[EXHIBIT 10.14]
MANAGEMENT CONSULTING AGREEMENT
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MANAGEMENT CONSULTING AGREEMENT, dated as of December 31,
2002, between TATRA a.s., a corporation organized under the laws of
the Czech Republic, with its registered office at Koprivnice,
Stefanikova 1163, registered with the Commercial Register held by the
Municipal Court in Ostrava under section B, file no. 309, IC: 45 19 34
44 (the "Company"), and TEREX CORPORATION, a Delaware corporation,
with its principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Terex").
W I T N E S S E T H:
WHEREAS, SDC International, Inc. ("SDC") and SDC Prague
s.r.o. ("SDC Prague") are indebted to Terex pursuant to Note No. 2 and
Note No. 3 issued pursuant to that certain Loan Agreement dated as of
December 29, 2001; and
WHEREAS, the Company is indebted to Terex in the principal
amount of $5,000,000 pursuant to a Loan Agreement dated as of February
20, 2002 (the "Tatra Loan Agreement"); and
WHEREAS, the Company, SDC and SDC Prague desire to avail
itself of the management experience, advice and assistance of Terex
and, consistent with the duty of the Board of Directors of the Company
to manage the affairs and business of the Company, to retain the
services of Terex to perform various managerial services in connection
with the operations of the business of the Company, and Terex desires
to furnish such services on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth-herein, the parties hereto
hereby agree, subject to the terms and conditions hereof, as follows:
1. Administration and Management of the Company.
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(a) Subject to the terms and condition's set forth herein,
the Company hereby appoints Terex, as an independent contractor and
consultant, to assist in the administration and management of the day-
to-day operation of the business and affairs of the Company in the
ordinary course of business (the "Business"), with the objective of
improving the Business, which shall, under the supervision of the
Tatra Supervisory Board and Tatra Board of Directors, and subject to
the satisfaction of all legal requirements, include the following:
(i) Terminate certain existing management employment
contracts and agreements between the Company and the senior
management of the Company Terex shall have the right to (x)
offer to reinstate and/or amend any of these contracts and
agreements, (y) cause the recall and appointment of any member of
Board of Directors of the Company which Terex deems necessary for
the improvement of the operations of the Company including, but
not limited to, the recall or resignation of Tatra's current
Chairman, ▇▇▇▇ Srkal;
(ii) Consult and advise on the management of the day-
to-day operations, properties and assets of the Company
comprising the Business, including reorganizing and consolidating
the Company's manufacturing facilities, rationalizing salaried
and hourly workers, hiring and termination of employees,
outsourcing certain components and processes as appropriate;
(iii) Using the Company's accountants and legal
counsel, and engage as necessary additional accountants, legal
counsel and other professionals in connection with the Business;
and
(iv) Engaging in such other activities that are
necessary or appropriate to assist the Company in conducting the
Business.
(b) All services to be furnished by Terex under this
Agreement may be furnished by Fil Filipov and any other officers or
employees of Terex.
(c) Terex hereby accepts such appointment and agrees to
assist in the administration and management of the Business of the
Company as an independent contractor and consultant in accordance with
the terms and conditions set forth in this Agreement.
2. Expenses. The Company shall pay or reimburse Terex for (a)
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all out-of-pocket costs and expenses to provide its services hereunder
(b) all reasonable third party costs and expenses incurred on behalf
of the Company and approved by the Company and SDC and (c) a pro rata
portion of any costs and expenses incurred Terex with respect to
providing such services, which portion shall be based on estimated
reasonable allocations mutually determined by Terex and the Company.
3. Term. (a) The term (the "Term") of this Agreement shall
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commence on January 1, 2003 and expire on December 31, 2003.
(b) Terex shall have the right to terminate this
Agreement at any time during the Term upon 30 days prior written
notice to the Company. The Company shall have the right to terminate
this Agreement at any time during the Term upon 30 days prior written
notice to Terex for any reason, provided that if the Company
terminates pursuant to this Section 3 (b), the Modification and
Amendment No. 1 To Loan Agreement Dated February 20, 2002 shall be
null and void and the Loan Agreement shall revert to its original
terms.
(c) If this Agreement is terminated, such termination
shall be without any further liability or obligation of either party
to the other, except as set forth in Section 5.
(d) Except as is required by applicable law, Tatra,
SDC, SDC Prague and Terex agree that the Term of this Agreement shall
be kept strictly confidential and shall not be disclosed to any person
or entity with the prior written approval of Tatra, SDC, SDC Prague
and Terex.
4. Activities of the Company Terex and Its Affiliates. Terex
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and its affiliates shall be entitled to and may have business
interests and may engage in and supervise and manage business
activities related to the activities of the Company and the Business,
and nothing in this
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Agreement shall be deemed to preclude or prevent Terex or any affiliate
of Terex from performing any duties or acting on its own behalf, on
behalf of any of its affiliates or on behalf of any third parties including,
without limitation, in connection with any business related to the
activities of the Company and the Business. The Company shall not have any
rights by virtue of this Agreement in any business interests or activity of
Terex or any affiliate of Terex.
