MANAGEMENT AGREEMENT
AGREEMENT made as of October _, 1996 by and between XXXXXXX-
XXXXXX, INC., a Delaware corporation (the "Corporation"), and AEA INVESTORS
INC., a Delaware corporation ("AEA").
WHEREAS, AEA rendered certain investment banking services to the
Corporation since the date of the acquisition by the Corporation's affiliate of
the stock or other equity interests and certain indebtedness of the entities
comprising the Xxxxxxx-Xxxxxx Group of AG Fur Prazisionsinstrumente
Greifensee, Switzerland and the financing related thereto;
WHEREAS, AEA also rendered advisory services to selected client companies,
and the Corporation desires to retain AEA to render advisory and consulting
services to it and AEA is willing to provide such services on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, it is mutually agreed as follows:
1. The Corporation hereby retains AEA to render advisory and consulting
services to the Corporation, and AEA hereby agrees to render such services,
for the period commencing on the date hereof and continuing so long as
AEA owns any securities of MT Investors Inc., a Delaware corporation. AEA shall
render such advisory and consulting services to the Corporation in connection
with such financial, management and other matters relating to the business
and operations of the Corporation, or any of its subsidiaries or affiliated
companies, as the Corporation's Board of Directors may from time to time
request.
2. As compensation for AEA's advisory and consulting services rendered
pursuant to Section 2 hereof, the Corporation will pay, and AEA will accept, so
long as this Agreement continues in effect, a fee at the rate of $1,000,000
per year payable quarterly in advance, on the first day of each calendar
quarter, commencing as of November 1, 1996. The parties hereto will also enter
into an Indemnification Agreement substantially in the form of Exhibit A
hereto (the "Indemnification Agreement").
(a) It is the understanding of the parties that AEA may be involved with
potential acquisitions, mergers, financing or other major transactions
involving the Corporation, in which case AEA shall be entitled to such
compensation, in addition to the annual fee provided above, as the Corporation
and AEA shall mutually agree.
(b) In the event that the Corporation employs any employee of AEA as an
officer of the Corporation or otherwise, and such employment involves a
substantial amount of such employee's time, the Corporation shall compensate
such employee at a reasonable rate to be agreed upon among such employee, the
Corporation and AEA, and the compensation payable to such employee by the
Corporation shall not reduce or affect in any way the fees payable to AEA
hereunder.
In addition to the aforementioned fees, the Corporation shall reimburse AEA
for its reasonable out-of-pocket costs and expenses incurred in connection with
the performance of its advisory and consulting services hereunder.
3. Any notice required to be given hereunder shall be in writing and shall
be deemed sufficient if delivered in person or mailed by certified mail as
follows: if to the Corporation, to it at its office at Xxxxxxx-Xxxxxx AG, Im
Langacher, XX-0000 Xxxxxxxxxx, Xxxxxxxxxxx or such other address as the
Corporation may hereafter designate for that purpose; and if to AEA, to it at
its office at Park Avenue Tower, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
or such other address as AEA may hereafter designate for that purpose.
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4. This Agreement, together with the Indemnification Agreement, constitutes
the entire agreement between the parties and supersedes all prior agreements and
understandings, both written and oral, with respect to the subject matter
hereof. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, including any
corporation into which the Corporation shall consolidate or merge or to which it
shall transfer substantially all of its assets. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed entirely within such state.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date and year first above written.
XXXXXXX-XXXXXX, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
AEA INVESTORS INC.
By:__________________________________
Name:________________________________
Title:_______________________________
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EXHIBIT A
INDEMNIFICATION AGREEMENT
AGREEMENT made as of October __, 1996 by and between XXXXXXX-XXXXXX,
INC., a Delaware corporation (the "Corporation") and AEA INVESTORS INC., a
Delaware corporation ("AEA").
Reference is made to the Management Agreement of even date herewith
by and between the Corporation and AEA.
As part of the consideration for the agreement of AEA to furnish its
services under the Management Agreement, the Corporation agrees to indemnify and
hold harmless AEA and its affiliates and the respective managing directors,
officers, directors, shareholders, employees and agents of, and persons
controlling, AEA or any of its affiliates within the meaning of either Section
15 of the Securities Act of 1933, as amended, or Section 20 of the Securities
Act of 1934, as amended, and each of their respective successors and assigns
(collectively, the "indemnified persons") from and against all claims,
liabilities, expenses, losses or damages (or actions in respect thereof) related
to or arising out of actions taken (or omitted to be taken) by AEA pursuant to
the terms of the Management Agreement, or AEA's role in connection therewith;
provided, however, that the Corporation shall not be responsible for any claims,
liabilities, expenses, losses and damages to the extent that it is finally
judicially determined that they result primarily from actions taken or omitted
to be taken by AEA in bad faith or due to AEA's gross negligence or willful
misconduct. If for any reason (other than the bad faith, gross negligence or
willful misconduct of AEA as provided above) the foregoing indemnity is
unavailable to AEA or insufficient to hold AEA harmless, then the Corporation
shall contribute to the amount paid or payable by AEA as a result of such claim,
liability, expense, loss or damage in such proportion as is appropriate to
reflect not only the relative benefits received by the Corporation on the one
hand and AEA on the other but also the relative fault of the Corporation and
AEA, as well as any relevant equitable considerations, subject to the
limitations that in any event AEA's aggregate contribution to all claims,
expenses, losses, liabilities and damages shall not exceed the amount of fees
actually received by AEA pursuant to the Management Agreement. Promptly after
receipt by AEA of notice of any complaint or the commencement of any action or
proceeding with respect to which indemnification may be sought against the
Corporation, AEA will notify the Corporation in writing of the receipt or
commencement thereof, but failure to notify the Corporation will relieve the
Corporation from any liability which it may have hereunder only if, and to the
extent that, such failure results in the forfeiture of substantial rights and
defenses, and will not in any event relieve the Corporation from any other
obligation to any indemnified person other than under this indemnification
agreement. The Corporation shall assume the defense of such action
(including payment of fees and disbursements of counsel) insofar as such action
shall relate to any alleged liability in respect of which indemnity may be
sought against the Company. AEA shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
disbursements of such counsel shall be at the expense of AEA unless employment
of such counsel has been specifically authorized by the Corporation in writing.
The Corporation shall pay the fees and expenses of one separate counsel for AEA
and any other indemnified persons if the named parties to any such action
(including any impleaded parties) include the Corporation (or any of the
directors of the Corporation) and AEA and (i) in the good faith judgment of AEA
the use of joint counsel would present such counsel with an actual or potential
conflict of interest, or (ii) AEA shall have been advised by counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the Corporation (or the director(s)). The
Corporation shall not be liable to indemnify any person for any settlement of
any claim or action effected without the Corporation's written consent, which
consent shall not be unreasonably withheld. In addition, the Corporation agrees
to reimburse AEA and each other indemnified person for all expenses (including
reasonable fees and disbursements of counsel if the Corporation does not assume
the defense of such action) as they are incurred by AEA, or any indemnified
person in connection with investigating, preparing or defending any such action
or claim. AEA shall have no liability to the Corporation or any other person in
connection with the services which they render pursuant to the Management
Agreement, except for AEA's bad faith, gross negligence or willful misconduct
judicially determined as aforesaid. The indemnification, contribution and
expense reimbursement obligation the Corporation has under this paragraph shall
be in addition to any liability the Corporation may otherwise have.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first written above.
XXXXXXX-XXXXXX, INC.
By:
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Name:
Title:
AEA INVESTORS INC.
By:
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Name:
Title:
