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Exhibit 10.21
FINANCIAL ADVISORY AGREEMENT
THIS FINANCIAL ADVISORY AGREEMENT ("Agreement"), dated as of August 4,
1999, is by and between Equity Group Investments, L.L.C. ("EGI") and Anixter
International Inc. (the "Company").
WHEREAS, the Company believes that the experience of EGI in business and
financial management and analysis generally, and merger and acquisition
transactions in particular, as well as EGI's extensive knowledge of the Company
and the Company's business, have been and continue to be of great benefit to the
Company;
WHEREAS, the Company desires to secure the services of EGI in the event
that the Company or any subsidiary is party to or the subject of a merger,
acquisition, disposition or other similar transactions; and
WHEREAS, EGI is willing to provide such services to the Company, and the
Company desires to secure such services from EGI, subject to the compensation
arrangements and other terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements hereinafter set forth, and the mutual benefits to be
derived herefrom, EGI and the Company, intending to be legally bound, hereby
agree as follows:
1. Engagement. The Company hereby engages EGI as the Company's
non-exclusive financial advisor, and EGI hereby agrees to provide financial
advisory services to the Company, all on the terms and subject to the conditions
set forth below.
2. Services of EGI to the Company. EGI hereby agrees during the term of
this engagement to consult with the Company's senior management and provide
financial advisory services in such manner and on such business and financial
matters as may be reasonably requested from time to time by management or the
Board of Directors of the Company, with respect to each tender offer, stock or
asset acquisition, stock or asset sale, merger, exchange offer, recapitalization
or other similar transaction involving the Company or any direct or indirect
subsidiary of the Company (a "Transaction"), including but not limited to
analysis of financial and strategic alternatives, valuation of the Company
or/and the target company, evaluation of any offers, including the consideration
offered and the structure of any proposed Transaction, and assistance in
negotiating any proposed Transaction; provided, however, that EGI shall not be
required to issue a fairness opinion in connection with any such Transaction.
3. Personnel. EGI shall provide and devote the services of such officers
and employees of EGI as EGI shall deem appropriate for the performance of this
Agreement; provided, however, that Samuel Zell and Rod Dammeyer shall be
significantly involved in, and one or both of them will personally oversee, the
rendering of such services.
4. Advisory Fees. In consideration for the services to be performed by EGI
hereunder, the Company shall pay EGI a fee in an amount equal to 49 basis points
of the Enterprise Value of any Transaction as to which EGI has rendered services
to the Company at the Company's request, provided that such Enterprise Value is
in excess of $50,000,000. For purposes hereof, "Enterprise Value" means the
total value of the transferred asset(s) or securities, which shall be valued at
the aggregate amount of consideration (including the fair market value of
securities issued or sold) paid or issued in such Transaction plus the amount of
indebtedness, preferred stock or similar liabilities or securities assumed
directly or indirectly by the buyer following the Transaction, but shall not
include any assets ( or proceeds thereof) which have previously been transferred
as part of, or to facilitate, the subject Transaction, and as to which a
separate fee shall have been paid or is payable. In the event the Transaction
involves the issuance of a fairness opinion from another financial advisor, the
cost to the Company of such fairness opinion shall be deducted from the fee
otherwise payable to EGI under this Section 4. Advisory fees
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payable pursuant hereto shall in each such case be paid by or on behalf of the
Company at the closing of the relevant Transaction.
5. Expenses. The Company shall promptly reimburse EGI for such reasonable
travel expenses and other reasonable out-of-pocket fees and expenses as may be
incurred by EGI, its officers and employees in connection with the rendering of
services hereunder, regardless of whether the Transaction with respect to which
such expenses and fees were incurred is consummated.
6. Term. This Agreement will continue from the date hereof until
terminated as provided in this Section 6. The Company shall have the right to
terminate this Agreement at any time by giving written notice to EGI. EGI may
terminate this Agreement at any time by giving 30 days' prior written notice to
the Company. No termination of this Agreement by the Company (without cause) or
by EGI (with cause), whether pursuant to this paragraph or otherwise, shall
affect the Company's obligations with respect to the fees payable to EGI in
connection with any completed or uncompleted Transactions, whether or not
pending at the time of termination, in each case with respect to which EGI
rendered any services or performed any work at the Company's request, regardless
of whether or not such Transaction shall have been consummated during the term
of this Agreement, so long as such Transaction shall have been consummated
within 180 days after expiration of such term, and fees, costs and expenses
incurred by or on behalf of EGI in rendering services hereunder and not paid or
reimbursed by the Company as of the effective date of such termination.
