Exhibit 10.27
MJD COMMUNICATIONS, INC.
MANAGEMENT SERVICES AGREEMENT
WITH
THL EQUITY ADVISORS IV, LLC
AGREEMENT entered into as of January 20, 2000, between THL Equity
Advisors IV, LLC, a Massachusetts limited liability company (the "CONSULTANT"),
and MJD Communications, Inc., a Delaware corporation ("MJD").
WHEREAS, the Consultant has and its affiliates have staff
specially skilled in corporate finance, strategic corporate planning and other
management skills and services;
WHEREAS, as of the date hereof, Xxxxxx X. Xxx Equity Fund IV,
L.P. ("THL FUND IV") and certain parties related to it have consummated an
investment in MJD pursuant to the Stock Purchase Agreement (the "STOCK PURCHASE
AGREEMENT") dated as of January 4, 2000, among MJD, THL Fund IV, certain parties
related to THL Fund IV, Xxxxx Investment Associates V, L.P., Xxxxx Equity
Partners V, L.P. and the other parties thereto.
WHEREAS, MJD will require the Consultant's special skills and
manage ment advisory services in connection with its general business
operations; and
WHEREAS, the Consultant is willing to provide such skills and
services to MJD.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, do hereby agree as
follows:
1. ENGAGEMENT. MJD hereby engages the Consultant for the Term (as
defined in Section 2) and upon the terms and conditions herein set forth to
provide consulting and management advisory services to MJD, as requested by MJD.
These services will be in connection with financial and strategic corporate
planning and such other management services as the Consultant and MJD shall
mutually agree. In consideration of the remunera tion herein specified, the
Consultant accepts such engagement and agrees to perform the services specified
herein.
2. TERM. The engagement hereunder shall be for a term commencing
on the Closing Date (as defined in the Stock Purchase Agreement) and expiring on
the earlier to occur of (a) December 31, 2006, or (b) the date that THL Fund IV
and the THL Holders
(as defined in the Stock Purchase Agreement) cease to own, collectively, at
least 10% of the number of shares of MJD Class A Common Stock (including any
Class A Common Stock issuable upon conversion of MJD's Series D Preferred Stock
or Class B Common Stock) they hold collectively immediately after the Closing
(as defined in the Stock Purchase Agreement), unless the Consultant and MJD
agree to extend the term beyond such date, in which case the term shall expire
on the date agreed to by the Consultant and MJD (the "TERM").
3. SERVICES TO BE PERFORMED. The Consultant shall devote
reasonable time and efforts to the performance of the consulting and management
advisory services contemplated by this Agreement. However, no precise number of
hours is to be devoted by the Consultant on a weekly or monthly basis. The
Consultant may perform services under this Agreement directly, through its
employees or agents or with such outside consultants as the Consultant may
engage for such purpose. The Consultant agrees that the consulting and
management advisory services provided hereunder will be performed by individuals
qualified in accordance with the Consultant's normal business practices and in a
manner providing quality of standards no lower than the quality provided by the
Consultant to its other customers.
4. COMPENSATION; EXPENSE REIMBURSEMENT.
(a) In consideration of the management advisory services
hereunder, MJD agrees to pay to the Consultant an annual fee equal to $500,000.
The annual fee shall be payable in equal quarterly installments each year, to be
paid in advance on the first day of each calendar quarter with the first such
payment, pro-rated for the period of the Closing Date through March 31, 2000, to
be made at the Closing. Notwithstanding anything to the contrary herein, MJD's
obligation to pay such advisory fee to the Consultant shall be deferred to the
extent MJD is restricted from paying such advisory fee by any debt instruments
or agreements, including any amendment, renewal, extension, substitution,
refinancing, replacement or other modification thereof ("FINANCING DOCUMENTS")
entered into by MJD or any of its subsidiaries. In the event MJD is unable to
pay all or any part of such advisory fee to the Consultant when due because of
any such restriction, MJD shall pay such deferred amounts together with 5.5%
annual interest thereon, as soon as such payment is permissible under such
Financing Documents and MJD shall not make any payment or distribution or pay
any dividend to its stockholders until all such deferred fees and accrued
interest thereon have been paid to the Consultant. Any consulting fee payments
made hereunder or pursuant to the Amended and Restated Financial Advisory
Agreement with Xxxxx & Company, L.P. of even date herewith (the "XXXXX FINANCIAL
ADVISORY AGREEMENT") that MJD is permitted to make under its Financing
Documents, including any back-payments with interest paid pursuant to the
preceding sentence, shall be shared ratably between the Consultant and Xxxxx &
Company, L.P.
