Exhibit 10.16
[EXECUTION COPY]
AMENDED AND RESTATED PROFESSIONAL SERVICES AGREEMENT
THIS AMENDED AND RESTATED PROFESSIONAL SERVICES AGREEMENT (this
"AGREEMENT"), dated as of April 6, 2004, is entered into by and between GTCR
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, L.L.C., a Delaware limited liability company ("GTCR"), and
Prestige Brands, Inc., a Delaware corporation and successor to Medtech/Denorex
Management, Inc. (the "COMPANY"), and amends and restates the Professional
Services Agreement dated as of February 6, 2004 (the "PRIOR AGREEMENT").
WHEREAS, the Company is a wholly owned subsidiary of Prestige International
Holdings, LLC, a Delaware limited liability company formerly known as
Medtech/Denorex, LLC (the "PARENT");
WHEREAS, certain affiliates of GTCR have purchased, and from time to time
will purchase (including in connection with the Company's indirect acquisition
of all of the shares of capital stock of ▇▇▇▇▇▇ Bay Holdings, Inc., a Virginia
corporation and ultimate parent of Prestige Brands International, Inc. (the
"PRESTIGE TRANSACTION")), Class B Preferred Units and Common Units of the Parent
pursuant to that certain Unit Purchase Agreement, dated as of February 6, 2004,
by and among the Parent, such GTCR affiliates and the other parties named
therein, as amended from time to time pursuant to its terms (the "PURCHASE
AGREEMENT");
WHEREAS, in connection with its affiliates' equity interest in the Parent,
GTCR has been providing financial and management consulting services to the
Company pursuant to the Prior Agreement in consideration for the compensation
arrangements set forth therein;
WHEREAS, the Company desires to continue to receive, and GTCR desires to
continue to provide, financial and management consulting services after the
Prestige Transaction (as defined above) so that the Company may obtain the
benefit of the experience of GTCR in business and financial management generally
and its knowledge of the Company and the Company's financial affairs in
particular; and
WHEREAS, the parties hereto desire to amend and restate the Prior Agreement
effective immediately prior to the consummation of the Prestige Transaction (the
"EFFECTIVE TIME") to change certain terms thereunder to reflect the increased
size of the Company after consummation of the Prestige Transaction and the
additional services that will be provided by GTCR as a result thereof.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements hereinafter set forth and the mutual benefits to be
derived herefrom, GTCR and the Company hereby agree as follows:
1. ENGAGEMENT. The Company hereby agrees to continue to engage GTCR as a
financial and management consultant, and GTCR hereby agrees to continue to
provide financial and management consulting services to the Company and its
affiliates, all on the terms and subject to the conditions set forth below.
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2. SERVICES OF GTCR. GTCR hereby agrees during the term of this
engagement to consult with the board of directors of the Company (the "BOARD"),
the boards of directors (or similar governing bodies) of the Company's
affiliates and the management of the Company and its affiliates in such manner
and on such business and financial matters as may be reasonably requested from
time to time by the Board, including, but not limited to:
(a) corporate strategy;
(b) budgeting of future corporate investments;
(c) acquisition and divestiture strategies; and
(d) debt and equity financings.
3. PERSONNEL. GTCR will provide and devote to the performance of this
Agreement such partners, employees and agents of GTCR as GTCR shall deem
appropriate for the furnishing of the services required thereby.
4. PLACEMENT FEES.
(a) At the time of any purchase of equity by the Purchasers (as
defined in the Purchase Agreement) and/or their affiliates
pursuant to Section 1B of the Purchase Agreement (excluding all
such purchases made concurrently with the consummation of the
Prestige Transaction), the Company shall pay to GTCR a
placement fee in immediately available funds equal to two
percent (2.0%) of the amount paid to the Parent in connection
with such purchase.
(b) At the time of any other equity or debt financing of the
Parent, the Company or any of their respective subsidiaries
(excluding all of the financing for the Prestige Transaction)
prior to a Public Offering (as defined in the Parent's Third
Amended and Restated Limited Liability Company Agreement, dated
as of the date hereof), the Company shall pay to GTCR a
placement fee in immediately available funds equal to two
percent (2.0%) of the gross amount of such financing (including
the committed amount of any revolving credit facility);
PROVIDED that the Company will not be obligated pursuant to
this SECTION 4(b) to pay GTCR a placement fee as the result of
any purchase of securities of the Parent by any executive of
the Parent, the Company or any of their respective
subsidiaries.
If any individual payment to GTCR pursuant to this SECTION 4 would be less than
$10,000, then such payment shall be held by the Company until the first to occur
of (i) such time as the aggregate of such payments equals or exceeds $10,000,
and (ii) the effective date of the termination of this Agreement.
5. MANAGEMENT FEE. Commencing on the date hereof, the Company shall pay
to GTCR an annual management fee equal to $4 million, which fee shall begin to
accrue on the date
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hereof and be payable in equal quarterly installments on each January 1, April
1, July 1 and October 1 during the term of this Agreement, beginning on July 1,
2004. Notwithstanding the foregoing, no payment shall be made to GTCR pursuant
to the immediately preceding sentence at any time when (a) an Event of Default
(as defined in the Credit Agreement) exists under the Credit Agreement, (b) an
Event of Default (as defined in the Indenture) exists under the Indenture and/or
(c) the Company may not incur at least $1.00 of additional debt under Section
4.09(a) of the Indenture; PROVIDED, HOWEVER, the Company shall immediately pay
to GTCR the full amount of all such deferred payments as soon as none of the
circumstances set forth in clause (a), (b) or (c) above continues to exist. For
purposes hereof, (i) "CREDIT AGREEMENT" means the Credit Agreement, dated as of
April 6, 2004, among the Company, Prestige Brands International, LLC, a Delaware
limited liability company, the lenders and issuers party thereto, Citicorp North
America, Inc., as administrative agent and Tranche C Agent (as defined therein),
Bank of America, N.A., as syndication agent for the lenders and issuers, ▇▇▇▇▇▇▇
▇▇▇▇▇ Capital, a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc., as
documentation agent for the lenders and issuers, and the other parties named
therein, as the same is in effect on the date hereof and (ii) "INDENTURE" means
the Indenture, dated as of the date hereof, by and among the Company, the
Guarantors listed on the signature pages thereto and U.S. Bank National
Association, as trustee, as the same is in effect on the date hereof.
6. EXPENSES. The Company shall promptly reimburse GTCR for such
reasonable travel expenses, legal fees and other out-of-pocket fees and expenses
as have been or may be incurred by or on behalf of GTCR, its directors, officers
and employees in connection with the Prestige Transaction, in connection with
any Subsequent Closing (as defined in the Purchase Agreement) or other financing
of the Parent, the Company or any of their respective subsidiaries, and/or in
connection with the rendering of any other services hereunder (including, but
not limited to, fees and expenses incurred in attending Company-related
meetings).
7. TERM. This Agreement will continue from the date hereof until the
Purchasers and their affiliates cease to own at least 10% of the Investor
Securities (as defined in the Purchase Agreement). No termination of this
Agreement, whether pursuant to this paragraph or otherwise, shall affect the
Company's obligations with respect to the fees, costs and expenses incurred by
GTCR in rendering services hereunder and not reimbursed by the Company as of the
effective date of such termination.
8. LIABILITY. Neither GTCR nor any of its affiliates, partners, employees
or agents shall be liable to the Parent, the Company or their subsidiaries or
affiliates for any loss, liability, damage or expense arising out of or in
connection with the performance of services contemplated by this Agreement,
except to the extent such loss, liability, damage or expense shall result from
the gross negligence or willful misconduct of GTCR.
9. INDEMNIFICATION. The Company agrees to indemnify and hold harmless
GTCR, its partners, affiliates, officers, agents and employees against and from
any and all loss, liability, suits, claims, costs, damages and expenses
(including attorneys' fees) arising from their performance hereunder, except as
a result of their gross negligence or intentional wrongdoing.
10. GTCR AN INDEPENDENT CONTRACTOR. GTCR and the Company agree that GTCR
shall perform services hereunder as an independent contractor, retaining control
over and
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responsibility for its own operations and personnel. Neither GTCR nor its
directors, officers, or employees shall be considered employees or agents of the
Company as a result of this Agreement nor shall any of them have authority to
contract in the name of or bind the Company, except as expressly agreed to in
writing by the Company.
11. NOTICES. Any notice, report or payment required or permitted to be
given or made under this Agreement by one party to the other shall be deemed to
have been duly given or made if personally delivered, telecopied (with hard copy
sent to the recipient by reputable overnight courier service (charges prepaid)
that same day) if telecopied before 5:00 p.m. Chicago, Illinois time on a
business day, and otherwise on the next business day, or mailed by registered or
certified mail (postage prepaid) or sent by reputable overnight courier service
(charges prepaid), to the other party at the following addresses (or at such
other address as shall be given in writing by one party to the other):
IF TO GTCR:
GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C.
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
IF TO THE COMPANY:
Prestige Brands, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
WITH COPIES TO:
GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C.
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
12. ENTIRE AGREEMENT; MODIFICATION. This Agreement, those documents
expressly referred to herein and the other documents of even date herewith (a)
contain the complete and entire understanding and agreement of GTCR and the
Company with respect to the subject matter hereof and (b) supersede all prior
and contemporaneous understandings, conditions and agreements, oral or written,
express or implied, respecting the engagement of GTCR in connection with the
subject matter hereof (including the Prior Agreement); PROVIDED, HOWEVER,
nothing herein shall limit or otherwise affect any of the Company's obligations
under the Prior Agreement to the extent arising prior to the date hereof
(including, without limitation, the obligation to pay GTCR for all unpaid fees
which have accrued prior to the date hereof and all costs and expenses incurred
by or on behalf of GTCR in rendering services under the Prior Agreement to the
extent not reimbursed by the Company prior to the date hereof). The provisions
of this Agreement may be amended, modified and/or waived only with the prior
written consent of the Company and GTCR.
13. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach of that provision or any other provision
hereof.
14. ASSIGNMENT. Neither GTCR nor the Company may assign its rights or
obligations under this Agreement without the express written consent of the
other, except that GTCR may assign its rights and obligations to an affiliate of
GTCR (which shall include GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.C.).
15. SUCCESSORS. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and permitted assigns of the parties.
16. COUNTERPARTS. This Agreement may be executed and delivered by each
party hereto in separate counterparts (including by means of facsimile), each of
which when so executed and delivered shall be deemed an original and both of
which taken together shall constitute one and the same agreement.
17. CHOICE OF LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.
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18. MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON, AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN
THE PARTIES HERETO, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT
OF, CONNECTED WITH, OR RELATED TO THIS AGREEMENT AND/OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, the undersigned have caused this Amended and Restated
Professional Services Agreement to be duly executed and delivered on the date
and year first above written.
GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, L.L.C.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its: Principal
PRESTIGE BRANDS, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: Vice President
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[SIGNATURE PAGE TO AMENDED AND RESTATED PROFESSIONAL SERVICES
AGREEMENT]