Exhibit 10.17
AMENDED AND RESTATED CONSULTING AGREEMENT
This AMENDED AND RESTATED CONSULTING AGREEMENT, dated as of January 1,
2001 the ("AGREEMENT"), by and among Allied Worldwide, Inc. (formerly named NA
Holding Corporation), a Delaware corporation ("ALLIED") and North American Van
Lines, Inc., a Delaware corporation and wholly owned subsidiary of Allied (the
"COMPANY", together with Allied and its subsidiaries, the "COMPANY GROUP") and
Xxxxxxx, Dubilier & Rice, Inc., a Delaware corporation ("CD&R").
W I T N E S S E T H:
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WHEREAS, Allied, indirectly through its subsidiaries, acquired all of the
outstanding shares of capital stock of the Company pursuant to a certain Stock
Purchase Agreement, dated as of January 9, 1998 (as amended from time to time,
the "STOCK PURCHASE AGREEMENT") and a certain Preferred Shares Stock Purchase
Agreement, dated as of January 9, 1998 (the "PREFERRED STOCK AGREEMENT") (such
transactions being hereinafter referred to as the "ACQUISITION");
WHEREAS, CD&R has performed financial, management advisory and other
services for the Company Group, including but not limited to assistance in
connection with (I) the preparation, negotiation, execution and delivery of the
Stock Purchase Agreement and the Preferred Stock Purchase Agreement, (II) the
retention of legal, accounting, environmental, insurance, investment banking,
financial and other advisors and consultants in connection with the Acquisition,
(III) the preparation, negotiation, execution and delivery of the commitment,
fee and engagement letters, registration rights and purchase agreements, credit
agreements, guarantees, mortgages, pledge agreements and other security
agreements, subscription, management equity agreements, and other agreements,
instruments and documents, relating to the Acquisition, the financing of the
Acquisition and (IV) the structuring, implementation and consummation of the
Acquisition (such services collectively, the "ACQUISITION SERVICES");
WHEREAS, the parties hereto and their predecessors entered into a
Consulting Agreement, dated as of March 30, 1998 (the "ORIGINAL AGREEMENT"),
pursuant to which the Company Group receives financial and managerial advisory
services from CD&R;
WHEREAS, in accordance with a resolution adopted by the Boards of
Directors of Allied and the Company on March 8, 2001, the parties to the
Original Agreement wish to amend certain provisions of the Original Agreement
relating to, among other things the services to be provided by CD&R to the
Company Group and the compensation to be paid by the Company Group to CD&R and,
in connection therewith, to amend and restate the Original Agreement in its
entirety;
NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth and the mutual benefits to be derived herefrom,
the parties hereto hereby agree as follows:
1. ENGAGEMENT. The Company and Allied hereby engage CD&R as a consultant,
and CD&R hereby agrees to provide financial and managerial advisory services to
the Company Group, all on the terms and subject to the conditions set forth
below.
2. SERVICES, ETC.
(a) CD&R hereby agrees during the term of this engagement to assist,
advise and consult with the respective Boards of Directors and management of
each member of the Company Group in such manner and on such business, management
and financial matters, and provide such other financial and managerial advisory
services, as may be reasonably requested from time to time by the Boards of
Directors of each member of the Company Group (the "CONTINUING SERVICES"),
including but not limited to assistance in:
(i) establishing and maintaining banking, legal and other business
relationships for each such member;
(ii) developing and implementing corporate and business strategy and
planning for each such member, including plans and programs for
improving operating, marketing and financial performance and
budgeting of future corporate investments;
(iii) arranging future debt and equity financings and refinancings; and
(iv) providing professional employees to serve as directors members of
the Company Group.
(b) CD&R hereby agrees during the term of this engagement to provide each
member of the Company Group financial advisory, investment banking and other
similar services (the "TRANSACTION SERVICES") with respect to any proposal for
an acquisition, merger, recapitalization or any other similar transaction
directly or indirectly involving such member of the Company Group and any other
person or entity (collectively, "ADD-ON TRANSACTIONS").
