AMENDED AND RESTATED SUPPLY MANAGEMENT AGREEMENT Dated as of August 15, 2008
NB
SUPPLY
MANAGEMENT CORP.
as
Manager,
and
GAC
MANUFACTURING, LLC,
as
Manufacturing
Page
DEFINITIONS
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1
|
|
Section
1.1
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Defined
Terms
|
1
|
ARTICLE
II.
|
DUTIES
OF THE MANAGER
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2
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Section
2.1
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Nature
of Management Services
|
2
|
Section
2.2
|
Manager
Fee
|
5
|
Section
2.3
|
Modifications,
Amendments and Consents With Respect to the Manufacturing
Assets
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5
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ARTICLE
III.
|
EFFECTIVE
DATE
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5
|
ARTICLE
IV.
|
DEPOSIT
OF COLLECTIONS
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6
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ARTICLE
V.
|
REPRESENTATIONS
AND WARRANTIES OF THE MANAGER
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6
|
Section
5.1
|
Representations
and Warranties
|
6
|
ARTICLE
VI.
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COVENANTS
OF THE MANAGER
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9
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Section
6.1
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Covenants
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9
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ARTICLE
VII.
|
MANAGER
TERMINATION EVENT
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13
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Section
7.1
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Manager
Termination Event
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13
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Section
7.2
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Termination
of Manager
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15
|
Section
7.3
|
Appointment
of Successor
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15
|
Section
7.4
|
Back-up
Manager
|
16
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ARTICLE
VIII.
|
MISCELLANEOUS
|
16
|
Section
8.1
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Notices
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16
|
Section
8.2
|
Entire
Agreement
|
17
|
Section
8.3
|
Severability
|
17
|
Section
8.4
|
CONSENT
TO JURISDICTION
|
17
|
Section
8.5
|
Waiver
of Jury Trial
|
17
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Section
8.6
|
Further
Assurances
|
18
|
Section
8.7
|
Amendments;
Waivers
|
18
|
Section
8.8
|
Successors
and Assigns
|
18
|
Section
8.9
|
Severability
of Provisions
|
18
|
Section
8.10
|
No
Bankruptcy Petition
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18
|
Section
8.11
|
Relationship
of Parties
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18
|
-i-
Section
8.12
|
Limitation
on Liability; Indemnity
|
19
|
|
||
Section
8.13
|
Errors
and Omissions Insurance
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19
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Section
8.14
|
Governing
Law
|
19
|
Section
8.15
|
Counterparts
|
19
|
Section
8.16
|
Limitation
on Payment
|
20
|
Section
8.17
|
Separate
Identity Provisions
|
20
|
Section
8.18
|
Status
of Parties
|
21
|
Section
8.19
|
Limitations
on Authority
|
21
|
Section
8.20
|
Headings
and Captions
|
21
|
Section
8.21
|
Third
Party Beneficiary
|
21
|
Section
8.22
|
Effect
on Amended and Restated Supply Management Agreement;
Acknowledgement
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21
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Appendix
A: Standard Definitions
Exhibit
A: [Reserved]
Exhibit
B: Power of Attorney
Exhibit
C: Form of Manager Report
Exhibit
D: Litigation
Schedule
1: Insurance
-ii-
AMENDED
AND RESTATED SUPPLY MANAGEMENT AGREEMENT
This
AMENDED AND RESTATED SUPPLY MANAGEMENT AGREEMENT is dated as of August 15,
2008
(this “Supply
Management Agreement”),
and
is by and between NB SUPPLY MANAGEMENT CORP., a Delaware corporation (the
“Manager”)
and
GAC MANUFACTURING, LLC, a Delaware limited liability company (“Manufacturing”).
PRELIMINARY
STATEMENT
As
of the
date of this Supply Management Agreement, Manufacturing owns the Real Property
and certain other Assets (the “Manufacturing
Assets”)
as set
forth in that certain Security Agreement Supplement, dated as of the date
hereof, by and among Manufacturing, NexCen Holding Corporation, GAC Supply,
LLC
(“Supply”)
and
BTMU Capital Corporation (the “GAC
Supply and Manufacturing Security Agreement Supplement”);
and
Manufacturing and Supply have entered into that certain Manufacturing Agreement,
dated as of January 29, 2008 (the “Manufacturing
Agreement”)
pursuant to which Manufacturing shall provide dough and other ancillary
products, as described in such agreement, to Supply.
This
Supply Management Agreement hereby amends and restated in its entirety that
certain Supply Management Agreement, dated as of August 15, 2008 (the
“Original
Management Agreement”),
by
and between the parties hereto. By executing this Supply Management Agreement,
each of the parties hereto consents to such Amendment.
Manufacturing
has requested that the Manager provide certain management services and assist
and advise in the management of the Manufacturing Assets and the performance
of
the duties of Manufacturing under the Manufacturing Agreement and other
Transaction Documents to which Manufacturing is party.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I.
DEFINITIONS
Section
1.1 Defined
Terms.
(a) Except
as
otherwise expressly provided herein or unless the context otherwise requires,
the capitalized terms used, but not defined, herein shall have the respective
meanings specified in the Standard Definitions attached to the Security
Agreement as Appendix A. The definitions of such terms are equally applicable
both to the singular and plural forms of such terms.
(b) All
references in this instrument to designated “Articles,” “Sections,”
“Subsections” and other subdivisions are to the designated Articles, Sections,
Subsections and other subdivisions of this instrument as originally executed
or
if amended or supplemented, as so amended and supplemented. The words “herein,”
“hereof,” “hereunder” and other words of similar import refer to this Supply
Management Agreement as a whole and not to any particular Article, Section,
Subsection or other subdivision. The words “including” and “include” shall be
deemed to be followed by the words “without limitation”. References to Persons
herein shall be deemed to include their permitted successors and assigns.
Additionally, and for the avoidance of doubt, all references to “NexCen Brands”
shall be deemed to refer to any entity, including any other Affiliate thereof,
into which NexCen Brands shall merge, or consolidate, or to which NexCen Brands
shall contribute, sell, or otherwise transfer any material portion of its assets
or liabilities.
-1-
ARTICLE
II.
DUTIES
OF THE MANAGER
Section
2.1 Nature
of Management Services.
(a) Management
Services.
