Exhibit 10.71
SERVICES AGREEMENT
SERVICES AGREEMENT ("Agreement"), dated as of October 1, 2000, by and
between Harvest Partners, Inc., a New York corporation ("Harvest"), and Xxxx
International Holdings, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company is in the business of designing, manufacturing and
marketing a broad line of exterior accessories for new and used light trucks,
sport utility vehicles, vans and over the road trucks (the "Business"); and
WHEREAS, the Company desires that Harvest provide the Company with
financial advisory and corporate services relating to the Company's business and
affairs; and
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. EFFECTIVE DATE. This Agreement shall be effective as of October 1,
2000.
2. SERVICES. (a) Harvest will provide the Harvest Consulting Services
("Harvest Consulting Services") to the Company from time to time as requested by
the Board of Directors of the Company. The Harvest Consulting Services shall
include, without limitation, (i) supervisory services, human resource services,
accounting and computer services, (ii) assisting the Company, generally, with
respect to financial and business matters, as the Company's financial advisor,
(iii) recommending and assisting the Company in implementing a general strategy
in connection with the Company's accomplishing its business plan and anticipated
growth; (iv) assisting the Company to structure and negotiate dispositions of
assets and/or business units; (v) if necessary, locating equity partners and
structuring the terms of any such equity investment, (vi) communicating with
lenders and stockholders, including, assisting in the coordination of investor
relation services, (vii) structuring and negotiating refinancing and other
lending or borrowing transactions relating to the Company and (viii) such other
investment, advisory, related financial and corporate services as Harvest or the
Company shall, from time to time, deem necessary or appropriate, except that it
does not include services provided to the Company under Section 3. (e) of this
Agreement. The Harvest Consulting Services may be rendered both through the
Harvest Directors (as defined in Section 2. (b)) and directly by Harvest and its
affiliates. The Harvest Consulting Services shall be strictly advisory in nature
and the Company shall be free to accept or reject any such advice in its sole
and absolute discretion. Harvest shall have no authority to bind or obligate the
Company in any way. Nothing contained in this Agreement shall require the
Company to exclusively use the services of Harvest or the Harvest Directors in
connection with the matters referred to herein as Harvest Consulting Services.
(b) Harvest hereby agrees to provide the Company with directors
services, if requested by the Board of Directors of the Company. In that event,
Harvest hereby agrees to cause two of its principals, directors or designees
with financial and/or management expertise to serve on the Company's Board of
Directors (the "Harvest Directors"). The Harvest Directors shall devote such
time and attention as is reasonably necessary to provide guidance, counsel and
managerial or corporate assistance to the Company.
3. COMPENSATION.
(a) Subject to Section 4 below, and governed by, subject to,
and limited by the terms of the Credit Agreement, dated on or about February 27,
1998, among the Company and its subsidiaries and their subsidiaries, Xxxxxx
Financial, Inc., and Dresdner Bank AG, New York and Grand Cayman Branches, and
the AMENDMENT NO. 1 TO CREDIT AGREEMENT dated on or about April 1, 1998, the
AMENDMENT NO. 2 TO CREDIT AGREEMENT dated on or about December 23, 1998, the
WAIVER AND THIRD AMENDMENT TO CREDIT AGREEMENT, dated on or about January 24,
2000, and the WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT, dated on or about
November 14, 2000, including the defined terms therein (the "Credit Agreement As
Amended") and the CAPITAL CALL AGREEMENT, dated on or about November 14, 2000 by
and among the Company, Xxxxxx Financial, Inc., a Delaware corporation (in its
individual capacity, "Xxxxxx"), as Agent (in such capacity, "Agent") and HARVEST
PARTNERS III, L.P. ("Harvest LP"), a Delaware limited partnership, and
acknowledged and consented to by XXXX ACQUISITION CORP., a Minnesota
corporation, BAC ACQUISITION CO., a Delaware corporation, TRAILMASTER PRODUCTS,
INC., a Delaware corporation and DELTA III, INC., a Delaware corporation
("Capital Call Agreement"), as full payment for the Harvest Consulting Services
to be rendered to the Company hereunder (specifically excluding, however, all
amounts payable directly by the Company to its directors, including the Harvest
Directors, for directors' services), the Company shall pay to Harvest a fee for
one calendar year from the Effective Date hereof and up to and including
September 30, 2001, the sum of Four Hundred Thousand Dollars and no/cents
($400,000.00) ("Management Fees"), payable in quarterly installments of One
Hundred Thousand Dollars and no/cents ($100,000) after the Company's quarterly
financial statements are published under the terms of the Credit Agreement As
Amended.
