Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report 90 504K
2: EX-3.1 Composite Certificate of Incorporation 28 111K
3: EX-4.1.1 Supplemental Indenture 3 14K
4: EX-10.1.1 First Amendment to Agreement 6 34K
5: EX-10.27 Management and Advisory Services Agreement 7 32K
6: EX-21 List of Subsidiaries 2 10K
EX-10.27 — Management and Advisory Services Agreement
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Exhibit 10.27
MANAGEMENT AND ADVISORY SERVICES AGREEMENT
------------------------------------------
This Management and Advisory Services Agreement (this "Agreement"), dated
as of November 30, 2000, is entered into between Palladium Equity Partners,
L.L.C., a Delaware limited liability company ("Advisor"), and Philipp Brothers
Chemicals, Inc., a New York corporation (the "Company").
WHEREAS, Advisor, by and through itself, its affiliates and their
respective officers, employees and representatives, has expertise in the areas
of management, finance, strategy, investment, acquisitions and other matters
relating to the business of the Company; and
WHEREAS, the Company desires to avail itself, for the term of this
Agreement, of the expertise of Advisor in the aforesaid areas, and Advisor
wishes to provide the services to the Company as herein set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. Appointment. The Company hereby appoints Advisor to render the advisory
and consulting services described in Section 2 hereof for the term of this
Agreement.
2. Services. Advisor hereby agrees that during the term of this Agreement
it shall render to the Company, by and through itself, its affiliates and their
respective officers, employees and representatives as Advisor in its sole
discretion shall designate from time to time, advisory and consulting services
in relation to the affairs of the Company in connection with ongoing strategic
and operational oversight of the Company, including (i) advice in designing
financing structures and advice regarding relationships with the Company's
lenders and bankers; (ii) advice regarding the structure and timing of public
offerings of debt and equity securities of the Company; (iii) advice regarding
property dispositions or acquisitions; and (iv) such other advice directly
related or ancillary to the above financial advisory services as may be
reasonably requested by the Company. It is expressly agreed that the services to
be performed hereunder shall not include investment banking or other financial
advisory services rendered by Advisor or its affiliates to the Company in
connection with any specific acquisition, divestiture, refinancing or
recapitalization by the Company or any of its subsidiaries. Advisor may be
entitled to receive additional compensation for providing services of the type
specified in the preceding sentence by mutual agreement of the Company or such
subsidiary and Advisor.
3. Fees. In consideration of the services contemplated by Section 2, for
the term of this Agreement, the Company agrees to pay to Advisor an annual fee
(the "Fee") of $2,250,000, payable quarterly in advance commencing on the date
hereof through the Termination Date and due immediately on the first day of each
fiscal quarter; provided that the fee for December 2000 in the amount of
$187,500 and the first quarterly fee of $562,500 shall be due and payable
immediately on January 15, 2001 or upon such
other date as agreed to between the parties. The Company shall have 30 days from
a due date to pay the applicable Fee (such thirty day period, a "Grace Period").
If the quarterly Fee for the corresponding Grace Period is not paid in full by
the end of such Grace Period, then for each day after the due date and during
and after the Grace Period that a quarterly Fee due is not paid in full and
until such quarterly overdue Fee is paid in full, the Company shall pay to
Advisor an additional fee (the "Additional Fee") equal to 2.5% per annum,
compounded daily beginning on the start of the Grace Period, on the aggregate
amount of the then Series B Liquidation Preference and Series C Liquidation
Preference of the Series B Redeemable Participating Preferred Shares and Series
C Redeemable Participating Preferred Shares of the Company (each as defined in
the Certificate of Amendment of the Company as filed on or about November 30,
2000). The Additional Fee shall be due and payable as and when accrued.
4. Reimbursements. In addition to the Fees payable pursuant to this
Agreement, the Company shall pay directly or reimburse Advisor for its
Out-of-Pocket Expenses (as defined below); provided that any Out-of-Pocket
Expenses that are incurred other than in the ordinary course of providing the
services of Section 2 shall require the consent of the Company, which consent
shall not be unreasonably withheld or delayed. Promptly following the Company's
request therefor, Advisor will provide written documentation relating to any
Out-of-Pocket Expenses to be paid or reimbursed by the Company pursuant to this
Agreement. For the purposes of this Agreement, the term "Out-of-Pocket Expenses"
shall mean the reasonable out-of-pocket costs and expenses incurred by Advisor
or its affiliates in connection with the services rendered hereunder, including,
without limitation, (i) fees and disbursements or any independent professionals
and organizations, including independent accountants, outside legal counsel or
consultants, (ii) costs of any outside services or independent contractors such
as financial printers, couriers, business publications, financial services or
similar services and (iii) transportation, word processing expenses or any
similar expense not associated with its ordinary operations. All reimbursements
for Out-of-Pocket Expenses shall be made promptly upon or as soon as practicable
after presentation by Advisor to the Company of a written statement thereof.
