Document:

Exhibit 10.3

                        PROPERTIES SERVICE AGREEMENT

         THIS PROPERTIES SERVICES AGREEMENT (this "Agreement") is made and
entered into as of this 14th day of December, 2001, by and between JI
Properties, Inc., a Delaware corporation ("JI Properties"), and each of the
other parties a signatory hereto (hereinafter collectively referred to as
the "Company").

         WHEREAS, the Company wishes to obtain the use of certain real
estate, asset and transportation assets owned or leased by JI Properties
and to obtain related services of JI Properties' personnel or personnel to
which JI Properties has access; and

         WHEREAS, JI Properties desires to provide or cause to be provided
those assets and services requested by the Company under such terms and
conditions.

         NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
agree as follows:

         Section 1.  Assets and Services.

              1.1.  Assets.  JI Properties hereby grants to the Company the
rights to use the Assets set forth on Exhibit A.

              1.2. Services to be Rendered. JI Properties shall make
available the services of its personnel or personnel to which it has access
to provide such services in connection with the use of the Assets as are
necessary for the use and/or operation of such Assets (the "Services").

              1.3. Charges. The charges to the Company for the use of
Assets and Services shall consist of an amount equal to the sum of (i) the
costs actually incurred in the use and/or operation of the Assets used or
operated by the Company (including the costs of the related Services as
determined by JI Properties) and (ii) a portion of the costs associated
with owning such assets which are not directly attributable to the
operation or use of such assets equal in amount to such costs multiplied by
a fraction, the numerator of which is equal to the Company's net revenues
and the denominator of which is the sum of the net revenues of all entities
which have entered into agreements with JI Properties similar to this
Agreement.

              1.4. Performance of Services. JI Properties covenants that
it will perform or cause to be performed the Services in a timely,
efficient and workmanlike manner and in substantially the same manner in
which JI Properties (or its predecessor) is providing such services to the
Company currently. JI Properties further covenants that it will maintain or
contract for a sufficient staff of trained personnel to enable it to
perform the Services hereunder. JI Properties may retain third parties or
its affiliates to provide certain of the Services hereunder. Any
arrangements between JI Properties and its affiliates for the provision of
Services hereunder shall be commercially reasonable and on terms not less
favorable than those which could be obtained from unaffiliated third
parties.

<PAGE>

              1.5. Payment for Facilities and Services. JI Properties shall
bill the Company, at the end of each calendar month for the applicable
charges, or on such other periodic basis a determined by JI Properties.
Such amount shall be payable by the Company in full within 30 days of
receipt thereof by the Company.

              1.6. Reimbursement. The Company shall reimburse JI Properties
for all reasonable third party out-of-pocket expenses it incurs on behalf
of the Company not billed directly to the Company within 30 days of receipt
of the invoice therefor, if not included in the charges pursuant to Section
1.3.

           Section 2. Term. The term of this Agreement shall commence the
date hereof and continue until December 31, 2011, unless extended, or
sooner terminated, as provided below. This Agreement shall be automatically
renewed for successive one-year terms starting December 31, 2011 unless
either party hereto, within sixty (60) days prior to the scheduled renewal
date, notifies the other party as to its election to terminate this
Agreement. Notwithstanding the foregoing, this Agreement may be terminated
by not less than ninety (90) days' prior written notice from the Company to
JI Properties at any time after (a) substantially all of the stock or
substantially all of the assets of the Company or all of its subsidiaries
are sold to an entity unaffiliated with JI Properties and/or a majority of
the Company stockholders immediately prior to the sale or (b) the Company
is merged or consolidated into another entity unaffiliated with JI
Properties and/or a majority of the Company's stockholders immediately
prior to such merger and the Company is not the survivor of such
transaction. Subject to the foregoing, the Agreement will not be terminated
as a result of any subsidiary of the Company ceasing to be a subsidiary of
the Company for financial reporting or other purposes.

