MANAGEMENT AGREEMENT
This Management Agreement (this "Agreement") is entered into as of the 28th
day of October 1997 by and between Details, Inc., a California corporation
(together with each of its direct and indirect subsidiaries becoming party
hereto by executing a counterpart signature page hereof, the "Company"), and
▇▇▇▇ Capital Partners V, L.P., a Delaware limited partnership ("Bain").
Whereas, DI Acquisition Corp., a California corporation ("DIA"), the
Company and the Company's stockholders are party to that certain Amended
and Restated Recapitalization Agreement dated as of October 4, 1997 (the
"Recapitalization Agreement") pursuant to which the Company will be
recapitalized by means of a merger of DIA with and into the Company (the
"Recapitalization");
Whereas, Bain is providing advisory and other services to the Company
in connection with the debt financing (the "Financing") being provided for
the Recapitalization;
Whereas, certain funds (the "Bain Funds") affiliated with Bain are
providing equity financing (the "Equity Investments") to DIA in connection
with the Recapitalization; and
Whereas, subject to the terms and conditions of this Agreement, the
Company desires to retain Bain to provide certain management and advisory
services to the Company, and Bain desires to provide such services;
Now, therefore, in consideration of the mutual covenants contained herein,
and for 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. Services. Bain hereby agrees that, during the term of this Agreement (the
"Term"), to the extent requested by the Company, it will:
a. provide the Company with advice in connection with the negotiation and
consummation of agreements, contracts, documents and instruments
necessary to provide the Company with financing from banks or other
financial institutions or other entities on terms and conditions
satisfactory to the Company; and
b. provide the Company with financial, managerial and operational advice
in connection with its day-to-day operations, including, without
limitation:
i. advice with respect to the investment of funds; and
ii. advice with respect to the development and implementation of
strategies for improving the operating, marketing and financial
performance of the Company; and
c. subject to Section 11 below
i. identify to the Company any potential business combinations or
other strategic actions which it believes, in its sole judgment,
the Company might wish to consider pursuing; and
ii. from time to time notify the Company if it becomes aware of
acquisition opportunities which it believes, in its sole
judgment, are particularly well-suited for the Company;
provided, however, that nothing in this Agreement is intended or shall
be construed to require Bain to provide information regarding any
acquisition opportunity or other transaction or matter with respect to
which (A) Bain may have an interest in pursuing, directly or
indirectly, for itself or any of its affiliates, associated investment
funds or portfolio companies, or clients or (B) Bain has, or believes
it may have, any obligation of confidentiality or loyalty to any
person or entity other than the Company which obligation would be
inconsistent with, or could be compromised by, disclosure of
information to (or cooperation with) the Company.
2. Payment of Fees. The Company hereby agrees to:
a. pay to Bain (or an affiliate of Bain designated by it) a fee in the
amount of $3.1 million in connection with the structuring of the
Financing for the Recapitalization, together with reimbursement of
▇▇▇▇'▇ expenses incurred on behalf of DIA and/or the Company through
the Effective Date in connection with the Recapitalization, such fees
and expenses being payable by the Company at the closing of the
Recapitalization or, if the Recapitalization is not consummated,
promptly after the time the Company has abandoned the
Recapitalization;
b. during the Term, pay to Bain (or an affiliate of Bain designated by
it) a management fee in an in exchange for the services provided to
the Company by Bain, as more fully described in Section 1 of this
Agreement, at ▇▇▇▇'▇
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customary rates for such services, such fee being payable by the
Company quarterly in arrears; and
c. during the Term, allow Bain to participate in the negotiation and
consummation of senior financing for any acquisition transactions by,
or recapitalization or refinancing transaction of, the Company or any
of its direct or indirect subsidiaries, and pay (or cause one or more
of its subsidiaries to pay) to Bain (or an affiliate of Bain
designated by it) a fee in connection therewith equal to one percent
(1%) of the gross value of such transaction (including all liabilities
assumed, retained or otherwise included in such transaction), such fee
to be due and payable for the foregoing services at the closing of
such transaction, whether or not any such senior financing is actually
committed or drawn upon (it being understood and agreed that no such
fee shall be due and payable in connection with the placement of
permanent financing to replace any bridge financing incurred by the
Company in connection with the consummation of the Recapitalization).
Payments made pursuant to Section 2(a) and 2(c) shall be paid by wire
transfer of immediately available federal funds to the account specified on
Schedule 1 hereto, or to such other account(s) as Bain may specify to the
Company in writing prior to such payment. If services shall have been
performed hereunder during any period for, or on behalf of, one or more
direct or indirect subsidiaries of Details, Inc., the Board of Directors of
Details, Inc. shall make a good faith allocation of the fees paid or
payable in respect of such period among Details, Inc. and such
subsidiaries.
3. Term. This Agreement shall continue in full force and effect, unless and
until terminated by mutual consent of the parties, for so long as Bain (or
any successor or permitted assign, as the case may be) continues to carry
on the business of providing services of the type described in Section 1
above; provided, however, that either party may terminate this Agreement
following a material breach of the terms of this Agreement by the other
party hereto and a failure to cure such breach within 30 days following
written notice thereof; and provided further that if the parties agree to
terminate this Agreement in connection with a transaction or a series of
related transactions involving the sale or other disposition of all or
substantially all of the assets or capital stock of the Company, the
original term of this Agreement shall be deemed to have been twelve years;
and provided further that each of (a) the obligations of the Company under
Section 4 below, (b) any and all accrued and unpaid obligations of the
Company owed under Section 2 above and (c) the provisions of Section 7
shall survive any termination of this Agreement to the maximum extent
permitted under applicable law.
