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Exhibit 10(a)
CONSULTING AGREEMENT
This CONSULTING AGREEMENT, dated as of February __, 1997 (the
"Agreement"), is entered by and among EVI Audio Holding, Inc., a Delaware
corporation ("Holding"), EV International, Inc. a Delaware corporation (the
"Company"), and Greenwich Street Capital Partners, Inc., a Delaware corporation
("Greenwich"). Capitalized terms not otherwise defined herein shall have their
respective meanings set forth in the Purchase Agreement, referred to below.
W I T N E S S E T H:
WHEREAS, Xxxx XX Industries, Inc., a Delaware corporation,
Gulton Industries, Inc., a Delaware corporation ("Gulton"), Xxxx XX PLC, a
United Kingdom corporation and Gulton Acquisition Corp. ("Acquisition"), entered
into a Purchase Agreement, dated as of December 12, 1996 as amended (the
"Purchase Agreement"), pursuant to which Xxxx XX and PLC sold all the issued and
outstanding shares of Common Stock to Acquisition;
WHEREAS, immediately following the purchase by Acquisition of
all of the Common Stock of Gulton, Acquisition merged with and into Gulton (the
"Company Merger");
WHEREAS, immediately following the First Merger, Gulton and
its wholly owned subsidiaries, Xxxx XX Audio Magnetic, Inc., a Delaware
corporation, LFE Corporation, a Delaware corporation and Xxxx XX Audio, Inc., a
Delaware corporation merged, with and into Electro-Voice, Incorporated, a
Delaware corporation and a wholly owned subsidiary of Gulton ("Electro-Voice"),
which was the surviving corporation of such mergers, and the name of
Electro-Voice was changed to EV International, Inc. (such transactions and the
First Merger being referred to collectively as the "Mergers");
WHEREAS, as of January __, 1997, Holding, Acquisition and
Greenwich entered into an Indemnification Agreement and, as a result of the
Mergers, the Company succeeded to all of the rights and obligations of
Acquisition under such Indemnification Agreement;
WHEREAS, the Company and its direct and indirect subsidiaries
collectively referred to herein as the "Company Group") desire to receive
financial and
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managerial advisory services from Greenwich, and Greenwich desires to provide
such services to the Company Group; 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. Engagement. Each member of the Company Group, jointly and
severally, hereby engage Greenwich as a consultant, and Greenwich hereby agrees
to provide financial and managerial advisory services to the Company Group, all
on the terms and subject to the conditions set forth below.
2. Services. (a) Greenwich hereby agrees during the term of
this Agreement to assist, advise and consult with the respective Boards of
Directors and management of each member of the Company Group and their
subsidiaries in such manner and on such business, management and financial
matters, and provide such other financial and managerial advisory services, as
may be reasonably requested from time to time by the respective Boards of
Directors of the members of the Company Group, including but not limited to
assistance in:
(i) the raising of additional debt and equity capital from
time to time for the Company Group;
(ii) establishing and maintaining banking, consulting,
advising and other business relationships for the
Company Group;
(iii) developing and implementing corporate and business
strategy and planning for the Company Group, including
plans and programs for improving operating, marketing
and financial performance, budgeting of future corporate
investments, acquisition and divestiture strategies, and
reorganizational programs;
(iv) providing individuals to serve as directors or officers
of the Company Group; and
(v) providing such other consulting and advisory services as
the Company Group may reasonable request.
(b) Each member of the Company Group will furnish Greenwich with such
information as Greenwich believes appropriate to its engagement hereunder (all
such
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information so furnished being referred to herein as the "Information"). Each of
the Companies recognizes and confirms that (i) Greenwich will use and rely
primarily on the Information and on information available from generally
recognized public sources in performing the services to be performed hereunder
and (ii Greenwich does not assume responsibility for the accuracy or
completeness of the Information and such other information.
3. Fee. In consideration of providing the foregoing services,
the Companies will pay to Greenwich an annual advisory fee of $750,000, payable
quarterly in arrears (the "Fee"). The first payment will be due on the last day
of the end of the first full calendar quarter following the date hereof. If
Greenwich or any of its affiliates or designees invests additional equity in the
Company Group or any of its affiliates on one or more occasions after the date
hereof, then, in each such case, the Company Group and Greenwich will negotiate
in good faith to effect a mutually acceptable increase to such advisory fee.
4. Payment of Expenses. The Company Group will also reimburse
Greenwich promptly for Greenwich's reasonable out-of-pocket costs and expenses
incurred by Greenwich or its employees, agents or advisors in connection with
the performance of Greenwich's duties hereunder including but not limited to (a)
any fees and expenses of any reasonable legal, accounting or other professional
advisors to Greenwich engaged in connection with the services being provided
hereunder or (b) any fees associated with the maintenance or operation of EVI
Audio LLC ("Expenses").
5. Term, etc. (a) This Agreement shall be in effect until, and
shall terminate upon, the earlier to occur of (i) the tenth anniversary of the
date hereof and (ii) the date on which Greenwich Street Capital Partners, L.P.
directly or indirectly no longer owns any shares of the capital stock of
Holding, and may be earlier terminated by Greenwich, in its sole discretion,
upon 15 days' prior written notice to the Companies.
(b) Upon any consolidation or merger (other than the Mergers),
or any conveyance, transfer or lease of all or substantially all of the assets
of any of the members of the Company Group, the successor corporation (or other
entity) formed by such consolidation or into which such Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, such Company under this Agreement with the same effect as if
such successor corporation had been a party thereto. No such consolidation,
merger or conveyance, transfer or lease of all or substantially all of the
assets of any of the Company Group shall have the effect of terminating this
Agreement or of releasing such Company or any such successor corporation from
its obligations hereunder.
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(c) Upon any termination of this Agreement, any accrued and
unpaid installment of the Fee or portion thereof (pro-rated, with respect to the
month in which such termination occurs, for the portion of such month that
precedes such termination), and any unpaid and unreimbursed Expenses that shall
have been incurred prior to such termination (whether or not such Expenses shall
then have become payable), shall be immediately paid or reimbursed, as the case
may be, by the Company.
6. Indemnification. The obligations of the parties hereto are
in addition to, and shall in no way reduce or limit, the obligations thereof
under the Indemnification Agreement, which shall remain in full force and
effect.
7. 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.
8. 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 Companies, to:
EV International, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
or to such other person or address as the Company shall furnish to Greenwich in
writing.
(ii) If to Greenwich, to:
Greenwich Street Capital Partners, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxx
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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 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.
9. Entire Agreement. This Agreement and the Indemnification
Agreement 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.
10. Headings. The headings contained in this Agreement are for
purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
11. 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.
12. Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties to this Agreement and their
respective successors 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 a 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.
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13. Governing Law. This Agreement shall be governed in all
respects, including validity, interpretation and effect, by the law of the State
of New York, regard less of the law that might be applied under principles of
conflicts of laws.
14. 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.
EV INTERNATIONAL, INC.
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: President
EVI AUDIO HOLDING, INC.
By: /s/ XXXXXXXXX X. VANDEN BEUKEL
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Name: Xxxxxxxxx X. Vanden Beukel
Title: Vice President and Secretary
GREENWICH STREET CAPITAL PARTNERS, INC.
By: /s/ XXXXXXXX X. XXXXXX
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Name: Xxxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
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