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EXHIBIT 10.33
February 28, 1998
CONSULTING AGREEMENT
This Agreement ("Agreement") is entered into this date by and
between INTERPOOL, INC., a Delaware corporation ("Interpool"), and ATLAS CAPITAL
PARTNERS, L.L.C., a Delaware limited liability corporation ("Atlas").
In consideration of the mutual promises of the parties and
other good and valuable consideration, the parties hereby agree:
Section 1. Services. Interpool hereby engages Atlas to provide
merger and acquisition consulting services (the "Services"), as more fully
described herein below, and Atlas hereby accepts such engagement with Interpool.
The Services shall include seeking out, identifying and bringing to Interpool's
attention merger and acquisition and other investment opportunities
(collectively, "investment opportunities"), whether such investment
opportunities arise in the container or chassis leasing business or otherwise;
analyzing and evaluating investment opportunities; preparing business plans and
credit analyses; devising acquisition strategies; and providing such other
services with respect to investment opportunities as would normally be expected
of an individual employed by Interpool as its investment banker.
Section 2. Term.
(a) Atlas shall provide such services for a period beginning
this date and terminating two years hereafter. Interpool shall have the right to
terminate this Agreement at any time for "cause". For the purposes of this
Agreement, termination for "cause" shall mean (i) the material breach by Atlas
of any material term or provision of this Agreement; (ii) the commission by
Atlas of any act of fraud or willful misconduct in connection with performance
of Services hereunder; (iii) the bankruptcy or insolvency of Atlas; or (iv) the
termination of Xxxxxxxx X. Xxxxxx'x ("Xxxxxx") employment with Atlas or his
ceasing to provide or to manage the providing of Services, as more fully
described in sub-paragraph (b), below; (v) the conviction of Atlas, Xxxxxx or
any other of Atlas' officers or
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employees of a crime involving moral turpitude. Prior to any termination for
"cause" as defined in the preceding clauses (i) or (ii), Interpool shall provide
to Atlas not less than 30 days notice and an opportunity to cure any such breach
or to contest the basis for determination of "cause".
(b) All Services shall be provided directly by Xxxxxx or
employees of Atlas under the direct management of Xxxxxx; accordingly, unless
Atlas has made available a substitute for Xxxxxx acceptable to Interpool in
Interpool's sole discretion, it shall constitute "cause" if Xxxxxx shall no
longer be an employee of Atlas or continue to provide or manage the providing of
Services.
Services 3. Compensation.
A. During the term of this Agreement, Interpool shall, in
return for the Services referred to herein,
(i) pay Atlas a fee of $20,000.00 per month,
(ii) provide Xxxxxx with the same medical, dental and
life insurance benefits that employees of Interpool receive;
(iii) reimburse Atlas for its reasonable,
out-of-pocket business travel and entertainment expenses incurred in
connection with performing Services hereunder, provided that Interpool
approves any such expenses in advance that are reasonably estimated to
exceed $5,000,
(iv) pay Atlas an annual incentive fee in an amount
which is usual and customary in the investment banking business.
No incentive fee shall be earned by Atlas pursuant
hereto unless and until the closing by Interpool (a "Closing") of a
purchase, disposition or financing of an investment opportunity
developed by Atlas. Atlas shall have no claim for the payment of an
incentive fee with respect to any services provided by it to Interpool
hereunder if a Closing shall fail to take place for any reason
whatsoever,
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including without limitation (i) the inability of Interpool and the
third party to the transaction to agree upon a contract for any reason,
including without limitation Interpool's arbitrary termination of
negotiations with respect to such transaction; (ii) the termination of
a contract with respect to such transaction by Interpool during any
inspection or due diligence period provided for in the contract; (iii)
the failure or inability of the third party to consummate the Closing
in accordance with the contract with respect to such transaction or any
other default by such party under such contract; or (iv) the failure or
inability of Interpool to consummate the Closing for any reason,
including without limitation the failure of any condition precedent to
the Closing or the willful or other default by Interpool under the
contract with respect thereto.
