Vyaire- Completion Fee App v13 — In re Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS) (Jointly Administered)
- Date
- 2024-11-22
Source document: Vyaire- Completion Fee App v13; document type: exhibit (engagement letter / professional-services agreement).
Full text
Exhibit A
Engagement Letter
Case 24-11217-BLS Doc 795-2 Filed 11/22/24 Page 1 of 12
AP Services, LLC | 2101 Cedar Springs Road | Suite 1100 | Dallas, TX 75201 | 214.647.7500 | alixpartners.com
June 6, 2024
John Bibb
Group Chief Executive Officer
Vyaire Holding Company
26125 Riverwoods Blvd
Mettawa, IL 60045
Re: Agreement for Interim Management Services
Dear Mr. Bibb:
This letter, together with the attached Schedule(s) and General Terms and Conditions, sets forth
the agreement (“Agreement”) between AP Services, LLC (“APS”), and Vyaire Holding Company
and certain of its subsidiaries and affiliates (the “Company”) for the engagement of APS to
provide interim management services to the Company.
All defined terms shall have the meanings ascribed to them in this letter and in the attached
Schedule(s) and General Terms and Conditions. The Company and APS are each a “Party,” and
together the “Parties.”
The engagement of APS, including any APS employees who serve in Executive Officer positions,
shall be under the supervision of the Board of Directors of the Company.
Objectives and Tasks
Subject to APS’s (i) internal approval from its Risk Management Committee, (ii) confirmation the
Company has a Directors and Officers Liability insurance policy in accordance with the
Indemnification section of the General Terms and Conditions regarding Directors and Officers
Liability Insurance coverage, and (iii) receipt of a copy of the signed Board of Directors’ resolution
(or similar document as required by the Company's governance documents) as official
confirmation of the appointment, APS will provide Charles Braley to serve as the Company’s Chief
Restructuring Officer ("CRO"), reporting to the Company’s Restructuring Committee of the Board
of Directors. Working collaboratively with the senior management team, the Board of Directors
and other Company professionals, Mr. Braley and APS will assist the Company with the following:
•
Prepare budgets and 13-week cash forecasts and evaluate variances thereto, as
required by the Company’s lenders.
•
Communicate with, and meet information needs of, the Company's various
constituencies, including current lenders and potential DIP and/or exit lenders.
•
Strengthen the Company’s core competencies in the finance organization, particularly
cash management, planning, general accounting and financial reporting information
management.
•
Assist the Company with the financial reporting requirements, diligence, and review,
attendant to a bankruptcy filing, including, but not limited to, court orders, reports and
investigations, court-approved transactions, emergence, and fresh-start accounting.
•
Develop the Company’s revised business plan, and such other related forecasts as may
be required by the Company’s lenders in connection with negotiations or by the
Company for other corporate purposes.
•
Identify, implement, and monitor both short-term and long-term liquidity generating
initiatives.
Case 24-11217-BLS Doc 795-2 Filed 11/22/24 Page 2 of 12
Vyaire Holding Company
Page 2 of 11
•
Develop a short-term cash disbursement plan designed to minimize cash requirements
while maintaining the efficiency of operations, sustaining vendor relationships, and
minimizing the impact on the Company’s customer base.
•
Design, negotiate and implement a restructuring strategy designed to maximize
enterprise value, taking into account the unique interests of key constituencies.
•
Develop short-term and long-term cash flow forecasting tools and related methodologies
to support negotiations with the Company’s stakeholders and fundraising initiatives.
•
Prepare for bankruptcy and file bankruptcy petitions, coordinating and providing
administrative support for the bankruptcy proceedings, the sale process, and developing
the Company’s plan of reorganization or other appropriate case resolution, including,
but not limited to, a wind down of certain of the Company’s businesses including in a
chapter 7 bankruptcy or a structured dismissal, each to the extent applicable.
•
In connection with a bankruptcy, prepare (i) a disclosure statement and plan of
reorganization, (ii) a liquidation analysis, (iii) statements of financial affairs and
schedules of assets and liabilities, (iv) a potential preference analysis, (v) a claims
analysis, (vi) monthly operating reports and other regular reporting required by the
Bankruptcy Court, (vii) diligence and other information necessary to facilitate the
Company’s sale process, and (viii) analysis with respect to costs, expenses, and other
information related to a wind down of the Debtors’ businesses.
•
Coordinate the Company's professionals assigned to sourcing, negotiating and
implementing any financing, including debtor-in-possession and exit financing facilities,
in conjunction with the sale process, plan of reorganization and/or the overall
restructuring.
•
Manage the “working group” professionals who are assisting the Company in the
reorganization process or who are working for the Company’s various stakeholders to
improve coordination of their effort and individual work product to be consistent with
the Company’s overall restructuring goals.
•
Create and communicate materials for diligence purposes and manage the flow of
information to potential acquirers in connection a potential sale of the Company’s
assets.
•
Conduct eDiscovery, document review and forensic data services required in conjunction
with any document requests or other discovery.
