NEW SUBSIDIARY ADVISORY AGREEMENT
THIS NEW SUBSIDIARY ADVISORY AGREEMENT ("Agreement"), is executed as
of the 25th day of July 1997 by and among JORDAN INDUSTRIES, INC., an Illinois
corporation, JII, Inc., a Delaware corporation (hereinafter referred to as the
"Consultant"), and each of the other parties a signatory hereto (hereinafter
collectively referred to as the "Company").
W I T N E S E T H:
- - - - - - - - -
WHEREAS, the Consultant has and/or has access to personnel who are
highly skilled in the field of rendering advice to businesses and financial
advice to the Company;
WHEREAS, the Board of Directors of the Company has been made fully
aware of the relationships of certain members of the Company's Board of
Directors to the Consultant;
WHEREAS, the Company's Board of Directors has reviewed in detail and
discussed the terms and provisions of this Agreement and the fairness of this
Agreement and whether more favorable agreements for the Company could be
obtained from unaffiliated third parties; and
WHEREAS, on the basis of its review of this Agreement, the Board of
Directors of the Company deemed it advisable and in the best interests of the
Company and necessary to the conduct, promotion, and attainment of the
business objectives of the Company that the Company retain Consultant to
provide business and financial advice to the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto do hereby agree
as follows:
1. The Company hereby retains the Consultant, through the
Consultant's own personnel or through personnel available to the Consultant,
to render consulting services from time to time to the Company and its direct
and indirect subsidiaries (whether now existing or hereafter acquired) in
connection with their acquisitions, divestitures and investments, their
financial affairs, their relationships with their lenders, stockholders and
other third-party associates or affiliates, and the expansion of their
businesses. Consultant shall render such services to the Company and/or its
direct and indirect subsidiaries in good faith and in accordance with
professional standards and applicable law. The term of this Agreement shall
commence the date hereof and continue until December 31, 2007, unless
extended, or sooner terminated, as provided in Section 5 below. The
Consultant's personnel shall be reasonably available to the Company's
managers, auditors and other personnel for consultation and advice pursuant to
this Agreement, subject to Consultant's reasonable convenience and scheduling.
Services may be rendered at the Consultant's offices or at such
other locations selected by the Consultant as the Company and the Consultant
shall from time to time agree.
2. Subject to Section 4 hereof, the Company shall pay to the
Consultant (i) an investment banking and sponsorship fee of up to two percent
(2%) of the aggregate consideration paid (including non-competition, earnout,
contingent purchase price, incentive arrangements and similar payments) (A) by
the Company and/or its subsidiaries in connection with the acquisition by the
Company and/or its subsidiaries of all or substantially all of the outstanding
capital stock, warrants, options or other rights to acquire or sell capital
stock, or all or substantially all of the business or assets of another
individual, corporation, partnership or other business entity, (B) by the
Company and/or its subsidiaries in connection with any joint venture or other
minority investment, or (C) to the Company in connection with the sale by the
Company of all or substantially all of the Company's and/or its subsidiaries'
outstanding capital stock, warrants, options, or other rights to acquire or
sell stock, or all or substantially all of the business or assets of the
Company and/or its subsidiaries (each of the transactions described in clauses
(A), (B) and (C), a "Transaction"), including, but not limited to, any
Transaction negotiated for the Company involving any affiliate of the Company
or the Consultant, including, but not limited to, any Transaction involving,
TJC Management Corporation, The Jordan Company, MCIT PLC, Jordan/Zalaznick
Capital Company, Leucadia National Corporation or any affiliates of any of the
foregoing (collectively, the "Jordan Affiliates"); and (ii) a financial
consulting fee of up to one percent (1%) of the amount obtained or made
available pursuant to any debt, equity or other financing (including without
limitation, any refinancing) by the Company and/or its subsidiaries with the
assistance of Consultant, including, but not limited to, any financing
obtained for the Company and/or its subsidiaries from one or more of the
Jordan Affiliates. However, the amount of such fees payable in each such
Transaction will be no less favorable to the Company than those that could be
obtained from comparable, unaffiliated third parties, and will be subject to
separate discussion and approval, in connection with each such Transaction, by
each of a majority of the Board of Directors and a majority of the directors
who are disinterested directors in relation to Consultant and its affiliates.
Notwithstanding and in addition to the foregoing, if the Consultant renders
services to the Company outside the ordinary course of business, the Company
shall pay an additional amount equal to the value of such extraordinary
services rendered by the Consultant as may be separately agreed to between the
Consultant and the Company.
3. The Company shall promptly reimburse Consultant for out-of-pocket
expenses (including, without limitation, an allocable amount of the
Consultant's overhead expenses attributable to the Company and its direct and
indirect subsidiaries, determined on actual usage, percentage revenue or such
other basis as Consultant may determine) incurred by the Consultant and its
personnel in performing services hereunder to the Company and its direct and
indirect subsidiaries upon the Consultant rendering a statement therefor,
together with such supporting data as the Company shall reasonably require.
-2-
4. Notwithstanding the foregoing, the Company shall not be required
to pay the fees under Section 2, (a) if and to the extent expressly prohibited
by the provisions of any credit, stock, financing or other agreements or
instruments binding upon the Company, its subsidiaries or properties, (b) if
the Company has not paid cash interest on any interest payment date or has
postponed or not made any principal payments with respect to any of their
indebtedness on any scheduled payment dates, or (c) if the Company has not
paid cash dividends on any dividend payment date as set forth in its
certificate of incorporation or as declared by its Board of Directors, or has
postponed or not made any redemptions on any redemption date as set forth in
its certificate of incorporation or any certificate of designation with
respect to its preferred stock, if any. Any payments otherwise owed hereunder,
which are not made for any of the above-mentioned reasons, shall not be
canceled but rather accrue, and shall be payable by the Company promptly when,
and to the extent, that the Company is no longer prohibited from making such
payments and when the Company has become current with respect to such
principal or interest payments, has become current with respect to such
dividends and has made such redemptions with respect to such preferred stock,
if any. Any payment required hereunder which is not paid when due shall bear
interest at the rate of ten percent (10%) per annum. This Section 4 will not,
in any event, restrict or limit the Company's obligations under Sections 3, 8
and 9, which will be absolute and not subject to set-off.
5. This Agreement shall be automatically renewed for successive
one-year terms starting December 31, 2007 unless either party hereto, within
sixty (60) days prior to the scheduled renewal date, notifies the other party
as to its election to terminate this Agreement. Notwithstanding the foregoing,
this Agreement may be terminated by not less than ninety (90) days' prior
written notice from the Company to the Consultant at any time after (a)
substantially all of the stock or substantially all of the assets of the
Company or all of its subsidiaries are sold to an entity unaffiliated with the
Consultant and/or a majority of the Company stockholders immediately prior to
the sale, or (b) the Company is merged or consolidated into another entity
unaffiliated with the Consultant and/or a majority of the Company's
stockholders immediately prior to such merger and the Company is not the
survivor of such transaction. Subject to the foregoing, the Agreement will not
be terminated as a result of any Company ceasing to be a subsidiary of Jordan
Industries, Inc. for financial reporting or other purposes.
6. The Consultant shall have no liability to the Company on account
of (a) any advice which it renders to the Company or any of its direct or
indirect subsidiaries, provided the Consultant believed in good faith that
such advice was useful or beneficial to the Company or any of its direct or
indirect subsidiaries at the time it was rendered, or (b) the Consultant's
inability to obtain financing or achieve other results desired by the Company
(or any of its direct or indirect subsidiaries) or Consultant's failure to
render services to the Company at any particular time or from time to time, or
(c) the failure of any Transaction to meet the financial, operating, or other
expectations of the Company or any of direct or indirect subsidiaries. The
Company's and any of its direct or indirect subsidiaries' sole remedy for any
claim under this Agreement shall be termination of this Agreement.
-3-
7. Notwithstanding anything contained in this Agreement to the
contrary, the Company agrees and acknowledges for itself and on behalf of its
direct and indirect subsidiaries that the Consultant, the Jordan Affiliates
and their shareholders, employees, directors and affiliates intend to engage
and participate in acquisitions and business transactions outside of the scope
of the relationship created by this Agreement and neither the Consultant, any
of the Jordan Affiliates nor any of their respective shareholders, partners,
employees, directors or agents shall be under any obligation whatsoever to
make such acquisitions or business transactions through the Company or any of
its direct or indirect subsidiaries or offer such acquisitions or business
transactions to the Company or any of its direct or indirect subsidiaries.
8. The Company will, and will cause each of its direct and indirect
subsidiaries to, indemnify and hold harmless to the fullest extent permitted
by applicable law the Consultant, its affiliates and associates, each of the
Jordan Affiliates, and each of the respective owners, partners, officers,
directors, employees and agents of each of the foregoing, from and against any
loss, liability, damage, claim or expenses (including the fees and expenses of
counsel) arising as a result or in connection with this Agreement, the
Consultant's services hereunder or other activities on behalf of the Company
and its subsidiaries.
9. Any payments paid by the Company under this Agreement shall not be
subject to set-off and shall be increased by the amount, if any, of any taxes
(other than income taxes) or other governmental charges levied in respect of
such payments, so that the Consultant is made whole for such taxes or charges.
10. (a) This Agreement may not be modified, waived, terminated or
amended except expressly by an instrument in writing signed by the Consultant
and the Company.
(b) This Agreement may be assigned by Consultant to any of its
subsidiaries or affiliates without the consent of the Company, provided,
however, such assignment shall not relieve such party from its obligations
hereunder. Any assignment of this Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.
(c) In the event that any provision of this Agreement shall be
held to be void or unenforceable in whole or in part, the remaining provisions
of this Agreement and the remaining portion of any provision held void or
unenforceable in part shall continue in full force and effect.
(d) Except as otherwise specifically provided herein, notice given
hereunder shall be deemed sufficient if delivered personally or sent by
registered or certified mail to the address of the party for whom intended at
the principal executive offices of such party, or at such other address as such
party may hereinafter specify by written notice to the other party.
-4-
(e) If at any time after the date upon which this Agreement is
executed, the Company acquires or creates one or more subsidiary corporations
(a "Subsequent Subsidiary"), the Company shall cause such Subsequent Subsidiary
to be subject to this Agreement and all references herein to the Company's
"direct and indirect subsidiaries" shall be interpreted to include all
Subsequent Subsidiaries.
(f) Each subsidiary of the Company shall be jointly and severally
liable and obligated hereunder with respect to each obligation, responsibility
and liability of the Company, as if a direct obligation of such subsidiary.
(g) No waiver by either party of any breach of any provision of
this Agreement shall be deemed a continuing waiver or a waiver of any preceding
or succeeding breach of such provision or of any other provision herein
contained.
(h) Except as provided by that certain Termination Agreement, of
even date herewith, by and among certain of the parties hereto, this Agreement
sets forth the entire understanding of the Company and the Consultant, and
supersedes all prior agreements, arrangements and communications, whether oral
or written, with respect to the subject matter hereof.
(i) The Consultant and its personnel shall, for purposes of this
Agreement, be independent contractors with respect to the Company.
(j) This Agreement shall be governed by the internal laws (and not
the law of conflicts) of the State of Illinois.
-5-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
JORDAN INDUSTRIES, INC.
By:
---------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Senior Vice President
TJC MANAGEMENT CORPORATION
By:
---------------------------------
Name: G. Xxxxxx Xxxxxx
Secretary
JII, INC.
JI PROPERTIES, INC.
J.I. FINANCE COMPANY
CAPE CRAFTSMAN, INC.
WELCOME HOME, INC.
HOME AGAIN STORES, INC.
SPL HOLDINGS, INC.
VALMARK INDUSTRIES, INC.
PAMCO PRINTED TAPE & LABEL CO., INC.
SALES PROMOTION ASSOCIATES, INC.
SEABOARD FOLDING BOX CORPORATION
BEEMAK PLASTICS, INC.
JII/SALES PROMOTION ASSOCIATES, INC.
THE OLD IMPERIAL ELECTRIC COMPANY
THE OLD XXXXX MOTORS COMPANY
OLD GEAR RESEARCH, INC.
DACCO, INCORPORATED
DETROIT TRANSMISSION PRODUCTS CO.
DACCO/DETROIT OF OHIO, INC.
ABC TRANSMISSION PARTS
WAREHOUSE, INC.
DACCO/DETROIT OF MINNESOTA, INC
DACCO/DETROIT OF INDIANA, INC.
DACCO/DETROIT OF
NORTH CAROLINA, INC.
DACCO/DETROIT OF MEMPHIS, INC.
DACCO/DETROIT OF ALABAMA, INC.
DACCO/DETROIT OF MICHIGAN, INC.
DACCO/DETROIT OF TEXAS, INC.
DACCO/DETROIT OF WEST VIRGINIA, INC.
BORG MANUFACTURING
-6-
NASHVILLE TRANSMISSION PARTS, INC.
DACCO/DETROIT OF FLORIDA, INC.
DACCO/DETROIT OF COLORADO, INC.
DACCO/DETROIT OF MISSOURI, INC.
DACCO/DETROIT OF ARIZONA, INC.
DACCO/DETROIT OF NEBRASKA, INC.
DACCO/DETROIT OF NEW JERSEY, INC.
DACCO/DETROIT OF OKLAHOMA, INC.
DACCO/DETROIT OF
SOUTH CAROLINA, INC.
DACCO INTERNATIONAL, INC.
XXXXXXX PRECISION PRODUCTS, INC.
SATE-LITE MANUFACTURING COMPANY
RIVERSIDE BOOK AND BIBLE HOUSE,
INCORPORATED
By:
---------------------------------
Name: Xxxxxx X. Xxxxx
Authorized Officer
-7-
NEW SUBSIDIARY ADVISORY AGREEMENT
THIS NEW SUBSIDIARY ADVISORY AGREEMENT ("Agreement"), is executed as
of the 25th day of July 1997 by and among JORDAN INDUSTRIES, INC., an Illinois
corporation (hereinafter referred to as the "Consultant"), and JORDAN
TELECOMMUNICATION PRODUCTS, INC., a Delaware corporation and each of the other
parties a signatory hereto (hereinafter collectively referred to as the
"Company").
