EXHIBIT 10.15
CONFORMED COPY
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CONSULTING AGREEMENT
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This CONSULTING AGREEMENT, dated as of May 21, 1998 (the "Agreement"),
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by and among Dynatech Corporation, a Massachusetts corporation (the "Company"),
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Telecommunications Techniques Company, LLC, a Delaware limited liability company
("TTC") and ▇▇▇▇▇▇▇, Dubilier & Rice, Inc., a Delaware corporation ("CD&R").
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W I T N E S S E T H:
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WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company is entering into an Indemnification Agreement, dated as
of the date hereof (the "Indemnification Agreement"), by and among the Company,
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TTC, CD&R and ▇▇▇▇▇▇▇, Dubilier & Rice Fund V Limited Partnership, a Cayman
Islands exempted limited partnership (capitalized terms used herein without
definition having the meanings ascribed in the Indemnification Agreement);
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of
December 20, 1997 (the "Merger Agreement"), by and between the Company and CDRD
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Merger Corporation, a Delaware corporation ("MergerCo") formed by the CD&R Fund,
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MergerCo has merged with and into the Company (the "Merger") on the date hereof;
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WHEREAS, CD&R has performed financial, management advisory and other
services for the Company, including but not limited to assistance in connection
with (i) the preparation, negotiation, execution and delivery of the Merger
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Agreement, (ii) the preparation, filing and circulation of the S-4, the 13E-3
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and related materials to the stockholders of the Company in connection with the
Merger, (iii) the retention of legal, accounting, environmental, insurance,
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investment banking, financial and other advisors and consultants in connection
with the Merger, (iv) the preparation, negotiation, execution and delivery of
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the commitment, fee and engagement letters, registration rights and purchase
agreements, credit agreements, indentures and indenture supplements, guarantees,
mortgages, pledge agreements and other security agreements, subscription,
registration rights agreements, management equity agreements, exchange agent
agreements, and other agreements, instruments and documents, relating to the
Senior Secured Financing, Note Offering, or otherwise relating to the Financing
or the other Transactions, (v) the preparation and circulation of information
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and offering memoranda and other materials in connection with the Senior Secured
Financing and the Note
Offering and (vi) the structuring, implementation and consummation of the Merger
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(such services collectively, the "Merger Services");
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WHEREAS, the Company desires to receive financial and managerial
advisory services from CD&R, and CD&R desires to provide such services to the
Company;
NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth and the mutual benefits to be derived herefrom,
the parties hereto hereby agree as follows:
1. Engagement. The Company hereby engages CD&R as a consultant, and
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CD&R hereby agrees to provide financial and managerial advisory ser vices to
the Company, all on the terms and subject to the conditions set forth below.
2. Services, etc. (a) CD&R hereby agrees during the term of this
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Agreement to assist, advise and consult with the respective Boards of Directors
and management of the Company and its Subsidiaries in such manner and on such
business, management and financial matters, and provide such other financial and
managerial advisory services (collectively, the "Continuing Services"), as may
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be reasonably requested from time to time by the Board of Directors of the
Company, including but not limited to assistance in:
(i) establishing and maintaining banking, legal and other business
relation ships for the Company and its Subsidiaries;
(ii) developing and implementing corporate and business strategy and
planning for the Company and its Subsidiaries, including plans and programs
for improving operating, marketing and financial performance, budgeting of
future corporate investments, acquisition and divestiture strategies, and
reorganizational programs;
(iii) arranging future debt and equity financings and refinancings; and
(iv) providing professional employees to serve as directors or officers
of the Company and its Subsidiaries.
(b) The Company will furnish CD&R with such information as CD&R
believes appropriate to its engagement hereunder (all such information so
furnished being referred to herein as the "Information"). The Company recognizes
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and confirms that (i)
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CD&R will use and rely primarily on the Information and on information available
from generally recognized public sources in performing the services to be
performed hereunder and (ii) CD&R does not assume responsibility for the
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accuracy or completeness of the Information and such other information.
