MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (the "Agreement") is made and
entered into as of June 28 1995, by and between MSC Holdings, Inc.., a
Delaware corporation ("MSC"), Century City 1800 Partners L.P., a Delaware
limited partnership ("CCP"), and UBS Capital Corporation, a New York
corporation ("UBS Capital").
WHEREAS, MSC wishes to assure itself of the services of CCP as a
financial consultant upon the terms and conditions set forth in this
Agreement, and CCP is willing to accept such consultancy;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties agree as follows:
1. SCOPE OF SERVICES. CCP, through its employees, affiliates and
employees of affiliates, shall provide MSC and affiliates of MSC in which MSC
has an ownership interest (collectively, the "MSC Group") with consultation
and advice in such fields as financial services, accounting, general business
management, acquisitions, banking and legal matters (the "Services"). CCP
shall, in its reasonable discretion, determine the amount of time to be
expended by its affiliates and employees in performing such Services. CCP
shall perform its duties hereunder at such times and places as are
reasonable, in the reasonable discretion of CCP, in light of the tasks
involved. CCP shall not be required to comply with any established work
schedule and shall have no regularly scheduled duties assigned to it by MSC.
MSC shall, in soliciting CCP's advice and requesting CCP's performance of its
duties hereunder, give CCP reasonable advance notice of the same in
consideration of CCP's other business obligations.
2. COMPENSATION.
(a) In consideration of the Services to be rendered hereunder, MSC
hereby agrees to pay CCP a base annual management fee (the "Base
Compensation") of $400,000. Payments of the Base Compensation shall be made
in monthly installments payable in advance on the first day of each calendar
month. The first and last payments hereunder shall be appropriately pro
rated for the shorter periods that may be reflected thereby. The Base
Compensation shall be increased on each anniversary of the date of this
Agreement by the percentage increase in the Consumer Price Index as published
by the Bureau of Labor Statistics.
(b) In addition to the fees payable to CCP under Section 2(a)
above, MSC shall (i) pay to CCP a transaction fee for merger and acquisition
services rendered in connection with acquisitions made by any member of the
MSC Group, such fee to equal 1.4% of the aggregate acquisition consideration
(including debt assumed by the purchaser and current assets retained by the
seller); and (ii) reimburse CCP for all of its reasonable out-of-pocket costs
and expenses incurred in connection with the performance of its obligations
under this Agreement.
(c) Notwithstanding the foregoing provisions of this Section 2, MSC
shall not make payment of any compensation payable to CCP pursuant to
Section 2(a) or (b) or to UBS Capital pursuant to Section 2(d) at any time that
such payment would be
Management Services Agreement
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prohibited by the terms of that certain Facility Agreement, dated June 16,
1995, between ABI Acquisition 2 PLC and MSC Holdings, Inc. as initial
borrowers, the companies named therein as initial guarantors, Union Bank of
Switzerland as arranger, Union Bank of Switzerland as facility agent, Union
Bank of Switzerland as security trustee and certain others, as the same may
be amended, revised or restated from time to time. Nothing in this Section
2(c), shall prohibit the payment of compensation payable to CCP or UBS
Capital at any time following the expiration or termination of a payment
blockage pursuant to the preceding sentence, nor prohibit or limit the
accrual of compensation payable to CCP pursuant to Section 2(a) or (b) or to
UBS Capital pursuant to Section 2(d) at any time during which a payment
blockage pursuant to the preceding sentence remains in effect.
(d) UBS Capital will provide such merger and acquisition services
as may be reasonably requested from time to time by MSC in connection with
acquisitions made by any member of the MSC Group. Such acquisition services
shall consist of consultation and advice in such fields as financial
services, accounting, general business management, acquisitions, banking and
legal matters. In consideration of such services, MSC shall (i) pay to UBS
Capital a transaction fee equal to 0.6% of the aggregate acquisition
consideration (including debt assumed by the purchaser and current assets
retained by the seller); and (ii) reimburse UBS Capital for all of its
reasonable out-of-pocket costs and expenses incurred in connection with the
performance of such merger and acquisition services. Nothing in this Section
2(d) shall entitle UBS Capital to the payment of any amounts with respect to
the transactions and payments described in Section 2(e).