Manufacturing hereby appoints the Manager, as manager, to provide the Management
Services. The Manager hereby agrees to such appointment. The Manager hereby
agrees to perform all of the following services (the “Management
Services”)
at its
sole cost and expense, except as may otherwise be provided herein, and in
accordance with the standards set forth in Section
2.1(b)
hereof,
for the benefit of Manufacturing including:
(i)
|
to
manage the Manufacturing Assets, and to take any and all actions
on behalf
of Manufacturing which may be necessary, required, convenient or
incidental to cause the business to be conducted, including without
limitation, compliance with the Security Deed, the Transaction Documents
and all laws and ordinances applicable to the Real Property and the
operation of Manufacturing’s
business;
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(ii)
|
to
pay all Manager Costs as and when
due;
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(iii)
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to
record ownership changes, and other conveyances, in connection with
the
Manufacturing Assets;
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(iv)
|
to
pursue the business strategy chosen by Manufacturing to maximize
the value
of and the income derived from the Manufacturing Assets and the ability
to
manufacture the product to be delivered to Supply under the Manufacturing
Agreement and on the Franchisees of GAC Franchising,
LLC;
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(v)
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to
cause Manufacturing to enter into, enforce its rights under and comply
with the provisions of the Manufacturing Agreement (including, without
limitation, causing Manufacturing to purchase raw materials, providing
employees necessary to facilitate production of product and otherwise
manage the production of the product) and from time to time, to take
reasonable steps to negotiate, amend and/or renew the terms of the
Manufacturing Agreement consistent with the exercise of sound business
judgment and the other provisions hereof and the other Transaction
Documents;
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-2-
(vi)
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to
coordinate distribution of product to Supply pursuant to the Manufacturing
Agreement, and to xxxx and collect accounts receivable from Supply
in
connection with the same
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(vii)
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to
keep the Manufacturing Assets and Real Property in good working order
and
useable condition as necessary to comply with the Transaction Documents,
including with respect to taking all reasonable steps for their physical
repair and maintenance;
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(viii)
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to
manage the affairs and take all such action as may be necessary to
cause
Manufacturing to be in compliance with, and enforce its rights under,
its
obligations under the Transaction Documents, including, without
limitation, with respect to the deposit of all Collections into the
appropriate accounts as required by the provisions of the Security
Agreement and the disbursement of monies as set forth in Sections
6.6 and
14.1 of the Security Agreement and with respect to the Security
Deed;
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(ix)
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to
enforce and collect payment of the amount owing on each Manufacturing
Asset;
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(x)
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to
respond, on behalf of Manufacturing, to inquiries with respect to
the
Manufacturing Agreement and any supply
agreements;
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(xi)
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to
enforce and maintain, on behalf of Manufacturing, the terms of all
Contracts (including all vendor contracts, leases of assets, supply
contracts and other agreements in connection with the operation of
the
Manufacturing business and compliance with the Transaction Document)
related to the Real Property and Manufacturing Assets, the manufacturing
and distribution of the product in accordance with the terms of such
Contracts and the Transaction
Documents;
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(xii)
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to
maintain separate, complete and accurate books and records with respect
to
all transactions contemplated hereunder in connection with the Real
Property and Manufacturing Assets;
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(xiii)
|
to
deliver electronically or otherwise to Manufacturing on a calendar
quarterly basis an informational listing of any additions, subtractions
or
changes to the Manufacturing Assets or the Real Property, the date
of any
new Contract and a summary of its key terms and, also, hard copies
of all
documents evidencing new Manufacturing Assets or Real
Property;
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(xiv)
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to
cause Manufacturing to pay all Taxes when due;
and
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(xv)
|
to
procure and maintain all necessary or prudent licenses, permits,
approvals
or consents with respect to the Real Property, the Manufacturing
business
and the product.
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-3-
The
list
of Management Services may be amended from time to time by mutual agreement
of
the Manager and Manufacturing, but subject to the prior written consent of
the
Agent.
(b) Manager’s
Standard of Performance.
The
Manager shall exercise commercially reasonable efforts in performing the
Management Services and shall perform the Management Services in accordance
with
industry practice, the express terms of this Supply Management Agreement and
Applicable Law and with at least the same care, prudence, skill and diligence
as
the Manager would employ in the management of its own assets or any other assets
that it manages.
(c) Discretionary
Powers.
The
Manager shall exercise all discretionary powers involved in connection with
the
Management Services subject to the terms hereof, and shall pay all costs and
expenses incurred in connection therewith that may be necessary or advisable
for
the carrying out of the transactions contemplated by this Supply Management
Agreement. The Manager may, for its own account, seek the assistance of other
parties in carrying out its duties hereunder.
(d) Approvals.
The
Manager shall consult with and obtain written approval from Manufacturing for
any action in connection with the Manufacturing Assets that is not in the
ordinary course of the Management Services. The Manager shall not take any
action pursuant to this Supply Management Agreement on behalf of Manufacturing
which is inconsistent with, or would cause Manufacturing, the Issuer, NexCen
Brands or any of their Affiliates to violate, the Transaction
Documents.
(e) Legal
Proceedings.
The
Manager is hereby authorized, empowered, and agrees, in accordance with
Section
2.1(b)
and
consistent with past practice and clause
(b) above
to
commence, at Manufacturing’s sole cost and expense in its own name or in the
name of Manufacturing, and to pursue legal proceedings relating to any aspect
of
the Manufacturing Assets. The Manager is hereby further authorized and empowered
to determine whether and where to bring litigation, to retain counsel on a
contingency fee or other basis to enforce Manufacturing’s rights in the
Manufacturing Assets and to protect the value of the Manufacturing Assets and
to
obtain judgments with respect thereto. Manufacturing shall take any and all
such
actions that the Manager may deem necessary or appropriate to enable the Manager
to carry out its duties under this Supply Management Agreement. If, in any
legal
proceeding, it shall be determined that the Manager may not enforce
Manufacturing’s rights in the Manufacturing Assets and to protect the value of
the Manufacturing Assets on the ground that is not a real party in interest
or a
holder entitled to enforce Manufacturing’s rights in the Manufacturing Assets
and to protect the value of the Manufacturing Assets, Manufacturing, shall,
at
its expense, take such steps as the Manager deems reasonably necessary to
enforce Manufacturing’s rights in the Manufacturing Assets and/or to protect the
value of the Manufacturing Assets, including bringing suit in its own name
or
joining the action as a party.
(f) Principal
Place of Business.
All
activities hereunder by the Manager and its employees shall be conducted from
the Manager’s principal place of business identified in Section
8.1
hereof,
or at such other location as to which Manufacturing and the Agent are provided
thirty (30) days’ prior written notice.
-4-
Section
2.2 Manager
Fee.
As
compensation for the performance of the Management Services, the Manager shall
be entitled to the applicable Manager Fee, as provided in the Security
Agreement. The Manager represents that the Manager Fee is not more or less
than
the fee that is customarily paid in arm’s length transactions for similar
services. The Manager shall not be entitled to any other amounts for its
services hereunder other than the Manager Fee. The
Manager shall have the right, but not the obligation, to advance all Operating
Expenses, provided, however, that the Manager shall not make any such advance
if
the Manager reasonably determines that such advance would not be ultimately
recoverable from the Collections. On any Payment Date on which there is
insufficient Distributable Cash in accordance with Section 14.1(a) of the
Security Agreement to pay the Subordinate Manager Fee, in whole or in part,
on
such Payment Date, the Manager shall have the right to receive funds from the
Held Collections Account to pay such shortfall in the Subordinate Manager Fee
for the related Collection Period in accordance with, and to the extent amounts
are available for such purpose under Section 14.1(b)(i) of the Security
Agreement.
