Advisory Services Agreement - National Fiberstok Corp., MDC Management Co. II LP and MDC Management Co.
AMENDED AND RESTATED ADVISORY SERVICES AGREEMENT
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THIS AMENDED AND RESTATED ADVISORY SERVICES AGREEMENT (the
"Agreement") is entered into as of the 28th day of June, 1996, by and between
National Fiberstok Corporation, a Delaware corporation (the "Company"), MDC
Management Company II, L.P., a California limited partnership, and MDC
Management Company, a California general partnership (collectively, "MDC").
WHEREAS, the Company and MDC entered into a Management Services
Agreement as of the 16th day of October, 1992 (the "1992 Agreement"); and
WHEREAS, the Company and MDC desire to amend and restate the 1992
Agreement as provided herein.
NOW, THEREFORE, in consideration of the mutual promises of the
parties hereinafter set forth, MDC and the Company hereto agree as follows:
1. RETENTION AS MANAGEMENT ADVISOR.
Subject to each of the terms, conditions and provisions of
this Agreement, the Company hereby retains MDC and MDC hereby agrees to be
retained by the Company to perform those consulting, financial and managerial
functions set forth in Section 4 of this Agreement.
2. TERM.
2.1 Subject to the provisions for termination set forth
herein, this Agreement shall be from the date hereof through December 31, 2000,
and renewable annually thereafter unless terminated by the Company for
"justifiable cause," as defined in Section 2.2.
2.2 The Company, by written notice to MDC, authorized by a
majority of the directors other than those who are partners, principals or
employees of MDC (or an affiliate of MDC), may terminate this Agreement for
"justifiable cause," which shall mean any of the following events: material
breach by MDC of any of its obligations hereunder, misappropriation by MDC of
funds or property of the Company or other willful breach in the course of the
consultancy; any attempt by MDC to secure personal profit related to the
business of the Company and not fairly disclosed to and approved by the Board of
Directors; or gross neglect by MDC in the fulfillment of its obligations
hereunder.
2.3 MDC, by thirty (30) days' prior written notice to the
Company, may terminate this Agreement at any time.
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3. COMPENSATION.
3.1 As compensation to MDC for its management and advisory
services to the Company under this Agreement, the Company agrees to pay to MDC a
fee in the amount of $350,000 per fiscal year of the Company, which amount may
be increased to an amount not to exceed $500,000 in any such fiscal year with
the approval of the members of the Board of Directors of the Company who do not
have a direct financial interest in any person receiving such payments
hereunder. Subject to Section 3.2 below, such fee shall be payable in equal
quarterly installments, in arrears, on the first day of each April, July,
October and January, commencing on the first such day following the date hereof.
3.2 MDC acknowledges that its right to receive fees pursuant
to this Agreement shall be subordinated to the extent described in the letter
agreement attached hereto as Exhibit A.
3.3 MDC shall also be entitled to be reimbursed by the
Company for all reasonable out-of-pocket costs and expenses incurred by MDC and
any of its partners, employees or affiliates in connection with (a) providing
the Services under this Agreement, or (b) serving as a member of the Board of
Directors or as an officer of the Company, including, without limitation, all
travel expenses. Reimbursement shall be provided upon receipt by the Company of
invoices from MDC with respect to such costs and expenses.
4. DUTIES AS MANAGEMENT ADVISOR.
4.1 MDC's duties as a financial and management consultant to the
Company under the provisions of this Agreement shall include providing services
in obtaining equity, debt, lease and acquisition financing, as well as providing
other financial and consulting services to assist management in developing and
implementing strategies for improving the operating, marketing, and financial
performance of the Company (the "Services"). Such Services shall be rendered
upon the reasonable request of the Company. MDC shall devote as much time as is
reasonably necessary to the affairs of the Company.
5. DECISIONS.
The Company reserves the right to make all decisions with
regard to any matter upon which MDC has rendered its advice and consultation,
and there shall be no liability to MDC for any such advice accepted by the
Company pursuant to the provisions of this Agreement.
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6. AUTHORITY OF MANAGEMENT ADVISOR.
MDC shall have authority only to act as a consultant and
advisor to the Company. MDC shall have no authority to enter into any agreement
or to make any representation, commitment or warranty binding upon the Company
or to obtain or incur any right, obligation or liability on behalf of the
Company.
7. INDEPENDENT CONTRACTOR
Except as may be provided elsewhere in this Agreement, MDC
shall act as an independent contractor and shall have complete charge of its
personnel engaged in the performance of the Services.
8. BOOKS AND RECORDS
MDC's books and records with respect to the Services and any
reimbursable costs ("Books and Records") shall be kept at MDC's office located
at 3000 Sand Hill Road, Building 3, Suite 290, Menlo Park, California 94025.
The Books and Records shall be kept in accordance with recognized accounting
principles and practices, consistently applied, and shall be made available for
the Company or the Company's representatives' inspection and copying at all
times during regular office hours. MDC shall not be required to maintain the
Books and Records for more than three years after termination of this Agreement.
9. CONFIDENTIAL INFORMATION
9.1 The parties acknowledge that during the course of
provision of the Services, the Company may disclose information to MDC or its
affiliated companies. MDC shall treat such information as the Company's
confidential property and safeguard and keep secret all such information about
the Company, including reports and records, customer lists, trade lists, trade
practices, and prices pertaining to the Company's business coming to the
attention or knowledge of MDC because of any activities conducted by MDC under
or pursuant to this Agreement.
