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EXHIBIT 8
Xxxxxxxxx & Company, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000 (000) 000-0000
CORPORATE FINANCE Fax (000) 000-0000
July 30, 1997
Xx. Xxxxxxxx X. Xxxxxxxxxx, XX
Chief Executive Officer
BUCYRUS INTERNATIONAL, INC.
0000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, XX 00000
Dear Xx. Xxxxxxxxxx:
This letter agreement (the "Agreement") confirms that Bucyrus
International, Inc. (the "Company") has engaged Jefferies & Company, Inc.
("Jefferies" or the "Financial Advisor") to act as exclusive financial advisor
to the Company in connection with the proposed acquisition of the Company (the
"Acquisition") by American Industrial Partners or another party (the
"Purchaser").
1. Retention. The Company hereby retains Jefferies as its exclusive
financial advisor in connection with the Acquisition.
2. Information on the Company. The Company recognizes and confirms that in
rendering services hereunder, the Financial Advisor has been, prior to the date
hereof, and hereinafter will be, using and relying on and assuming the accuracy
of, without independent verification, data, material and other information with
respect to the Company, furnished to the Financial Advisor by or on behalf of
the Company and their agents, counsel, employees and representatives (the
"Information").
The Company recognizes and confirms that the Financial Advisor: (a) will
use and rely primarily on the Information and on information available from
generally recognized public sources in performing the services contemplated by
this Agreement without having independently verified the same; (b) does not
assume responsibility for the accuracy or completeness of the Information and
such other information; (c) will not make an appraisal of any assets of the
Company or the Purchaser; and (d) retains the right to continue to perform due
diligence during the course of the engagement. The Company represents and
warrants that any prospectus, placement memorandum or similar disclosure
materials utilized by the Company in connection with the Acquisition will not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances in
which they were made, not false or misleading. The Financial Advisor agrees to
keep the Information confidential so long as it is and remains non-public,
unless disclosure is required by law or requested by any government, regulatory
or self-regulatory agency or body, and the Financial Advisor will not make use
thereof, except in connection with our services hereunder for the Company.
3. Use of Name. The Company agrees that any reference to the Financial
Advisor in any release, communication, or material distributed by the Company,
is subject to the Financial Advisor's prior written approval. If the Financial
Advisor resigns prior to the dissemination of any such release, communication or
material, no reference shall be made therein to the Financial Advisor despite
any prior written approval which may have been given therefor.
4. Use of Advice. Except as provided in Section 5(b) below, no advice
rendered by the Financial Advisor in connection with the services performed by
the Financial Advisor pursuant to this Agreement will be quoted by either party
hereto, nor will any such advice be referred to, in any report, document,
release or other
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communication, whether written or oral, prepared, issued or transmitted by such
party or any person or corporation controlling, controlled by or under common
control with such party or any director, officer, employee, agent or
representative of any such party, without the prior written authorization of
both parties hereto, except to the extent required by law (in which case the
appropriate party shall so advise the other in writing prior to such use and
shall consult with the other with respect to the form and timing of disclosure),
provided that the foregoing shall not prohibit appropriate internal
communication or reference with respect to such advice internally within such
parties.
5. Compensation. In full payment for services rendered and to be rendered
hereunder by Jefferies, the Company agrees to pay to Jefferies as follows:
(a) In consideration of the services rendered by Jefferies hereunder
as exclusive financial advisor in connection with the Acquisition, the
Company agrees to pay to Jefferies in cash, immediately upon execution of
this Agreement, $250,000 as a one-time retainer fee (the "Retainer").
(b) The Company agrees to pay Jefferies a fee of $250,000 in cash for
the fairness opinion issued in conjunction with the Acquisition
contemplated herein, payable immediately upon delivery of such fairness
opinion.
(c) In consideration of the services rendered by Jefferies hereunder
as exclusive financial advisor in connection with the Acquisition, the
Company agrees to pay to Jefferies in cash upon the successful consummation
of the Acquisition, $1,250,000 as a success fee (the "Success Fee").