Section
2.3 Modifications,
Amendments and Consents With Respect to the Manufacturing Assets.
Except
as provided in Section
2.1(d),
the
Manager shall not agree to any modification, waiver or amendment of any term
of
any material element of any agreements with respect to the Manufacturing Assets
or to any extension of a Contract, if such modification, waiver or amendment,
individually or together with all modifications, waivers or amendments
previously made, shall reasonably be expected to result in a Material Adverse
Change without the prior written consent of Franchising or Brands, as
applicable, and the Agent; provided,
however,
that
the Manager shall not make any modification, waiver or amendment to any Covered
Material Contract in any material respect that is adverse or could reasonably
be
expected to be adverse to Franchise or Brands without the prior written consent
of Franchising or Brands, as applicable and the Agent.
(a) Power
of Attorney.
So long
as this Supply Management Agreement is in effect, Manufacturing hereby
irrevocably constitutes and appoints the Manager and any officer thereof with
full power of substitution, as its true and lawful attorney-in-fact with full
power and authority to act in the place and stead of Manufacturing, and in
the
name of Manufacturing, or in its own name, from time to time in the Manager’s
discretion, for the purpose of Managing the Manufacturing Assets, the business
in which the Manufacturing Assets are employed and providing the Management
Services in accordance with the terms of this Supply Management Agreement,
and
will execute the power of attorney in the form attached hereto as Exhibit
B.
ARTICLE
III.
EFFECTIVE
DATE
This
Supply Management Agreement shall become effective as of the date hereof and,
except as provided in Article
VII,
shall
continue in force on a calendar year to calendar year basis unless terminated
in
writing by either party on or before December 1 of any calendar year, but not
earlier than the date after the date on which all Secured Obligations are
indefeasibly paid in full in cash (other than with respect to any indemnity
obligations or obligations under any Transaction Document that by their terms
survive the termination thereof).
-5-
ARTICLE
IV.
DEPOSIT
OF COLLECTIONS
All
Collections is the property of Manufacturing. All Collections received by the
Manager shall be deposited into Manufacturing’s Co-Issuer Collection Account or
as otherwise directed in writing by Manufacturing (acting the consent of the
Agent), and the Manager shall direct that any Collections be paid to
Manufacturing’s Co-Issuer Collection Account; provided,
however,
if,
notwithstanding such direction, any proceeds of the Manufacturing Assets shall
come into the possession or control of the Manager or its agents, the Manager
shall hold such proceeds, or cause the same to be held, in the form received,
in
trust for Manufacturing and shall within one (1) Business Day after receipt
thereof, cause the same to be deposited into Manufacturing’s Co-Issuer
Collection Account.
ARTICLE
V.
REPRESENTATIONS
AND WARRANTIES OF THE MANAGER
Section
5.1 Representations
and Warranties.
The
Manager as of the Restatement Date and each Payment Date represents and warrants
to, and in favor of, Manufacturing and the Agent that:
(a) Organization,
Power, Qualification.
The
Manager (i) is a Delaware corporation, duly organized, validly existing and
in
good standing, (ii) has the corporate power, legal right and authority to own
its properties and to carry on its business as now being and hereafter proposed
to be conducted and (iii) is, and always has been, duly qualified and is in
good
standing and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization and the failure to be so qualified could,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change.
(b) Authorization,
Enforceability.
The
Manager (i) has the corporate power, and (ii) has taken all necessary action
to
authorize it to execute, deliver and perform this Supply Management Agreement
in
accordance with its terms and to consummate the transactions contemplated
hereby. This Supply Management Agreement has been duly executed and delivered
by
the Manager and is a legal, valid and binding obligation of the Manager,
enforceable in accordance with its terms, subject, as to enforcement of
remedies, to any applicable bankruptcy, insolvency or other similar law
affecting the enforcement of creditors’ rights and secured parties generally,
and subject to the limitation that the availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
(c) Non-Contravention.
The
execution, delivery and performance of this Supply Management Agreement in
accordance with its terms and the consummation of the transactions contemplated
hereby by the Manager do not and will not (i) require any consent or approval
or
authorization of, or giving notice to, any Person, except for consents and
approvals that have already been obtained or notices that have been duly given,
(ii) violate any Applicable Law, (iii) conflict with, result in a breach of,
or
constitute a default under its Organizational Documents, or conflict with,
result in a breach of a material provision under (with or without notice or
lapse of time or both) any agreement or other instrument, to which the Manager
is a party or by which it or any of its properties or assets may be bound,
which
conflict, breach or default would have a material adverse effect on the
business, assets, liabilities, condition (financial or otherwise), results
of
operations or prospects of the Manager or on the ability of the Manager to
perform any of its obligations under this Supply Management Agreement, or (iv)
result in or require the creation or imposition of any Liens upon or with
respect to any property now owned or hereafter acquired by the
Manager.
-6-
(d) Compliance
with Law.
(i)
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The
Manager is, and always has been, in compliance with all Applicable
Laws,
including without limitation those relating to ERISA and Taxes, except
where non-compliance, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse
Change.
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(ii)
|
Except
as previously set forth on Schedule VIII to the Security Agreement,
the
Manager, to the Manager’s knowledge, is not, and never has been, under
investigation with respect to any violation of any Applicable Law,
regulation, order or requirement relating to any of the foregoing
in
connection with its respective
business.
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(iii)
|
There
does not currently exist, nor has there existed at any time since
its
formation, any threatened or actual dispute between the Manager and
any of
its outside accountants, auditors or other financial
advisors.
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(iv)
|
Neither
the Manager nor any of its officers or agents, nor any Person acting
on
behalf of any of them, have made any illegal or improper payment
to, or
provided any illegal or improper benefit or inducement for, any
governmental official, union official, supplier, customer, union
or other
Person, in an attempt to influence any such Person to take or to
refrain
from taking any action relating to the Manager, Manufacturing or
the
business of the Manager, Manufacturing, or to engage in any action
by or
on behalf of any of them in any way, or paid any bribe, payoff, influence
payment, kickback or other unlawful payment. Neither the Manager
nor any
of the officers or agents of the Manager or any Person acting on
behalf of
any of them, have taken any action that violates the Foreign Corrupt
Practices Act. The Manager has at all times been in compliance with
all
Applicable Laws relating to export control and trade embargoes. To
the
Manager’s knowledge, no product sold or service provided by the Manager or
Manufacturing during the last five years has been, directly or indirectly,
sold to or performed on behalf of any country where such sale of
products
or provision of services is prohibited by OFAC, the Department of
Treasury
or other U.S. governmental
authority.
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(e) Litigation.
There
is no, and never has been, action, suit or proceeding pending or, to the
knowledge of the Manager, threatened against the Manager or any of its
properties or assets in any court or before any arbitrator of any kind or before
or by any Governmental Authority which, if decided adversely to the Manager,
would reasonably be expected to result in a Material Adverse
Change.
-7-
(f) Governmental
Regulation.
