EXHIBIT 10(h)
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MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT (this "Agreement") is made and
entered into as of July 20, 2000, by and between Insilco Corporation, a Delaware
corporation ("Seller"), and ThermaSys Holding Company, a Delaware corporation
("Buyer" and, together with Seller, the "Parties"). Capitalized terms used and
not otherwise defined herein shall have the respective meanings ascribed to such
terms in that certain Transaction Agreement (the "Transaction Agreement") dated
as of July 20, 2000, by and among Seller and certain of its subsidiaries and
Buyer and certain of its subsidiaries.
WHEREAS, the Parties have agreed that it would be desirable for
Seller to provide certain management services to Buyer, ThermaSys Corporation,
ThermaSys I, Inc., ThermaSys II, Inc., ThermaSys III, Inc., Arup Alu-Xxxx und
ProFil GmbH, Dalian General Thermodynamics Incorporated, Ltd., Thermal
Components, Inc. and Thermalex, Inc. (collectively, the "Subsidiaries")
following the sale of the Business pursuant to the Transaction Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:
1. SERVICES.
(a) SERVICES. During the term hereof, Seller shall provide
to Buyer and its Subsidiaries the services listed in Schedule A attached hereto
(the "Services"), as such Schedule A may be amended from time to time pursuant
to this Section 1.
(b) CHANGES IN SERVICES. Should Buyer and its Subsidiaries
find that the Services set forth in Exhibit A are not adequate, Buyer may, at
any time and from time to time during the term of this Agreement, request the
provisions of additional services to it hereunder by Seller by giving reasonable
notice to Seller of the nature and extent of such additional services and the
proposed time of commencement and duration of performance of such services. The
Parties shall negotiate in good faith and use commercially reasonable efforts to
accommodate Buyer's request for such additional services based upon commercially
reasonable terms provided the parties reach an agreement as to the price for
such additional services. Furthermore, Buyer may, at any time and from time to
time during the term of this Agreement, by reasonable notice to Seller, request
changes in the nature, extent or duration of performance of Services provided by
Seller, and Seller shall comply with such changes so requested, as long as such
request falls within the terms set forth in Section 1(c) below. Buyer may also,
at any time during the term of this Agreement, by written notice to Seller
(given a reasonable time in advance of the effective date of the termination to
allow Seller to shelve the service), terminate the provision of any individual
Service provided by Seller at such time. However, nothing in this Section shall
be construed to obligate Seller to provide any services other than the Services
described in Schedule A.
Any agreed-upon additional Service or any change in
Services pursuant to this Section 1(b) shall be reflected in
an update to Exhibit A, notwithstanding Section 11. Any such update shall be
prepared and executed by representatives of Buyer and Seller.
(c) STANDARD OF SERVICE. Seller shall provide the Services
of a scope and in a manner of service consistent with the provision of such
Services by Seller to the Business prior to the Closing Date.
2. TERM.
(a) This Agreement shall be valid for and remain in effect
until one year from the date hereof and may be extended for periods of one (1)
year unless and until either party provides 60 days prior written notice of its
intention not to extend the term of this Agreement. Upon each annual renewal,
the parties shall use their reasonable best efforts to reach an agreement on new
fees, on a commercially reasonable basis, to be charged to Buyer during each
such annual renewal. Notwithstanding anything in this Agreement to the contrary,
Buyer may terminate this agreement in its entirety at any time upon 60 days
prior written notice to Seller and Seller may terminate this agreement in its
entirety at any time upon 180 days prior written notice.
(b) Notwithstanding anything in this Agreement to the
contrary, either Party may immediately terminate this Agreement by written
notice to the other Party (i) in the event of the other Party's voluntary
bankruptcy or insolvency, (ii) in the event that the other Party shall make any
assignment for the benefit of creditors, (iii) in the event that a petition
shall have been filed against the other Party under any bankruptcy law,
corporate reorganization law or any other law for relief of debtors (or other
law similar in purpose or effect), which causes such other party to have its
business effectively discontinued in its then present form, or (iv) in the event
that there is a Change of Control of the other Party. For purposes of this
paragraph, a Change of Control means the failure of:
(i) with respect to the Buyer, DLJ Merchant Banking
Partners II, L.P. and its affiliated funds ("DLJ") and 399 Venture
Partners, Inc. ("399"), (A) to own 51% or more of the issued and
outstanding shares of Buyer; (B) to possess, directly or indirectly,
the present power to direct or cause the direction of the management
or policies of the Buyer whether through the ownership of voting
stock, by contract or otherwise; and (C) to own, directly or
indirectly, 51% of the issued and outstanding shares of the Buyer's
Subsidiaries.
(ii) with respect to the Seller, DLJ and 399, (A) to own
51% or more of the issued and outstanding shares of the Seller; and
(B) to possess, directly or indirectly, the present power to direct
or cause the direction of the management or policies of the Seller
whether through the ownership of voting stock, by contract or
otherwise.
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(c) Once the Services have been terminated in accordance
with this Section 2, Buyer and its Subsidiaries shall have no right to cause
Seller to thereafter provide the Services.
3. FEE. Buyer shall pay to Seller quarterly service fees equal to the
sum of (i) direct costs and expenses incurred by Seller in providing the
Services and (ii) 35% of Seller's quarterly indirect administrative headquarter
selling general and administrative expenses. Buyer shall make all payments due
hereunder on a quarterly basis within thirty (30) days after its receipt of
Seller's invoice therefor. Seller shall, upon Buyer's request, supply Buyer with
reasonable supporting documentation of such invoices. In no event shall Buyer be
responsible for costs arising from (i) severance payments to employees of Seller
providing Services when terminated or (ii) matters of any nature associated with
the provision of Services other than pursuant to this Agreement.
Buyer and Seller shall use their reasonable best efforts to
reach an agreement on (i) the rates to be charged by Buyer for any additions or
changes in Services pursuant to Section 1(b) and (ii) new fees to be charged to
Buyer during each annual renewal of this Agreement pursuant to Section 2(a).
4. TRANSITION ASSISTANCE. In the event that this Agreement is
terminated pursuant to Section 2, Seller shall use its reasonable commercial
efforts while providing the Services to provide such assistance as Buyer may
reasonably request in order to facilitate Buyer's and its Subsidaries migration
of their data and systems, and related hardware and software infrastructure, to
Buyer's and its Subsidiaries' systems, provided that Buyer shall reimburse all
out-of-pocket costs reasonably incurred by Seller in providing such assistance.
5. NO OWNERSHIP RIGHT OR LICENSE. Buyer acknowledges that it is not
acquiring by virtue of this Agreement any ownership right or license to any item
of equipment or software utilized by Seller in providing the Services, and that
its nonexclusive right to use such equipment and software shall cease upon the
expiration or termination of this Agreement. Buyer further acknowledges that all
equipment and software owned or licensed by Seller and utilized by Seller in
providing the Services shall at all times remain the property of Seller or of
the equipment or software owner, whichever is applicable, and that Buyer shall
have no right at any time or by any means to copy, reproduce, or make available
to any other party any of the equipment, software or related documentation
utilized by Seller in providing the Services.
6. INDEMNIFICATION.
(a) Buyer and its Subsidiaries shall hold harmless and
indemnify Seller and its Affiliates from and against all claims losses,
liabilities, costs and expenses, including without limitation, court costs,
costs of investigation and attorneys' fees (collectively referred to hereinafter
as "Losses"), in any way arising out of, or related to, any breach by Buyer of
any provision of this Agreement. Buyer shall hold harmless and indemnify each of
Seller's officers, directors, employees, agents and other representatives
(collectively, "Seller Agents") from and against any and all Losses to the
extent that such Losses arise out of, or relate to such Seller Agent's
performance of his or her duties on behalf of Buyer and its Subsidiaries
pursuant to this Agreement.
