Exhibit 10.3
ADVISORY
AGREEMENT
This Advisory Agreement (this
“ Agreement ”), dated as of July 31, 2006,
and effective as of May 22, 2006 (the “ Effective
Date ”), is made by and among ACN Holdings Inc., a
Delaware corporation (the “ Company ”), and
Valcon Acquisition B.V., a private limited company (besloten
vennootschap) incorporated under the laws of the Netherlands
(“ Valcon ”). Certain defined terms are defined
in Section 19 .
WHEREAS, the Company has determined
that, for valid business reasons and to enhance its success and
profitability, it desires to retain Valcon with respect to the
services described herein; and
WHEREAS, the Company expects that
Valcon will provide a substantial amount of services to the Company
and its subsidiaries throughout the Term and, accordingly, the
Company and Valcon have agreed that the consideration set forth
herein for the services to provided by Valcon represents the fair
value of such services.
NOW, THEREFORE, the parties to this
Agreement agree as follows:
1. Term . This Agreement
shall be in effect for an initial term commencing on the Effective
Date and ending on the eighth anniversary of the Effective Date
(including any extensions thereof, the “ Term
”), which Term shall automatically be extended for one
additional year upon each anniversary of the Effective Date unless
the Company and Valcon mutually agree not to extend the Term of
this Agreement by an additional year or agree to terminate this
Agreement. In addition, in connection with the consummation of a
Change in Control or a Qualified Public Offering, Valcon may elect
to terminate this Agreement by providing written notice of
termination to the Company. In the event of a termination of this
Agreement, the Company shall pay in cash to Valcon (a) all
unpaid Advisory Fees (as defined in Section 3(a)) , all
unpaid fees agreed upon pursuant to Section 4
(collectively, “ Subsequent Transaction Fees ”)
and all expenses due under this Agreement with respect to periods
prior to the termination date, plus (b) the net present value
(using a discount rate equal to the yield as of such termination
date on U.S. Treasury securities of like maturity based on the
times such payments would have been due) of the Advisory Fees that
would have been payable to Valcon with respect to the period from
the termination date through the end of the Term. Upon termination
of this Agreement, including, without limitation, termination in
connection with the consummation of a Change in Control or a
Qualified Public Offering, Valcon shall no longer be obligated to
provide any services hereunder. The provisions of Sections 1
, 3(b) , 4 , 6 , 7 , 9 , and
15 through 19 shall survive any termination of this
Agreement.
2. Services . Valcon shall
make available one or more of the Sub-Contractors (or any other
sub-contractors retained by Valcon or the Sub-Contractors) to
perform the services for the Company and/or its subsidiaries as
mutually agreed by Valcon and the Company, which services may
include, without limitation, the following:
(a) general advisory services and
support for executive and management functions;
(b) identification, support,
negotiation and analysis of acquisitions and dispositions by the
Company and/or its subsidiaries;
(c) support, negotiation and
analysis of financing alternatives, including, without limitation,
in connection with acquisitions, capital expenditures and
refinancing of existing indebtedness;
(d) finance functions, including
assistance in the preparation of financial projections and
monitoring of compliance with financing agreements;
(e) human resources functions,
including searching and hiring of executives; and
(f) other services for the Company
and its subsidiaries upon which the Company and Valcon
agree.
3. Advisory Fees and Expenses
.
(a) During the Term of this
Agreement, the Company shall pay Valcon an advisory fee (each, an
“ Advisory Fee ”) for each fiscal quarter of the
Company equal to the Quarterly Fee Amount for such fiscal quarter.
The Advisory Fee will be payable in advance to Valcon or its
designees by wire transfer of immediately available funds on the
first business day of the first month of each fiscal quarter. A
pro-rated amount of the Advisory Fee for the period commencing on
the Effective Date and ending on the last day of the
Company’s fiscal quarter ending on June 30, 2006 will be
payable by wire transfer of immediately available funds on or
before August 15, 2006.
(b) The Company will reimburse
Valcon or its designees for such reasonable travel expenses and
other reasonable out-of-pocket fees and expenses (including the
reasonable fees and expenses of attorneys, accountants or other
advisors retained by Valcon, the Sub-Contractors or any other
sub-contractors) as may be incurred by Valcon, the Sub-Contractors
and such other sub-contractors and their respective partners,
members, shareholders, employees or agents in connection with the
rendering of advisory, management or other such services pursuant
to this Agreement or the rendering of such other services as may be
agreed upon by the Company and Valcon. Such expenses will be
reimbursed by wire transfer of immediately available funds promptly
upon the request of Valcon (but in any case no later than five
business days following such request) and will be in addition to
any other fees or amounts payable to Valcon pursuant to this
Agreement. Unless requested by the Company, in no event shall
Valcon submit its expenses to the Company more often than
monthly.
4. Transaction Fees and
Expenses . In the event that the Company shall determine that
it is advisable for the Company or any of its subsidiaries to hire
a financial advisor, consultant, investment bank or any similar
agent in connection with any transaction that could result in a
Change in Control, acquisition, disposition or divestiture,
spin-off, split-off, recapitalization, issuance of securities
(including, without limitation, any Qualified Public Offering),
financing (whether debt or equity financing) or any similar
transaction by or involving the Company or its subsidiaries, the
Company shall notify Valcon of such determination in writing.