The
Manager is not required to obtain any consent, approval, authorization, permit
or license from, or effect any filing or registration with, any Governmental
Authority in connection with the execution, delivery and performance, in
accordance with its respective terms, of this Supply Management
Agreement.
(g) Investment
Company.
The
Manager is not, and has never been, an “investment company” within the meaning
of the Investment Company Act.
(h) Bankruptcy.
The
Manager is not, and has never been, a debtor in a bankruptcy case.
(i) Absence
of Default.
The
Manager is, and has always been, in compliance with all of the provisions of
its
Organizational Documents, as the same may have been amended or restated (or
comparable constitutive documents) and no event has occurred, or failed to
occur, which has not been remedied or waived, the occurrence or nonoccurrence
of
which constitutes, or which with the passage of time or giving of notice or
both
would constitute, (i) a Manager Termination Event or (ii) a default by the
Manager under any agreement or other instrument, or any judgment, decree or
order to which the Manager is a party or by which the Manager or any of its
properties or assets may be bound, which default could, individually or in
the
aggregate, reasonably be expected to result in a Material Adverse
Change.
(j) Disclosure.
The
Manager has not failed to disclose any fact, circumstance or other information
which could, either alone or in conjunction with all other such facts,
circumstances and information, reasonably be expected to result in a Material
Adverse Change; and to the Manager’s knowledge, there is no fact that has
specific application to any of the Manager, Manufacturing, NexCen Brands or
any
of their Affiliates (other than general economic or industry conditions) and
that could, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change. This representation shall not be affected by
any
investigation made by or on behalf of the Agent.
(k) Information.
All
written information, reports and other papers and data furnished to the Agent,
with respect to the Manager, shall be, at the time the same is so furnished,
complete, true and correct in all material respects as and when
made.
(l) Taxes. The
Manager has timely filed all tax returns (federal, state and local) which are
required to be filed and has paid all taxes related thereto. There has been
no
waiver of any statutes of limitation in respect of taxes or agreement to any
extension of time with respect to a tax assessment or deficiency of the Manager;
there is no material claim, audit, action, suit or proceeding against or with
respect to the Manager in any tax; the Manager has not received from any taxing
authority any formal or informal (x) notice indicating an intent to open an
audit or other review, (y) request for information related to tax matters or
(z)
notice of deficiency or proposed adjustment for any amount of tax proposed,
asserted, or assessed by any taxing authority against the Manager.
-8-
(m) Subsidiaries.
As of
the date hereof, there are no corporations, partnerships, limited liability
companies, joint ventures or other business entities in which the Manager owns,
of record or beneficially, a direct or indirect equity interest or contract
or
agreement, contingent or otherwise, to acquire the same.
(n) Absence
of Liabilities.
The
Manager has no Indebtedness.
(o) Manufacturing
Assets.
The
Manager does not have any interest in or own any of the Manufacturing
Assets.
(p) Real
Property.
The
Manager does not own any real property.
(q) Insurance.
The
Manager has insurance in coverages and amounts that is prudent and customary
for
its business, including in the performance of its duties and undertakings
contemplated hereunder and under the other Transaction Documents. All such
insurance is primary coverage and all premiums therefor due have been paid
in
full. Schedule
1
sets
forth a complete, true and correct list of all certificates of insurance,
binders for insurance policies and insurance maintained by the Manager, or
under
which the Manager is the beneficiary of coverage.
(r) Factual
Assumptions.
The
factual assumptions identified in the opinion letter delivered by Xxxxx &
XxXxxxxx LLP or Xxxxxxxx & Xxxxx LLP on the Restatement Date or on any
Funding Date with respect to certain bankruptcy matters are true and accurate
as
of such date with respect to the Manager.
(s) Corporate
Structure.
The
Manager is a wholly-owned subsidiary of NexCen Brands.
ARTICLE
VI.
COVENANTS
OF THE MANAGER
Section
6.1 Covenants.
So long
as this Supply Management Agreement remains in effect:
(a) Financial
Statements.
As soon
as practicable and in any event within forty-five (45) days after the end of
each of its fiscal quarters and ninety (90) days after the end of each of its
fiscal years, the Manager shall deliver to Manufacturing and the Agent a
statement of income and statement of cash flow for the Manager for such quarter
and such year, as the case may be, setting forth in each case in comparative
form the figures for the previous period, and a balance sheet of the Manager
as
at the end of such quarter and such year, as the case may be, all prepared
by
management of the Manager in accordance with GAAP (applied on a consistent
basis) and certified as being complete, true and correct by the
Manager.
(b) Instruments.
The
Manager shall not take any action to cause any Receivable to be evidenced by
any
instrument (as defined in the UCC) or any title in bearer form except in
connection with the enforcement or collection of a Receivable.
-9-
(c) Information.
From
time to time and promptly upon request of Manufacturing, Franchising, the
Issuer, any Back-up Manager or the Agent, the Manager shall deliver to the
requesting party such information, reports and other papers and data regarding
the business, assets, liabilities, financial condition or results of operations
with respect to the Manufacturing Assets as any requesting party may reasonably
request, in each case in form and substance reasonably satisfactory to the
requesting party.
Written
information, reports and other papers and data furnished to Manufacturing or
the
Agent by or on behalf of the Manager, shall be, at the time the same is so
furnished, complete, true and correct in all material respects. This covenant
shall not be affected by any investigation made by or on behalf of Manufacturing
or the Agent.
(d) Company
Existence; Governing Documents.
The
Manager will keep in full force and effect its existence and rights as a
corporation under the laws of the State of Delaware and will obtain and preserve
its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Supply Management Agreement. The Manager will not form
or
otherwise acquire the equity interests in any other Person unless the primary
business purpose of such entity is consistent with, and in furtherance of,
the
business of Manufacturing and other parties to management agreements with the
Manager.
(e) Applicable
Law.
If the
Grant by Manufacturing of the first priority perfected security interests under
the Security Agreement, or any portion or aspect thereof, requires any further
approval, perfection or compliance with any Applicable Law or administrative
rule, or shall be prohibited under or in violation of any Applicable Law or
administrative rule, the Manager agrees to cause Manufacturing to do all things
and, at its expense, to take all action reasonably necessary or advisable to
obtain all such approvals and to accomplish such perfection or compliance,
and/or expeditiously to remove any prohibition and cure any violation, so as
to
effectuate to the fullest extent permissible by law the entire security interest
Granted under the Security Agreement.
(f) No
Liens.
The
Manager shall not create, incur, assume or suffer to exist any Lien upon or
with
respect to any property or assets of any kind of Manufacturing other than
Permitted Encumbrances.
(g) Inspection.