W I T N E S E T H:
- - - - - - - - -
WHEREAS, the Consultant has and/or has access to personnel who are
highly skilled in the field of rendering advice to businesses and financial
advice to the Company;
WHEREAS, the Board of Directors of the Company has been made fully
aware of the relationships of certain members of the Company's Board of
Directors to the Consultant;
WHEREAS, the Company's Board of Directors has reviewed in detail and
discussed the terms and provisions of this Agreement and the fairness of this
Agreement and whether more favorable agreements for the Company could be
obtained from unaffiliated third parties; and
WHEREAS, on the basis of its review of this Agreement, the Board of
Directors of the Company deemed it advisable and in the best interests of the
Company and necessary to the conduct, promotion, and attainment of the
business objectives of the Company that the Company retain Consultant to
provide business and financial advice to the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto do hereby agree
as follows:
1. The Company hereby retains the Consultant, through the
Consultant's own personnel or through personnel available to the Consultant,
to render consulting services from time to time to the Company and its direct
and indirect subsidiaries (whether now existing or hereafter acquired) in
connection with their acquisitions, divestitures and investments, their
financial affairs, their relationships with their lenders, stockholders and
other third-party associates or affiliates, and the expansion of their
businesses. Consultant shall render such services to the Company and/or its
direct and indirect subsidiaries in good faith and in accordance with
professional standards and applicable law. The term of this Agreement shall
commence the date hereof and continue until December 31, 2007, unless
extended, or sooner terminated, as provided in Section 5 below. The
Consultant's personnel shall be reasonably available to the Company's
managers, auditors and other personnel for consultation and advice pursuant to
this Agreement, subject to Consultant's reasonable convenience and scheduling.
Services may be rendered at the Consultant's offices or at such
other locations selected by the Consultant as the Company and the Consultant
shall from time to time agree.
2. (a) Subject to Section 4 hereof, the Company shall pay to the
Consultant (i) an investment banking and sponsorship fee of up to two percent
(2%) of the aggregate consideration paid (including non-competition, earnout,
contingent purchase price, incentive arrangements and similar payments) (A) by
the Company and/or its subsidiaries in connection with the acquisition by the
Company and/or its subsidiaries of all or substantially all of the outstanding
capital stock, warrants, options or other rights to acquire or sell capital
stock, or all or substantially all of the business or assets of another
individual, corporation, partnership or other business entity, (B) by the
Company and/or its subsidiaries in connection with any joint venture or other
minority investment, or (C) to the Company in connection with the sale by the
Company of all or substantially all of the Company's and/or its subsidiaries'
outstanding capital stock, warrants, options, or other rights to acquire or
sell stock, or all or substantially all of the business or assets of the
Company and/or its subsidiaries (each of the transactions described in clauses
(A), (B) and (C), a "Transaction"), including, but not limited to, any
Transaction negotiated for the Company involving any affiliate of the Company
or the Consultant, including, but not limited to, any Transaction involving,
TJC Management Corporation, The Jordan Company, MCIT PLC, Jordan/Zalaznick
Capital Company, Leucadia National Corporation or any affiliates of any of the
foregoing (collectively, the "Jordan Affiliates"); and (ii) a financial
consulting fee of up to one percent (1%) of the amount obtained or made
available pursuant to any debt, equity or other financing (including without
limitation, any refinancing) by the Company and/or its subsidiaries with the
assistance of Consultant, including, but not limited to, any financing obtained
for the Company and/or its subsidiaries from one or more of the Jordan
Affiliates. However, the amount of such fees payable in each such Transaction
will be no less favorable to the Company than those that could be obtained from
comparable, unaffiliated third parties, and will be subject to separate
discussion and approval, in connection with each such Transaction, by each of a
majority of the Board of Directors and a majority of the directors who are
disinterested directors in relation to Consultant and its affiliates.
Notwithstanding and in addition to the foregoing, if the Consultant renders
services to the Company outside the ordinary course of business, the Company
shall pay an additional amount equal to the value of such extraordinary
services rendered by the Consultant as may be separately agreed to between the
Consultant and the Company.
(b) In recognition of the services rendered by the
Consultant in connection with the evaluation, negotiation, financing and
closing of the Company's senior note, senior discount note, preferred stock
and bank financing on or about the date hereof, the Company will pay
Consultant a fee of $4,100,000, such amount to be in lieu of any fees that may
otherwise be payable pursuant to this Section 2 in connection with the
Offerings and the transactions contemplated thereby.
3. The Company shall promptly reimburse Consultant for out-of-pocket
expenses (including, without limitation, an allocable amount of the
Consultant's overhead expenses
-2-
attributable to the Company and its direct and indirect subsidiaries,
determined on actual usage, percentage revenue or such other basis as
Consultant may determine) incurred by the Consultant and its personnel in
performing services hereunder to the Company and its direct and indirect
subsidiaries upon the Consultant rendering a statement therefor, together with
such supporting data as the Company shall reasonably require.