(v) In addition to the compensation set out in items
(i) through (iv), above, during the term of this Agreement Interpool
agrees to pay Atlas on an annual basis on each anniversary hereof, an
amount equal to $560,000 less the amount of the annual incentive fee
actually paid to Atlas pursuant to sub-paragraph (iv), above, in such
year (the "incentive fee differential"). It being further understood
and agreed that should Interpool lawfully terminate this Agreement for
cause, it shall not be required to pay Atlas said incentive fee
differential in the year in which such termination takes effect.
B. In addition to the compensation set out in Section 3.A.,
should Interpool, alone or with others, at any time during the term of this
Agreement form or participate in an equity capital fund (the "Capital Fund")
with Interpool as the initial investor and with general partners (or other
managers) responsible for the management of the entity, the purpose of which is
to acquire, develop and dispose of investment opportunities, it shall offer
Xxxxxx a general partnership interest (or other equivalent) in said entity, as
well as the appointment of Xxxxxx as the president of the Capital Fund (or its
management company), at no charge to Xxxxxx. Interpool contemplates such
general partnership or equivalent interest will include an interest in the
investment opportunities acquired by the Capital Fund, to be shared by and
among the general partners (or managers) upon the sale or disposition of assets
of the Capital Fund after the investors' and general partners' (or managers')
cumulative return as set forth hereinafter is distributed. Interpool also
contemplates that the general partners (or managers) will share on a 20/80
basis with the investors in any profit realized by the Capital Fund upon such
sale or other disposition, including without limitation, recapitalization and
initial public offering, after both the investors and the general partners (or
managers) shall have first received an amount equal to an 8% per annum return
calculated on the basis of the initial investment in such asset. Furthermore,
Interpool contemplates that there will be three general partners (or managers),
in total, who will share equally in the general partners' (or managers')
interest, except with respect to the initial $75,000,000 invested by Interpool
in the Capital Fund, with respect to which Xxxxxx'x share of the general
partners' (or managers) interest will be 20%. Furthermore, Interpool
contemplates that the Capital Fund will seek to assume Interpool's rights and
obligations under this Agreement and thereby seek to retain Xxxxxx as a merger
and acquisition consultant pursuant to the terms and conditions hereof, with
appropriate modifications to this Agreement to reflect the structure and
operation of the Capital Fund.
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Nothing contained herein shall be construed to require
Interpool to form or participate in the Capital Fund or said limited or general
partnerships (or equivalent entities), either during the term hereof or
otherwise, or to structure it as outlined above, and Interpool shall have no
liability to Xxxxxx should it decide in its sole commercial discretion not to do
so.
C. In addition to the compensation set out in Section 3.A.,
Xxxxxx shall receive an interest in investments which Interpool acquires through
Services performed by Xxxxxx hereunder, which shall entitle Xxxxxx to 4% of the
amount by which each such investment appreciates over Interpool's acquisition
cost thereof, after taking into account an 8% per annum return to Interpool on
such investment, determined upon the sale or other disposition, in whole or in
part, including without limitation, recapitalization and initial public
offering, of such investment. Any such interest earned by Xxxxxx hereunder shall
survive the expiration or termination of this Agreement. If the Capital Fund is
formed and Xxxxxx becomes entitled to receive a general partnership (or
equivalent) interest in Capital Fund investments pursuant to Section 3.B., it
shall no longer be entitled to earn an interest pursuant to this Section 3.C.
in investments acquired thereafter, and the provisions of Section 3.B. will
replace and supersede the provisions of this Section 3.C., as of and from the
date Xxxxxx becomes so entitled under Section 3.B., except that Xxxxxx shall be
entitled to receive a 4% equity interest in any investments acquired by
Interpool through its Services prior to such date.
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Section 4. Relationship of the Parties. The parties intend
that the relationship between them created under this Agreement is that of an
independent contractor only, and Atlas shall maintain complete control of and
responsibility for any of its employees, agents, sub-contractors, methods and
operations. Atlas shall undertake no formal agreement or exercise any
contracting power, nor make commitments on behalf of Interpool. Notwithstanding
the foregoing, Atlas may conduct negotiations leading to agreements, contracts
and commitments, and advise Interpool as to the reasonableness of entering into
such contracts; provided that nothing in this Agreement shall authorize Atlas,
or any employees, agents or sub-contractors of Atlas, to act as agents of
Interpool or as its affiliates or to execute any contract or other document on
their behalf or to bind or obligate them in any manner. Atlas shall be
responsible for all state, federal, and local taxes, including estimated taxes,
and employment reporting for Atlas and any employees, agents and sub-contractors
of Atlas.
Section 5. Proprietary Rights.
A. Atlas agrees that all Work Product (defined below) created
solely or jointly by Atlas, its employees, agents or subcontractors, arising
from work performed hereunder, or previously conceived in anticipation of
consulting work to be performed in regard to Interpool's engagement of Atlas,
shall be deemed "work made for hire" and shall be the exclusive property of
Interpool and Atlas shall relinquish all right, title and interest in and to
such Work Product. Atlas shall cause any of its employees, agents, or
subcontractors assisting in creating the Work Product to execute a similar
acknowledgment that the Work Product is a "work made for hire." Atlas and any of
its employees, agents or subcontractors assisting in creating the Work Product
shall execute all such assignments, oaths, declarations, and other documents as
may be prepared by Interpool to effect the foregoing.
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B. "Work Product" shall mean all documentation, manuals,
teaching materials, creative works, know-how, and information created on behalf
of Interpool, in whole or in part, by Atlas and any of its employees, agents or
subcontractors assisting in creating the Work Product within the scope of this
Agreement, whether or not copyrightable or otherwise protectable.
C. Atlas shall make prompt and full disclosure of such Work
Product to Interpool and, at Interpool 's expense, shall assist in every lawful
way in obtaining for Interpool patents, copyrights or trademarks for any or all
of such Work Product, in perfecting in Interpool all right, title, and interest
in and to such Work Product, in protecting or enforcing Interpool's rights
therein, and in prosecuting and defending appeals, interferences, infringement
suits, and controversies relating thereto. Atlas shall do all other things
necessary to effectuate the foregoing, including but not limited to executing
and delivering assignments, oaths, and disclaimers as needed.
Section 6. Confidentiality.
A. Atlas' employees, agents and sub-contractors shall maintain
in confidence (i) the names of investment opportunities and related information
thereof as defined in this Agreement, (ii) the consulting work carried out
hereunder, (iii) any Work Product conceived hereunder, and (iv) any business or
technical information of Interpool acquired by Atlas as a result of the
consulting work carried out pursuant to this Agreement ("Confidential
Information"), and Atlas shall not, without Interpool's prior authorization,
directly or indirectly use, publish, or disclose to others any Confidential
Information resulting from the consulting work carried out pursuant to this
Agreement. These obligations of secrecy shall continue throughout the duration
of this Agreement and for one (1) year thereafter.
B. Notwithstanding anything hereinabove to the contrary,
Interpool authorizes Atlas and the aforementioned persons to make disclosure of
Confidential Information (i) pursuant to a court order by a court of competent
jurisdiction, (ii) to any authority exercising executive, legislative,
regulatory or administrative functions of or pertaining to a government having
jurisdiction with respect to
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Interpool, Atlas or any of the aforementioned persons, or (iii) to a third
party, on a "need-to-know" basis, arising from or in connection with the
performance by Atlas of the Services, provided such third party first in writing
agrees to keep Confidential Information confidential in accordance with the
terms and conditions hereof.
C. Interpool shall be entitled, in addition to any other right
and remedy it may have, at law or in equity, to an injunction, without the
posting of any bond or other security, enjoining or restraining Atlas or its
employees, agents or sub-contractors from any material violation or threatened
material violation of Sections 5 or 6 hereof, and Atlas for itself and on behalf
of its employees, agents and sub-contractors, hereby consents to the issuance of
such injunction. If any of the restrictions contained herein shall be deemed to
be unenforceable by reason of the extent, duration or geographical scope thereof
or otherwise, then the parties hereto contemplate that the court shall reduce
such extent, duration, geographical scope, or other provision hereof, and
enforce this Section 6. C. in its reduced form for all purposes in the manner
contemplated hereby.
Section 7. Conflict of Interest. This Agreement is intended to
secure to Interpool Xxxxxx'x assistance and cooperation and shall operate to
preclude Atlas from performing services comparable or identical to the Services
performed hereunder for others during the term of this Agreement. Atlas shall
perform the Services to the highest level of business and professional ethics.
Atlas shall not make or receive any payments, gifts, favors, entertainment,
secret commissions or hidden gratuities for the purpose of securing preferential
treatment or action from or to any party. Certain gratuities may be given or
accepted if there is no violation of any law or generally accepted ethical
standards; the gratuity is given as a courtesy for a courtesy received and does
not result in any preferential treatment or action; the gratuity is of limited
value and could not be construed as a bribe, payoff or deal; and public
disclosure would not embarrass Interpool.
Section 8. Non-Exclusive. It is expressly understood that this
Agreement does not grant Atlas an exclusive privilege to furnish Interpool any
or all of the Services which are the subject of this Agreement which Interpool
may require, and
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Interpool expressly reserves the right to contract with others for the purchase
of services comparable or identical to the Services which are the subject of
this Agreement.
Section 9. Records. Atlas shall keep full and accurate
records of all consulting work performed under this Agreement. All records,
sketches, drawings, prints, computations, charts, reports, and other
documentation made in the course of the consulting work performed hereunder, or
in anticipation of the consulting work to be performed in regard to this
Agreement, shall at all times be and remain the sole property of Interpool.
Atlas shall turn over to Interpool all copies of such documentation on request
by Interpool.
Section 10. Indemnity. Interpool shall indemnify Atlas on the
same basis as officers, directors and employees of Interpool, provided that such
indemnity of Atlas is covered by Interpool's insurance.
Section 11. Non-assignability. This Agreement and the benefits
hereunder are personal to the parties hereto and are not assignable or
transferable by either party without the prior written consent of the other
party, except that Interpool may assign this Agreement to any subsidiary of
Interpool, without the consent of Atlas, In the event of any assignment by
Interpool of its rights under this Agreement to a subsidiary, Interpool shall
give notice thereof to Atlas and Interpool shall remain liable hereunder
notwithstanding such assignment. Interpool may assign this Agreement to the
Capital Fund, provided that the Capital Fund has sufficient capital to commence
operation and that the parties negotiate in good faith appropriate modifications
of this Agreement to reflect the structure and operation of the Capital Fund.
Section 12. Entire Agreement. This Agreement contains the
entire understanding of the parties hereto and supersedes all prior agreements
written or verbal, between Interpool and Atlas with respect to the subject
matter hereof and shall not be modified except in writing executed by the
parties hereto.
Section 13. Governing Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.
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Section 14. Captions. All captions and heading herein are for
convenience of reference only and shall not be deemed to affect the meaning of
this Agreement.
Section 15. Survival. The terms and conditions contained in
this Agreement that by their sense and context are intended to survive the
performance hereof by either or both parties hereunder shall so survive the
termination, cancellation or completion of performance of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
INTERPOOL, INC.
By: \s\ Xxxxx X. Xxxxxxxxx
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ATLAS CAPITAL PARTNERS, L.L.C.
By: \s\ Xxxxxxxx X. Xxxxxx
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