On a
monthly basis and at any other time and from time to time, deemed necessary
in
the Agent’s, Manufacturing’s (each in their sole discretion), the Manager shall
permit Manufacturing or the Agent, or their respective agents or representatives
(including Agent’s Professionals and Consultants), during regular business hours
and without charge and at the sole cost and expense of the Manager (provided
that so long as no Manager Termination Event or Event of Default under the
Security Agreement has occurred and has not been waived, such cost and expenses
shall not exceed $500,000 per year): (i) to examine and make copies of and
abstracts from the books and records (financial and corporate) of the Manager,
insofar as they relate to the Manufacturing Assets or its duties hereunder
as
Manager and (ii) to visit the offices and properties of the Manager for the
purpose of examining such books and records and to discuss matters relating
thereto and to the performance of the Manager under this Supply Management
Agreement with any of the officers or employees of the Manager having knowledge
of such matters.
-10-
(h) Manager’s
Report.
On or
before the tenth day after each Collection Period, the Manager shall deliver
to
Manufacturing (with a copy to the Agent and any Back-up Manager) (i) a report,
substantially in the form of Exhibit
C
attached
hereto and (ii) an Officer’s Certificate of the Manager certifying that each of
the representations and warranties in this Supply Management Agreement are
complete, true and correct as of such date. The Manager Report shall include,
without limitation, all deposits into, and withdrawals from, the GAC
Manufacturing Operating Account, along with a list of the actual expenditures
made with respect to such flow of funds.
(i) Manager
Not to Resign; No Assignment.
(i)
|
The
Manager shall not resign from the respective duties and obligations
hereby
imposed on it except upon a determination by Manufacturing, the Issuer
and
the Agent that by reason of a change in applicable legal requirements
the
continued performance by the Manager of its duties under this Supply
Management Agreement would cause it to be in material violation of
such
legal requirements (i.e., requirements pursuant to law or regulation,
rather than contractual), said determination to be evidenced by a
an
opinion of counsel to such effect.
|
(ii)
|
The
Manager may not assign this Supply Management Agreement, or any of
its
rights, powers, duties or obligations hereunder without the prior
written
consent of Manufacturing and the
Agent.
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(iii)
|
Except
as provided in Sections
7.2
and 7.3,
the duties and obligations of the Manager under this Supply Management
Agreement shall continue until this Supply Management Agreement shall
have
been terminated as provided in Articles
III
and VII,
and shall survive the exercise by Manufacturing or the Agent of any
right
or remedy under this Supply Management Agreement, or the enforcement
by
Manufacturing or the Agent of any provision of this Supply Management
Agreement. The Manager shall continue to serve as Manager hereunder
until
such time as a successor shall be appointed and assume the duties
of
Manager hereunder.
|
(j) Contracts.
The
Manager shall not, and shall not cause Manufacturing to enter into or be a
party
to any agreement or instrument without the prior written consent of the Agent;
provided,
however,
that
such consent of the Agent shall not be required for Manufacturing to enter
into
contracts and agreements with third parties, entered into in the ordinary course
of Manufacturing’s business and that do not impair Manufacturing’s ability to
perform its obligations under the Manufacturing Agreement and the Transaction
Documents.
(k) Absence
of Liabilities.
The
Manager will not incur any Indebtedness.
(l) Insurance.
The
Manager shall maintain, or cause Manufacturing to maintain, as applicable,
with
financially sound insurers with an S&P Credit Rating of not less than “BBB-”
and with a claims-paying ability rated not less than “A:VIII” by A.M. Best’s Key
Rating Guide, insurance coverages customary for business operations of the
type
conducted in respect of the transactions contemplated by the Transaction
Documents and the Manufacturing Assets managed by the Manager. The Manager
shall
annually provide to the Agent evidence reasonably satisfactory to the Agent
(which may be by cover note) that the insurance required to be maintained by
the
Manager and Manufacturing hereunder is in full force and effect, by not later
than December 31 of each calendar year. The Manager shall provide written notice
to the Agent, within five (5) days of knowledge thereof, of any default, breach
or condition, which with the giving of notice or the lapse of time, would
constitute a default under, or breach of, any of its insurance
policies.
-11-
(m) Taxes.
The
Manager shall, and shall on behalf of Manufacturing (out of the portion of
its
Manager Fee related to such purpose), (i) pay all Taxes when due or payable,
together with any interest or penalty, addition to tax or additional amount
imposed thereon or in connection therewith, (ii) file, when due, all tax
returns, statements, reports or forms required to be filed with any taxing
authority and (iii) except for consolidated tax returns, not become, or permit
itself to become, liable for the Taxes of any other person or entity, whether
by
contract, operation of law or otherwise. The Manager shall provide prompt (and
in any event within three (3) Business Days) notice to the Agent of (x) any
formal or informal notice from any taxing authority of any intent to open an
audit or other review or (y) any claim, audit, action suit or proceeding against
or with respect to the Manager or Manufacturing in respect of any
tax.
(n) Litigation.
The
Manager, upon obtaining knowledge thereof, shall provide prompt (and in any
event within three (3) Business Days) written notice to the Agent with respect
to the threat or commencement of any material litigation, arbitration or
administrative proceedings against Manufacturing or any property included in
the
Collateral that could, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Change or a liability in any amount. In the
event that any such litigation, arbitration or other proceeding shall have
been
commenced, the Manager shall keep the Agent informed on a regular basis as
reasonably requested by the Agent regarding the same. The Agent shall be
entitled, but not obligated, to consult with the Issuer, the Co-Issuers, any
Support Fund, the Manager, NexCen Brands and any of their Affiliates with
respect to, and participate in the defense or resolution of, any such
proceeding.
(o) Bankruptcy.
The
Manager or any assignee or successor to the Manager or substantially all of
the
business of the Manager; will not (i) voluntarily institute, or consent to
the
institution of, bankruptcy or insolvency proceedings, or file a petition seeking
or consenting to reorganization or relief under any applicable federal or state
law relating to bankruptcy, or seek or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) for
it,
or any substantial part of its assets, or make any assignment for the benefit
of
creditors, or admit in writing its inability to pay its debts generally as
they
become due, or take any corporate action in furtherance of any such action;
or
(ii) consolidate, merge, dissolve or liquidate, in whole or in
part.
(p) Factual
Assumptions.
The
Manager shall not take any action which shall cause the factual assumptions
identified in the opinion letter delivered by Xxxxx & XxXxxxxx LLP or
Xxxxxxxx & Xxxxx LLP on any Funding Date and on the Restatement Date with
respect to certain bankruptcy matters to no longer be true and accurate with
respect to the Manager.
-12-
(q) Updated
Information.
The
Manager shall promptly update (and in any event, at least once per calendar
quarter) Exhibit D and Schedule 1 hereto to the extent that any of the
information contained therein has changed.
ARTICLE
VII.
MANAGER
TERMINATION EVENT
Section
7.1 Manager
Termination Event.
