Exhibit 10
JPMORGAN
[LETTERHEAD]
June 22, 1995
The Board of Directors
UNR Industries, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
Members of the Board:
This letter confirms our understanding (the "Agreement") that UNR Industries,
Inc. (together with its subsidiaries and affiliates, the "Company") has
engaged X.X. Xxxxxx Securities Inc. ("X.X. Xxxxxx") to act as the Company's
exclusive financial advisor with respect to the Company's analysis and review
of its general corporate and financial strategies and its consideration of
various potential strategic or financial transactions, including any sale,
merger, consolidation, or any other business combination, in one or a series
of transactions, involving all or a portion of the stock, assets, or business
of the Company or any of its subsidiaries or divisions (each, a "Business
Combination"), any repurchase by the Company of a significant amount of its
securities, any recapitalization of the Company, or any spin-off, split-off,
or other extraordinary dividend in excess of $1.00 per share on the Company's
common stock, in cash, securities, or other assets, to stockholders of the
Company (each of the foregoing, including any Business Combination, a
"Transaction").
As discussed, we propose to undertake certain services on your behalf as part
of our mandate to assist you in analyzing and evaluating various strategic
and financial alternatives, including to the extent requested by you:
(i) assisting you in preparing an offering memorandum describing the Company,
its operations, historical performance, and future prospects,
(ii) identifying and contacting selected qualified acquirors acceptable to
you, (iii) arranging for potential acquirors to conduct business
investigations, (iv) assisting you in negotiating the financial aspects of
any proposed Transaction, and (v) delivering an opinion to the Board of
Directors of the Company, if requested, as to the fairness to the Company's
stockholders from a financial point of view of the consideration to be
received by the Company's stockholders in any proposed Transaction (an
"Opinion").
As compensation for the services to be rendered hereunder by X.X. Xxxxxx, the
Company agrees to pay X.X. Xxxxxx (i) an engagement fee (the "Engagement
Fee") of $200,000 payable promptly upon execution of this Agreement,
(ii) a success fee as described below (the "Success Fee"), and (iii) a no-go
fee (the "No-Go Fee") of $300,000, payable 12 months from the date of this
Agreement in the event that a bona fide written proposal (or proposals) for a
Business Combination (or Business Combinations), determined by the Board of
Directors to be reasonably acceptable, is received from a third party (or
parties) during the
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term of this Agreement, and the Company has rejected such proposal (or
proposals) and no alternative Transactions are or become available to the
Company during the term of this Agreement.
The Success Fee (except as otherwise provided in this paragraph) referred to
in clause (ii) above shall be in an amount equal to (1) 0.70% (70 basis
points) of the Aggregate Transaction Value (as hereinafter defined) if only
one Business Combination is consummated by the Company and (2) .80% (80 basis
points) of the Aggregate Transaction Value if two or more Business
Combinations are consummated. If the Company consummates any sale or other
transfer of stock, assets or business of its Home Products division to
Franke, Inc. (a "Home Products Transaction"), the foregoing Success Fee
structure shall not apply to such Transaction and X.X. Xxxxxx shall receive
instead a Success Fee equal to .35% (35 basis points) of the Aggregate
Transaction value of such Home Products Transaction; PROVIDED, however, that
the Success Fee structure slated in the first sentence of this paragraph
shall apply to any Transaction involving the Home Products division other
than such a sale or other transfer to Franke, Inc. The Engagement Fee paid to
X.X. Xxxxxx hereunder shall be credited to any Success Fee payable to X.X.
Xxxxxx hereunder. A Success Fee shall be payable with respect to each
Transaction in cash upon consummation of such Transaction. In the event that
the Company enters into a Transaction other than a Business Combination, X.X.
Xxxxxx and the Company will negotiate, in good faith, a mutually agreeable
Success Fee, which will take into account, among other things, the results
obtained and the custom and practice among investment bankers acting in
similar transactions.
For purposes of this Agreement, "Aggregate Transaction Value" means the
aggregate amount of consideration received by the Company and/or its
stockholders (treating any shares issuable upon exercise of options,
warrants, or other rights of conversion as outstanding) in all Transactions,
plus the amount of any debt securities or other liabilities assumed,
redeemed, or remaining outstanding or equity securities redeemed or remaining
outstanding in connection with all Transactions, plus, without duplication,
the value of any securities, cash, or other assets (in the case of
distributions to the Company's common stockholders, including only
extraordinary dividends in excess of $1.00 per share on the Company's common
stock) distributed to stockholders of the Company since the date hereof.