•
Assist the Company with such other matters as may be requested by the Company and
are mutually agreeable.
Staffing
Charles Braley and Eric Koza will be responsible for the engagement, supported by the APS
personnel necessary to complete the services provided under the Agreement. In addition, APS
and its affiliates have relationships with, and may periodically use, independent contractors with
specialized skills and abilities to assist in this engagement.
We will periodically review the staffing levels to determine the proper mix for this assignment. We
will only use the necessary staff required to complete the requested or planned tasks.
Timing and Fees
Case 24-11217-BLS Doc 795-2 Filed 11/22/24 Page 3 of 12
Vyaire Holding Company
Page 3 of 11
APS will commence this engagement on or about June [3], 2024 after receipt of a copy of the
executed Agreement and confirmation of the Company’s compliance with the requirements set
forth in the first paragraph of the Objectives and Tasks section above.
This Agreement shall supersede in its entirety the agreement between AlixPartners, LLP
(“AlixPartners”) and the Company dated March 29, 2024 (the “Prior Engagement Letter”), which
Prior Engagement Letter will be terminated upon full execution of this Agreement.
The Company shall compensate APS for its services, and reimburse APS for expenses, as set forth
on Schedule 1.
In the event the Company seeks protection under the U.S. Bankruptcy Code, the Company will
promptly apply to the Bankruptcy Court to obtain approval of APS's retention nunc pro tunc to the
date of filing. APS acknowledges its retention and the terms thereof are subject to Bankruptcy
Court approval.
* * *
If these terms meet with your approval, please sign and return a copy of the executed
Agreement.
We look forward to working with you.
Sincerely yours,
Eric Koza
Charles Braley
Americas Co-Leader of Turnaround &
Restructuring, PMD
Partner & Managing Director
For and on behalf of AP Services, LLC
Agreement and acceptance confirmed
By:
Its:
Dated:
For and on behalf of Vyaire Holding Company
6/7/2024 | 5:31 PM EDT
Group CEO
Case 24-11217-BLS Doc 795-2 Filed 11/22/24 Page 4 of 12
Page 4 of 11
Schedule 1
Fees and Expenses
1. Fees: APS’s fees will be based on the hours spent by APS personnel at APS’s hourly rates,
which are effective as of July 1, 2024:
Partner / Partner & Managing
Director
USD 1,200 – USD 1,495
Senior Vice President / Director
USD 825 – USD 1,125
Vice President
USD 640 – USD 810
Consultant
USD 230 – USD 625
APS generally reviews and revises its billing rates semi-annually.
APS’s total fees include any retainer, break fee, or success fee payable hereunder, if any
(together, the “Fees”). In the event of a Chapter 11 filing, the Fees shall also include the Case
Management Platform usage fees set forth in the Bankruptcy Related Matters Section of the
General Terms and Conditions.
2. Completion Fee: In addition to the Fees above, APS will be compensated for its efforts by
the payment of a Completion Fee. The Company understands and acknowledges that the
Completion Fee is an integral part of APS’s compensation for this engagement and that the
structure and amount of the Completion Fee is reasonable.
APS shall earn a Completion Fee of US $1,000,000 upon the earliest to occur of any of the
following: (i) completion of a restructuring through confirmation of a Chapter 11 Plan (which,
for avoidance of doubt, shall not include a plan of liquidation), (ii) the consummation of any
material recapitalization or debt restructuring of the Company, or (iii) consummation of one or
more transactions, in any form, that effectively transfers a significant and material portion of
the business as a going concern to another entity or entities, or that results in a change in
structure of the board of directors. For the avoidance of doubt, the Completion Fee shall be
earned upon a sale or sales of all or substantially all the assets of the Company pursuant to
section 363 of the Bankruptcy Code (“Sale Transaction”); provided, however, that (i) if the
sale or sales of some, all or substantially all assets of the Company does not result in an
aggregate purchase price of in excess of the amount of “new money” debtor-in-possession
financing actually funded, (ii) the Company’s lenders elect to credit bid for such assets, or (iii)
the company confirms a chapter 11 plan of liquidation but does not complete any Sale
Transaction, APS shall earn a Completion Fee of $750,000; provided further that if the
Company converts its chapter 11 cases to chapter 7 cases prior to APS’s earning of the
Completion Fee, APS shall not be entitled to a Completion Fee. The Completion Fee shall be
due and payable immediately when the objective or objectives determined as described above
have been achieved.
If at any time prior to 24 months after the cessation of services performed by APS under this
engagement, the objective(s) described above have been achieved, whether or not the
Company has then engaged the services of another professional or this Agreement has been
terminated, concluded or completed, APS will be entitled to payment in full of the Completion
Fee. For the avoidance of doubt, no more than one Completion Fee shall be earned or paid
hereunder.