Each of
the following shall constitute a “Manager
Termination Event”,
whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment
or
order of any court or any order, rule or regulation of any Governmental
Authority or non-governmental body or otherwise:
(a) the
Manager shall fail, (i) within two (2) Business Days after the date the same
is
due, to deliver a Manager’s Report to Manufacturing, any Back-up Manager and the
Agent or (ii) within two (2) Business Days after receipt thereof, to remit
or
cause to be remitted to the related Co-Issuer Collection Account, or such other
account as directed by Manufacturing (with the consent of the Agent), any
License Income or other Collections received by the Manager;
(b) default
in the performance, or breach, of any covenant of the Manager in this Supply
Management Agreement (not referenced in clause (a) above), and continuance
of
such default or breach for a period of five (5) Business Days;
(c) a
failure
of any representation or warranty of the Manager in this Supply Management
Agreement to be complete, true and correct as and when made;
(d) either
(i) the filing of an involuntary case in respect of the Manager under the
federal bankruptcy laws, as not or hereafter in effect, or any other present
or
future period of thirty (30) consecutive days or (ii) the entry of a decree
or
order for relief by a court having jurisdiction in respect of the Manager in
an
involuntary case under the federal bankruptcy laws, as now or hereafter in
effect, or any other present or future federal or state bankruptcy, insolvency
or similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Manager or of any
substantial part of its property, or ordering the winding up or liquidation
of
the affairs of the Manager or any assignee or successor to the Manager or
substantially all of the business of the Manager;
(e) the
commencement by the Manager of a voluntary case under the federal bankruptcy
laws, as now or hereafter in effect, or any other present or future federal
or
state bankruptcy, insolvency or similar law, or the consent by the Manager
to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Manager or
any
substantial part of its property or the making by the Manager of an assignment
for the benefit of creditors or the failure by the Manager generally to pay
its
debts as such debts become due or the taking of action by the Manager in
furtherance of any of the foregoing;
-13-
(f) (i)
either (A) a final non-appealable judgment shall be entered by any court against
the Manager for the payment of money the uninsured portion of which, together
with the uninsured portion of all other outstanding final non-appealable
judgments against the Manager, exceeds $250,000 in the aggregate, or (B) a
warrant of attachment or execution or similar process shall be issued or levied
against any of the Manager’s $250,000 in the aggregate, and (ii) if, within
thirty (30) days after the entry, issue or levy thereof, such judgment, warrant
or process shall not have been paid or discharged or a bond satisfactory to
the
related court shall not have been posted;
(g) the
Manager shall cease to carry on, or be enjoined, restrained or in way prevented
by the order of any Governmental Authority from conducting, any material part
of
the business of the Manager;
(h) the
occurrence of an Event of Default under, and as defined in, the Security
Agreement;
(i) any
report of material adverse findings from the SEC, any other regulatory body
or
Governmental Authority, or independent counsel in connection with an
investigation, that either (i) may materially impair, or has materially
impaired, the value of Assets or (ii) results, directly or indirectly in the
delisting of NexCen Brand’s stock from the NASDAQ stock market;
(j) Xxxxxxx
X. Xxxx is no longer employed as Chief Financial Officer or another officer
having higher authority and responsibility for the management of NexCen Brands,
and a replacement acceptable to Agent (which acceptance will not be unreasonably
withheld) has not been named within sixty (60) days of the effective or
constructive date of the cessation of his activities as Chief Financial Officer
(such 60-day period does not re-start if proposed replacement is not acceptable
to the Agent);
(k) Xxxxxxx
X. “Xxxxx” Dull is no longer employed as President, Chief Executive Officer or
another officer having ultimate authority and responsibility for the management
of NexCen Franchise Management, Inc., and a replacement acceptable to Agent
(which acceptance will not be unreasonably withheld) has not been identified
within sixty (60) days of the effective or constructive date of the cessation
of
his activities as President (such 60-day period does not re-start if proposed
replacement is not acceptable to the Agent);
(l) (i)
for
the period from the Restatement Date continuing through March 31, 2009, Xxxxxx
Xxxxx shall have resigned from the Board of Directors of NexCen Brands, unless
the BBI Entities and Waverly have been sold in accordance with the terms of
the
Security Agreement prior to such resignation, or (ii) from the Restatement
Date
for the period continuing through December 31, 2009, any three of Xxxxx X.
Xxxxxx, Xxxxx X. Xxxx, Xxxx Xxxxx, Xxxxxx X Xxxxxxx and Xxxxxx X. Xxxxxx shall
have resigned from the Board of Directors of NexCen Brands;
(m) on
or
after December 31, 2009, the Rolling 12 Month Free Cash Flow Margin with respect
to the Issuer and all of the Co-Issuers for the preceding twelve (12) months
is
less than 40%;
(n) NexCen
Brands shall have received a qualified audit report for its fiscal year 2008
financial statements or with respect to any of its financial statements
delivered thereafter;
-14-
(o) the
occurrence of any Material Adverse Change;
(p) any
material provision of this Supply Management Agreement, at any time after its
execution and delivery and for any reason, ceases to be in full force and
effect; or the Manager, the Issuer, Manufacturing, NexCen Brands or any other
Person contests, attacks or challenges in any manner the validity or
enforceability of any provision of any this Supply Management Agreement; or
the
Manager, the Issuer, Manufacturing or NexCen Brands denies that it has any
further liability or obligation under this Supply Management Agreement, or
purports to revoke, terminate or rescind any provision of this Supply Management
Agreement;
(q) the
Manager shall have incurred any Indebtedness; or
(r) the
Manager is no longer a wholly-owned subsidiary of NexCen Brands;
provided,
however,
that
for purposes of effecting a cure of a Manager Termination Event described in
clause
(q)
above,
the Manager shall be entitled to redeem any Indebtedness it may have then
outstanding or then pledge to the Agent cash in an amount, and upon terms,
as
may be acceptable to Manufacturing and the Issuer, and then only upon the prior
written consent and approval of the Agent.
Section
7.2 Termination
of Manager.
(a) Upon
the
occurrence of any Manager Termination Event, the Manager shall give notice
thereof to Manufacturing, the Issuer, each Back-up Manager (if any), each
Noteholder and the Agent within two (2) Business Days of its actual knowledge
thereof. Manufacturing, the Issuer and the Agent shall have all rights and
remedies against the Manager as may exist at law or in equity. Upon, or at
any
time after the occurrence of, a Manager Termination Event, Manufacturing and
the
Issuer may, with the consent of the Agent (and shall, at the direction of the
Agent or the Noteholders), by notice then given in writing to the Manager (a
“Manager
Termination Notice”)
with a
copy to the Agent, terminate all or any part of the rights and obligations
of
the Manager under this Supply Management Agreement.
(b) After
receipt by the Manager of a Manager Termination Notice all authority and power
of the Manager under this Supply Management Agreement shall terminate with
respect to the rights and obligations so terminated.
(c) All
costs
and expenses incurred by the Manager in connection with the transfer of the
Manager’s duties hereunder to a successor manager following a Manager
Termination Event shall be for the account of and payable by, jointly and
severally, the Manager and NexCen Brands.
Section
7.3 Appointment
of Successor.