(b) MJD at all times shall reimburse the Consultant for all
out-of-pocket expenses incurred by the Consultant and its affiliates in
connection with management
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advisory services provided by the Consultant hereunder, including, without
limitation, reasonable travel, lodging, accounting, legal, administrative and
similar out-of-pocket costs reasonably incurred by it and its affiliates in
connection with the performance of services for MJD hereunder. Reimbursement
shall be made only upon presentation to MJD by the Consultant of reasonably
itemized documentation therefor.
5. INDEMNIFICATION.
(a) In addition to its agreements and obligations under this
Agreement, MJD agrees to indemnify and hold harmless the Consultant and its
affiliates (including their respective officers, directors, stockholders,
partners, members, employees, agents and control persons (as the term is used in
the Securities Act of 1933, as amended, and the rules and regulations
thereunder)) from and against, and pay or reimburse the Consultant and such
other indemnified persons for, any and all actions, claims, demands,
proceedings, investigations, inquiries, liabilities, obligations, fines,
deficiencies, costs, expenses, royalties, losses and damages (whether or not
resulting from third party claims), including interest and penalties with
respect thereto, in any way related to or arising out of the execution, delivery
or existence of this Agreement, the assertion, preservation or enforcement of
any rights hereunder or the performance by the Consultant of services under
Sections 1 and 3 of this Agreement (other than for expenses described in Section
4(b) hereof which are reimbursed under Section 4 hereof), and to reimburse the
Consultant and any other such indemnified person for out-of-pocket expenses and
reasonable legal and accounting expenses incurred by it in connection with or
relating to investigating, preparing to defend, defending, asserting or
prosecuting any actions, claims or other proceedings (including any
investigation or inquiry) arising in any manner out of or in connection with the
execution, delivery or existence of this Agreement, the assertion, preservation
or enforcement of any rights hereunder or the Consultant's performance of
services hereunder (whether or not such indemnified person is a named party in
such proceeding); PROVIDED, HOWEVER, that MJD shall not be responsible under
this Section 5 for any claims, liabilities, losses, damages or expenses to the
extent that they are finally judicially determined to result from actions taken
by the Consultant (or such other indemnified person) due to the Consultant's (or
such other indemnified person's) gross negligence or willful misconduct.
(b) MJD also agrees that the Consultant (or such other
indemnified person) shall not have any liability (whether direct or indirect, in
contract or tort or otherwise) to MJD or any of its affiliates for or in
connection with the retention of the Consultant pursuant to this Agreement or
the performance by the Consultant of its obligations under this Agreement,
except to the extent that any such liability is finally judicially determined to
have resulted from the Consultant's (or such other indemnified person's) gross
negligence or willful misconduct.
(c) The indemnification provided for in this Section 5 shall be
in addition to any liability which MJD may otherwise have to the Consultant or
the other indemnified persons. Further, if and to the extent that the
indemnification provided for in this Section 5
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is not enforceable for any reason, MJD agrees to make the maximum contribution
possible pursuant to applicable law to the payment and satisfaction of any
actions, claims, liabilities, losses and damages incurred by the Consultant or
the other indemnified persons for which they would have otherwise been entitled
to be indemnified hereunder.
