TRANSITION AGREEMENT
--------------------
THIS TRANSITION AGREEMENT (this "Agreement") is made and entered into
as of this 25th day of July, 1997, by and between Jordan Telecommunication
Products, Inc., a Delaware corporation (the "Company"), and Jordan Industries,
Inc., an Illinois corporation ("Parent").
WHEREAS, the Company wishes to occupy certain of the facilities
leased by the Parent and to purchase from Parent certain services designed to
assist the Company in transitioning to a stand-alone company pursuant to terms
and conditions as more specifically described herein;
WHEREAS, Parent desires to provide or cause to be provided those
facilities and services requested by the Company under such terms and
conditions; and
WHEREAS, the Company will retain the sole and absolute right and
authority to fully and completely operate and manage its business and
properties.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the parties hereto agree as follows:
Section 1. Facilities and Services.
1.1 Facilities. Parent hereby grants to the Company the
right to use the Facilities set forth on Exhibit A. The Company acknowledges
and agrees that within 60 days of the expiration of the term of this
Agreement, it shall leave the Facilities in the same condition as at the
commencement of the term of the Agreement, ordinary wear and tear and damage
by casualty excepted.
1.2 Services to be Rendered. Parent shall provide the
Company with the services described below (each, a "Service", and
collectively, the "Services") as selected from time to time by the Company:
(a) Insurance Administration. Assistance in securing all
forms of insurance, including property, casualty, workers'
compensation and trustees' and officers' liability coverage; managing
insurance policies; negotiation of premiums; arranging payment terms;
managing claims; and preparation of loss fund analysis. The amount
and levels of insurance shall be determined in the sole and absolute
discretion of the Company.
(b) Accounting. Provision of all accounting services,
including accounts payable functions; processing of all employee
expense reports and reimbursements of travel and entertainment
expenses; and maintenance of accounts payable, cash disbursement
systems, including reasonable internal controls, internal audit
coverage and audit support, including
financial audits, operational audits and information system audits,
as requested and authorized in advance by the Company.
(c) Management Information Systems.
(i) Applications Development. Development, maintenance
and continuing evolution of system applications to provide
technology solutions to business needs and problems, as
requested and authorized in advance by the Company.
(ii) Telecommunications. Design, operation and
maintenance of network infrastructure, including telephone
and data transmission lines, voice mail, facsimile machines,
cellular phones, pager, etc.; negotiation of contracts with
third party vendors and suppliers; and local area network and
wide area network communications support.
(iii) Operations/Technical Support and User Support.
Design, maintenance and operation of the computing
environment, including business specific applications,
network wide applications, electronic mail and other systems;
purchase and maintenance of equipment, including hardware and
software; configuration, installation and support of computer
equipment; and education and training of the user community.
(d) Special Projects. Support of all special projects, as
requested and authorized in advance by the Company.
(e) Legal. Coordination and supervision of all third party
legal services; assistance in the preparation of public filings and
registration statements; and oversight of processing of claims
against the Company.
(f) Investor Relations/Communications. Preparation and
coordination of annual and quarterly reports to securityholders;
presentations to public; public relations; preparation of marketing
materials; and investor relations services.
1.3 Allocation of Facilities; Scope of Services; Charges.
The parties agree to cooperate and use reasonable efforts in order to allocate
the Facilities in accordance with the reasonable requests (based on their
business needs) of Parent and the Company. Charges for the use of the
Facilities will be allocated based upon the square footage assigned to the
parties hereunder. The parties will agree from time to time on the Services to
be provided, the scope of Services listed in Section 1.2 and the charges for
such Services. The scope of Services shall consist of the estimated amount of
items to be processed or hours to be spent for a category of the Services in
any year as agreed to by the parties. The charges for Services shall consist
of an amount equal to Parent's costs incurred in providing such Services. If
the scope of Services actually performed by Parent in any category of Services
is different than that agreed to by the parties, or if the scope
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of Services is increased at the request of the Company, then the parties shall
negotiate in good faith to revise the scope of Services and to adjust the
charges for such Services.
1.4 Performance of Services. Parent covenants that it will
perform or cause to be performed the Services in a timely, efficient and
workmanlike manner and in substantially the same manner in which Parent is
providing such services to the Company currently. Parent further covenants
that it will maintain or contract for a sufficient staff of trained personnel
to enable it to perform the Services hereunder. Parent may retain third
parties or its affiliates to provide certain of the Services hereunder. Any
arrangements between Parent and its affiliates for the provision of Services
hereunder shall be commercially reasonable and on terms not less favorable
than those which could be obtained from unaffiliated third parties.