On and
after the time specified in a Manager Termination Notice pursuant to
Section
7.2(a),
a
successor manager shall be appointed by Manufacturing and the Issuer, with
the
prior written consent, or upon the direction, of Agent in its sole discretion,
such successor manager shall be the successor in all respects to the Manager
in
its capacity as Manager under this Supply Management Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Manager
by the terms and provisions hereof, provided, that the successor manager shall
have no liability for actions or inactions of the predecessor
Manager.
-15-
The
successor manager shall be entitled to receive all reasonable costs incurred
by
the successor manager in connection with assuming the duties and obligations
of
the Manager hereunder (which shall be included in its Operating Expenses).
Notwithstanding the above, if the Manager shall resign as provided in
Section
6.1(i),
Manufacturing shall take such actions as may be necessary to cause the
appointment of a successor manager with the prior written consent, or upon
the
direction of the Agent, in its sole discretion.. The successor manager and
the
Manager, as the case may be, shall take such actions, consistent with this
Supply Management Agreement, as shall be necessary to effectuate any such
succession. Such successor manager shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Manager by the terms
and
provisions hereof.
In
no
event shall any successor manager be appointed without prior written consent
of
the Agent in its sole discretion.
Section
7.4 Back-up
Manager.
One or
more Back-up Managers may be appointed by the Agent, from time to time, and
at
any time, in its sole and absolute discretion. The Issuer and the Manager,
agree
to allow, and consent to, any modifications to this Supply Management Agreement,
the Security Agreement and any other Transaction Documents that are reasonably
requested by any appointed Back-up Manager or by the Agent in connection with
arrangements related to the appointment of such Back-up Manager or the
performance of its duties hereunder or under any other Transaction Document.
The
Back-up Manager shall perform, without limitation, such services under the
this
Agreement as directed by the Agent, from time to time, in its sole and absolute
discretion. Any such Back-up Manager appointed pursuant to this Section
shall be
entitled to the applicable Back-up Manager Fee.
ARTICLE
VIII.
MISCELLANEOUS
Section
8.1 Notices.
All
notices from one party to the other party shall be in writing and shall be
sent
to the other party’s address by delivery by a reputable courier service or by
registered mail (return receipt requested), all charges prepaid. The date of
receipt or refusal shall be the effective date of any such notice. Copies of
all
notices and reports delivered to Manufacturing pursuant to Sections 2.1(a)(xiii),
6.1(a),
6.1(c),
6.1(e)
and
6.1(h)
shall
also be concurrently delivered to the Agent and each Back-up Manager (if any)
and any party authorized, in writing, by Manufacturing to receive such notices
and reports.
Manufacturing
GAC
Manufacturing, LLC
c/o
NB Supply Management Corp.
0000
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Attention:
General Counsel
|
The
Manager
NB
Supply Management Corp.
0000
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Attention:
General Counsel
|
-16-
Section
8.2 Entire
Agreement.
This
Supply Management Agreement sets forth the entire agreement and understanding
among the parties with reference to the transactions contemplated hereby and
supersede any and all other oral or written agreements heretofore
made.
Section
8.3 Severability.
If any
provision of this Supply Management Agreement or the application of any
provision hereof to any person or in any circumstances is held invalid, the
remainder of this Supply Management Agreement and the application of such
provision to other persons or circumstances shall not be affected unless the
provision held invalid shall substantially impair the benefits of the remaining
portions of this Supply Management Agreement.
Section
8.4 CONSENT
TO JURISDICTION.
EACH
PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY
NEW
YORK STATE OR FEDERAL COURT SITTING IN NEW YORK CITY IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS MANUFACTURING MANAGEMENT AGREEMENT, AND
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO
THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING. EACH
PARTY HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN
ANY
SUCH ACTION OR PROCEEDING BY THE MAILING, OR DELIVERY, OF COPIES OF SUCH PROCESS
TO SUCH PARTY AT ITS ADDRESS SPECIFIED IN SECTION
8.1
HEREOF.
EACH PARTY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL
BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW.
Section
8.5 Waiver
of Jury Trial.
The
parties hereto each waive their respective rights to a trial by jury of any
claim or cause of action based upon or arising out of or related to this Supply
Management Agreement, or the transactions contemplated hereby, in any action,
proceeding or other litigation of any type brought by any of the parties against
any other party or parties, whether with respect to contract claims, tort
claims, or otherwise. The parties hereto each agree that any such claim or
cause
of action shall be tried by a court trial without a jury. Without limiting
the
foregoing, the parties further agree that their respective right to a trial
by
jury is waived by operation of this Section
8.5
as to
any action, counterclaim or other proceeding which seeks, in whole or in part,
to challenge the validity or enforceability of this Supply Management Agreement
or any provision hereof, the waiver shall apply to any subsequent amendments,
renewals, supplements or modifications to this Supply Management
Agreement.
Section
8.6 Further
Assurances.
The
Manager shall furnish Manufacturing with any further instruments, in form and
substance reasonably satisfactory to it which it may reasonably require or
deem
necessary, from time to time, to evidence, establish, protect, enforce, defend
or secure it and any and all of its rights hereunder.
-17-
Section
8.7 Amendments;
Waivers.
Any
term, covenant, agreement or condition of this Supply Management Agreement
may
only be amended with the consent of the Manager, Manufacturing and the Agent
or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively) by Manufacturing and the Agent in
its
sole discretion and in any such event the failure to observe, perform or
discharge any such covenant, condition or obligation (whether such amendment
is
executed or such consent or waiver is given before or after such failure) shall
not be construed as a breach of such covenant, condition or obligation or as
a
Manager Termination Event.
Section
8.8 Successors
and Assigns.
This
Supply Management Agreement shall be binding upon and inure to the benefit
of
and be enforceable by the respective successors and assigns of the parties
hereto. All agreements, statements, representations and warranties made by
the
Manager herein or in any certificate or other instrument delivered by the
Manager or on its behalf under this Supply Management Agreement shall be
considered to have been relied upon by Manufacturing and shall survive the
execution and delivery of this Supply Management Agreement.
Section
8.9 Severability
of Provisions.
Any
provision of this Supply Management Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction. To the extent
permitted by Applicable Law, the Manager hereby waives any provision of
Applicable Law that renders any provision of the prohibited or unenforceable
in
any respect.
Section
8.10 No
Bankruptcy Petition.
The
Manager by entering into this Supply Management Agreement covenants and agrees
that it will not institute against, or join any other Person in instituting
against, the Issuer or any other Co-Issuer, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any federal or state bankruptcy or similar law.
Section
8.11 Relationship
of Parties.
Except
as provided in Section
8.18,
nothing
contained in this Supply Management Agreement is intended to create, or shall
in
any event or under any circumstance be construed as creating, a partnership,
joint venture, tenancy-in-common, joint tenancy, agency or other relationship
of
any nature whatsoever between Manufacturing, on the one hand, and the Manager,
on the other hand. The Manager acknowledges that (a) the Manager is represented
by competent counsel and has consulted counsel before executing this Supply
Management Agreement and (b) it shall rely solely on its own judgment and
advisors in entering into the transactions contemplated hereby.