(c) Each of Allied and the Company will furnish CD&R with such information
as CD&R believes appropriate to its engagement hereunder (all such information
so furnished being referred to herein as the "INFORMATION"). Each Allied and the
Company recognizes and confirms that (i) CD&R will use and rely primarily on the
Information and on information available from generally recognized public
sources in performing the services to be performed hereunder and (ii) CD&R does
not assume
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responsibility for the accuracy or completeness of the Information and such
other information.
(d) As used in this Agreement, "affiliate" means, with respect to any
person or entity, any other person or entity directly or indirectly controlling,
controlled by or under common control with such first person or entity and
"control' means the possession, directly or indirectly, of the power to direct
or cause the direction of the management policies of a person or entity by
reason of ownership of voting securities, by contract or otherwise.
3. COMPENSATION; PAYMENT OF EXPENSES.
(a) Concurrently with the execution of the Original Agreement, the Company
Group and their predecessors paid CD&R as compensation for the Acquisition
Services, a fee of $2,950,000.
(b) The Company agrees to pay to CD&R, as compensation for Continuing
Services rendered and to be rendered by CD&R hereunder, a fee of $1,000,000 per
year (the "CONTINUING SERVICES FEE"), one quarter of which shall be payable
quarterly in advance on the first day of each of January, April, July and
October commencing on January 1, 2001. Any Continuing Services Fees due for the
quarterly period commencing January 1, 2001 that has not been paid shall be
payable on the date hereof. Such Continuing Services Fee may be increased with
the approval of a majority of the members of the Company's Board of Directors
who are not employees of any member of the Company Group, CD&R or any affiliate
of CD&R (the "DISINTERESTED DIRECTORS") but may not be decreased without the
prior written consent of CD&R. If any employee of CD&R shall be elected to serve
on the Board of Directors of any member of the Company Group or any of their
affiliates (a "DESIGNATED DIRECTOR"), in consideration of the Continuing
Services Fee being paid to CD&R, CD&R shall cause such Designated Director to
waive any and all fees to which such director would otherwise be entitled as a
director for any period for which the Continuing Services Fee or any installment
thereof is paid.
(c) If an employee of CD&R is appointed to an executive management
position (or a position of comparable responsibility), whether in addition to or
other than as a Designated Director, in any member of the Company Group, then
for the period of such employee's service in such position the Continuing
Services Fee shall be increased by an amount to be determined by CD&R, such
amount not to exceed 100% of the Continuing Services Fee in effect at such time.
(d) The Company agrees to pay to CD&R upon consummation of any Add-on
Transaction, as compensation for Transaction Services rendered by CD&R hereunder
with respect to such Add-on Transaction, a cash fee equal to 1.0% of the
Transaction
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Value of such Add-on Transaction (the "ADD-ON FEE"). Payment by the Company of
an Add-on Fee in excess of 1.0% of the Transaction Value of the Add-on
Transaction shall require the approval of a majority of the Disinterested
Directors, PROVIDED that an Add-on Fee shall not be payable in connection with
the sale by way of merger or otherwise of all or substantially all of the
outstanding shares of capital stock of Allied or the sale of all or
substantially all of the assets of Allied and its subsidiaries. As used herein,
the term "Transaction Value" means the total value of the Add-on Transaction,
including, without limitation, the aggregate amount of the cash funds or other
securities required to complete the Add-on Transaction (excluding any fees
payable pursuant to this Section 3(c)) including the amount of any indebtedness,
preferred stock or similar items assumed, refinanced or left outstanding. For
purposes of calculating the Add-on Fee, the value of any securities included in
the Transaction Value will be determined by the average of the last sales prices
for such securities on the five trading days ending five days prior to the
consummation of the Add-on Transaction, PROVIDED that if such securities do not
have an existing public trading market, the value of the securities shall be
their fair market value as mutually agreed between the Company and CD&R on the
day prior to consummation of the Add-on Transaction.
(d) The Company Group jointly and severally agree to reimburse CD&R for
such reasonable travel and other out-of-pocket expenses ("EXPENSES") as may be
incurred by CD&R and its employees and agents in the course or on account of
rendering any services hereunder including but not limited to any fees and
expenses of any legal, accounting or other professional advisors to CD&R engaged
in connection with the services previously provided or being provided hereunder
and any expenses incurred by any Designated Director in connection with the
performance of his or her duties. CD&R may submit monthly expense statements,
which shall be payable within thirty days.
4. TERM, ETC.
(a) This Agreement shall be in effect until, and shall terminate upon, the
earlier to occur of (X) the tenth anniversary of the date of the Original
Agreement and (Y) the date on which the CD&R Fund no longer owns any shares of
the capital stock of Allied, and may be earlier terminated by either party
hereto upon 30 days' prior written notice to the other party hereto. The
provisions of this Agreement shall survive any termination of this Agreement,
except for the provisions of Section 1, Section 2(a), Section 2(b), the first
sentence of Section 2(c) and (solely as to any portion of the Continuing
Services Fee or any Expense not paid or reimbursed prior to such termination and
not required to be paid or reimbursed thereafter pursuant to Section 4(c)
hereof) Section 3 hereof.
(b) Upon any consolidation or merger, or any conveyance, transfer or lease
of all or substantially all of the assets of Allied or the Company as an
entirety, the successor corporation formed by such consolidation or into which
Allied or the Company are
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merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, Allied or the Company under this Agreement with the same
effect as if such successor corporation has been a party thereto. No such
consolidation, merger or conveyance, transfer or lease of all or substantially
all of the assets of Allied or the Company shall have the effect of terminating
this Agreement or of releasing Allied or the Company or any such successor
corporation from its obligations hereunder.
(c) Upon any termination of this Agreement, any accrued and unpaid
installment of the Continuing Services Fee or portion thereof (pro rated, with
respect to the month in which such termination occurs, for the portion of such
month that precedes such termination), any accrued and unpaid Add-on Fee or
portion thereof and any unpaid and unreimbursed Expenses that shall have been
incurred prior to such termination (whether or not such Expenses shall then have
become payable), shall be immediately paid or reimbursed, as the case may be, by
Allied or the Company. In the event of the liquidation of the Company, all
amounts due CD&R hereunder shall be paid to CD&R before any liquidating
distributions or similar payments are made to stockholders of Allied or the
Company.
5. INDEMNIFICATION.
(a) Allied and the Company confirm and reaffirm their obligations pursuant
to the Indemnification Agreement, dated as of the date hereof, (the
"INDEMNIFICATION AGREEMENT"), among Allied, the Company, NA Acquisition
Corporation (which merged with and into the Company), CD&R and the CD&R Fund (as
such term is defined in the Indemnification Agreement), as the same may be
amended, waived, modified or supplemented from time to time. Without limiting
the generality of the foregoing, Allied and the Company confirm and agree that
(a) they shall indemnify, defend and hold harmless CD&R, the CD&R Fund (as
defined in the Indemnification Agreement), CD&R Associates (as defined in the
Indemnification Agreement) and each of the respective directors, officers,
partners, employees, agents, advisors, representatives and controlling persons
(within the meaning of the Securities Act of 1933, as amended) of CD&R, the CD&R
Fund and CD&R Associates (collectively, "INDEMNITEES") from and against any and
all claims, obligations, liabilities, causes of action, actions, suits,
proceedings, investigations, judgments, decrees, losses, damages, fees, costs
and expenses (including without limitation interest, penalties and fees and
disbursements of attorneys, accountants, investment bankers and other
professional advisors) (collectively, "OBLIGATIONS"), whether incurred with
respect to third parties or otherwise, in any way resulting from, arising out of
or in connection with, based upon or relating to, the performance of the
services contemplated hereby, except to the extent that any such Obligation is
found in a final judgment by a court having jurisdiction to have resulted from
the gross negligence or intentional misconduct of CD&R, (b) no Indemnitee shall
have any liability (whether direct or indirect, in contract or tort or
otherwise) to a member of the Company Group or their respective security holders
or creditors with respect to any
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Obligation in any way resulting from, arising out of or in connection with,
based upon or relating to, the performance of the services contemplated hereby,
except to the extent that any such Obligation is found in a final judgment by a
court having jurisdiction to have resulted from the gross negligence or
intentional misconduct of CD&R, and (c) the rights of each Indemnitee to be
indemnified under any agreement, document, certificate or instrument or
applicable law are independent of and in addition to any rights of such
Indemnitee under any other agreement, document, certificate or instrument or
applicable law.
