MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (this "Agreement"), dated as of
October 20, 1999, is between Consoltex (USA) Inc., a New York
corporation (the "Company"), and American Industrial Partners,
a Delaware general partnership ("AIP").
BACKGROUND
Subject to the terms and conditions of this Agreement, the Company
desires to retain AIP to provide certain management services to the
Company and its subsidiaries.
TERMS AND CONDITIONS
In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties agree as follows:
1. MANAGEMENT SERVICES. AIP shall provide general management,
financial and other corporate advisory services to the Company
and its subsidiaries. These management services shall be performed
by the officers, employees or agents of AIP as it may determine in
its discretion from time to time.
2. FEES AND EXPENSES.
(a) The Company shall pay to AIP an annual management fee
(the "Management Fee") of One Million Three Hundred and Fifty
Thousand Dollars (US $1,350,000). The Management Fee shall be payable
in advance in quarterly installments of US$337,500 payable on or before
each December 31, March 31, June 30 and September 30 occurring during
the term of this Agreement, beginning December 31, 1999. On the date
hereof, the Company shall pay to AIP its pro rata Management Fee for
the period beginning on the Closing Date (as defined in the
Shareholders Agreement) and ending on December 31, 1999.
(b) The Company shall promptly, when requested, reimburse
AIP for all reasonable out-of-pocket expenses incurred in the
ordinary course by AIP in connection with AIP's obligations
hereunder.
(c) Notwithstanding anything to the contrary contained herein,
the Company shall accrue but not pay the Management Fee if (i) any
such payment would violate, breach or otherwise constitute a default
(or any event which might with the lapse of time or the giving of
notice or both, constitute a default) under any of the financing
agreements of the Company or Consoltex Group Inc. ("Consoltex"),
or (ii) AIP instructs the Company not to pay all or any portion
of the Management Fee during any fiscal year.
(d) Upon the consummation of the sale of all (but not less than
all) of the outstanding capital stock of Consoltex, the amalgamation,
statutory arrangement, consolidation or merger with or into any person,
the sale, lease, assignment or transfer of all or substantially all
of the assets of Consoltex or any of its significant subsidiaries or
a recapitalization of Consoltex or any of its significant subsidiaries,
the Company shall pay to AIP the sum of (i) the lesser of (A) the
remaining Management Fee payable under the term of this Agreement
or (B) $10,000,000 PLUS (ii) the accrued and unpaid amounts due
under Section 2(c).
3. INDEMNIFICATION. To the extent permitted by law, the Company shall
protect, hold harmless and indemnify AIP from and against any and all
liability, obligations, losses, claims and damages whatsoever and
expenses in connection therewith including, without limitation,
reasonable counsel fees and expenses, penalties and interest arising
out of or as the result of the entering into of this Agreement except
to the extent, and only to the extent, that such liability or claim
is the result of the willful misconduct or gross negligence of AIP.
4. INDEPENDENT CONTRACTOR; NO JOINT VENTURE. AIP is performing
services hereunder as an independent contractor (and not as an agent,
representative or employee of the Company), and AIP is not and shall
not be deemed to be a co-venturer with, or partner of, the Company
in any respect.
5. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the
entire agreement and understanding between the parties with respect
to the subject matter hereof. This Agreement may be amended or
modified, or any provision hereof may be waived, provided that such
amendment or waiver is set forth in a writing executed by the parties.
No courses of dealing between or among any persons having any interest
in this Agreement will be deemed effective to modify, amend or discharge
any part of this Agreement or any rights or obligations of any person
under or by reason of this Agreement.
6. NO ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other parties hereto;
PROVIDED that AIP may assign all of its rights and obligations hereunder
to any affiliate of AIP without the consent of the Company; and PROVIDED
FURTHER that AIP may assign any or all of its rights hereunder, without
the consent of the Company (i) to any lender providing financing to AIP
or its affiliates and (ii) in connection with any sale of all or
substantially all of the assets, capital stock or business or a
recapitalization of AIP or Consoltex or any of its subsidiaries
(whether effected by sale, exchange, merger, statutory arrangement,
consolidation or other transaction).
7. BINDING EFFECT. In the event of assignment of this Agreement
pursuant to Section 6 hereunder, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their successors
and permitted assigns.
8. TERM. This Agreement shall terminate on the fifteenth anniversary
of the date hereof. Notwithstanding the foregoing, this Agreement
shall always remain in effect to the extent that any money is owed
under sections 2 or 3 of this Agreement.
9. GOVERNING LAW. The validity, performance, construction and
effect of this Agreement shall be governed by and construed in
accordance with the internal law of the State of New York.
10. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given
by personal delivery, by reputable overnight courier or by mail
(registered or certified mail, postage prepaid, return receipt
requested) to the respective parties as follows:
If to AIP:
American Industrial Partners
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telecopy: 000-000-0000
Telephone: 000-000-0000
Attention: Xxx X. Xxxxxx
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to the Company:
Consoltex (USA) Inc.
1040 Avenue of the Americas
6{th} Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
or to such other address as any party hereto may, from time to time,
designate in a written notice given in like manner. Notices will
be deemed to have been given hereunder when delivered personally,
five days after deposit in the U.S. mail and one business day after
deposit with a reputable overnight courier service.
IN WITNESS WHEREOF, each of the parties hereto has caused this
writing to be executed as of the day and year first above written.
CONSOLTEX (USA) INC.
By:____________________________________
Name:
Title:
AMERICAN INDUSTRIAL PARTNERS
By:____________________________________
Name: Xxx X. Xxxxxx
Title: Authorized Signatory