4. Notwithstanding the foregoing, the Company shall not be required
to pay the fees under Section 2, (a) if and to the extent expressly prohibited
by the provisions of any credit, stock, financing or other agreements or
instruments binding upon the Company, its subsidiaries or properties, (b) if
the Company has not paid cash interest on any interest payment date or has
postponed or not made any principal payments with respect to any of their
indebtedness on any scheduled payment dates, or (c) if the Company has not
paid cash dividends on any dividend payment date as set forth in its
certificate of incorporation or as declared by its Board of Directors, or has
postponed or not made any redemptions on any redemption date as set forth in
its certificate of incorporation or any certificate of designation with
respect to its preferred stock, if any. Any payments otherwise owed hereunder,
which are not made for any of the above-mentioned reasons, shall not be
canceled but rather accrue, and shall be payable by the Company promptly when,
and to the extent, that the Company is no longer prohibited from making such
payments and when the Company has become current with respect to such
principal or interest payments, has become current with respect to such
dividends and has made such redemptions with respect to such preferred stock,
if any. Any payment required hereunder which is not paid when due shall bear
interest at the rate of ten percent (10%) per annum. This Section 4 will not,
in any event, restrict or limit the Company's obligations under Sections 3, 8
and 9, which will be absolute and not subject to set-off.
5. This Agreement shall be automatically renewed for successive
one-year terms starting December 31, 2007 unless either party hereto, within
sixty (60) days prior to the scheduled renewal date, notifies the other party
as to its election to terminate this Agreement. Notwithstanding the foregoing,
this Agreement may be terminated by not less than ninety (90) days' prior
written notice from the Company to the Consultant at any time after (a)
substantially all of the stock or substantially all of the assets of the
Company or all of its subsidiaries are sold to an entity unaffiliated with the
Consultant and/or a majority of the Company stockholders immediately prior to
the sale, or (b) the Company is merged or consolidated into another entity
unaffiliated with the Consultant and/or a majority of the Company's
stockholders immediately prior to such merger and the Company is not the
survivor of such transaction. Subject to the foregoing, the Agreement will not
be terminated as a result of any Company ceasing to be a subsidiary of Jordan
Industries, Inc. for financial reporting or other purposes.
6. The Consultant shall have no liability to the Company on account
of (a) any advice which it renders to the Company or any of its direct or
indirect subsidiaries, provided the Consultant believed in good faith that
such advice was useful or beneficial to the Company or any of its direct or
indirect subsidiaries at the time it was rendered, or (b) the
-3-
Consultant's inability to obtain financing or achieve other results desired by
the Company (or any of its direct or indirect subsidiaries) or Consultant's
failure to render services to the Company at any particular time or from time
to time, or (c) the failure of any Transaction to meet the financial,
operating, or other expectations of the Company or any of direct or indirect
subsidiaries. The Company's and any of its direct or indirect subsidiaries'
sole remedy for any claim under this Agreement shall be termination of this
Agreement.
7. Notwithstanding anything contained in this Agreement to the
contrary, the Company agrees and acknowledges for itself and on behalf of its
direct and indirect subsidiaries that the Consultant, the Jordan Affiliates
and their shareholders, employees, directors and affiliates intend to engage
and participate in acquisitions and business transactions outside of the scope
of the relationship created by this Agreement and neither the Consultant, any
of the Jordan Affiliates nor any of their respective shareholders, partners,
employees, directors or agents shall be under any obligation whatsoever to
make such acquisitions or business transactions through the Company or any of
its direct or indirect subsidiaries or offer such acquisitions or business
transactions to the Company or any of its direct or indirect subsidiaries.
8. The Company will, and will cause each of its direct and indirect
subsidiaries to, indemnify and hold harmless to the fullest extent permitted
by applicable law the Consultant, its affiliates and associates, each of the
Jordan Affiliates, and each of the respective owners, partners, officers,
directors, employees and agents of each of the foregoing, from and against any
loss, liability, damage, claim or expenses (including the fees and expenses of
counsel) arising as a result or in connection with this Agreement, the
Consultant's services hereunder or other activities on behalf of the Company
and its subsidiaries.
9. Any payments paid by the Company under this Agreement shall not be
subject to set-off and shall be increased by the amount, if any, of any taxes
(other than income taxes) or other governmental charges levied in respect of
such payments, so that the Consultant is made whole for such taxes or charges.
10. (a) This Agreement may not be modified, waived, terminated or
amended except expressly by an instrument in writing signed by the Consultant
and the Company.
(b) This Agreement may be assigned by Consultant to any of its
subsidiaries or affiliates without the consent of the Company, provided,
however, such assignment shall not relieve such party from its obligations
hereunder. Any assignment of this Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.
(c) In the event that any provision of this Agreement shall be
held to be void or unenforceable in whole or in part, the remaining provisions
of this Agreement and the
-4-
remaining portion of any provision held void or unenforceable in part shall
continue in full force and effect.
(d) Except as otherwise specifically provided herein, notice given
hereunder shall be deemed sufficient if delivered personally or sent by
registered or certified mail to the address of the party for whom intended at
the principal executive offices of such party, or at such other address as such
party may hereinafter specify by written notice to the other party.
