EXHIBIT 10.2
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is dated February 2, 1998 by and between Xxxxxx
Packaging Holdings Company, a Pennsylvania limited partnership (formerly known
as Xxxxxx Packaging Company, the "Partnership"), and Xxxxxx Capital Corporation,
a Pennsylvania corporation ("Capital").
BACKGROUND
1. The Partnership is engaged in the business of the sale and manufacturing
of extrusion blow molded rigid plastic containers primarily for the food and
beverage, household and automotive business segments (the "Business").
2. Capital has agreed to provide the Partnership with general business,
operational and financial consulting services concerning the Business, all on
the terms and conditions hereinafter set forth.
3. On December 18, 1997, the partners of the Partnership and certain other
entities entered into an Agreement and Plan of Recapitalization, Redemption and
Purchase (the "Recapitalization Agreement") pursuant to which, among other
things, the capitalization of the Partnership will be restructured.
4. The execution and delivery of this Agreement is a condition to the
consummation of the transactions contemplated by the Recapitalization Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained in this Agreement, the parties hereto, intending to be
legally bound, agree as follows:
SECTION 1. SERVICES
1.1 Nature of Services. Subject to the terms and conditions hereinafter set
forth, during the term of this Agreement, Capital shall provide such general
business, administrative, operational and financial consulting services
concerning the Business as the Partnership shall reasonably request from time to
time.
1.2 Rendering of Services. All consulting services required to be provided
hereunder shall be rendered on behalf of Capital by employees, consultants and
representatives of Capital as are employed or retained from time to time
(including, without limitation, Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxx Xxxxxx and
Xxxxxxx Xxxxxx) as may be mutually acceptable to the Partnership and Capital
(each an "Operating Consultant," and together the "Operating Consultants");
provided, however, that in the event Xx. Xxxxxx serves on the Partnership's
Advisory Committee, Capital shall not be obligated to provide the consulting
services of Xx. Xxxxxx hereunder unless and until he reaches his maximum time
commitment to the Advisory Committee pursuant to the Fifth Amended and Restated
Agreement of Limited
Partnership of the Partnership dated the date hereof, and any services provided
by Xx. Xxxxxx to the Partnership after such time shall be presumed to be
services provided under this Agreement. Capital shall cause the Operating
Consultants to provide requested consulting services to the Partnership within a
reasonable amount of time following Capital's receipt of notice from the
Partnership specifying the type of consulting services requested, the location
where such consulting services need to be performed and the estimated time
commitment for such consulting services.
1.3 Time Commitment. During the term of this Agreement, the extent to which
Capital shall (or shall not) be obligated hereunder to provide the consulting
services of any individual Operating Consultant shall be mutually agreed upon by
the Partnership and Capital.
SECTION 2. COMPENSATION
2.1 Fee for Operating Consultants' Services. In consideration of the
consulting services rendered by the Operating Consultants under this Agreement,
the Partnership shall pay to Capital a mutually agreed upon consulting fee on a
retainer basis or at hourly rates to be agreed upon by the parties before such
services are provided (but ranging from $200 per hour to $750 per hour depending
upon the Operating Consultant that is performing the services) for each hour
actually spent by the Operating Consultants performing such services, including
time spent in travel in connection therewith, payable within 10 days of the date
of an invoice therefor from Capital.
2.2 CPI Adjustments. On the first anniversary of this Agreement (the
"Adjustment Date"), the agreed upon fees pursuant to Section 2.1 hereof shall be
increased to an amount not less than the product of such agreed upon fees
multiplied by a fraction, the numerator of which shall be the CPI (as
hereinafter defined) for the month immediately preceding the Adjustment Date,
and the denominator of which shall be the CPI for the month of December, 1997.
For purposes of this Section 2.2, the term "CPI" shall mean the Consumer Price
Index -- All Urban Consumers -- All Items, as published by the Bureau of Labor
Statistics of the United States Department of Labor, or any revised or successor
index hereafter published by the Bureau of Labor Statistics or other agency of
the United States Government succeeding to its functions.
2.3 Expenses. The Partnership shall promptly reimburse Capital for all
actual out-of-pocket expenses reasonably incurred by or on behalf of Capital in
connection with the performance of the consulting services contemplated hereby.
Such reimbursement shall be made in accordance with the Partnership's
reimbursement policies as in effect from time to time and upon receipt of
itemized vouchers therefor and such other supporting information as the
Partnership may reasonably require.
SECTION 3. TERM AND TERMINATION
3.1 Term. This Agreement shall commence on the date hereof and shall
continue for a period of two (2) years, unless earlier terminated as hereinafter
provided. The term of this Agreement may be extended by mutual written agreement
of the parties.
