MANAGEMENT CONSULTING AGREEMENT
Management Consulting Agreement made as of March 14, 1997 between
COSTAIN COAL, INC., a Delaware corporation ("Corporation"), and THE RENCO
GROUP, INC., a New York corporation ("Consultant").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Consultant is in the business, among other things, of providing
management and consulting services to its clients; and
WHEREAS, Corporation desires to retain Consultant on the terms herein
provided, and Consultant is agreeable to accepting such retainer.
NOW, THEREFORE, it is hereby agreed as follows:
1. RETAINER.
Corporation hereby retains Consultant as management consultant for
itself and all subsidiary corporations on the terms herein set forth, and
Consultant hereby accepts such retainer.
2. DUTIES OF CONSULTANT.
Consultant shall, through its staff and persons specially retained
by it:
(a) Become generally informed, and keep itself informed, as to the
business and affairs of the Corporation, and its subsidiary corporations, and
general business developments in their industries.
(b) From time to time visit the physical facilities of the
Corporation and its subsidiaries and consult with its officers and managers.
(c) Provide the Corporation and its subsidiaries from time to time
with its
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advice and recommendations relating to such matters as product, improving
productivity, personnel matters and like matters.
(d) On request of the Corporation and its subsidiaries, meet with
the Corporation and its subsidiaries and review operating plans, budgets,
forecasts, employee benefit programs, proposed major transactions, and like
matters, and consult with the Corporation thereon.
(e) Advise and assist the Corporation and subsidiaries in
negotiations.
3. COMPENSATION TO CONSULTANT.
For Consultant's services hereunder Corporation shall pay to
consultant an Annual Fee ("Annual Fee") of One Million Two Hundred
($1,200,000) Dollars payable at such times and in such installments as shall
be agreed upon from time to time between Corporation and Consultant.
Notwithstanding any other provision herein contained, the Corporation
shall not make any payment hereunder which is violative of any of the
agreements between itself or any of its subsidiaries and any of its or their
lending institutions or creditors, now or hereafter in effect, or any other
agreement to which the Corporation or a subsidiary may now or hereafter be a
party.
Nothing herein contained shall be deemed to preclude the parties from
agreeing upon an additional fee for extra services of Consultant over and
above the normal services contemplated by this Agreement.
In addition, the Corporation shall reimburse the Consultant for actual
travel and lodging expenses, and other reasonable expenses incurred by
Consultant in furnishing its
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services hereunder.
4. CONSULTANT'S DUTY OF CONFIDENTIALITY.
Consultant recognizes that the Corporation will make available to
it confidential information as to their business and affairs and Consultant
agrees to preserve all such information in confidence and to use the same
solely in discharge of its duties.
5. EXPENSES OF CONSULTANT.
Except as provided in paragraph 3, the out-of-pocket expenses of
Consultant in performing its duties hereunder shall be borne by Consultant.
Nothing herein contained shall be deemed to preclude the parties from agreeing
upon the payment or reimbursement by Corporation to Consultant of the
expenses of services of Consultant, rendered at the request of Corporation,
which are beyond the services contemplated by this Agreement. Consultant is
not authorized to incur any liability or expense on behalf of Corporation
except with the prior written authorization of Corporation.
6. TERM.
The initial term of this Agreement shall extend to and end on
October 31, 2005. Thereafter, this Agreement shall continue for additional
terms of three (3) years each, subject to termination by either party, at the
end of the initial term, or at the end of any additional term, by six (6)
months prior written notice given to the other party.
7. MISCELLANEOUS.
(a) Notices hereunder by either party to the other shall be deemed
given when sent by certified mail, return receipt requested, to the party to
whom the same is intended at the address herein specified, or at such other
address as such party shall have
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specified by written notice hereunder:
If to Corporation: Costain Coal, Inc.
249 East Main Street, Suite 200
Lexington, KY 40507
If to Consultant: The Renco Group, Inc.
30 Rockefeller Plaza, Suite 4225
New York, New York 10112
(b) This Agreement expresses the entire understanding between the
parties with respect to the subject matter hereof and may be amended only by
an agreement in writing signed by each of the parties hereto.
(c) This Agreement is made under and shall be construed in
accordance with the laws of the State of New York applicable to contracts to
be performed wholly within such State.
COSTAIN COAL, INC.
By: /s/ John W. Hughes
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THE RENCO GROUP, INC.
By: /s/ Marvin M. Koenig
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Marvin M. Koenig
Executive Vice President
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