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EXHIBIT 10.9
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION
PROVISIONS IN SECTION 5 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES, DAMAGES
OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM
THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE
OF LLC OR ANY OTHER INDEMNIFIED PERSON IDENTIFIED THEREIN.
FINANCIAL ADVISORY AGREEMENT
THIS FINANCIAL ADVISORY AGREEMENT (this "Agreement") is made and
entered into effective as of May 1, 1999 among CustomerONE Corporation, a
Delaware corporation (together with its successors, the "Company"). CustomerONE
Holding Corporation, a Delaware corporation (together with its successors,
"Holdings"), LCS Industries, Inc., a Delaware corporation, Catalog Liquidators,
Inc., a Delaware corporation, LCS Canada, Inc., a Delaware corporation, Catalog
Resources, Inc., a Delaware corporation, LCS Industries Ltd., a corporation
organized under the laws of the United Kingdom, Spec Holdings, Inc., a New York
corporation, The SpeciaLISTS Ltd., a New York corporation, Computer Marketing
Systems, Inc., a New York corporation, 1293219 Ontario Inc., a corporation
organized under the laws of the province of Ontario, Canada, 1293220 Ontario
Inc., a corporation organized under the laws of the province of Ontario, Canada,
ClientLogic Canada Corporation, a corporation organized under the laws of the
province of Ontario, Canada, The Ivy Group Limited, a corporation organized
under the laws of the United Kingdom, Professional Support Centre Limited, a
corporation organized under the laws of the United Kingdom, UCA&L Limited, a
corporation organized under the laws of Ireland, together with any subsidiary
that may hereafter become a party hereto ("Subsidiaries," and together with the
Company and Holdings, the "Clients") and Onex Service Partners, a New York
general partnership (together with its successors, "OSP").
WHEREAS, the Clients have requested that OSP render financial advisory,
investment banking, and other similar services to them with respect to future
proposals for a tender offer, acquisition, sale, merger, exchange offer,
recapitalization, restructuring, or other similar transaction directly or
indirectly involving any of the Clients or any of their respective subsidiaries
and any other person or entity (collectively, "Transactions");
NOW, THEREFORE, in consideration of the services rendered and to be
rendered by OSP to the Clients, and to evidence the obligations of the Clients
to OSP and the mutual covenants herein contained, the Clients hereby jointly and
severally agree with OSP as follows:
1. Retention. Each of the Clients acknowledges that it has retained OSP
as its exclusive financial advisor in connection with any Transactions that may
be
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consummated during the term of this Agreement, and that none of the Clients will
retain any other person or entity to provide such services in connection with
any such Transaction without the prior written consent of OSP. OSP agrees that
it shall provide such financial advisory, investment banking and other similar
services in connection with any such Transaction as may be requested from time
to time by the board of directors of the applicable Client.
2. Term. The term of this Agreement shall continue until the earlier to
occur of (i) the tenth anniversary of the date hereof and (ii) the date on which
Onex Corporation, a corporation organized under the laws of the province of
Ontario, Canada ("Onex"), or its successors, and their respective affiliates
shall cease to own beneficially, directly or indirectly, any securities of any
of the Clients or their respective successors.
3. Compensation. In connection with any Transaction consummated during
the term of this Agreement, the applicable Client shall, and the other Clients
shall cause such Client to, pay to OSP, at the closing of any such Transaction,
a cash fee (the "Advisory Fee") equal to up to 1.5% of the Transaction Value of
such Transaction. As used herein, the term "Transaction Value" means the total
value of the Transaction, including, without limitation, the aggregate amount of
the funds required to complete the Transaction (excluding any fees payable
pursuant to this Section 3), including, without limitation, the amount of any
indebtedness, preferred stock or similar items assumed (or remaining
outstanding) less any cash balances, the aggregate amount of any noncompetition
or consulting agreements entered into in conjunction with any Transaction, the
aggregate amount of any "golden parachutes" or termination payments to employees
incurred as a result of any such Transaction, and like costs, all as reasonably
determined by OSP. Notwithstanding the foregoing, payment of an Advisory Fee
pursuant to this Section 3 will only be made to the extent payment of such
Advisory Fee does not result in an event of default or violate any provision of
any agreement for indebtedness of the Clients, both before and after giving
effect to payment of such Advisory Fee.
