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EXHIBIT 10.8
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION
PROVISIONS IN SECTION 5 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES, DAMAGES
OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM
THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE
OF ONEX SERVICE PARTNERS OR ANY OTHER INDEMNIFIED PERSON IDENTIFIED
THEREIN.
MONITORING AND OVERSIGHT AGREEMENT
THIS MONITORING AND OVERSIGHT AGREEMENT (this "Agreement") is made and
entered into effective as of January 1, 1999, among CustomerONE Corporation, a
Delaware corporation (together with its successors, the "Company") CustomerONE
Holding Corporation, a Delaware corporation (together with its successors,
"Holdings") LCS Industries, Inc., a Delaware corporation, Catalog Liquidators,
Inc., a Delaware corporation, LCS Canada, Inc., a Delaware corporation, Catalog
Resources, Inc., a Delaware corporation, LCS Industries Ltd., a corporation
organized under the laws of the United Kingdom, Spec Holdings, Inc., a New York
corporation, The SpeciaLISTS Ltd., a New York corporation, Computer Marketing
Systems, Inc., a New York corporation, 1293219 Ontario Inc., a corporation
organized under the laws of the province of Ontario, Canada, 1293220 Ontario
Inc., a corporation organized under the laws of the province of Ontario, Canada,
ClientLogic Canada Corporation, a corporation organized under the laws of the
province of Ontario, Canada, The Ivy Group Limited, a corporation organized
under the laws of the United Kingdom, Professional Support Centre Limited, a
corporation organized under the laws of the United Kingdom, UCA&L Limited, a
corporation organized under the laws of Ireland, together with any subsidiary
that may hereafter become a party hereto ("Subsidiaries," and together with the
Company and Holdings, the "Clients") and Onex Service Partners, a New York
general partnership (together with its successors, "QSP").
1. Retention. The Clients hereby acknowledge that they have retained
OSP to, and OSP acknowledges that, subject to reasonable advance notice in order
to accommodate scheduling, OSP will, provide financial oversight and monitoring
services to the Clients as requested by the board of directors of Holdings
during the term of this Agreement.
2. Term. The term of this Agreement shall continue until the earlier to
occur of (i) the tenth anniversary of the date hereof and (ii) the date on which
Onex Corporation, a corporation organized under the laws of the province of
Ontario, Canada ("Onex"), or its successors, and their respective affiliates
shall cease to own beneficially, directly or indirectly, any securities of any
of the Clients or their respective successors.
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3. Compensation.
(a) As compensation for OSP's services to the Clients under this
Agreement, the Clients hereby irrevocably agree, jointly and severally, to pay
to OSP an annual fee (the "Monitoring Fee") of US$600,000 (the "Base Fee"),
prorated on a daily basis for any partial calendar year during the term of this
Agreement. The Monitoring Fee shall be payable in equal quarterly installments
on each January 1, April 1, July 1 and October 1 during the term of this
Agreement (each a "Payment Date"), beginning with the first Payment Date
following the date hereof All payments shall be made by wire transfer of
immediately available funds to the account described on Exhibit A hereto (or
such other account as OSP may hereafter designate in writing). Notwithstanding
the foregoing, payment of a Monitoring Fee pursuant to this Section 3 will only
be made to the extent payment of such Monitoring Fee does not result in an event
of default or violate any provision of any agreement for indebtedness of the
Clients, both before and after giving effect to payment of such Monitoring Fee.
(b) All past due payments in respect of the Monitoring Fee shall bear
interest at the lesser of the highest rate of interest which may be charged
under applicable law or the prime commercial lending rate per annum of Toronto
Dominion (Texas), Inc. or its successors (which rate is a reference rate and is
not necessarily its lowest or best rate of interest actually charged to any
customer) (the "Prime Rate") as in effect from time to time, plus one percent
(1.0%), from the due date of such payment to and including the date on which
payment is made to OSP in full, including such interest accrued thereon.