Promptly thereafter, upon the request of Valcon, the Company and
Valcon shall
- 2 -
negotiate in good faith to agree upon
appropriate services, additional compensation and indemnification
from the Company and/or one or more of its subsidiaries, as
applicable, to hire Valcon, its Affiliates or the Sub-Contractors
for such services on terms and conditions customary for
transactions of similar size and scope.
5. Personnel . Valcon will
provide or cause to be provided and devote to the performance of
this Agreement such partners, employees and agents of Valcon or the
Sub-Contractors, as the case may be, as it shall deem appropriate
to the furnishing of the services mutually agreed upon by the
Company and Valcon; it being understood that no minimum
number of hours is required to be devoted by Valcon or any of the
Sub-Contractors on a weekly, monthly, annual, or other basis. The
fees and other compensation specified in this Agreement will be
payable by the Company regardless of the extent of services
requested by the Company pursuant to this Agreement, and regardless
of whether or not the Company requests Valcon to provide any such
services. Notwithstanding the foregoing, the Company expects that
Valcon will provide a substantial amount of services to the Company
and its subsidiaries throughout the Term. The Company acknowledges
that the services of the Sub-Contractors retained by Valcon will
not be exclusive, and that one or more of the Sub-Contractors will
render similar services to other Persons (including, without
limitation, with the same partners, employees, and agents thereof
as may render services to the Company).
6. Liability . None of Valcon
nor any of the Sub-Contractors nor any of their respective
Affiliates, nor any of their respective partners, shareholders,
directors, officers, members, employees or agents (collectively,
the “ Advisor Group ”) shall be liable to the
Company, its subsidiaries or any of their Affiliates, employees or
shareholders for any loss, liability, damage, cost, settlement,
judgment or expense (including attorneys’ fees and expenses)
(collectively, a “ Loss ”) arising out of or in
connection with the performance of services contemplated by this
Agreement or otherwise provided by Valcon or any of the
Sub-Contractors to, or otherwise in connection with the operations
of, the Company or any of its subsidiaries or Affiliates, other
than as a result of the gross negligence or willful misconduct of
Valcon or any member of the Advisor Group. No member of the Advisor
Group makes any representations or warranties, express or implied,
in respect of the services provided by any member of the Advisor
Group. Except as Valcon or any other Sub-Contractor may otherwise
agree in writing with respect to itself or its Affiliates:
(i) each member of the Advisor Group shall have the right to,
and shall have no duty (contractual or otherwise) not to, directly
or indirectly: (A) engage in the same or similar business
activities or lines of business as the Company, its subsidiaries or
any of their Affiliates and (B) do business with any client or
customer of the Company, its subsidiaries or any of their
Affiliates; (ii) no member of the Advisor Group shall be
liable to the Company, its subsidiaries or any of their Affiliates,
employees or shareholders for breach of any duty (contractual or
otherwise) by reason of any such activities or of such
Person’s participation therein; and (iii) in the event
that any member of the Advisor Group acquires knowledge of a
potential transaction or matter that may be a corporate opportunity
for the Company, its subsidiaries or any of their Affiliates or
shareholders, on the one hand, and any member of the Advisor Group,
on the other hand, or any other Person, no member of the Advisor
Group shall have any duty (contractual or otherwise) to communicate
or present such corporate opportunity to the Company, its
subsidiaries or any of their Affiliates or shareholders and,
notwithstanding any provision of this Agreement to the contrary, no
member of the Advisor Group shall be liable to the Company, its
subsidiaries or any of their Affiliates or shareholders for breach
of any duty
- 3 -
(contractual or otherwise) by reason of the fact
that any member of the Advisor Group directly or indirectly pursues
or acquires such opportunity for itself, directs such opportunity
to another Person, or does not present such opportunity to the
Company, its subsidiaries or any of their Affiliates or
shareholders. In no event will any of the parties hereto be liable
to any other party hereto for (i) any indirect, special,
incidental or consequential damages, including lost profits or
savings, whether or not such damages are foreseeable, arising out
of this Agreement or the performance of services hereunder, or
(ii) in respect of any liabilities relating to any third party
claims (whether based in contract, tort or otherwise) arising out
of this Agreement or the performance of services hereunder, except
as set forth in Section 7 below.
7. Indemnity . The Company
and its subsidiaries shall defend, indemnify and hold harmless each
member of the Advisor Group from and against any and all Losses
arising from any claim (collectively, “ Claims
”) by any Person with respect to, or in any way related to,
this Agreement, arising out of or in connection with the
performance of services contemplated by this Agreement or otherwise
provided by any member of the Advisor Group to, or otherwise in
connection with the operation of, the Company or any of its
subsidiaries or Affiliates; provided that the foregoing indemnity
shall not be available to any member of the Advisor Group if such
member’s Loss is a result of the gross negligence or willful
misconduct of any member of the Advisor Group. The Company and its
subsidiaries shall defend at their own cost and expense any and all
suits or actions (just or unjust) which may be brought against the
Company, its subsidiaries or any of their Affiliates, or any member
of the Advisor Group or in which any member of the Advisor Group
may be impleaded with other