5. Indemnification; Relationship. (a) The relationship of the
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Company and Terex shall be that of principal and agent. The Company
is neither partner nor joint venturer with Terex, and nothing
contained herein shall be construed to make them partners or joint
venturers or to impose any liability as such on either of them. Terex
shall assume no obligations or liabilities of the Company of any
nature whatsoever, whether absolute, accrued contingent or otherwise,
and Terex shall not assume or agree to discharge, and the Company
shall be responsible for and shall fully pay and discharge, all of the
liabilities and obligations of the Company.
(b) The Company shall indemnify and hold harmless Terex
and its officers, directors, agents, employees, controlling persons
and affiliates for any and all losses, claims, demands, judgments and
expenses (including reasonable attorneys' fees and disbursements)
incurred by any of them due to or arising out of any act performed by
them in connection with the Management of the Business, except for any
act which constitutes willful misconduct or bad faith.
(c) Terex shall not be responsible for any action of the
Company in following or declining to follow any advice or
recommendations of Terex; it shall be understood that the Company
shall have the right in its sole discretion to decline to follow any
advice or recommendation of Terex to the extent that the Company
believes that following such advice or recommendation is reasonably
likely to cause a default under the Loan Agreement or is otherwise
inconsistent with the fiduciary obligations of the Company, its
Supervisory Board or its Board of Directors to the shareholders of the
Company. Terex and its shareholders, controlling persons, directors,
officers, agents, employees and affiliates shall not be liable to the
Company or others for any acts or omissions or for any error of
judgment or mistake of fact or law, except by reason of acts
constituting willful misconduct or bad faith. In no event shall
Terex's entering into this Agreement or its actions pursuant hereto be
construed to guarantee, directly or indirectly, the success or
profitability of the Company or the Business.
(d) Terex shall indemnify and hold harmless the Company,
its officers, directors, agents, employees, controlling persons and
affiliates for any and all losses, claims, demands, judgments and
expenses (including reasonable attorneys' fees and disbursements)
incurred by any of them due to or arising out of any act performed by
Terex in connection with the Management of the Business which
constitutes willful misconduct or bad faith.
(e) Other than a default for any non-payment of the Loan
provided for in the Tatra Loan Agreement Dated February 20, 2002,
Terex shall have no right to enforce a default of that Loan unless
this Management Consulting Agreement has been terminated by either the
Company or Terex.
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6. Sale and Leaseback Transaction. In consideration of the
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Company retaining Terex to provide the management consulting services
provided for in this Agreement, Terex agrees to consent to the
proposed sale and leaseback by the Company of machinery and equipment
with CAC Leasing in the amount of approximately US$1.3 million.
7. Assignment. No party to this Agreement may assign its
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rights or obligations hereunder without the prior written consent of
the other party hereto, except as otherwise provided in Section 1
hereof.
8. Confidential and Proprietary Information. Terex, SDC and
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the Company shall execute and deliver a Confidentiality Agreement in
the form attached hereto as Exhibit "A" as a condition to the
effectiveness of this Agreement.
9. Miscellaneous. (a) Any notice, report or other
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communication required or permitted to be given hereunder to any party
shall be in writing and shall be deemed to have been given when
delivered in person or deposited with an overnight courier service or
in the United States mails by registered or certified mail, postage
prepaid, return receipt requested, addressed to the address of such
party set forth on the first page of this Agreement. Any party hereto
may at any time give notice in writing to the other parties of any
change of its address in accordance with the provisions of this
Section 9(a).
(b) This Agreement shall be construed under and shall be
governed by the internal laws of the State of New York, without giving
effect to the conflicts of laws principles thereof.
(c) The failure of either party to insist upon a strict
performance of any of the terms or provisions of this Agreement, or
to exercise any option, right or remedy herein contained, shall not be
construed as a waiver or as a relinquishment for the future of such
term, provision, option, right or remedy, but the same shall continue
and remain in full force and effect. No waiver by either party of any
term or provision hereof shall be deemed to have been made unless
expressed in writing and signed by such party.
(d) If any portion of this Agreement shall be declared
invalid for any reason whatsoever, this Agreement shall be construed
as if such portion had not been inserted herein except when such
construction would constitute a substantial deviation from the general
intent and purpose of the parties as reflected in this Agreement.
(e) This Agreement constitutes the entire agreement
between the parties and supersedes all prior understandings and
writings and may not be amended, changed, modified, terminated or
discharged in whole or in part except by an instrument in writing
signed by their respective successors or assigns or otherwise as
provided herein.
(f) This Agreement shall be binding upon any successors or
assigns of the parties hereto as herein provided.
(g) This Agreement may be considered as executed in any
number of counterparts, each of which shall be an original and which
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
TATRA a.s.
By: /s/
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Name:
Title:
SDC INTERNATIONAL, INC.
By: /s/
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Name:
Title:
SDC PRAGUE s.r.o.
By: /s/
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Name:
Title:
TEREX CORPORATION
By: /s/
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Name:
Title:
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