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Exhibit 10.8
AMENDED AND RESTATED MANAGEMENT SERVICES AGREEMENT
THIS AMENDMENT, dated as of March 27, 2000 amends and restates the
MANAGEMENT SERVICES AGREEMENT (the "Agreement") dated as of September 30, 1998
is between True Temper Corporation (f/k/a/ True Temper Sports, Inc.) (the
"Company") and Cornerstone Equity Investors, LLC ("Cornerstone").
WHEREAS, the Company and Cornerstone desire to amend the Agreement to
provide that the Advisory Fees and Transaction Fees payable hereunder be
subordinated to the Company's outstanding Senior Discount Notes issued on the
date hereof;
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
seven (7) years commencing on September 30, 1998 (the "Term"), and shall be
automatically extended thereafter on a year to year basis unless the Company or
Cornerstone 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.
2. Services. Cornerstone 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 Cornerstone, which may
include, without limitation, the following:
(a) general management services;
(b) identification, support, negotiation and analysis of acquisitions
and dispositions;
(c) support, negotiation and analysis of financing alternatives,
including, without limitation, in connection with acquisitions, capital
expenditures and refinancing of existing indebtedness;
(d) finance functions, including assistance 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 Cornerstone agree.
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3. Advisory Fees and Transaction Fees.
(a) Payment to Cornerstone for services rendered in connection with the
performance of services pursuant to this Agreement shall be $500,000 per year or
such other amount as the parties hereto shall agree ("Advisory Fees") plus
reasonable out-of-pocket expenses of Cornerstone. The Advisory Fees shall be
payable quarterly in advance by the Company in immediately available funds, the
first such payment to be made promptly after the date hereof.
(b) During the term of this Agreement, Cornerstone shall be entitled to
receive from the Company a transaction fee in connection with the consummation
by the Company or any of its subsidiaries of (i) each material acquisition of an
additional business (ii) each material divestiture and (iii) each material
financing or refinancing, in each case, in an amount equal to 1% of the
aggregate value of such transaction (each such payment, a "Transaction Fee").
(c) In the event that during the term of this Agreement the Company and
Cornerstone agree, in their respective sole discretion, that all or a portion of
the Advisory Fees to be paid by the Company to Cornerstone can be advantageously
applied directly by the Company for purposes that are beneficial to the Company
and to Cornerstone in connection with services provided by Cornerstone hereunder
or that may facilitate the provision of such services by Cornerstone, then the
Advisory Fees payable hereunder will be reduced and the Company will apply such
agreed amounts directly for such other purposes.
4. Subordination. Cornerstone covenants and agrees that the payment to
Cornerstone of any Advisory Fees and Transaction Fees as contemplated in this
Agreement shall be subordinate and junior in right to payment for any
indebtedness incurred by the Company related to or arising out of the issuance
by the Company of the Senior Discount Notes (the "Notes") pursuant to that
certain Note and Warrant Purchase Agreement, dated as of the date hereof, among
the Company and the other parties thereto (the "Purchase Agreement"). No
payment shall be made by the Company hereunder, whether with respect to any
Advisory Fees or Transaction Fees, at any time when there shall have occurred
and be continuing (i) any default in the payment of all or any part of the
principal or premium, if any, on any of the Notes as and when the same shall
become due and payable either at maturity, upon any redemption, by declaration
or otherwise or (ii) any default in the payment of any installment of interest
upon any of the Notes or any fees payable under the Purchase Agreement or any
taxes payable thereunder as and when the same shall become due and payable;
provided, however, that following the earlier of (a) the cure, waiver or other
resolution of such default or (ii) the payment in full in cash of all
obligations under the Notes then outstanding, all amounts that have not been
paid to Cornerstone due to the application of the provisions of this Section 4
shall be promptly paid to Cornerstone without requiring any demand, notice to
the Company or other action on the part of Cornerstone.
5. Personnel. Cornerstone shall provide and devote to the performance
of this Agreement such employees, affiliates and agents of Cornerstone as
Cornerstone shall deem appropriate to the furnishing of the services required.
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6. Liability. Neither Cornerstone 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 Cornerstone, its affiliates, members, partners, employees or agents
acting within the scope of their employment or authority.
7. Indemnity. The Company and its subsidiaries shall defend, indemnify
and hold harmless Cornerstone, its affiliates, members, partners, employees and
agents from and against any 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
Cornerstone, 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 Cornerstone, 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
Cornerstone, its officers, directors, affiliates, members, partners, employees
or agents or in which any of Cornerstone, 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 Cornerstone, 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
Cornerstone, its affiliates, members, partners, employees or agents, then
Cornerstone shall reimburse the Company for the costs of defense and other costs
incurred by the Company.
8. 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:
True Temper Sports, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
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To Cornerstone:
Cornerstone Equity Investors, LLC
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx & Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
9. 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, Cornerstone may assign its rights and obligations
under this Agreement to any of its affiliates without the consent of the
Company.
10. Successors. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and assigns of the parties hereto.
11. 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.
12. 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 Amended and Restated
Management Services Agreement as of the date first written above.
TRUE TEMPER CORPORATION
By: _________________________________
Name:
Title:
CORNERSTONE EQUITY INVESTORS, LLC
By: __________________________________
Name:
Title:
