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Exhibit 10.2
TRANSACTION ADVISORY AGREEMENT
THIS TRANSACTION ADVISORY AGREEMENT (this "Agreement") is made and
entered into as of June 27, 1997, between Belden & Blake Corporation, an Ohio
corporation (the "Company"), and TPG Partners II, L.P., a Delaware limited
partnership (together with its successors, "TPG").
WHEREAS, TPG and certain other investors are, concurrently with the
execution of this Agreement, acquiring the Company by the merger of BB Merger
Corp., a corporation owned by TPG and such investors ("BB Merger Corp."), into
the Company (the "Acquisition");
WHEREAS, TPG has rendered financial advisory services to BB Merger
Corp. in connection with the negotiation of the Acquisition and the debt and
equity financing transactions related thereto (collectively with the
Acquisition, the "Transaction"); and
WHEREAS, the Company has requested that TPG render financial advisory
and other similar services to the Company with respect to any future proposals
for a tender offer, acquisition, sale, merger exchange offer, recapitalization,
restructuring, or other similar transaction directly or indirectly involving the
Company, or any of its subsidiaries, and any other person or entity
(collectively, "Add-on Transaction");
NOW THEREFORE, in consideration of the services rendered and to be
rendered by TPG and to evidence the obligations of the Company to TPG and the
mutual covenants herein contained, the Company and TPG hereby agree as follows:
1. RETENTION.
(a) The Company and TPG hereby acknowledge that TPG has acted as
financial advisor to BB Merger Corp. in connection with the Transaction.
(b) The Company hereby retains TPG as the exclusive financial
advisor in connection with any Add-on Transactions that may be consummated
during the term of this Agreement, and agrees that the Company will not retain
any other person or entity to provide such services in connection with any such
Add-on Transaction without the prior written consent of TPG. TPG agrees that it
shall provide such financial advisory, investment banking, and other similar
services in connection with any such Add-on Transaction as may be requested from
time to time by the Board of Directors of the Company.
2. TERM. The term of this Agreement shall continue until the earlier
to occur of (i) the tenth anniversary of the date hereof or (ii) the date on
which TPG and its affiliates cease to own beneficially, directly or indirectly,
at lease twenty-five percent of the voting power of the securities of the
Company or its successors.
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3. COMPENSATION.
(a) As compensation for TPG's services as financial advisor
to BB Merger Corp. in connection with the Transaction, the Company hereby
irrevocable agrees to pay to TPG a cash fee of $5,000,000 to be paid at the
closing of the Transaction.
(b) As compensation for TPG's financial advisory and other
similar
services rendered in connection with any Add-on Transaction pursuant to Section
1(b) hereof, the Company shall pay to TPG, at the closing of any such Add-on
Transaction, a cash fee in the amount of 1.5% of the Transaction Value of such
Add-on Transaction. As used herein, the term "Transaction Value" means the total
value of the Add-on Transaction, including, without limitation, the aggregate
amount of the funds required to complete the Add-on Transaction (excluding any
fees payable pursuant to this Section 3(b)), including the amount of any
indebtedness, preferred stock or similar items assumed (or remaining
outstanding).
(c) Any or all of the fees provided for in this Section 3 may
be waived in full or in part by TPG in its sole and absolute discretion.
4. REIMBURSEMENT OF EXPENSES. In addition to the compensation to
be paid pursuant to Section 3 hereof, the Company agrees to reimburse TPG,
promptly following demand therefor, together with invoices or reasonably
detailed descriptions thereof, for all reasonable disbursements and
out-of-pocket expenses (including fees and disbursements of counsel and
accountants) incurred by TPG (i) as financial advisor to BB Merger Corp. in
connection with the Transaction or (ii) in connection with the performance
by it of the services contemplated by Section 1(b) hereof.
