EXHIBIT 4.1
CONSULTING AGREEMENT
--------------------
This Agreement is made as of July 14, 1988, by and among Intercole
Holding Corporation, a Delaware corporation ("Holding"), Intercole Inc., a
Washington corporation (the "Company"), and ▇▇▇▇▇▇▇ F.O. ▇▇▇▇▇▇ (the
"Consultant").
Holding, the Company and the Consultant desire to enter into an
agreement pursuant to which the Consultant will provide consulting services to
the Company and will purchase certain shares of Holding's Class A Common Stock,
par value $.Ol per share (the "Stock"). In addition, Holding shall grant the
Consultant certain options to acquire shares of Stock as provided herein (the
"Options"). All of the shares of Stock issued hereunder and all shares of Stock
issued upon exercise of the Options are referred to herein as "Consultant
Stock". The execution and delivery of this Agreement by Holding, the Company
and the Consultant are conditions to the purchase of the Company's securities
by Golder, Thoma, ▇▇▇▇▇▇▇ Fund II ("GTC"), The Prudential Insurance Company of
America and Pruco Life Insurance Company (the "Investors"), pursuant to the
Investors Subscription and Stockholders Agreement of even date herewith.
Certain provisions of this Agreement are for the benefit of the Investors and
will be enforceable by the Investors. Capitalized terms not otherwise defined
herein have the meaning set forth in paragraph 20 hereof.
The parties hereto agree as follows:
CONSULTING TERMS
1. Consulting Services. In consideration of the right to purchase the
-------------------
Stock hereunder and the granting of the Options, the Consultant hereby agrees to
serve as an independent contractor, and not as an employee, to render consulting
services to the Company as hereinafter provided for a period commencing on the
date of this Agreement and ending on the date on which this Agreement is
terminated pursuant to paragraph 4 below (the "Consulting Period"). During the
Consulting Period, the Consultant will render such consulting services to the
Company in connection with the Company's business as the Company from time to
time requests. The Consultant shall have no authority to act, incur expenses or
other obligations or make any authority to act, incur expenses or other
obligations or make any commitments on behalf of the Company or otherwise bind
the Company without the prior specific written approval of the Company.
2. Board Membership. During the Consulting Period, the Consultant
----------------
will serve on Holding's board of directors (the "Board") as requested by Holding
and its shareholders.
3. Confidential Information. The Consultant acknowledges that the
------------------------
information, observations and data obtained by him during the course of his
performance under this Agreement concerning the business or affairs of the
Company and Holding and their respective affiliates are the property of the
Company. Therefore, the Consultant agrees that he will not disclose to any
unauthorized person or use for his own account any of such information,
observations or data without Holding's written consent, unless and to the extent
that the aforementioned matters become generally known to and available for use
by the public other than as a result of the Consultant's acts or omissions to
act.
4. Termination of Consulting Period. Holding or the Consultant may
--------------------------------
terminate the Consulting Period by providing written notice thereof to the other
party with written notice at least 60 days prior to the effective time of the
termination; provided however that the Consulting Period shall not terminate
until the termination of the Northern Consulting Agreement dated the date
hereof.
CONSULTANT STOCK AND OPTIONS
5. Purchase and Sale of Stock and Grant of Options.
-----------------------------------------------
(a) On the date hereof, the Consultant will purchase, and Holding will
sell, 92,749 shares of Stock at a price per share of $.727. The Company will
deliver to the Consultant a certificate or certificates representing such shares
of Consultant Stock, and, upon the receipt of such certificates), Consultant
will deliver to the Company a check (or a promissory note on terms and
conditions satisfactory to Holding) in the amount of the full purchase price
therefore.
(b) The Company hereby grants to the Consultant the Option to purchase
from Holding upon the terms and subject to the conditions hereinafter set forth
up to 107,251 shares of the Stock (the "Option Shares") at a purchase price of
$.727 per share.