(d) In addition to the compensation to be paid to Jefferies as
provided in Sections 5(a), 5(b) and 5(c) hereof, the Company shall pay to,
or on behalf of, Jefferies, promptly as billed, all out-of-pocket expenses
incurred by Jefferies in connection with its services to be rendered
hereunder (including, without limitation, the fees and disbursements of
Jefferies' counsel, travel and lodging expenses, word processing charges,
messenger and duplicating services, facsimile expenses and other customary
expenditures).
(e) Jefferies may resign at any time and the Company may terminate
Jefferies' services at any time, each by giving notice to the other. If
Jefferies resigns or the Company terminates Jefferies' services for any
reason, Jefferies and its counsel shall be entitled to receive all of the
amounts due pursuant to Sections 5(a), 5(b), 5(c) and 5(d) hereof up to and
including the effective date of such termination or resignation, as the
case may be. In addition, if Jefferies' services hereunder are terminated
by the Company, and the Company completes a transaction similar to the
Acquisition contemplated herein within one year of Jefferies being
terminated, then the Company shall pay Jefferies within five (5) days of
the closing of such transaction in cash the fees as outlined in Sections
5(a), 5(b) and 5(c) as applicable.
(f) No fee paid or payable to Xxxxxxxx or any of its affiliates shall
be credited against any other fee paid or payable to Jefferies or any of
its affiliates.
(6) Representations and Warranties. The Company represents and warrants to
Jefferies that this Agreement has been duly authorized, executed and delivered
by the Company, and, assuming the due execution by the Financial Advisor,
constitutes a legal, valid and binding agreement of the Company, enforceable
against the Company, in accordance with its terms. The Company represents that,
to the best of its knowledge, the Information will not, when delivered and at
the closing of the Acquisition, contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein in
light of the circumstances under which they were made not misleading. The
Company agrees to advise the Financial Advisor promptly of the occurrence of any
event or any other change prior to the closing known to it which results in the
Information containing any untrue statement of a material fact or omitting to
state any material fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading.
(7) Indemnity. In partial consideration of the services to be rendered
hereunder the Company agrees to indemnify Jefferies and certain other
Indemnified Persons in accordance with Schedule A attached hereto.
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(8) Survival of Certain Provisions. The indemnity and contribution
agreements contained in Section 7 and Schedule A to this Agreement, the
representations and warranties of the Company contained in Section 6 of this
Agreement, and the provisions of Section 5 of this Agreement shall remain
operative and in full force and effect regardless of (a) any investigation made
by or on behalf of the Financial Advisor, or by or on behalf of any affiliate of
the Financial Advisor or any person controlling either, (b) completion of the
Acquisition, (c) the resignation of the Financial Advisor or any termination of
the Financial Advisor's services or (d) any expiration or termination of this
Agreement, and shall be binding upon, and shall inure to the benefit of, any
successors, assigns, heirs and personal representatives of the Company, the
Financial Advisor, and the Indemnified Persons identified in Schedule A.
9. Notices Notice given pursuant to any of the provisions of this Agreement
shall be in writing and shall be mailed or delivered (a) if to the Company, at
the address set forth above, and (b) if to Jefferies, at the offices of
Jefferies at 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxxx X. Xxxxx, Executive Vice President and General Counsel.
10. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
11. Third Party Beneficiaries. This Agreement has been and is made solely
for the benefit of the Company, the Financial Advisor and the other Indemnified
Persons referred to in Schedule A hereof and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement.
12. Construction. This Agreement incorporates the entire understanding of
the parties and supersedes all previous agreements relating to the subject
matter hereof should they exist and shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of law.
13. Headings. The section headings in this Agreement have been inserted as
a matter of convenience of reference and are not part of this Agreement.
14. Press Announcements. At any time after the consummation or other public
announcement of the Acquisition, the Financial Advisor may place an announcement
in such newspapers and publications as it may choose, stating that the Financial
Advisor has acted as exclusive financial advisor to the Company in connection
with the Acquisition contemplated by this Agreement.
15. Amendment. This Agreement may not be modified or amended except in a
writing duly executed by the parties hereto.
16. Term. Except as provided herein, this Agreement shall run from the date
of this letter to a date of one year thereafter, unless extended by mutual
consent of the parties (the "Term").