(e) If at any time after the date upon which this Agreement is
executed, the Company acquires or creates one or more subsidiary corporations
(a "Subsequent Subsidiary"), the Company shall cause such Subsequent Subsidiary
to be subject to this Agreement and all references herein to the Company's
"direct and indirect subsidiaries" shall be interpreted to include all
Subsequent Subsidiaries.
(f) Each subsidiary of the Company shall be jointly and severally
liable and obligated hereunder with respect to each obligation, responsibility
and liability of the Company, as if a direct obligation of such subsidiary.
(g) No waiver by either party of any breach of any provision of
this Agreement shall be deemed a continuing waiver or a waiver of any preceding
or succeeding breach of such provision or of any other provision herein
contained.
(h) Except as provided by that certain Termination Agreement, of
even date herewith, by and among certain of the parties hereto, this Agreement
sets forth the entire understanding of the Company and the Consultant, and
supersedes all prior agreements, arrangements and communications, whether oral
or written, with respect to the subject matter hereof.
(i) The Consultant and its personnel shall, for purposes of this
Agreement, be independent contractors with respect to the Company.
(j) This Agreement shall be governed by the internal laws (and not
the law of conflicts) of the State of Illinois.
-5-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
JORDAN INDUSTRIES, INC.
By:
------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Senior Vice President
JORDAN TELECOMMUNICATION
PRODUCTS, INC.
JTP INDUSTRIES, INC.
AIM ELECTRONICS CORPORATION
OLD JORDAN TELECOMMUNICATIONS
PRODUCT GROUP, INC.
JORDAN TELECOMMUNICATIONS
PRODUCT GROUP - EUROPE, INC.
VITELEC ELECTRONICS LIMITED
LODAN WEST, INC.
XXXXXXX COMPONENTS, INC.
NEW VIEWSONICS, INC.
SHANGHAI VIEWSONICS ELECTRONICS
CO., LTD.
ADAPT COMMUNICATION
SUPPLY CO. S. FL., INC.
NORTHERN TECHNOLOGIES
HOLDINGS, INC.
NORTHERN TECHNOLOGIES, INC.
NEW DURA-LINE CORPORATION
DIVERSIFIED WIRE & CABLE CO.
BOND HOLDINGS, INC.
NEW CAMBRIDGE PRODUCTS
CORPORATION
By:
------------------------------------
Name: Xxxxxx X. Xxxxx
Authorized Officer
-6-
NEW SUBSIDIARY ADVISORY AGREEMENT
THIS NEW SUBSIDIARY ADVISORY AGREEMENT ("Agreement"), is executed as
of the 25th day of July 1997 by and among JORDAN INDUSTRIES, INC., an Illinois
corporation (hereinafter referred to as the "Consultant"), MOTORS AND GEARS
HOLDINGS, INC., a Delaware corporation and each of the other parties a
signatory hereto (hereinafter collectively referred to as the "Company").
W I T N E S E T H:
- - - - - - - - -
WHEREAS, the Consultant has and/or has access to personnel who are
highly skilled in the field of rendering advice to businesses and financial
advice to the Company;
WHEREAS, the Board of Directors of the Company has been made fully
aware of the relationships of certain members of the Company's Board of
Directors to the Consultant;
WHEREAS, the Company's Board of Directors has reviewed in detail and
discussed the terms and provisions of this Agreement and the fairness of this
Agreement and whether more favorable agreements for the Company could be
obtained from unaffiliated third parties; and
WHEREAS, on the basis of its review of this Agreement, the Board of
Directors of the Company deemed it advisable and in the best interests of the
Company and necessary to the conduct, promotion, and attainment of the
business objectives of the Company that the Company retain Consultant to
provide business and financial advice to the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto do hereby agree
as follows:
1. The Company hereby retains the Consultant, through the
Consultant's own personnel or through personnel available to the Consultant,
to render consulting services from time to time to the Company and its direct
and indirect subsidiaries (whether now existing or hereafter acquired) in
connection with their acquisitions, divestitures and investments, their
financial affairs, their relationships with their lenders, stockholders and
other third-party associates or affiliates, and the expansion of their
businesses. Consultant shall render such services to the Company and/or its
direct and indirect subsidiaries in good faith and in accordance with
professional standards and applicable law. The term of this Agreement shall
commence the date hereof and continue until December 31, 2007, unless
extended, or sooner terminated, as provided in Section 5 below. The
Consultant's personnel shall be reasonably available to the Company's
managers, auditors and other personnel for consultation and advice pursuant to
this Agreement, subject to Consultant's reasonable convenience and scheduling.
Services may be rendered at the Consultant's offices or at such other
locations selected by the Consultant as the Company and the Consultant shall
from time to time agree.