(b) The Company hereby agrees to advance costs and expenses, including
attorneys' fees, incurred by CD&R (acting on its own behalf or, if requested by
any such Indemnitee other than itself, on behalf of such Indemnitee) or any
Indemnitee in defending any claim relating to any Obligation in advance of the
final disposition of such claim within 30 days of receipt from CD&R of (i) a
notice setting forth the amount of such costs and expenses (a "PAYMENT NOTICE")
and (ii) an undertaking by or on behalf of CD&R or such Indemnitee to repay
amounts so advanced if it shall ultimately be determined that CD&R or such
Indemnitee is not entitled to be indemnified by the Company as authorized by
this Agreement. CD&R may submit Payment Notices to the Company monthly.
6. INDEPENDENT CONTRACTOR STATUS. The parties agree that CD&R shall
perform services hereunder as an independent contractor, retaining control over
and responsibility for its own operations and personnel. Neither CD&R nor any of
its employees or agents shall, solely by virtue of this Agreement or the
arrangements hereunder, be considered employees or agents of any member of the
Company Group nor shall any of them have authority to contract in the name of a
member of or bind the Company Group, except (A) to the extent that any
professional employee of CD&R may be serving as an officer of a member of the
Company Group pursuant to Section 3(b) hereof, (B) as expressly agreed to in
writing by a member of the Company Group and (C) each member of the Company
Group hereby acknowledges and agrees that any agreements, arrangements or
understandings entered into by CD&R on behalf of any member of the Company Group
prior to the date hereof in connection with the formation of the Company and the
acquisition by the Company of its business (including, but not limited to, any
confidentiality agreements, agreements with brokers or finders and any
arrangements relating to the financing of such acquisition) shall be obligations
of the Company binding on it to the same extent as such obligations may be
binding on CD&R and the Company shall fully perform, and shall indemnify and
hold harmless CD&R from and against, all such obligations. Any duties of CD&R
arising out of its engagement to perform services hereunder shall be owed solely
to Allied and the Company.
7. NOTICES. Any notice or other communication required or permitted to be
given or made under this Agreement by one party to the other parties shall be in
writing
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and shall be deemed to have been duly given and effective (i) on the date of
delivery if delivered personally or (ii) when sent if sent by prepaid telegram,
or mailed first-class, postage prepaid, registered or certified mail, or
facsimile transmission as follows (or to such other address as shall be given in
writing by one party to the other parties in accordance herewith):
If to Company or Allied to:
North American Van Lines, Inc.
0000 X.X. Xxxxxxx 00 Xxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to CD&R to:
Xxxxxxx, Dubilier & Rice, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTENTION: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTENTION: Xxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
8. ENTIRE AGREEMENT. This Agreement, together with the Indemnification
Agreement (a) contain the complete and entire understanding and agreement of
CD&R and each member of the Company Group with respect to the subject matter
hereof, and (b) supersede all prior and contemporaneous understandings,
conditions and agreements, oral or written, express or implied, in respect of
the subject matter hereof, including but not limited to in respect of the
engagement of CD&R in connection with the subject matter hereof. There are no
representations or warranties of CD&R in connection with this Agreement or the
services to be provided hereunder, except as expressly made and contained in
this Agreement.