(c) The Consultant represents and warrants that the Consultant Stock
and Option to be acquired by him pursuant to this Agreement will be acquired for
his own account and not with a view to, or present intention of, distribution
thereof in violation of the Securities Act of 1933, as amended (the "1933 Act"),
and will not be disposed of in contravention of the 1933 Act.
(d) The Consultant acknowledges that he is able to bear the economic
risk of his investment in the Consultant Stock for an indefinite period of time
because the Consultant Stock,
2
when issued, will not have been registered under the 1933 Act and, therefore,
cannot be sold unless subsequently registered under the 1933 Act or an exemption
from such registration is available.
(e) The Consultant represents and warrants that he has had an
opportunity to ask questions and receive answers concerning the terms and
conditions of the offering of Consultant Stock and Option and has had full
access to such other information concerning Holding as he has requested.
(f) The Consultant agrees that within 30 days after he purchases any
Consultant Stock from Holding, he will make an effective election with the
Internal Revenue Service under Section 83(b) of the Internal Revenue Code and
the regulations promulgated thereunder in the form attached hereto as Appendix
(g) The Consultant acknowledges that the Consultant Stock and Option
to be issued hereunder are being issued in connection with the Consultant's
compensation for the consulting services to be rendered hereunder and but for
Consultant's agreement to provide services hereunder, the Executive would not be
permitted to purchase the Stock hereunder. This Agreement is a written contract
relating to the compensation of the Consultant.
6. Vesting of Option Terms.
-----------------------
(a) The Option shall become exercisable for Option Shares in
installments. The portion of the total number of Option Shares which are
exercisable shall be determined as follows:
Cumulative Percentage
of Total Number of
Shares of Common
Stock For Which Option
Date is Exercisable
---- --------------
Prior to the first anniversary hereof 0%
On and after the first anniversary 20%
hereof but prior to the second
anniversary hereof
On and after the second anniversary 40%
hereof but prior to the third
anniversary hereof
3
Cumulative Percentage
of Total Number of
Shares of Common
Stock For Which Option
Date is Exercisable
---- --------------
On and after the third anniversary
hereof but prior to the fourth
anniversary hereof 60%
On and after the fourth anniversary 80%
hereof but prior to the fifth
anniversary hereof
On and after the fifth anniversary 100%
hereof
As of any given date, all Option Shares which the Consultant has become eligible
to purchase are referred to as "Vested Option Shares" and all Option Shares
which the Consultant has not yet become eligible to purchase are referred to as
"Unvested Option Shares." Notwithstanding the foregoing, no Unvested Option
Shares shall become Vested Option Shares after the date on which the Consulting
Period has terminated for whatever reason or no reason (including, without
limitation, death, disability or termination with or without cause) (the
"Termination Date"); provided that after the first anniversary hereof if the
Termination Date occurs on any date other than an anniversary date hereof, the
percentage of Option Shares treated as Vested Option Shares will be the
percentage set forth for the previous anniversary date increased by a pro rata
share of the next percentage change based upon the number of days elapsed
between the Termination Date and the previous anniversary date; and further
provided that all Unvested Option Shares shall become Vested Option Shares
immediately prior to, but contingent upon, the consummation of a Sale of Holding
(as such term is defined in paragraph (c) below).
(b) The Consultant (or such Optionee's estate or legal representative)
may only exercise the Option with respect to the Vested Option Shares until the
first to occur of (i) the tenth anniversary of the date hereof, (ii) the
consummation of a Sale of Holding, or (iii) 10 days after the Termination Date.
Neither the Consultant nor such Consultant's estate or legal representative may
exercise the Options with respect to Unvested Qualified Options and all of
Optionee's rights with respect to the Unvested Options shall terminate as of the
Termination Date.
(c) As used herein, the term "Sale of Holding" means (i) any sale of
all or substantially all of the Holding's consolidated assets in any single
transaction or series of
4
related transactions, (ii) any merger or consolidation to which Holding is a
party if, after giving effect to such merger or consolidation, persons who were
stockholders of Holding immediately prior to such merger or consolidation cease
to own capital stock of the surviving or resulting corporation with the ordinary
voting power to elect a majority of the board of directors of the surviving or
resulting corporation, (iii) the consummation of a registered public offering of
the Stock pursuant to a registration statement which has become effective under
the Securities Act of 1933, as amended, at a price per share of at least $3.65
(as such number is equitably adjusted for stock splits, stock dividends and
other recapitalizations affecting the Stock) and the net proceeds of which offer
to Holding are at least $15 million, or (iv) any sale of more than 70% of the
shares of Stock originally issued to GTC pursuant to the Stock Purchase
Agreement dated the date hereof between the Company and CTC in any single
transaction or series of related transactions.
7. Other Conditions and Limitations. The Option shall not be
--------------------------------
transferable by the Consultant otherwise than by will or by the laws of descent
and distribution, and the Option shall be exercisable during the lifetime of the
Consultant by the Consultant only.
8. Exercise of Option. Written notice of the exercise of any Option
------------------
or any portion thereof shall be given to Holding at its principal office
accompanied by the Option price payable by check.
9. Stock Dividends; Stock Splits; Stock Combination;
-------------------------------------------------
Recapitalizations. Appropriate adjustment (in number, kind and price) shall be
-----------------
made in the Option Shares to give effect to any stock dividends, stock splits,
stock combinations, recapitalizations and other similar changes in the capital
structure of Holding after the grant of the Option.
10. Merger; Sale of Assets; Dissolution. In the event of a change in
-----------------------------------
the Stock resulting from a merger or consolidation to which Holding is a party
which does not result in a Sale of Holding, the number and kind of shares then
subject to the Option and the price per share thereof shall be appropriately
adjusted in such manner as the Board or the Compensation Committee thereof may
deem equitable to prevent substantial dilution or enlargement of the rights
available or granted hereunder.
11. Miscellaneous. The Consultant shall have no rights as a
-------------
stockholder with respect to the shares subject to the Option until the exercise
of the Option and the issuance of a stock certificate for the shares with
respect to which the Option shall have been exercised. Nothing herein contained
shall impose
5
any obligation on Holding or any of its subsidiaries or the Consultant with
respect to the Consultant's continued employment by Holding or any of its
subsidiaries or to seek a Sale of Holding. Nothing herein contained shall
impose any obligation upon the Consultant to exercise the Option. Holding makes
no representation as to the tax treatment to the Consultant upon receipt or
exercise of the Option or sale or other disposition of the shares covered by
such Option.
STOCK TERMS
12. Repurchase Option.
-----------------
(a) Upon termination of the Consulting Period for any reason or no
reason (including, without limitation, death, disability or termination with or
without cause), the Consultant Stock, whether held by the Consultant or one or
more transferees, will be subject to repurchase by Holding pursuant to the terms
and conditions set forth in this paragraph 12 (the "Repurchase Option").
(b) On or after the Termination Date but prior to the 180th day
following the Termination Date, Holding may elect to purchase all or any portion
of the Consultant Stock at a price per share equal to 150% of the sum of (i)
such share's Original Cost and (ii) such share's pro rata portion (on a fully-
diluted basis determined as of the date of purchase, assuming the-exercise and
conversion of all outstanding options, warrants and convertible securities and
ignoring any restrictions on the convertibility or exercise of such options,
warrants and convertible securities) of the difference between (A) Holding's
cumulative, consolidated net earnings from August 1, 1988 to the end of
Holding's fiscal quarter immediately preceding the date of repurchase as
reflected on Holding's normally prepared financial statements (audited, if
available) and (B) any dividends paid or accrued on any preferred stock of any
Subsidiary or any common stock of Holding. Holding's normally prepared
financial statement will be prepared in accordance with generally accepted
accounting principles consistently applied except for differences concurred in
by Holding's auditors.
(c) The Board may elect to exercise, pursuant to paragraph 12(b),
Holding's right to purchase all or any portion of the shares of Consultant Stock
by delivering written notice (the "Repurchase Notice") to the holder or holders
of Consultant Stock. The Repurchase Notice will set forth the number of shares
of Consultant Stock to be acquired from such holder, the aggregate
consideration to be paid for such shares and the time and place for the closing
of the transaction. The number of shares to be repurchased by Holding shall
first be satisfied to the extent possible from the shares of Consultant Stock
held by the
6
Consultant at the time of delivery of the Repurchase Notice. if the number of
shares of Consultant Stock then held by Consultant is less than the total number
of shares of Consultant Stock Holding has elected to purchase, then Holding
shall purchase the remaining shares elected to be purchased from the other
holder(s) of Consultant Stock, pro rata according to the number of shares of
Consultant Stock held by such other holder(s) at the time of delivery of such
Repurchase Notice (determined as nearly as practicable to the nearest share).
(d) If for any reason Holding does not elect to purchase all of the
shares of Consultant Stock pursuant to the Repurchase Option, the Investors
shall be entitled to exercise Holding's Repurchase option in the manner set
forth in paragraph 12(c) for the shares of Consultant Stock Holding has not
elected to purchase (the "Available Shares"). As soon as practicable after
Holding has determined that there will be Available Shares, but in any event
within 160 days after the Termination Date, Holding shall deliver written notice
(the "Option Notice") to the Investors setting forth the number of Available
Shares and the price for each Available Share. Each Investor may elect to
purchase its pro rata share of the Available Shares by delivering written notice
to Holding within 25 days after receipt of the Option Notice from Holding. As
soon as practicable, and in any event within 5 days, after the expiration of
such 25-day period, Holding shall notify each holder of Consultant Stock as to
the number of shares being purchased from such holder by the Investors (the
"Supplemental Repurchase Notice"). At the time Holding delivers the
Supplemental Repurchase Notice to the holder(s) of Consultant Stock, each
Investor shall also receive written notice from Holding setting forth the number
of shares it is entitled to purchase, the aggregate purchase price and the time
and place of the closing of the transaction. For the purpose of this paragraph
12(d), each Investor's "pro rata share" will be equal to the percentage
determined by dividing (i) the number of shares of Stock (on a fully-diluted
basis assuming the exercise or conversion of any options, warrants ' or
convertible securities held by such Investor regardless of any restrictions on
such exercise or conversion) held by such Investor by (ii) the total number of
shares of Stock (on a fully diluted basis) held by the Investors electing to
purchase Available Shares.
(e) The Closing of the purchase transactions contemplated by this
paragraph 12 shall take place on the date designated by Holding in the
Repurchase Notice (or the Supplemental Repurchase Notice, as the case may be),
which date shall not be more than 30 days and not less than 10 days after the
delivery of such notice. Holding will pay for the Consultant Stock to be
purchased pursuant to the Repurchase Option by check payable to the holder of
such Consultant Stock. Holding will be entitled to
7
receive customary representations and warranties from the seller regarding the
sale of the Consultant Stock.
(f) For the purposes Of this paragraph 12, Consultant Stock will
include all shares of Stock issuable upon exercise or conversion of any options,
warrants or convertible securities then held by the Consultant, ignoring any
restrictions on the convertibility or exercise of such options, warrants or
convertible securities; provided that the price at which the Repurchase Option
may be exercised with respect to any such shares of Consultant Stock shall be
less any consideration payable by the Consultant if such options, warrants or
convertible securities were then exercised or converted.
13. Restrictions on Transfer.
------------------------
(a) The Consultant will not sell, pledge or otherwise transfer any
interest in any shares of Consultant Stock except (i) pursuant to the provisions
of (A) paragraph 12 or 15 hereof (an "Exempt Transfer") or (B) paragraph 13(c)
below or (ii) after the 180th day following the Termination Date (with respect
to any shares of Consultant Stock for which the Repurchase Option is not
exercised), subject to the provisions of paragraph 13(b) below.