Section
8.12 Limitation
on Liability; Indemnity.
(a)
None of the shareholders, directors, officers, employees or agents of the
Manager shall be under any liability to Manufacturing or any other person for
any action taken or for refraining from the taking of any action taken in good
faith pursuant to this Supply Management Agreement; provided,
however,
that
this provision shall not protect the Manager against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of its duties hereunder.
-18-
(a) Notwithstanding
the foregoing, the Manager hereby agrees to indemnify and hold harmless each
of
the Issuer, Manufacturing, the Agent, Noteholder, each other Indemnified Party,
each successor and assign of the Issuer, Manufacturing, the Agent, each
Noteholder, each other Indemnified Party, as the case may be, and each of their
respective officers, directors, affiliates, agents and representatives from
and
against any claim, loss, liability, damage, settlement, cost or other expense
including reasonable attorney’s fees and expenses that arise out of, relate to
or are in connection with any negligent act or any negligent failure to act
of
the Manager in the performance of its duties hereunder or any breach by the
Manager of any representation, covenant or other provision
hereunder.
This
Section
8.12
shall
survive termination of this Supply Management Agreement.
Section
8.13 Errors
and Omissions Insurance.
The
Manager shall maintain, at its own expense, an errors and omissions insurance
policy, with broad coverage with responsible companies on all officers,
employees or other persons acting on behalf of the Manager in any capacity
with
regard to the handling of money, documents and papers relating to the
Manufacturing Assets. Any such errors and omissions insurance shall protect
and
insure the Manager against losses, including forgery, theft, embezzlement,
fraud, errors and omissions and negligent acts of such persons and shall be
maintained in a form and amount that would meet the requirements of prudent
managers. No provisions of this Section
8.13
requiring such errors and omissions insurance shall diminish or relieve the
Manager from its duties and obligations as set forth in this Supply Management
Agreement. The Manager shall cause to be delivered to Manufacturing a
certification evidencing coverage under such insurance policy. Any such
insurance policy shall not be cancelled or modified in a materially adverse
manner without ten (10) days prior written notice to Manufacturing and the
Agent.
Section
8.14 Governing
Law.
THIS
MANUFACTURING MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICT OF LAWS, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
Section
8.15 Counterparts.
This
Supply Management Agreement may be executed in any number of counterparts,
each
of which shall be deemed to be an original, but all such separate counterparts
shall together constitute one and the same instrument.
Section
8.16 Limitation
on Payment.
Any and
all payments, including but not limited to fees, expenses and costs, to be
made
to the Manager under this Supply Management Agreement shall be made only to
the
extent of funds available therefor in accordance with Sections
11.7
and
14.1,
as
applicable, of the Security Agreement and the GAC Supply and Manufacturing
related Security Agreement Supplement.
Section
8.17 Separate
Identity Provisions.
By
entering into this Supply Management Agreement, the Manager covenants and agrees
that, prior to the date after the Facility Termination Date on which all Secured
Obligations are paid indefeasibly in full in cash, the Manager
shall:
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(a) conduct
its business solely in its own name through its duly authorized officers or
agents so as not to mislead others as to the identity of the entity with which
such persons are concerned, and shall avoid the appearance that it is conducting
business on behalf of any Affiliate thereof or that its assets are available
to
pay the creditors of any other Person (other than as expressly provided
herein);
(b) maintain
corporate records and books of account separate from those of any other
Person;
(c) establish
and maintain an office through which its business shall be conducted separate
and apart from those of its Affiliates or, if it shares office space with any
Affiliate, it shall allocate fairly and reasonably any overhead and expenses
for
such shared office space;
(d) conduct
its business using letterhead separate from those of its
Affiliates;
(e) obtain
proper authorization for all action requiring such authorization;
(f) pay
its
own operating expenses and liabilities from its own funds;
(g) continuously
maintain its resolutions, agreements and other instruments underlying the
transactions described in this Supply Management Agreement as part of its
official records;
(h) maintain
an arm’s-length relationship with its Affiliates, and shall not hold itself out
as being liable for the debts of any other Person, except as contemplated by
this Supply Management Agreement and the other Transaction
Documents;
(i) keep
its
assets and liabilities separate from those of all other entities, except as
contemplated by this Supply Management Agreement and the other Transaction
Documents;
(j) not
maintain bank accounts or other depository accounts to which any Affiliate
is an
account party or from which any Affiliate has the power to make withdrawals,
except as contemplated by this Supply Management Agreement and the other
Transaction Documents;
(k) not
amend, supplement or otherwise modify its organizational documents, except
in
accordance therewith; and
(l) observe
all procedures required by its organizational documents and preserve and
maintain its existence, rights, franchises and privileges in the jurisdiction
of
its formation and qualify and remain qualified in good standing in each
jurisdiction where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualifications would materially adversely affect
the
interests of Manufacturing or its ability to perform its obligations
hereunder.
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Section
8.18 Status
of Parties.
The
Manager is authorized pursuant to this Supply Management Agreement to act as
the
authorized agent of Manufacturing for the purposes set forth in this Supply
Management Agreement.
Section
8.19 Limitations
on Authority.
Except
as expressly set forth herein, the Manager shall not be authorized to manage
the
affairs of Manufacturing. The management, policies, and operations of
Manufacturing shall be the responsibility of Manufacturing and officers of
Manufacturing, acting pursuant to and in accordance with Manufacturing’s
Organizational Documents and other applicable documents.
Section
8.20 Headings
and Captions.
The
headings or captions in this Supply Management Agreement are inserted for
convenience and identification only and are in no way intended to describe,
interpret, define, or limit the scope, extent, or intent of this Supply
Management Agreement or any provisions thereof.
Section
8.21 Third
Party Beneficiary.
Each of
the Agent, each Noteholder and each other Indemnified Party is an express third
party beneficiary hereof. The Agent’s consent shall be required for any
amendment, termination or waiver hereunder; provided,
however,
that
all rights of such Person hereunder, other than with respect to Sections
8.10
and
8.12(b)
hereof
or any provision that survives termination hereof, shall terminate on the day
after the date on which all Secured Obligations are indefeasibly paid in full
in
cash (other than with respect to any indemnity obligations or obligations under
any Transaction Document that by their terms survive the termination
thereof).
Section
8.22 Effect
on
Amended and Restated Supply Management Agreement; Acknowledgement. The Supply
Management Agreement shall not effect a novation of the obligations of the
parties to the Original Supply Management Agreement, but instead shall be merely
a restatement and, where applicable, an amendment of the terms governing such
obligations. The parties hereto acknowledge and consent to the amendment and
restatement of the Original Supply Management Agreement.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, this Supply Management Agreement has been executed by the
duly
authorized signatories of the parties hereto all as of the day and year first
above written.
NB
SUPPLY MANAGEMENT CORP.,
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as
Manager
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By:
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Name: | ||
Title:
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GAC
MANUFACTURING, LLC,
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as
Manufacturing
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By:
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Name: | ||
Title:
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