Exhibit 10.10
MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT (the "Agreement"), dated as
of March 31, 1998, is made by and between DIAMOND TRIUMPH AUTO GLASS, INC., a
Delaware corporation ("Diamond"), and XXXXXXX XXXXX & PARTNERS, L.P. ("LGP"). As
used herein, the term "Company" shall refer to DIAMOND and its existing and
future subsidiaries.
The Company desires to obtain from LGP, and LGP desires to
provide, certain management, consulting and financial planning services on an
ongoing basis and certain financial advisory and investment banking services in
connection with major financial transactions that may be undertaken from time to
time in the future;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Retention.
1.1 General Services. Subject to the terms and conditions
hereof, Diamond hereby retains LGP, and LGP hereby agrees to be retained by
Diamond, to provide management, consulting and financial planning services to
the Company on an ongoing basis in connection with the operation and growth of
the Company during the term of this Agreement (the "General Services").
1.2 Major Transaction Services. Subject to the terms and
conditions hereof, Diamond hereby retains LGP, and LGP hereby agrees to be
retained by Diamond, to provide financial advisory and investment banking
services to the Company in connection with major financial transactions ("Major
Transactions") that may be undertaken from time to time in the future ("Major
Transaction Services" and, together with the General Services, the "Services").
2. Compensation.
2.1 General Services Fee. In consideration of the General
Services, Diamond shall pay LGP an aggregate annual fee of $685,000. Such fee
shall be payable in equal monthly installments, in advance, on the first day of
each month commencing on the first such day following the date hereof.
2.2 Major Transaction Services Fee. In consideration of Major
Transaction Services provided by LGP from time to time, Diamond shall pay LGP
reasonable and customary fees for services of like kind, taking into
consideration all relevant factors, including but not limited to, the complexity
of the subject Major Transaction, the time devoted to providing such services,
and the value of LGP's investment banking expertise and relationships within the
business and financial community. The amount of such fees shall be (a) approved
in accordance with the procedures set forth in Diamond's charter documents or
financing agreements, or, if no such procedures are set forth therein, (b)
either (i) approved by a majority of the Board of
Directors of Diamond or (ii) fair to Diamond from a financial point of view in
the opinion of an independent nationally recognized investment banking firm.
2.3 Expenses. In addition to the fees to be paid to LGP under
Section 2.1 and 2.2 hereof, Diamond shall pay to, or on behalf of, LGP, promptly
as billed, all reasonable out-of-pocket expenses incurred by LGP in connection
with the Services rendered hereunder. Such expenses shall include, among other
things, fees and disbursements of counsel, travel expenses, word processing
charges, messenger and duplicating services, facsimile expenses and other
customary expenditures.
3. Term.
3.1 Termination. This Agreement shall terminate on the tenth
anniversary of this Agreement. Notwithstanding the foregoing, this Agreement may
be terminated at any time by LGP by written notice to Diamond.
3.2 Survival of Certain Obligations. Notwithstanding any other
provision hereof, Diamond's obligation to pay amounts due pursuant to Section 2
hereof with respect to periods prior to the termination hereof and the
provisions of Section 5 hereof shall survive any termination of this Agreement.
4. Decisions/Authority of Management Advisor.
4.1 Decisions by Company. The Company reserves the right to
make all decisions with regard to any matter upon which LGP has rendered its
advice and consultation, and there shall be no liability to LGP for any such
advice accepted by the Company pursuant to the provisions of this Agreement or
otherwise.
4.2 Independent Contractor. LGP shall act solely as an
independent contractor and shall have complete charge of its personnel engaged
in the performance of the Services. As an independent contractor, LGP shall have
authority only to act as an advisor to the Company and shall have no authority
to enter into any agreement or to make any representation, commitment or
warranty binding upon the Company or to obtain or incur any right, obligation or
liability on behalf of the Company.
5. Indemnification.
5.1 Indemnification/Reimbursement of Expenses. Each Company
shall, jointly and severally, (i) indemnify, defend and hold harmless LGP and
Green Equity Investors II, L.P. ("GEI"), their respective affiliates, and the
partners, directors, officers, employees, agents and controlling persons of LGP
and GEI and their respective affiliates (collectively, the "Indemnified
Parties"), to the fullest extent permitted by law, from and against any and all
losses, claims, damages and liabilities, joint or several, to which any
Indemnified Party may become subject, caused by, related to or arising out of
the Services or any other advice or services contemplated by this Agreement or
the engagement of LGP pursuant to, and the performance by LGP of the Services
contemplated by, this Agreement, and (ii) promptly reimburse each Indemnified
Party for all costs and expenses (including reasonable attorneys' fees and
expenses), as incurred, in connection with the investigation of, preparation for
or
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defense of any pending or threatened claim or any action or proceeding arising
therefrom, whether or not such Indemnified Party is a party and whether or not
such claim, action or proceeding is initiated or brought by or on behalf of any
Company and whether or not resulting in any liability.
5.2 Limited Liability. The Company shall not be liable under
the indemnification contained in Section 5.1 to the extent that such loss,
claim, damage, liability, cost or expense is found in a final non-appealable
judgment by a court to have resulted from LGP's bad faith or gross negligence.
The Company further agrees that no Indemnified Party shall have any liability
(whether direct or indirect, in contract, tort or otherwise) to the Company,
holders of their securities or their creditors related to or arising out of the
engagement of LGP pursuant to, or the performance by LGP of the Services
contemplated by, this Agreement, except to the extent that any loss, claim,
damage, liability, cost or expense is found in a final non-appealable judgment
by a court to have resulted from LGP's bad faith or gross negligence.
5.3 Contribution. In order to provide for just and equitable
contribution, if a claim for indemnification pursuant to this Agreement is made
but is found in a final non-appealable judgment by a court that such
indemnification may not be enforced in such case, even though the express
provisions hereof provide for indemnification in such case, then the Company on
the one hand, and LGP on the other hand, shall contribute to the losses, claims,
damages, liabilities, costs and expenses to which the Indemnified Parties may be
subject in accordance with the relative benefits received by the Company, on the
one hand, and LGP, on the other hand, and also the relative fault of the
Company, on the one hand, and LGP, on the other hand, in connection with the
statements, acts or omissions which resulted in such losses, claims, damages,
liabilities, costs and expenses and the relevant equitable considerations shall
also be considered. No person found liable for fraudulent misrepresentation
shall be entitled to contribution from any person who is not also found liable
for such fraudulent misrepresentation. Notwithstanding the foregoing, LGP shall
not be obligated to contribute any amount hereunder that exceeds the amount of
fees previously received by it pursuant to this Agreement.
6. Subordination.
6.1 Agreement to Subordinate. LGP agrees that, to the extent
set forth in this Section 6, all payments and fees owed to LGP pursuant to this
Agreement shall be subordinated in right of payment to the payment in full in
cash or cash equivalents of all Senior Indebtedness whether outstanding on the
date hereof or hereafter created, incurred, assumed or guaranteed, and that such
subordination is for the benefit of the holders of Senior Indebtedness. For
purposes of this Section 6, the term "Senior Indebtedness" means indebtedness of
the Company under the 9-1/4% Senior Notes due 2008 of the Company.
6.2 Relative Rights. Upon any distribution of assets of the
Company, winding up, total or partial liquidation or reorganization of the
Company, whether voluntary or involuntary, the holders of all Senior
Indebtedness shall be entitled to receive payment on such Senior Indebtedness in
full in cash or cash equivalent before LGP shall be entitled to receive any
payments pursuant to this Agreement. No payment (by set-off or otherwise) may be
made by or on behalf of the Company pursuant to this Agreement, for cash or
property, (i) upon the maturity of any Senior Indebtedness of the Company by
lapse of time, acceleration or otherwise, unless
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and until all principal of, premium, if any, and the interest on and fees in
respect of such Senior Indebtedness are paid in full in cash or cash
equivalents, (ii) when such payment is prohibited by the Indenture relating to
the Senior Indebtedness (the "Indenture") and (iii) in the event of default in
the payment of any principal of, premium, if any, or interest on and fees in
respect of Senior Indebtedness of the Company when it becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise (a "Payment Default"), unless and until such Payment Default has been
cured or waived or otherwise has ceased to exist.
6.3 When Amounts Must be Paid Over. In the event that,
notwithstanding the other provisions of this Agreement, LGP receives any payment
or distribution of any payment or fees pursuant to this Agreement at a time when
LGP has actual knowledge that such payment or distribution is prohibited by this
Section 6 or the Indenture, such payment or distribution shall be held by LGP in
trust for the benefit of, and shall be paid forthwith over and delivered, upon
written request, to, the holders of Senior Indebtedness remaining unpaid or
unprovided for, or to the trustee or trustees under the Indenture, ratably
according to aggregate principal amounts remaining unpaid on account of such
Senior Indebtedness held or represented by such, for application to the payment
of all obligations with respect to Senior Indebtedness remaining unpaid, to the
extent necessary to pay or to provide for the payment of all such obligations in
full in cash or cash equivalents in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for holders of Senior
Indebtedness.
7. Miscellaneous.
7.1 Assignment. None of the parties hereto shall assign this
Agreement or the rights and obligations hereunder, in whole or in part, without
the prior written consent of the other party; provided, however, that, without
obtaining such consent, LGP may assign this Agreement or its rights and
obligations hereunder to (i) any of its affiliates; (ii) any investment manager,
investment advisor or partner of LGP, or any principal or beneficial owner of
any of the foregoing; or (iii) any investment fund, investment account or
investment entity whose investment manager, investment advisor or partner, or
any principal or beneficial owner of any of the foregoing, is either LGP or any
person identified in (i) or (ii) above. Subject to the foregoing, this Agreement
will be binding upon and inure solely for the benefit of the parties hereto and
their respective successors and assigns, and no other person shall acquire or
have any right hereunder or by virtue hereof.
7.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York as
applied to contracts made and performed within the State of New York without
regard to principles of conflict of laws.
7.3 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction.
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7.4 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter of this
Agreement and memorializes and supersedes all written or verbal representations,
warranties, commitments and other understandings prior to the date of this
Agreement with respect to the subject matter hereof.
7.5 Further Assurances. The parties hereto agree to use all
reasonable efforts to obtain all consents and approvals and to do all other
things necessary to consummate the transactions contemplated by this Agreement.
The parties agree to take such further action and to deliver or cause to be
delivered any additional agreements or instruments as any of them may reasonably
request for the purpose of carrying out this Agreement and the agreements and
transactions contemplated hereby.
7.6 Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
7.7 Headings. The headings in this Agreement are for
convenience and reference only and shall not limit or otherwise affect the
meaning hereof.
7.8 Amendment and Waiver. This Agreement may be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may be given, provided that the same are in writing and signed
by each of the parties hereto. No waiver by any party hereto at any time of any
breach by another party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same time or
at any prior or subsequent time.
7.9 Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties have executed this Management
Services Agreement on the date first appearing above
DIAMOND TRIUMPH AUTO GLASS, INC.
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Co-Chairman & Co-Chief
Executive Officer
XXXXXXX XXXXX & PARTNERS, L.P.
By: LGP Management, Inc.,
its general partner
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title:
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