9.2 MDC shall exercise its best efforts and shall cause any
of its affiliated companies to exercise their best efforts to prevent any
confidential information from being disclosed to third parties, except as
necessarily required in the performance of the Services and except under terms
of confidentiality satisfactory to the Company. This obligation shall remain in
effect until the Company shall release MDC or its affiliated companies from
their obligations under this paragraph 9, but in no event later than three years
after the completion of the Services. MDC shall not use any of the Company's
confidential information in any way that is detrimental to the interests of the
Company, directly or indirectly, either during the term of this Agreement or at
any time thereafter.
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10. INDEMNIFICATION. The Company agrees to indemnify and hold
MDC and its partners, officers, directors and agents harmless from damages,
losses or expenses (including, without limitation, reasonable attorneys' fees
and expenses) incurred or paid directly or indirectly, by MDC as a result or
arising out of any actions taken by MDC in connection with the performance of
the Services under this Agreement, except to the extent that such actions result
solely from the gross negligence or willful misconduct of MDC. The Company
hereby further agrees to reimburse MDC for all reasonable fees and expenses
(including attorneys fees) incurred in connection with defending any such claim
to which MDC is a party, as such fees and expenses are incurred by MDC.
11. NOTICES AND COMMUNICATIONS
11.1 All communications relating to the day-to-day activities
necessary to render the Services shall be exchanged between the respective
representatives of the Company and MDC, who will be designated by the parties
promptly upon commencement of the services.
11.2 All other notices, demands, and communications required
or permitted hereunder shall be in writing and shall be delivered personally or
by fax to the respective representatives of the Company and MDC set forth below
or shall be mailed by registered mail, postage prepaid, return receipt
requested. Notices, demands and communications hereunder shall be effective:
(i) if delivered personally or by fax, on delivery; or (ii) if mailed, 48 hours
after deposit thereof in the United States mail addressed to the party to whom
such notice, demand, or communication is given. Until changed by written
notice, all such notices, demands and communications shall be addressed as
follows:
If to the Company: Robert M. Miklas, President
and Chief Executive Officer
National Fiberstok Corporation
5775 Peachtree Dunwoody Road
Suite C150
Atlanta, Georgia 30342
Fax: (404) ______________
If to MDC: McCown De Leeuw & Co.
900 Third Avenue, 28th Floor
New York, New York 10022
Attn: Mr. Tyler Zachem
Fax: (212) 355-6283 or (212) 355-6945
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With copies to: McCown De Leeuw & Co.
3000 Sand Hill Road
Building 3, Suite 290
Menlo Park, CA 94025
Attn: Mr. Steven A. Zuckerman
Tel: (415) 854-6000
Fax: (415) 854-0843
12. ASSIGNMENTS
MDC shall not assign this Agreement in whole or in part without the
prior written consent of the Company; provided, however, that such consent shall
not be unreasonably withheld with respect to assignments to MDC's affiliates or
wholly-owned subsidiaries; and provided, further, that any such assignment shall
not relieve MDC of any of its obligations under this Agreement.
Subject to the foregoing, all the terms and conditions contained
herein shall inure to the benefit of and shall be binding upon the parties
hereto and their respective heirs, personal representatives, successors and
assigns.
13. APPLICABLE LAW AND SEVERABILITY
This document shall, in all respects, be governed by the laws of the
State of Delaware applicable to agreements executed and to by wholly performed
within the State of Delaware. Nothing contained herein shall be construed so as
to require the commission of any act contrary to law, and wherever there is any
conflict between any provisions contained herein and any present or future
statute, law, ordinance or regulation contrary to which the parties have no
legal right to contract, the latter shall prevail, but the provision of this
document which is affected shall be curtailed and limited only to the extent
necessary to bring it within the requirements of the law.
13. FURTHER ASSURANCES
Each of the parties hereto shall execute and deliver any and all
additional papers, documents and other assurances, and shall do any and all acts
and things reasonably necessary in connection with the performance of their
obligations hereunder and to carry out the intent of the parties hereto.
14. ATTORNEYS' FEES
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In the event any action is instituted by a party to enforce any of
the terms and provisions contained herein, the prevailing party in such action
shall be entitled to such reasonable attorneys' fees, costs and expenses as may
be fixed by the court.
15. TIME OF THE ESSENCE
Time is of the essence of this Agreement and all the terms,
provisions, covenants and conditions hereof.
16. CAPTIONS
The captions appearing at the commencement of the paragraphs hereof
are descriptive only and for convenience and reference. Should there be any
conflicts between any such caption and the paragraph at the head of which it
appears, the paragraph and not such caption shall control and govern in the
construction of this document.
17. MODIFICATIONS OR AMENDMENTS
No amendment, change or modification of this document shall be valid
unless it is in writing and signed by all the parties hereto, and expressly
states that it is an amendment, change or modification of this Agreement is
intended.
18. SEPARATE COUNTERPARTS
This document may be executed in one or more separate counterparts,
each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and be one and the same.
19. ENTIRE AGREEMENT
This Agreement shall constitute the entire understanding and
agreement between the parties hereto and shall supersede any and all letters of
intent, whether written or oral, pertaining to the subject matter of this
Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers on the date first appearing above.
NATIONAL FIBERSTOK CORPORATION
By: /S/ ROBERT M. MIKAS
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Title: President
MDC MANAGEMENT COMPANY,
a California general partnership
By: /S/ DAVID E. DE LEEUW
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Title: General Partner
MDC MANAGEMENT COMPANY II, L.P.,
a California limited partnership
By: /S/ DAVID E. DE LEEUW
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Title: General Partner
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