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Exhibit 10.18
CONSULTING AGREEMENT
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THIS CONSULTING AGREEMENT (the "Agreement") is made as of this 17th day
of May, 1994, by and between Argo-Tech Corporation, a Delaware corporation (the
"Company") and Vestar Capital Partners, Inc., a Delaware corporation
("Vestar").
WHEREAS, Vestar, by and through its officers and employees, has expertise
in the area of financial and corporate consulting and other matters relating
to the ongoing business of the Company; and
WHEREAS, the Company desires to avail itself, for the term of this
Agreement, of the expertise of Vestar in the aforesaid areas, in which the
Company acknowledges the expertise of Vestar;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants and conditions herein set forth, the parties hereto agree as follows:
1. CONSULTING SERVICES. Vestar hereby agrees that, during the term of
this Agreement, it shall render to the Company, by and through such of its
officers or employees as Vestar, in its sole discretion, shall designate from
time to time, financial and corporate consulting services in relation to the
day-to-day affairs of the Company as reasonably requested by the Company;
provided, however, that the reasonableness of the amount of time and the nature
of the consulting services requested by the Company shall be determined with a
view to the nature of Vestar's expertise and the compensation provided to
Vestar hereunder.
2. FEES. In consideration of the consulting services to be provided to
the Company hereunder, Vestar will receive (i) an initial fee of $250,000
payable on July 1,1994 and (ii) thereafter, a consulting fee of $87,250 per
annum payable semi-annually in advance beginning January 1, 1995 and increasing
proportionately with fuel pump sales increases over the immediately preceding
fiscal year, with such increases not to exceed $12,500 per annum.
3. REIMBURSEMENTS. In addition to the fees to be paid to Vestar
hereunder, the Company shall, at the direction of Vestar, pay directly or
reimburse Vestar for any of its reasonable out-of-pocket expenses incurred in
connection with the services provided hereunder.
4. INDEMNIFICATION. The Company will indemnify and hold harmless Vestar
and its partners, employees, agents, representatives and affiliates (each being
and "Indemnified Party") from and against any and all losses, claims, damages
and liabilities, joint or several, to which such Indemnified Party may become
subject under any applicable federal or state law, any claim made by any third
party or otherwise, relating to or arising out of the consulting services
contemplated by this Agreement or the engagement of Vestar pursuant to, and the
performance by Vestar of the consulting services contemplated by, this
Agreement, and the Company will reimburse any Indemnified Party for all
reasonable costs
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and expenses (including reasonable attorneys' fees and expenses) as they are
incurred in connection with the investigation of, preparation for or defense of
any pending or threatening claim, or any action or proceeding arising
therefrom, whether or not such Indemnified Party is a party thereto. The
Company will not be liable under the foregoing indemnification provision to the
extent that any loss, claim, damage, liability, cost or expense is determined
by a court in a final judgment from which no further appeal may be taken, to
have resulted primarily from the gross negligence or willful misconduct of
Vestar.
5. TERM. The term of this Agreement shall begin on July 1, 1994 and
continue until December 31, 2000 (the "Initial Term"). Such term shall be
renewed automatically for additional one-year terms thereafter unless Vestar or
the Company shall give notice in writing within 90 days, but not later than 30
days, prior to the expiration of the Initial Term or of any one-year renewal
thereof of its desire to terminate this Agreement. The provisions of Paragraphs
2 (to the extent any fee has not been paid prior to the termination hereof), 3,
4, 6 and 7 shall survive the termination of this Agreement.
6. PERMISSIBLE ACTIVITIES. Subject to all applicable provisions of
Delaware law that impose fiduciary duties upon Vestar or its partners or
affiliates, nothing herein shall in any way preclude Vestar, its partners or
affiliates from engaging in any business activities or from performing services
for its or their own account or for the account of others, including companies
that may be in competition with the business conducted by the Company.
7. GENERAL.
(a) No amendment or waiver of any provision of this Agreement, or
consent to any departure by either party from any such provision, shall in any
event be effective unless the same shall be in writing and signed by the
parties to this Agreement and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) Any and all notices hereunder shall, in the absence of receipted
hand delivery, be deemed duly given when mailed, if the same shall be sent by
registered or certified mail, return receipt requested, and the mailing date
shall be deemed the date from which all time periods pertaining to a date of
notice shall run. Notices shall be addressed to the parties at the following
addresses:
If to Vestar:
Vestar Capital Partners, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTENTION: Xxxxxx X. X'Xxxxxxx
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With a copy to:
Xxxxxxxx & Xxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
ATTENTION: Xxxx X. Xxxxx, Esquire
If to the Company:
Argo-Tech Corporation
00000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
ATTENTION: Secretary
With a copy to:
Xxxxxxxx, Xxxx and Xxxxx
1100 National City Bank Building
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
ATTENTION: Xxxxxx X. Xxxxxxxxx, Esquire
(c) This Agreement shall constitute the entire Agreement between the
parties with respect to the subject matter hereof, and shall supersede all
previous oral and written (and all contemporaneous oral) negotiations,
commitments, agreements and understandings relating hereto.
(d) This Agreement shall be construed and enforced in accordance with
the laws of New York (excluding the choice of law provisions thereof) and
shall inure to the benefit of, and be binding upon, Vestar and the Company and
their representatives, successors and assigns.
(e) The waiver of any party of any breach of this Agreement shall not
operate or be construed to be a waiver of any subsequent breach.
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IN WITNESS WHEREOF, the parties have caused this Consulting Agreement to
be executed and delivered by their duly authorized officers or agents of the
date first written above.
VESTAR CAPITAL PARTNERS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Managing Director
ARGO-TECH CORPORATION
By: /s/ Xxxx X. Xxxx
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