For purposes of this Agreement, a Transaction shall be deemed to have been
consummated upon the earliest of any of the following events to occur:
(a) the acquisition by another person of at least 80% of the outstanding
common stock of, or voting power in, the Company; (b) a merger or
consolidation of the Company with another person; (c) the acquisition by
another person of assets of the Company representing at least 5% of the
Company's book value; (d) acquisition by the Company (including any such
acquisition by any shareholder of the Company) of at least 20% of its
outstanding equity securities; (e) consummation of any recapitilization; or
(f) the receipt by stockholders of the Company of any cash, securities, or
other assets to be distributed in any spin-off, split-off or other
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extraordinary dividend (in the case of distributions to the Company's common
stockholders, including only such distributions in excess of $1.00 per share
of the Company's common stock).
If the consideration or other value received in any Business Combination is
paid in whole or in part in the form of securities, the value of such
securities, for purposes of calculating the Success Fee, shall be the fair
market value thereof, as the parties hereto shall mutually agree, on the day
prior to the consummation of the Business Combination; PROVIDED, HOWEVER,
that if such securities consist of securities with an existing public trading
market, the value thereof shall be determined by the last sales price for
such securities on the last trading day thereof prior to such consummation.
If all or a portion of the consideration is related to or contingent upon the
future earnings or operations of the Company, the portion of X.X. Xxxxxx'x
compensation relating thereto shall be calculated and shall be paid at the
time the Transaction is consummated based upon the estimated net present
value thereof.
The Company agrees to provide X.X. Xxxxxx all financial and other information
requested by it for the purpose of its assignment hereunder. In performing
its services hereunder (including, without limitation, in giving any
Opinion), X.X. Xxxxxx shall be entitled to rely upon and assume, without
independent verification, the accuracy and completeness of all information
that is publicly available and of all information that has been furnished to
it by the Company or otherwise reviewed by X.X. Xxxxxx , and X.X. Xxxxxx
shall not assume any responsibility nor have any liability therefor. X.X.
Xxxxxx shall have no obligation to conduct any valuation or appraisal of any
assets or liabilities. For the execution of its assignment, X.X. Xxxxxx shall
establish a team of qualified individuals from appropriate specialty areas
within X.X. Xxxxxx & Co. Incorporated, including Xxxxxx Guaranty Trust
Company of New York.
Any financial advice rendered by X.X. Xxxxxx pursuant to this Agreement may
not be disclosed publicly in any manner without X.X. Xxxxxx'x prior written
approval and will be treated by the Company as confidential. X.X. Xxxxxx
understands that its Opinion may be reproduced in full in any proxy or
information statement mailed to stockholders of the Company and agrees to
provide its written approval for such use.
In order to coordinate our efforts with respect to possible Transactions,
during the period of our engagement hereunder neither the Company nor any
representative thereof (other than X.X. Xxxxxx) will initiate discussions
regarding a Transaction except through X.X. Xxxxxx. If the Company or its
management receives an inquiry regarding a Transaction (other than the Home
Products Transaction), they will promptly advise X.X. Xxxxxx of such inquiry
in order that X.X. Xxxxxx may evaluate the person making such inquiry and its
interest and assist the Company in any resulting negotiations.
The Company agrees to reimburse X.X. Xxxxxx promptly upon request from time
to time for all reasonable expenses (including, without limitation, travel,
communication, and document production expenses, and the fees and
disbursements of counsel) incurred by X.X. Xxxxxx in
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performing its engagement hereunder, whether or not a Transaction is
consummated. The Company also agrees to indemnify X.X. Xxxxxx and certain
other entities and persons as set forth on Schedule I attached hereto.
This Agreement may be terminated by either the Company or X.X. Xxxxxx at any
time upon giving written notice to the other party. No such termination will
affect (i) X.X. Xxxxxx'x rights to receive fees accrued prior to such
termination or to receive reimbursement of its expenses as set forth above,
(ii) the rights of X.X. Xxxxxx or any other Indemnified Person (as defined in
Schedule I hereto) to receive indemnification and contribution, or (iii) the
Company's confidentiality obligations hereunder. In addition, if at any time
prior to the expiration of 18 months after any such termination by the
Company or expiration of this Agreement a Transaction is consummated, X.X.
Xxxxxx will be entitled to payment in full or the Success Fee.
It is understood that if the Company completes a transaction in lieu of any
Transaction for which X.X. Xxxxxx is entitled to compensation pursuant to
this Agreement, X.X. Xxxxxx and the Company will negotiate in good faith
appropriate compensation for X.X. Xxxxxx in an amount to be mutually agreed
upon, which will take into account, among other things, the results obtained
and the custom and practice among investment bankers acting in similar
transactions.
