KANDERS & COMPANY, INC.
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
January 1, 2002
Armor Holdings, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Dear Sirs:
We are pleased to set forth in this agreement (the "Agreement") the terms
of the retention of Kanders & Company, Inc. (the "Consultant") by Armor
Holdings, Inc. and its affiliates and subsidiaries (collectively, the
"Company").
1. The Consultant will act as the non-exclusive consultant to the Company,
and will, subject to the provisions hereinafter set forth, render investment
banking and financial advisory services to the Company, including assisting in
the development and structuring of corporate debt and equity financings,
including introductions to sources of capital; and provide guidance and advice
to the Company as to (i) potential targets for mergers and acquisitions, joint
ventures, and strategic alliances, including facilitating the negotiations in
connection with such transactions; and (ii) capital and operational
restructuring. In connection with the Consultant's activities on the Company's
behalf, the Consultant will familiarize itself with the business, operations,
properties and financial condition of the Company. Nothing contained in this
Agreement shall require the Consultant to render a fairness opinion to the
Company.
2. In consideration for the investment banking and financial advisory
services to be rendered by Consultant to the Company under this Agreement, the
Company shall pay Consultant fees, mutually agreed upon, for such investment
banking and financial advisory services during the term of this Agreement on a
transaction by transaction basis. The Company may make advance payments to
Consultant related to the investment banking and financial advisory services to
be rendered by Consultant to the Company under this Agreement to help defray
expenses incurred by Consultant in performing such investment banking and
financial advisory services. Any advances made by the Company to Consultant
shall be deducted from the mutually agreed upon fees associated with each
completed transaction. The aggregate amount of fees shall not exceed $1,575,000
in any calendar year during the term of this Agreement.
3. In connection with the Consultant's activities on the Company's behalf,
the Company will cooperate with the Consultant and will furnish the Consultant
with all information and data concerning the Company which the Consultant
reasonably believes appropriate to its assignment (all such information so
furnished being the "Information") and will provide the
Armor Holdings, Inc.
January 1, 2002
Page 2
Consultant with access to the Company's officers, directors, employees,
independent accountants and legal counsel. The Company recognizes and confirms
that the Consultant (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
same, (b) does not assume responsibility for the accuracy or completeness of the
Information and such other information and (c) will not make an independent
appraisal of any of the Company's assets. The Information to be furnished by the
Company, when delivered, will be true and correct in all material respects and
will not contain any material misstatement of fact or omit to state any material
fact necessary to make the statements contained therein not misleading. The
Company will promptly notify the Consultant if it learns of any material
inaccuracy or misstatement in, or material omission from, any information
theretofore delivered to the Consultant. The Consultant agrees to keep
confidential and not disclose, without the Company's prior written consent, any
Information delivered to the Consultant by the Company that the Company has
identified in writing as not publicly available and confidential.
4. In addition to the fees described in paragraph 2 herein, the Company
agrees to reimburse the Consultant, upon request from time to time, for
reasonable out-of-pocket expenses incurred (including, but not limited to,
expenses for office space, an executive assistant, furniture and equipment,
travel and entertainment, reasonable fees and disbursements of counsel, and of
other consultants retained by the Consultant).
5. The Company agrees to the indemnification and other agreements set forth
in the Indemnification Agreement attached hereto, the provisions of which are
incorporated herein by reference and shall survive the termination of this
Agreement.
6. (a) This Agreement shall commence on the date hereof and continue for a
period of five years.
(b) The Company shall have the right to terminate this Agreement upon
giving Consultant 90 days prior written notice of such termination, in which
event the Company's payment obligations to Consultant under this Agreement shall
continue during such 90-day period, and the Company will pay all accrued and
unpaid amounts due Consultant under this Agreement to Consultant, including,
without limitation, amounts under paragraphs 2 and 4 hereof, on the effective
date of such termination.
(c) In the event of a material breach by Consultant of this Agreement
and the expiration of a 10-business day cure period after written notice from
the Company to Consultant of such breach, the Company shall have the right to
terminate this Agreement upon a failure of the Consultant to have cured such
breach upon expiration of such 10-business day cure period, in which event the
Company's payment obligations to Consultant under this Agreement shall cease to
accrue as of the effective date of such termination, and the Company will pay
all accrued and unpaid amounts due Consultant under this Agreement to
Consultant, including,
Armor Holdings, Inc.
January 1, 2002
Page 3
without limitation, amounts under paragraphs 2 and 4 hereof, within 10 business
days of the effective date of such termination.
7. This Agreement will be governed by, and construed in accordance with,
the laws of the State of New York applicable to agreements made and to be fully
performed therein.
8. The benefits of this Agreement shall inure to the parties hereto and
their respective successors and assigns, and the obligations and liabilities
assumed in this Agreement by the parties hereto shall be binding upon their
respective successors and assigns.
9. For the convenience of the parties hereto, any number of counterparts of
this Agreement may be executed by the parties hereto. Each such counterpart
shall be, and shall be deemed to be, an original instrument, but all such
counterparts taken together shall constitute one and the same Agreement. This
Agreement may not be modified or amended except in writing signed by the parties
hereto.
If the foregoing correctly sets forth our Agreement, please sign the
enclosed copy of this letter in the space provided and return it to us.
Very truly yours,
KANDERS & COMPANY, INC.