4. Reimbursement of Expenses. In addition to the compensation to be
paid pursuant to Section 3 hereof, the Clients agree, jointly and severally, to
reimburse OSP, promptly following demand therefor, together with invoices or
reasonably detailed descriptions thereof, for all reasonable disbursements and
out-of-pocket expenses (including, without limitation, fees and disbursements
of counsel) incurred by OSP in connection with the performance by it of the
services contemplated by Section 1 hereof (the "Reimbursable Expenses").
Notwithstanding the foregoing, the payment or reimbursement of any Reimbursable
Expenses pursuant to this Section 4 will only be made to the extent such payment
or reimbursement does not result in an event of default or violate any provision
of any agreement for indebtedness of the Clients, both before and after giving
effect to such payment or reimbursement.
5. Indemnification. The Clients jointly and severally shall indemnify
and hold harmless each of OSP, its affiliates and their respective directors,
officers, controlling persons (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20(a) of the Securities Exchange
Act of 1934, as amended), if any,
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agents and employees (OSP, its affiliates and such other specified persons being
collectively referred to as "Indemnified Persons" and individually as an
"Indemnified Person") from and against any and all claims, liabilities, losses,
damages and expenses incurred by an Indemnified Person (including, without
limitation, those arising out of an Indemnified Person's negligence and
reasonable fees and disbursements of the respective Indemnified Person's
counsel) which (A) are related to or arise out of (i) actions taken or omitted
to be taken (including, without limitation, any untrue statements made or any
statements omitted to be made) by any of the Clients or (ii) actions taken or
omitted to be taken by an Indemnified Person with any Client's consent or in
conformity with any Client's instructions or any Client's actions or omissions
or (B) are otherwise related to or arise out of OSP's engagement, and will
reimburse each Indemnified Person for all costs and expenses, including, without
limitation, fees and disbursements of any Indemnified Person's counsel, as they
are incurred, in connection with investigating, preparing for, defending or
appealing any action, formal or informal claim, investigation, inquiry or other
proceeding, whether or not in connection with pending or threatened litigation,
caused by or arising out of or in connection with OSP's acting pursuant to OSP's
engagement, whether or not any Indemnified Person is named as a party thereto
and whether or not any liability results therefrom. None of the Clients will,
however, be responsible for any claims, liabilities, losses, damages or expenses
pursuant to clause (B) of the preceding sentence that have resulted primarily
from OSP's bad faith, gross negligence or willful misconduct. The Clients also
agree that neither OSP nor any other Indemnified Person shall have any liability
to any Client for or in connection with such engagement except for any such
liability for claims, liabilities, losses, damages or expenses incurred by any
Client that have resulted primarily from OSP's bad faith, gross negligence or
willful misconduct. The Clients further agree that none of them will, without
the prior written consent of OSP, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or proceeding
in respect of which indemnification may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of OSP and each other Indemnified Person hereunder from
all liability arising out of such claim, action, suit or proceeding. EACH CLIENT
HEREBY ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ALL
CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE
ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR
CONCURRENT ORDINARY NEGLIGENCE OF OSP OR ANY OTHER INDEMNIFIED PERSON.
The foregoing right to indemnity shall be in addition to any rights
that OSP and/or any other Indemnified Person may have at common law or otherwise
and shall remain in full force and effect following the completion or any
termination of the engagement. Each Client hereby consents to personal
jurisdiction and to service and venue in any court in which any claim which is
subject to this Agreement is brought against OSP or any other Indemnified
Person.
It is understood that, in connection with OSP's engagement, OSP may
also be engaged to act for a Client or Clients in one or more additional
capacities, and that the
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terms of this engagement or any such additional engagements may be embodied in
one or more separate written agreements. This indemnification shall apply to the
engagement specified in the first paragraph hereof as well as to any such
additional engagement(s) (whether written or oral) and any modification of said
engagement or such additional engagement(s) and shall remain in full force and
effect following the completion or termination of said engagement or such
additional engagements.
Each of the Clients further understands and agrees that if OSP is asked
to furnish any Client a financial opinion letter or act for any Client in any
other formal capacity, such further action may be subject to a separate
agreement containing provisions and terms to be mutually agreed upon.