           Section 3. Audit of Services. At any time during regular
business hours and as often as reasonably requested by the Company's
officers, JI Properties shall permit the Company or its authorized
representatives to examine and make copies and abstracts from the records
and books of JI Properties for the purpose of auditing the performance of,
and the charges of, JI Properties under the terms of this Agreement;
provided, that all costs and expenses of such inspection shall be borne by
the Company.

           Section 4. Prevention of Performance. JI Properties shall not be
determined to be in violation of this Agreement if it is prevented from
performing any Services hereunder for any reason beyond its reasonable
control, including without limitation, acts of God, nature, or of public
enemy, strikes, or limitations of law, regulations or rules of the Federal
or of any state or local government or of any agency thereof.

           Section 5. Indemnification.

               5.1. By the Company. The Company shall indemnify, defend and
hold JI Properties, and its directors, officers, and employees harmless
from and against all damages, losses and reasonable out-of-pocket expenses
(including fees) incurred by them in the course of performing the duties on
behalf of the Company and its subsidiaries as prescribed hereby.

                                    2

<PAGE>

               5.2. Remedy. JI Properties does not assume any
responsibility under this Agreement other than to render the services
called for under this Agreement in good faith and in a manner reasonably
believed to be in the best interests of the Company. The Company's sole
remedy on account of the failure of JI Properties to provide the Assets
render the Services as and when required hereunder shall be to procure such
assets or services elsewhere.

           Section 6. Additional Subsidiaries. If at any time after the
date which this Agreement is executed, the Company acquires to creates one
or more subsidiary corporation (a "Subsequent Subsidiary"), the Company
shall cause such Subsequent Subsidiary to be subject to this Agreement and
all references herein to the Company's "direct and indirect subsidiaries"
shall be interpreted to include all Subsequent Subsidiaries.

           Section 7. Payments Not Subject to Set-Off. Any payments paid by
the Company under this Agreement shall not be subject to set-off and shall
be increased by the amount, if any, of any taxes (other than income taxes)
or other governmental charges levied in respect of such payments, so that
JI Properties is made whole for such taxes or charges.

           Section 8.        Notices.

               8.1. Manner of Delivery. Each notice, demand, request,
consent, report, approval or communication (each a "Notice") which is or
may be required to be given by either party to the other party in
connection with this Agreement and the transactions contemplated hereby,
shall be in writing, and given by telecopy, personal delivery, receipted
delivery service, or by certified mail, return receipt requested, prepaid
and properly addressed to the party to be served.

               8.2. Addresses.  Notices shall be addressed as follows:

                           If to the Company:

                                    _________________________________
                                    ArborLake Centre
                                    1751 Lake Cook Road, Suite 550
                                    Deerfield, Illinois 60015
                                    Attention:  Gordon L. Nelson, Jr.

                           If to JI Properties:

                                    JI Properties, Inc.
                                    ArborLake Centre
                                    1751 Lake Cook Road, Suite 550
                                    Deerfield, Illinois 60015
                                    Attention:  Gordon L. Nelson, Jr.

               8.3. Effective Date. Notices shall be effective on the date
sent via telecopy, the date delivered personally or by receipted delivery
service, or three (3) days after the date mailed.

               8.4. Change of Address. Each party may designate by notice
to the others in writing, given in the foregoing manner, a new address to
which any notice may thereafter be so given, served or sent.

                                  3
<PAGE>

           Section 9. Independent Contractor. JI Properties and its
personnel shall, for purposes of this Agreement, be independent contractors
with respect to the Company.

           Section 10. Entire Agreement. This Agreement sets forth the
entire understanding of the Company and JI Properties, and supersedes all
prior agreements, arrangements and communications, whether oral or written,
with respect to the subject matter hereof. No supplement, modification,
termination in whole or in part, or waiver of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. No
waiver by either party of any breach of any provision of this Agreement
shall be deemed a continuing waiver or a waiver of any preceding or
succeeding breach of such provision or of any other provision herein
contained.

           Section 11. Assignability; Binding Effect. This Agreement may be
assigned by either party hereto without the consent of the other party,
provided, however, such assignment shall not relieve such party from its
obligations hereunder. Any assignment of this Agreement shall be binding
upon and inure to the benefit of the parties and their respective
successors and assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, each of their respective
successors and permitted assigns, and no other persons shall have or derive
any right, benefit or obligation hereunder.

           Section 12. Headings. The headings and titles of the various
paragraphs of this Agreement are inserted merely for the purpose of
convenience, and do not expressly or by implication limit, define, extend
or affect the meaning or interpretation of this Agreement or the specific
terms or text of the paragraph so designated.

           Section 13. Governing Law. This Agreement shall be governed by
the internal laws (and not the law of conflicts) of the State of Delaware.

           Section 14. Severability. In the event that any provision of
this Agreement shall be held to be void or uneforceable in whole or in
part, the remaining provisions of this Agreement and the remaining portion
of any provision held void or uneforceable in part shall continue in full
force and effect.

           Section 15. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which taken together shall be considered one and the same instrument.

                          (SIGNATURE PAGE FOLLOWS)

                                       4

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.

                          JI PROPERTIES, INC.

                          By:
                             ----------------------------------------------
                          Name:  Gordon L. Nelson, Jr.
                          Title: Senior Vice President

                          MOTORS AND GEARS HOLDINGS, INC.
                          KINETEK, INC.
                          KINETEK INDUSTRIES, INC.
                          FIR GROUP HOLDINGS, INC.
                          FIR GROUP HOLDINGS ITALIA, S.R.L. (ITALIAN LLC)
                          CONSTRUGIONI ITALIANE MOTORI ELETTRICI, S.P.A.
                          (ITALIAN CORPORATION)
                          SELINSISTEMI, S.P.A. (ITALIAN CORPORATION)
                          FIR ELECTROMECCANICA, S.P.A. (ITALIAN CORPORATION)
                          T.E.A. TECHNOLOGIE ELECTROMECCANICHE ED AUTOMAZIONE,
                          S.R.L. (ITALIAN LLC)
                          MOTION HOLDINGS, INC.
                          MOTION CONTROL ENGINEERING, INC.
                          MERKLE-KORFF INDUSTRIES, INC.
                          MERKLE-KORFF DE MEXICO S.A. DE C.V
                          THE IMPERIAL ELECTRIC COMPANY
                          GEAR RESEARCH, INC.
                          ADVANCED D.C. HOLDINGS, INC.
                          ADVANCED D.C. MOTORS, INC.
                          SERMED S.A.R.L.
                          ADVANCED D.C. MOTORS GMBH
                          ELECTRIC VEHICLE COMPONENTS LTD.
                          ELECTRICAL DESIGN AND CONTROL COMPANY

                          By:
                              --------------------------------------------
                          Name:   Gordon L. Nelson, Jr.
                          Title:  Vice PresidentExhibit 10.4

                         TRANSACTION ADVISORY AGREEMENT

     THIS TRANSACTION ADVISORY AGREEMENT ("Agreement"), is executed as of the
14th day of December, 2001 by and among Jordan Industries, Inc., an Illinois
corporation (the "Consultant") and each of the other parties a signatory hereto
(hereinafter collectively referred to as the "Company").

                                   WITNESSETH
                                   ----------

     WHEREAS, the Consultant has and/or has access to personnel who are
highly skilled in the field of rendering advice, financial and otherwise, to the
Company;

     WHEREAS, the Board of Directors of the Company has been made fully aware of
the relationships of certain members of the Company's Board of Directors to the
Consultant;

     WHEREAS, the Company's Board of Directors has reviewed in detail and
discussed the terms and provisions of this Agreement and the fairness of this
Agreement and whether more favorable agreements for the Company could be
obtained from unaffiliated third parties; and

     WHEREAS, on the basis of its review of this Agreement, the Board of
Directors of the Company deemed it advisable and in the best interests of the
Company and necessary to the conduct, promotion, and attainment of the business
objectives of the Company that the Company retain Consultant to provide business
and financial advice to the Company.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein set forth, the parties hereto do hereby agree as follows:

     1.  The Company hereby retains the Consultant, through the Consultant's own
personnel or through personnel available to the Consultant, to render consulting
services from time to time to the Company and its direct and indirect
subsidiaries, (whether now existing or hereafter acquired) in connection with
their acquisitions, divestitures and investments, their financial and business
affairs, their relationships with their lenders, stockholders and other
third-party associates or affiliates, and the expansion of their businesses.
Consultant shall render such services to the Company and/or its direct and
indirect subsidiaries in good faith and in accordance with professional
standards and applicable law. The term of this Agreement shall commence the date
hereof and continue until December 31, 2011, unless extended, or sooner
terminated, as provided in Section 5 below. The Consultant's personnel shall be
reasonably available to the Company's managers, auditors and other personnel for
consultation and advice pursuant to this Agreement, subject to Consultant's
reasonable convenience and scheduling. Services may be rendered at the
Consultant's offices or at such other locations selected by the Consultant as
the Company and the Consultant shall from time to time agree.

     2. Subject to Section 4 hereof, the Company shall pay to the Consultant, in
the aggregate, (i) an investment banking and sponsorship fee of up to two
percent (2%) of the aggregate consideration paid (including non-competition,
earnout, contingent purchase price, incentive arrangements and similar payments)
(A) by the Company and/or its direct and indirect subsidiaries in connection
with the acquisition by the Company and/or its direct and indirect subsidiaries
of all or substantially all of the outstanding capital stock, warrants, options
or other rights to acquire or sell capital stock, or all or substantially all of
the business or assets of another individual, corporation, partnership or other
business entity, (B) by the Company and/or its direct and indirect subsidiaries
in connection with any joint venture or other minority investment, or (C) to the
Company in connection with the sale by the Company of all or substantially all
of the Company's and/or its direct and indirect subsidiaries outstanding capital
stock, warrants, options, or other rights to acquire or sell stock, or all or
substantially all of the business or assets of the Company and/or its direct and
indirect subsidiaries (each of the transactions described in clauses (A), (B)
and (C), a "Transaction"), including, but not limited to, any Transaction
negotiated for the Company involving any affiliate of the Company or the
Consultant, including, but not limited to, any Transaction involving the
Consultant, JII, Inc., Jordan Industries, Inc., JII Partners Limited

<PAGE>

Partnership, The Jordan Company, TJC Management Corp., JZ Equity Partners, PLC,
Jordan/Zalaznick Capital Company, Leucadia National Corporation or any
affiliates of any of the foregoing (collectively, the "Jordan Affiliates"); and
(ii) a financial consulting fee of up to one percent (1%) of the amount obtained
or made available pursuant to any debt, equity or other financing (including
without limitation, any refinancing) by the Company and/or its direct and
indirect subsidiaries with the assistance of Consultant, including, but not
limited to, any financing obtained for the Company and/or its subsidiaries from
one or more of the Jordan Affiliates. However, the amount of such fees payable
in each such Transaction will be no less favorable to the Company than those
that could be obtained from comparable, unaffiliated third parties, and will be
subject to separate discussion and approval, in connection with each such
Transaction, by each of a majority of the Board of Directors and a majority of
the directors who are disinterested directors in relation to Consultant and its
affiliates. Notwithstanding and in addition to the foregoing, if the Consultant
renders services to the Company outside the ordinary course of business, the
Company shall pay an additional amount equal to the value of such extraordinary
services rendered by the Consultant as may be separately agreed to between the
Consultant and the Company.

     3.  The Company shall promptly reimburse Consultant for out-of-pocket
expenses (including, without limitation, an allocable amount of the Consultant's
overhead expenses, attributable to the Company and its direct and indirect
subsidiaries, determined on actual usage, percentage or revenue or such other
basis as Consultant may determine), incurred by the Consultant and its personnel
in performing services hereunder to the Company and its direct and indirect
subsidiaries upon the Consultant rendering a statement therefor, together with
supporting data as the Company shall reasonably require.

     4.  Notwithstanding the foregoing, the Company shall not be required to pay
the fees under Section 2, (a) if and to the extent expressly prohibited by the
provisions of any credit, stock, financing or other agreements or instruments
binding upon the Company, its subsidiaries or properties, (b) if the Company has
not paid cash interest on any interest payment date or has postponed or not made
any principal payments with respect to any of their indebtedness on any
scheduled payment dates, or (c) if the Company has not paid cash dividends on
any dividend payment date as set forth in its certificate of incorporation or as
declared by its Board of Directors, or has postponed or not made any redemptions
on any redemption date as set forth in its certificate of incorporation or any
certificate of designation with respect to its preferred stock, if any. Any
payments otherwise owed hereunder, which are not made for any of the
above-mentioned reasons, shall not be canceled but rather accrue, and shall be
payable by the Company promptly when, and to the extent, that the Company is no
longer prohibited from making such payments and when the Company has become
current with respect to such principal or interest payments, has become current
with respect to such dividends and has made such redemptions with respect to
such preferred stock, if any. Any payment required hereunder which is not paid
when due shall bear interest at the rate of ten percent (10%) per annum. This
Section 4 will not, in any event, restrict or limit the Company's obligations
under Sections 3, 8 and 9, which will be absolute and not subject to set-off.

     5.  This Agreement shall be automatically renewed for successive one-year
terms starting December 31, 2011 unless either party hereto, within sixty (60)
days prior to the scheduled renewal date, notifies the other party as to its
election to terminate this Agreement. Notwithstanding the foregoing, this
Agreement may be terminated by not less than ninety (90) days' prior written
notice from the Company to the Consultant at any time after (a) substantially
all of the stock or substantially all of the assets of the Company or all of its
subsidiaries are sold to an entity unaffiliated with the Consultant and/or a
majority of the Company stockholders immediately prior to the sale or (b) the
Company is merged or consolidated into another entity unaffiliated with the
Consultant and/or a majority of the Company's stockholders immediately prior to
such merger and the Company is not the survivor of such transaction. Subject to
the foregoing, this Agreement will not be terminated as a result of any
subsidiary of the Company ceasing to be a subsidiary of the Company for
financial reporting or other purposes.

     6.  The Consultant shall have no liability to the Company on account of (i)
any advice which it renders to the Company or any of its direct or indirect
subsidiaries, provided the Consultant believed in good faith that such advice
was useful or beneficial to the Company or any of its direct or indirect
subsidiaries at the time it was rendered, or (ii) the Consultant's inability to
obtain financing or achieve other results desired by the Company (or any of its
direct or indirect subsidiaries) or Consultant's failure to render services to
the Company at any particular time or from time to time, or (iii) the failure of
any Transaction to meet the financial, operating, or other expectations of the
Company or any of its direct or indirect subsidiaries. The Company's and any of
its direct or indirect subsidiaries' sole remedy for any claim under this
Agreement shall be termination of this Agreement.

<PAGE>

     7.  Notwithstanding anything contained in this Agreement to the contrary,
the Company agrees and acknowledges for itself and on behalf of its direct and
indirect subsidiaries that the Consultant, the Jordan Affiliates and their
respective shareholders, partners, employees, directors and agents intend to
engage and participate in acquisitions and business transactions outside of the
scope of the relationship created by this Agreement and neither the Consultant,
any of the Jordan Affiliates nor any of their respective shareholders, partners,
employees, directors or agents shall be under any obligation whatsoever to make
such acquisitions or business transactions through the Company or any of its
direct or indirect subsidiaries or offer such acquisitions or business
transactions to the Company or any of its direct or indirect subsidiaries.

     8.  The Company will, and will cause each of its direct and indirect
subsidiaries to, indemnify and hold harmless to the fullest extent permitted by
applicable law, the Consultant, its affiliates and associates, each of the
Jordan Affiliates, and each of the respective owners, partners, officers,
directors, employees and agents of each of the foregoing, from and against any
loss, liability, damage, claim or expenses (including the fees and expenses of
counsel) arising as a result or in connection with this Agreement, the
Consultant's services hereunder or other activities on behalf of the Company and
its direct and indirect subsidiaries.

     9.  Any payments paid by the Company under this Agreement shall not be
subject to set-off and shall be increased by the amount, if any, of any taxes
(other than income taxes) or other governmental charges levied in respect of
such payments, so that the Consultant is made whole for such taxes or charges.

     10 (a)   This Agreement sets forth the entire understanding of the parties
with respect to the Consultant's rendering of transaction or financial services
to the Company. This Agreement may not be modified, waived, terminated or
amended except expressly by an instrument in writing signed by the Consultant
and the Company.

        (b)   This Agreement may be assigned by Consultant to any of its
subsidiaries or affiliates without the consent of the Company, provided,
however, such assignment shall not relieve such party from its obligations
hereunder. Any assignment of this Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.

        (c)   In the event that any provision of this Agreement shall be held
to be void or unenforceable in whole or in part, the remaining provisions of
this Agreement and the remaining portion of any provision held void or
unenforceable in part shall continue in full force and effect.

        (d)   Except as otherwise specifically provided herein, notice given
hereunder shall be deemed sufficient if delivered personally or sent by
registered or certified mail to the address of the party for whom intended at
the principal executive offices of such party, or at such other address as such
party may hereinafter specify by written notice to the other party.

        (e)   If at any time after the date upon which this Agreement is
executed, the Company acquires or creates one or more subsidiary corporations
(a "Subsequent Subsidiary"), the Company shall cause such Subsequent Subsidiary
to be subject to this Agreement and all references herein to the Company's
"direct and indirect subsidiaries" shall be interpreted to include all
Subsequent Subsidiaries.

        (f)   Each direct and indirect subsidiary of the Company shall be
jointly and severally liable and obligated hereunder with respect to each
obligation, responsibility and liability of the Company, as if a direct
obligation of such subsidiary. The Company will cause each direct and indirect
subsidiary of the Company to honor each obligation, responsibility and
liability of each subsidiary hereunder.

        (g)   No waiver by either party of any breach of any provision of this
Agreement shall be deemed a continuing waiver or a waiver of any preceding or
succeeding breach of such provision or of any other provision herein contained.

        (h)   The Consultant and its personnel shall, for purposes of this
Agreement, be independent contractors with respect to the Company,

        (i)   This Agreement shall be governed by the internal laws (and not
the law of conflicts) of the State of Delaware.

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                             JORDAN INDUSTRIES, INC.

                             By: /s/ Gordon L. Nelson, Jr.
                                 -----------------------------------------------
                             Name:    Gordon L. Nelson, Jr.
                             Title:   Senior Vice President

                             MOTORS AND GEARS HOLDINGS, INC.
                                            KINETEK, INC.
                             KINETEK INDUSTRIES, INC.
                             FIR Group Holdings, Inc.
                             FIR Group Holdings Italia, S.r.l. (Italian LLC)
                             Construgioni Italiane Motori Elettrici, S.p.A.
                             (Italian Corporation)
                             SelinSistemi, S.p.A. (Italian Corporation)
                             FIR Electromeccanica, S.p.A. (Italian Corporation)
                             T.E.A. Technologie Electromeccaniche ed
                             Automazione, S.r.l. (Italian
                             LLC)
                             Motion Holdings, Inc.
                             Motion Control Engineering, Inc.
                             Merkle-Korff Industries, Inc.
                             Merkle-Korff de Mexico S.A. de C.V
                             The Imperial Electric Company
                             Gear Research, Inc.
                             Advanced D.C. Holdings, Inc.
                             Advanced D.C. Motors, Inc.
                             Sermed S.A.R.L.
                             Advanced D.C. Motors GmbH
                             Electric Vehicle Components Ltd.
                             Electrical Design and Control Company

                             By:  /s/ Gordon L. Nelson, Jr.
                                  ----------------------------------------------
                             Name:    Gordon L. Nelson, Jr.
                             Title:   Vice President

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