5. Indemnification. The Company will indemnify and hold harmless Advisor,
its affiliates and their respective partners (both general and limited), members
(both managing and otherwise), officers, directors, employees, agents and
representatives (each such person being an "Indemnified Party") from and against
any and all losses, claims, damages, liabilities, costs and expenses, whether
joint or several (the "Liabilities"), related to, arising out of or in
connection with the advisory and consulting services contemplated by this
Agreement or the engagement of Advisor pursuant to, and the performance by
Advisor of the services contemplated by, this Agreement, whether or not pending
or threatened, whether or not an Indemnified Party is a party, whether or not
resulting in any liability and whether or not an action, claim, suit,
investigation or proceeding is initiated or brought by the Company. The Company
will reimburse any Indemnified Party for all reasonable costs and expenses
(including reasonable attorneys' fees and expenses) as they are incurred in
connection with investigating, preparing, pursuing, defending or assisting in
the defense of any action, claim, suit, investigation or proceeding for which
the Indemnified Party would be entitled to indemnification under the terms of
the previous sentence, or any action or proceeding arising therefrom,
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whether or not such Indemnified Party is a party thereto; provided that, subject
to the following sentence, the Company shall be entitled to assume the defense
thereof at its own expense, with counsel satisfactory to such Indemnified Party
in its reasonable judgment. Any Indemnified Party may, at its own expense,
retain separate counsel to participate in such defense; and in any action,
claim, suit, investigation or proceeding in which both the Company or one or
more of its subsidiaries or both, on the one hand, and an Indemnified Party, on
the other hand, is, or is reasonably likely to become, a party, such Indemnified
Party shall have the right to employ separate counsel at the expense of the
Company and to control its own defense of such action, claim, suit,
investigation or proceeding if, in the reasonable opinion of counsel to such
Indemnified Party, a conflict or potential conflict exists between the company
or one or more of its subsidiaries or both, on the one hand, and such
Indemnified Party, on the other hand, that would make such separate
representation advisable. The Company agrees that it will not, without the prior
written consent of the applicable Indemnified Party, settle, compromise or
consent to the entry of any judgment in any pending or threatened action, claim,
suit, investigation or proceeding relating to the matters contemplated hereby
(if any Indemnified Party is a party thereto or has been threatened to be made a
party thereto) unless such settlement, compromise or consent includes an
unconditional release of the applicable Indemnified Party and each other
Indemnified Party from all liability arising or that may arise out of such
action, claim, suit, investigation or proceeding. Provided the Company is not in
breach of its indemnification obligations hereunder, no Indemnified Party shall
settle or compromise any claim subject to indemnification hereunder without the
consent of the Company. The Company will not be liable under the foregoing
indemnification provision with respect to any Indemnified Party, to the extent
that any loss, claim, damage, liability, cost or expense is determined by a
court, in a final judgment from which no further appear may be taken, to have
resulted primarily from the gross negligence or willful misconduct of Advisor.
6. Accuracy of Information. The Company shall furnish or cause to be
furnished to Advisor such information as Advisor believes appropriate to its
assignment (all such information so furnished being the "Information"). The
Company recognizes and confirms that Advisor (i) will use and rely primarily on
the Information and on information available from generally recognized public
course in performing the services contemplated by this Agreement without having
independently verified the same; (ii) does not assume responsibility for the
accuracy or completeness of the Information and such other information and (iii)
is entitled to rely upon the Information without independent verification.
7. Confidentiality. Except as contemplated by the terms hereof or as
required by applicable law or legal process, Advisor shall keep confidential all
material non-public information provided to it by or at the request of the
Company, and shall not disclose such information to any third party or to any of
its employees or advisors except to those persons who have a need to know such
information in connection with Advisor's performance of its responsibilities
hereunder.
