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Advisory Svcs. Agreement 6/26/98 Dmac/mdc Mgt.

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Exhibit 10.10


ADVISORY SERVICES AGREEMENT


THIS ADVISORY SERVICES AGREEMENT (this "Agreement") is entered into as of June 26, 1998, by and between DMAC ACQUISITION CORP., a Delaware corporation (the "Company") and MDC MANAGEMENT COMPANY IV, LLC, a California limited liability company ("MDC").


A. Contemporaneously with the execution of this Agreement, certain affiliates of MDC will acquire general control of the Company.


B. Execution and delivery of this agreement is a condition precedent to consummation of the foregoing described transactions.


NOW, THEREFORE, in consideration of the mutual promises of the parties hereinafter set forth, MDC and the Company hereto agree as follows:


1. Retention as Advisor. Subject to each of the terms, conditions and provisions of this Agreement, the Company hereby retains MDC to perform, and MDC hereby agrees to perform, those financial, advisory and managerial functions set forth in Section 4 of this Agreement.


2. Term.


2.1. Subject to the provisions for termination set forth herein, this Agreement shall be effective as of the date hereof and expire on the fifth anniversary of the date hereof; provided, however, that this Agreement shall be renewable automatically annually for one-year terms unless MDC receives notice of the termination prior to the renewal date.


2.2. The Company, by written notice to MDC, authorized by a majority of the directors other than those who are representatives of MDC, may terminate this Agreement for justifiable cause, which shall mean any of the following events: (i) material breach by MDC of any of its obligations hereunder; (ii) misappropriation by MDC of funds or property of the Company or other willful breach in the course of the consultantcy; or (iii) gross neglect by MDC in the fulfillment of its obligations hereunder.


2.3. MDC, by thirty (30) days prior written notice to the Company, may terminate this Agreement at any time.


3. Change of Control Payment. Notwithstanding any other provision herein, upon the occurrence of a Change of Control (as such term is hereinafter defined), this Agreement shall terminate and all amounts, which but for such termination would otherwise have become due and payable to MDC during the remaining term of this Agreement (in the case of the annual fee under Section 4.2, based upon the annual fee than in existence) shall become due and


payable by the Company on the effective date of such termination. For purposes of this Section, a "Change of Control" shall be defined as (i) a stock sale, merger, consolidation, combination, reorganization or other transaction resulting in more than fifty percent (50%) of the combined voting power of the surviving or resulting entity being owned, directly or indirectly by persons other than the stockholders of the Company immediately prior to any such transaction (other than in connection with a public offering of common stock of the Company pursuant to a registration statement declared effective under the Securities Act), or (ii) the liquidation or dissolution of the Company or the sale or other disposition of all or substantially all of the assets or business of the Company


4. Compensation.


4.1. For services rendered in connection with the acquisition of the Company, the Company shall pay to MDC a transaction fee equal to $9,900,000, payable upon the execution and delivery of this Agreement.


4.2. As compensation to MDC for its management and advisory services to the Company under this Agreement, the Company agrees to pay to MDC an annual fee equal to the greater of (i) $550,000 per annum and (ii) 1.06% of the pro forma EBITDA of the Company for the immediately preceding fiscal year (such EBITDA to be calculated without any deduction in respect of the annual fee payable to MDC in respect of such fiscal year); it being understood that prior to the fiscal year commencing January 1, 1999 the annual fee payable to MDC pursuant to this Agreement shall be $550,000 multiplied by a fraction, the numerator of which shall be the number of days in the period beginning on the date hereof and ending on and including December 31, 1998, and the denominator of which shall be 360. From and after January 1, 1999, such fee shall be recalculated at the beginning of each fiscal year of the Company in accordance with the immediately preceding sentence; provided that in no event shall the annual fee exceed $1,000,000 in any year. Such fee shall be payable in advance (a) on the date hereof for the period from the date hereof through September 30, 1998, and (b) thereafter in quarterly installments, on or before the first day of January, April, July and October, which payment shall be prorated for the actual number of days in such fiscal quarter that this Agreement is in effect.


4.3. From time to time, the Company may request MDC to provide significant additional services, such as in connection with a major acquisition, debt restructuring or an initial public offering. MDC will be entitled to receive additional compensation for such services. The Company and MDC agree to negotiate in good faith concerning the scope and compensation for such additional services, based upon compensation customarily received by independent investment banking firms for providing similar assistance. Any agreement regarding additional compensation shall be in writing and signed by MDC and the Company.


4.4. The Company agrees to pay actual and direct out-of-pocket expenses (including, but not limited to, reasonable fees and disbursements of attorneys, accountants and other professionals and consultants retained by MDC in connection with the services provided hereunder) incurred by MDC and its personnel in performing services hereunder to the Company and its subsidiaries which shall be reimbursed to it by the Company upon MDC's rendering of an


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invoice statement therefor together with such supporting data as the Company rea
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