AMENDMENT
to
MANAGEMENT AGREEMENT
This Amendment (this "Amendment") is made and entered into as of March 31,
2004, by and between ▇▇▇▇▇ ▇▇▇▇▇▇ INTERNATIONAL, INC. (F/K/A WINSLOEW FURNITURE,
INC.), a Florida corporation (the "Company"), and TRIVEST PARTNERS, L.P., a
Florida limited partnership or its successors ("Trivest").
Preliminary Statements:
A. On August 27, 1999, the Company entered into a Management Agreement, as
amended by two separate amendments, dated as of May 8, 2001 and March 19, 2003,
respectively (as may be amended or modified from time to time, the "Management
Agreement") with Trivest II, Inc., which assigned its rights and obligations
thereunder to Trivest pursuant to an Assignment and Assumption Agreement among
the Company, Trivest II, Inc. and Trivest effective as of January 1, 2000.
Capitalized terms used herein and not otherwise defined shall have the meaning
ascribed thereto in the Management Agreement.
B. The Company is the borrower under the Credit Agreement, dated May 8,
2001, executed by the Company, as borrower, the financial institutions listed
therein as Lenders (collectively, the "Terminating Senior Lenders"), CIBC Inc.,
as swing line lender, Canadian Imperial Bank of Commerce, acting through on or
more of its agencies, branches or affiliates as Administrative Agent (the
"Terminating Administrative Agent"), Antares Capital Corporation and ▇▇▇▇▇▇
Financial, Inc., each as Co-Syndication Agent, and General Electric Capital
Corporation, as Documentation Agent (as amended or modified from time to time,
the "Terminating Senior Credit Agreement").
C. On the date hereof, the Company will refinance the Terminating Senior
Credit Agreement and obtain the necessary funds to do so by entering into two
financing transactions: a $90,000,0000 revolving loan pursuant to that certain
Loan and Security Agreement (the "Revolving Credit Agreement"), dated as of the
date hereof, among the Company, WLFI Holdings, Inc., the subsidiaries of the
Company set forth therein, and GMAC Commercial Finance LLC, as agent for the
lenders (the "Revolving Credit Agent"); and a $135,000,000 term loan pursuant to
that certain Purchase and Security Agreement and Senior Secured Notes
(collectively, the "Tranche B Note Agreements"), dated as of the date hereof,
among the Company, WLFI Holdings, Inc. and the subsidiaries of the Company set
forth therein, and The Bank of New York (the "Tranche B Agent") for the benefit
of the "Tranche B Noteholders".
D. The Company and Trivest desire to amend the Management Agreement to do
the following: (i) provide for the payment of accrued and unpaid Base
Compensation in the amount of Five Hundred and Twenty-Five Thousand Dollars
($525,000); (ii) provide for the payment of an Additional Incentive Fee of Seven
Hundred and Fifty Thousand Dollars ($750,000); (iii) provide for a permanent
reduction in the Base Compensation; and (iv) provide for Trivest to earn
compensation based upon the Company's EBITDAM.
Agreement:
1. Accrued and Unpaid Base Compensation. Pursuant to the terms of that
certain Second Amendment to the Terminating Senior Credit Agreement, dated as of
March 19, 2003, Base Compensation in excess of $350,000 was accrued and unpaid,
and the Company owes Trivest Five Hundred and Twenty-Five Thousand Dollars
($525,000) related to such accrual and non-payment ("Accrued Base
Compensation"). The Company hereby agrees to pay the Accrued Base Compensation
on the earlier to occur of (a) April 15, 2004, or (b) the date on which the 2003
audit is delivered by the Company's auditors (such date is referred to herein,
as the "Payment Date").
2. Additional Incentive Compensation. In accordance with Section 6(c)(ii)
of the Management Agreement, the Company agrees to pay Trivest the sum of Seven
Hundred and Fifty Thousand Dollars ($750,000) on the Payment Date.
3. Amendment to Section 6(a). Section 6(a) of the Management Agreement is
hereby amended in its entirety as follows:
"(a) Base Compensation. During the term of this Agreement, Trivest
shall receive annually with respect to the management of the business
operations of the Company and its subsidiaries (including subsidiaries
of subsidiaries), a base cash consulting and management fee equal to
$350,000, payable in advance in equal quarterly installments; provided
that such amount due on April 1, 2004 shall be payable on the Payment
Date (the "Base Compensation"). The Base Compensation shall be adjusted
annually to reflect any increase from the previous year in the Consumer
Price Index. For purposes of this Agreement, the term "Consumer Price
Index" shall mean the Consumer Price Index For All Urban Consumers,
U.S. City Average, All Items, published by the United States Department
of Labor, Bureau of Labor Statistics, with the first such adjustment to
occur as of January 1, 2005."
4. Performance Compensation. The Management Agreement is hereby amended
by adding a Section 6(d):
"(d) Performance Compensation. To the extent the Company's EBITDAM
exceeds $35,000,000 for the year then ended, Trivest will be entitled
to receive "Performance Compensation" equal to the difference between
(x) the product of (A) EBITDAM for such year and (B) .01, and (y)
$350,000. For the avoidance of doubt and by way of example only: If the
Company's EBITDAM is $39,000,000 for fiscal year 2004, the Performance
Compensation for fiscal year 2004 shall be $40,000. Any Performance
Compensation payable with respect to any such fiscal year shall be paid
by the Company to Trivest within 75 days after the end of such fiscal
year; provided, however, that the Board may approve the payment of an
estimated amount of Performance Compensation (the "Estimated
Performance Compensation"). In the event that the Estimated Performance
Compensation (if any) paid to Trivest with respect to such fiscal year
is greater than the actual amount of Performance Compensation that is
finally determined to have been payable with respect to such fiscal
year, then Trivest shall promptly repay the amount of such excess to
the Company. In the event that the Estimated Performance Compensation
(if any) paid to Trivest with respect to any such fiscal year is less
than the actual amount of Performance Compensation that is finally
determined to have been payable with respect to such fiscal year, than
the Company shall promptly pay the amount of such deficiency to
Trivest. The determination of Performance Compensation will begin with
fiscal year 2004.
(i) Notwithstanding any provision hereof which may be
to the contrary, in the event any Base Compensation with respect to any
fiscal year of the Company is paid prior to the issuance of the
Company's regularly prepared financial statements for such fiscal year,
any amount paid shall be subject to increase or decrease based upon the
results of such financial statements.
(ii) For purposes of this Section 6(d), "EBITDAM"
means the Company's consolidated earnings before net interest expense,
income taxes, depreciation, amortization and any compensation incurred
by the Company to Trivest hereunder computed in accordance with
generally accepted accounting principles consistently applied.
(iii) In the event that Trivest's engagement
hereunder is terminated pursuant to Section 8 below, then
notwithstanding the fact that Trivest is not engaged by the Company
through the end of the fiscal year in which such termination occurs,
Trivest shall be entitled to receive the Performance Compensation that
would have otherwise been payable to it had it been engaged hereunder
through the end of such fiscal year, pro rated based upon the number of
days elapsed in such year through the effective date of such
termination.
(iv) Notwithstanding the foregoing, the Performance
Compensation shall never exceed $400,000 in any fiscal year."
5. References. All references in the Management Agreement to "this
Agreement" shall hereafter refer to the Agreement as amended hereby.
6. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7. Full Force and Effect. The Management Agreement, as amended by this
Amendment, shall continue in full force and effect, and nothing herein contained
shall be construed as a waiver or modification of existing rights or
obligations, under the Management Agreement, except as such rights or
obligations are expressly modified hereby.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first above written.
▇▇▇▇▇ ▇▇▇▇▇▇ INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Executive Vice President, Chief Administrative Officer
TRIVEST PARTNERS, L.P..
By: Trivest III, Inc., its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director & General Counsel