(e) The parties hereto acknowledge that substantially concurrently
with the execution of this Agreement, Petrowax PA Inc. will pay CCP a fee of
$500,000 in connection with certain equity and debt financing being provided
to MSC, and an affiliate of CCP, Aurora Capital Partners L.P., will be paid a
transaction fee of $1,350,000 by ABI Acquisition 2 PLC in connection with the
acquisition of Associated British Industries PLC. The parties agree that
none of the foregoing amounts are being paid pursuant to this Agreement or
will constitute compensation payable or paid to CCP pursuant to this Section
2.
3. TERM. Unless earlier terminated as provided in Section 4
below, the term of this Agreement shall commence on the date hereof and shall
terminate automatically upon the earliest of (i) the occurrence of any Change
of Control of MSC, (ii) the date one year after the consummation of a
Qualified IPO and (iii) the seventh anniversary of the date of this Agreement.
For purposes hereof, the following terms shall have the following
meanings:
"BENEFICIAL OWNER" has the meaning attributed to it in Rules 13d-3
and 13d-5 under the Securities Exchange Act of 1934 (the "Exchange
Act") (as in effect on the date first set forth above), whether or
not applicable, except that a "person" shall be deemed to have
"beneficial ownership" of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or
only after the passage of time.
"CAPITAL STOCK" means, any and all shares, interests, rights to
purchase (other than convertible or exchangeable indebtedness),
warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by MSC.
Management Services Agreement
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"CHANGE OF CONTROL" means with respect to MSC (i) any sale,
transfer or other conveyance, whether direct or indirect, of all or
substantially all of the assets of MSC, on a consolidated basis, in
one transaction or a series of related transactions, (ii) any
transaction as a result of which any "person" or "group" (as such
terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act, whether or not applicable) (other than any Excluded
Person) is or becomes the Beneficial Owner, directly or indirectly,
of 50% or more of the total voting power in the aggregate of all
classes of Capital Stock of MSC then outstanding normally entitled
to vote in elections of directors, (iii) during any period of 12
consecutive months after the date first set forth above,
individuals who at the beginning of any such 12-month period
constituted the Board of Directors of MSC (together with any new
directors whose election by such Board or whose nomination for
election by the shareholders of MSC was approved by a vote of a
majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of MSC
then in office or (iv) if at any time prior to the consummation of
a Qualified IPO, the Originating Partnerships fail to have the
ability to elect not less than a majority of the members of the
Board of Directors of MSC (with each UBS nominee elected pursuant
to Section 11.2 of the Stockholders Agreement being deemed to have
been elected by the Originating Partnerships).
"EXCLUDED PERSON" means (i) MSC, (ii) any employee benefit plan of
MSC or any trustee or similar fiduciary holding Capital Stock of
MSC for or pursuant to the terms of any such plan, (iii) the
holders of any Capital Stock of MSC on the date first set forth
above and, as to any partnership which is a holder of the Capital
Stock of MSC on the date first set forth above, any Person who
holds, directly or indirectly, any beneficial interest in any such
partnership on such date, and (iv) all Related Persons of any
Person described in the foregoing clause (iii) of this Paragraph.
"ORIGINATING PARTNERSHIPS" means Petrowax Equity Partners I L.P., a
Delaware limited partnership, and Petrowax Equity Partners II L.P.,
a Delaware limited partnership.
"PERSON" or "PERSON" means any corporation, individual, limited
liability company, joint stock company, joint venture, partnership,
unincorporated association, governmental regulatory entity,
country, state or political subdivision thereof, trust,
municipality or other entity.