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Please sign and return an original and one copy of this letter to the
undersigned to indicate your acceptance of the terms set forth herein, whereupon
this letter and your acceptance shall constitute a binding agreement between the
Company and Jefferies as of the date first above written.
Sincerely,
JEFFERIES & COMPANY, INC.
By: /s/ XXXXXX X. XXXXXXX, XX.
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Xxxxxx X. Xxxxxxx, Xx.
Executive Vice President
Accepted and Agreed:
BUCYRUS INTERNATIONAL, INC.
By: /s/ XXXXXXXX X. XXXXXXXXXX
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Xx. Xxxxxxxx X. Xxxxxxxxxx
Chief Executive Officer
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SCHEDULE A
July 30, 1997
JEFFERIES & COMPANY, INC.
00000 Xxxxx Xxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Ladies and Gentlemen:
This letter agreement is entered into pursuant to, and in order to induce
Jefferies & Company, Inc. ("Jefferies" or the "Financial Advisor") to enter
into, the engagement letter dated July 30, 1997 (the "Agreement") between
Bucyrus International, Inc. (the "Company") and Jefferies. Unless otherwise
noted, all capitalized terms used herein shall have the meanings set forth in
the Agreement.
Since Jefferies will be acting on behalf of the Company in connection with
the transactions contemplated by the Agreement, and as part of the consideration
for the agreement of Jefferies to furnish its services pursuant to such
Agreement, the Company agrees to indemnify and hold harmless Jefferies and its
affiliates and their officers, directors, partners, counsel, employees and
agents, and any other persons controlling Jefferies or any of its respective
affiliates within the meaning of either Section 15 of the Securities Act of 1933
or Section 20 of the Securities Exchange Act of 1934, and the respective agents,
employees, officers, directors, partners, counsel and shareholders of such
persons (Jefferies and each such other person being referred to as an
"Indemnified Person"), to the fullest extent lawful, from and against all
claims, liabilities, losses, damages and expenses (or actions in respect
thereof) related to or arising out of (i) actions taken or omitted to be taken
by the Company, its affiliates, employees or agents, (ii) actions taken or
omitted to be taken by any Indemnified Person (including acts or omissions
constituting ordinary negligence) pursuant to the terms of, or in connection
with services rendered pursuant to, the Agreement or any transaction or proposed
transaction contemplated thereby or any Indemnified Person's role in connection
therewith, provided, however, that the Company shall not be responsible for any
losses, claims, damages, liabilities or expenses of any Indemnified Person to
the extent that it is finally judicially determined that they result solely from
actions taken or omitted to be taken by such Indemnified Person in bad faith or
to be due primarily to such Indemnified Person's gross negligence, and (iii) any
untrue statement or alleged untrue statement of a material fact contained in the
Information, or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading.
Each Indemnified Person shall give prompt written notice to the Company
after the receipt by such Indemnified Person of any written notice of the
commencement of any action, suit or proceeding for which such Indemnified Person
will claim indemnification or contribution pursuant to this Agreement. The
Company shall have the right, exercisable by giving written notice to an
Indemnified Person within 10 business days after the receipt of written notice
from such Indemnified Person of such commencement, to assume, at its expense,
the defense of any such action, suit or proceeding; provided, however, that an
Indemnified Person shall have the right to employ counsel in any such action,
suit or proceeding, and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company fails to assume the defense of such action, suit or
proceeding or fails to employ separate counsel reasonably satisfactory to such
Indemnified Person in any such action, suit or proceeding; or (ii) the Company
and such Indemnified Person shall have been advised by counsel that there may be
one or more defenses available to such Indemnified Person which are in conflict
with, different from or additional to those available to the Company, any of its
affiliates, or another Indemnified Person, as the case may be (in which case, if
such Indemnified Person notifies the Company in writing that it elects to employ
separate counsel at the expense of the Company, the Company shall not have the
right to assume the defense of such action, suit or proceeding on behalf of such
Indemnified Person); it being understood, however, that the Company shall not,
in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (together with appropriate local
counsel) at any time acting for each Indemnified Person in any one jurisdiction.
