EXHIBIT 10.2
MANAGEMENT AGREEMENT
WITH
XXXXXX X. XXX COMPANY
AGREEMENT entered into as of September [ ], 1996, by and between
Xxxxxx X. Xxx Company, a Massachusetts sole proprietorship with a principal
place of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the
"Consultant"), and Rayovac Corporation, a Wisconsin corporation ("Rayovac").
WHEREAS, the Consultant has and its affiliates have staff specially
skilled in corporate finance, strategic corporate planning and other management
skills and services; and
WHEREAS, as of the date hereof, Rayovac has completed its
recapitalization pursuant to the Stock Purchase and Redemption Agreement dated
this date by and among Rayovac, certain affiliates of the Consultant and all of
the shareholders of Rayovac, together with the consummation of senior credit
facilities and bridge mezzanine debt financing (collectively, the
"Recapitalization"); and
WHEREAS, Rayovac will require the Consultant's special skills and
management advisory services in connection with its general business operations;
and
WHEREAS, the Consultant is willing to provide such skills and services
to Rayovac.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, do hereby agree as
follows:
1. Engagement. Rayovac hereby engages the Consultant for the Term (as
hereinafter defined) and upon the terms and conditions herein set forth to
provide consulting and management advisory services to Rayovac, as requested by
Rayovac. These services will be in connection with financial and strategic
corporate planning and such other management services as the Consultant and
Rayovac shall mutually agree. In consideration of
the remuneration herein specified, the Consultant accepts such engagement and
agrees to perform the services specified herein.
2. Term. The engagement hereunder shall be for a term commencing on
the date hereof and expiring on the fifth (5th) anniversary hereof (the "Term").
Upon expiration of the Term, this Agreement shall automatically extend for
successive periods of one (1) year, unless the Consultant or Rayovac shall give
notice to the other at least ninety (90) days prior to the end of the Term (or
any annual extension thereof) indicating that it does not intend to renew the
Agreement. Upon final expiration of the Term (or any annual extension thereof)
all obligations as between the parties shall be without recourse to one another
under this Agreement.
3. Services to be Performed. The Consultant shall devote reasonable
time and efforts to the performance of the consulting and management advisory
services contemplated by this Agreement. However, no precise number of hours is
to be devoted by the Consultant on a weekly or monthly basis. The Consultant may
perform services under this Agreement directly, through its employees or agents,
or with such outside consultants as the Consultant may engage for such purpose.
4. Compensation; Expense Reimbursement.
4.1 (a) In connection with the closing of the Recapitalization,
Rayovac shall pay or cause to be paid to the Consultant (and/or to such of the
Consultant's affiliates as the Consultant may direct) an aggregate closing fee
of $3,250,000, on the date hereof.
(b) In consideration of the management advisory services
hereunder, the Consultant shall be paid an annual fee (hereinafter, the
"Management Fee") equal to $360,000, which Management Fee shall be paid to the
Consultant by Rayovac in equal monthly installments each year, to be paid
monthly in arrears.
4.2 Rayovac shall reimburse the Consultant for all reasonable
out-of-pocket expenses incurred in connection with management advisory services
to be provided by the Consultant hereunder, including, without limitation,
reasonable travel, lodging and similar out-of-pocket
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costs reasonably incurred by it in connection with or on account of its
performance of services for Rayovac hereunder. Reimbursement shall be made only
upon presentation to Rayovac by the Consultant of reasonably itemized
documentation therefor.
5. Indemnification. In addition to its agreements and obligations
under this Agreement, Rayovac agrees to indemnify and hold harmless the
Consultant, and its affiliates (including its officers, directors, stockholders,
partners, members, employees and agents) from and against any and all claims,
liabilities, losses and damages (or actions in respect thereof), in any way
related to or arising out of the performance by the Consultant of services under
Sections 1 and 3 of this Agreement (other than for expenses incurred described
in Section 4 hereof or for compensation for services rendered), and to reimburse
the Consultant and any other such indemnified person for reasonable
out-of-pocket legal and other expenses incurred by it in connection with or
relating to investigating, preparing to defend, or defending any actions, claims
or other proceedings (including any investigation or inquiry) arising in any
manner out of or in connection with the Consultant's performance under this
Agreement (whether or not such indemnified person is a named party in such
proceeding); provided, however, that Rayovac shall not be responsible under this
Section 5 for any claims, liabilities, losses, damages or expenses to the extent
that they are finally judicially determined to result from actions taken by the
Consultant (or such other indemnified person) due primarily to the Consultant's
(or such other indemnified person's) gross negligence or willful misconduct.
6. Notice. All notices hereunder, to be effective, shall be in
writing and shall be mailed by certified mail, postage prepaid as follows:
(i) If to the Consultant:
Xxxxxx X. Xxx Company
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
(ii) If to Rayovac:
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000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: President
7. Modifications. This Agreement constitutes the entire agreement
between the parties hereto with regard to the subject matter hereof, superseding
all prior understandings and agreements whether written or oral. This Agreement
may not be amended or revised except by a writing signed by the parties.
8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns
but may not be assigned by either party without the prior written consent of the
other. Notwithstanding the foregoing, the Consultant may elect to have its
obligations hereunder performed in whole or in part by a partnership or other
entity affiliated with the Consultant, and the Consultant may direct that any
compensation (including all or a portion of the Management Fee) and
reimbursement of expenses be paid to the affiliate performing the services
hereunder with respect thereto.
9. Captions. Captions have been inserted solely for the convenience of
reference and in no way define, limit or describe the scope or substance of any
provision and shall not affect the validity of any other provision.
10. Governing Law. This Agreement shall be construed under and
governed by the laws of the Commonwealth of Massachusetts, without reference to
its conflicts of law principles.
11. Counterparts. This Agreement may be signed in two counterparts,
each of which shall be deemed an original but which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as a
sealed instrument as of the date first above written.
XXXXXX X. XXX COMPANY
By /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Managing Director
RAYOVAC CORPORATION
By /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Director