"QUALIFIED IPO" means an underwritten public offering of common
stock of MSC pursuant to a registration statement filed with the
Securities and Exchange Commission; provided that either (i) there
are sales pursuant to such registration statement of shares of
common stock for an aggregate offering price of not less than
$15,000,000 or (ii) upon consummation of such underwritten public
offering at least
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fifteen percent (15%) of the issued and outstanding shares of
common stock of MSC shall have been issued pursuant to one or more
registration statements filed with the Securities and Exchange
Commission.
"RELATED PERSON" means, with respect to any Excluded Person, (i)
any Person who, directly or indirectly, controls, is controlled by
or under common control with such Excluded Person; PROVIDED,
HOWEVER, that for purposes of this definition "control" means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise, and shall be deemed to include the beneficial ownership
of more than 10% of the total voting power of a Person normally
entitled to vote in the election of directors, managers or
trustees, as applicable, of a Person and (ii) as to any natural
person, (A) such person's spouse, parents and descendants (whether
by blood or adoption, and including stepchildren) and the spouses
of any of such natural persons and (B) any corporation,
partnership, trust or other Person in which no one has any interest
(directly or indirectly) except for any of such natural person,
such spouse, parents and descendants (whether by blood or adoption,
and including stepchildren) and the spouses of any of such natural
persons.
"STOCKHOLDERS AGREEMENT" means that certain Stockholders Agreement,
of even date herewith, among MSC and certain of its stockholders,
optionholders and warrantholders, as the same may be supplemented,
amended or otherwise modified from time to time.
4. TERMINATION FOR CAUSE. MSC, by written notice to CCP
authorized by a majority of the disinterested members of the Board of
Directors of MSC, may terminate this Agreement for justifiable cause, which
shall mean any of the following events: (a) misappropriation by CCP of funds
or property of MSC; (b) gross neglect by CCP in the fulfillment of its
obligations hereunder; or (c) the conviction of CCP or any person who is then
a principal of CCP of a felony involving moral turpitude that has become
final and not subject to further appeal.
5. CONFIDENTIAL INFORMATION. During the term of this Agreement,
CCP and UBS Capital will have access to and become acquainted with
confidential information of MSC, including among other things customer
relationships, processes, and compilations of information, records and
specifications, which are owned by MSC. Neither CCP nor UBS Capital shall
use any of MSC's confidential information in any way that is detrimental to
the interests of MSC, directly or indirectly, either during or within three
(3) years after the term of this Agreement, except as required in the course
of this Agreement.
6. NOTICES. All notices, demands and requests required under
this Agreement shall be in writing and shall be deemed to have been given if
served personally or sent by registered or certified mail, postage prepaid,
or by telegraph or telex addressed to the addressee set forth or such other
addresses as either party may designate by notice to the other:
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If to MSC: MSC Holdings, Inc.
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn: Xxxxx Xxxx
If to CCP: Century City 1800 Partners L.P.
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
If to UBS Capital: UBS Capital Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Telecopier No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
Notices delivered in person shall be effective when so delivered. Notices
delivered by courier shall be effective three (3) business days after
delivery by the sender to an air courier of national reputation who
guarantees delivery within such three (3) business day period. Telecopied
notices shall be effective when receipt is acknowledged telephonically by the
addressee or its agent or employee. Notices sent by mail shall be effective
five (5) business days after the sender's deposit of such notice in the
United States mails, first class postage prepaid.
7. ASSIGNS AND SUCCESSORS. The rights and obligations of MSC
under this Agreement shall inure to the benefit of and shall be binding upon
the successors and assigns of MSC.
8. ATTORNEYS' FEES. If any legal proceeding is necessary to
enforce or interpret the terms of this Agreement, or to recover damages for
breach thereof, the prevailing party shall be entitled to reasonable
attorneys' fees, as well as costs and disbursements, in addition to any other
relief to which he or she is entitled.
