Mr. Jesse McVay
Bryan Steam Corporation
March 18, 1998
Page 1
[Goelzer & Co. Letterhead]
March 18, 1998
Mr. Jesse McVay
President
Bryan Steam Corporation
P O Box 27
Peru, Indiana 46970
Dear Mr. McVay:
Bryan Steam Corporation ("Bryan" or the "Company" hereby engages
Goelzer & Co., Inc. ("Goelzer") to put forth its best efforts to arrange a
buyout proposal for up to 100% of the common equity of the Company that is
supported by the management of Bryan. For purposes of this agreement,
"Management" means a group of the Company's incumbent management employees led
by H. Jesse McVay. In the event that Goelzer is successful in consummating a
sale, merger, consolidation or transfer to any entity, based on a proposal
submitted by Management, of any or all tangible or intangible assets or stock of
the Company, Bryan agrees to pay Goelzer a finders fee as a percentage of the
net proceeds of such sale or exchange, due at closing, as follows:
2% of all proceeds received at the time of closing
2% of future proceeds paid to the shareholders and
all related entities,
less the up front fee described below
The Company shall reserve the right to refuse or close, at its sole
discretion.
Goelzer has previously rendered an opinion of fair market value for
Bryan common equity. This opinion will be converted into an offering memorandum
for an up front fee of $6,000.00. All other costs incurred by Goelzer during the
course of this engagement shall be the sole responsibility of Goelzer, with the
exception of Bryan approved, major travel expenses. However, it is Goelzer's
understanding that the Board of Directors of Bryan is soliciting other offers to
purchase the equity of the Company in addition to the buyout proposal from
Management. Therefore, as an incentive for Goelzer to undertake this assignment,
the Company agrees to pay Goelzer a walk away fee of $35,000.00 (in addition to
the up front fee) if an offer for the Company is accepted by the Board of
Directors other than the proposal submitted by Management, provided that
Management is able to put forth an offer (identifying its sources of financing)
for no less than $90.00 per share for control of the Company.
Goelzer shall have the exclusive right to represent the Management for
a period of one (1) year. Unless the Company has previously consummated a
transaction (either with a third party or
Mr. Jesse McVay
Bryan Steam Corporation
March 18, 1998
Page 2
pursuant to a proposal submitted by Management), if a sale, merger,
consolidation or conveyance of a substantial interest in Bryan Steam Corporation
occurs within one (1) year after the expiration of the exclusive representation
period set forth herein with a party first contacted for, or introduced to,
Management by Goelzer prior to such expiration, the company shall pay, or cause
to be paid, to Goelzer a fee equal to that which would have been paid if closed
during the one year exclusive term.
In no event shall H. Jesse McVay or any individual member of Management
be personally obligated to pay Goelzer's fees under this agreement.
This agreement will be effective upon your having signed and returned
this agreement via fax or mail. A copy of the original signed agreement will be
furnished to you for your records. If the need for additional services or
modifications arise, such revisions or modifications will be mutually agreed
upon by written addendum.
Sincerely,
GOELZER & CO., INC.
/s/ George G. Cassiere
----------------------------
George G. Cassiere, CFA
Managing Director
Agreed to and Accepted: Agreed to and Accepted as to
Payment of Fees Only:
The Management of
BRYAN STEAM CORPORATION BRYAN STEAM CORPORATION
By: /s/ Jesse McVay By: /s/ Albert J. Bishop
- ---------------------------- ----------------------------
Mr. Jesse McVay, President
Date: March 23, 1998 Date: March 23, 1998
[Bryan Steam Corporation Letterhead]
August 26, 1998
George G. Cassiere, CFA
Managing Director
Goelzer & Co., Inc.
Bank One Center - Circle
111 Monument Circle - Suite 502
Indianapolis, IN 46204-5171
Re: Modification of Letter Agreement dated March 18, 1998
Dear George:
Reference is hereby made to the letter agreement dated March 18, 1998
among Bryan Steam Corporation ("Company"), Goelzer & Co. ("Goelzer"), and H.
Jesse McVay on behalf of the management group referred to therein (the
"Engagement Letter"). This letter confirms our agreement that upon payment by
the Company to Goelzer the amount of $200,000, the Engagement Letter shall
terminate and the parties thereto shall have no further rights or obligations
thereunder. Bryan shall pay such amount to Goelzer on or before October 10,
1998.
Please confirm your agreement with the foregoing by signing below.
Thank you very much.
Very truly yours,
Bryan Steam Corporation
By: /s/ Albert J. Bishop
----------------------------
Albert J. Bishop, Chairman
AGREED:
Goelzer & Co.
By:/s/ George G. Cassiere
- ----------------------------
Its: Managing Director
ACKNOWLEDGED:
/s/ H. Jesse McVay
- ----------------------------
H. Jesse McVay