3.2 Termination. This Agreement may be terminated at any time prior to the
expiration hereof as follows:
(a) by mutual consent of Capital and the Partnership; and
(b) by either party, if the other party materially breaches any
covenant or other term of this Agreement; provided, that the party seeking
to terminate this Agreement has given the party who committed the breach
thirty (30) days' notice in writing, particularly specifying the breach,
and the
notified party has not cured such breach prior to the expiration of such
notice period to the reasonable satisfaction of the other party.
3.3 Payment of Accrued Amounts. If this Agreement is terminated pursuant to
Section 3.2, the Partnership shall not thereafter be obligated to make any
further payment under this Agreement other than amounts payable hereunder as of
the date of termination. All such payments shall be due and payable immediately
upon termination.
SECTION 4. INDEMNIFICATION
The Partnership shall indemnify and hold Capital (including its officers,
directors, shareholders, consultants, representatives, and employees (including
the Operating Consultants)) harmless against and in respect of any and all
losses, costs, expenses, claims, damages, obligations and liabilities, including
interest, penalties and reasonable attorney's fees and disbursements, which
Capital or any such person may suffer, incur or become subject to arising out
of, based upon or otherwise in respect of the performance by Capital of the
consulting services required to be provided by Capital hereunder or the exercise
by Capital of its rights under this Agreement, except to the extent Capital is
found by a court of competent jurisdiction in a final non-appealable order to
have been guilty of gross negligence or wilful misconduct.
SECTION 5. MISCELLANEOUS
5.1 No Agency Relationship. It is understood and agreed that in providing
consulting services hereunder, Capital is acting as an independent contractor,
and neither Capital nor any Operating Consultant will have any authority to act
as agent for the Partnership in any matter or in any respect.
5.2 Notices. All notices of any kind required or permitted under this
Agreement shall be in writing and shall be sufficiently given if hand-delivered
to the recipient, or sent to the recipient by documented overnight delivery
service or registered or certified mail, postage prepaid, return receipt
requested or by facsimile (confirmed by U.S. mail), confirmation received,
addressed as set forth below or to such other person and/or at such other
address as may be furnished in writing by any party hereto to the other. Any
such notice shall be deemed to have been given as of the date received, in the
case of personal delivery, or on the date shown on the receipt or confirmation
therefor, in all other cases.
If to Capital, to:
Xxxxxx Capital Corporation
c/o The Xxxxxx Companies
0000 Xxxxx Xxxxxx
Xxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Xx.
Facsimile: 000-000-0000
With a copy to:
Drinker Xxxxxx & Xxxxx LLP
Philadelphia National Bank Building
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Xx.
Facsimile: 000-000-0000
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If to the Partnership, to:
BCP/Xxxxxx Holdings LLC
c/o Blackstone Capital Partners III Merchant Banking Fund LP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
5.3 Assignment. This Agreement may not be assigned by either party hereto
without the prior written consent of the other. Subject to the foregoing
sentence, this Agreement and the rights and obligations set forth herein shall
inure to the benefit of, and be binding upon, the parties hereto and each of
their respective permitted successors and assigns.
5.4 Entire Agreement and Modification. This Agreement constitutes the
entire agreement between the parties hereto with respect to the matters
contemplated herein and supersedes all prior agreements and understandings with
respect thereto. Any amendment, modification, or waiver of this Agreement shall
not be effective unless in writing and signed by the party to be bound or their
respective successors in interest.
5.5 Waiver. Unless expressly provided, the waiver by a party of any breach
of any provision of this Agreement shall not constitute or operate as a waiver
of any other breach of such provision or of any other provision hereof, nor
shall any failure to enforce any provision hereof operate as a waiver of such
provision or of any other provision hereof.
5.6 Governing Law. This Agreement is made pursuant to, and shall be
construed and enforced in accordance with, the internal laws of the Commonwealth
of Pennsylvania, without giving effect to otherwise applicable principles of
conflicts of law.
5.7 Severability. The invalidity or unenforceability of any particular
provision or part of any provision of this Agreement shall not affect
the other provisions or parts thereof.
5.9 Headings. All section headings contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement and
shall not affect in any way the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement on the date first written.
XXXXXX PACKAGING HOLDINGS COMPANY
By: Xxxxxx Packaging Corporation,
its general partner
By:/s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Chief Executive Officer
XXXXXX CAPITAL CORPORATION
By:/s/ Xxxxxxx X. Xxxxxx, Xx.
--------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: President
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