(b) At least 60 days prior to making any transfer permitted by clause
(ii) of paragraph 13(a) above, the Consultant (or Consultant's transferees) will
deliver a written notice (the "Sale Notice") to Holding and the Investor. The
Sale Notice will disclose in reasonable detail the identity of the prospective
transferees) and the terms and conditions of the proposed transfer. Consultant
(and Consultant's transferees) agrees not to consummate any such transfer until
60 days after the Sale Notice has been delivered to Holding and the Investor,
unless either Holding or the Investor has exercised its right of first refusal
prior to the expiration of such 60-day period. (The date of the first to occur
of such events is referred to herein as the Authorization Date.)
(c) Holding may elect to purchase all (but not less than all) of the
Consultant Stock to be transferred upon the same terms and conditions as those
set forth in the Sale Notice by delivering a written notice of such election to
the Consultant within 30 days after the receipt of the Sale Notice by Holding.
If Holding has not elected to purchase all of the Consultant Stock to be
transferred, the Investors may elect to purchase all (but not less than all) of
the Consultant Stock to be transferred upon the same terms and conditions as
those set forth in the Sale Notice by delivering a written notice of such
election to the Consultant within 60 days after the receipt of the Sale Notice
by the Investors. If more than one Investor elects to purchase the
8
Consultant Stock pursuant to this paragraph 13(b), each Investor shall have the
right to purchase its pro rata share of Consultant Stock to be transferred. For
the purpose of this paragraph 13(b), each Investor's "pro rata share" will be
equal to the percentage determined by dividing (i) the number of shares of Stock
(on a fully-diluted basis assuming the exercise or conversion of any options,
warrants or convertible securities held by such Investor regardless of any
restrictions on such exercise or conversion) held by such Investor by (ii) the
total number of shares of Stock (on a fully diluted basis) held by the Investors
electing to purchase Consultant Stock to be transferred herein. Any person who
has exercised its right to acquire Consultant Stock pursuant to this paragraph
13(b) shall be given up to 60 days (after it has been determined that such
person has such right) to consummate the purchase and sale of Consultant Stock.
If neither Holding nor the Investors have elected to purchase all of the
Consultant Stock specified in the Sale Notice, Consultant may transfer the
Consultant Stock specified in the Sale Notice at a price and on terms no more
favorable to the transferees) thereof than specified in the Sale Notice during
the 60-day period immediately following the Authorization Date. Any shares of
Consultant Stock not transferred within such 60-day period will be subject to
the provisions of this paragraph 13(b) upon subsequent transfer.
(d) The Consultant may transfer Consultant Stock (i) pursuant to
applicable laws of descent and distribution or (ii) among Consultant's family
group; provided that the restrictions contained in this Agreement will continue
to be applicable to the Consultant Stock after any such transfer and the
transferees of such Consultant Stock have agreed in writing to be bound by the
provisions of this Agreement. Consultant's "family group" means Consultant's
spouse and descendants (whether natural or adopted) and any trust solely for the
benefit of Consultant and/or Consultant's spouse and/or descendants. At least
30 days prior to making any transfer of Consultant Stock pursuant to this
paragraph 13(c), Consultant will deliver a written notice to Holding which will
describe in reasonable detail the identity of the prospective transferees).
14. Additional Restrictions on Transfer.
-----------------------------------
(a) The certificates representing the Consultant Stock will bear the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED ON _________ __, HAVE NOT BEEN REGISTERED UNDER SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
9
ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER
AGREEMENTS SET FORTH IN A CONSULTING AGREEMENT BY AND BETWEEN THE
ISSUER (THE "COMPANY") AND A CERTAIN CONSULTANT OF THE COMPANY DATED
AS OF JULY 14, 1988, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER
HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(b) No holder of Consultant Stock may sell, transfer or dispose of any
Consultant Stock (except pursuant to an effective registration statement under
the Securities Act of 1933) without first delivering to Holding an opinion of
counsel reasonably acceptable in form and substance to Holding that registra-
tion under the Securities Act of 1933 is not required in connection with such
transfer.