(b). Payment of the Management Fees by the Company shall be
determined by the Chief Financial Officer of the Company, taking into
consideration the terms, conditions, and restrictions of the Credit Agreement As
Amended, the Capital Call Agreement, and the Investment Agreement between the
Company and LIH Holdings IV, LLC, a Delaware limited liability corporation,
dated December 28, 2000 ("Investment Agreement"). The Chief Financial Officer's
determination, in absence of manifest error, shall be binding and conclusive on
Harvest and the Company, this includes but is not
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limited to any restrictions placed on the Company by its senior and subordinated
lenders to withhold payment of the Management Fees to Harvest until certain
terms and conditions are met under the Credit Agreement As Amended, the Capital
Call Agreement, and the Investment Agreement ("Suspended Payments").
(c). Notification by the Company to Harvest on a quarterly
basis of the Company's compliance with the terms of the Credit Agreement As
Amended, together with a copy of the Chief Financial Officer's certification to
the Company of said compliance, shall be delivered to Harvest in writing by the
Company simultaneously with the public release of the Company's earnings
following the end of each fiscal quarter of the Company.
(d). Any Suspended Payments mandated in accordance with the
terms of the Credit Agreement As Amended shall accumulate without interest and
shall only be payable at such time as, with respect to each full fiscal quarter
ending prior to termination of this Agreement, the Company is in full compliance
with the terms and conditions of the Credit Agreement As Amended.
(e). The Company, provided the prior approval of a majority of
the Independent Directors of the Board of Xxxx International Holdings, Inc. is
obtained, may pay Harvest negotiated amounts in excess of the Management Fees.
This excess payment above the Management Fees may be paid by the Company to the
extent Harvest provides the Company with investment banking, advisory or other
similar services in connection with any extraordinary transaction effected by
the Company, including but not limited to any merger, business combination,
recapitalization or significant asset acquisition or disposition ("Harvest
Fees").
(f). Harvest shall not be entitled to reimbursement of
out-of-pocket expenses for performing Harvest Consulting Services hereunder.
Nothwithstanding the foregoing, the Harvest Directors shall be entitled to
expense reimbursement available to the Company's directors generally.
4. TERM. This Agreement commences on October 1, 2000, and after due
consideration by the Independent Directors of Xxxx International Holdings, Inc.,
and in their sole discretion, is renewable in writing on a yearly basis. This
Agreement may be earlier terminated if it is terminated for cause as provided in
Section 7 below, or the date the number of shares of Common Stock beneficially
owned, as defined under but not limited to: the Stock Purchase Agreement between
LIH Holdings, LLC and the Company, dated September 9, 1997 and any amendment(s)
thereto; the Investment Agreement between LIH Holdings, II, LLC and the Company
dated November 25, 1997 and any amendment(s) thereto; the Investment Agreement
between LIH Holdings III, LLC and the Company dated December 28, 1998 and any
amendments(s) thereto; and the Investment Agreement between LIH Holdings IV, LLC
and the Company dated November 14, 2000, by Harvest or any entity affiliated
with Harvest decreases to less than fifty percent (50%) of the number of issued
and outstanding shares of the Company.
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5. RIGHT TO ENGAGE IN OTHER ACTIVITIES. The Harvest Consulting Services
provided herein are not to be deemed exclusive. Nothing contained herein shall
restrict Harvest, the Harvest Directors, or any of its shareholders, directors,
officers, employees or agents from engaging in any other business or devoting
time and attention to the management, investment, involvement or other aspects
of any other business, including becoming an officer or director thereof, or
rendering services of any kind to any other corporation, firm, individual or
association. The Company further acknowledges that Harvest or the Harvest
Directors from time to time, may provide investment, management and advisory
services to other companies and entities. In addition, the Company acknowledges
that Harvest or the Harvest Directors have, and will continue, to render
investment and advisory advice and services to certain of the Company's
stockholders, including LIH Holdings, LLC, a Delaware limited liability
corporation, LIH Holdings II LLC, a Delaware limited liability corporation, LIH
Holdings III, LLC, a Delaware limited liability corporation, and LIH IV, a
Delaware limited liability corporation (collectively "LIH"), and LIH's members
and their affiliates.
