EXHIBIT 10.1
AMENDED AND RESTATED MANAGEMENT SERVICES AGREEMENT
THIS AMENDED AND RESTATED MANAGEMENT SERVICES AGREEMENT (this
"Agreement") is made and entered as of the 19th day of April, 2005, by and
between ▇▇▇▇▇▇▇▇▇ GROUP, LLC, a Delaware limited liability company ("Service
Provider"), and ORCHID PAPER PRODUCTS COMPANY, a Delaware corporation (the
"Company").
WHEREAS, Service Provider and the Company desire to amend and restate
that certain Management Services Agreement entered as of March 1, 2005 by and
between Service Provider and the Company (the "Original Agreement"); and
WHEREAS, Service Provider has developed experience and knowledge in
business and financial management, which experience and knowledge are of great
value to the Company in implementing its business. Service Provider is willing
to provide financial and management consulting services to the Company.
Accordingly, the compensation arrangements set forth in this Agreement are
designed to compensate Service Provider for such services.
NOW, THEREFORE, for and in consideration of the covenants and
conditions hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, intending to be
legally bound hereby, the parties hereto mutually agree as follows:
SECTION 1. TERM; TERMINATION. Subject to the provisions hereinafter set
forth, the term of this Agreement commenced as of March 1, 2004 and shall end
five (5) years from such date (the "Term") and shall terminate upon the
expiration of the Term or as otherwise provided herein. The Term shall terminate
prior to the fifth anniversary of March 1, 2004 in the event of the consummation
of a change of control transaction or at any time after the March 1, 2007 in the
event that the Company upon a resolution of the Board gives notice of such
termination.
SECTION 2. EXTENT OF SERVICES. During the Term, Service Provider shall
provide acquisition, management and operations services of a type similar to the
following:
(a) assisting with the coordination, attendance and
organization of the regularly scheduled meetings of the Company's Board of
Directors (the "Board") and with the dissemination of all materials and other
information which the Board will be asked to consider and act on at such
meetings;
(b) actively seeking out and bringing to the Board's attention
new business opportunities;
(c) at the request of the Board finding financing for
acquisitions, growth and/or refinancing of the Company's existing debt;
(d) serving as the primary liaison between the Company and its
investors and financial institutions;
(e) actively monitoring and evaluating the Company's
performance and report the results of his findings to the Board;
(f) assisting the President of the Company in developing an
annual business plan for the Company;
(g) assisting the President of the Company in planning for the
Company's future; and
(h) performing such other services as may be reasonably
requested by the Board.
SECTION 3. TIME COMMITMENT. The Service Provider shall devote
sufficient time to enable the Service Provider to provide the services
contemplated in this Agreement; provided, however, the Company acknowledges and
agrees that the amount of time provided by the Service Provider hereunder will
vary depending on the nature and status of the Company's activities in any given
month.
SECTION 4. CONSIDERATION.
(a) Consulting Fee. The Company shall pay Service Provider an
annual management fee of Three Hundred Twenty-Five Thousand Dollars ($325,000),
payable monthly in arrears; provided that in the event of an initial public
offering of shares of the Company's capital stock pursuant to a registration
statement filed by the Company under the Securities Act of 1933, as amended,
which has become effective thereunder (other than a registration statement
relating solely to employee benefit plans or a transaction covered by Rule 145
of the Securities and Exchange Commission), the management fee shall be reduced
to an annual management fee of One Hundred Twenty-Five Thousand Dollars
($125,000.00), payable monthly in arrears, in exchange for the Company making a
lump sum payment to Service Provider of One Hundred Fifty Thousand Dollars
($150,000.00), for services rendered hereunder (the "Consulting Fee");
(b) In addition to the amount specified in Section 4(a) above,
Company shall pay Manager a fee for each acquisition made by Company during the
Term. Such fees shall be calculated on a standard ▇▇▇▇▇▇ Scale (5.0% of the
first $1.0 million of value, 4.0% of the second $1.0 million of value, 3.0% of
the third $1.0 million of value, 2.0% of the fourth $1.0 million of value and
1.0% of the value paid above $4.0 million) and applied to the total acquisition
consideration of any acquisition made by Orchids during the Term.
(c) Financing Related Suspension in Payment of the Consulting
Fee. In the event that the Company is not in compliance with the financial
covenants contained in that certain Agented Revolving Credit and Term Loan
Agreement dated October 15, 2002, as amended, between Bank of Oklahoma et. al.,
the Board shall provide written notice of such deficiency to the Service
Provider and, to the extent required by the terms of either of the Financing
Agreements, the Board may elect to suspend the payment of, but not the accrual
of, 50% of the Consulting Fee (or such larger percentage as may be required
under the Financing Agreements) for so long as the Company is not in compliance
with such covenants. In such reduction, partial months shall be computed at an
appropriate daily rate. At such time as the
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Company comes into compliance with such covenants, all accrued, but unpaid,
portions of the Consulting Fee shall be paid in full.
(d) Expenses. At all times during the Term, the Company shall
promptly reimburse Service Provider for reasonable out-of-pocket expenses
incurred in performing services pursuant to this Agreement, including, without
limitation, travel expenses.