(c) Each holder of Consultant Stock agrees not to effect any public
sale or distribution of any equity securities of Holding, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and the 90 days after the effectiveness of any public
offering of Holding's securities registered under the Securities Act of 1933, as
amended, except pursuant to such underwritten registration if otherwise
permitted.
15. Sale of Holding.
---------------
(a) If the Board and the holders of a majority of the Stock then
outstanding approve the Sale of Holding to an independent third party (the
"Approved Sale"), the holders of Consultant Stock will consent to and raise no
objections against the Approved Sale of Holding, and if the Approved Sale of
Holding is structured as a sale of stock, the holders of Consultant Stock will
agree to sell all of their shares of Consultant Stock and rights to acquire
shares of Holding's capital stock on the terms and conditions approved by the
Board and the holders of a majority of the Stock then outstanding. The holders
of Consultant Stock will take all necessary and desirable actions to effect the
consummation of the Approved Sale. For purposes of this paragraph 15, an
"independent third party" is any person who does not own in excess of 5% of the
Stock on a fully-diluted basis, who is not controlling, controlled by or under
common control with any such 5% owner of the Stock and who is not the spouse,
ancestor or descendant (by birth or adoption) of any such 5% owner of the Stock.
10
(b) The obligations of the holders of Consultant Stock with respect to
the Approved Sale of Holding are subject to the satisfaction of the condition
that upon the consummation of the Approved Sale, all of the holders of Stock
will receive the same form and amount of consideration per share of Stock, or if
any holders are given an option as to the form and amount of consideration to
be received, all holders will be given the same option.
(c) If Holding or the holders of Holding's securities enter into any
negotiation or transaction for which Rule 506 (or any similar rule then in
effect) promulgated by the Securities Exchange Commission may be available with
respect to such negotiation or transaction (including a merger, consolidation
or other reorganization), the holders of Consultant Stock will, at the request
of Holding, appoint a purchaser representative (as such term is defined in Rule
501) reasonably acceptable to Holding. If any holder of Consultant Stock
appoints the purchaser representative designated by Holding, Holding will pay
the fees of such purchaser representative, but if any holder of Consultant Stock
declines to appoint the purchaser representative designated by Holding, such
holder will appoint another purchaser representative (reasonably acceptable to
Holding), and such holder will be responsible for the fees of the purchaser
representative so appointed.
16. Definition of Consultant Stock. For all purposes of this
------------------------------
Agreement, Consultant Stock will continue to be Consultant Stock in the hands
of any holder other than Consultant (except for Holding, the Investor and
purchasers pursuant to an offering registered with the Securities Exchange
Commission or purchasers pursuant to a Rule 144 transaction), and each such
other holder of Consultant Stock will succeed to all rights and obligations
attributable to the Consultant as a holder of Consultant Stock hereunder.
Consultant Stock will also include shares of Holding'B capital stock issued with
respect to shares of Consultant Stock by way of a stock split, stock dividend or
other recapitalization.
17. Termination of Provisions Relating to Consultant Stock. The
------------------------------------------------------
provisions of paragraphs 12, 13 and 15 hereof will terminate upon the first to
occur of (i) the date on which Holding has consummated a registered public
offering of the Stock pursuant to a registration statement which has become
effective under the Securities Act of 1933, as amended, at a price per share of
at least $3.65 (as such number is equitably adjusted for any stock splits, stock
dividends or other recapitalizations affecting Holding's capital stock) and the
net proceeds of which offer to Holding are at least $15 million, (ii) any merger
or consolidation to which Holding is a party if, after giving effect to such
merger or consolidation, persons who were stockholders of
11
Holding immediately prior to such merger or consolidation cease to own capital
stock of the surviving or resulting corporation with the ordinary voting power
to elect a majority of the board of directors of the surviving or resulting
corporation, (iii) a sale of all, or substantially all, of Holding's assets or
capital stock in any transaction or series of related transactions, or (iv) any
sale of more than 70% of the shares of Stock originally issued to GTC pursuant
to the Stock Purchase Agreement dated the date hereof between the Company and
GTC in any single transaction or series of related transactions.
