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EXHIBIT 10.8
MANAGEMENT AGREEMENT
This Management Agreement (this "Agreement") is entered into as of the
24th day of April 1998 by and between Eye Care Centers of America, Inc. (the
"Company") and THL Equity Advisors IV, LLC ("THL").
Whereas, on or about the date hereof the Company has consummated certain
transactions (such transactions being referred to herein as the
"Recapitalization"), pursuant to that certain Recapitalization Agreement dated
as of March 6, 1998 (as amended from time to time, the "Recapitalization
Agreement") among ECCA Merger Corp. ("ECCA"), the Company, and the Sellers named
therein;
Whereas, THL is providing advisory and other services to the Company in
connection with the senior secured financing (the "Senior Financing") being
provided in connection with the Recapitalization pursuant to a Credit Agreement
dated on or about the date hereof among ECCA, the Company, and Bankers Trust
Company, as agent, and the lending institutions from time to time party thereto;
and
Whereas, subject to the terms and conditions of this Agreement, the
Company desires to retain THL to provide certain management and advisory
services to the Company, and THL desires to provide such services;
Now, therefore, In consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Services. THL, in its individual business capacity and for its own account,
and not in its capacity as general partner of ▇▇▇▇▇▇ ▇. ▇▇▇ Equity Fund IV, L.P.
and ▇▇▇▇▇▇ ▇. ▇▇▇ Foreign Fund IV, L.P. (the "THL Funds"), hereby agrees that,
during the term of this Agreement (the "Term"), it will:
a. provide the Company with advice in connection with the negotiation and
consummation of agreements, contracts, documents and instruments necessary to
provide the Company with financing from banks or other financial institutions or
other entities on terms and conditions satisfactory to the Company; and
b. provide the Company with financial, managerial and operational advice
in connection with its day-to-day operations, including, without limitation:
i. advice with respect to the investment of funds; and
ii. advice with respect to the development and implementation of
strategies for improving the operating, marketing and
financial performance of the Company.
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THL shall devote reasonable time and efforts to the performance of the
services contemplated by this Agreement. However, no precise number of hours is
to be devoted by THL on a weekly or monthly basis. THL may perform services
under this Agreement directly, through its employees or agents, or with such
outside consultants as THL may engage for such purpose.
2. Payment of Fees. The Company hereby agrees to:
a. pay to THL (or its designee) for its services hereunder a fee in the
amount of $6,000,000 in connection with the structuring of the Senior Financing
for the Recapitalization, together with reimbursement of THL's expenses incurred
on behalf of the Company through the Closing Date in connection with the
Recapitalization, such fees and expenses being payable by the Company at the
closing of the Recapitalization;
b. during the Term, pay to THL (or its designee) a management fee in an
amount of $500,000 per annum in exchange for the services provided to the
Company by THL, as more fully described in Section 1 of this Agreement, such fee
being payable by the Company quarterly in advance, the first such payment to be
made at or after the closing of the Recapitalization; and
c. during the Term, allow THL to participate in the negotiation and
consummation of any acquisition of any company or line of business by the
Company or any of its direct or indirect subsidiaries, and pay to THL (or its
designee) a fee in connection therewith equal to one percent (1%) of the gross
purchase price of such acquisition (including all liabilities assumed or
otherwise included therein), such fee to be due and payable for the foregoing
services at the closing of such acquisition.
Each payment made pursuant to this Section 2 shall be paid by wire
transfer of immediately available federal funds to the account specified on
Schedule I hereto, or to such other account(s) as THL may specify to the Company
in writing prior to such payment.
3. Term. This Agreement shall continue in full force and effect, unless and
until terminated by mutual consent of the parties in writing, for so long as THL
(or any successor or permitted assign, as the case may be) continues to carry on
the business of providing services of the type described in Section 1 above;
provided, however, that either party may terminate this Agreement following a
material breach of the terms of this Agreement by the other party hereto and a
failure to cure such breach within 30 days following written notice thereof; and
provided further that each of (a) the obligations of the Company under Section 4
below, (b) any and all accrued and unpaid obligations of the Company owed under
Section 2 above and (c) the provisions of Section 7 shall survive any
termination of this Agreement to the maximum extent permitted under applicable
law.
