EXHIBIT 99(f)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 31st day of October, 1997 among TSG Ventures L.P., a
Delaware limited partnership (the "Partnership"), TSGVI Associates, Inc., a
Delaware corporation and the general partner of the Partnership (the "General
Partner"), and TSG Management Co., L.L.C., a Delaware limited liability
company (the "Manager").
W I T N E S S E T H:
WHEREAS, the General Partner is the general partner of the Partnership
and desires to engage the Manager on behalf of the Partnership to act as the
manager of the Partnership as hereinafter set forth; and
WHEREAS, the Manager is willing to act as aforesaid on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Services to be Rendered by the Manager.
A. The Partnership and the General Partner hereby appoint the
Manager, and the Manager hereby accepts such appointment, as
the manager for the Partnership on the terms and conditions set
forth herein, subject to control by the General Partner, in its
sole discretion. Without limiting the generality of the
foregoing, the Manager shall advise and consult with the
General Partner concerning the general and day-to-day
operations of the Partnership and its subsidiaries and the
acquisition and disposal of, and dealings with, investments by
or for the account of the Partnership and its subsidiaries;
shall regularly provide the Partnership with such investment
research, advice and management as shall be necessary or
appropriate for the proper management of the Partnership's and
its subsidiaries' assets, subject to the provisions of the
Agreement of Limited Partnership of the Partnership, as amended
from time to time (the "Partnership Agreement"), and any other
agreement to which the Partnership or the General Partner is a
party (collectively, the "Additional Agreements"); shall be
responsible for ensuring fulfillment of the obligations of the
General Partner under the Partnership Agreement and the
Additional Agreements and ensuring compliance by the
Partnership with the provisions of the Small Business
Investment Act of 1958, as amended, and the rules and
regulations of the Small Business Administration, including
without limitation the provisions of the 3% Preferred Stock
Repurchase Agreement dated June 20, 1994 entered into by the
Partnership's predecessor-in-interest. The provisions of this
Management Agreement shall not, however,
confer any power or authority on the Manager to enter into any
transaction on behalf of or in any way bind the General Partner
or the Partnership except as expressly conferred upon the
Manager by the General Partner and only in accordance with the
terms and provisions of the Partnership Agreement. In
performing its duties hereunder, the Manager shall act in
accordance with the provisions of the Partnership Agreement
and, in connection therewith, shall not knowingly take or
recommend the taking of any action which would constitute a
breach of the Partnership Agreement or any other agreement to
which the Partnership or the General Partner is a party. All
terms used herein which are not otherwise defined are used as
defined in the Partnership Agreement.
B. The Manager shall furnish all such information concerning its
activities hereunder as shall from time to time be requested or
required by the General Partner, and shall afford to the
General Partner, the Partnership's auditors and the
Partnership's other representatives access to all documents and
records concerning the Partnership and the activities of the
Manager hereunder as shall be requested or required by the
General Partner.
2. Manager's Fees. As compensation for services to be rendered
hereunder, the Partnership shall pay or reimburse the Manager for the
following, in each case subject to the provisions of Section 5.3(b) of the
Partnership Agreement (and, in the case of any conflict between this Agreement
and said provisions, said provisions shall govern) (the "Management Fee"):
A. Subject to assumption by the Manager of all obligations to pay
employee compensation contemplated by Section 5.3 of the
Partnership Agreement, all base salary and incentive
compensation reasonably paid or accrued by the Manager to the
extent the amounts thereof relate to services performed on
behalf of the Partnership to the extent the amounts thereof do
not exceed the amounts payable pursuant to the compensation
arrangements approved by the United States Small Business
Administration (the "SBA") from time to time with respect to
the Partnership or its predecessor, subject to such limitations
and restrictions thereto as to which the Partnership may agree
or may have agreed (the "Compensation Arrangements") and
subject to appropriate reduction to the extent that services
for which compensation is payable pursuant to the Compensation
Arrangements are not performed by the Manager. The
Compensation Arrangements as in effect on the date of this
Agreement are attached hereto as Exhibit A. Such portion of
the Management Fee, and each component thereof, shall be paid
on the date on which the corresponding payment under the
Compensation Arrangements would be made if it had been paid
directly by the Partnership or its predecessor.
B. The Partnership's share of all costs allocated to the
Partnership pursuant to the Cost Sharing Agreement, dated as of
January 31, 1995, between TSG Capital Group, L.L.C. and TSG
Ventures Inc., as amended (the "Cost Sharing Agreement"), which
Cost Sharing Agreement has previously been approved by the SBA,
subject to assumption by the Manager of all obligations of TSG
Ventures Inc. thereunder. Such portion of the Management Fee,
and each component thereof, shall be paid on the date on which
the corresponding payment or allocation under the Cost Sharing
Agreement is made.
C. A reasonable charge for equipment provided or used by the
Manager in connection with the performance of its duties
hereunder, in each case determined in advance by the General
Partner and the Manager. Such portion of the Management Fee
shall be paid monthly upon presentation of reasonably itemized
invoices therefor.
D. Such other reasonable expenses incurred by the Manager in
connection with the performance of its duties hereunder, to the
extent consistent with past practices, in each case determined
in advance by the General Partner and the Manager, provided
that the parties hereby agree that such expenses shall include
the employer's share of any and all payroll taxes in respect of
salaries paid or reimbursed hereunder. Such portion of the
Management Fee shall be paid monthly upon presentation of
reasonably itemized invoices therefor, provided that payments
in respect of payroll taxes as aforesaid shall be made on or
prior to the date on which such taxes must be deposited with
the relevant governmental authority.