3. Compensation; Payment of Expenses. (a) The Company and TTC
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jointly and severally agree to pay to CD&R, concurrent with the execution of
this Agreement, as compensation for the Merger Services, a fee of $9,200,000.
(b) The Company and TTC jointly and severally agree to pay to CD&R, as
compensation for the Continuing Services rendered and to be rendered by CD&R
hereunder, a fee of $500,000 per year (the "Continuing Services Fee"), payable
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on the first day of the month in monthly installments of $41,666.66 in arrears
commencing on June 1, 1998. Such Continuing Services Fee may, in the sole
discretion of a majority of the members of the Company's Board of Directors who
are not affiliated with CD&R, be increased but may not be decreased without the
prior written consent of CD&R. If any employee of CD&R shall be elected to
serve on the Board of Directors or as an officer of the Company (a "Designated
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Director"), in consideration of the Continuing Services Fee being paid to CD&R,
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CD&R shall cause such Designated Director to waive any and all compensation,
including without limitation, fees, stock options, equity participation and
other incentives, to which such director would otherwise be entitled as a
director for any period for which the Continuing Services Fee or any installment
thereof is paid and for which such Designated Director continues to be employed
by CD&R.
(c) The Company and TTC jointly and severally agree to reimburse CD&R
for such reasonable travel and other out-of-pocket expenses ("Expenses") as may
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have been or be incurred by CD&R and its employees, agents and advisors in the
course or on account of rendering of the Merger Services or the Continuing
Services, including but not limited to any reasonable fees and expenses of any
legal, accounting or other professional advisors to CD&R engaged in connection
with the Merger Services and Continuing Services and any reasonable expenses
incurred by any Designated Director in connection with the performance of his
duties. CD&R may submit monthly expense statements, which shall be payable
within thirty days.
4. Term, etc. (a) This Agreement shall be in effect until, and
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shall terminate upon, the earlier to occur of (x) the tenth anniversary of the
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date hereof and (y) the date on which the CD&R Fund no longer owns any shares of
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the capital stock of the Company, and may be earlier terminated by either party
hereto upon 30 days' prior written notice to the other party hereto. The
provisions of this Agreement shall survive any termination of this Agreement,
except for the provisions of Section 1, Section 2(a),
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the first sentence of Section 2(b) and (solely as to any portion of the
Continuing Services Fee or any Expense not paid or reimbursed prior to such
termination and not required to be paid or reimbursed thereafter pursuant to
Section 4(c) hereof) Section 3 hereof.
(b) Upon any consolidation or merger, or any conveyance, transfer or
lease of all or substantially all of the assets of the Company, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, the Company under this Agreement with the same effect as if
such successor corporation had been a party thereto. No such consolidation,
merger or conveyance, transfer or lease of all or substantially all of the
assets of the Company shall have the effect of terminating this Agreement or of
releasing the Company or any such successor corporation from its obligations
hereunder.
(c) Upon any termination of this Agreement, any accrued and unpaid
installment of the Continuing Services Fee or portion thereof (pro rated, with
respect to the month in which such termination occurs, for the portion of such
month that precedes such termination), and any unpaid and unreimbursed Expenses
that shall have been incurred prior to such termination (whether or not such
Expenses shall then have become payable), shall be immediately paid or
reimbursed, as the case may be, by the Company. In the event of the liquidation
of the Company, all amounts due CD&R hereunder shall be paid to CD&R before any
liquidating distributions or similar payments are made to stockholders of the
Company.