18. Confidential Information. Consultant acknowledges that the
------------------------
information, observations and data obtained by him during the course of the
Consulting Period concerning the business or affairs of Holding and its
affiliates are the property of Holding. Therefore, Consultant agrees that he
will not disclose to any unauthorized person or use for his own account any of
such information, observations or data without the Board's written consent,
unless and to the extent that the aforementioned matters become generally known
to and available for use by the public other than as a result of the
Consultant's acts or omissions to act.
19. Notices. Any notice provided for in this Agreement must be in
-------
writing and must be personally delivered, mailed by first class mail, or sent by
overnight delivery service, to the recipient at the address indicated below:
To Holding: Intercole Holding Corporation
c/o ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
To Consultant: ▇▇▇▇▇▇▇ F.O. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
12
20. Definitions.
-----------
The "Original Cost" of each share of Consultant Stock will be equal to
$.727 for each share of Stock (as proportionally adjusted for all stock splits,
stock dividends and other recapitalizations affecting the Stock subsequent to
the date hereof).
"Subsidiary" means any corporation of which shares of stock having a
majority of the general voting power in electing the board of directors are, at
the time as of which any determination is being made, owned by Holding either
directly or through its Subsidiaries.
21. Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
22. Complete Agreement. This Agreement, those documents expressly
------------------
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understand ings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
23. Counterparts. This Agreement may be executed on separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
24. Successors and Assigns. This Agreement is intended to bind and
----------------------
inure to the benefit of and be enforceable by the Consultant and Holding and
their respective successors and assigns, except that the Consultant may not
assign any of his rights or obligations under paragraph 18.
25. Choice of Law. The corporate law of the State of Delaware will
-------------
govern all issues concerning the relative rights of Holding and its
shareholders. All other questions concerning the construction, validity and
interpretation of this Agreement and the exhibits and schedules hereto will be
governed by the internal law, and not the law of conflicts of the State of
Illinois.
13
26. Remedies. Each of the parties to this Agreement will be entitled
--------
to enforce his or its rights under this Agreement specifically, to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in his or its favor. The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that any party may in his or its
sole discretion apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief in order to enforce or prevent
any violations of the provisions of this Agreement.
27. Amendments and Waivers. Any provision of this Agreement may be
----------------------
amended or waived only with the prior written consent of Holding and the
Consultant; provided that no amendment or waiver of paragraph 12 or 13 hereof
shall be effective without the prior written consent of the Investor.
28. No Employment Terms. No provision of this Agreement shall be
-------------------
construed to obligate Holding to employ or engage the Consultant. Holding may
terminate the Consulting Period for any reason or no reason (including, without
limitation, the Consultant's death, disability or termination with or without
cause).
* * * * *
14
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
INTERCOLE HOLDING CORPORATION
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Its_______________________________
INTERCOLE INC.
By /s/▇▇▇▇▇▇▇ F.O. ▇▇▇▇▇▇
--------------------------------
Its _____________________________
/s/▇▇▇▇▇▇▇ F.O. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ F.O. ▇▇▇▇▇▇
Accepted as of July 13, 1988:
GOLDER, THOMA, ▇▇▇▇▇▇▇ FUND II
By ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
Its General Partner
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Its General Partner
---------------------------
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
Prucapital Management Inc., agent
By /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Its Vice President, Corporate Finance
----------------------------------
PRUCO LIFE INSURANCE COMPANY
By /s/Man Walfield
-----------------------------------
Its Assistant Vice President
----------------------------------