EXHIBIT 10.14
AMENDED AND RESTATED
HAMPSHIRE MANAGEMENT CONSULTING AGREEMENT
THIS AMENDED AND RESTATED HAMPSHIRE MANAGEMENT CONSULTING AGREEMENT (this
"Agreement") is executed as of February 28, 2005 and is effective as of February
1, 2004 (the "Effective Date"), by and between HAMPSHIRE MANAGEMENT COMPANY LLC,
a Delaware limited liability company and affiliate of Hampshire Equity Partners
II, L.P. (the "Consultant") and CITI TRENDS, INC., a Delaware corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, the Company previously entered into a Management Consulting
Agreement with an affiliate of the Consultant, Lexington Equity Partners II,
L.L.C., on April 13, 1999 (the "Original Agreement");
WHEREAS, Lexington Equity Partners II, L.L.C. has been dissolved;
WHEREAS, the Company desires to retain Consultant to provide business and
financial advice to the Company and to amend and restate the Original Agreement;
and
WHEREAS, the Consultant wishes to provide such business and financial
advice to the Company.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein set forth, the parties hereto do hereby agree follows:
Section 1. The Company hereby retains the Consultant, through the
Consultant's own personnel or through personnel available to the Consultant, to
render consulting services from time to time to the Company and its subsidiaries
(whether now existing or hereafter acquired), in connection with their financial
and business affairs, their relationships with their lenders, stockholders and
other third-party associates or affiliates, and the expansion of their
businesses. Consultant shall render such services to the Company in good faith
and in accordance with professional standards and applicable law. Consultant
shall report directly to the Board of Directors of the Company (the "Board of
Directors") and, when appropriate in conjunction with management, shall prepare
reports and provide other documentation for review by the Board of Directors as
to its work on behalf of the Company. The Board of Directors shall in its sole
discretion determine the scope and breadth of the Consultant's responsibilities
and duties hereunder. The terms of this Agreement shall commence on the date
hereof and continue until February 1, 2009, unless extended, or sooner
terminated, as provided in Section 5 below. The Consultant's personnel shall be
reasonably available to the Company's Board of Directors, managers, auditors and
other personnel for consultation and advice to be rendered pursuant to this
Agreement, subject to Consultant's reasonable convenience and scheduling.
Services may be rendered at the Consultant's offices or at such other locations
selected by the Consultant as the Company and the Consultant shall from time to
time agree.
Section 2. The Company shall pay the Consultant a management fee equal to
$240,000 per year from the Effective Date through the termination of this
Agreement. The Company shall pay the Consultant such management fee in monthly
installments on the last day of each month during the term of this Agreement.
The Company and the Consultant acknowledge and agree that all fees and other
amounts due and owing to the Consultant for all periods prior to the Effective
Date have been paid in full.
Section 3. Subject to the approval of the Board of Directors, the Company
shall reimburse Consultant for reasonable out-of-pocket expenses and any
reasonable, direct, allocable costs incurred by the Consultant and its personnel
in performing services hereunder to the Company and its subsidiaries upon the
Consultant's rendering of a statement therefor, together with supporting data as
the Company shall reasonably require.
Section 4. Notwithstanding the foregoing, the Company shall not pay the
fees under Section 2 and such fees shall accrue pursuant to the second sentence
of this Section 4, if and to the extent expressly prohibited by the provisions
of any credit, stock, financing or other agreements or instruments binding upon
the Company, its subsidiaries or properties, if the Company has not paid cash
interest on any interest payment date or has postponed or not made any principal
payments with respect to any of their indebtedness on any scheduled payment
dates, or if the Company has not paid cash dividends on any dividend payment
date as set forth in its certificate of incorporation or as declared by its
Board of Directors, or has postponed or not made any redemptions on any
redemption date as set forth in its certificate of incorporation or any
certificate of designation with respect to its preferred stock, if any. Any
payments otherwise owed hereunder, which are not made for any of the
above-mentioned reasons, shall not be canceled but rather shall accrue, without
interest, and shall be payable by the Company promptly when, and to the extent,
that the Company is no longer prohibited from making such payments. This Section
4 will not, in any event, restrict or limit the Company's obligations under
Sections 3, 8 and 9 which will be absolute and not subject to set-off.
Section 5. This Agreement shall be automatically renewed for successive
one (1) year terms starting February 1, 2008 unless either party hereto, within
sixty (60) days prior to the scheduled renewal date, notifies the other party as
to its election to terminate this Agreement. Notwithstanding the foregoing, this
Agreement may be terminated by not less than ninety (90) days' prior written
notice from the Company to the Consultant at any time after (a) substantially
all of the stock or substantially all of the assets of the Company are sold to
any entity unaffiliated with the Consultant and/or a majority of the Company's
stockholders immediately prior to such sale or (b) the Company is merged or
consolidated into another entity unaffiliated with the Consultant and/or a
majority of the Company's stockholders immediately prior to such merger and the
Company is not the survivor of such transaction, or (c) the consummation of a
public offering and sale of equity securities of the Company pursuant to an
effective registration statement under the Securities Act of 1933, as amended.