5. INDEMNIFICATION. The Company shall indemnify and hold harmless
each of TPG, its affiliates, and their respective directors, officers,
controlling persons (within the meaning of Section 15 of the Securities Act
of 1933 or Section 20(a) of the Securities Exchange Act of 1934), if any,
agents and employees (TPG, its affiliates, and such other specified persons
being collectively referred to as "Indemnified Persons" and individually as
an "Indemnified Person") from and against any and all claims, liabilities,
losses, damages and expenses incurred by an Indemnified Person (including
those resulting from the negligence of the Indemnified Person and fees and
disbursements of the respective Indemnified Person's counsel) which (A) are
related to or arise out of (i) actions taken or omitted to be taken
(including any untrue statements made or any statements omitted to be made)
by the Company or (ii) actions taken or omitted to be taken by an
Indemnified Person with the Company's consent or in conformity with the
Company's instructions or the Company's actions or omissions or (B) are
otherwise related to or arise out of TPG's engagement, and will reimburse
each Indemnified Person for all costs and expenses, including fees of any
Indemnified Person's counsel, as they are incurred, in connection with
investigating, preparing for, defending, or appealing any action, formal or
informal claim, investigation, inquiry or other proceeding, whether or not
in connection with TPG's acting pursuant to the engagement, whether or not
any Indemnified Person is named as a party thereto and whether or not any
liability results therefrom. The Company will not however, be responsible
for any claims, liabilities, losses, damages, or expenses pursuant to
clause (B) of the preceding sentence that have resulted primarily from
TPG's gross negligence or willful misconduct. The Company also agrees that
neither TPG nor any other Indemnified
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Person shall have any liability to the Company for or in connection with such
engagement except for any such liability for claims, liabilities, losses,
damages or expenses incurred by the Company that have resulted primarily from
TPG's gross negligence or willful misconduct. The Company further agrees that it
will not, without the prior written consent of TPG, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought hereunder
(whether or not any Indemnified Person is an actual or potential party to such
claim, action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of TPG and each other Indemnified Person
hereunder from all liability arising out of such claim, action, suit or
proceeding. THE COMPANY HEREBY ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL
BE APPLICABLE TO ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES, OR EXPENSES THAT HAVE
RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE, OR THE
SOLE, JOINT OR CONCURRENT, ORDINARY NEGLIGENCE OF TPG OR ANY OTHER INDEMNIFIED
PERSON.
The foregoing right to indemnity shall be in addition to any rights
that TPG and/or any other Indemnified Person may have at common law or otherwise
and shall remain in full force and effect following the completion or any
termination of the engagement. The Company hereby consents to personal
jurisdiction and to service and venue in any court in which any claim which is
subject to this agreement is brought against TPG or any other Indemnified
Person.
It is understood that, in connection with TPG's engagement, TPG may
also be engaged to act for the Company in one or more additional capacities, and
that the terms of this engagement or any such additional engagement may be
embodied in one or more separate written agreements. This indemnification shall
apply to the engagement specified in the first paragraph hereof as well as to
any such additional engagement(s) (whether written or oral) and any modification
of said engagement or such additional engagement(s) and shall remain in full
force and effect following the completion or termination of said engagement or
such additional engagements.
6. CONFIDENTIAL INFORMATION. In connection with the performance of
the services hereunder, TPG agrees not to divulge any confidential
information, secret processes or trade secrets disclosed by the Company to it
solely in its capacity as a financial advisor, unless the Company consents to
the divulging thereof or unless such information, secret processes, or trade
secrets are publicly available or otherwise available to TPG without
restriction or breach of any confidentiality agreement or unless required by
any governmental authority or in response to any valid legal process.
7. GOVERNING LAW. This Agreement shall be construed, interpreted, and
enforced in accordance with the laws of the State of Texas excluding any
choice-of-law provisions thereof.
8. ASSIGNMENT. This Agreement and all provisions contained herein
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided, however, neither this Agreement
nor any of the rights, interests, or obligations hereunder shall be assigned
(other than with respect to the rights and obligations of TPG, which
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may be assigned to any one or more of its principals or affiliates) by any of
the parties without the prior written consent of the other parties (which
consent will not unreasonably be withheld).
9. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of
any party to any counterpart shall be deemed a signature to, and may be
appended to, any other counterpart.
10. OTHER UNDERSTANDINGS. All discussions, understandings, and
agreements heretofore made between any of the parties hereto with respect to
the subject matter hereof are merged in this Agreement, which fully and
completely expresses the Agreement of the parties hereto. All calculations of
(i) compensation pursuant to Section 3(b) and (ii) reimbursable expenses
pursuant to Section 4 of this Agreement shall be made by TPG and, in the
absence of objection from the Company, shall be final and conclusive. The
Company expressly acknowledges that TPG has been retained solely as an advisor
to the Company, and not as an advisor to or agent of any other person, and
that the Company's engagement of TPG is not intended to confer any rights upon
any person not a party hereto, including shareholders, employees or creditors
of the Company, as against TPG, TPG's affiliates or their respective
directors, officers, agents and employees.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TPG PARTNERS II, L.P.
By: TPG Genpar II, L.P.,
its General Partner
By: TPG Advisors II, Inc.,
its General Partner
By: /s/ Carrie A. Wheeler
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Name: Carrie A. Wheeler
Title: Vice President
BELDEN & BLAKE CORPORATION
By: /s/ Joseph M. Vitale
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Name: Joseph M. Vitale
Title: Sr. Vice President
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