MANAGEMENT CONSULTING AGREEMENT
THIS MANAGEMENT CONSULTING AGREEMENT (the "Agreement"), dated as of March
30, 1998, by and between Xxxxxx Material Handling, Inc., a Delaware corporation
(the "Company"), and Chartwell Investments Inc., a Delaware corporation (the
"Consultant").
WHEREAS, the Company desires to avail itself of the expertise possessed by
the Consultant and consequently has requested that the Consultant provide it,
from time to time, with certain management consultant and advisory services
related to the business, strategy, administration and affairs of the Company and
the review and analysis of certain financial and other transactions; and
WHEREAS, the Consultant and the Company agree that it is in their
respective interests to enter into a management consulting agreement whereby,
for the consideration specified herein, the Consultant shall provide such
services as an independent consultant to the Company.
NOW THEREFORE, in consideration of the mutual premises and covenants
contained herein, the Company and the Consultant agree as follows:
1. Retention of Consultant. The Company hereby retains the Consultant, and
the Consultant hereby accepts such retention, upon the terms and conditions set
forth in this Agreement.
2. Effective Date/Term. This Agreement shall commence as of the Closing
Date (as such term is defined in the Recapitalization Agreement (the
"Recapitalization Agreement") dated as of January 28, 1998, as amended, by and
among Harnischfeger Corporation, a Delaware corporation, the Sellers named
therein and MHE Investments, Inc., a Delaware corporation) and shall continue
through the period ending on the tenth anniversary of such date, subject to
renewal pursuant to paragraph 5 below (such period, including any renewal
hereinafter referred to as the "Term").
3. Management Consulting Services.
(a) The Consultant shall advise the Company concerning such
management matters relating to the Company's personnel, business and acquisition
strategy, administration and proposed financial transactions, and other senior
management matters relating to the Company as the Company shall reasonably and
specifically request. The Consultant shall not be required to devote any
specified amount of time to any such request, and
shall be required to devote only so much time to any such request as the
Consultant shall, in its reasonable discretion, deem necessary to complete such
services. Such consulting services shall, in the Consultant's reasonable
discretion, be rendered in person or by telephone or other communication. The
Consultant shall (i) use its reasonable efforts to deal effectively with all
subjects submitted to it hereunder and (ii) endeavor to further, by performance
of its services hereunder, the policies and objectives of the Company.
(b) The Consultant shall perform all such services as an independent
contractor to the Company. The Consultant is not an agent or representative of
the Company and has no authority to act for or to bind the Company without its
prior written consent.
(c) This Agreement shall in no way prohibit the Consultant from
engaging in other activities, whether or not competitive with any business of
the Company. The parties hereto agree that, in the event additional services not
contemplated hereby are requested of the Consultant, the parties hereto shall
negotiate the scope of, and appropriate compensation for, such additional
services.
4. Compensation.
(a) As compensation for the services provided by the Consultant
hereunder, the Company shall pay to the Consultant, as provided herein, an
annual fee (the "Management Fee") of $1,000,000 for each fiscal year of the
Company during the Term hereof. The Management Fee shall be payable
semi-annually, in advance on the first day of the first and third quarters of
each fiscal year of the Company during the Term (except that the first payment
will be made on the date hereof), or, if such date is not a business day, on the
next succeeding business day.
(b) In addition to the payment of the Management Fee, the Company
shall reimburse the Consultant for all out-of-pocket costs and expenses
reasonably incurred by the Consultant in connection with the provision of
services hereunder, including legal, accounting, temporary and overtime
secretarial, travel and entertainment fees and expenses, promptly upon receipt
of a statement of such expense from the Consultant.
(c) If the Agreement is terminated at the Company's option upon 30
days prior notice to the Consultant (the "Company's Termination Option"), the
Consultant shall, within five business days of termination, receive a payment
equal to the amount of compensation the Consultant would have received
thereunder, absent the exercise of the Company's Termination Option, if the
Agreement had not been terminated until the date on which the Agreement would
next have expired if not renewed.
5. Renewal. This Agreement shall automatically be renewed by the Board of
Directors of the Company (the "Board") for
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additional 1-year periods unless the Board determines not to renew the Agreement
and gives written notice to the Consultant of non-renewal at least 60 business
days prior to the date in which the Agreement would otherwise have been renewed.
6. Indemnification. The Company agrees to indemnify and hold the
Consultant, its officers, employees and agents (each an "Indemnified Party")
harmless against any liability, claim, loss or expenses (the "Damages") to which
an Indemnified Party may become subject as a result of the performance of the
Consultant's services hereunder, such claims, losses or expenses shall be paid
when and as incurred; provided that the Company shall not be liable to an
Indemnified Party for Damages resulting primarily and directly from the
Indemnified Party's bad faith, gross negligence or willful misconduct, and
Consultant shall so indemnify the Company, its officers, employees and agents
for Damages arising from its bad faith, gross negligence or willful misconduct.
7. Notices. Any notice, request, demand or other communications required
or permitted to be given under this Agreement shall be in writing and shall be
effective and deemed to have been duly given when delivered personally or on the
earlier to occur of (a) the date of delivery as shown by the return receipt; (b)
two (2) days after the mailing thereof by registered or certified mail, return
receipt requested, with first class postage prepaid; (c) confirmation of receipt
of telecopy; or (d) the day after shipment by a nationally recognized overnight
delivery service. All notices shall be addressed to the person at the addresses
set forth on the signature page hereto. Any party hereto may at any time and
from time to time change its address for purpose of receiving notices by giving
notice thereof to the other party as provided in this Section 7. Any notice
which is required to be made within a stated period of time shall be deemed
timely if made before midnight of the last day of such period.
8. Binding Agreement; Benefit. This Agreement shall bind and inure to the
benefit of any heirs or legal representatives of the Consultant and the Company.
9. Governing Law. This Agreement shall be subject to and governed by the
laws of the State of Delaware regardless of applicable conflict of laws rules or
principles or the fact that either or both of the parties now is or may become a
resident of a different state or country.
10. Headings. Section headings are used for convenience only and shall in
no way affect the construction of this Agreement.
11. Entire Agreement; Additional Agreements; Amendments. This Agreement
contains the entire understanding of the parties with respect to its subject
matter; provided, however, that
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nothing contained herein shall be construed to prevent the Company from
contracting with the Consultant for additional services pursuant to other,
separately documented agreements. Neither this Agreement nor any part hereof may
in any way be altered, amended, extended, waived, discharged or terminated
except by a written agreement signed by each of the parties.
12. Successors and Assigns. The benefits of this Agreement shall inure to
the respective successors and assigns of the parties hereto and of the
Indemnified Parties hereunder and their successors and assigns and
representatives, and the obligations and liabilities assumed hereunder by the
parties hereto shall be binding upon their respective successors and assigns.
Consultant may not assign its rights and obligations hereunder except to an
entity controlled by or under common control with Consultant.
13. Counterparts. This Agreement may be executed in any number of
counterparts and by each of the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
14. Confidentiality. The Consultant shall maintain the confidentiality of
all proprietary information received by it in the course of its engagement
hereunder relating to the Company, and shall not use the same for any purpose
other than as contemplated herein.
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IN WITNESS WHEREOF, the parties have duly executed this Consulting
Agreement as of the date first above written.
XXXXXX MATERIAL HANDLING, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: President
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Address: 000 X. Xxxxxx Xxxx Xxxxxx
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Xxx Xxxxx, XX 00000
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CHARTWELL INVESTMENTS INC.
By: Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: President
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Address: 000 Xxxxx Xxxxxx, 00xx Xxxxx
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Xxx Xxxx, XX 00000
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