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EXHIBIT 10(e)
FEE AGREEMENT
This FEE AGREEMENT, dated as of May 6, 1997 (the "Agreement"), is
entered into between GST Acquisition Corp., a Delaware corporation ("GST") and
Greenwich Street Capital Partners, Inc., a Delaware corporation ("Greenwich").
W I T N E S S E T H:
WHEREAS, Greenwich II LLC, a Delaware limited liability company
("G-II"), GST and Telex Communications Group, Inc., a Delaware Corporation
("Holdings"), have entered into a Recapitalization Agreement and Plan of Merger,
dated as of March 4, 1997, as amended (the "Recapitalization Agreement"),
providing for the recapitalization of Holdings (the "Recapitalization"), to be
effected in part through a merger of GST with and into Holdings (the "Merger"),
subject to the terms and conditions set forth therein;
WHEREAS, immediately following the Recapitalization, it is anticipated
that Telex Communications, Inc., a Delaware corporation and a wholly-owned
subsidiary of Holdings ("Telex"), will assume, among other things, the
obligations of Holdings (as successor to GST following the Merger) under (i) the
Indenture dated as of May 6, 1997 between GST and Manufacturers and Traders
Trust Company (the "Trustee"), as trustee (the "Indenture"), as supplemented by
the First Supplemental Indenture, dated as of May 6, 1997, among Holdings, Telex
and the Trustee and (ii) the Senior Credit Facility (as defined in the
Indenture), in consideration for Holdings (a) making funds available to Telex to
allow Telex to complete the tender offer for certain existing notes of Telex and
(b) making the Senior Credit Facility available to Telex from and after the date
of the Recapitalization;
WHEREAS, it was determined that the success of Holdings and Telex
depends in large part on Telex's senior management and its ability to retain
other highly qualified management personnel;
WHEREAS, on the date hereof, GST and Greenwich have entered into an
Indemnification Agreement (the "Indemnification Agreement") and, following the
Recapitalization, each of Greenwich and Telex intend to enter into a Consulting
Agreement (the "Consulting Agreement");
WHEREAS, at the request of GST, Greenwich has performed and will
perform for the benefit of GST, Holding, Telex and the other direct and indirect
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subsidiaries of Holding (collectively, the "Company Group") certain financial,
management advisory and other services in connection with the transactions
contemplated by the Recapitalization Agreement and the financing arrangements
relating to such transactions, including but not limited to, services performed
and to be performed in connection with (i) the Company Group officials,
structuring and imple xxxxxxx a management organization designed to meet the
requirements of the Company Group upon consummation of the Recapitalization,
together with related compensation arrangements, (ii) the preparation,
negotiation, execution and delivery of the Recapitalization Agreement and other
agreements, instruments and documents relating to the transactions contemplated
by the Recapitalization Agreement, (iii) the preparation, negotiation, execution
and delivery of commitment, fee and engagement letters, credit agreements,
guarantees, pledge agreements and other security agreements, offerings documents
and other agreements, instruments and documents, relating to the financings to
be entered into by the Company Group at the closing, (iv) any and all expenses
incurred with the structuring, implementation and consummation of the foregoing
transactions and (v) the retention of legal, accounting, environmental,
insurance, employee benefits, financial and other advisors and consultants in
connection with the foregoing (such services being referred to collectively as
the "Services"), but not including services to be performed by Greenwich
pursuant to the Consulting Agreement; and
NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth and the mutual benefits to be derived herefrom,
the parties hereto hereby agree as follows:
1. Fee. At and subject to the closing under the Recapitalization
Agreement, the Company or its successor pursuant to the Merger shall pay to
Greenwich on behalf of all members of the Company Group as compensation for the
Services a fee of $2,500,000.00 payable in immediately available funds.
Greenwich shall deliver to the Company a fee statement as set forth in Exhibit A
hereto reasonably allocating the fee among the various Services performed on or
prior to the date hereof; provided that the fee shall not be subject to
reduction or challenge by GST, or to any refund by Greenwich based upon any
challenge by GST or any third party to the allocation.
2. Payment of Expenses. (a) The Company Group shall reimburse Greenwich
for such travel and other out-of-pocket expenses ("Expenses") as may be incurred
by Greenwich and its employees, agents and advisors in the course or on account
of rendering of the Services.
