Exhibit 10.52
MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT (this "AGREEMENT") is dated as of
December 18, 2000, and entered into among Roller Bearing Company of America,
Inc., a Delaware corporation (the "COMPANY") and Whitney & Co., a Delaware
corporation and affiliate of Whitney Acquisition II, Corp. ("WHITNEY").
WHEREAS, Whitney Acquisition II, Corp., a Delaware corporation
("WHITNEY ACQUISITION"), Roller Bearing Holding Company, Inc., a Delaware
corporation and sole stockholder of the Company ("Holdings"), Xx. Xxxxxxx X.
Xxxxxxxx and Xxxxxxxx Family Investments, L.P. are parties to a Stock Purchase
Agreement dated as of November 20, 2000 (the "STOCK PURCHASE AGREEMENT"),
pursuant to which Whitney Acquisition shall acquire a significant percentage of
Holdings' outstanding common stock (the "COMMON STOCK"). Capitalized terms used
but not defined herein shall have the meanings ascribed to such terms in the
Stock Purchase Agreement;
WHEREAS, Whitney Acquisition is a party to certain other agreements
pursuant to which Whitney shall acquire on the date hereof a significant
percentage of Holdings' outstanding common stock (such shares together with the
shares of Common Stock described in the preceding paragraph, the "Whitney
Shares");
WHEREAS, Whitney Acquisition together with its affiliates and certain
of their limited partners intend on holding the Whitney Shares as a long-term
investment and, in connection therewith, wish to assist the Company in executing
its business plan and achieving its long-term strategic objectives; and
WHEREAS, in furtherance of the matters set forth in the preceding
paragraph, the Company desires to retain Whitney to provide, and Whitney desires
to provide to the Company, certain financial consulting and management advisory
services, as directed by the board of directors of the Company and agreed to by
Whitney, which may include, without limitation, providing strategic direction
and oversight of corporate and financial planning and analyzing and negotiating
financial alternatives.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. TERM. This Agreement shall be in effect for an initial term of five
(5) years commencing on the date hereof (the "TERM"), and shall be automatically
extended thereafter on a year to year basis unless the Company or Whitney gives
written notice of its desire to terminate this Agreement to the other party 90
days prior to the expiration of the Term or any extension thereof.
Notwithstanding the foregoing, this Agreement shall terminate automatically upon
the earlier to occur of (i) an Initial Public Offering (as defined below) and
(ii) such time that Whitney Acquisition and its Permitted Transferees (as
defined in that certain Stockholders' Agreement dated on even date
herewith among the Company and certain of its stockholders) own less than 20% of
the Whitney Shares. For purposes of this Agreement, the term "INITIAL PUBLIC
OFFERING" means the underwritten public offering by either the Company or any of
its subsidiaries of its common stock pursuant to a registration statement (other
than a registration statement on Form S-8 or S-4 or any successor form thereto)
that has been filed under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and declared effective by the Securities and Exchange
Commission or any similar agency then having jurisdiction to enforce the
Securities Act; PROVIDED, HOWEVER, that for this purpose any offering under Rule
144A under the Securities Act or any similar rule or regulation promulgated
under the Securities Act shall not be deemed to be an Initial Public Offering.
2. SERVICES. Whitney shall perform or cause to be performed such
services for the Company and its direct and indirect subsidiaries as directed by
the Company's board of directors and agreed to by Whitney, which may include,
without limitation, the following:
(a) general management consulting services;
(b) identification, support, negotiation and/or analysis of
acquisitions and dispositions;
(c) support, negotiation and/or analysis of financing alternatives,
including, without limitation, in connection with acquisitions, capital
expenditures and refinancing of existing indebtedness;
(d) finance functions, including assisting in the preparation of
financial projections, and monitoring of compliance with financing agreements;
(e) strategic planning functions, including evaluating major strategic
alternatives; and
(f) other services for the Company and its subsidiaries upon which the
Company's board of directors and Whitney agree.
3. FEES.
(a) ADVISORY FEES. As consideration for services rendered hereunder,
the Company shall pay to Whitney the following fees (the "ADVISORY FEES"): (i)
for each of the first two (2) years of the Term, an annual advisory fee of
$650,000, (ii) for each additional year of the Term (including any extension
period), an annual advisory fee of $150,000, and (iii) for each year of the Term
(including any extension period), all reasonable out-of-pocket fees and expenses
incurred by Whitney or any of its affiliates in connection with the provision of
services hereunder. The Advisory Fees shall be payable quarterly in advance on
each March 31, June 30, September 30 and December 31, or if any such date shall
not be a business day, on the next succeeding business day to occur after such
date, beginning on December 31, 2000 and ending upon the termination of this
Agreement; PROVIDED, that on the date hereof the Company shall prepay (x)
$500,000 of the $650,000 of
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Advisory Fees due in the first year of the Term and (y) $500,000 of the
$650,000 of Advisory Fees due in the second year of the Term, and, in each
case, the remainder of such Advisory Fees shall be paid as and when otherwise
described above. In addition to the foregoing fees and as further
consideration for services rendered hereunder, on the date hereof the Company
shall pay to Whitney an interim advisory fee equal to (x) $150,000 MULTIPLIED
BY (y) a fraction, the numerator of which is the actual number of days
elapsed from and including the date hereof through and including December 31,
2000, and the denominator of which is 365. Upon the termination of this
Agreement, the Company shall promptly pay to Whitney any unpaid portion of
the annual Advisory Fees to the extent such payment was due and payable prior
to such date. Notwithstanding the foregoing, the Company shall not be
obligated to pay any portion of the Advisory Fees during the continuation of
a "default" or an "event of default" as defined in the Company's Credit
Agreement dated as of June 23, 1997, among the Company, the financial
institutions party thereto as lenders and Credit Suisse First Boston as
administrative agent, as amended from time to time and as in effect on the
date hereof.
(b) OTHER FEES. As further consideration for Whitney agreeing to
perform services hereunder, on the date hereof, the Company shall (i) pay to
Whitney a fee of $1,000,000 (the "CLOSING FEE"), and (ii) reimburse all of
Whitney Acquisition and Whitney's reasonable out-of-pocket expenses (including,
but without limitation, fees, charges and disbursements of counsel and
consultants) incurred in connection with (A) the preparation, negotiation,
execution, delivery and performance of the Stock Purchase Agreement and any
other documents relating to the transactions contemplated thereby (including,
without limitation, this Agreement) and (B) Whitney's due diligence
investigation, which payments shall be made by wire transfer of immediately
available funds to an account or accounts designated by Whitney; PROVIDED,
HOWEVER, that notwithstanding the foregoing, all fees and disbursements of
Whitney's counsel shall be paid at the Second Closing, and not at the First
Closing. Notwithstanding the foregoing, Whitney acknowledges and agrees that the
Company shall not be obligated under this paragraph 3(b) to reimburse Whitney
Acquisition or Whitney for Whitney Acquisition's portion of any filing fees
related to the filing required under Section 7.02(b) of the Stock Purchase
Agreement.
4. PERSONNEL. Whitney shall provide and devote to the performance of
this Agreement such employees, affiliates and agents of Whitney as Whitney shall
deem appropriate to the furnishing of the services required. The parties
acknowledge and agree that this Agreement shall not create an agency
relationship between the Company and Whitney and neither party shall have the
authority to bind the other.
5. LIABILITY. Neither Whitney nor any of its affiliates, members,
partners, employees or agents shall be liable to the Company or any of its
subsidiaries or affiliates for any loss, liability, damage or expense arising
out of or in connection with the performance of services contemplated by this
Agreement, unless such loss, liability, damage or expense shall be proven to
result directly from gross negligence, willful misconduct or bad faith on the
part of Whitney, its affiliates, members, partners, employees or agents acting
within the scope of their employment or authority.
6. INDEMNITY. The Company and its subsidiaries shall defend, indemnify
and hold harmless Whitney, its affiliates, members, partners, employees and
agents from and against any
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and all loss, liability, damage, or expenses arising from any claim (a "CLAIM")
by any person with respect to, or in any way related to, the performance of
services contemplated by this Agreement (including attorneys' fees)
(collectively, "CLAIMS") resulting from any act or omission of Whitney, its
affiliates, members, partners, employees or agents, other than for Claims which
shall be proven to be the direct result of gross negligence, bad faith or
willful misconduct by Whitney, its affiliates, members, partners, employees or
agents. The Company and its subsidiaries shall defend at its own cost and
expense any and all suits or actions (just or unjust) which may be brought
against the Company, and/or any of its subsidiaries and any of Whitney, its
officers, directors, affiliates, members, partners, employees or agents or in
which any of Whitney, its affiliates, members, partners, employees or agents may
be impleaded with others upon any Claim or Claims, or upon any matter, directly
or indirectly, related to or arising out of this Agreement or the performance
hereof by Whitney, its affiliates, members, partners, employees or agents,
except that if such damage shall be proven to be the direct result of gross
negligence, bad faith or willful misconduct by Whitney, its affiliates, members,
partners, employees or agents acting within the scope of their employment or
authority, then Whitney shall reimburse the Company for the costs of defense and
other costs incurred by the Company.
7. NOTICES. All notices or other communications required or permitted
by this Agreement shall be effective upon receipt and shall be in writing and
delivered personally or by overnight courier, or sent by facsimile, as follows:
TO THE COMPANY:
Roller Bearing Holding Company, Inc.
00 Xxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
WITH A COPY (WHICH SHALL NOT CONSTITUTE
NOTICE TO THE PURCHASER) TO:
XxXxxxxxx, Will & Xxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: C. Xxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
TO WHITNEY:
Whitney Acquisition II, Corp.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx
Xx. Xxxxxxx X. Xxxxxxxx
Xx. Xxxxxxx Xxxxxx
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Telecopy No.: (000) 000-0000
WITH A COPY (WHICH SHALL NOT CONSTITUTE
NOTICE TO THE PURCHASER) TO:
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxx
Telecopy No.: (000) 000-0000
8. ASSIGNMENT. No party hereto may assign any obligations hereunder to
any other party without the prior written consent of the other party hereto,
which consent shall not be unreasonably withheld; PROVIDED, HOWEVER, that,
notwithstanding the foregoing, Whitney may assign its rights and obligations
under this Agreement to any of its affiliates without the consent of the
Company.
94. SUCCESSORS. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and assigns of the parties hereto.
10. COUNTERPARTS. This Agreement may be executed and delivered by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original and both of which taken together shall
constitute but one and the same agreement.
11. ENTIRE AGREEMENT; MODIFICATION; GOVERNING LAW. The terms and
conditions hereof constitute the entire agreement between the parties hereto
with respect to the subject matter of this Agreement and supersede all previous
communications, either oral or written, representations or warranties of any
kind whatsoever, except as expressly set forth herein. No modifications of this
Agreement nor waiver of the terms or conditions hereof shall be binding upon any
party hereto unless approved in writing by an authorized representative of such
party. All issues concerning this Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than the State of New York.
* * *
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IN WITNESS WHEREOF, the parties have executed this Management Services
Agreement as of the date first written above.
ROLLER BEARING COMPANY OF AMERICA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xx. Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
WHITNEY & CO.
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title:
