Exhibit 10.15
ADVISORY AGREEMENT
This Advisory Agreement (this "Agreement") is made and entered into as of
December 21, 2000 by and between AMI Holdings, Inc. ("Holdings"), AMI Spinco,
Inc. (the "Company") and together with Holdings, the "Companies") and TBW LLC
("Advisor"). Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Agreement and Plan of Merger and
Recapitalization dated December 5, 2000 (the "Recapitalization Agreement") by
and among Japan Energy Corporation ("JEC"), GA-TEK Inc., Holdings, AMI Merger
Company, Inc., the Company, FP-McCartney, LLC ("FP-McCartney") and Advisor.
WHEREAS, the Companies desire to retain Advisor and Advisor desires to
perform for the Companies and/or their subsidiaries certain services;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Term. This Agreement shall be in effect for an initial term of ten
(10) years commencing on the date hereof (the "Term"), and shall be
automatically extended thereafter on a year to year basis unless the Companies
provide or Advisor provides written notice of its or their desire to terminate
this Agreement to the other party 90 days prior to the expiration of the Term
or any extension thereof.
2. Services. Advisor shall perform or cause to be performed such
services for the Companies and/or their subsidiaries as directed by such
Company's board of directors, which may include, without limitation, the
following:
(a) executive and management services;
(b) identification, support and analysis of acquisitions and
dispositions by such Company or its subsidiaries;
(c) support and analysis of financing alternatives, including,
without limitation, in connection with acquisitions, capital expenditures and
refinancing of existing indebtedness;
(d) finance functions, including assistance in the preparation of
financial projections, and monitoring of compliance with financing agreements;
(e) human resource functions, including searching and hiring of
executives; and
(f) other services for such Company or its subsidiaries upon which
such Company's board of directors and Advisor agree.
Notwithstanding any provision in this Agreement to the contrary, each of
the parties hereto acknowledges and agrees that there are no minimum levels of
services required to be provided to the Companies pursuant to this Agreement.
3. Advisory Fee. Subject to the terms and conditions herein, payment for
services rendered by Advisor and/or its affiliates incurred in connection with
the performance of services pursuant to this Agreement shall be billed on an
hourly basis for actual services rendered (it being agreed that no minimum
services levels shall be required), plus reasonable out-of-pocket expenses
incurred by Advisor and/or its affiliates commencing with the calendar quarter
ended March 31, 2001; provided that, if the Companies and their subsidiaries are
in compliance with the financial covenants contained in that certain Credit
Agreement dated as of December 21, 2000 (the "Credit Agreement") between the
Companies and AMI Merger Company, Inc., on one hand, and the Lenders named
therein together with Credit Suisse First Boston, as Administrative Agent and
Collateral Agent, on the other hand, in lieu of the aforementioned fees and
expenses, Advisor and/or its affiliates shall have the right to collect an
annual advisory fee (the "Advisory Fee"), the amount of which shall be the
greater of (i) $1,000,000 per annum (the "Flat Fee") or (ii) 0.3% per annum of
the annual consolidated revenue of the Companies and their subsidiaries
(determined on a trailing twelve month basis) (the "Percentage Fee"), plus
reasonable out-of-pocket expenses of Advisor and/or its affiliates.
(a) Adjustment. In the event that the Advisory Fee paid in any given
year pursuant to this Section 3 exceeds the greater of the Flat Fee or the
Percentage Fee, the Advisor shall promptly repay to the Companies the difference
between the greater of the Flat Fee or the Percentage Fee and the amount of the
Advisory Fee actually paid by the Companies during that year. In the event that
the amount of the Advisory Fee paid by the Companies to the Advisor in any given
year is less than the greater of the Flat Fee or the Percentage Fee, the
Companies shall promptly pay the difference between the amount of Advisory Fee
actually paid to the Advisor and the greater of the Flat Fee or the Percentage
Fee.
(b) Advisory Fees Paid to the Other Advisor. Notwithstanding anything
in this Section 3 to the contrary, the Advisory Fee paid to the Advisor
hereunder shall be same amount as the Advisory Fee paid to Francisco Partners
GP, LLC ("Francisco") pursuant to that certain Advisory Agreement dated as of
the date hereof between the Companies and Francisco, as the same may be amended,
replaced or modified from time to time (the "Francisco Agreement").
(c) Consent to Payment of Advisory Fee. No Advisory Fee may be paid
in any given year without the prior written consent of Francisco, such consent
to be in Francisco's reasonable discretion. The Companies acknowledge that they
will not pay any Advisory Fee without having received a copy of the written
consent of Francisco. Notwithstanding the foregoing sentence, in any year that
the Advisor does not collect the Advisory Fee for any reason it shall
nonetheless remain entitled to collect hourly fees and expense reimbursements as
described above.
(d) Collection of Fee. Subject to the limitation described in Section
3(c) above, the decision whether to collect any Advisory Fee in a given year
shall be in the Advisor's sole discretion. The Advisor's decision not to collect
an Advisory Fee in any given
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year shall not be construed to be a waiver of the Advisor's right to collect an
Advisory Fee in any future year.
(e) Fee Calculation. All fees and expenses described in this
paragraph 3 shall be payable to Advisor or its designees on a quarterly basis
in advance (based on the parties' estimate of the amount of fees and expenses
which shall become due and payable for such quarter) commencing as of the date
hereof. For the purposes of this Section 3, compliance with the financial
covenants contained in the Credit Agreement shall be determined on a pro forma
basis and shall include the deduction of the Advisory Fee, the deduction of any
other fees and expenses that may be payable to the Advisor hereunder and the
deduction of any other fees and expenses that may be payable to the Advisor
hereunder and the deduction of any fees that may be payable pursuant to the
Francisco Agreement.
4. Transaction Fees. The Companies hereby agree to pay to Advisor
or its designee on the Closing Date (as defined in the Recapitalization
Agreement) upon the consummation of the transactions contemplated by the
Recapitalization Agreement a fee for services rendered in connection with the
structuring of the financing for the transactions contemplated by the
Recapitalization Agreement (the "Transactions") and certain other management
services in the amount of Six Million Dollars ($6,000,000), plus reasonable
out-of-pocket expenses. Such fees shall be payable to Advisor or its designees
by wire transfer to an account designated in writing by the Advisor.
5. Personnel. Advisor shall provide and devote to the performance
of this Agreement such partners, employees and agents of Advisor as Advisor
shall deem appropriate to the furnishing of the services required.
6. Liability. Neither Advisor nor any other Indemnitee (as defined
in Section 7 below) shall be liable to any of the Companies or any of their
subsidiaries or affiliates for any loss, liability, damage or expense arising
out of or in connection with the performance of services contemplated by this
Agreement, unless such loss, liability, damage or expense shall be proven to
result directly from gross negligence, willful misconduct or bad faith on the
part of an Indemnitee acting within the scope of such person's employment or
authority. Advisor makes no representations or warranties, express or implied,
in respect of the services to be provided by Advisor or any of the other
Indemnitees. Except as Advisor may otherwise agree in writing after the date
hereof: (i) Advisor shall have the right to, and shall have no duty (contractual
or otherwise) not to, directly or indirectly: (A) engage in the same or similar
business activities or lines of business as any of the Companies or any of their
subsidiaries, including those competing with any of the Companies or any of
their subsidiaries and (B) do business with any client or customer of any of the
Companies or any of their subsidiaries; (ii) neither Advisor nor any officer,
director, employee, partner, affiliate or associated entity thereof shall be
liable to any of the Companies or any of their subsidiaries or affiliates for
breach of any duty (contractual or otherwise) by reason of any such activities
of or of such person's participation therein; and (iii) in the event that
Advisor acquires knowledge of a potential transaction or matter that may be a
corporate opportunity for the Companies or any of their subsidiaries, on the one
hand, and Advisor, on the other hand, or any other person, Advisor shall have no
duty (contractual or otherwise) to communicate or present such corporate
opportunity to the Companies or any of their subsidiaries and, notwithstanding
any provision of this Agreement to the contrary, shall not be liable to the
Companies or any of their affiliates for breach of any duty (contractual or
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otherwise) by reasons of the fact that Advisor directly or indirectly pursues
or acquires such opportunity for itself, directs such opportunity to another
person, or does not present such opportunity to the Companies. In no event will
any of the parties hereto be liable to any other party hereto for any indirect,
special, incidental or consequential damages, including lost profits or
savings, whether or not such damages are foreseeable, or in respect of any
liabilities relating to any third party claims (whether based in contract, tort
or otherwise) other than the Claims (as defined in Section 7 below) relating to
the service to be provided by Advisor hereunder.