The Company shall not settle or compromise or
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consent to the entry of any judgment in or otherwise seek to terminate any
pending or threatened action, claim, suit or proceeding in which any Indemnified
Person is or could be a party and as to which indemnification or contribution
could have been sought by such Indemnified Person hereunder (whether or not such
Indemnified Person is a party thereto), unless such Indemnified Person has given
its prior written consent or the settlement, compromise, consent or termination
includes an express unconditional release of such Indemnified Person,
satisfactory in form and substance to such Indemnified Person, from all losses,
claims, damages or liabilities arising out of such action, claim, suit or
proceeding.
If for any reason (other than the bad faith or gross negligence of an
Indemnified Person as provided above) the foregoing indemnity is unavailable to
an Indemnified Person or insufficient to hold an Indemnified Person harmless,
then the Company, to the fullest extent permitted by law, shall contribute to
the amount paid or payable by such Indemnified Person as a result of such
claims, liabilities, losses, damages or expenses in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by Jefferies on the other, from the transaction or proposed transaction
under the Agreement or, if allocation on that basis is not permitted under
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits received by the Company on the one hand and Jefferies on the
other, but also the relative fault of the Company and Jefferies, as well as any
relevant equitable considerations. Notwithstanding the provisions hereof, the
aggregate contribution of all Indemnified Persons to all claims, liabilities,
losses, damages and expenses shall not exceed the amount of fees actually
received by Jefferies pursuant to the Agreement. It is hereby further agreed
that the relative benefits to the Company on the one hand and Jefferies on the
other with respect to any transaction or proposed transaction contemplated by
the Agreement shall be deemed to be in the same proportion as (i) the total
value of the transaction bears to (ii) the fees paid to Jefferies with respect
to such transaction. The relative fault of the Company on the one hand and
Jefferies on the other with respect to the transaction shall be determined by
reference to, among other things, whether any untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by Jefferies and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. No Indemnified Person shall have any
liability to the Company or any other officer, director, employee or affiliate
thereof in connection with the services rendered pursuant to the Agreement
except for any liability for claims, liabilities, losses or damages finally
judicially determined to have resulted primarily from actions taken or omitted
to be taken by such Indemnified Person in bad faith or as a result of gross
negligence. The indemnity, contribution and expense reimbursement obligations
set forth herein (i) shall be in addition to any liability the Company may have
to any Indemnified Person at common law or otherwise, (ii) shall survive the
expiration of the Term, (iii) shall apply to any modification of Jefferies'
engagement and shall remain in full force and effect following the completion or
termination of the Agreement, (iv) shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of Jefferies or any
other Indemnified Person and (v) shall be binding on any successor or assign of
the Company and successors or assigns to all or substantially all of the
Company's business and assets.
In addition, the Company agrees to reimburse the Indemnified Persons for
all expenses (including fees and expenses of counsel) as they are incurred in
connection with investigating, preparing or defending any such action or claim,
whether or not in connection with litigation in which any Indemnified Person is
a named party. If any of Jefferies' personnel appears as witnesses, are deposed
or are otherwise involved in the defense of any action against Jefferies, the
Company or the Company's directors, the Company will pay Jefferies (i) with
respect to each day that one of Jefferies' professional personnel appears as a
witness or is deposed and/or (ii) with respect to each day that one of
Jefferies' professional personnel is involved in the preparation therefor, (a) a
fee of $2,000 per day for each such person with respect to each appearance as a
witness or for a deposition and (b) at a rate of $200 per hour with respect to
each hour of preparation for any such appearance and the Company will reimburse
Jefferies for all reasonable expenses incurred by Jefferies by reason of any of
its personnel being involved in any such action.
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Please sign and return an original and one copy of this letter to the
undersigned to indicate your acceptance of the terms set forth herein, whereupon
this letter and your acceptance shall constitute a binding agreement between the
Company and Jefferies as of the date of the Agreement.
Sincerely,
BUCYRUS INTERNATIONAL, INC.
By: /s/ XXXXXXXX X. XXXXXXXXXX
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Xxxxxxxx X. Xxxxxxxxxx
Chief Executive Officer
Accepted and Agreed:
JEFFERIES & COMPANY, INC.
By: /s/ XXXXXX X. XXXXXXX, XX.
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Xxxxxx X. Xxxxxxx, Xx.
Executive Vice President
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