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EXHIBIT 10.4
ADVISORY AGREEMENT
ADVISORY AGREEMENT ("Agreement"), dated July 2, 1997, by and
between Key Equity Capital Corporation ("KECC"), and Glasstech Sub Co., a
Delaware corporation (the "Company").
BACKGROUND
The Company desires to receive general financial and other
business advisory services from KECC, and thereby obtain the benefit of the
experience of KECC in business and financial matters generally and its knowledge
of the Company and the Company's financial affairs in particular. KECC is
willing to provide general financial and other business advisory services to the
Company. Accordingly, the compensation arrangements set forth in this Agreement
are designed to compensate KECC for such services.
NOW, THEREFORE, in consideration of the foregoing premises and
the respective agreements hereinafter set forth and the mutual benefits to be
derived herefrom, KECC and the Company hereby agree as follows:
TERMS
1. ENGAGEMENT. The Company hereby engages KECC as a general
financial and business advisor, and KECC hereby agrees to
provide only general financial and business advisory
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services to the Company, all on the terms and subject to the conditions
set forth below. This Agreement shall be effective as of the date the
Company merges (the "Merger") with and into Glasstech, Inc., a Delaware
corporation (the "Effective Date"). This Agreement shall survive the
Merger and shall be binding upon Glasstech, Inc. in all respects after
the consummation of the Merger. All references in this Agreement to the
Company shall mean and include Glasstech Sub Co. and Glasstech, Inc.,
after the consummation of the Merger.
2. SERVICES OF KECC.
(a) KECC hereby agrees during the term of this engagement to
consult with the Company's board of directors (the "Board")
and management of the Company and its subsidiaries in such
manner and on such general business and financial matters as
may be reasonably requested from time to time by the Board,
including but not limited to:
(i) corporate strategy;
(ii) budgeting of future corporate
investments; and
(iii) acquisition and divestiture strategies.
The parties hereto agree that the services to be
provided hereunder shall include only general financial
and other advisory services. In the event the Company
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requests extraordinary services (e.g., obtaining debt or
equity financing or coordinating or negotiating the
consummation of acquisitions or divestitures), additional fees
may be charged pursuant to arrangements to be mutually agreed
upon by the Company and KECC.
(b) The services provided pursuant to this Agreement are advisory
only and the Company is free to accept or reject the advice
rendered by officers or employees of KECC or its affiliates.
3. COMPENSATION.
(a) The Company agrees to pay to KECC as compensation for
services to be rendered by KECC hereunder, a fee based
upon the number of hours of service rendered by KECC at
such rates as are in effect from time to time; provided
that the fee for all services hereunder ("Advisory
Fees") shall in no event exceed $200,000 for each
calendar year. Payments shall be made quarterly in
arrears on the last business day of March, June,
September and December each year and any hours actually
worked during a period which exceed the number of hours
charged for such period shall be carried forward to
future periods.
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(b) The parties hereto reasonably believe that services rendered
pursuant to this Agreement will require payment of Advisory
Fees averaging $50,000 per calendar quarter. Therefore, the
Company many, in its sole discretion, choose to make estimated
payments of $50,000 per calendar quarter.
4. EXPENSE REIMBURSEMENT. The Company shall promptly reimburse
KECC for such reasonable travel expenses and other out-of-
pocket fees and expenses as may be incurred by KECC, its
directors, officers and employees in connection with the
rendering of services hereunder. Such expenses shall be in
addition to any Advisory Fees and shall not affect the
maximum amount of Advisory Fees payable pursuant to
paragraph 3 above.
5. TERM.
(a) This Agreement shall be in effect for an initial term
commencing on the Effective Date and terminating on the
tenth anniversary date of the Effective Date; provided,
however, that this Agreement may be terminated upon 30
days notice at any time by the Company's Board of
Directors, and further provided that this Agreement
shall terminate on the first to occur of (i) the date
of a Qualified Public Offering (as defined below), (ii)
the date of the sale of all or substantially all of the
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assets of the Company or all of its material subsidiaries,
(iii) the date of the delivery by the Company to KECC of a
notice of termination for Cause, or (iv) 30 days after the
date of the delivery by KECC to the Company of a notice of
termination for any reason, including any breach of this
Agreement by the Company. No termination of this Agreement,
whether pursuant to this paragraph or otherwise, shall affect
the Company's obligations with respect to the fees, costs and
expenses incurred by KECC in rendering services hereunder and
not reimbursed by the Company as of the effective date of such
termination.