6. Confidential Information. In connection with the performance of the
services hereunder, OSP agrees not to divulge any confidential information,
secret processes or trade secrets disclosed by any Client or any of its
subsidiaries to it solely in its capacity as a financial advisor, unless such
Client consents to the divulging thereof or such information, secret processes
or trade secrets are publicly available or otherwise available to OSP without
restriction or breach of any confidentiality agreement or unless required by any
governmental authority or in response to any valid legal process.
7. Governing Law. This Agreement shall be construed, interpreted, and
enforced in accordance with the laws of the State of New York, excluding any
choice-of-law provisions thereof. Each of the parties hereby (a) irrevocably
submits to the exclusive jurisdiction of the United States Federal District
Court for the Southern District of New York, sitting in New York County, New
York, the United States of America, in the event such court has jurisdiction or,
if such court does not have jurisdiction, to any district court sitting in New
York County, New York, the United States of America, for the purpose of any
suit, action, or proceeding arising out of or relating to this Agreement,
including any claims by any Indemnified Persons for indemnity pursuant to
Section 5 hereof, (b) waives, and agrees not to assert in any such suit, action,
or proceeding, any claim that (i) it is not personally subject to the
jurisdiction of such court or of any other court to which proceedings in such
court may be appealed, (ii) such suit, action or proceeding is brought in an
inconvenient forum, or (iii) the venue of such suit, action, or proceeding is
improper and (c) expressly waives any requirement for the posting of a bond by
the party bringing such suit, action, or proceeding. Each of the parties
consents to process being served in any such suit, action, or proceeding by
mailing, certified mail, return receipt requested, a copy thereof to such party
at the address in effect for notices hereunder, and agrees that such services
shall constitute good and sufficient service of process and notice thereof.
Nothing in this Section 7 shall affect or limit any right to serve process in
any other manner permitted by law.
8. Assignment. This Agreement and all provisions contained herein shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned (other than with respect to the rights and obligations of OSP, which
may be assigned to any one or more of its
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principals or affiliates) by any of the parties without the prior written
consent of the other parties.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended
to, any other counterpart.
10. Other Understandings. All discussions, understandings and
agreements heretofore made between any of the parties hereto with respect to the
subject matter hereof are merged in this Agreement, which alone fully and
completely expresses the Agreement of the parties hereto.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
ONEX SERVICE PARTNERS
By: /s/ XXXXXX X. XXXXXXXX
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Xxxxxx X. Xxxxxxxx,
its Managing Director
CUSTOMERONE CORPORATION
By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
Chief Financial Officer
CUSTOMERONE HOLDING CORPORATION
By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
Chief Financial Officer
LCS INDUSTRIES, INC.
By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
Chief Financial Officer
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CATALOG LIQUIDATORS, INC.
By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
Chief Financial Officer
LCS CANADA, INC.
By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
Chief Financial Officer
CATALOG RESOURCES, INC.
By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
Chief Financial Officer
LCS INDUSTRIES LTD.
By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
Chief Financial Officer
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SPEC HOLDINGS, INC.
By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
Chief Financial Officer
THE SPECIALISTS LTD.
By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
Chief Financial Officer
COMPUTER MARKETING SYSTEMS, INC.
By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
Chief Financial Officer
1293219 ONTARIO INC.
By: /s/ XXXXXX X. XXX
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Name: Xxxxxx X. Xxx
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Title:
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1293220 ONTARIO INC.
By: /s/ XXXXXX X. XXX
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Name: Xxxxxx X. Xxx
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Title:
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CLIENTLOGIC CANADA CORPORATION
By: /s/ XXXXXX X. XXX
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Name: Xxxxxx X. Xxx
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Title:
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THE IVY GROUP LIMITED
By: /s/ XXXXXX X. XXXXXXXX
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Xxxxxx X. Xxxxxxxx
Company Secretary
PROFESSIONAL SUPPORT CENTRE LIMITED
By:
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Xxxxxx X. Xxxxxxxx
Company Secretary
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UCA&L LIMITED
By: /s/ XXXX XXXXXX
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Name: XXXX XXXXXX
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Title: FINANCIAL CONTROLLER
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