3. Other Expenses. The Partnership shall directly pay all reasonable
expenses incurred by the Partnership in connection with the conduct of its
investment activities (without duplication of the Management Fee or any part
thereof), subject to such limitations as may be imposed by the SBA. Such
expenses shall include, without limitation, legal, accounting and other
professional fees, examination fees and meeting costs.
4. Affiliations. The parties hereto agree that any member, shareholder,
partner, officer, director, employee or agent of the Manager may be a partner,
officer, employee or agent of the Partnership or a partner, officer, employee
or agent of the General Partner.
5. Indemnification and Exculpation.
A. The Manager shall not be liable and shall be exculpated and
indemnified by the Partnership to the full extent provided in
Section 5.5 of the Partnership Agreement.
B. In addition, subject to the terms and provisions of the Partnership
Agreement, the General Partner (on behalf of itself and not on
behalf of the Partnership) shall indemnify the Manager (including
its partners and its and their directors, officers employees,
beneficial owners, agents and affiliates and each person who
controls the Manager) against and hold it harmless from any expense,
loss, liability or damage (including reasonable counsel fees and
expenses) arising out of any claim asserted in connection with the
Manager serving or having served as such pursuant to this Investment
Advisory Agreement. In case any claim shall be made or action
brought against the Manager for any reason for which indemnity may
be sought against the General Partner as provided above, the Manager
shall promptly notify the General Partner in writing setting forth
the particulars of such claim or action and the General Partner may
assume the defense thereof. In the event that the General Partner
so assumes the defense, the Manager shall have the right to retain
separate counsel in any such action but shall bear the fees and
expenses of such counsel unless (i) the General Partner shall have
specifically authorized the retaining of such counsel or (ii) the
parties to such suit include the Manager, the
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Partnership, and the General Partner, and the Manager has been
advised in writing by such counsel that one or more legal defenses
may be available to it which may not be available to the General
Partner. All obligations of the General Partner under this
Paragraph B shall expire on the Changeover Date.
The term "liability," as used in this Section, shall include any losses,
claims, damages, expenses (including, without limitation, the Manager's
reasonable costs and expenses in defending itself against losses, claims or
investigations of any nature whatsoever) or other liabilities arising for any
reason under this Management Agreement.
6. Confidentiality. For purposes hereof, the term "Confidential
Material" shall be defined to mean all proprietary or confidential information
furnished to the Manager, or any of its members, officers, employees or agents
(each a "Receiving Party") by the Partnership or the General Partner, or any
of their respective employees or agents (each a "Disclosing Party").
Notwithstanding the foregoing, the term "Confidential Material" shall not
include information which becomes generally available to the trade or the
public other than as a result of a disclosure by the Disclosing Party. In
connection with and as a condition to the Disclosing Party furnishing
Confidential Material to the Receiving Party, the Manager hereby agrees that,
during the term of this Agreement and thereafter, the Receiving Party shall
treat all Confidential Material confidentially, and not disclose it except in
accordance herewith. Notwithstanding the foregoing or any other provision
contained herein, unless otherwise agreed to by the parties hereto, the
Receiving Party may not in any manner use any Confidential Material for any
purpose other than in connection with performance by the Manager of its
obligations hereunder.
7. Amendments; Term. No provision of this Management Agreement, nor of
any agreement assumed by the Manager from the Partnership's
predecessor-in-interest, may be amended, altered or modified unless in a
writing executed by the parties hereto and approved by a Majority Interest of
the partners of the Partnership. This Management Agreement shall become
effective commencing as of the date hereof and shall continue until the
earlier of (a) the date that the Partnership is dissolved and its liquidation
completed under the Partnership Agreement, (b) the date of the removal of the
Manager under the Partnership Agreement; provided, that Section 5 will survive
until the first anniversary thereof and (c) termination of this Management
Agreement by the General Partner, in its sole discretion.
8. Notice. Any notice under this Management Agreement shall be given
in writing, addressed and delivered by first class mail, postage paid, and
shall be deemed to be effective upon receipt, if to the Partnership, the
General Partner or the Manager:
c/o TSG Management Co., L.L.C.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
or at such other address as such party shall have specified in writing to the
other parties hereto.
9. Assignment. This Management Agreement may not be assigned in whole
or in part, nor any obligations hereunder subcontracted, by any of the parties
hereto. The covenants and agreements contained herein shall inure to the
benefit of the parties hereto and to the parties to the Stockholders Agreement
(as defined in the Partnership Agreement).
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10. Governing Law. This Management Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware.
11. Counterparts. This Management Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
12. Entire Agreement. There are no oral agreements or understandings
with respect to or affecting this Management Agreement, and this Management
Agreement and the Partnership Agreement and the Stockholders Agreement
constitute the entire agreement between the parties hereto with regard to the
subject hereof.
13. Related Agreements. This Management Agreement will be subject to
the terms and provisions of the Partnership Agreement and the Stockholders
Agreement, and in the event of any conflict between this Management Agreement
and the Partnership Agreement or the Stockholders Agreement, the Partnership
Agreement and the Stockholders Agreement will supersede and control such
conflict.
14. Independent Contractors. For all purposes of this Agreement, the
Manager shall be an independent contractor and not an employee or agent of the
Partnership or the General Partner; nor shall anything herein be construed as
making the Partnership or the General Partner a partner or co-venturer with
the Manager or any of its affiliates.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
TSGVI ASSOCIATES, INC. TSG MANAGEMENT CO., L.L.C.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Title:
TSG VENTURES L.P.
By: TSGVI Associates, Inc.
its general partner
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title:
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