8. Term. This Agreement shall be effective as of the date hereof and shall
terminate on the date that no Investor Stockholder (as defined in the
Stockholders Agreement dated November 30, 2000 by and among the Company,
Palladium Equity
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Partners II, L.P., Palladium Equity Partners II-A, L.P., Palladium Equity
Investors II, L.P., and the stockholders signatory thereto (the "Stockholders
Agreement")) nor any of its Affiliates (as defined in the Stockholders
Agreement) own any Equity Securities (as defined in the Stockholders Agreement)
(the "Termination Date"); provided that Section 4 shall remain in effect with
respect to Out-of-Pocket Expenses incurred prior to the Termination Date; and
provided that Section 3 shall remain in effect with respect to Additional Fees
until payment in full of all Fees payable prior to the Termination Date. The
provisions of Sections 5, 7 and 9 and otherwise as the context so requires shall
survive the termination of this Agreement.
9. Permissible Activities. Subject to applicable law, nothing herein shall
in any way preclude Advisor, its affiliates or their respective partners (both
general and limited), members (both managing and otherwise), officers,
directors, employees, agents or representatives from engaging in any business
activities or from performing services for its or their own account or for the
account of others, including for companies that may be in competition with the
business conducted by the Company.
10. Miscellaneous.
(a) Governing Law; Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York. No suit, action or proceeding with respect to this
Agreement may be brought in any court or before any similar authority other than
in a court of competent jurisdiction in the State of New York, and the parties
hereto submit to the exclusive jurisdiction of these courts for the purpose of
such suit, proceeding or judgment. The parties hereto irrevocably waive any
right which they may have to bring such an action in any other court, domestic
or foreign, or before any similar domestic or foreign authority. Each of the
parties hereto irrevocably and unconditionally waives trial by jury in any legal
action or proceeding in relation to this Agreement and for any counterclaim
therein.
(b) Successors and Assigns; Assignment. Neither this Agreement nor
any of the rights, interests or obligations hereunder may be assigned by any of
the parties hereto, in whole or in part (whether by operation of law or
otherwise), without the prior written consent of the other parties, and any
attempt to make any such assignment without such consent shall be null and void,
except that Advisor may assign its rights and obligations hereunder to any one
or more of its affiliates. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
(c) Entire Agreement; Third Parties. This Agreement constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
This Agreement shall be binding upon and inure solely to the benefit of the
parties hereto, and nothing in this Agreement, express or implied, is intended
to confer upon any other person any right, benefit or remedy of any nature under
or by reason of this Agreement.
(d) Severability. If any term or provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms
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and provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
(e) Amendment and Waiver. This Agreement may be amended only by the
written consent of all the parties hereto. Any waiver, consent or approval of
any kind by any party hereto of any breach, default or noncompliance under this
Agreement or any waiver by such party of any provision or condition of this
Agreement must be in writing and is effective only to the extent specifically
set forth in such writing.
(f) Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of or in
any similar breach, default or noncompliance thereafter occurring. All remedies,
either under this Agreement, by law, or otherwise afforded to any party, shall
be cumulative and not alternative.
(g) Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (c) five calendar days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (d) one business day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications are to be
sent to the addresses set forth below:
If to the Company
Philipp Brothers Chemicals, Inc.
One Parker Plaza
Fort Lee, New York 07024
Tel: (201) 944-6020
Fax: (201) 944-5937
Attn: Jack C. Bendheim, President
with copies to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036-8299
Tel: (212) 969-3325
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Fax: (212) 969-2900
Attn: Ronald R. Papa, Esq.
If to Advisor:
Palladium Equity Partners, L.L.C.
1270 Avenue of the Americas
Suite 2200
New York, New York 10020
Tel: (212) 218-5150
Fax (212) 218-5155
Attn: Adam R. Karr
with copies to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Tel: (212) 455-2000
Fax: (212) 455-3502
Attn: Gary Sellers, Esq.
(h) Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to Section of this Agreement unless otherwise
indicated. The table of contents titles and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
(i) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties have caused this Management and Advisory
Services Agreement to be executed and delivered by their duly authorized
officers or agents as of the date first above written.
PALLADIUM EQUITY PARTNERS, L.L.C.
By: /s/ Peter A. Joseph
----------------------------
Name: Peter A. Joseph
Title: Member
PHILIPP BROTHERS CHEMICALS, INC.
By: /s/ Jack C. Bendheim
----------------------------
Name: Jack C. Bendheim
Title: President
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Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
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| This ‘10-K’ Filing | | Date | | First | | Last | | | Other Filings |
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| |  |
| Filed on: | | 10/11/01 |
| For Period End: | | 6/30/01 | | | | | | | NT 10-K |
| | 1/15/01 | | 1 |
| | 11/30/00 | | 1 | | 3 | | | 8-K |
| List all Filings |
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