9. INDEMNITY. MSC shall indemnify and hold CCP and UBS Capital
and each of their respective partners, directors, officers, employees and the
stockholders, affiliates, directors, officers and employees of its partners
(and representatives and agents of any of the foregoing designated by CCP or
UBS Capital from time to time whether before or after the occurrence of the
event giving rise to the claim for indemnity) (each such person entitled to
indemnity hereunder being referred to as an "Indemnitee") harmless from any
and all losses, costs, liabilities and damages (including reasonable
attorneys' fees) arising out of or connected with, or claimed to arise out of
or to be connected with, any act performed or omitted to be performed under
this Agreement, provided such act or omission was taken in good faith by such
Indemnitee and did not constitute gross negligence or willful misconduct on
the part of the relevant Indemnitee, and provided further only in the event
of criminal proceedings, that the Indemnitee had no reasonable cause to
believe the conduct of the Indemnitee was unlawful. An adverse judgment or
plea of NOLO CONTENDERE shall not, of itself, create a presumption that the
Indemnitee did not act
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in good faith or that the Indemnitee had reasonable cause to believe the
conduct of the Indemnitee was unlawful. Expenses incurred in defending any
civil or criminal action arising out of or relating to any event or
circumstance to which this indemnity shall apply shall be paid by MSC upon
receipt of an undertaking by or on behalf of the Indemnitee to repay such
amount if it be later shown that such Indemnitee was not entitled to
indemnification. No Indemnitee shall be liable to MSC or any of its
affiliates, stockholders, directors, officers or employees or any affiliates,
stockholders, partners, directors, officers, employees, representatives or
agents of any of the foregoing or any other person claiming through any of
the foregoing for any act or omission by CCP or UBS Capital in the
performance of its duties hereunder or otherwise in relation hereto which was
taken or omitted to be taken in good faith by such Indemnitee and which did
not constitute gross negligence or willful misconduct on the part of such
Indemnitee.
10. OUTSIDE ACTIVITIES OF CCP. CCP shall be entitled to and may
have business interests and engage in business activities in addition to the
activities contemplated by this Agreement. Neither CCP nor any partner,
director, officer, or employee of CCP nor any stockholder, director, officer
or employee of any partner of CCP shall have any obligation or duty to offer
any investment or business opportunity (other than an opportunity directly
involving the petroleum wax industry) of any kind to MSC or any of their
respective stockholders, directors, officers or employees (under any doctrine
of "corporate opportunity" or otherwise), it being expressly understood that
CCP and its partners, directors, officers and employees and the stockholders,
directors, officers and employees of CCP's partners may make investments in,
acquire, or provide management, advisory or consulting services to, entities
engaged in businesses similar to the business of MSC without any duty,
obligation or liability to MSC or their respective stockholders, directors,
officers or employees.
11. AMENDMENT; WAIVER. This Agreement may be amended, and any
right or claim hereunder waived, only by a written instrument signed by CCP,
UBS Capital and MSC. Except as provided in Section 9 hereof, nothing in this
Agreement, express or implied, is intended to confer upon any third person
any rights or remedies under or by reason of this Agreement. No amendment or
waiver of this Agreement requires the consent of any individual, partnership,
corporation or other entity not a party to this Agreement, except that any
amendment of Section 9 shall only operate prospectively as to any Indemnitee
provided therein unless such Indemnitee shall have agreed in writing to such
amendment.
12. CONSTRUCTION, ETC. This Agreement shall be construed under
and governed by the internal laws of the State of California. Section
headings are for convenience only and shall not be considered a part of the
terms and provisions of this Agreement. This Agreement may be executed in
any number of counterparts, each of which when executed and delivered shall
be deemed an original and all of which when taken together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
MSC HOLDINGS, INC.
By: /s/ Xxxxxxxxx X. Xxxxx
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Name: Xxxxxxxxx X. Xxxxx, III
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Title: Vice President
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CENTURY CITY 1800 PARTNERS L.P.
By: CENTURY CITY 1800 MANAGEMENT
PARTNERS, L.P., as General Partner
By: GELPAR, INC., as General Partner
By: /s/ Xxxxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxxxx X. Xxxxx, III
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Title: Chief Financial Officer
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UBS CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
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Title: Managing Director
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By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
----------------------------------
Title: Managing Director
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Management Services Agreement
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