4. Reimbursement of Expenses. In addition to the compensation to be
paid pursuant to Section 3 hereof, the Clients agree, jointly and severally, to
pay or reimburse OSP for all "Reimbursable Expenses," which shall consist of all
reasonable disbursements and out-of-pocket expenses (including, without
limitation, costs of travel, postage, deliveries, communications, etc.) incurred
by OSP or its affiliates for the account of any Client or in connection with the
performance by OSP of the services contemplated by Section 1 hereof. Promptly
(but not more than 10 days) after request by or notice from OSP, the applicable
Client shall pay OSP, by wire transfer of immediately available funds to the
account described on Exhibit A hereto (or such other account as OSP may
hereafter designate in writing), the Reimbursable Expenses for which OSP has
provided such Client invoices or reasonably detailed descriptions. All past due
payments in respect of the Reimbursable Expenses shall bear interest at the
lesser of the highest rate of interest which may be charged under applicable law
or the Prime Rate plus 1.0% from the Payment Date to and including the date on
which such Reimbursable Expenses plus accrued interest thereon are fully paid to
OSP. Notwithstanding the foregoing, the payment or reimbursement of any
Reimbursable Expenses pursuant to this Section 4 will only be made to the extent
such payment or reimbursement does not result in an event of default or violate
any provision of any agreement for indebtedness of the Clients, both before and
after giving effect to such payment or reimbursement.
5. Indemnification. The Clients jointly and severally shall indemnify
and hold harmless each of OSP, its affiliates, and their respective directors,
officers,
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controlling persons (within the meaning of Section 15 of the Securities Act of
1933, as amended, or Section 20(a) of the Securities Exchange Act of 1934, as
amended), if any, agents and employees (OSP, its affiliates, and such other
specified persons being collectively referred to as "Indemnified Persons," and
individually as an "Indemnified Person") from and against any and all claims,
liabilities, losses, damages and expenses incurred by any Indemnified Person
(including those arising out of an Indemnified Person's negligence and
reasonable fees and disbursements of the respective Indemnified Person's
counsel) which (A) are related to or arise out of (i) actions taken or omitted
to be taken (including, without limitation, any untrue statements made or any
statements omitted to be made) by any of the Clients or (ii) actions taken or
omitted to be taken by an Indemnified Person with any Client's consent or in
conformity with any Client's instructions or any Client's actions or omissions
or (B) are otherwise related to or arise out of OSP's engagement, and will
reimburse each Indemnified Person for all costs and expenses, including, without
limitation, fees and disbursements of any Indemnified Person's counsel, as they
are incurred, in connection with investigating, preparing for, defending or
appealing any action, formal or informal claim, investigation, inquiry or other
proceeding, whether or not in connection with pending or threatened litigation,
caused by or arising out of or in connection with OSP's acting pursuant to OSP's
engagement, whether or not any Indemnified Person is named as a party thereto
and whether or not any liability results therefrom. None of the Clients will,
however, be responsible for any claims, liabilities, losses, damages or expenses
pursuant to clause (B) of the preceding sentence that have resulted primarily
from OSP's bad faith, gross negligence or willful misconduct. The Clients also
agree that neither OSP nor any other Indemnified Person shall have any liability
to any Client for or in connection with such engagement except for any such
liability for claims, liabilities, losses, damages or expenses incurred by any
Client that have resulted primarily from OSP's bad faith, gross negligence or
willful misconduct. The Clients further agree that none of them will, without
the prior written consent of OSP, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or proceeding
in respect of which indemnification may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of OSP and each other Indemnified Person hereunder from
all liability arising out of such claim, action, suit or proceeding. EACH CLIENT
HEREBY ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ANY
CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE
ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR
CONCURRENT ORDINARY NEGLIGENCE OF OSP OR ANY OTHER INDEMNIFIED PERSON.
The foregoing right to indemnity shall be in addition to any rights
that OSP and/or any other Indemnified Person may have at common law or otherwise
and shall remain in full force and effect following the completion or any
termination of the engagement. Each Client hereby consents to personal
jurisdiction and to service and venue in any court in which any claim which is
subject to this Agreement is brought against OSP or any other Indemnified
Person.