7. Liability. None of EGI, its directors, officers, employees,
shareholders, affiliates and agents shall be liable to the Company, any Company
subsidiary or any of their respective affiliates for any loss, liability, damage
or expense arising out of or in connection with the performance of services
contemplated by this Agreement, unless such loss, liability, damage or expense
shall be judicially determined to result directly from their gross negligence,
bad faith or intentional wrongdoing.
8. Indemnification. The Company agrees to indemnify and hold harmless EGI
and its directors, officers, employees, shareholders, affiliates and agents
against and from any and all loss, liability, suits, claims, costs damages and
reasonable expenses (including reasonable attorneys' fees and expenses) arising
from their performance hereunder, except as a result of their judicially
determined gross negligence, bad faith or intentional wrongdoing or except as a
result of injury to persons or tangible property. The Company may elect to
assume the defense of any action or proceeding with counsel reasonably
satisfactory to the indemnified party.
9. EGI as Independent Contractor. EGI and the Company agree that EGI shall
perform services hereunder as an independent contractor, retaining control over
and responsibility for its own operations and personnel. None of EGI and its
officers, employees, affiliates and agents shall be considered officers and
employees of the Company as a result of this Agreement, nor shall any of them
have authority to contract in the name of or bind the Company by reason of this
Agreement, except as expressly agreed to in writing by the Company and EGI.
10. Notices. All notices provided for or permitted to be given under this
Agreement must be in writing and shall be deemed delivered: (a) upon delivery if
delivered in person; (b) three business days after deposit in the United States
mail, addressed to the recipient, postage paid and registered or certified with
return receipt requested; (c) upon transmission if sent via telecopy, with a
confirmation copy sent via overnight mail, provided that confirmation of such
overnight delivery is received; or (d) one business day after deposit with a
national overnight courier provided that confirmation of such overnight delivery
is received. Such notices, demands and other communications shall be sent to
each party at the address or telecopy number indicated below:
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If to EGI: Equity Group Investments, L.L.C.
Two North Riverside Plaza, Suite 600
Chicago, Illinois 60606
Attn.: Sheli Z. Rosenberg
Fax: (312) 454-0531
If to the
Company: Anixter International Inc.
4711 Golf Road
Skokie, Illinois 60076
Attn.: Dennis Letham
Fax: (847) 715-7518
11. Entire Agreement; Modification. This Agreement (a) contains the
complete and entire understanding and agreement of EGI and the Company with
respect to the subject matter hereof, and (b) supersedes all unperformed prior
understandings, conditions and agreements, oral or written, express or implied,
respecting the engagement of EGI in connection with potential Transactions, and
the other subject matter hereof. This Agreement may be amended or modified in a
writing duly executed by both of the parties hereto and not by any course of
conduct, course of dealing or purported oral amendment or modification.
12. Waiver of Breach. The waiver of either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach of that provision or any other provision
hereof.
13. Assignment. Neither EGI nor the Company may assign their rights or
obligations under this Agreement without the express written consent of the
other party hereto, except that EGI may assign (a) this Agreement to any EGI
affiliate reasonably believed by EGI to be capable of adequately performing
hereunder, including but not limited to providing the services of Samuel Zell
and Rod Dammeyer, and (b) any and all of its rights under this Agreement to
receive payment of fees and reimbursement of EGI's expenses as provided in this
Agreement.
14. Successors. Subject to Section 13 hereof, this Agreement and all the
obligations and benefits hereunder shall be binding upon and shall inure to this
successors and permitted assigns of the parties.
15. Counterparts. This Agreement may be executed and delivered by each
party hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original and both of which taken together shall
constitute one and the same agreement.
16. No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any party
hereto.
17. CHOICE OF LAW. ALL ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF ILLINOIS,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
ILLINOIS.
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IN WITNESS WHEREOF, EGI and the Company have caused this Agreement to be
duly executed and delivered on the date and year first above written.
EQUITY GROUP INVESTMENTS, L.L.C.
By: _________________________
Its: _________________________
ANIXTER INTERNATIONAL INC.
By: _________________________
Its: _________________________
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