Vice President
JORDAN TELECOMMUNICATION
PRODUCTS, INC.
JTP INDUSTRIES, INC.
AIM ELECTRONICS CORPORATION
OLD JORDAN TELECOMMUNICATIONS
PRODUCT GROUP, INC.
JORDAN TELECOMMUNICATIONS PRODUCT
GROUP EUROPE, INC.
VITELEC ELECTRONICS LIMITED
XXXXXXX COMPONENTS, INC.
NEW VIEWSONICS, INC.
SHANGHAI VIEWSONICS ELECTRONICS CO.,
LTD.
ADAPT COMMUNICATION SUPPLY CO. S. FL.
INC.
NORTHERN TECHNOLOGIES HOLDINGS,
INC.
NORTHERN TECHNOLOGIES, INC.
NEW DURA-LINE CORPORATION
DIVERSIFIED WIRE & CABLE, INC.
BOND HOLDINGS, INC.
NEW CAMBRIDGE PRODUCTS CORPORATION
By: /s/Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Authorized Officer
NEW SUBSIDIARY CONSULTING AGREEMENT
THIS NEW SUBSIDIARY CONSULTING AGREEMENT ("Agreement"), is executed
as of the 25th day of July 1997 by and among JORDAN INDUSTRIES, INC., an
Illinois corporation (hereinafter referred to as the "Consultant"), MOTORS AND
GEARS HOLDINGS, INC., a Delaware corporation and each of the other parties a
signatory hereto (hereinafter collectively referred to as the "Company").
W I T N E S E T H:
- - - - - - - - -
WHEREAS, the Consultant has and/or has access to personnel who are
highly skilled in the field of rendering advice to businesses and financial
advice 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 business affairs. 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, 2007,
unless extended, or sooner terminated, as provided in Section 6 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. Consultant shall be obligated to present to the Company all
acquisition, business and investment opportunities identified by the
Consultant that related to manufacturing, assembly, distribution or marketing
of products and services in the motors and gears industry, and will not
permitted to purse such opportunities or present such opportunities to third
parties unless the Company determines not to pursue such opportunities or
consents thereto, provided that this obligation will apply only to Consultant,
and will not apply to any stockholders of affiliates of the Consultant,
including The Jordan Company. This Agreement will not prohibit, and
Consultant's stockholders and affiliates will not be prohibited from, pursuing
such opportunities or offering them to third parties without the Company's
consent.
3. Subject to Section 5 hereof, the Company shall pay to the
Consultant a consulting services fee of one percent (1%) of the net sales of
the Company and its subsidiaries, without duplication, payable quarterly in
arrears on the March 31, June 30, September 30 and December 31 of each year,
starting with a pro rata payment on September 30, 1997 for the period from the
date hereof through September 30, 1997. 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.
4. 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 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 such supporting data as the Company shall reasonably require.
5. Notwithstanding the foregoing, the Company shall not be required
to pay the fees under Section 3, (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 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 5 will
not, in any event, restrict or limit the Company's obligations under Sections
4, 9 and 10, which will be absolute and not subject to set-off.
6. This Agreement shall be automatically renewed for successive
one-year terms starting December 31, 2007 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, the Agreement will not
be terminated as a result of any Company ceasing to be a subsidiary of Jordan
Industries, Inc. for financial reporting or other purposes.
7. The Consultant shall have no liability to the Company on account
of (a) 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 (b) 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
(c) the failure of any acquisition, divestiture, financing or business plan to
meet the financial, operating, or other expectations of the Company or any of
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.
8. Notwithstanding anything contained in this Agreement to the
contrary, but subject to Section 2, the Company agrees and acknowledges for
itself and on behalf of its direct and indirect subsidiaries that the
Consultant, TJC Management Corporation, The Jordan Company, MCIT PLC,
Jordan/Zalaznick Capital Company, Leucadia National Corporation or any
affiliates of any of the foregoing (collectively, 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.
9. 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 subsidiaries.
10. 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.
11. (a) 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 either party hereto without
the consent of the other party, 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 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.
(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) Except as provided by that certain Termination Agreement, of
even date herewith, by and among certain of the parties hereto, this Agreement
sets forth the entire understanding of the Company and the Consultant, and
supersedes all prior agreements, arrangements and communications, whether oral
or written, with respect to the subject matter hereof.
(i) The Consultant and its personnel shall, for purposes of this
Agreement, be independent contractors with respect to the Company.
(j) This Agreement shall be governed by the internal laws (and not
the law of conflicts) of the State of Illinois.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
JORDAN INDUSTRIES, INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Senior Vice President
THE IMPERIAL ELECTRIC COMPANY
THE XXXXX MOTORS COMPANY
GEAR RESEARCH, INC.
MOTORS AND GEARS HOLDINGS, INC.
MOTORS AND GEARS, INC.
MOTORS AND GEARS INDUSTRIES, INC.
XXXXXX-XXXXX INDUSTRIES, INC.
FIR GROUP HOLDINGS, INC.
MOTORS AND GEARS AMSTERDAM B.V.
MOTORS AND GEARS HOLDINGS
AMSTERDAM B.V.
FIR GROUP HOLDINGS ITALIA, S.r.l.
CONSTRUGIONI INTALIANE MOTORI
ELETTRICI, S.p.a.
SELIOSISTERNI, S.p.a.
FIR ELECTROMECCANICA, S.p.a.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxx
Authorized Officer
