EXHIBIT 10.10
THE JORDAN COMPANY, L.P. MANAGEMENT CONSULTING AGREEMENT
THIS MANAGEMENT CONSULTING AGREEMENT ("Agreement"), is executed as of
November 3, 2004 by and among The Jordan Company, L.P. (the "Consultant"), TAL
International Group, Inc., a Delaware corporation (the "Company"), and its
direct or indirect subsidiaries, including those party hereto (each are referred
to as a "Subsidiary" and collectively as the "Subsidiaries").
W I T N E S S E T H:
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WHEREAS, the Consultant has and/or has access to personnel who are
highly skilled in the field of rendering advice to businesses such as 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, 2009, 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. (a) In recognition of the services rendered through the date hereof by
the Consultant in connection with the evaluation, negotiation, financing and
closing of the Stock Purchase Agreement, dated July 10, 2004, between TA Leasing
Holding Co., Inc. and Xxxxxx & Company Limited, as amended, and related
financing, the Company shall pay Consultant a fee of $14,000,000.
(b) In addition to the foregoing, in recognition of the services
rendered through the date hereof by the Consultant for the evaluation,
negotiation, financing and closing of the Stock Purchase Agreement, dated July
10, 2004, between TA Leasing Holding Co., Inc. and Xxxxxx & Company Limited, as
amended (the "SPA"), and related financing, the Company shall pay all reasonable
and documented out-of-pocket costs and expenses incurred by Consultant for
services provided by the entities listed on Exhibit I in connection with such
evaluation, negotiation, financing and closing, promptly after submission of the
appropriate invoices. In addition, the Company shall reimburse Consultant for
any private aircraft, travel, meals and lodging expenses incurred by Consultant
in connection with such evaluation, negotiation, financing and closing and
thereafter in connection with the SPA and related financing, up to $850,000 in
the aggregate, promptly after submission of the appropriate invoices.
3. (a) Subject to Section 4, for services to be rendered, the Company shall
pay quarterly to the Advisor a consulting services fee equal to (i) 60% of the
first $1,250,000 of the Base Amount (as defined below) plus (ii) the Advisor's
Pro Rata Portion (as defined below) of any Base Amount in excess of $1,250,000.
Such fee will be paid quarterly in arrears on each Payment Date (as defined in
the Credit Agreement dated as of November 3, 2004, among Transamerica Leasing,
Inc., Trans Ocean Ltd., Trans Ocean Container Corporation, the Lenders party
thereto and Fortis Bank (Nederland) N.V. (the "Senior Credit Agreement"),
starting with a payment in respect of the quarter ended March 31, 2005.
(b) For purposes of this Agreement the following terms shall have the
corresponding meanings:
(i) "Base Amount" shall mean an amount equal to 2.5% of EBITDA
(as defined in that certain Senior Subordinated Credit Agreement,
dated as of November 3, 2004, by and among the Company and the lenders
named therein) for the most recently completed and reported fiscal
quarter of the Company and its Subsidiaries on a consolidated basis.
(ii) "Common Stock" shall mean the Common Stock, par value $.001
per share of the Company.
(iii) "Pro Rata Portion" shall mean the fraction obtained by
dividing (x) the number of shares of Common Stock owned by the
Resolute Investors on the date of payment of the consulting fee under
this Section 3 by (y) the number of shares of Common Stock owned by
the Resolute Investors plus the number of shares of Common Stock owned
by the Seacon Investors on the date of payment of the consulting fee
under this Section 3.
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(iv) "Resolute Investors" shall mean The Resolute Fund, L.P., The
Resolute Fund Singapore PV, L.P., The Resolute Fund Netherlands PV I,
L.P., The Resolute Fund Netherlands PV II, L.P., The Resolute Fund
NQP, L.P., JZ Equity Partners PLC, Fairholme Partners, L.P., Fairholme
Ventures II, LLC, Fairholme Holdings, Ltd., Edgewater Private Equity
Fund III, L.P., Edgewater Private Equity IV, L.P., and their
respective affiliates.
(v) "Seacon Investors" shall mean Seacon Holdings Limited and its
affiliates.
4. Notwithstanding the foregoing, the Company shall not be required to pay
the fees under Sections 2 or 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 including,
without limitation, the Senior Credit Agreement, (b) if the Company or any of
its subsidiaries 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 and such payments have not been made
within applicable cure periods, or has not paid or accrued 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 with
respect to its preference shares, if any or (c) if for any other reason payment
of the monitoring fee set forth in Section 1 of the Transaction Fee Agreement
dated as of the date hereof, by and between Seacon Holdings Limited and the
Company and its subsidiaries is prohibited under any credit, stock or other
financing agreement of the Company. 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 and its Subsidiaries are no longer prohibited from
making such payments and when the Company has become current with respect to
such principal or interest payments, and has become current with respect to such
dividends and has made such redemptions with respect to such preferred shares,
if any. Any payment required hereunder which is not paid when due shall bear
interest at the rate of five percent (5%) per annum. This Section 4 will not, in
any event, restrict or limit the Company's obligations under Sections 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, 2009 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 thirty (30) days' prior written
notice from the Company to the Consultant at any time after (a) substantially
all of the shares or substantially all of the assets of the Company or all of
its Subsidiaries are sold to an entity which is not an Affiliate (as defined in
the Shareholders Agreement, dated the date hereof, between the Company and the
other parties thereto) of the Resolute Investors or the Seacon Investors, (b)
the Company is merged or consolidated into another entity unaffiliated with the
Consultant and/or the Seacon Investors and the Company is not the survivor or
resulting company of such transaction, (c) the Company consummates a "Public
Offering" (as defined in the Shareholders Agreement dated as of the date hereof,
by and among the Company and the
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stockholders of the Company party thereto) for gross proceeds of at least $50
million, (d) the Resolute Investors own less than five percent (5%) of the
outstanding Common Stock.