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9. HEADINGS. The headings contained in this Agreement are for purposes of
convenience only and shall not affect the meaning or interpretation of this
Agreement.
10. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed an original and all of which shall together
constitute one and the same instrument.
11. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors and assigns and to each Indemnitee, PROVIDED that none of CD&R or any
member of the Company Group may assign any of its rights or obligations under
this Agreement without the express written consent of the other party hereto.
This Agreement is not intended to confer any right or remedy hereunder upon any
person other than the parties to this Agreement and their respective successors
and permitted assigns and each Indemnitee.
12. GOVERNING LAW. This Agreement shall be deemed to be a contract made
under, and is to be governed and construed in accordance with, the laws of the
State of New York, without regard to the conflict of laws principles or rules
thereof. Each member of the Company Group and CD&R hereby irrevocably submit to
the jurisdiction of the courts of the State of New York and the Federal courts
of the United States of America located in the State, City and County of New
York solely in respect of the interpretation and enforcement of the provisions
of this Agreement, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof,
that it is not subject thereto or that such action, suit or proceeding may not
be brought or is not maintainable in such courts or that the venue thereof may
not be appropriate or that this Agreement may not enforced in or by such courts,
and the parties hereto irrevocably agree that all claims with respect to such
action or proceeding shall be heard and determined in such a New York State or
Federal court. Each member of the Company Group and CD&R hereby consent to and
grant any such court jurisdiction over the person of such parties and over the
subject matter of any such dispute and agree that mailing of process or other
papers in connection with any such action or proceeding in the manner provided
in Section 7, or in such other manner as may be permitted by law, shall be valid
and sufficient service thereof.
13. WAIVER OF JURY TRIAL. Each party hereto acknowledges and agrees that
any controversy that may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore it hereby irrevocably and
unconditionally waives any right it may have to a trial by jury in respect of
any litigation directly or indirectly arising out of or relating to this
Agreement, or the breach, termination or validity of this Agreement, or the
transactions contemplated by this Agreement. Each party certifies and
acknowledges that (a) no representative, agent or attorney of any other party
has represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver, (b) it understands
and has considered the
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implications of this waiver, (c) it makes this waiver voluntarily, and (d) it
has been induced to enter into this Agreement by, among other things, the mutual
waivers and certifications contained in this Section 13.
14. AMENDMENT; WAIVERS. No amendment, modification, supplement or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party or Indemnitee against
whom enforcement of the amendment, modification, supplement, discharge or waiver
is sought (and in the case of a member of the Company Group, approved by
resolution of the Boards of Directors of such member of the Company Group). Any
such waiver shall constitute a waiver only with respect to the specific matter
described in such writing and shall in no way impair the rights of the party or
Indemnitee granting such waiver in any other respect or at any other time.
Neither the waiver by any of the parties hereto or any Indemnitee of a breach of
or a default under any of the provisions of this Agreement, nor the failure by
any party hereto or any Indemnitee on one or more occasions, to enforce any of
the provisions of this Agreement or to exercise any right, powers or privilege
hereunder, shall be construed as a waiver of any other breach or default of a
similar nature, or as a waiver of any of such provisions, rights, power or
privileges hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies that any party or Indemnitee may
otherwise have at law or in equity or otherwise.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
XXXXXXX, DUBILIER & RICE, INC.
By /s/ Xxxxxx X. Xxxx, III
------------------------
Name: Xxxxxx X. Xxxx, III
Title: Chairman
ALLIED WORLDWIDE, INC.
By: /s/ Xxxxxx Xxxxxxxx
------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President Finance
NORTH AMERICAN VAN LINES, INC.
By: /s/ Xxxxxx Xxxxxxxx
------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President Finance
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