(e) Payment to Service Provider. All fees payable to Service
Provider shall be payable in cash by wire transfer of immediately available
funds to the account of Service Provider, as specified thereby to the Company in
writing prior to such payment.
SECTION 5. PROVIDER OF SERVICES. The Service Provider agrees that the
services to be provided hereunder shall be provided exclusively by principals of
Service Provider or its affiliates or assigns.
SECTION 6. INDEPENDENT CONTRACTOR STATUS. In the performance of Service
Provider's obligations hereunder, it is understood that Service Provider shall
be at all times acting and performing independently of the Company's control as
to the manner and methods of providing the services required under this
Agreement. Service Provider's compliance with the rules and regulations of the
Company governing the conduct of Service Provider, generally, shall be limited
to those rules and regulations to which Service Provider has previously agreed
in writing. In the performance of Service Provider's obligations hereunder,
neither Service Provider nor any of its stockholders, officers, directors,
employees, agents or representatives shall be considered an employee, agent,
officer, or associate of the Company or any of its subsidiaries for any purpose.
It is understood that Service Provider is free to contract for similar services
with other persons or companies while under contract with the Company. Service
Provider shall not, in connection with any services provided for, to, or on
behalf of the Company represent to any person or entity that Service Provider is
associated with the Company in any capacity other than that of an independent
contractor. This Agreement in no way limits the ability of Service Provider, or
any of its affiliates, to engage in any other activities.
SECTION 7. INDEMNIFICATION. The Company agrees to indemnify, defend and
hold harmless Service Provider and its stockholders, officers, directors,
affiliates, employees and agents against and from any and all loss, liability,
suits, claims, costs, damages and expenses (including attorneys' fees, whether
arising in disputes between the parties or with third parties) arising from this
Agreement and/or their performance hereunder, except as a result of their gross
negligence or intentional wrongdoing and except for diminution in value of any
investment in the Company.
SECTION 8. SUPERSEDES. Upon the execution of this Agreement by the
parties hereto, this Agreement shall supersede and replace the Original
Agreement.
SECTION 9. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties relating to the provision of services
contemplated herein and there are no covenants, conditions, representations, or
agreements, oral or written, of any nature whatsoever, other than those
contained herein, relating to the provision of services contemplated herein.
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SECTION 10. AMENDMENTS. No amendment, alteration, or modification of
this Agreement shall be binding upon the parties hereto unless said amendment,
alteration, or modification is in writing and signed by both parties hereto.
SECTION 11. SEVERABILITY. In the event any provision of this Agreement
shall be found to be void, the remaining provisions of this Agreement shall
nevertheless be binding with the same effect as though the void part were
deleted.
SECTION 12. WAIVER. The waiver of a breach of any term of this
Agreement by any of the parties hereto shall not operate or be construed as a
waiver by such party of the breach of any other term of this Agreement or as a
waiver of a subsequent breach of the same term of this Agreement.
SECTION 13. ASSIGNMENT. Service Provider shall not assign, transfer, or
convey this Agreement, or in any way encumber the compensation or other benefits
payable to it hereunder, except with the prior written consent of the Company;
provided, however, the Service Provider may assign this Agreement to its
affiliates without the prior written consent of the Company. The Company may
assign this Agreement and its rights hereunder in whole, but not in part, to any
entity with or into which it may transfer all or substantially all of its assets
(and, in such event, the term "Company" as used herein shall mean and refer to
such successor-in-interest).
SECTION 14. NOTICES. All notices required or permitted to be given
under this Agreement shall be in writing and shall be delivered personally or
sent by facsimile, overnight delivery, or registered mail, return receipt
requested, to the parties at the addresses set forth on the signature page of
this Agreement or at such other addresses as either party may designate to the
other in writing. Notices delivered personally or by overnight delivery shall be
effective upon delivery. Notices properly addressed and delivered by mail,
return receipt requested, shall be effective upon deposit with the United States
Postal Service. Notices sent by facsimile shall be effective upon confirmation
of transmission.
SECTION 15. BINDING EFFECT. This Agreement shall be binding on the
parties hereto and on their respective heirs, administrators, executors,
successors, and permitted assigns.
SECTION 16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts and by facsimile, each of which shall constitute an original, but
all of which together shall constitute but a single document.
SECTION 17. GOVERNING LAW; JURISDICTION. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to the conflict of laws provisions. Each party consents to
the in personam jurisdiction of the state and federal courts located in the
State of Delaware in connection with any claim or dispute arising under or in
connection with this Agreement. Each party consents to service of process by
U.S. mail.
SECTION 18. Waiver of Jury Trial. EXCEPT TO THE EXTENT PROHIBITED BY
ANY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY
WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE), ANY RIGHT TO TRIAL BY
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JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, CAUSE OF ACTION,
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING
AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY EACH OTHER PARTY THAT THE PROVISIONS
OF THIS SECTION 18 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH SUCH PARTY IS
RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY. EITHER OF THE PARTIES HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF EACH OF THE PARTIES HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY
JURY.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
ORCHIDS PAPER PRODUCTS COMPANY
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (908) ___-____
▇▇▇▇▇▇▇▇▇ GROUP, LLC
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
TAGLICH BROTHERS, INC.
By:
-----------------------------------
Name:
Title:
Address:
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