Section 6. The Consultant shall have no liability to the Company on
account of (a) any advice which it renders to the Company, provided the
Consultant believed in good faith that such advice was useful or beneficial to
the Company at the time it was rendered, or (b) the Consultant's inability to
obtain financing or achieve other results desired by the Company or Consultant's
failure to render services to the Company at any particular time or from time to
time, (c) the failure of any transaction to meet the financial, operating or
other expectations of the Company. The Company's sole remedy for any claim under
this Agreement shall be termination of this Agreement.
Section 7. Notwithstanding anything contained in this Agreement to the
contrary, the Company agrees and acknowledges that the Consultant, Hampshire
Equity Partners II, L.P., their respective affiliates, members, employees, and
directors (the "Hampshire Affiliates") intend to engage and participate in
acquisitions and business transactions outside of the scope of the relationship
created by this Agreement and the Hampshire Affiliates shall not be under any
obligation whatsoever (except to the extent that fiduciary duty principles under
Delaware corporate law may be applicable to individual directors and officers of
the Company) to make such acquisitions, business transactions or other
opportunities through the Company or offer such acquisitions, business
transactions or other opportunities to the Company.
Section 8. The Company will, to the fullest extent permitted by applicable
law, indemnify and hold harmless the Consultant, its affiliates and associates,
each of the Hampshire Affiliates, and each of the respective owners, partners,
officers, directors, members, employees and agents of each of the foregoing (the
"Indemnified Parties"), from and against any loss, liability, damage, claim or
expenses (including the fees and expenses of counsel) arising as a result of or
in connection with this Agreement; provided, however, that the Company shall not
indemnify any of the Indemnified Parties for any losses, liabilities, damages,
claims or expenses arising as a result of the Consultant's breach (or alleged
breach) of its obligations under Section 10 of this Agreement.
Section 9. Any payments paid by the Company under this Agreement shall not
be subject to set-off and shall be increased by the amount, if any, of any taxes
(other than income taxes) or other governmental charges levied in respect of
such payments, so that the Consultant is made whole for such taxes or charges.
Section 10. (a) This Agreement sets forth the entire understanding of the
parties with respect to the Consultant's rendering of services to the Company.
This Agreement may not be modified, waived, terminated or amended except
expressly by an instrument in writing signed by the Consultant and the Company.
(b) This Agreement may be assigned by either party hereto without
the consent of the other party, provided, however, such assignment shall not
relieve such party from its obligations hereunder. Any assignment of this
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns.
(c) In the event that any provision of this Agreement shall be held
to be void or unenforceable in whole or in part, the remaining provisions of
this Agreement and the remaining portion of any provision held void or
unenforceable in part shall continue in full force and effect.
(d) Except as otherwise specifically provided herein, notice given
hereunder shall be deemed sufficient if delivered personally or sent by
registered or certified mail to the
address of the party for whom intended at the principal executive offices of
such party, or at such other address as such party may hereinafter specify by
written notice to the other party.
(e) If at any time after the date upon which this Agreement is
executed, the Company acquires or creates one or more subsidiary corporations (a
"Subsequent Subsidiary"), the Company shall cause such Subsequent Subsidiary to
be subject to this Agreement and all references herein to the Company's "direct
and indirect subsidiaries" shall be interpreted to include all Subsequent
Subsidiaries.
(f) Each subsidiary of the Company shall be jointly and severally
liable and obligated hereunder with respect to each obligation, responsibility
and liability of the Company as if a direct obligation of such subsidiary.
(g) No waiver by either party of any breach of any provision of this
Agreement shall be deemed a continuing waiver or a waiver of any preceding or
succeeding breach of such provision or of any other provision herein contained.
(h) The Consultant and its personnel shall, for purposes of this
Agreement, be independent contractors with respect to the Company.
(i) This Agreement shall be governed by the internal laws (and not
the law of conflicts) of the State of New York.
Section 11. The parties shall keep the terms of this Agreement strictly
confidential and shall not reveal them to any person, except as may be necessary
in any proceeding to enforce the terms of this Agreement or as consented to by
the parties hereto.
Section 12. This Agreement supersedes all prior agreements between the
parties in the entirety with respect to the subject matter hereof, including the
terms of the Original Agreement, and no agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
[Signature Page Follows]
[Hampshire Management
Consulting Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
HAMPSHIRE MANAGEMENT COMPANY LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
CITI TRENDS, INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