Case 24-11217-BLS Doc 795-2 Filed 11/22/24 Page 5 of 12
Page 5 of 11
3. Expenses: In addition to the Fees set forth in this Schedule, the Company shall pay directly,
or reimburse APS upon receipt of periodic billings, for all reasonable out-of-pocket expenses
incurred in connection with this engagement, such as travel, lodging and meals, and any
technology costs associated with secure storage and handling of client data not otherwise
covered by this Agreement.
4. Retainer: AlixPartners is currently holding a retainer in the amount of USD 500,000 in
connection with the Prior Engagement Letter. Such retainer amount will be transferred to this
Agreement and held for the remainder of the engagement to be applied against Fees and
expenses. Any balance of the retainer will be applied against the final invoice or returned to
the Company at the end of the engagement.
5. Payment: APS will submit invoices bi-weekly for services rendered and expenses incurred. All
invoices shall be due and payable immediately upon receipt. In the event of a bankruptcy
filing, APS will submit invoices in the manner required by the Bankruptcy Court. All invoices
will be due and payable immediately upon receipt, subject to Bankruptcy Court approval, as
applicable.
Case 24-11217-BLS Doc 795-2 Filed 11/22/24 Page 6 of 12
Page 6 of 11
Data Protection Schedule
Description of Transfer
1. Categories of data subjects whose personal data is transferred
x
Employees / Members / Contractors of Client
Customers / Consumers / Clientele / Prospects of Client
Other:
2. Categories of personal data transferred
Background Check Data (Criminal History, Drug Test Results, References, etc.)
Biometric Data (Facial Recognition, Fingerprints, Voice Recording, etc.)
Browsing Data (Cookies, Website History, IP Address, etc.)
x
Contact Information (Contact Details, Address, Email Address, Phone Numbers, etc.)
Education and Skills (Academic Transcripts, Degrees, Languages, Training, etc.)
x
Employment Information (Compensation, Job Title, Personnel Number, Workers Comp, Office Location, etc.)
Family Information (Children, Parents, etc.)
Financial Personal Information (Bank Accounts, Credit Card Numbers, etc.)
Genetic Information (Genetic Sequence)
Government Identifiers (National Identification Number, SSN, Driving License, etc.)
Personal Identifiers (Name, Age, Date of Birth, Race, Video/Photo, Signature, etc.)
Professional Experience & Affiliations (Trade Union Membership, Qualifications/Certifications, etc.)
Social Media Data (Social Media Accounts, Social Media History, etc.)
Travel and Expense (Travel History, Expense Details, etc.)
User Account Information (Account Age, Account Number, Account Password, etc.)
Workplace Welfare (Harassment Reports, Disciplinary Action, etc.)
Other:
3. Frequency of data transfers
The frequency of the transfer will be continuous (multiple transfers).
4. Processing by APS
4.1. Nature of processing: The nature of processing will include receiving, storing, analyzing,
transmitting to appropriate parties, and disposing of Personal Data.
4.2. Purpose of the data transfer and further processing: The purpose of processing is to provide the
services described in the agreement above.
4.3. The period for which the personal data will be retained, or if the period is unknown, the criteria
used to determine the period: APS will process Personal Data for the duration of the engagement.
4.4. Transfer to Sub-processors: Sub-processors may process Personal Data for the duration of the
engagement life cycle and for the purposes specified above. See
https://www.alixpartners.com/policies/subprocessors/ for a list of sub-processors.
Case 24-11217-BLS Doc 795-2 Filed 11/22/24 Page 7 of 12
AP Services, LLC
General Terms and Conditions
Page 7 of 11
These General Terms and Conditions (“Terms”) are incorporated into the Agreement to which these Terms are attached. In
case of conflict between the wording in the letter and/or schedule(s) and these Terms, the wording of the letter and/or
schedule(s) shall prevail.
Section 1. Company Responsibilities
APS’s performance of the services in accordance with the
terms of the Agreement are dependent on the Company’s
timely
and
effective
completion
of
the
following
responsibilities to the extent they are reasonably
necessary for such performance: (a) provide timely,
reliable, accurate and detailed information, materials,
documentation; and (b) make timely decisions, gain
relevant approvals, and co-operate with APS as is
necessary or desirable for the performance of the services.
Section 2. Nature of the Services of APS
APS is not an accounting firm or a law firm. APS is
providing advisory and consulting services only and will
not
(i) unless
expressly
stated
otherwise
in
the
Agreement,
make
management
decisions
for
the
Company, (ii) perform accounting audits, or (iii) provide
legal services or advice. While APS may, from time-to-
time, suggest options that may be available to the
Company, the ultimate decision as to such options rests
with the Company, and APS makes no promise or
guarantee, nor gives any representations, about the
outcome of the Company’s matters and/ or any decision it
makes.
Section 3. Billing, Payments, and Taxes
Billing and Payments. All invoices for Fees and expenses
are due as set forth on Schedule 1 (the “Due Date”) via
wire transfer to APS’s bank account, as shown on the
invoice. All amounts invoiced are based on services
rendered and expenses incurred to date, and are not
contingent upon future services or Work Product (as
defined below), or the outcome of any case or matter.