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(b) Seller shall, subject to the provisions of this
subsection (b), indemnify and hold Buyer and its Subsidiaries harmless from and
against any and all Losses in any way arising out of, or related to, (i) any
breach by Seller of any provision of this Agreement, or (ii) any material error
or omission affecting Seller's provision of the Services, provided such material
error, or omission was caused by the gross negligence or willful misconduct of
Seller.
(c) IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR ANY LOST PROFITS, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL
DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR
OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGE.
7. CONFIDENTIALITY.
(a) Seller shall and shall cause each of its officers,
directors and employees to hold all information relating to the assets and
liabilities of Buyer and its Subsidiaries confidential, and shall not disclose
any of such information to any party (other than Buyer and its Subsidiaries, and
their respective employees, agents and designees) for a period of three (3)
years from the termination or expiration of this Agreement unless legally
compelled to disclose such information; provided, however, that to the extent
that any of them may become so legally compelled they may only disclose such
information if they shall first have used reasonable efforts to, and if
practicable, shall have afforded Buyer the opportunity to obtain an appropriate
protective order, or other satisfactory assurance of confidential treatment, for
the information required to be so disclosed.
(b) Buyer shall and shall cause each of its officers,
directors and employees to hold all information relating to the assets and
liabilities of Seller and its Affiliates confidential, and shall not disclose
any of such information to any party (other than Seller and its Affiliates and
their respective employees, agents and designees) for a period of three (3)
years from the termination or expiration of this Agreement unless legally
compelled to disclose such information; provided, however, that to the extent
that any of them may become so legally compelled they may only disclose such
information if they shall first have used reasonable efforts to, and, if
practicable, shall have afforded Seller the opportunity to, obtain an
appropriate protective order or other satisfactory assurance of confidential
treatment for the information required to be so disclosed.
(c) Each Party shall ensure that neither it nor its
officers, directors nor employees will advertise, publish or otherwise disclose
the terms of this Agreement without the other Party's prior written approval.
8. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed given (a) if delivered
personally or sent by facsimile transmission (confirmed electronically) on the
date given, (b) if delivered by an overnight express mail service, on the date
of delivery or (c) if by certified or registered mail, postage prepaid, return
receipt requested, five (5) days after mailing, to the Parties, their successors
in interests or their permitted assignees at the following addresses or at such
other addresses as the Parties may from time to time designate by written notice
in the manner aforesaid:
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If to Buyer and its Subsidiaries:
ThermaSys Holding Company
000 Xxxxx Xxxxx Xxxxx
Xxxxxx, Xxxx 00000
Attn: President
Facsimile: (000) 000-0000
If to Seller: Insilco Corporation
000 Xxxxx Xxxxx Xxxxx
Xxxxxx, Xxxx 00000
Attn: President
Facsimile: (000) 000-0000
9. BENEFITS; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto, and Buyer's Subsidiaries and each of
their respective permitted assignees (as set forth below) or successors in
interest, including a trustee appointed pursuant to Chapter 7 or Chapter 11 of
the United States Bankruptcy Code, as amended form time to time. Nothing herein
expressed or implied is intended to confer upon any person, other than the
Parties, Buyer's Subsidiaries and their respective permitted assignees, any
rights, obligations or liabilities under or by reason of this Agreement. The
respective rights and obligations of either Party shall not be assignable by
such Party without the prior written consent of the other Party.
10. RELATIONSHIP BETWEEN THE PARTIES. The Parties hereto understand
and agree that this Agreement does not make them an agent or legal
representative of each other for any purpose whatsoever. No Party is granted, by
this Agreement or otherwise, any right or authority to assume or create any
obligation or responsibility, express or implied, on behalf of or in the name of
any other Party, or to bind any other Party in any manner whatsoever. All
Parties expressly acknowledge (i) that Seller is an independent contractor with
respect to Buyer and its Subsidiaries in all respects, including, without
limitation, the provision of the Services, and (ii) that the Parties are not
partners, joint venturers, employees or agents of or with each other.
11. ENTIRE AGREEMENT; MODIFICATIONS AND AMENDMENTS. This Agreement,
including the attached Schedules, contains the entire understanding of the
Parties with respect to the subject matter contained herein, and may only be
amended, modified or supplemented by written agreement of both Parties.
12. SEVERABILITY. Any provision of this Agreement which is held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions hereof
in such jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal or unenforceable in any other jurisdiction.
13. FEES AND EXPENSES. In the event of any dispute arising out of the
subject matter of this Agreement, the prevailing Party shall recover, in
addition to any other relief to which it may be entitled, its attorneys' fees
and court costs incurred in litigating or otherwise settling or resolving such
dispute.
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14. VALIDITY OF DOCUMENTS. The Parties hereto shall be entitled to
rely upon the genuineness, validity or truthfulness of any document, instrument
or other writing presented in connection with this Agreement unless such
document, instrument or other writing appears on its face to be fraudulent,
false or forged.
15. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware applicable to
contracts made and to be performed entirely within the state of Delaware by
residents of that state.
16. COUNTERPARTS; HEADINGS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument. Section
captions are not a part of this Agreement and are provided solely for the
convenience of the Parties.
17. PRECEDENCE. This Agreement and the Transaction Agreement shall be
construed consistently, but in the event of any conflict, the terms of the
Transaction Agreement shall supercede any inconsistent terms of this Agreement.
[Remainder of page intentionally left blank - signature page follows.]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date first above written.
"BUYER"
THERMASYS HOLDING COMPANY
By: /S/ XXXXXXX X. XXXX
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Printed Name: Xxxxxxx X. Xxxx
Title: Senior Vice President, CFO, Secretary
and Treasurer
"SELLER"
INSILCO CORPORATION
By: /S/ XXXXX X. XXXXX
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Printed Name: Xxxxx X. Xxxxx
Title: President & CEO
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SCHEDULE A
SELLER SERVICES
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1. Seller shall perform for Buyer and its Subsidiaries any and all tax
services requested by Buyer and its Subsidiaries, including, without
limitation, general tax planning and filing of state and federal
income tax returns.
2. Seller shall perform for Buyer and its Subsidiaries any and all
financial planning and reporting services requested by Buyer and its
Subsidiaries, including without limitation, the preparation of
periodic balance sheets, income statements and budgets.
3. Seller shall perform for Buyer and its Subsidiaries any and all
treasury services requested by Buyer and its Subsidiaries, including,
without limitation, the management of working capital and foreign
currency.
4. Seller shall perform for Buyer and its Subsidiaries any and all
strategic planning services requested by Buyer and its Subsidiaries.
5. Seller shall perform for Buyer and its Subsidiaries any and all
acquisition and divestiture services requested by Buyer and its
Subsidiaries.
6. Seller shall perform for Buyer and its Subsidiaries any and all
general legal oversight services requested by Buyer and its
Subsidiaries, including, without limitation, monitoring legal claims
involving Buyer and its Subsidiaries.
7. Seller shall perform for Buyer and its Subsidiaries any and all
financial advisory services requested by Buyer and its Subsidiaries,
including, without limitation, advisory services relating to debt and
equity offerings.
8. Seller shall perform for Buyer and its Subsidiaries any and all
ancillary management oversight services requested by Buyer and its
Subsidiaries, including, without limitation, sales and marketing
planning.
9. Seller shall perform for Buyer and its Subsidiaries any and all
employee benefits administrative services requested by Buyer and its
Subsidiaries.
10. Seller shall perform for Buyer and its Subsidiaries any and all risk
management services requested by Buyer and its Subsidiaries,
including, without limitation, selecting and maintaining property
insurance.
