Exhibit 10.2
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "AGREEMENT"), dated as of May 18, 2004 is
made by and among CHS Management IV LP, a Delaware limited partnership ("CHS"),
GEO Holdings Corp., a Delaware corporation ("PARENT"), and Gundle/SLT
Environmental, Inc., a Delaware corporation (the "COMPANY").
WHEREAS, Parent and the Company desire to receive financial and management
consulting services from CHS, and thereby obtain the benefit of the experience
of CHS in business and financial management generally and its knowledge of
Parent and the Company and Parent and the Company's financial affairs in
particular. CHS is willing to provide financial and management consulting
services to Parent and the Company. Accordingly, the compensation arrangements
set forth in this Agreement are designed to compensate CHS for such services.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements hereinafter set forth and the mutual benefits to be
derived herefrom, CHS, Parent and the Company hereby agree as follows:
TERMS
1. ENGAGEMENT. Parent and the Company hereby engage CHS as a financial and
management consultant, and CHS hereby agrees to provide financial and
management consulting services to Parent and the Company, all on the terms
and subject to the conditions set forth below.
2. SERVICES OF CHS. CHS hereby agrees during the term of this engagement to
consult with the boards of directors and the management of Parent and the
Company in such manner and on such business and financial matters as may be
reasonably requested from time to time by the boards of directors and the
management of Parent and the Company, including but not limited to: (a)
business strategy; (b) budgeting of future business investments; (c)
acquisition and divestiture strategies; and (d) debt and equity financings.
3. COMPENSATION.
(a) MONTHLY FEE. The Company agrees to pay to CHS as compensation for
services to be rendered by CHS hereunder, a monthly fee equal to
$166,666.66, payable monthly in arrears on the last day of each month,
commencing with the month during which the closing of the Purchase (as
defined below) occurs, with the monthly payment for the month in which
the Purchase is closed being pro rated for the number of days between
the date of such closing and the end of such month. Such fee shall be
expressly subordinated to the principal, interest and premium, if any,
owing under the Company's 11% Senior Notes due 2012 (the "SENIOR
NOTES") and under the Credit Agreement (as such term is defined in the
Indenture (as defined below)) until all obligations under the Senior
Notes and the
Credit Agreement, including interest through the date of payment
(whether or not such interest is allowed in a bankruptcy case), have
been paid in full in cash; PROVIDED that, notwithstanding such
subordination, such fee shall be permitted to be paid at all times
other than during such time (a "RESTRICTED PERIOD") as either (i) a
Default or an Event of Default (each such term as defined in the
Indenture governing the Senior Notes (as such Indenture may be
amended, restated, supplemented, renewed, replaced or otherwise
modified from time to time, the "INDENTURE")) has occurred and is
continuing with respect to the Senior Notes (it being understood that
any such Default or Event of Default that results exclusively due to a
default under the Credit Agreement shall not give rise under this
clause (i) to the Restricted Period) or (ii) any Event of Default (as
defined in the Credit Agreement) specified in any of Sections 8.01(a),
8.01(b), 8.01(g) or 8.01(h) of the Credit Agreement has occurred and
is continuing; PROVIDED further that the fee shall continue to accrue
during any Restricted Period and all accrued and unpaid fees will be
paid upon the termination of the Restricted Period. In the event that
any amount of the fee specified in this paragraph is paid by the
Company to CHS during a Restricted Period, CHS agrees to turn over
such amount to the Collateral Agent under the Credit Agreement, to be
held as additional Collateral for the Obligations under the Credit
Agreement (all capitalized terms in this sentence not otherwise
defined in this Agreement shall have the meanings provided in the
Credit Agreement); PROVIDED that, pursuant to pursuant to Section
11.4(b) of that certain Security Agreement, dated as of May 18, 2004,
among the Company, the Guarantors party thereto and UBS AG, Stamford
Branch, as Collateral Agent, the Company shall (and shall cause its
subsidiaries and affiliates to) request the Collateral Agent to (and
take other actions reasonably requested by CHS to cause the Collateral
Agent to) return to CHS upon the end of the Restricted Period any
amount so turned over; PROVIDED FURTHER that any amount turned over to
the Collateral Agent and not returned to CHS upon the end of the
applicable Restricted Period pursuant to the preceding proviso shall
be deemed to have accrued and not been paid by the Company, and the
Company shall pay CHS such unreturned amounts within 2 days after
CHS's written request. Upon a termination of this Agreement in
accordance with SECTION 5 hereof which does not occur on the last day
of a month, a pro rated monthly fee shall be paid based upon the
number of days elapsed in the partial month prior to termination.