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4. Expenses; Indemnification.
a. Expenses. The Company agrees to pay on demand all expenses incurred by
THL in connection with this Agreement, the Recapitalization and such other
transactions and operations hereunder incurred in connection with the
Recapitalization or the Company, including but not limited to (i) the fees and
disbursements of: (A) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a Professional Corporation
("HWD"), special counsel to THL and (B) any other consultants or advisors
retained by THL or by HWD arising in connection therewith (including but not
limited to the preparation, negotiation and execution of this Agreement and any
other agreement executed in connection herewith or in connection with the
Recapitalization, the Senior Financing or the consummation of the other
transactions contemplated hereby (and any and all amendments, modifications,
restructurings and waivers, and exercises and preservations of rights and
remedies hereunder or thereunder) and the operations of the Company and any of
its subsidiaries), and (ii) any out-of-pocket expenses incurred by THL in
connection with the provision of services hereunder or the attendance at any
meeting of the board of directors (or any committee thereof) of the Company or
any of its affiliates.
b. Indemnity and Liability. In consideration of the execution and delivery
of this Agreement by THL, the Company hereby agrees to indemnify, exonerate and
hold THL, and each of its affiliates, owners, principals, directors, officers,
fiduciaries, employees and agents and each of the partners, shareholders,
affiliates, owners, principals, directors, officers, fiduciaries, employees and
agents of each of the foregoing (collectively, the "Indemnitees") free and
harmless from and against any and all actions, causes of action, suits, losses,
liabilities and damages, and expenses in connection therewith, including without
limitation reasonable attorneys' fees and disbursements (collectively, the
("Indemnified Liabilities"), incurred by the Indemnitees or any of them as a
result of, or arising out of, or relating to the Recapitalization, the
execution, delivery, performance, enforcement or existence of this Agreement or
the transactions contemplated hereby or thereby except for any such Indemnified
Liabilities arising on account of such Indemnitee's gross negligence or willful
misconduct, and if and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. None of the Indemnitees
shall be liable to the Company or any of its affiliates for any act or omission
suffered or taken by such Indemnitee that does not constitute gross negligence
or willful misconduct.
5. Assignment, etc. Neither party shall have the right to assign this Agreement.
THL acknowledges that its services under this Agreement are unique. Accordingly
any purported assignment by THL shall be void.
6. Amendments and Waivers. No amendment or waiver of any term, provision or
condition of this Agreement shall be effective, unless in writing and executed
by each of THL
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and the Company. No waiver on any one occasion shall extend to or effect or be
construed as a waiver of any right or remedy on any future occasion. No course
of dealing of any person nor any delay or omission in exercising any right or
remedy shall constitute an amendment of this Agreement or a waiver of any right
or remedy of any party hereto.
7. Miscellaneous.
a. Choice of Law. This Agreement shall be governed by and construed in
accordance with the domestic substantive laws of The Commonwealth of
Massachusetts without giving effect to any choice or conflict of law provision
or rule that would cause the application of the domestic substantive laws of any
other jurisdiction.
b. Consent to Jurisdiction. Each of the parties agrees that all actions,
suits or proceedings arising out of or based upon this Agreement or the subject
matter hereof shall be brought and maintained exclusively in the federal and
state courts of The Commonwealth of Massachusetts. Each of the parties hereto by
execution hereof (i) hereby irrevocably submits to the jurisdiction of the
federal and state courts in The Commonwealth of Massachusetts for the purpose of
any action, suit or proceeding arising out of or based upon this Agreement or
the subject matter hereof and (ii) hereby waives to the extent not prohibited by
applicable law, and agrees not to assert, by way of motion, as a defense or
otherwise, in any such action, suit or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that it is
immune from extraterritorial injunctive relief or other injunctive relief that
its property is exempt or immune from attachment or execution, that any such
action, suit or proceeding may not be brought or maintained in one of the
above-named courts, that any such action, suit or proceeding brought or
maintained in one of the above-named courts should be dismissed on grounds of
forum non conveniens, should be transferred to any court other than one of the
above-named courts, should be stayed by virtue of the pendency of any other
action, suit or proceeding in any court other than one of the above-named
courts, or that this Agreement or the subject matter hereof may not be enforced
in or by any of the of above-named courts. Each of the parties hereto hereby
consents to service of process in any such suit, action or proceeding in any
manner permitted by the laws of The Commonwealth of Massachusetts, agrees that
service of process by registered or certified mail, return receipt requested, at
the address specified in or pursuant to Section 9 is reasonably calculated to
give actual notice and waives and agrees not to assert by way of motion, as a
defense or otherwise, in any such action, suit or proceeding any claim that
service of process made in accordance with Section 9 does not constitute good
and sufficient service of process. The provisions of this Section 7(b) shall not
restrict the ability of any party to enforce in any court any judgment obtained
in a federal or state court of The Commonwealth of Massachusetts.
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c. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND COVENANT
THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE), ANY
RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND,
CAUSE OF ACTION, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. Each of the
parties hereto acknowledges that it has been informed by each other party that
the provisions of this Section 7(c) constitute a material inducement upon which
such party is relying and will rely in entering into this Agreement and the
transactions contemplated hereby. Any of the parties hereto may file an original
counterpart or a copy of this Agreement with any court as written evidence of
the consent of each of the parties hereto to the waiver of its right to trial by
jury.
8. Merger/Entire Agreement. Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
communication or agreement with respect thereto.
9. Notice. All notices, demands, and communications of any kind which any party
may require or desire to serve upon any other Party under this Agreement shall
be in writing and shall be served upon such other party and such other party's
copied persons as specified below by personal delivery to the address set forth
for it below or to such other address as such party shall have specified by
notice to each other party or by mailing a copy thereof by certified or
registered mail, or by Federal Express or any other reputable overnight courier
service, postage prepaid, with return receipt requested, addressed to such party
and copied persons at such address. In the case of service by personal delivery,
it shall be deemed complete on the first business day after the date of actual
delivery to such address. In the case of service by mail or by overnight
courier, it shall be deemed complete, whether or not received, on the third day
after the date of mailing as shown by the registered or certified mail receipt
or courier service receipt. Notwithstanding the foregoing, notice to any party
or copied person of change of address shall be deemed complete only upon actual
receipt by an officer or agent of such party or copied person.
If to the Company, to it at:
Eye Care Centers of America, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
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If to THL, to it at:
▇▇▇▇▇▇ ▇. ▇▇▇ Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
A Professional Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
10. Severability. If in any judicial or arbitral proceedings a court or
arbitrator shall refuse to enforce any provision of this Agreement, then such
unenforceable provision shall be deemed eliminated from this Agreement for the
purpose of such proceedings to the extent necessary to-permit the remaining
provisions to be enforced. To the full extent, however, that the provisions of
any applicable law may be waived, they are hereby waived to the end that this
Agreement be deemed to be valid and binding agreement enforceable, in accordance
with its terms, and in the event that any provision hereof shall be found to be
invalid or unenforceable, such provision shall be construed by limiting it so as
to be valid and enforceable to the maximum extent consistent with and possible
under applicable law.
11. Counterparts. This Agreement may be executed in any number of counterparts
and by each of the parties hereto in separate counterparts, each of which when
so executed shall be deemed to be an original and all of which together shall
constitute one and the same agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as an instrument under seal as of the date first above
written by its officer or representative thereunto duly authorized.
THE COMPANY: EYE CARE CENTERS OF AMERICA, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By _________________________
Title:
THL: THL EQUITY ADVISORS IV, LLC
By _________________________
Title: Managing Director
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SCHEDULE 1 TO MANAGEMENT AGREEMENT
Wire Transfer Instructions for ▇▇▇▇▇▇ ▇. ▇▇▇ Company
Bank:
ABA #
For:
Account #
Account Name:
Acct. #
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