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It is understood that, in connection with OSP's engagement, OSP may
also be engaged to act for a Client or Clients in one or more additional
capacities, and that the terms of this engagement or any such additional
engagement(s) may be embodied in one or more separate written agreements. This
indemnification shall apply to the engagement specified in the first paragraph
hereof as well as to any such additional engagement(s) (whether written or oral)
and any modification of said engagement or such additional engagement(s) and
shall remain in full force and effect following the completion or termination of
said engagement or such additional engagements.
Each of the Clients further understands and agrees that if OSP is asked
to furnish any Client a financial opinion letter or act for any Client in any
other formal capacity, such further action may be subject to a separate
agreement containing provisions and terms to be mutually agreed upon.
6. Confidential Information. In connection with the performance of the
services hereunder, OSP agrees not to divulge any confidential information,
secret processes or trade secrets disclosed by any Client or any of its
subsidiaries to it solely in its capacity as a financial advisor, unless such
Client consents to the divulging thereof or such information, secret processes
or trade secrets are publicly available or otherwise available to OSP without
restriction or breach of any confidentiality agreement or unless required by any
governmental authority or in response to any valid legal process.
7. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New York, excluding any
choice-of-law provisions thereof. Each of the parties hereby (a) irrevocably
submits to the exclusive jurisdiction of the United States Federal District
Court for the Southern District of New York, sitting in New York County, New
York, the United States of America, in the event such court has jurisdiction or,
if such court does not have jurisdiction, to any district court sitting in New
York County, New York, the United States of America, for the purpose of any
suit, action, or proceeding arising out of or relating to this Agreement,
including any claims by any Indemnified Persons for indemnity pursuant to
Section 5 hereof, (b) waives, and agrees not to assert in any such suit, action,
or proceeding, any claim that (i) it is not personally subject to the
jurisdiction of such court or of any other court to which proceedings in such
court may be appealed, (ii) such suit, action or proceeding is brought in an
inconvenient forum, or (iii) the venue of such suit, action, or proceeding is
improper and (c) expressly waives any requirement for the posting of a bond by
the party bringing such suit, action, or proceeding. Each of the parties
consents to process being served in any such suit, action, or proceeding by
mailing, certified mail, return receipt requested, a copy thereof to such party
at the address in effect for notices hereunder, and agrees that such services
shall constitute good and sufficient service of process and notice thereof.
Nothing in this Section 7 shall affect or limit any right to serve process in
any other manner permitted by law.
8. Assignment. This Agreement and all provisions contained herein shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned (other than with respect to
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the rights and obligations of OSP, which may be assigned to any one or more of
its principals or affiliates) by any of the parties without the prior written
consent of the other parties.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended to,
any other counterpart.
10. Other Understandings. All discussions, understanding and agreements
heretofore made between any of the parties hereto with respect to the subject
matter hereof are merged in this Agreement, which alone fully and completely
expresses the Agreement of the parties hereto. All calculations of the
Monitoring Fee and Reimbursable Expenses shall be made by OSP and, in the
absence of mathematical error, shall be final and conclusive.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
ONEX SERVICE PARTNERS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
its Managing Director
CUSTOMERONE CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
CUSTOMERONE HOLDING CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
LCS INDUSTRIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
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CATALOG LIQUIDATORS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
LCS CANADA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
CATALOG RESOURCES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
LCS INDUSTRIES LTD.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
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SPEC HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
THE SPECIALISTS LTD.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
COMPUTER MARKETING SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
1293219 ONTARIO INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇
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Title:
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1293220 ONTARIO INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇
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Title:
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CLIENTLOGIC CANADA CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇
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Title:
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THE IVY GROUP LIMITED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Company Secretary
PROFESSIONAL SUPPORT CENTRE LIMITED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Company Secretary
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UCA&L LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
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Title: Financial Controller
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