5. Indemnification. (a) The Company confirms and reaffirms its
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obligations pursuant to the Indemnification Agreement. Without limiting the
generality of the foregoing, the Company confirms and agrees that (a) it shall
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indemnify, defend and hold harmless CD&R, the CD&R Fund, CD&R Associates, CD&R
Investment Associates Inc., Associates II, their respective successors and
assigns and each of the respective directors, officers, partners, employees,
agents, advisors, representatives and controlling persons (within the meaning of
the Securities Act of 1933, as amended) and their respective successors and
assigns (collectively, "Indemnitees") from and against any and all claims,
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obligations, liabilities, causes of action, actions, suits, proceedings,
investigations, judgments, decrees, losses, damages, fees, costs and expenses
(including without limitation interest, penalties and fees and disbursements of
attorneys, accountants, investment bankers and other professional advisors)
(collectively, "Obligations"), whether incurred with respect to third parties or
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otherwise, in any way resulting from, arising out of or in connection with,
based upon or relating to, the performance of the Merger Services or the
Continuing Services, except to the extent that any such Obligation is found in a
final judgment by a court having jurisdiction to have
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resulted from the gross negligence or intentional misconduct of an Indemnitee,
(b) no Indemnitee shall have any liability (whether direct or indirect, in
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contract or tort or otherwise) to the Company or their respective security
holders or creditors with respect to any Obligation in any way resulting from,
arising out of or in connection with, based upon or relating to, the performance
of the Merger Services or the Continuing Services, except to the extent that any
such Obligation is found in a final judgment by a court having jurisdiction to
have resulted from the gross negligence or intentional misconduct of an
Indemnitee, and (c) the rights of each Indemnitee to be indemnified under any
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agreement, document, certificate or instrument or applicable law are independent
of and in addition to any rights of such Indemnitee under any other agreement,
document, certificate or instrument or applicable law.
(b) The Company hereby agrees to advance costs and expenses,
including attorneys' fees, incurred by CD&R (acting on its own behalf or, if
requested by any such Indemnitee other than itself, on behalf of such
Indemnitee) or any Indemnitee in defending any claim relating to any Obligation
in advance of the final disposition of such claim within 30 days of receipt from
CD&R of (i) a notice setting forth the amount of such costs and expenses (a
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"Payment Notice") and (ii) an undertaking by or on behalf of CD&R or such
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Indemnitee to repay amounts so advanced if it shall ultimately be determined
that CD&R or such Indemnitee is not entitled to be indemnified by the Company as
authorized by this Agreement. CD&R may submit Payment Notices to the Company
monthly.
6. Independent Contractor Status. The parties agree that CD&R shall
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perform services hereunder as an independent contractor, retaining control over
and responsibility for its own operations and personnel. Neither CD&R nor any
of its employees or agents shall, solely by virtue of this Agreement or the
arrangements hereunder, be considered employees or agents of the Company nor
shall any of them have authority to contract in the name of or bind the Company,
except (a) to the extent that any professional employee of CD&R may be serving
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as a director or an officer of the Company pursuant to Section 2(a)(iv) hereof
or (b) as expressly agreed to in writing by the Company. The Company hereby
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acknowledges and agrees that the agreements, arrangements or understandings
entered into by CD&R on behalf of the Company, MergerCo or any of their
respective subsidiaries prior to the date hereof in connection with the Merger
(including, but not limited to, any confidentiality agreements and agreements
with brokers or finders) and set forth on Schedule 6 attached hereto shall be
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obligations of the Company binding on it to the same extent as such obligations
may be binding on CD&R, and the Company shall fully perform, and indemnify and
hold harmless CD&R from and against, all such obligations. Any duties of CD&R
arising out of its engagement to perform services hereunder shall be owed solely
to the Company.
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7. Notices. Any notice or other communication required or permitted
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to be given or made under this Agreement by one party to the other parties shall
be in writing and shall be deemed to have been duly given and effective (i) on
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the date of delivery if delivered personally or (ii) when sent if sent by
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prepaid telegram, or mailed first-class, postage prepaid, registered or
certified mail, or facsimile transmission as follows (or to such other address
as shall be given in writing by one party to the other parties in accordance
herewith):
If to the Company or TTC, to:
Dynatech Corporation
Corporate Headquarters
3 New England Executive Park
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
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If to CD&R, to:
▇▇▇▇▇▇▇, Dubilier & Rice, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, III
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with a copy to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
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8. Entire Agreement. This Agreement, together with the
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Indemnification Agreement, (a) contains the complete and entire understanding
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and agreement of CD&R, TTC and the Company with respect to the subject matter
hereof and (b) supersedes all prior and contemporaneous understandings,
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conditions and agreements, oral or written, express or implied, in respect of
the subject matter hereof, including but not limited to in respect of the
engagement of CD&R in connection with the subject matter hereof. There are no
representations or warranties of CD&R in connection with this Agreement or the
services to be provided hereunder, except as expressly made and contained in
this Agreement.