(b) GST shall pay the fees and expenses of any legal, accounting or
other professional advisors engaged by Greenwich to advise or assist Greenwich
or the Company Group in connection with (i) the Services, (ii) the formation of
G-II, the
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investment by the investors in G-II, the investment by G-II, or the status of
G-II or any of the investors in G-II, as an indirect shareholder of GST or (iii)
the management or operation of the Company Group.
3. Independent Contractor Status. The parties agree that Greenwich
shall perform services hereunder as an independent contractor, retaining control
over and responsibility for its own operations and personnel. Neither Greenwich
nor any of its employees or agents shall, solely by virtue of this Agreement or
the arrangements hereunder, be considered employees or agents of any other party
hereto or any member of the Company Group nor shall any of them have authority
to contract in the name of any such person, except as expressly agreed to in
writing by such person.
4. Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage pre-paid, (c)
sent by next day or overnight mail or delivery or (d) sent by telecopy or
telegram, as follows:
(i) If to the Company Group, to:
Telex Communications Group, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn.: Xxxx X. Xxxxxxxxx, Esq.
or to such other person or address as the Company Group shall furnish to
Greenwich in writing; and
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(ii) If to Greenwich, to:
Greenwich Street Capital Partners, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxx
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other person or address as Greenwich shall furnish to the Company
Group in writing.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery, on the day
after such delivery, (x) if by certified or registered mail, on the fifth
business day after the mailing thereof, (y) if by next-day or overnight mail
delivery, on the day delivered, or (z) if by telecopy or telegram, on the day on
which such telecopy or telegram was sent, provided that a copy is also sent by
certified or registered mail.
5. Entire Agreement. This Agreement and the Indemnification Agreement,
dated as of May 6, 1997, between GST and Greenwich, contain the complete and
entire understanding and agreement of each party hereto with respect to the
subject matter hereof and supersede all prior and contemporaneous
understandings, conditions and agreements, oral or written, express or implied,
in respect of the subject matter hereof.
6. Headings. The headings contained in this Agreement are for purposes
of convenience only and shall not affect the meaning or interpretation of this
Agreement.
7. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
8. Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors
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and assigns, provided that no party hereto may assign any of its rights or
obligations under this Agreement without the express written consent of each
other party hereto. By operation of merger, this Agreement shall be binding upon
and inure to the benefit of the surviving entity of the Merger or any other
merger. This Agreement is not intended to confer any right or remedy hereunder
upon any person other than the parties to this Agreement and their respective
successors and permitted assigns.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAW OF THE STATE OF NEW
YORK, REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS
OF LAWS.
10. Amendment; Waivers. No amendment, modification, supplement or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party against whom
enforcement of the amendment, modification, supplement, discharge or waiver is
sought, and acknowledged by the other party. Any such waiver shall constitute a
waiver only with respect to the specific matter described in such writing and
shall in no way impair the rights of the party granting such waiver in any other
respect or at any other time. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity or otherwise.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
GST ACQUISITION CORP.
By:_____________________________________
Name: Xxxxxxxxx X. Vanden Beukel
Title: Vice President and Secretary
GREENWICH STREET CAPITAL PARTNERS, INC.
By:_____________________________________
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
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Exhibit A
Greenwich Street Capital Partners, Inc.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
May 6, 1997
Gentlemen:
Pursuant to Section 1 of the Fee Agreement, dated as of ______, __,
1997 (the "Fee Agreement"), between Telex Communication Group, Inc., as
successor to GST Acquisition Corp. following the Recapitalization, and Greenwich
Street Capital Partners, Inc., set out below is our allocation of our fee among
the Services we have performed under the Fee Agreement. Capitalized terms used
herein without definition have the meaning given to such terms in the Fee
Agreement.
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Fee Allocation
FOR SERVICES AND ADVICE rendered in
connection with:
1. Structuring and implementing, in consultation
with Company Group officials, a management
organization designed to meet the requirements
of the Company Group upon consummation of the
Recapitalization, together with related
compensation arrangements . . . . . . . . . . --------------
2. Preparation, negotiation, execution and
delivery of the RecapitalizationAgreement and other
agreements, instruments and documents, relating to
the transactions contemplated by the Recap-
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italization Agreement ................................. --------------
3. Preparation, negotiation, execution and delivery of
commitment, fee and engagement letters, credit
agreements, guarantees, pledge agreements and other
security agreements, and other agreements,
instruments and documents, relating to the financings
to be entered into (or assumed by) Holding and Telex
or its affiliates on or following the Recapitalization
and the Closing under the Recapitalization
Agreement ............................................. --------------
$ 2,500,000.00
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