EXHIBIT 10.8
JII MANAGEMENT SERVICES AGREEMENT
THIS JII MANAGEMENT SERVICES AGREEMENT (this "Agreement"), is
executed as of the 7th day of November, 1996, by and among JORDAN
INDUSTRIES, INC., an Illinois corporation (the "Consultant"), and MOTORS
AND GEARS HOLDINGS, INC., a Delaware corporation ("Holdings"), MOTORS AND
GEARS, INC., a Delaware corporation, MOTORS AND GEARS INDUSTRIES, INC., a
Delaware corporation, ▇▇▇▇▇▇-▇▇▇▇▇ INDUSTRIES, INC., an Illinois
corporation, BCM HOLDINGS, INC., an Illinois corporation, THE NEW IMPERIAL
ELECTRIC COMPANY, a Delaware corporation, THE NEW ▇▇▇▇▇ MOTORS COMPANY, a
Delaware corporation, and NEW GEAR RESEARCH, INC., a Delaware corporation
(each individually and collectively referred to herein as the "Companies").
W I T N E S S E T H:
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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 Companies;
WHEREAS, the Boards of Directors of the Companies have been made
fully aware of the relationships of certain members of the Companies' Board
of Directors to the Consultant;
WHEREAS, the Companies' Boards of Directors have 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 Companies
could be obtained from unaffiliated third parties; and
WHEREAS, on the basis of their review of this Agreement, the Boards
of Directors of the Companies deemed it advisable and in the best interests
of the Companies and necessary to the conduct, promotion, and attainment of
the business objectives of the Companies that the Companies retain
Consultant to provide business and financial advice to the Companies.
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 Companies hereby retain the Consultant, through the
Consultant's own personnel or through personnel available to the
Consultant, to make certain management and advisory services available from
time to time to the Companies and their direct and indirect subsidiaries
(whether now existing or hereafter acquired), including the resources of
its acquisition, business development and international expansion and
accounting staffs. Consultant shall render such services to the Companies
and their 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 November 7, 2006, unless
extended, or sooner terminated, as provided in paragraph 4 below. The
Consultant's personnel shall be reasonably available to the Companies'
managers, auditors and other personnel for consultation and advice, 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 Companies and the Consultant shall from time to time
agree.
2. Subject to the terms and restrictions, if any, in the Companies'
credit, debt and financing agreements, the Companies agree to pay the
Consultant a quarterly fee equal to one percent (1%) of the Companies' and
their direct and indirect subsidiaries' net sales, without duplication,
during the preceding calendar quarter, payable on the 30th day of March,
June, September and December of each year, starting with a pro-rata payment
on December 31, 1996 for the period from the date hereof through December
31, 1996.
3. Subject to the terms and restrictions, if any, in the Companies'
credit, debt and financing agreements, any payment required hereunder which
is not paid when due shall bear interest at the rate of twelve and three
quarters percent (12.75%) per annum.
4. The Companies shall reimburse the Consultant for out-of-pocket
expenses (including, without limitation, an allocable amount of the
Consultant's overhead expenses, as determined by the Consultant in its sole
discretion) incurred by the Consultant and its personnel in performing
services hereunder to the Companies and their direct and indirect
subsidiaries which shall be promptly reimbursed to it by the Companies upon
the Consultant's rendering of a statement therefor, together with
supporting data as the Companies shall reasonably require.
5. This Agreement shall be automatically renewed for successive
one-year terms starting on the tenth anniversary of the date hereof 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 Companies
to the Consultant at any time after (i) substantially all of the stock or
substantially all of the assets of the Companies are sold to an entity
unaffiliated with the Consultant and/or a majority of the Companies'
stockholders immediately prior to such sale, (ii) the Companies are merged
or consolidated into another entity unaffiliated with the Consultant and/or
a majority of the Companies' stockholders immediately prior to such merger
and the Companies are not the survivor of such transaction or (iii) a
public offering of the voting securities of the Company has commenced.
6. The Consultant shall have no liability to the Companies or any of
their direct or indirect subsidiaries on account of (i) any advice which it
renders to the Companies or any of their direct or indirect subsidiaries,
provided the Consultant believed in good faith that such advice was useful
or beneficial to the Companies or any of their direct or indirect
subsidiaries at the time it was rendered, or (ii) the Consultant's
inability to obtain results desired by the Companies (or any of their
direct or indirect subsidiaries) or Consultant's failure to render services
to the Companies or any of their direct or indirect subsidiaries at any
particular time or from time to time. The Companies' and their direct and
indirect subsidiary's 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 Companies acknowledge and agree for themselves and on behalf
of their direct and indirect subsidiaries that the Consultant and its
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
nor any of its shareholders, employees, directors or affiliates shall be
under any obligation whatsoever to make such acquisitions or business
transactions through the Companies (or any of their direct or indirect
subsidiaries) or offer such acquisitions or business transactions to the
Companies or any of their direct or indirect subsidiaries.
8. The Companies 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, Jordan Industries, Inc.,
Leucadia National Corporation, The Jordan Company, MCIT PLC,
Jordan/Zalaznick Capital Company, TJC Management Corporation and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Advisers, Inc., and affiliates and associates of each of the
foregoing, and each of their respective owners, partners, officers,
directors, employees and agents, 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 Companies and any
of their direct and subsidiaries. The above indemnification does not
include fees and third party operating expenses incurred by Consultant in
performing consulting services hereunder.
9. Payments made by the Companies 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 sets forth the entire understanding of the
parties with respect to the Consultant's rendering of services to the
Companies. This Agreement may not be modified, waived, terminated or
amended except expressly by an instrument in writing signed by the
Consultant and the Companies.
b. This Agreement may not be assigned by the Companies without the
consent of the Consultant, but may be assigned by the Consultant to any
affiliate of the Consultant, as the term "affiliate" is defined in Rule
144(a) promulgated under the Securities Act of 1933, as amended. Any
permitted 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. To the extent not expressly prohibited by the provisions of any
credit, stock, financing or other agreements or instruments binding upon
the Companies and their direct and indirect subsidiaries, each direct and
indirect subsidiary of the Companies shall be jointly and severally liable
and obligated hereunder with respect to each obligation, responsibility and
liability of the Companies, as if a direct obligation of such subsidiary.
f. 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
hereinafter contained.
g. The Consultant and its personnel shall, for purposes of this
Agreement, be independent contractors with respect to the Companies.
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 Companies and the Consultant,
and supersedes all prior agreements, arrangements and communications,
whether oral or written, with respect to the subject matter hereof.
i. If at any time after the date upon which this Agreement is
executed, any of the Companies acquire or create one or more subsidiary
corporations (a "Subsequent Subsidiary"), the Companies shall cause such
Subsequent Subsidiary to be subject to this Agreement and all references
herein to the Companies' "direct and indirect subsidiaries" shall be
interpreted to include all Subsequent Subsidiaries.
j. This Agreement shall be governed by the internal laws (and not
the law of conflicts) of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
JORDAN INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President-Chief Financial Officer
MOTORS AND GEARS HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MOTORS AND GEARS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MOTORS AND GEARS INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
BCM HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
THE NEW IMPERIAL ELECTRIC COMPANY
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
THE NEW ▇▇▇▇▇ MOTORS COMPANY
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
NEW GEAR RESEARCH, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇-▇▇▇▇▇ INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President