2. Subject to Section 4 hereof, the Company shall pay to the
Consultant (i) an investment banking and sponsorship fee of up to two percent
(2%) of the aggregate consideration paid (including non-competition, earnout,
contingent purchase price, incentive arrangements and similar payments) (A) by
the Company and/or its subsidiaries in connection with the acquisition by the
Company and/or its subsidiaries of all or substantially all of the outstanding
capital stock, warrants, options or other rights to acquire or sell capital
stock, or all or substantially all of the business or assets of another
individual, corporation, partnership or other business entity, (B) by the
Company and/or its subsidiaries in connection with any joint venture or other
minority investment, or (C) to the Company in connection with the sale by the
Company of all or substantially all of the Company's and/or its subsidiaries'
outstanding capital stock, warrants, options, or other rights to acquire or
sell stock, or all or substantially all of the business or assets of the
Company and/or its subsidiaries (each of the transactions described in clauses
(A), (B) and (C), a "Transaction"), including, but not limited to, any
Transaction negotiated for the Company involving any affiliate of the Company
or the Consultant, including, but not limited to, any Transaction involving,
TJC Management Corporation, The Jordan Company, MCIT PLC, Jordan/Zalaznick
Capital Company, Leucadia National Corporation or any affiliates of any of the
foregoing (collectively, the "Jordan Affiliates"); and (ii) a financial
consulting fee of up to one percent (1%) of the amount obtained or made
available pursuant to any debt, equity or other financing (including without
limitation, any refinancing) by the Company and/or its subsidiaries with the
assistance of Consultant, including, but not limited to, any financing
obtained for the Company and/or its subsidiaries from one or more of the
Jordan Affiliates. However, the amount of such fees payable in each such
Transaction will be no less favorable to the Company than those that could be
obtained from comparable, unaffiliated third parties, and will be subject to
separate discussion and approval, in connection with each such Transaction, by
each of a majority of the Board of Directors and a majority of the directors
who are disinterested directors in relation to Consultant and its affiliates.
Notwithstanding and in addition to the foregoing, if the Consultant renders
services to the Company outside the ordinary course of business, the Company
shall pay an additional amount equal to the value of such extraordinary
services rendered by the Consultant as may be separately agreed to between the
Consultant and the Company.
3. The Company shall promptly reimburse Consultant for out-of-pocket
expenses (including, without limitation, an allocable amount of the
Consultant's overhead expenses attributable to the Company and its direct and
indirect subsidiaries, determined on actual usage, percentage revenue or such
other basis as Consultant may determine) incurred by the Consultant and its
personnel in performing services hereunder to the Company and its direct and
indirect subsidiaries upon the Consultant rendering a statement therefor,
together with such supporting data as the Company shall reasonably require.
4. Notwithstanding the foregoing, the Company shall not be required
to pay the fees under Section 2, (a) if and to the extent expressly prohibited
by the provisions of any credit, stock, financing or other agreements or
instruments binding upon the Company, its subsidiaries or properties, (b) if
the Company has not paid cash interest on any interest payment date or has
postponed or not made any principal payments with respect to any of their
indebtedness on any
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scheduled payment dates, or (c) if the Company has not paid cash dividends on
any dividend payment date as set forth in its certificate of incorporation or
as declared by its Board of Directors, or has postponed or not made any
redemptions on any redemption date as set forth in its certificate of
incorporation or any certificate of designation with respect to its preferred
stock, if any. Any payments otherwise owed hereunder, which are not made for
any of the above-mentioned reasons, shall not be canceled but rather accrue,
and shall be payable by the Company promptly when, and to the extent, that the
Company is no longer prohibited from making such payments and when the Company
has become current with respect to such principal or interest payments, has
become current with respect to such dividends and has made such redemptions
with respect to such preferred stock, if any. Any payment required hereunder
which is not paid when due shall bear interest at the rate of ten percent
(10%) per annum. This Section 4 will not, in any event, restrict or limit the
Company's obligations under Sections 3, 8 and 9, which will be absolute and
not subject to set-off.
5. This Agreement shall be automatically renewed for successive
one-year terms starting December 31, 2007 unless either party hereto, within
sixty (60) days prior to the scheduled renewal date, notifies the other party
as to its election to terminate this Agreement. Notwithstanding the foregoing,
this Agreement may be terminated by not less than ninety (90) days' prior
written notice from the Company to the Consultant at any time after (a)
substantially all of the stock or substantially all of the assets of the
Company or all of its subsidiaries are sold to an entity unaffiliated with the
Consultant and/or a majority of the Company stockholders immediately prior to
the sale, or (b) the Company is merged or consolidated into another entity
unaffiliated with the Consultant and/or a majority of the Company's
stockholders immediately prior to such merger and the Company is not the
survivor of such transaction. Subject to the foregoing, the Agreement will not
be terminated as a result of any Company ceasing to be a subsidiary of Jordan
Industries, Inc. for financial reporting or other purposes.
6. The Consultant shall have no liability to the Company on account
of (a) any advice which it renders to the Company or any of its direct or
indirect subsidiaries, provided the Consultant believed in good faith that
such advice was useful or beneficial to the Company or any of its direct or
indirect subsidiaries at the time it was rendered, or (b) the Consultant's
inability to obtain financing or achieve other results desired by the Company
(or any of its direct or indirect subsidiaries) or Consultant's failure to
render services to the Company at any particular time or from time to time, or
(c) the failure of any Transaction to meet the financial, operating, or other
expectations of the Company or any of direct or indirect subsidiaries. The
Company's and any of its direct or indirect subsidiaries' sole remedy for any
claim under this Agreement shall be termination of this Agreement.
7. Notwithstanding anything contained in this Agreement to the
contrary, the Company agrees and acknowledges for itself and on behalf of its
direct and indirect subsidiaries that the Consultant, the Jordan Affiliates
and their shareholders, employees, directors and affiliates intend to engage
and participate in acquisitions and business transactions outside of the scope
of the relationship created by this Agreement and neither the Consultant, any
of the Jordan Affiliates nor any of their respective shareholders, partners,
employees, directors or agents shall
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be under any obligation whatsoever to make such acquisitions or business
transactions through the Company or any of its direct or indirect subsidiaries
or offer such acquisitions or business transactions to the Company or any of
its direct or indirect subsidiaries.
8. The Company will, and will cause each of its direct and indirect
subsidiaries to, indemnify and hold harmless to the fullest extent permitted
by applicable law the Consultant, its affiliates and associates, each of the
Jordan Affiliates, and each of the respective owners, partners, officers,
directors, employees and agents of each of the foregoing, from and against any
loss, liability, damage, claim or expenses (including the fees and expenses of
counsel) arising as a result or in connection with this Agreement, the
Consultant's services hereunder or other activities on behalf of the Company
and its subsidiaries.
9. Any payments paid by the Company under this Agreement shall not be
subject to set-off and shall be increased by the amount, if any, of any taxes
(other than income taxes) or other governmental charges levied in respect of
such payments, so that the Consultant is made whole for such taxes or charges.
10. (a) This Agreement may not be modified, waived, terminated or
amended except expressly by an instrument in writing signed by the Consultant
and the Company.
(b) This Agreement may be assigned by Consultant to any of its
subsidiaries or affiliates without the consent of the Company, provided,
however, such assignment shall not relieve such party from its obligations
hereunder. Any assignment of this Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.
(c) In the event that any provision of this Agreement shall be
held to be void or unenforceable in whole or in part, the remaining provisions
of this Agreement and the remaining portion of any provision held void or
unenforceable in part shall continue in full force and effect.
(d) Except as otherwise specifically provided herein, notice given
hereunder shall be deemed sufficient if delivered personally or sent by
registered or certified mail to the address of the party for whom intended at
the principal executive offices of such party, or at such other address as such
party may hereinafter specify by written notice to the other party.
(e) If at any time after the date upon which this Agreement is
executed, the Company acquires or creates one or more subsidiary corporations
(a "Subsequent Subsidiary"), the Company shall cause such Subsequent Subsidiary
to be subject to this Agreement and all references herein to the Company's
"direct and indirect subsidiaries" shall be interpreted to include all
Subsequent Subsidiaries.
(f) Each subsidiary of the Company shall be jointly and severally
liable and obligated hereunder with respect to each obligation, responsibility
and liability of the Company, as if a direct obligation of such subsidiary.
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(g) No waiver by either party of any breach of any provision of
this Agreement shall be deemed a continuing waiver or a waiver of any preceding
or succeeding breach of such provision or of any other provision herein
contained.
(h) Except as provided by that certain Termination Agreement, of
even date herewith, by and among certain of the parties hereto, this Agreement
sets forth the entire understanding of the Company and the Consultant, and
supersedes all prior agreements, arrangements and communications, whether oral
or written, with respect to the subject matter hereof.
(i) The Consultant and its personnel shall, for purposes of this
Agreement, be independent contractors with respect to the Company.
(j) This Agreement shall be governed by the internal laws (and not
the law of conflicts) of the State of Illinois.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
JORDAN INDUSTRIES, INC.
By:
-----------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Senior Vice President
THE IMPERIAL ELECTRIC COMPANY
THE XXXXX MOTORS COMPANY
GEAR RESEARCH, INC.
MOTORS AND GEARS HOLDINGS, INC.
MOTORS AND GEARS, INC.
MOTORS AND GEARS INDUSTRIES, INC.
XXXXXX-XXXXX INDUSTRIES, INC.
FIR GROUP HOLDINGS, INC.
MOTORS AND GEARS AMSTERDAM B.V.
MOTORS AND GEARS HOLDINGS
AMSTERDAM B.V.
FIR GROUP HOLDINGS ITALIA, S.r.l.
CONSTRUGIONI INTALIANE MOTORI
ELETTRICI, S.p.a.
SELIOSISTERNI, S.p.a.
FIR ELECTROMECCANICA, S.p.a.
By:
-----------------------------------
Name: Xxxxxx X. Xxxxx
Authorized Officer
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