1.5 Payment for Facilities and Services. Parent shall xxxx
the Company, at the end of each calendar month for the applicable Facilities
and Services. Such amount shall be payable by the Company in full within 30
days of receipt thereof by the Company.
1.6 Reimbursement. The Company shall reimburse Parent for
all reasonable third party out-of-pocket expenses it incurs on behalf of the
Company not billed directly to the Company within 30 days of receipt of the
invoice therefor, if not included in the charges pursuant to Section 1.3.
Section 2. Term. The initial term of this Agreement shall commence on
the date hereof and shall be through December 31, 1997 (the "Initial Term")
and shall be renewable by the Company every year thereafter, subject to
approval by a majority of the Independent Directors (which they may withhold
or grant in their sole discretion). Absent written notice of non-renewal as
provided in this Section 2, this Agreement shall be automatically renewed for
successive one-year terms (each, a "Renewal Term") upon the expiration of the
Initial Term and each Renewal Term. Notice of non-renewal, if given, shall be
given in writing by either party hereto not less than ninety (90) calendar
days before the expiration of the Initial Term or any Renewal Term. Upon
termination of this Agreement, Parent shall promptly return to the Company all
monies, books, records and other materials held by it for or on behalf of the
Company. As used herein, the term "Independent Director" means each member of
the Company's Board of Trustees who is not affiliated with Parent or any of
its affiliates, directly or indirectly, whether by ownership of, ownership
interest in, employment by, any material business or professional relationship
with, or service as an officer of Parent or any of its affiliates, and is not
serving as a trustee or director for more than three real estate investment
trusts organized by a sponsor of the Company.
Section 3. Audit of Services. At any time during regular business
hours and as often as reasonably requested by the Company's officers, Parent
shall permit the Company or its authorized representatives to examine and make
copies and abstracts from the records and books of Parent for the purpose of
auditing the performance of, and the charges of, Parent under the terms of
this Agreement; provided, that all costs and expenses of such inspection shall
be borne by the Company.
-3-
Section 4. Prevention of Performance. Parent shall not be determined
to be in violation of this Agreement if it is prevented from performing any
Services hereunder for any reason beyond its reasonable control, including
without limitation, acts of God, nature, or of public enemy, strikes, or
limitations of law, regulations or rules of the Federal or of any state or
local government or of any agency thereof.
Section 5. Indemnification.
5.1 By the Company. The Company shall indemnify, defend and
hold Parent, and its directors, officers, and employees harmless from and
against all damages, losses and reasonable out-of-pocket expenses (including
fees) incurred by them in the course of performing the duties on behalf of the
Company and its subsidiaries as prescribed hereby.
5.2 Remedy. Parent does not assume any responsibility under
this Agreement other than to render the services called for under this
Agreement in good faith and in a manner reasonably believed to be in the best
interests of the Company. The Company's sole remedy on account of the failure
of Parent to render the services as and when required hereunder shall be to
procure services elsewhere and to charge Parent the difference between the
reasonable increased cost, if any, to procure new services, and the current
cost to the Company to procure services under this Agreement.
Section 6. Notices.
6.1 Manner of Delivery. Each notice, demand, request,
consent, report, approval or communication (each a "Notice") which is or may
be required to be given by either party to the other party in connection with
this Agreement and the transactions contemplated hereby, shall be in writing,
and given by telecopy, personal delivery, receipted delivery service, or by
certified mail, return receipt requested, prepaid and properly addressed to
the party to be served.
6.2 Addresses. Notices shall be addressed as follows:
If to the Company:
Jordan Telecommunication Products, Inc.
ArborLake Centre
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
If to Parent:
Jordan Industries, Inc.
ArborLake Centre
0000 Xxxx Xxxx Xxxx, Xxxxx 000
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Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
6.3 Effective Date. Notices shall be effective on the date
sent via telecopy, the date delivered personally or by receipted delivery
service, or three (3) days after the date mailed.
6.4 Change of Address. Each party may designate by notice to
the others in writing, given in the foregoing manner, a new address to which
any notice may thereafter be so given, served or sent.
Section 7. Independent Contractor. The Parent and its personnel shall,
for purposes of this Agreement, be independent contractors with respect to the
Company
Section 8. Entire Agreement. This Agreement sets forth the entire
understanding of the Company and Parent, and supersedes all prior agreements,
arrangements and communications, whether oral or written, with respect to the
subject matter hereof. No supplement, modification, termination in whole or in
part, or waiver of this Agreement shall be binding unless executed in writing
by the party to be bound thereby. No waiver by either party of any breach of
any provision of this Agreement shall be deemed a continuing waiver or a
waiver of any preceding or succeeding breach of such provision or of any other
provision herein contained.
Section 9. Assignability; Binding Effect. This Agreement may be
assigned by either party hereto without the consent of the other party,
provided, however, such assignment shall not relieve such party from its
obligations hereunder. Any assignment of this Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto, each of their respective successors and permitted assigns,
and no other persons shall have or derive any right, benefit or obligation
hereunder.
Section 10. Headings. The headings and titles of the various
paragraphs of this Agreement are inserted merely for the purpose of
convenience, and do not expressly or by implication limit, define, extend or
affect the meaning or interpretation of this Agreement or the specific terms
or text of the paragraph so designated.
Section 11. Governing Law. This Agreement shall be governed by the
internal laws (and not the law of conflicts) of the State of Illinois.
Section 12. Severability. In the event that any provision of this
Agreement shall be held to be void or unenforceable in whole or in part, the
remaining provisions of this Agreement and the remaining portion of any
provision held void or unenforceable in part shall continue in full force and
effect.
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Section 13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall be considered one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
JORDAN TELECOMMUNICATION PRODUCTS, INC.
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Officer
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
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EXHIBIT A
DESCRIPTION OF FACILITIES
For purposes of the Transition Agreement, Facilities shall mean the
facilities maintained by Parent or one of its affiliates at the following
addresses:
ArborLake Centre
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Facilities shall also include any other premises owned, leased or
subleased by Parent at which the Company desires to utilize such premises as
well as the utilities, fixtures, furniture and equipment used in connection
with the operation of such premises.
TRANSITION AGREEMENT
THIS TRANSITION AGREEMENT (this "Agreement") is made and entered into
as of this 25th day of July, 1997, by and between Motors and Gears Holdings,
Inc., a Delaware corporation (the "Company"), and Jordan Industries, Inc., an
Illinois corporation ("Parent").
WHEREAS, the Company wishes to occupy certain of the facilities
leased by the Parent and to purchase from Parent certain services designed to
assist the Company in transitioning to a stand-alone company pursuant to terms
and conditions as more specifically described herein;
WHEREAS, Parent desires to provide or cause to be provided those
facilities and services requested by the Company under such terms and
conditions; and
WHEREAS, the Company will retain the sole and absolute right and
authority to fully and completely operate and manage its business and
properties.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the parties hereto agree as follows:
Section 1. Facilities and Services.
1.1 Facilities. Parent hereby grants to the Company the
right to use the Facilities set forth on Exhibit A. The Company acknowledges
and agrees that within 60 days of the expiration of the term of this
Agreement, it shall leave the Facilities in the same condition as at the
commencement of the term of the Agreement, ordinary wear and tear and damage
by casualty excepted.
1.2 Services to be Rendered. Parent shall provide the
Company with the services described below (each, a "Service", and
collectively, the "Services") as selected from time to time by the Company:
(a) Insurance Administration. Assistance in securing all
forms of insurance, including property, casualty, workers'
compensation and trustees' and officers' liability coverage; managing
insurance policies; negotiation of premiums; arranging payment terms;
managing claims; and preparation of loss fund analysis. The amount
and levels of insurance shall be determined in the sole and absolute
discretion of the Company.
(b) Accounting. Provision of all accounting services,
including accounts payable functions; processing of all employee
expense reports and reimbursements of travel and entertainment
expenses; and maintenance of accounts payable, cash disbursement
systems, including reasonable internal controls, internal audit
coverage and audit support, including
financial audits, operational audits and information system audits,
as requested and authorized in advance by the Company.
(c) Management Information Systems.
(i) Applications Development. Development, maintenance
and continuing evolution of system applications to provide
technology solutions to business needs and problems, as
requested and authorized in advance by the Company.
(ii) Telecommunications. Design, operation and
maintenance of network infrastructure, including telephone
and data transmission lines, voice mail, facsimile machines,
cellular phones, pager, etc.; negotiation of contracts with
third party vendors and suppliers; and local area network and
wide area network communications support.
(iii) Operations/Technical Support and User Support.
Design, maintenance and operation of the computing
environment, including business specific applications,
network wide applications, electronic mail and other systems;
purchase and maintenance of equipment, including hardware and
software; configuration, installation and support of computer
equipment; and education and training of the user community.
(d) Special Projects. Support of all special projects, as
requested and authorized in advance by the Company.
(e) Legal. Coordination and supervision of all third party
legal services; assistance in the preparation of public filings and
registration statements; and oversight of processing of claims
against the Company.
(f) Investor Relations/Communications. Preparation and
coordination of annual and quarterly reports to securityholders;
presentations to public; public relations; preparation of marketing
materials; and investor relations services.
1.3 Allocation of Facilities; Scope of Services; Charges.
The parties agree to cooperate and use reasonable efforts in order to allocate
the Facilities in accordance with the reasonable requests (based on their
business needs) of Parent and the Company. Charges for the use of the
Facilities will be allocated based upon the square footage assigned to the
parties hereunder. The parties will agree from time to time on the Services to
be provided, the scope of Services listed in Section 1.2 and the charges for
such Services. The scope of Services shall consist of the estimated amount of
items to be processed or hours to be spent for a category of the Services in
any year as agreed to by the parties. The charges for Services shall consist
of an amount equal to Parent's costs incurred in providing such Services. If
the scope of Services actually performed by Parent in any category of Services
is different than that agreed to by the parties, or if the scope
-2-
of Services is increased at the request of the Company, then the parties shall
negotiate in good faith to revise the scope of Services and to adjust the
charges for such Services.
1.4 Performance of Services. Parent covenants that it will
perform or cause to be performed the Services in a timely, efficient and
workmanlike manner and in substantially the same manner in which Parent is
providing such services to the Company currently. Parent further covenants
that it will maintain or contract for a sufficient staff of trained personnel
to enable it to perform the Services hereunder. Parent may retain third
parties or its affiliates to provide certain of the Services hereunder. Any
arrangements between Parent and its affiliates for the provision of Services
hereunder shall be commercially reasonable and on terms not less favorable
than those which could be obtained from unaffiliated third parties.
1.5 Payment for Facilities and Services. Parent shall xxxx
the Company, at the end of each calendar month for the applicable Facilities
and Services. Such amount shall be payable by the Company in full within 30
days of receipt thereof by the Company.
1.6 Reimbursement. The Company shall reimburse Parent for
all reasonable third party out-of-pocket expenses it incurs on behalf of the
Company not billed directly to the Company within 30 days of receipt of the
invoice therefor, if not included in the charges pursuant to Section 1.3.
Section 2. Term. The initial term of this Agreement shall commence on
the date hereof and shall be through December 31, 1997 (the "Initial Term")
and shall be renewable by the Company every year thereafter, subject to
approval by a majority of the Independent Directors (which they may withhold
or grant in their sole discretion). Absent written notice of non-renewal as
provided in this Section 2, this Agreement shall be automatically renewed for
successive one-year terms (each, a "Renewal Term") upon the expiration of the
Initial Term and each Renewal Term. Notice of non-renewal, if given, shall be
given in writing by either party hereto not less than ninety (90) calendar
days before the expiration of the Initial Term or any Renewal Term. Upon
termination of this Agreement, Parent shall promptly return to the Company all
monies, books, records and other materials held by it for or on behalf of the
Company. As used herein, the term "Independent Director" means each member of
the Company's Board of Trustees who is not affiliated with Parent or any of
its affiliates, directly or indirectly, whether by ownership of, ownership
interest in, employment by, any material business or professional relationship
with, or service as an officer of Parent or any of its affiliates, and is not
serving as a trustee or director for more than three real estate investment
trusts organized by a sponsor of the Company.
Section 3. Audit of Services. At any time during regular business
hours and as often as reasonably requested by the Company's officers, Parent
shall permit the Company or its authorized representatives to examine and make
copies and abstracts from the records and books of Parent for the purpose of
auditing the performance of, and the charges of, Parent under the terms of
this Agreement; provided, that all costs and expenses of such inspection shall
be borne by the Company.
-3-
Section 4. Prevention of Performance. Parent shall not be determined
to be in violation of this Agreement if it is prevented from performing any
Services hereunder for any reason beyond its reasonable control, including
without limitation, acts of God, nature, or of public enemy, strikes, or
limitations of law, regulations or rules of the Federal or of any state or
local government or of any agency thereof.
Section 5. Indemnification.
5.1 By the Company. The Company shall indemnify, defend and
hold Parent, and its directors, officers, and employees harmless from and
against all damages, losses and reasonable out-of-pocket expenses (including
fees) incurred by them in the course of performing the duties on behalf of the
Company and its subsidiaries as prescribed hereby.
5.2 Remedy. Parent does not assume any responsibility under
this Agreement other than to render the services called for under this
Agreement in good faith and in a manner reasonably believed to be in the best
interests of the Company. The Company's sole remedy on account of the failure
of Parent to render the services as and when required hereunder shall be to
procure services elsewhere and to charge Parent the difference between the
reasonable increased cost, if any, to procure new services, and the current
cost to the Company to procure services under this Agreement.
Section 6. Notices.
6.1 Manner of Delivery. Each notice, demand, request,
consent, report, approval or communication (each a "Notice") which is or may
be required to be given by either party to the other party in connection with
this Agreement and the transactions contemplated hereby, shall be in writing,
and given by telecopy, personal delivery, receipted delivery service, or by
certified mail, return receipt requested, prepaid and properly addressed to
the party to be served.
6.2 Addresses. Notices shall be addressed as follows:
If to the Company:
Motors and Gears Holdings, Inc.
Arborlake Center
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
If to Parent:
Jordan Industries, Inc.
Arborlake Center
0000 Xxxx Xxxx Xxxx, Xxxxx 000
-0-
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
6.3 Effective Date. Notices shall be effective on the date
sent via telecopy, the date delivered personally or by receipted delivery
service, or three (3) days after the date mailed.
6.4 Change of Address. Each party may designate by notice to
the others in writing, given in the foregoing manner, a new address to which
any notice may thereafter be so given, served or sent.
Section 7. Independent Contractor. The Parent and its personnel shall,
for purposes of this Agreement, be independent contractors with respect to the
Company
Section 8. Entire Agreement. This Agreement sets forth the entire
understanding of the Company and Parent, and supersedes all prior agreements,
arrangements and communications, whether oral or written, with respect to the
subject matter hereof. No supplement, modification, termination in whole or in
part, or waiver of this Agreement shall be binding unless executed in writing
by the party to be bound thereby. No waiver by either party of any breach of
any provision of this Agreement shall be deemed a continuing waiver or a waiver
of any preceding or succeeding breach of such provision or of any other
provision herein contained.
Section 9. Assignability; Binding Effect. This Agreement may be
assigned by either party hereto without the consent of the other party,
provided, however, such assignment shall not relieve such party from its
obligations hereunder. Any assignment of this Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto, each of their respective successors and permitted assigns,
and no other persons shall have or derive any right, benefit or obligation
hereunder.
Section 10. Headings. The headings and titles of the various
paragraphs of this Agreement are inserted merely for the purpose of
convenience, and do not expressly or by implication limit, define, extend or
affect the meaning or interpretation of this Agreement or the specific terms
or text of the paragraph so designated.
Section 11. Governing Law. This Agreement shall be governed by the
internal laws (and not the law of conflicts) of the State of Illinois.
Section 12. Severability. In the event that any provision of this
Agreement shall be held to be void or unenforceable in whole or in part, the
remaining provisions of this Agreement and the remaining portion of any
provision held void or unenforceable in part shall continue in full force and
effect.
-5-
Section 13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall be considered one and the same instrument.
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
MOTORS AND GEARS HOLDINGS, INC.
By:
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Officer
JORDAN INDUSTRIES, INC.
By:
--------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
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EXHIBIT A
DESCRIPTION OF FACILITIES
For purposes of the Transition Agreement, Facilities shall mean the
facilities maintained by Parent or one of its affiliates at the following
addresses:
Arborlake Center
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Facilities shall also include any other premises owned, leased or
subleased by Parent at which the Company desires to utilize such premises as
well as the utilities, fixtures, furniture and equipment used in connection
with the operation of such premises.
