Amended & Restated Consulting Agreement

EXHIBIT 10.5


AMENDED AND RESTATED CONSULTING AGREEMENT
-----------------------------------------


This AMENDED AND RESTATED CONSULTING AGREEMENT, dated as of January 1, 2001 (the "Agreement"), by and among Acterna Corporation (formerly named Dynatech
--------- Corporation), a Delaware corporation (formerly incorporated in Massachusetts) (the "Company"), Acterna, LLC (formerly named Telecommunications Techniques
------- Company, LLC), a Delaware limited liability company ("Acterna", and together
------- with the Company and its subsidiaries the "Company Group") and Clayton, Dubilier
------------- & Rice, Inc., a Delaware corporation ("CD&R").
----


W I T N E S S E T H:
- - - - - - - - - -


WHEREAS, the parties hereto entered into an Indemnification Agreement, dated May 21, 1998 (the "Indemnification Agreement"), by and among the Company,
------------------------- Acterna, CD&R and Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership (capitalized terms used herein without definition having the meanings ascribed in the Indemnification Agreement);


WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of December 20, 1997 (the "Merger Agreement"), by and between the Company and CDRD Merger
---------------- Corporation, a Delaware corporation ("MergerCo") formed by the CD&R Fund,
-------- MergerCo has merged with and into the Company (the "Merger") effective May 21,
------ 1995;


WHEREAS, CD&R has performed financial, management advisory and other services for the Company, including but not limited to assistance in connection with (i) the preparation, negotiation, execution and delivery of the Merger
- Agreement, (ii) the preparation, filing and circulation of the S-4, the 13E-3
-- and related materials to the stockholders of the Company in connection with the Merger, (iii) the retention of legal, accounting, environmental, insurance,
--- investment banking, financial and other advisors and consultants in connection with the Merger, (iv) the preparation, negotiation, execution and delivery of
-- the commitment, fee and engagement letters, registration rights and purchase agreements, credit agreements, indentures and indenture supplements, guarantees, mortgages, pledge agreements and other security agreements, subscription, registration rights agreements, management equity agreements, exchange agent agreements, and other agreements, instruments and documents, relating to the Senior Secured Financing, Note Offering, or otherwise relating to the Financing or the other Transactions, (v) the preparation and circulation of information
- and offering memoranda and other materials in connection with the Senior Secured Financing and the Note Offering and (vi) the structuring, implementation and
-- consummation of the Merger (such services collectively, the "Merger Services");
---------------


WHEREAS, the parties hereto entered into a Consulting Agreement, dated as of May 21, 1998 (the "Original Agreement"), pursuant to which the Company and
------------------ Acterna receive financial and managerial advisory services from CD&R;


WHEREAS, in accordance with a determination of the Boards of Directors of Acterna and the Company at meetings of the Boards held on February 1, 2001, the parties to the Original Agreement wish to amend certain provisions of the Original Agreement relating to, among other things the services to be provided by CD&R to the Company Group and the compensation to be paid by the Company Group to CD&R and, in connection therewith, to amend and restate the Original Agreement in its entirety;


NOW, THEREFORE, in consideration of the premises and the respective agreements hereinafter set forth and the mutual benefits to be derived herefrom, the parties hereto hereby agree as follows:


1. Engagement. The Company hereby engages CD&R as a consultant, and CD&R
---------- hereby agrees to provide financial and managerial advisory services to the Company Group, all on the terms and subject to the conditions set forth below.


2. Services, etc. (a) CD&R hereby agrees during the term of this
------------- Agreement to assist, advise and consult with the respective Boards of Directors and management of the members of the Company Group in such manner and on such business, management and financial matters, and provide such other financial and managerial advisory services (collectively, the "Continuing Services"), as may
------------------- be reasonably requested from time to time by the Board of Directors of the Company, including but not limited to assistance in:


(i) establishing and maintaining banking, legal and other business
relationships for the Company Group;


(ii) developing and implementing corporate and business strategy and
planning for the Company Group, including plans and programs for
improving operating, marketing and financial performance and
budgeting of future corporate investments;


(iii) arranging future debt and equity financings and refinancings; and


(iv) providing professional employees to serve as directors of the
members of the Company Group.


(b) CD&R hereby agrees during the term of this engagement to provide each member of the Company Group financial advisory, investment banking and other similar services (the "Transaction Services") with respect to any proposal for
-------------------- an acquisition, merger, recapitalization or any other similar transaction directly or indirectly involving such member of the Company Group and any other person or entity (collectively, "Add-on Transactions").
-------------------


(c) Each of Acterna and the Company will furnish CD&R with such information as CD&R believes appropriate to its engagement hereunder (all such information so furnished being referred to herein as the "Information"). Acterna
----------- and the Company recognizes and confirms that (i) CD&R will use and rely
- primarily on the Information and on information available from generally recognized public sources in performing the


2


services to be performed hereunder and (ii) CD&R does not assume responsibility
-- for the accuracy or completeness of the Information and such other information.


(d) As used in this Agreement, "affiliate" means, with respect to any person or entity, any other person or entity directly or indirectly controlling, controlled by or under common control with such first person or entity and "control' means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a person or entity by reason of ownership of voting securities, by contract or otherwise.


3. Compensation; Payment of Expenses. (a) Concurrently with the
--------------------------------- execution of the Original Agreement, the Company and Acterna paid CD&R as compensation for the Merger Services, a fee of $9,200,000.


(b) The Company and Acterna jointly and severally agree to pay to CD&R, as compensation for the Continuing Services rendered and to be rendered by CD&R hereunder, a fee of $1,000,000 per year (the "Continuing Services Fee"), one
----------------------- quarter of which shall be payable quarterly in advance on the first day of each of January, April, July and October commencing on January 1, 2001. Any Continuing Services Fees due for the quarterly period commencing January 1, 2001 that has not been paid shall be payable on the date hereof. Such Continuing Services Fee may be increased with the approval of a majority of the members of the Company's Board of Directors who are not employees of any member of the Company Group, CD&R or any affiliate of CD&R (the "Disinterested Directors"),
----------------------- but may not be decreased without the prior written consent of CD&R. If any employee of CD&R shall be elected to serve on the Board of Directors of any member of the Company Group (a "Designated Director"), in consideration of the
------------------- Continuing Services Fee being paid to CD&R, CD&R shall cause such Designated Director to waive any and all compensation, including without limitation, fees, stock options, equity participation and other incentives, to which such director would otherwise be entitled as a director for any period for which the Continuing Services Fee or any installment thereof is paid and for which such Designated Director continues to be employed by CD&R.


(c) If an employee of CD&R is appointed to an executive management position (or a position of comparable responsibility), whether in ...