(d) If any action, claim, proceeding, inquiry or investigation is
commenced as to which the Consultant (or such other indemnified person) proposes
to demand indemnification, the Consultant shall notify MJD with reasonable
promptness; PROVIDED, HOWEVER, that any failure by the Consultant (or such other
indemnified person) to notify MJD shall not relieve MJD from its obligations
hereunder. The Consultant (or such other indemnified person) shall have the
right to retain counsel of its own choice to represent it, and MJD shall pay the
reasonable fees, expenses and disbursements of such counsel as incurred; and
such counsel shall, to the extent consistent with its professional
responsibilities, cooperate with MJD and any counsel designated by MJD. MJD
shall be liable for any settlement of any claim against the Consultant (or such
other indemnified person) made with MJD's written consent, which consent shall
not be unreasonably withheld. MJD shall not, without the prior written consent
of the Consultant (or such other indemnified person), settle or compromise any
claim, or permit a default or consent to the entry of any judgment in respect
thereof, unless such settlement, compromise or consent includes, as an
unconditional term thereof, the giving by the claimant to the Consultant (or
such other indemnified person) of an unconditional release from all liability in
respect of such claim.
6. NOTICES. All notices hereunder, to be effective, shall be in
writing and shall be sent by reputable nationwide courier, or sent by facsimile,
as follows:
(i) If to the Consultant:
THL Equity Advisors IV, LLC
c/o Xxxxxx X. Xxx Company
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxx
Xxxx X. Xxxxxx
Facsimile: 000-000-0000
(ii) If to MJD:
MJD Communications, Inc.
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Xx.
Facsimile: 000-000-0000
7. MODIFICATIONS. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, superseding all
prior
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understandings and agreements whether written or oral. This Agreement may not be
amended or revised except by a writing signed by the parties; PROVIDED, HOWEVER,
that if MJD (a) amends the Xxxxx Financial Advisory Agreement or (b) enters into
any other management services agreement, consulting agreement or similar
arrangement, whether with Xxxxx & Company, L.P. or with any other person or
entity that invests or has invested (or whose affiliate invests or has invested)
in MJD's securities, in the case of either (a) or (b), on terms more favorable
to such other consultant than the terms provided to the Consultant herein, then
this Agreement shall be deemed to be revised and amended to provide the
Consultant with all the benefits of those more favorable terms; it being
understood, however, that if MJD amends the Xxxxx Financial Advisory Agreement
or otherwise agrees to provide Xxxxx & Company, L.P. or any affiliate thereof
any additional payment, whether in connection with the termination of the Xxxxx
Financial Advisory Agreement (other than the payment already provided for under
Section 4b thereof) or otherwise, then the Consultant shall be entitled to the
exact same payment.
8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns but may not be assigned by either party without the prior written
consent of the other. Notwithstanding the foregoing (but subject to the final
sentence of Section 3), the Consultant may elect to have its obligations
hereunder performed in whole or in part by any other entity affiliated with the
Consultant, and the Consultant may direct that any compensation (including all
or a portion of the fees under Section 4(a)), and reimbursement of expenses be
paid to the affiliate performing the services hereunder with respect thereto.
9. CAPTIONS. Captions have been inserted solely for the
convenience of reference and in no way define, limit or describe the scope or
substance of any provision and shall not affect the validity of any other
provision.
10. GOVERNING LAW. This Agreement shall be construed under and
governed by and construed in accordance with the laws of the State of New York,
without reference to principles of conflicts or choice of laws, or any other law
that would make the laws of any jurisdiction other than the State of New York
applicable hereto.
11. COUNTERPARTS. This Agreement may be signed in multiple
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
12. SURVIVAL. MJD's obligations under Section 4 (with respect to
any fees or expenses incurred prior to or at the termination of this Agreement)
and under Section 5 shall survive the termination of this Agreement.
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IN WITNESS WHEREOF, the parties have duly executed this
Management Services Agreement as of the date first above written.
THL EQUITY ADVISORS IV, LLC
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. XxXxxx
Title: Managing Director
MJD COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Name:
Title:
