MANAGEMENT AGREEMENT
WITH
XXXXXX X. XXX COMPANY
AGREEMENT entered into as of the 30th day of April, 1990, by and among the
Xxxxxx X. Xxx Company, a Massachusetts sole proprietorship with a principal
place of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the
"Consultant"), Anchor Acquisition Corp., a Delaware corporation (the "Parent"),
and the Parent's subsidiaries, Anchor Brush Company, a Delaware corporation, and
Anchor Cosmetics Company, a Delaware corporation (collectively, the "Acquisition
Subsidiaries"). (The Parent and the Acquisition Subsidiaries are sometimes
referred to hereinafter collectively as the "Companies").
WHEREAS, the Consultant has staff specially skilled in corporate finance,
strategic corporate planning, and other management skills and services; and
WHEREAS, the Parent has been formed for the purpose of acquiring (the
"Acquisition") through the Acquisition Subsidiaries all of the assets and
certain liabilities and obligations of Anchor Advanced Products, a division of
North American Philips Corporation, a Delaware corporation ("NAPC"), pursuant to
that certain Asset Purchase and Sale Agreement, dated as of March 21, 1990, by
and between the Parent and NAPC (the "Purchase Agreement");
WHEREAS, the Parent and certain investors have entered into stock
subscription agreements, dated as of the date hereof, pursuant to which such
investors shall purchase shares of the common stock of the Parent; and
WHEREAS, the Acquisition Subsidiaries have entered into subordinated note
purchase and credit agreements with various senior and subordinated lenders in
order to obtain funds necessary for certain payments which are required to be
made by the Acquisition Subsidiaries in connection with the Acquisition; and ,
WHEREAS, prior to the date hereof, the Consultant has provided substantial
consulting services to the Companies concerning the planning, structuring and
negotiating of the stock subscription agreements, the subordinated note purchase
and credit agreements, the Purchase Agreement and other related documents and
agreements; and
WHEREAS, upon consummation of the closing of the Acquisition, the Companies
will continue to require the Consultant's special skills and management advisory
services in connection with their general business operations; and
WHEREAS, the Consultant is willing to provide such skills and services to
the Companies.
NOW THEREFORE, in consideration of the mutual promises, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. Engagement. The Companies hereby engage the Consultant for the Term (as
hereinafter defined) and upon the terms and conditions herein set forth to
provide consulting and management advisory services to the Companies. These
services will be in the field of financial and strategic corporate planning and
such other management areas as the Consultant and the Companies shall mutually
agree. In consideration of the remuneration herein specified, the Consultant
accepts such engagement and agrees to perform the services specified herein.
2. Term. The engagement hereunder shall be for a term commencing on the
date hereof and expiring on the fifth anniversary hereof (the "Term"). Upon
expiration of the Term, this Agreement shall automatically extend for additional
successive periods of one (1) year, unless the Consultant or the Companies shall
give notice to the other at least ninety (90) days prior to the end of the Term
(or any annual extension thereof) indicating that it does not intend to renew
the Agreement. Upon final expiration of the Term (or any annual extension
thereof) all obligations as between the parties shall be without recourse to one
another under this Agreement.
3. Services to be Performed. The Consultant shall devote, substantial time
and efforts to the performance of the consulting and management advisory
services contemplated by this Agreement. However, no precise number of hours is
to be devoted by the Consultant on a weekly or monthly basis. The Consultant may
perform services under this Agreement directly, through its employees or agents,
or with such outside consultants as the Consultant may engage for such purpose.
4. Confidentiality. The Consultant shall maintain secrecy with respect to
all non-public information of the Companies which may come into its possession
as a result of performance of services under this Agreement, and shall be
responsible for its employees, agents and outside consultants engaged hereunder
doing the same.
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5. Compensation: Expense Reimbursement.
5.1(a) In consideration of the consulting services provided by the
Consultant to the Companies prior to the date hereof in connection with
structuring, negotiating and arranging the financing necessary to fund the
Acquisition pursuant to the Purchase Agreement, the Companies shall pay to the
Consultant a fee of $420,000 which shall be paid in full on the Closing Date (as
defined in the Purchase Agreement).
(b) In consideration of the management advisory services hereunder, the
Consultant's compensation shall be an annual fee of $180,000, which shall be
paid to the Consultant by the Companies in equal monthly installments, to be
paid monthly in advance on the first day of each month, with the first of such
payments to be paid on the Closing Date.
5.2 The Companies shall reimburse the Consultant for all expenses incurred
in connection with management advisory services to be provided by the Consultant
hereunder, as well as for all travel, lodging and similar out-of-pocket costs
reasonably incurred by it in connection with or on account of its performance of
services for the Companies hereunder. Reimbursement shall be made only upon
presentation to the Companies by the Consultant of reasonably itemized
documentation therefor.
6. Notice. All notices hereunder, to be effective, shall be in writing and
shall be mailed by certified mail, postage prepaid as follows:
(i) If to the Consultant:
Xxxxxx X. Xxx Company
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
(ii) If to the Companies:
Anchor Acquisition Corp.
Xxxxxx X. Xxx Company
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx,
Vice President
7. Modifications. This Agreement constitutes the entire agreement between
the parties hereto with regard to the
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subject matter hereof, superseding all prior understandings and agreements
whether written or oral. This Agreement may not be amended or revised except by
a writing signed by the parties.
8. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns, but
may not be assigned by either party without the prior written consent of the
other.
9. Captions. Captions have been inserted solely for the convenience of
reference and in no way define, limit or describe the scope or substance of any
provisions of this Agreement.
10. Severability. The provisions of this Agreement are severable, and the
invalidity of any provision shall not affect the validity of any other
provision.
11. Governing Law. This Agreement shall be construed under and governed by
the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as a
sealed instrument as of the date first above written.
ANCHOR ACQUISITION CORP. XXXXXX X. XXX COMPANY
By:/s/Xxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
-------------------------- -------------------------
(signature) (signature)
Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx
-------------------------- -------------------------
(print name) (print name)
Vice President Vice President
-------------------------- -------------------------
(print title) (print title)
ANCHOR BRUSH COMPANY ANCHOR COSMETICS COMPANY
By:/s/Xxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
-------------------------- -------------------------
(signature) (signature)
Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx
-------------------------- -------------------------
(print name) (print name)
Vice President Vice President
-------------------------- -------------------------
(print title) (print title)
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