Exhibit 10.28
MJD COMMUNICATIONS, INC.
AMENDED AND RESTATED FINANCIAL ADVISORY AGREEMENT
WITH
XXXXX & COMPANY, L.P.
AMENDED AND RESTATED FINANCIAL ADVISORY AGREEMENT
entered into as of January 20, 2000, between Xxxxx & Company, L.P., a Delaware
limited partnership (the "CONSULTANT"), and MJD Communications, Inc., a Delaware
corporation ("MJD").
WHEREAS, in connection with an investment made in MJD by Xxxxx
Investment Associates V, L.P. ("KIA V") and Xxxxx Equity Partners V, L.P. ("KEP
V") pursuant to the Stock Purchase Agreement, dated as of Xxxxx 0, 0000, xxxxx
XXX, Xxxxxxxx Capital Partners, L.P., KIA V and KEP V, the Consultant and MJD
entered into a Financial Advisory Agreement, dated as of July 31, 1997 (the
"FINANCIAL ADVISORY AGREEMENT");
WHEREAS, as of the date hereof, KIA V and KEP V have consummated an
additional investment in MJD pursuant to the Stock Purchase Agreement (the
"STOCK PURCHASE AGREEMENT"), dated as of January 4, 2000, among MJD, Xxxxxx X.
Xxx Equity Fund IV, L.P. ("THL FUND IV"), certain parties related to THL Fund
IV, KIA V, KEP V and the other parties thereto;
WHEREAS, in connection with such additional investment, the
Consultant and MJD wish to amend and restate the Financial Advisory Agreement;
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
remuneration 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
January 17, 2000 and expiring on the earlier to occur of (I) December 31, 2006
or (II) the date that KIA V and KEP V and the Xxxxx 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
to be made at the Closing and to be calculated on a pro-rata basis for the
period from the Closing through March 31, 2000. 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
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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 Management Services Agreement with THL Equity Advisors IV, LLC
of even date herewith (the "THL Management Services 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 THL Equity Advisors IV, LLC.
b. MJD agrees to pay the Consultant a transaction fee of
$8,445,080.1/ Such fee shall be payable by MJD upon the earlier to occur of (I)
an initial public offering of the common stock of MJD, (II) the sale of MJD to a
third party or parties, whether structured as a sale of stock, merger, sale of
assets, recapitalization or otherwise, or (III) KIA V and KEP V ceasing 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.
c. 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 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,
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1 This amount will equal the fee being paid to THL at the Closing.
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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(c) 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, or
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 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 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
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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:
Xxxxx & Company
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, XX, Esq.
Facsimile: 000-000-0000
(ii) If to MJD:
MJD Communications, Inc.
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Facsimile: 000-000-0000
7. MODIFICATIONS. This Agreement amends and restates the Financial
Advisory Agreement and supersedes all prior agreements and understandings among
the parties with respect to such subject matter, whether written or oral. This
Agreement may not be amended or revised except by a writing signed by the
parties; PROVIDED, that if MJD (a) amends the THL Management Services Agreement,
or (b) enters into any other management services agreement, consulting agreement
or similar arrangement, whether with THL Equity Advisors IV, LLC or with any
other persons 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
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understood, however, that if MJD amends the THL Management Services Agreement,
or otherwise agrees, to provide THL Equity Advisors IV, LLC or any affiliate
thereof any additional payment, whether in connection with the termination of
the THL Management Services Agreement or otherwise the Consultant shall be
entitled to the exact same payment, in addition to the payment the Consultant is
entitled to under Section 4b hereof.
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 to 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 Amended and
Restated Financial Advisory Agreement as of the date first above written.
XXXXX & COMPANY, L.P.
BY: XXXXX & COMPANIES, INC.,
ITS GENERAL PARTNER
By: /s/ Xxxxx X. Xxxxxxx, XX
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Name: Xxxxx X. Xxxxxxx, XX
Title: Vice President and General
Counsel
MJD COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Name:
Title:
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