There will be no administrative fees or costs charged to
AlixPartners for the use of e-billing, procurement,
factoring, or other similar services in connection with our
invoicing (e.g. Ariba, SAP, Tymetrix, Brightflag, etc.) of
this engagement. If the Company requests or requires APS
to use the Company’s or a third party’s e-billing,
procurement, factoring, or other similar services in
connection with our invoicing and there are fees charged
or discounts applied in connection with APS’s use of such
services, the Company agrees to reimburse APS for those
fees or discounts as a reimbursable expense under the
Agreement.
Taxes. APS’s Fees are exclusive of taxes or similar
charges, which shall be the responsibility of the Company
(other than taxes imposed on APS’s income generally). If
APS’s Fees are subject to any taxes, such as State sales
tax or Value Added Tax, then APS will include such taxes
on its invoices as separate line items.
Section 4. Use of Work Product
“Work Product” means all information, reports, materials,
software and other work product that APS creates or
develops specifically for the Company in the performance
and/or preparation of the services that constitutes,
contains and/or comprises APS’s advice, observations,
assessments,
evaluations,
theories,
formulas,
methodologies,
opinions,
judgement,
endorsements,
recommendations and/ or proposals.
“Affiliate” means any entity that, directly or indirectly,
controls, is controlled by or is under common control with
the referenced entity, including the referenced entity’s
parent. In this definition, control means the power to direct
the management and policies of an entity, directly or
indirectly, whether through the ownership of voting
securities, by contract or otherwise.
Except as disclosure may be required by law, regulation or
regulatory process, or as allowed below, the Company
agrees that the Work Product shall only be used by the
Company internally solely for its own benefit and use
consistent with the purpose of the services under the
Agreement. The Company acknowledges and agrees that
APS’s only duty of care in respect of the services and the
Work Product is to the Company.
The Company may distribute the Work Product on a strictly
confidential and non-reliance basis to its auditors,
accountants, legal advisors, controlled and controlling
Affiliates (“Authorized Recipients”) provided that the
Company understands and agrees that APS does not
accept any liability to any of the Authorized Recipients and
APS sole duty of care is to the Company. The Company
shall be responsible for any damages resulting from a
breach of the terms of the Agreement by its Authorized
Recipients.
Except as described above and without APS’s prior written
approval (not to be unreasonably withheld or delayed), no
part of APS’s Work Product may be (i) disseminated,
reproduced, quoted, or referenced with attribution to APS
or an unnamed consultant or (ii) disseminated to third
parties without APS’s prior written consent and such third
parties executing APS’s Report Access Letter.
Section 5. Confidentiality
Nondisclosure of Confidential Information. Each
Party shall keep confidential all confidential information, in
whatever form, relating to a Party or its finances,
accounts, business, technologies, products, customers or
suppliers obtained from the other Party during the
performance
of
APS’s
services
hereunder
(the
“Confidential Information”), and neither Party will disclose
any Confidential Information to any other person or entity,
except as permitted below. Confidential Information
includes the terms of the Agreement.
Disclosure of Confidential Information. The foregoing
is not intended to prohibit, nor shall it be construed as
prohibiting, either Party from making such disclosures of
Confidential Information that either Party reasonably
believes are required by law or any regulatory requirement
or authority, including APS’s disclosures to clear client
conflicts and as may be required by FedRBank P2014 in
unrelated bankruptcy matters.
Either Party may disclose Confidential Information to its
Affiliates, and its and their directors, officers, employees,
partners, subcontractors, auditors, accountants, agents
and legal advisors (collectively, “Representatives”), but
only if such Representatives reasonably need to know the
Confidential Information as it relates to the services being
Case 24-11217-BLS Doc 795-2 Filed 11/22/24 Page 8 of 12
AP Services, LLC
General Terms and Conditions
Page 8 of 11
provided under the Agreement and such Representatives
are bound by similar confidentiality obligations. Each Party
is responsible for any breach of these confidentiality
obligations by any of its Representatives. In addition, APS
may use the Company’s Confidential Information obtained
in connection with, and/or generated in the performance
of, the services for benchmarking and related purposes, to
augment the consulting offerings APS provides to the
Company and other clients provided that APS will only use
such information on an aggregated and anonymized basis
and will not, in any circumstances, identify the Company
in connection with such benchmarking and related
purposes and in all such cases, APS shall comply with
applicable laws and professional obligations.
Marketing. APS will have the right to disclose to any
person that it provided services to the Company and a
general description of such services, but APS shall not
provide any other information about its involvement with
the Company.
Exclusions.
The
confidentiality
provisions
of
the
Agreement will not apply to any information that (a) is or
becomes generally available to the public through no
action by either Party or its Representatives (as defined
below), (b) are or become available to either Party on a
non-confidential basis from a source that such Party
reasonably believes is lawfully permitted to so provide, or
(c) is independently developed by either Party without the
use of the Confidential Information of the other Party.
Return or Destruction of Information. At the
conclusion of the Agreement, the receiving Party and its
Representatives may, and will if so requested in writing by
the disclosing Party, promptly return to the disclosing
Party all tangible Confidential Information provided to the
receiving
Party
and
its
Representative
and
will
destroy/delete all summaries, notes, studies, compilations
or written or electronic copies and records that reflect any
of the Confidential Information prepared by either Party or
any of its Representatives. Such destruction/deletion (or
return/delivery) will be confirmed in writing. The foregoing
obligation to return or destroy documents shall not extend
to (i) documents the receiving Party is obligated to retain
pursuant to any applicable law, rule, regulation, policy or
by a competent authority, or (ii) any computer files or
documents created as a result of automatic archiving and
backup procedures provided that any such retained
documents shall remain subject to the Agreement.
Expiration. The obligations of the Parties under this
section shall survive the end of any engagement between
the Parties for a period of three (3) years.
Section 6. Intellectual Property
“Intellectual Property” means patents, registered designs,
registered trademarks and applications and the right to
apply for any of the foregoing, copyright, design rights,
topography rights, database rights, brands, trademarks,
utility model rights, rights in the nature of copyright, rights
in inventions and all other industrial, commercial and
intellectual property rights and all other rights or forms of
protection having equivalent or similar effect to any of the
foregoing arising anywhere in the world.
“APS Intellectual Property” means any Intellectual
Property that APS has created, acquired or developed prior
to the date of and/or separately from the Agreement and
any enhancements, developments and/or improvements
to any of the foregoing by and/or on behalf of APS during
the course of, and/or in performance of, the Agreement.
“Company Intellectual Property” means any Intellectual
Property that APS creates specifically for the Company in
the performance of the services that is not APS Intellectual
Property.
As between the Parties, the Company’s Intellectual
Property shall be owned by the Company upon full
payment of all Fees and expenses due to APS and to that
effect, subject to the payment of such Fees and expenses,
APS hereby assigns its rights and interests in and the
Company’s Intellectual Property to the Company.
As between the Parties, the APS Intellectual Property shall
be owned by APS and except to the extent explicitly agreed
hereunder the Company shall not acquire any title or
interest in and to the APS Intellectual Property. APS hereby
grants to the Company a non-exclusive, non-transferable,
irrevocable, royalty-free, worldwide license to use the APS
Intellectual Property only to the extent necessary to enable
the Company to use and benefit from the results of the
services, including the Company’s Intellectual Property,
subject to and in accordance with the terms of the
Agreement.
Section 7. Limitation of Liability
THE APS PARTIES SHALL NOT BE LIABLE TO THE
COMPANY, OR ANY PARTY ASSERTING CLAIMS ON BEHALF
OF THE COMPANY, EXCEPT FOR DIRECT DAMAGES FOUND
IN A FINAL DETERMINATION TO BE THE DIRECT RESULT
OF
THE
FRAUD,
GROSS
NEGLIGENCE,
WILLFUL
MISCONDUCT,
BAD
FAITH,
SELF-DEALING
OR
INTENTIONAL MISCONDUCT OF APS. THE APS PARTIES
SHALL NOT BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL
OR SPECIAL DAMAGES, LOST PROFITS, LOST DATA,
REPUTATIONAL DAMAGES, PUNITIVE DAMAGES OR ANY
OTHER SIMILAR DAMAGES UNDER ANY CIRCUMSTANCES,
EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES. THE APS PARTIES’ AGGREGATE
LIABILITY,
WHETHER
IN
TORT,
CONTRACT,
OR
OTHERWISE, IS LIMITED TO THE AMOUNT OF FEES
ACTUALLY PAID TO APS FOR SERVICES UNDER THE
AGREEMENT (OR IF THE CLAIM ARISES FROM AN
ADDENDUM TO THE AGREEMENT, UNDER THE APPLICABLE
ADDENDUM) (THE “LIABILITY CAP”).
Nothing in the Agreement, including the Liability Cap, shall
be deemed to limit or exclude APS’s liability for (a) death
or personal injury caused by negligence, (b) gross
negligence, fraud or willful misconduct, or (c) to the extent
such claim cannot by capped or limited by applicable law.
APS is not responsible for any third-party products or
services separately procured by the Company. The
Company’s sole and exclusive rights and remedies with
respect to any such third-party products or services are
against the third-party vendor and not against APS,
whether or not APS is instrumental in procuring such third-
party product or service.
Section 8. Indemnification
The Company shall indemnify, hold harmless and defend
APS and its Affiliates and its and their partners, directors,
officers and employees (collectively, the “APS Parties”)
from and against all claims (including without limitation
claims from Authorized Recipients), liabilities, losses,
Case 24-11217-BLS Doc 795-2 Filed 11/22/24 Page 9 of 12
AP Services, LLC
General Terms and Conditions
Page 9 of 11
expenses and damages (“Loss”) incurred or suffered
arising out of or as a result of the performance by APS of
the services or its obligations hereunder, or any third
party’s use of or reliance on the services provided under
the Agreement or Work Product. The indemnity herein
shall not apply to the extent such Loss directly arises as a
result of APS’ Parties fraud, gross negligence or willful
misconduct. The Company shall pay Losses as incurred,
including reasonable legal fees and disbursements of
counsel. If, in the opinion of counsel, representing both
Parties in the matter covered by this indemnification
creates a potential conflict of interest, the APS Parties may
engage separate counsel to represent them at the
Company’s expense.