7. Indemnity. Each of the Companies and their subsidiaries shall
defend, indemnify and hold harmless each of Advisor, its affiliates, members,
partners, employees and agents (collectively, the "Indemnitees") from and
against any and all loss, liability, damage or expenses arising from any claim
by any person with respect to, or in any way related to, the performance of
services contemplated by this Agreement (including attorneys' fees)
(collectively, "Claims") resulting from any act or omission of any of the
Indemnitees, other than for Claims which shall be proven to be the direct
result of gross negligence, bad faith or willful misconduct by an Indemnitee.
Each of the Companies and their subsidiaries shall defend at its own cost and
expense any and all suits or actions (just or unjust) which may be brought
against such Company, any of its subsidiaries or any of the Indemnitees or in
which any of the Indemnitees may be impleaded with others upon any Claims, or
upon any matter, directly or indirectly, related to or arising out of this
Agreement or the performance hereof by any of the Indemnitees, except that if
such damage shall be proven to be the direct result of gross negligence, bad
faith or willful misconduct by an Indemnitee, then Advisor shall reimburse the
Companies and their subsidiaries for the costs of defense and other costs
incurred by the Companies and their subsidiaries.
8. Notices. All notices hereunder shall be in writing and shall be
delivered personally or mailed by United States mail, postage prepaid,
addressed to the parties as follows:
To the Companies as appropriate:
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AMI Holdings, Inc.
c/o AMI Spinco, Inc.
00000 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: 858.521.3777
To Advisor:
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TBW LLC
c/o Citicorp Venture Capital Ltd.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxx 0
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, XX
Xxxxx X. Xxxx
Facsimile: 212.888.2940
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9. Assignment. The Companies may not assign any obligations hereunder to
any other party without the prior written consent of Advisor (which consent
shall not be unreasonably withheld), and Advisor may not assign any Advisor
obligations hereunder to any other party without the prior written consent of
the Companies (which consent shall not be unreasonably withheld); provided that
Advisor may, without consent of the Companies, assign its rights and
obligations under this Agreement to any Permitted Transferee (as such term is
defined in the Shareholders Agreement dated December 21, 2000 among the
Company, FP-McCartney, LLC, the Advisor, JEC and certain other persons named
therein).
10. Successors. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and assigns of the parties.
11. Counterparts. This Agreement may be executed and delivered by each
party hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original and all of which taken together shall
constitute but one and the same agreement.
12. Entire Agreement; Modification; Governing Law. The terms and
conditions hereof constitute the entire agreement between the parties hereto
with respect to the subject matter of this Agreement and supersede all previous
communications, either oral or written, representations or warranties of any
kind whatsoever, except as expressly set forth herein. No modifications of this
Agreement nor waiver of the terms or conditions thereof shall be binding upon
either party unless approved in writing by an authorized representative of such
party. This Agreement may not be amended in a manner materially adverse to the
Company and the Company may not waive any material provision of this Agreement
that is for its benefit unless a corresponding amendment is made to the
Francisco Agreement or Francisco's consent is obtained. All issues concerning
this Agreement shall be governed by and construed in accordance with the laws of
the State of New York, without giving effect to any choice of law or conflict of
law provisions or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the law of any jurisdiction
other than the State of New York.
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IN WITNESS WHEREOF, the parties have executed this Advisory Agreement as
of the date first written above.
AMI HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Chief Financial Officer and Vice President
AMI SPINCO, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Chief Financial Officer and Vice President
TBW LLC
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
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Title: VP - CITICORP VENTURE CAPITAL LTD
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