By:
----------------------------------
Xxxxxx X. Xxxxxxx
President
AGREED TO AND ACCEPTED:
Armor Holdings, Inc. hereby accepts the terms and provisions of, and
agrees to be bound by the terms and provisions of the foregoing
letter, as of this 1st day of January, 2002.
ARMOR HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
ARMOR HOLDINGS, INC.
0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
January 1, 2002
Kanders & Company, Inc.
Two Soundview Drive
Greenwich, Connecticut 06830
Gentlemen:
In connection with the engagement of Kanders & Company, Inc. (the
"Consultant") to advise and assist us with the matters set forth in the
Agreement dated the date hereof between us and the Consultant, we hereby agree
to indemnify and hold harmless the Consultant, its affiliated companies, and
each of the Consultant's and such affiliated companies' respective officers,
directors, agents, employees and controlling persons (within the meaning of each
of Section 20 of the Securities Exchange Act of 1934 and Section 15 of the
Securities Act of 1933) (each of the foregoing, including the Consultant, being
hereinafter referred to as an "Indemnified Person") to the fullest extent
permitted by law from and against any and all losses, claims, damages, expenses
(including reasonable fees and disbursements of counsel), actions (including
shareholder derivative actions), proceedings or investigations (whether formal
or informal), or threats thereof (all of the foregoing being hereinafter
referred to as "Liabilities"), based upon, relating to or arising out of such
engagement or any Indemnified Person's role therein; provided, however, that we
shall not be liable under this paragraph: (a) for any amount paid in settlement
of claims without our consent, which consent shall not be unreasonably withheld,
or (b) to the extent that it is finally judicially determined that such
Liabilities resulted primarily from the willful misconduct, bad faith or gross
negligence of the Indemnified Person seeking indemnification. In connection with
our obligation to indemnify for expenses as set forth above, we further agree to
reimburse each Indemnified Person for all such expenses (including reasonable
fees and disbursements of counsel) as they are incurred by such Indemnified
Person; provided, however, that if an Indemnified Person is reimbursed hereunder
for any expenses, such reimbursement of expenses shall be refunded to the extent
it is finally judicially determined that the Liabilities in question resulted
primarily from the willful misconduct, bad faith or gross negligence of such
Indemnified Person.
Promptly after the Consultant receives notice of the commencement of any
action or other proceeding in respect of which indemnification or reimbursement
may be sought hereunder, the Consultant will notify us thereof; but the omission
so to notify us shall not relieve us from any obligation hereunder unless, and
only to the extent that, such omission results in our forfeiture of substantive
rights or defenses. If any such action or other proceeding shall be brought
against any Indemnified Person, we shall, upon written notice given reasonably
Armor Holdings, Inc.
January 1, 2002
Page 2
promptly following your notice to us of such action or proceeding, be entitled
to assume the defense thereof at our expense with counsel chosen by us and
reasonably satisfactory to the Indemnified Person; provided, however, that any
Indemnified Person may at its own expense retain separate counsel to participate
in such defense. Notwithstanding the foregoing, such Indemnified Person shall
have the right to employ separate counsel at our expense and to control its own
defense of such action or proceeding if (i) there are or may be legal defenses
available to such Indemnified Person or to other Indemnified Persons that are
different from or additional to those available to us, or (ii) in the reasonable
opinion of counsel to such Indemnified Person, a conflict or potential conflict
exists between us and such Indemnified Person that would make such separate
representation advisable; provided, however, that in no event shall we be
required to pay fees and expenses under this indemnity for more than one firm of
attorneys in any jurisdiction in any one legal action or group of related legal
actions.
If the indemnification or reimbursement provided for hereunder is finally
judicially determined by a court of competent jurisdiction to be unavailable to
an Indemnified Person in respect of any Liabilities (other than as a consequence
of a final judicial determination of willful misconduct, bad faith or gross
negligence of such Indemnified person), then we agree, in lieu of indemnifying
such Indemnified Person, to contribute to the amount paid or payable by such
Indemnified Person as a result of such Liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received, or sought to be received,
by us on the one hand and by such Indemnified Person on the other hand from the
transactions in connection with which the Consultant has been engaged or (ii) if
(but only if) the allocation provided in clause (i) of this sentence is not
permitted by applicable law, in such a proportion as is appropriate to reflect
not only the relative benefits referred to in such clause (i) but also the
relative fault of us and of such Indemnified Person; provided, however, that in
no event shall the aggregate amount contributed by the Indemnified Person exceed
the amount of fees actually received by the Consultant pursuant to this
engagement. The relative benefits received or sought to be received by us on the
one hand and by the Consultant on the other shall be deemed to be in the same
proportion as (a) the total value of the transactions with respect to which the
Consultant has been engaged bears to (b) the fees paid or payable to the
Consultant with respect to such engagement.
The rights accorded to Indemnified Persons hereunder shall be in addition
to any rights that any Indemnified Person may have at common law, by separate
agreement or otherwise.
This agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
entirely in such state. This agreement may not be amended or otherwise modified
except by an instrument signed by both the Consultant and us. If any provision
hereof shall be determined to be invalid or unenforceable in any respect, such
determination shall not effect such provision in any other respect or any other
provision of this agreement, which shall remain in full force and effect.
Armor Holdings, Inc.
January 1, 2002
Page 3
The foregoing indemnification agreement shall remain in effect
indefinitely, notwithstanding any termination of the Consultant's engagement.
Very truly yours,
ARMOR HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED TO:
KANDERS & COMPANY, INC.
By:
------------------------------------
Xxxxxx X. Xxxxxxx
President
