Exhibit 10.14
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October 25, 2000
Board of Directors
Xxxxxx A.S.L., Ltd.
c/o Xxxx Xxxxxx
Xxxx Xxxxxxx & Xxxxxx
000 Xxxxx Xxx.
New York, NY 10153
Gentlemen:
The purpose of this letter is to set forth the terms of the engagement of
Xxxxxxx & Marsal, Inc. ("A&M") by Xxxxxx X.X.X., (the "Company"), including the
scope of the services to be performed and the basis of compensation for those
services. Upon your execution, this letter will constitute an agreement between
the Company and A&M.
1. Description of Services
(a) A&M shall provide operational consulting and advisory services to
the Board of Directors, and the Company's Chief Executive Officer
in connection with their efforts in seeking to improve the
Company's financial and operating performance. It is anticipated
A&M's activities shall include the following:
(i) Review of the Company's 2001 Business Plan based upon a
review of the operations of the various segments of the
Company's business, and recommendations to modify such
plan, if appropriate;
(ii) Assistance in identification of additional cost reduction
and operations improvement opportunities through review of
the Company's facilities, personnel and operating
procedures, and the implementation thereof;
(iii) Assistance in communications with various creditor groups
and availability to meet with representatives of such
creditor groups to discuss the business operations,
financial performance and condition of the Company and the
progress made to effectuate the business plan and any
modifications thereof;
(iv) Other activities as approved by the Board of Directors or
the Chief Executive Officer.
It is understood that the services to be rendered by A&M may include
assistance in the preparation of projections and other forward-looking
statements. It is also understood that numerous factors can affect the
actual results of the Company's operations, which may materially and
adversely differ from those projections. In addition, A&M will be
relying on information provided by the Company in assisting in the
preparation of those projections and other forward-looking statements.
In rendering its services to the Company, A&M will report directly to
the Board of Directors and the CEO and will make recommendations to
and consult with the Board of Directors or to such committees thereof
or other senior officers as the Board or CEO directs.
(b) Xxxxxx Xxxx of A&M will be responsible for the overall engagement
and will devote substantially all of his time to the engagement.
Other A&M personnel (possibly including subcontractors) will
assist Xxxxxx as needed.
2. Compensation
(a) A&M will receive fees based on the following hourly rates:
Xxxxxx Xxxx $450
Managing Directors $400 - $425
Directors $350 - $400
Associates $275 - $340
Analysts $145 - $220
Such rates shall be subject to adjustment annually at such time as A&M
adjusts its rates generally.
(b) In addition, A&M will be reimbursed for its reasonable out-of-pocket
expenses incurred in connection with this assignment, such as travel,
lodging and telephone charges. In addition, A&M shall be reimbursed
for the reasonable fees and expenses of its counsel incurred in
connection with the preparation, negotiation and approval of this
agreement. All fees and expenses will be billed and payable on a
monthly basis.
(c) The Company and A&M mutually agree that they will no later than 45
days after the date hereof, in good faith, establish the basis and
amount of incentive compensation, criteria for which will be
established by A&M and the Company, once additional information has
been obtained to determine such appropriate compensation.
3. Retainer
The Company shall promptly remit to A&M a retainer in the amount of
$150,000, which shall be returned or credited against any amounts due at
the termination of this engagement.
4. Term
The engagement will commence as of the date hereof and may be terminated by
either party without cause by giving 30 days' written notice to the other
party. In the event of termination, any fees and expenses due to A&M shall
be remitted promptly and except as provided for herein, A&M shall remain
entitled to the incentive compensation which has
been agreed upon provided the criteria therefor are satisfied, as long as
the qualifying event shall occur within one year of A&M's termination.
5. Relationship of the Parties
The parties intend that an independent contractor relationship will be
created by this engagement letter. Neither A&M nor any of its personnel or
subcontractors is to be considered an employee or agent of the Company and
the personnel and subcontractors of A&M are not entitled to any of the
benefits that the Company provides for the Company" employees. The Company
acknowledges that A&M's engagement shall not constitute an audit, review or
compilation, or any other type of financial statement reporting engagement
that is subject to the rules of the AICPA, SEC or other state or national
professional or regulatory body.
6. No Third Party Beneficiary
The Company acknowledges that all advice (written or oral) given by A&M to
the Company in connection with this engagement is intended solely for the
benefit and use of the Company (limited to its Board and management and
other professionals as the Board or management may direct) in considering
the matters to which this engagement relates. The Company agrees that no
such advice shall be used for any other purpose or reproduced,
disseminated, quoted or referred to at any time in any manner or for any
purpose other than accomplishing the tasks referred to herein or in
discussions with the Company's lenders, shareholders or debt holders in
connection with such tasks, without A&M's prior approval (which shall not
be unreasonably withheld), except as required by law.
7. Conflicts
A&M is not currently aware of any relationship that would create a conflict
of interest with the Company or those parties-in-interest of which you have
made us aware. Because A&M is a consulting firm that serves clients on a
national basis in numerous cases, both in and out of court, it is possible
that A&M may have rendered services to or have business associations with
other entities or people which had or have or may have relationships with
the Company, including creditors of the Company. In the event you accept
the terms of this engagement, A&M will not represent the interests of any
such entities or people in connection with this matter.
8. Confidentiality / Non-Solicitation
A&M shall keep as confidential all non-public information received from the
Company in conjunction with this engagement, except: (i) as requested by
the Company or its legal counsel; (ii) as required by legal proceedings or
(iii) as reasonably required in the performance of this engagement. The
Company agrees not to solicit, recruit or hire any employees of A&M for a
period of two years subsequent to the termination of this agreement.
9. Indemnification
The attached indemnification agreement is incorporated herein by reference
and shall be executed upon the acceptance of this agreement. Termination of
this engagement shall not affect these indemnification provisions, which
shall remain in full force and effect.
10. Miscellaneous
This engagement letter (together with the attached indemnity provisions):
(a) shall be governed and construed in accordance with the laws of the
State of New York, regardless of the laws that might otherwise govern under
applicable principles of conflict of laws thereof; (b) incorporates the
entire understanding of the parties with respect to the subject matter
hereof; and (c) may not be amended or modified except in writing executed
by both parties hereto. The Company and A&M agree to waive trial by jury in
any action, proceeding or counterclaim brought by or on behalf of the
parties hereto with respect to any matter relating to or arising out of the
engagement or the performance or non-performance of A&M hereunder. In the
event the Company files under Chapter 11, the Company and A&M agree that
the Bankruptcy court shall have jurisdiction over any and all matters
arising under or in connection with this engagement letter and the
indemnity provisions and in connection with the services rendered by A&M
hereunder. .
Please sign the enclosed copy of this proposal and the attached
Indemnification Agreement to acknowledge your agreement with their terms.
Very truly yours,
Xxxxxxx & Marsal, Inc.
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx
Managing Director
Accepted and agreed:
Xxxxxx A.S.L., Ltd.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Chief Executive Officer
INDEMNIFICATION AGREEMENT
This indemnity is made part of an agreement, dated October 25, 2000 (which
together with any renewals, modifications or extensions thereof, is herein
referred to as the "Agreement") by and between Xxxxxxx & Xxxxxx, Inc. ("A&M")
and Xxxxxx A.S.L., Ltd. (the "Company"), for services to be rendered to the
Company by A&M.
A. The Company agrees to indemnify and hold harmless each of A&M, its
shareholders, employees, agents, representatives and subcontractors (each, an
"Indemnified Party" and collectively, the "Indemnified Parties") against any and
all losses, claims, damages, liabilities, penalties, obligations and expenses,
including the costs for counsel or others (including employees of A&M, based on
their then current hourly billing rates) in investigating, preparing or
defending any action or claim, whether or not in connection with litigation in
which any Indemnified Party is a party, or enforcing the Agreement (including
these indemnity provisions), as and when incurred, caused by, relating to, based
upon or arising out of (directly or indirectly) the Indemnified Parties'
acceptance of or the performance or nonperformance of their obligations under
the Agreement; provided, however, such indemnity shall not apply to any such
loss, claim, damage, liability or expense to the extent it is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal) to
have resulted from such Indemnified Party's gross negligence or willful
misconduct. The Company also agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with the engagement of A&M, except to the extent
for any such liability for losses, claims, damages, liabilities or expenses that
are found in a final judgment by a court of competent jurisdiction (not subject
to further appeal) to have resulted from such Indemnified Party's gross
negligence or willful misconduct. The Company further agrees that it will not,
without the prior consent of an Indemnified Party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which such Indemnified Party seeks
indemnification hereunder (whether or not such Indemnified Party is an actual
party to such claim, action, suit or proceedings) unless such settlement,
compromise or consent includes an unconditional release of such Indemnified
Party from all liabilities arising out of such claim, action, suit or
proceeding, which consent shall not be unreasonably withheld.
B. These indemnification provisions shall be in addition to any liability which
the Company may otherwise have to the Indemnified Parties.
C. If any action, proceeding or investigation is commenced to which any
Indemnified Party proposes to demand indemnification hereunder, such Indemnified
Party will notify the Company with reasonable promptness; provided, however,
that any failure by such Indemnified Party to notify the Company will not
relieve the Company from its obligations hereunder, except to the extent that
such failure shall have actually prejudiced the defense of such action. The
Company shall promptly pay expenses reasonably incurred by any Indemnified Party
in defending, participating in, or settling any action, proceeding or
investigation in which such Indemnified Party is a party or is threatened to be
made a party or otherwise is participating in by reason of the engagement under
the Agreement, upon submission of invoices therefor, whether in advance of the
final disposition of such action, proceeding, or investigation or otherwise.
Each Indemnified
Party hereby undertakes, and the Company hereby accepts its undertaking, to
repay any and all such amounts so advanced if it shall ultimately be determined
that such Indemnified Party is not entitled to be indemnified therefor. If any
such action, proceeding or investigation in which an Indemnified Party is a
party is also against the Company, the Company may, in lieu of advancing the
expenses of separate counsel for such Indemnified Party, provide such
Indemnified Party with legal representation by the same counsel who represents
the Company, provided such counsel is reasonably satisfactory to such
Indemnified Party, at no cost to such Indemnified Party; provided, however, that
if such counsel or counsel to the Indemnified Party shall determine that due to
the existence of actual or potential conflicts of interest between such
Indemnified Party and the Company such counsel is unable to represent both the
Indemnified Party and the Company, then the Indemnified Party shall be entitled
to use separate counsel of its own choice, and the Company shall promptly
advance its reasonable expenses of such separate counsel upon submission of
invoices therefor. Nothing herein shall prevent an Indemnified Party from using
separate counsel of its own choice at its own expense. The Company will be
liable for any settlement of any claim against an Indemnified Party made with
the Company's written consent, which consent shall not be unreasonably withheld.
D. In order to provide for just and equitable contribution if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification, then the
relative fault of the Company, on the one hand, and the Indemnified Parties, on
the other hand, in connection with the statements, acts or omissions which
resulted in the losses, claims, damages, liabilities and costs giving rise to
the indemnification claim and other relevant equitable considerations shall be
considered; and further provided that in no event will the Indemnified Parties'
aggregate contribution for all losses, claims, damages, liabilities and expenses
with respect to which contribution is available hereunder exceed the amount of
fees actually received by the Indemnified Parties pursuant to the Agreement. No
person found liable for a fraudulent misrepresentation shall be entitled to
contribution hereunder from any person who is not also found liable for such
fraudulent misrepresentation.
E. In the event the Company and A&M seek judicial approval for the assumption of
the Agreement or authorization to enter into a new engagement agreement pursuant
to either of which A&M would continue to be engaged by the Company, the Company
shall promptly pay expenses reasonably incurred by the Indemnified Parties,
including attorneys' fees and expenses, in connection with any motion, action or
claim made either in support of or in opposition to any such retention or
authorization, whether in advance of or following any judicial disposition of
such motion, action or claim, promptly upon submission of invoices therefor and
regardless of whether such retention or authorization is approved by any court.
The Company will also promptly pay the Indemnified Parties for any expenses
reasonable incurred by them, including attorneys' fees and expenses, in seeking
payment of all amounts owed it under the Agreement (or any new engagement
agreement) whether through submission of a fee application or in any other
manner, without offset, recoupment or counterclaim, whether as a secured claim,
an administrative expense claim, an unsecured claim, a prepetition claim or a
postpetition claim.
X. Xxxxxxx termination of the Agreement nor termination of A&M's engagement nor
the filing of a petition under Chapter 7 or 11 of the United States Bankruptcy
Code (nor the conversion of an existing case to one under a different chapter)
shall affect these indemnification provisions, which shall hereafter remain
operative and in full force and effect.
G. The rights provided herein shall not be deemed exclusive of any other rights
to which the Indemnified Parties may be entitled under the certificate of
incorporation or bylaws of the Company, any other agreements, any vote of
stockholders or disinterested directors of the Company, any applicable law or
otherwise.
XXXXXX A.S.L., LTD. XXXXXXX & XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxx
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Xxxxxx X. Xxxxxx Xxxxxx Xxxx
Chief Executive Officer Managing Director