The Company shall specifically include and cover APS
employees and agents serving as directors or officers of
the Company or Affiliates with direct coverage under the
Company’s policy for liability insurance covering its
directors, officers and any equivalently placed employees
(“D&O insurance”) in at least $10 million for any one
incident. The Company will maintain such D&O insurance
coverage for the period through which claims can be made
against such persons. The Company shall, at the request
of APS, provide a copy of its current D&O policy, a
certificate(s) of insurance evidencing the policy is in full
force and effect, and any other documents as APS may
reasonably request evidencing the appointment and
coverage of the indemnitees. The Company disclaims a
right to distribution from the D&O insurance coverage with
respect to such persons. In the event that the Company is
unable to include APS employees and agents under the
Company’s policy or does not have first dollar coverage
acceptable to APS (e.g., there are claims or threatened
claims against the policy), APS may, at its option, purchase
a separate D&O insurance policy (at the Company’s
expense) to cover APS employees and agents only.
APS employees serving as directors or officers of the
Company or Affiliates will receive the benefit of the most
favorable indemnification provisions provided by the
Company to its directors, officers and any equivalently
placed employees, whether under the Company’s charter
or by-laws, by contract or otherwise. The Company’s
indemnification obligations in this Section shall be primary
to,
and
without
allocation
against,
any
similar
indemnification obligations that APS may offer to its
personnel generally, and the Company’s D&O insurance
coverage for the indemnitees shall be specifically primary
to, and without allocation against, any other valid and
collectible insurance coverage that may apply to the
indemnitees (whether provided by APS or otherwise).
Section 9. Non-Solicitation of Employees
The Company acknowledges and agrees that APS has
made a significant monetary investment recruiting, hiring
and training its personnel. During the term of the
Agreement and for a period of one year after its
termination or expiration (the “Restrictive Period”), the
Company agrees not to directly or indirectly solicit the
employment of any of APS’s Partner & Managing Directors,
Partners, Directors, or other employees/contractors who
performed services under the Agreement or whom the
Company or its Affiliates had interactions with as a result
of the services provided under the Agreement. The
following shall not be a violation of this section: (i) general
solicitations, or recruitment through advertisements, job
boards, websites, or other similar channels not targeted at
APS personnel, or (ii) hiring former APS personnel who
have not been employed by APS for a period of six (6)
months prior to being contacted by the Company.
If during the Restrictive Period the Company directly or
indirectly solicits away, hires or contracts with any of
APS’s Partner
& Managing
Directors,
Partners,
Directors, or other employees/contractors in violation of
the preceding paragraph, the Company agrees to pay to
APS as liquidated damages and not as a penalty the total
cash compensation (salary plus any cash bonuses) paid to
such person during the preceding twelve months. The
Company acknowledges and agrees that liquidated
damages in such amounts are (x) fair, reasonable and
necessary under the circumstances to reimburse APS for
the costs of recruiting, hiring and training its employees as
well as the lost profits and opportunity costs related to
such personnel, and to protect the significant investment
that APS has made in its Partner & Managing Directors,
Partners, Directors, and other employees/ consultants;
and (y) appropriate due to the difficulty of calculating the
exact amount and value of that investment.
The provisions of this section shall apply except to the
extent the provisions conflict with applicable law.
Section 10. Governing Law and Arbitration
The Agreement is governed by and shall be construed in
accordance with the laws of the State of New York with
respect to contracts made and to be performed entirely
therein and without regard to choice of law or principles
thereof.
Any controversy or claim arising out of or relating to the
Agreement, or the breach thereof, shall be settled by
arbitration. Each Party shall appoint one non-neutral
arbitrator. The two party arbitrators shall select a third
arbitrator. If within 30 days after their appointment the
two party arbitrators do not select a third arbitrator, the
third arbitrator shall be selected by the American
Arbitration Association (AAA). The arbitration shall be
conducted in New York, New York under the AAA’s
Commercial Arbitration Rules, and the arbitrators shall
issue a reasoned award. The arbitrators may award costs
and attorneys’ fees to the prevailing Party. Judgment on
the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof.
Notwithstanding the foregoing, any Party may proceed
directly to a court of competent jurisdiction to enforce the
terms of the Agreement for any claim in connection with
(i) the non-payment of Fees or expenses due under the
Agreement, or (ii) the non-performance of obligations
under the Indemnification section of these Terms. For the
purposes of this paragraph, the Parties expressly consent
to the jurisdiction of all Federal and state courts located in
New York, New York.
In any court proceeding arising out of the Agreement, the
Parties hereby waive any right to trial by jury.
Equitable Remedies. Each Party acknowledges and
agrees that money damages alone may not be an
adequate remedy for a breach of the Agreement. Each
Party agrees that the non-breaching Party shall have the
right to seek a restraining order and/or an injunction for
any breach of the Agreement.
Case 24-11217-BLS Doc 795-2 Filed 11/22/24 Page 10 of 12
AP Services, LLC
General Terms and Conditions
Page 10 of 11
Section 11. Termination and Survival
The Agreement may be terminated at any time by written
notice by one Party to the other; provided, however, that
notwithstanding such termination APS will be entitled to
any Fees and expenses incurred through the termination
date (for fixed fee engagements, fees will be pro rata
based on the amount of time completed). Such payment
obligation shall inure to the benefit of any successor or
assignee of APS.
Additionally, unless the Agreement is terminated by the
Company due to APS’s material breach (and such material
breach continues after 30 days’ written notice thereof and
opportunity to cure) APS shall remain entitled to the
completion fee(s), if any, that otherwise would be payable
during the 12 months after the date of termination of the
Agreement.
Sections 2, 4, 5, 7, 8, 9 10, 11, 12, 13, and 14 of these
Terms, the provisions of Schedule 1 and the obligation to
pay accrued fees and expenses shall survive the expiration
or termination of the Agreement.
Section 12. General
Force Majeure. “Force Majeure Event” means any action,
omission, act, event or circumstance which is beyond the
reasonable control of APS and which prevents APS from
performing any of its obligations under the Agreement,
including failure to meet any standard of performance.
If a Force Majeure Event occurs, APS will, as soon as
reasonably practicable, notify the Company of its
occurrence, nature and the anticipated impact it will have
on APS’s ability to perform its obligations under the
Agreement and APS will have no liability in respect of the
non-performance
of
such
obligations
during
the
continuation of the Force Majeure Event and for such time
after its ends as is reasonably necessary for APS to
recommence
its
affected
performance
under
the
Agreement.
Anti-Money Laundering Compliance. APS is obliged to
and shall comply with certain regulations pertaining to its
activities, including client take-on and the services
contemplated during this engagement (for example UK,
US and European anti- money laundering regulations as
well as economic sanctions regulations administered by
OFAC and/ or the Department of State in the US). The
Company acknowledges and agrees that APS will conduct
customer due diligence checks at the outset of the
business relationship and periodically thereafter, which
may involve verifying the identity of the Company, the
beneficial owners of the Company, or their associated
persons and entities, as well as other persons and entities
with which APS is dealing in connection with this
engagement. In that context, APS may request such
information and documentation as is required for these
purposes and APS shall retain all information and
documentation provided in accordance with applicable
laws and its document retention policy, as amended from
time to time.
Anti-Bribery and Corruption. The Parties shall comply
with all applicable laws, statutes, regulations, and codes
relating to anti-bribery and anti-corruption (including but
not limited to the Bribery Act 2010). Each Party shall notify
the other immediately if it has reason to suspect that any
breach of the foregoing has occurred, is occurring or is
likely to occur in connection with the Agreement, its
subject matter or the receipt or payment (as the case may
be) of any moneys from or by or on behalf of the Company.
If either Party (the “Defaulting Party”) breaches this
section, the other Party (the “Non-Defaulting Party”) may,
notwithstanding any other terms of the Agreement
terminate the Agreement and may recover from the
Defaulting Party any loss or damage suffered by the Non-
Defaulting Party resulting from such termination.
The rights and remedies under this section entitled ‘Anti-
Bribery and Corruption’ shall survive acceptance and
payment of any moneys and be without prejudice to any
other right or remedy available to the Non-Defaulting
Party.
Severability. If any provision(s) of the Agreement are, in
any jurisdiction, found to be invalid or unenforceable, that
provision or parts thereof (as the case may be) will to that
extent and in that jurisdiction be deemed not to form part
of the Agreement and the enforceability of the remainder
will not be affected in such jurisdiction.
Entire Agreement. The Agreement, including the letter,
the Terms and the schedule(s), contains the entire
understanding of the Parties relating to the services and
supersedes any and all prior proposals, communications,
agreements,
understandings,
representations,
or
estimates among the Parties with respect to such services.
Each Party agrees that in entering into the Agreement
other than as expressly included in the Agreement it does
not rely on any statement, representation, undertaking,
agreement or understanding of any nature made by any
person. The Agreement, including the letter, the Terms
and the schedule(s), may not be amended or modified in
any respect except in a writing signed by the Parties.
Related Matters. If an APS Party is required by applicable
law, legal process or government action to produce
information or testimony as a witness with respect to the
Agreement, the Company shall reimburse APS for any
professional time and expenses (including reasonable
external and internal legal costs and e-discovery costs)
incurred to respond to the request, except in cases where
an APS Party is a party to the proceeding or the subject of
the investigation.
Joint
and
Several
Liability. If
more
than
one
counterparty enters into the Agreement with APS, the
liability of each such counterparty shall be joint and
several, and APS may take action against, or release or
compromise the liability of, any counterparty, without
affecting the liability of any other counterparty.
Third-Party
Beneficiaries. Except
where
expressly
stated to be for the benefit of Affiliates of APS (and such
Affiliates will acquire rights to enforce the relevant terms),
a person who is not a party to the Agreement has no rights
to enforce any terms of the Agreement.
Case 24-11217-BLS Doc 795-2 Filed 11/22/24 Page 11 of 12
AP Services, LLC
General Terms and Conditions
Page 11 of 11
Notices. All notices required or permitted to be delivered
under the Agreement shall be sent, if to APS, to:
AP Services, LLC
2000 Town Center, Suite 2400
Southfield, MI 48075
Attention: Chief Legal Officer
and if to the Company, to the address set forth in the
Agreement, to the attention of the Company’s General
Counsel, or to such other name or address as may be given
in writing to APS. All notices under the Agreement shall be
sufficient only if delivered by overnight mail. Any notice
shall be deemed to be given only upon actual receipt.
Section 13. Bankruptcy Related Matters
Notwithstanding anything to the contrary in these Terms,
in the event the Company files for protection under the
U.S. Bankruptcy Code, the following provisions will prevail:
The Company shall promptly apply to the Bankruptcy
Court for approval of the Company’s retention of APS
under the terms of the Agreement. The form of retention
application and proposed order shall be reasonably
acceptable to APS. APS shall have no obligation to provide
any further services if the Company becomes a debtor
under the U.S. Bankruptcy Code unless APS’s retention
under the terms of the Agreement is approved by a final
order of the Bankruptcy Court reasonably acceptable to
APS. The Company shall assist, or cause its counsel to
assist, with filing, serving and noticing of papers related to
APS’s fee and expense matters.
The Company and APS agree that the Bankruptcy Court
shall have exclusive jurisdiction over any and all matters
arising under or in connection with the Agreement.
APS will have the right to obtain independent legal counsel
to obtain advice with respect to its services under the
Agreement. The Company will reimburse APS for the
reasonable fees and expenses of such independent legal
counsel, following approval by the Bankruptcy Court.
APS acknowledges that, during the pendency of any
Bankruptcy Court approved retention, the indemnification
provisions and Liability Cap set forth above may be subject
to modification as stated within the Bankruptcy Court’s
retention order.
Due to the ordinary course and unavoidable reconciliation
of fees and submission of expenses immediately prior to,
and subsequent to, the date of filing, APS may have
incurred but not billed fees and reimbursable expenses
which relate to the prepetition period. APS will seek
Bankruptcy Court approval to apply the retainer to these
amounts.
If APS finds it desirable to augment its consulting staff with
independent contractors (an “I/C”) in this case, (i) APS will
file, and require the I/C to file, 2014 affidavits indicating
that the I/C has reviewed the list of the interested parties
in this case, disclosing the I/C’s relationships, if any, with
the interested parties and indicating that the I/C is
disinterested; (ii) the I/C must remain disinterested during
the time that APS is involved in providing services on
behalf of the Company; and (iii) the I/C must represent
that he/she will not work for the Company or other parties
in interest in this case during the time APS is involved in
providing services to the Company. APS’s standard
practice is to charge for an I/C’s services at the rate equal
to the compensation provided by APS to such I/C.
Case
Management
Platform.
APS
may,
where
applicable, grant the Company usage of APS’s proprietary
suite of digital tools to enable Bankruptcy Court reporting
(the “Case Management Platform”). APS will grant the
Company access and use of the Case Management
Platform to pre-approved authorized users at the Company
(as agreed to by the Parties). The Company understands
the Case Management Platform is APS Intellectual Property
as that term is defined in the Intellectual Property Section
of the Terms. The Company shall not acquire any other
interest in the Case Management Platform other than the
limited non-transferable ability to access and use the Case
Management Platform. When APS is providing the
Company access to the Case Management Platform, the
usage charges below will apply in addition to the Fees set
forth on Schedule 1.
Number of Authorized Users
Monthly Fee
1-25
USD 20,000
26-50
USD 35,000
51-75
USD 45,000
76-100
USD 50,000
Over 100
USD 65,000
The Case Management Platform usage fee will be invoiced
in accordance with the Billing, Payments, and Taxes
Section of the Terms.
Any custom modification or enhancement requests from
the Company regarding the Case Management Platform
may be performed at an additional cost to the Company
(as agreed by the Parties). Any such modifications or
enhancements will be billed at APS’s standard hourly rates.
Section 14. Data Protection
To the extent applicable, the Company and APS shall
comply with the terms of the APS Data Protection
Addendum
(located
at:
https://www.alixpartners.com/data-protection-
addendum/), which form part of the Agreement. The Data
Protection Schedule of the Agreement shall apply to the
Data Protection Addendum.
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