If the foregoing correctly sets forth the agreement between the Company and
X.X. Xxxxxx, please sign and return the enclosed copy of this Agreement,
whereupon it shall become our binding agreement to be governed by New York
law.
Very truly yours,
X.X. XXXXXX SECURITIES INC.
By: /s/ C. H. Xxxxxxxx Xxxx
-----------------------
Name: C. H. Xxxxxxxx Xxxx
Title: Managing Director
Accepted as of the
date first above written:
UNR INDUSTRIES, INC.
By: /s/ X. X. Xxxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
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JPMORGAN
[LETTERHEAD]
February 9, 1996
The Board of Directors
UNR Industries, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
Members of the Board:
This letter confirms our understanding (the "Agreement") that UNR
Industries, Inc. (together with its subsidiaries and affiliates, the
"Company") has engaged X.X. Xxxxxx Securities Inc. ("X.X. Xxxxxx") to act as
the Company's exclusive financial advisor with respect to the sale, merger,
consolidation, or any other business combination, in one or a series of
transactions, involving all or a portion of the stock, assets, or business of
any of the following divisions of the Company, either separately or in
combination (each, a "Transaction"): UNR-Xxxxxxx, Unarco Commercial Products,
UNR-Home Products and Real Time Solutions (each, a "Division" and
collectively, the "Divisions"). This Agreement replaces the previous
Agreement between the Company and X.X. Xxxxxx dated June 22, 1995 which is,
therefore, terminated. X.X. Xxxxxx hereby waives the No-Go Fee under that
Agreement.
As discussed, we propose to undertake certain services on your behalf,
including to the extent requested by you: (i) assisting you in preparing an
offering memorandum describing each Division, its operations, historical
performance, and future prospects, (ii) identifying and contacting selected
qualified acquirors acceptable to you, (iii) arranging for potential
acquirors to conduct business investigations, (iv) assisting you in
negotiating the financial aspects of any proposed Transaction, and (v)
delivering an opinion to the Board of Directors of the Company, if requested,
as to the fairness to the Company's stockholders from a financial point of
view of the consideration to be received by the Company in any proposed
Transaction (an "Opinion").
As compensation for the services to be rendered hereunder by X.X. Xxxxxx, the
Company agrees to pay X.X. Xxxxxx (i) a Success Fee as hereinafter-defined,
or (ii) a No-Go Fee of $300,000 payable 12 months from the date of this
Agreement in the event that no definitive agreement to consummate a
Transaction has been executed. The Success Fee shall be an amount equal to
(i) 1.25% (125 basis points) of the Aggregate Transaction Value (as
hereinafter defined) up to $175,000,000 plus 5% (500 basis points) of the
Aggregate Transaction Value in excess of $175,000,000 if all the Divisions
are sold, or (ii), in the event that the divestiture of all Divisions is not
consummated for any reason, the Success Fee shall be the sum of and be
defined as follows: (a) 1.00% of the Transaction Value for UNR-Xxxxxxx up to
$100,000,000 and 5% of the Transaction Value over $100,000,000; (b) 1.25% of
the Transaction Value for Unarco Commercial Products up to $40,000,000 and 3%
of the
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Transaction Value over $40,000,000; (c) 2.00% of the Transaction Value for
UNR-Home Products up to $15,000,000 and 5% of the Transaction Value over
$15,000,000; and (d) 2.00% of the Transaction Value for Real Time Solutions
up to $15,000,000 and 5% of the Transaction Value over $15,000,000. The
Success Fee shall be payable with respect to each Transaction in cash upon
consummation of such Transaction subject to a minimum Success Fee of $500,000
for the first Transaction. To the extent that X.X. Xxxxxx is entitled to
Success Fees greater than $500,000 as a result of the first Transaction and
a subsequent Transaction(s), the Success Fee(s) for the subsequent
Transaction(s) shall be adjusted so that X.X. Xxxxxx does not receive more
compensation than it would be entitled in clause (ii) of the second sentence
of this paragraph. The $200,000 engagement fee paid under the previous
Agreement between the Company and X.X. Xxxxxx dated June 22, 1995 shall be
credited against the Success Fee(s) payable to X.X. Xxxxxx hereunder.