(b) PURCHASE. As compensation for services rendered by CHS to Parent in
connection with the identification and negotiation of the Plan and
Agreement of Merger, dated as of December 31, 2003, by and among
Parent, the Company and GEO Sub Corp. (the "Merger Agreement"), the
structuring of the transactions contemplated by the Merger Agreement
and the financing of such transactions (the "PURCHASE"), Holdings
agrees to pay $5,000,000.00 to CHS on the date hereof.
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(c) FUTURE PURCHASES. When and as Code Xxxxxxxx & Xxxxxxx IV LP or any of
its affiliates purchase equity securities of Parent, Parent will pay
to CHS a fee equal to 5.0% of the gross purchase price of such
securities as compensation for services rendered by CHS to Parent in
connection with the consummation of the transaction or other activity
giving rise to such purchase.
4. EXPENSE REIMBURSEMENT. Parent and the Company, as applicable, shall
promptly reimburse CHS for such reasonable travel expenses and other
out-of-pocket fees and expenses as may be incurred by CHS, its partners and
employees in connection with the Purchase and future acquisitions, and in
connection with the rendering of services hereunder.
5. TERM. This Agreement shall be in effect for an initial term of seven years
commencing on the date hereof, and shall be automatically renewed
thereafter on a year-to-year basis unless one party gives 30 days' prior
written notice of its desire to terminate this Agreement; provided,
however, that this Agreement shall terminate on a Sale of the Company (as
defined in the Stockholders Agreement, dated as of the date hereof, by and
among Parent, Code Xxxxxxxx & Xxxxxxx IV LP and Parent's other
stockholders). No termination of this Agreement, whether pursuant to this
paragraph or otherwise, shall affect Parent's or the Company's obligations
with respect to the fees, costs and expenses incurred by CHS in rendering
services hereunder and not reimbursed by Parent or the Company as of the
effective date of such termination.
6. INDEMNIFICATION. Parent and the Company agree, jointly and severally, to
indemnify and hold harmless CHS, its officers and employees against and
from any and all loss, liability, suits, claims, costs, damages and
expenses (including attorneys' fees) arising from their performance
hereunder, except as a result of their gross negligence or intentional
wrongdoing.
7. CHS AN INDEPENDENT CONTRACTOR. CHS, Parent and the Company agree that CHS
shall perform services hereunder as an independent contractor, retaining
control over and responsibility for its own operations and personnel.
Neither CHS nor its partners or employees shall be considered employees or
agents of Parent or the Company as a result of this Agreement nor shall any
of them have authority to contract in the name of or bind Parent or the
Company, except as expressly agreed to in writing by Parent or the Company,
respectively.
8. NOTICES. Any notice, report or payment required or permitted to be given or
made under this Agreement by one party to the other shall be deemed to have
been duly given or made if personally delivered or, if mailed, when mailed
by registered or certified mail, postage prepaid, to the other party at the
following addresses (or at such other address as shall be given in writing
by one party to the other):
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If to CHS:
CHS Management IV LP
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxx
with a copy to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx, P.C.
If to Parent or the Company:
Gundle/SLT Environmental, Inc.
00000 Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxxx
9. ENTIRE AGREEMENT; MODIFICATION. This Agreement (a) contains the complete
and entire understanding and agreement of CHS, Parent and the Company with
respect to the subject matter hereof; (b) supersedes all prior and
contemporaneous understandings, conditions and agreements, oral or written,
express or implied, respecting the engagement of CHS in connection with the
subject matter hereof; and, (c) subject to SECTION 13 below, may not be
modified except by an instrument in writing executed by CHS, Parent and the
Company.
10. WAIVER OF BREACH. The waiver by a party of a breach of any provision of
this Agreement by another party shall not operate or be construed as a
waiver of any subsequent breach of that provision or any other provision
hereof.
11. ASSIGNMENT. None of CHS, Parent or the Company may assign its rights or
obligations under this Agreement without the express written consent of
each other party.
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12. CHOICE OF LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision or rule (whether
of the State of Illinois or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Illinois.
13. THIRD PARTY BENEFICIARIES. Each of the Collateral Agent and the
Administrative Agent (as each such term is defined in the Credit Agreement)
and the Trustee (as such term is defined in the Indenture) shall be third
party beneficiaries of the second and third sentences in SECTION 3(a)
above. Any modification of such sentences shall require the consent of such
Collateral Agent, such Administrative Agent and such Trustee.
* * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Management
Agreement to be duly executed and delivered on the date and year first above
written.
CHS MANAGEMENT IV LP
By: Code Xxxxxxxx & Xxxxxxx LLC
Its: General Partner
By: /s/ XXXXXX X. XXXXXXXX
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Name: Xxxxxx X. Xxxxxxxx
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Its: Partner
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GEO HOLDINGS CORP.
By: /s/ XXXXXX X. XXXXXXXX
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Name: Xxxxxx X. Xxxxxxxx
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Its: President
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GUNDLE/SLT ENVIRONMENTAL, INC.
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
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Its: President and Chief
Executive Officer
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