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EXHIBIT 10.51
INTERIM MANAGEMENT AGREEMENT
INTERIM MANAGEMENT AGREEMENT, dated as of January 30, 1998,
between The Cerplex Group, Inc., a Delaware corporation ("Cerplex"), and Aurora
Electronics, Inc., a Delaware corporation ("Aurora").
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as
of January 30, 1998 (the "Merger Agreement"), between Cerplex, Aurora and Xxxxx
Acquisition Corp., a Delaware corporation and a newly-formed subsidiary of
Aurora ("Sub"), Sub will merge with and into Cerplex (the "Merger"), with the
result that Cerplex will become a wholly-owned subsidiary of Aurora; and
WHEREAS, Xxxxxx X. XxXxxxxx ("McTavish") has been designated
the Chairman and Chief Executive Officer of Aurora and, following the
consummation of the Merger, will also be the Chairman and Chief Executive
Officer of Cerplex; and
WHEREAS, the Merger Agreement provides that the consummation
of the Merger is subject to certain conditions; and
WHEREAS, Cerplex and Aurora desire to make certain
arrangements regarding the joint management of Cerplex and Aurora during the
period (the "Interim Period") from the Effective Date (as defined below)
through the date of consummation of the Merger;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereby agree as follows:
1. For purposes of this Agreement, the "Effective Date"
shall mean the date on which any waiting period applicable to the consummation
of the Merger under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, shall have expired or been terminated, and no action shall have
been instituted by the Department of Justice or Federal Trade Commission, as of
such date, challenging or seeking to enjoin the consummation of this
transaction, which action shall have not been withdrawn or terminated.
2. Cerplex agrees to implement as of the Effective Date
an interim organization chart mutually acceptable to the parties.
3. (a) Xxxxxxx X. Xxxxx ("Xxxxx") shall continue as
Chairman of the Board of Directors of Cerplex and shall have such duties set
forth in the By-laws of Cerplex in effect on the date
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hereof and shall report directly to the Board of Directors of Cerplex.
(b) On the Effective Date, Xxxxxxx X. Xxxxxxx
("Xxxxxxx") shall resign as Chief Executive Officer of Cerplex and shall work
with Cerplex as a consultant. In that capacity, Xxxxxxx shall report directly
to the Chief Executive Officer of Cerplex.
(c) On the Effective Date, McTavish shall be
appointed and shall serve as Chief Executive Officer of Cerplex and shall
report directly to the Board of Directors of Cerplex. During the Interim
Period, McTavish shall be furnished notice of and be entitled to attend all
meetings of the Board of Directors of Cerplex.
4. Cerplex shall reimburse Aurora for the costs incurred
by Aurora in making Aurora's employees other than McTavish available to Cerplex
during the Interim Period in fulfillment of the purposes of this Agreement.
Such reimbursement shall be computed pro rata based upon the fraction of the
Aurora employees' business time devoted to Cerplex under this Agreement. Such
reimbursement shall be calculated as follows: (i) Aurora employee's hourly rate
(computed as annual salary divided by 2000 hours), plus (ii) fringe benefits
charged at a rate to be determined, multiplied by (iii) the number of hours
worked for Cerplex. Reimbursement by Cerplex to Aurora shall be made not later
than the fifteenth day of each calendar month for the preceding month based
upon appropriate documentation to be provided by Aurora not later than the
fifth business day each calendar month. All such reimbursements shall be made
pursuant to a plan formulated by McTavish and subject to review by Xxxxx and
the Cerplex Board of Directors from time to time. Cerplex shall reimburse
Aurora for McTavish's salary during the Interim Period pro rata based upon time
spent on Cerplex matters, such amount to be paid on the fifteenth day of each
month.
5. Cerplex shall indemnify and hold harmless Aurora,
McTavish, and those other Aurora employees who render services to Cerplex
during the Interim Period under this Agreement from and against any claims or
liabilities asserted against them relating to their services to Cerplex
hereunder (and Cerplex hereby forever releases Aurora and such persons from any
claims by or liabilities to Cerplex arising from or relating to such services),
provided that (i) such claims or liabilities did not result from acts or
omissions (x) not in good faith or (y) which involve intentional misconduct or
a knowing violation of law and (ii) such services were rendered in a manner
reasonably believed to be in or not opposed to the best interests of Cerplex.
This obligation of Cerplex shall survive the termination of this Agreement.
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6. During the Interim Period, McTavish and those other
Aurora employees made available to Cerplex pursuant to this Agreement shall use
their best efforts to (i) avoid doing anything to the competitive disadvantage
of Cerplex vis-a-vis Aurora and (ii) not use to the advantage of Aurora any
confidential information of Cerplex obtained while serving in these capacities.
The parties hereto acknowledge that, in the event the Merger Agreement is
terminated, their obligations with respect to confidential information of
Cerplex or Aurora (as the case may be) shall be governed by Section 7.01 of the
Merger Agreement.
7. During the Interim Period, Cerplex shall be managed
in accordance with Sections 2 and 3 above, subject to the direction of
Cerplex's Board of Directors. To the extent that it does not conflict with the
terms of this Agreement, the Engagement Letter, dated as of June 30, 1997, as
amended, between Cerplex and Nightingale & Associates, LLC, shall continue in
full force and effect during the Interim Period.
8. During the Interim Period, Aurora shall continue to
be managed by its executives, subject to the direction of Aurora's Board of
Directors.
9. Aurora and Cerplex each recognize that their
respective companies are marginally competitive with each other and that some
of the services offered by of them overlap with services offered by the other
and are thus potentially detrimental to the other company. Accordingly, Aurora
and Cerplex agree that during the Interim Period, neither company will
undertake a major change of market strategy or product offering to the
detriment of the other without first disclosing and discussing such changes
with the other company. In addition, in order to facilitate coordination of
the activities of Cerplex and Aurora during the Interim Period, McTavish shall
use his reasonable best efforts to keep Xxxxx reasonably informed of Aurora's
continuing marketing activities.
10. This Agreement shall terminate upon the earlier to
occur of (a) the consummation of the Merger, or (b) the termination of the
Merger Agreement as contemplated therein, except that the provisions of
Sections 4 and 5 hereof shall survive any such termination.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the date first above written.
AURORA ELECTRONICS, INC.
By: /s/ XXX X. XXXXXX
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Name: Xxx X. Xxxxxx
Title: Chairman
THE CERPLEX GROUP, INC.
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: Chairman
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