9. Headings. The headings contained in this Agreement are for
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purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
10. Counterparts. This Agreement may be executed in several
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counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
11. Binding Effect; Assignment. This Agreement shall be binding upon
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and inure to the benefit of the parties to this Agreement and their respective
successors and assigns and to each Indemnitee, provided that none of CD&R, the
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Company or TTC may assign any of its rights or obligations under this Agreement
without the express written consent of the other party hereto. This Agreement
is not intended to confer any right or remedy hereunder upon any person other
than the parties to this Agreement and their respective successors and permitted
assigns and each Indemnitee.
12. Governing Law. This Agreement shall be governed in all respects
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including as to validity interpretations and effects by the laws of the State of
New York, without giving effect to its principles or rules of conflict of laws
to the extent such principles or rules would require or permit the application
of the laws of another jurisdiction. The Company, TTC and CD&R hereby
irrevocably submit to the jurisdiction of the courts of the State of New York
and the Federal courts of the United States of America, in each case located in
the State, City and County of New York, solely in respect of the interpretation
and enforcement of the provisions of this Agreement, and hereby waive, and agree
not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof, that it is not subject thereto or that
such action, suit or proceeding may not be brought or is not maintainable in
such courts or that the venue thereof may not be appropriate or that this
Agreement may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims
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with respect to such action or proceeding shall be heard and determined in such
a New York State or Federal court. The Company, TTC and CD&R hereby consent to
and grant any such court jurisdiction over the person of such parties and over
the subject matter of any such dispute and agree that mailing of process or
other papers in connection with any such action or proceeding in the manner
provided in Section 7, or in such other manner as may be permitted by law, shall
be valid and sufficient service thereof.
13. Waiver of Jury Trial. Each party hereto acknowledges and agrees
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that any controversy that may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore it hereby irrevocably and
unconditionally waives any right it may have to a trial by jury in respect of
any litigation directly or indirectly arising out of or relating to this
Agreement, or the breach, termination or validity of this Agreement, or the
transactions contemplated by this Agreement. Each party certifies and
acknowledges that (a) no representative, agent or attorney of any other party
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has represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver, (b) it understands
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and has considered the implications of this waiver, (c) it makes this waiver
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voluntarily, and (d) it has been induced to enter into this Agreement by, among
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other things, the mutual waivers and certifications contained in this Section
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14. Amendment; Waivers. No amendment, modification, supplement or
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discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party or Indemnitee against
whom enforcement of the amendment, modification, supplement, discharge or waiver
is sought (and in the case of the Company, approved by resolution of the Board
of Directors of the Company). Any such waiver shall constitute a waiver only
with respect to the specific matter described in such writing and shall in no
way impair the rights of the party or Indemnitee granting such waiver in any
other respect or at any other time. Neither the waiver by any of the parties
hereto or any Indemnitee of a breach of or a default under any of the provisions
of this Agreement, nor the failure by any party hereto or any Indemnitee on one
or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right, powers or privilege hereunder, shall be construed as a
waiver of any other breach or default of a similar nature, or as a waiver of any
of such provisions, rights, power or privileges hereunder. The rights and
remedies herein provided are
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cumulative and are not exclusive of any rights or remedies that any party or
Indemnitee may otherwise have at law or in equity or otherwise.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
▇▇▇▇▇▇▇, DUBILIER & RICE, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, III
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Chairman
DYNATECH CORPORATION
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
TELECOMMUNICATIONS TECHNIQUES CO., LLC
By: Dynatech Corporation, its sole member
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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