6. The Consultant shall have no liability to the Company for breach of this
Agreement 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 achieve 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. The Company's and any
its direct or indirect Subsidiaries' sole remedy for any claim for breach 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, to the extent it is able, on
behalf of its direct and indirect Subsidiaries that the Consultant, the Resolute
Fund, L.P., JZ Equity Partners PLC, or any affiliates of any of the foregoing
(collectively, the "Jordan Affiliates") and their respective portfolio
companies, shareholders, members, 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, members, 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, members, 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.
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 and the other agreements entered into on the date
hereof in connection with this Agreement supersede all prior agreements between
the parties with respect to the subject matter thereof (including the letter
agreement dated September 16, 2004, by and among The Resolute Fund, L.P., TMC
Holdings, Inc. and Xxxxxx & Company Limited and the letter agreement dated
September 16, 2004, by and between The Resolute Fund, L.P. and Xxxxxx & Company
Limited) and constitute a complete and exclusive statement of the terms of the
agreements among the parties with respect to the subject matter thereof.
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(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, or in the case of Subsequent Subsidiaries
that are not direct or indirect Subsidiaries of the Company to the extent it is
able, 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) 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, CONSTRUED, APPLIED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH OF
THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF
THIS AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD
NOT BE MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY
TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE ENTITLED
TO SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE. THE CHOICE OF
FORUM SET FORTH IN THIS SECTION 10(i) SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT OF ANY JUDGMENT OF A NEW YORK FEDERAL OR STATE COURT OR THE TAKING
OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SUCH A JUDGMENT IN ANY OTHER
APPROPRIATE JURISDICTION.
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(j) IN THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION,
PROCEEDING OR OTHER LEGAL ACTION IN CONNECTION WITH OR RELATING TO THIS
AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN
OR THEREIN, THE PARTIES TO THIS AGREEMENT HEREBY (1) AGREE UNDER ALL
CIRCUMSTANCES ABSOLUTELY AND IRREVOCABLY TO INSTITUTE ANY LITIGATION, PROCEEDING
OR OTHER LEGAL ACTION IN A COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE
SOUTHERN DISTRICT OF NEW YORK, WHETHER A STATE OR FEDERAL COURT; (2) AGREE THAT
IN THE EVENT OF ANY SUCH LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL
CONSENT AND SUBMIT TO THE PERSONAL JURISDICTION OF ANY SUCH COURT DESCRIBED IN
CLAUSE (1) OF THIS SECTION AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE
WITH THE RULES AND STATUTES GOVERNING SERVICE OF PROCESS (IT BEING UNDERSTOOD
THAT NOTHING IN THIS SECTION SHALL BE DEEMED TO PREVENT ANY PARTY FROM SEEKING
TO REMOVE ANY ACTION TO A FEDERAL COURT IN THE SOUTHERN DISTRICT OF NEW YORK;
(3) AGREE TO WAIVE TO THE FULL EXTENT PERMITTED BY LAW ANY OBJECTION THAT THEY
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR
ACTION IN ANY SUCH COURT OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS
BROUGHT IN ANY INCONVENIENT FORUM; (4) AGREE, AFTER CONSULTATION WITH COUNSEL,
TO WAIVE ANY RIGHTS TO A JURY TRIAL TO RESOLVE ANY DISPUTES OR CLAIMS RELATING
TO THIS AGREEMENT; (5) AGREE TO DESIGNATE, APPOINT AND DIRECT AN AUTHORIZED
AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS AND DOCUMENTS IN
ANY LEGAL PROCEEDING IN THE SOUTHERN DISTRICT OF NEW YORK; (6) AGREE TO PROVIDE
THE OTHER PARTIES TO THIS AGREEMENT WITH THE NAME, ADDRESS AND FACSIMILE NUMBER
OF SUCH AGENT; (7) AGREE AS AN ALTERNATIVE METHOD OF SERVICE TO SERVICE OF
PROCESS IN ANY LEGAL PROCEEDING BY MAILING OF COPIES THEREOF TO SUCH PARTY AT
ITS ADDRESS SET FORTH HEREIN FOR COMMUNICATIONS TO SUCH PARTY; (8) AGREE THAT
ANY SERVICE MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT; AND (9) AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY
PARTY TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. TO THE
EXTENT PERMITTED BY LAW IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY
RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN,
AND AGREE TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH
WAIVER.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
THE JORDAN COMPANY, L.P.
By: The Jordan Company GP, LLC,
its General Partner
By: /s/ A. Xxxxxxx Xxxxxx, Xx.
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Name: A. Xxxxxxx Xxxxxx, Xx.
Title: Senior Principal
TAL INTERNATIONAL GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Authorized Officer