6. CONFIDENTIALITY. Harvest acknowledges that in connection with the
performance of the Harvest Consulting Services hereunder, it and its employees
may have access to the Company's confidential information (as hereinafter
defined). Harvest agrees that neither it nor its employees will use or disclose
outside the scope of its engagement hereunder any confidential information of
the Company and will take normal and reasonable steps to protect the
confidentiality of any such confidential information. Confidential Information
shall encompass information about the Company's products, business, finances and
marketing plans, but shall not include information which (i) becomes generally
available to the public other than as a result of a disclosure by Harvest or its
employees, (ii) was available to Harvest on a non-confidential basis prior to
its disclosure to Harvest by the Company, its representatives or agents or (iii)
becomes available to Harvest on a non-confidential basis from a source other
than the Company, its representatives or agents, provided that such source is
not bound by a confidentiality agreement with the Company, its representatives
or its agents or otherwise is prohibited from transmitting the information to
Harvest or its employees by a confidential, legal or fiduciary obligation.
7. TERMINATION FOR CAUSE. This Agreement may be terminated for cause by
the party whose conduct is not the cause for such termination if (a) either
party commits an act of criminal misconduct or gross negligence or neglect in
any material respect of its obligations as set forth herein, or (b) either party
files a voluntary petition in bankruptcy or is adjudicated as bankrupt or
insolvent, or such party files a petition under any chapter of the United States
Bankruptcy Code or any other present or future applicable Federal, state or
other statute or law regarding bankruptcy, insolvency or other relief for
debtors, or any party seeks, or consents to, or acquiesces in the appointment
of, any trustee, receiver, conservator or liquidator of itself or of all or any
substantial portion of its property, and such petition in bankruptcy, or
adjudication as a bankrupt or insolvent entity, is not waived, dismissed or
overturned within sixty (60) days from the date of the filing or adjudication in
question.
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8. ASSIGNMENT. Neither Harvest nor the Company may assign this
Agreement or any of their respective rights or obligations hereunder, except
that either of them may assign or transfer this Agreement to any other person
who or which acquires all or substantially all of their respective property,
business and assets, provided that, in the case of Harvest, the successor to its
business employs substantially the same personnel to provide the Harvest
Consulting Services and the services provided by the Harvest Directors
hereunder.
9. SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not in any manner or way affect any other provision hereof,
and this Agreement shall be construed, if possible, as if amended to conform to
legal requirements, failing which it shall be construed as if any such offending
provision were omitted.
10. INDEPENDENT CONTRACTOR RELATIONSHIP. Harvest shall serve as an
independent contractor to the Company pursuant to the terms and conditions of
this Agreement and this Agreement does not create and shall not be construed to
create a relationship of principal and agent, joint venturers, co-partners,
employer and employee, or any similar relationship between the Company and
Harvest, and the parties hereto expressly deny the existence of any such
relationship.
11. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York, without
giving effect to the conflicts of law principles thereof.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
13. BINDING NATURE. Subject to the restrictions on assignability
contained herein, each and all of the covenants, terms, conditions, provisions
and agreements herein contained shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors, heirs and permitted
assigns.
14. AMENDMENT, ETC. The provisions of this Agreement may not be
amended, waived, modified or changed except by an instrument in writing signed
by all of the parties hereto. No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent breach or
conditions, whether of like or different nature.
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15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one and the same instrument.
IN WITNES WHEREOF, the parties hereto have caused this Agreement to be
executed by their representatives thereunto duly authorized on the date first
above written.
HARVEST PARTNERS, INC.
By:/s/ Xxx Xxxxxxxx
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Name: Xxx Xxxxxxxx
Title: General Partner
XXXX INTERNATIONAL HOLDINGS, INC.
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