For purposes of this Agreement, "Transaction Value" means the amount of
consideration received by the Company in each Transaction, plus the amount of
any debt securities or other liabilities (excluding accounts payable and
accrued expenses) assumed by the purchaser as reflected on the Division's
financial statements immediately prior to closing plus any other liabilities
assumed by the Purchaser but not reflected on the Division's financial
statements and not incurred by the Division in the normal course of business
all as contemplated in the draft Asset Purchase and Sale Agreement provided
to potential purchasers. "Aggregate Transaction Value" means the sum of the
Transaction Values for all of the Divisions.
If the consideration or other value received in any Transaction is paid in
whole or in part in the form of securities, the value of such securities, for
purposes of calculating the Success Fee, shall be the fair market value
thereof, as the parties hereto shall mutually agree, on the day prior to the
consummation of the Transaction; PROVIDED, HOWEVER, that if such securities
consist of securities with an existing public trading market, the value
thereof shall be determined by the last sales price for such securities on
the last trading day thereof prior to such consummation. If all or a portion
of the consideration is related to or contingent upon the future earnings or
operations of the Company, the portion of X.X. Xxxxxx'x compensation relating
thereto shall be calculated and shall be paid at the time the Transaction is
consummated based upon the estimated net present value thereof as the parties
hereto shall mutually agree.
The Company agrees to provide X.X. Xxxxxx all financial and other information
requested by it for the purpose of its assignment hereunder. In performing
its services hereunder (including, without limitation, in giving any
Opinion), X.X. Xxxxxx shall be entitled to rely upon and assume, without
independent verification, the accuracy and completeness of all information
that is publicly available and of all information that has been furnished to
it by the Company or otherwise reviewed by X.X. Xxxxxx, and X.X. Xxxxxx shall
not assume any responsibility nor have any liability therefor. X.X. Xxxxxx
shall have no obligation to conduct any valuation or appraisal of any assets
or liabilities. For the execution of its assignment, X.X. Xxxxxx shall
establish a team of qualified individuals from appropriate speciality areas
within X.X. Xxxxxx & Co. Incorporated, including Xxxxxx Guaranty Trust
Company of New York.
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Any financial advice rendered by X.X. Xxxxxx pursuant to this Agreement may
not be disclosed publicly in any manner without X.X. Xxxxxx'x prior written
approval and will be treated by the Company as confidential. X.X. Xxxxxx
understands that its Opinion may be reproduced in full in any proxy or
information statement mailed to stockholders of the Company and agrees to
provide its written approval for such use.
In order to coordinate our efforts with respect to possible Transactions,
during the period of our engagement hereunder neither the Company nor any
representative thereof (other than X.X. Xxxxxx) will initiate discussions
regarding a Transaction except through X.X. Xxxxxx. If the Company or its
management receives an inquiry regarding a Transaction, they will promptly
advise X.X. Xxxxxx of such inquiry in order that X.X. Xxxxxx may evaluate the
person making such inquiry and its interest and assist the Company in any
resulting negotiations.
The Company agrees to reimburse X.X. Xxxxxx promptly upon request from time
to time for all reasonable expenses (including, without limitation, travel,
communication, and document production expenses, and the fees and
disbursements of counsel) incurred by X.X. Xxxxxx in performing its
engagement hereunder, whether or not a Transaction is consummated. The
Company also agrees to indemnify X.X. Xxxxxx and certain other entities and
persons as set forth on Schedule I attached hereto.
This Agreement may be terminated by either the Company or X.X. Xxxxxx at any
time upon giving written notice to the other party. No such termination will
affect (i) X.X. Xxxxxx'x rights to receive fees accrued prior to such
termination or to receive reimbursement of its expenses as set forth above,
(ii) the rights of X.X. Xxxxxx or any other Indemnified Person (as defined in
Schedule I hereto) to receive indemnification and contribution, or (iii) the
Company's confidentiality obligations hereunder. In addition, if at any time
prior to the expiration of 18 months after any such termination by the
Company or expiration of this Agreement a Transaction is consummated, X.X.
Xxxxxx will be entitled to payment in full of the Success Fee.
It is understood that if the Company completes a transaction in lieu of any
Transaction for which X.X. Xxxxxx is entitled to compensation pursuant to
this Agreement, including but not limited to the sale of the Company, any
repurchase by the Company of a significant amount of its securities, any
recapitalization of the Company, or any spin-off, split-off, or extraordinary
dividend (aside from those related to the Transactions contemplated in this
Agreement), X.X. Xxxxxx and the Company will negotiate in good faith
appropriate compensation for X.X. Xxxxxx is an amount to be mutually agreed
upon, which will take into account, among other things, the results obtained
and the custom and practice among investment bankers acting in similar
transactions.
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If the foregoing correctly sets forth the agreement between the Company and
X.X. Xxxxxx, please sign and return the enclosed copy of this Agreement,
whereupon it shall become our binding agreement to be governed by New York
law.
Very truly yours,
X.X. XXXXXX SECURITIES INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Accepted as of the
date first above written:
UNR INDUSTRIES, INC.
By: __________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
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JPMorgan
SCHEDULE I
UNR Industries, Inc. (the "Company") referred to in the attached agreement
(the "Agreement"), agrees to indemnify and hold harmless X.X. Xxxxxx
Securities Inc. ("X.X. Xxxxxx") and its affiliates, and the respective
directors, officers, agents, and employees of X.X. Xxxxxx and its affiliates
and each other entity or person, if any, controlling X.X. Xxxxxx or any of its
affiliates within the meaning of either Section 15 of the Securities Act of
1933,,as amended, or Section 20 of the Securities Exchange Act of 1934, as
amended, (X.X. Xxxxxx and each such entity or person being referred to as an
"Indemnified Person") from and against any losses, claims, demands,
damages, or liabilities (or actions in respect thereof) relating to or arising
out of activities performed pursuant to the Agreement, the transactions
contemplated thereby or X.X. Xxxxxx'x role in connection therewith, and to
reimburse X.X. Xxxxxx and any other Indemnified Person on a current basis for
all expenses (including, without limitation, reasonable fees and
disbursements of counsel) incurred by X.X. Xxxxxx or any such other
Indemnified Person n connection with pending or threatened litigation to
which X.X. Xxxxxx (or any other Indemnified Person) is a party, in each case,
as such expenses are incurred or paid. The Company will not, however, be
responsible for any such losses, claims, damages, liabilities, or expenses of
any Indemnified Person that are determined by final and nonappealable
judgment of a court of competent jurisdiction to have resulted primarily from
actions taken or omitted to be taken by such Indemnified Person in bad faith
or from such Indemnified Person's gross negligence or willful misconduct. The
Company also agrees that no Indemnified Person shall have any liability
(whether direct or indirect, in contract, tort or otherwise) to the Company
for or in connection with the Agreement, any transactions contemplated
thereby or X.X. Xxxxxx'x role in connection therewith, except for any such
liability for losses, claims, damages, liabilities or expenses incurred by
the Company that are determined by final and nonappealable judgment of a
court of competent jurisdiction to have resulted primarily from actions taken
or omitted to be taken by such Indemnified Person in bad faith or from such
Indemnified Person's gross negligence or willful misconduct.
Upon receipt by an Indemnified Person of actual notice of a claim, action or
proceeding against such Indemnified Person in respect of which indemnity may
be sought hereunder, such Indemnified Person shall promptly notify the
Company with respect thereto. In addition, an Indemnified Person shall
promptly notify the Company after any action is commenced (by way of service
with a summons or other legal process giving information as to the nature and
basis of the claim) against such Indemnified Person. In any event, failure so
to notify the Company shall not relieve the Company from any liability which
the Company may have on account of this indemnity or otherwise, except to the
extent the Company shall have been materially prejudiced by such failure. The
Company will, if requested by any Indemnified Person, assume the defense of
any litigation or proceeding in respect of which indemnity may be sought
hereunder, including the employment of counsel reasonably satisfactory to
X.X. Xxxxxx and the payment of the fees and expenses of such counsel, in
which event, except as provided below, the Company shall not be liable for
the fees and expenses of any other counsel retained by any
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Indemnified Person in connection with such litigation or proceeding. In any
such litigation or proceeding the defense of which the Company shall have so
assumed, and Indemnified Person shall have the right to participate in such
litigation or proceeding and to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Company and such Indemnified Person shall have mutually agreed
in writing to the retention of such counsel, or (ii) the named parties to any
such litigation or proceeding (including any impleaded parties) include the
Company and such Indemnified Person and representation of both parties by the
same counsel would, in the opinion of counsel to such Indemnified Person, be
inappropriate due to actual or potential differing interests between the
Company and such Indemnified Person. The Company shall not be liable for any
settlement of consent or if there be a final judgment for the plaintiff, the
Company agrees to indemnify the Indemnified Person from and against any loss
or liability by reason of such settlement or judgment. If the Company assume
the defense of any litigation or proceeding, the Company will not settle such
litigation or proceeding without X.X. Xxxxxx'x written consent, which shall
not be unreasonably withheld.
The provisions contained in this Schedule I shall remain operative and
in full force and effect regardless of the expiration or any termination of
the Agreement.
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