(b) "Cause" means (i) the conviction of KECC or any
individual employed by KECC and providing consulting
services hereunder on behalf of KECC (a "Consultant")
of any crime involving dishonesty or moral turpitude or
(ii) the commission by any Consultant of any act which
in any material respect undermines the integrity,
reputation or financial viability of the Company (other
than acts based upon the exercise of good faith
business judgment), all as determined by a resolution
of the Board.
(c) "Affiliate" means, with respect to any person, any other
person which, directly or indirectly, controls, is controlled
by or under common control with, such
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person and includes any person that would be deemed to be an
"affiliate" or "associate" of such person as each term is
defined in Rule 12b-2 of the General Rules and Regulations
promulgated under the Securities and Exchange Act of 1934, as
amended.
(d) "Qualified Public Offering" means the sale of shares of
the Company's common stock by the Company in one or
more public offerings pursuant to a registration
statement (other than (i) a registration statement on
Forms S-4 or S-8 or any successor forms or any other
registration statement relating to a special offering
to the Company's employees or then-existing security
holders or (ii) a registration statement registering
shares of the Company's common stock to be sold in an
underwritten public offering of a combination of debt
and the Company's common stock in which not more than
20% of the gross proceeds received from the sale of
such securities is attributed to such common stock)
filed with, and declared effective by, the Securities
and Exchange Commission pursuant to the Securities Act
of 1933, as amended, resulting in receipt by the
Company of at least [$30,000,000] in aggregate gross
proceeds' provided that at or about the time of such
sale shares of the Company's common stock shall be
listed for trading on the New York Stock Exchange or
the American Stock Exchange, or shall be quoted on the
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National Association of Securities Dealers Automated
Quotations System.
6. INDEMNIFICATION. The Company agrees to indemnify and hold harmless
KECC, its directors, officers and employees against and from any and
all loss, liability, suits, claims, costs, damages and expenses
(including attorneys' fees) arising from their performance hereunder,
except as a result of their gross negligence or intentional wrongdoing.
7. KECC AN INDEPENDENT CONTRACTOR. KECC and the Company agree
that KECC shall perform services hereunder as an independent
contractor, retaining control over and responsibility for
its own operations and personnel. Neither KECC nor its
directors, officers, or employees shall be considered
employees or agents of the Company as a result of this
Agreement nor shall any of them have authority under this
Agreement to contract in the name of or bind the Company,
except as expressly agreed to in writing by the Company.
8. NOTICES. Any notice, report or payment required or
permitted to be given or made under this Agreement by one
party to the other shall be deemed to have been duly given
or made if personally delivered or, if mailed, when mailed
by registered or certified mail, postage prepaid, to the
other party at the following addresses (or at such other
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address as shall be given in writing by one party to the
other):
If to KECC:
Key Equity Capital Corporation
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx Xxxxx
If to the Company:
Glasstech, Inc.
Ampoint Industrial Park
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
9. ENTIRE AGREEMENT. This Agreement (a) contains the complete and entire
understanding and agreement of KECC and the Company with respect to the
subject matter hereof; and (b) supersedes all prior and contemporaneous
understandings, conditions and agreements, oral or written, express or
implied, respecting the engagement of KECC in connection with the
subject matter hereof.
10. AMENDMENT. This Agreement may be amended only with the
written consent of both KECC and the Company.
11. WAIVER OF BREACH. The waiver by either party of a breach of
any provision of this Agreement by the other party shall not
operate or be construed as a waiver of any subsequent breach
of that provision or any other provision hereof.
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12. ASSIGNMENT. Neither KECC nor the Company may assign its
rights or obligations under this Agreement without the
express written consent of the other.
13. CHOICE OF LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Ohio, without giving
effect to any choice of law or conflict of law provision or rule
(whether of the State of Ohio or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
State of Ohio.
IN WITNESS WHEREOF, KECC and the parties hereto have caused
this Agreement to be duly executed and delivered on the date and year first
above written.
KEY EQUITY CAPITAL CORPORATION
By: /s/ Xxxxx X. Given
Its: President
GLASSTECH SUB CO.
By: /s/ Xxxx X. Xxxxxxxxx
Its: President
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