4. Expenses; Indemnification.
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a. Expenses. The Company agrees to pay (or cause one or more of its
subsidiaries to pay) on demand all expenses incurred by Bain, the Bain
Funds and ▇▇▇▇ Capital, Inc. (or any of them) in connection with this
Agreement, the Recapitalization and such other transactions and all
operations hereunder or in respect of the Equity Investments or
otherwise incurred in connection with the Recapitalization or the
Company, including but not limited to (i) the fees and disbursements
of: (A) Ropes & ▇▇▇▇, special counsel to ▇▇▇▇ Capital, Inc. and the
Bain Funds, (B) Price Waterhouse LLP, accountant to ▇▇▇▇ Capital, Inc.
and the Bain Funds, and (C) any other consultants or advisors retained
by Bain, ▇▇▇▇ Capital, Inc., the Bain Funds or either of the parties
identified in clauses (A) and (B) arising in connection therewith
(including but not limited to the preparation, negotiation and
execution of this Agreement and any other agreement executed in
connection herewith or in connection with the Recapitalization, the
Financing or the consummation of the other transactions contemplated
hereby (and any and all amendments, modifications, restructurings and
waivers, and exercises and preservations of rights and remedies
hereunder or thereunder) and the operations of the Company and any of
its subsidiaries), and (ii) any out-of-pocket expenses incurred by
Bain in connection with the provision of services hereunder or the
attendance at any meeting of the board of directors (or any committee
thereof) of the Company or any of its affiliates.
b. Indemnity. In consideration of the execution and delivery of this
Agreement by Bain and the provision of the Equity Investments by the
Bain Funds, the Company hereby agrees to indemnify, exonerate and hold
each of Bain, ▇▇▇▇ Capital, Inc. and each Bain Fund, and each of their
respective partners, shareholders, affiliates, directors, officers,
fiduciaries, employees and agents and each of the partners,
shareholders, affiliates, directors, officers, fiduciaries, employees
and agents of each of the foregoing (collectively, the "Indemnitees")
free and harmless from and against any and all actions, causes of
action, suits, losses, liabilities and damages, and expenses in
connection therewith, including without limitation reasonable
attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnitees or any of them as a result
of, or arising out of, or relating to the Recapitalization, the
execution, delivery, performance, enforcement or existence of this
Agreement or the transactions contemplated hereby (including but not
limited to any indemnification obligations assumed or incurred by any
Indemnitee to or on behalf of Seller, or any of its accountants or
other representatives, agents or affiliates) except for any such
Indemnified Liabilities arising on account of such Indemnitee's gross
negligence or willful misconduct, and if and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. None of the Indemnitees shall be
liable to the Company or any
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of its affiliates for any act or omission suffered or taken by such
Indemnitee that does not constitute gross negligence or willful
misconduct.
5. Assignment, etc. Except as provided below, neither party shall have the
right to assign this Agreement. Bain acknowledges that its services under
this Agreement are unique. Accordingly, any purported assignment by Bain
(other than as provided below) shall be void. Notwithstanding the
foregoing, (a) Bain may assign all or part of its rights and obligations
hereunder to any affiliate of Bain which provides services similar to those
called for by this Agreement, in which event Bain shall be released of all
of its rights and obligations hereunder, and (b) the provisions hereof for
the benefit of the Bain Funds shall inure to the benefit of their
successors and assigns.
6. Amendments and Waivers. No amendment or waiver of any term, provision or
condition of this Agreement shall be effective, unless in writing and
executed by each of Bain and Details, Inc. No waiver on any one occasion
shall extend to or effect or be construed as a waiver of any right or
remedy on any future occasion. No course of dealing of any person nor any
delay or omission in exercising any right or remedy shall constitute an
amendment of this Agreement or a waiver of any right or remedy of any party
hereto.
7. Miscellaneous.
a. Effectiveness. This Agreement shall become effective at the Effective
Time (as defined in the Recapitalization Agreement).
b. Subsidiaries. Each person or other entity who shall become a direct
or indirect subsidiary of the Company after the date hereof shall
become a party hereto and agree to be bound by the terms hereof by
executing a counterpart signature page of this Agreement. Each such
subsidiary shall thereafter be liable for the payment of the fees and
expenses of Bain to the extent set forth in Section 2 hereof.
c. Choice of Law. This Agreement shall be governed by and construed in
accordance with the domestic substantive laws of The Commonwealth of
Massachusetts without giving effect to any choice or conflict of law
provision or rule that would cause the application of the domestic
substantive laws of any other jurisdiction.
d. Consent to Jurisdiction. Each of the parties agrees that all actions,
suits or proceedings arising out of or based upon this Agreement or
the subject matter hereof shall be brought and maintained exclusively
in the federal and state courts of The Commonwealth of Massachusetts.
Each of the parties hereto by execution hereof (i) hereby irrevocably
submits to the jurisdiction of the federal
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and state courts in The Commonwealth of Massachusetts for the purpose
of any action, suit or proceeding arising out of or based upon this
Agreement or the subject matter hereof and (ii) hereby waives to the
extent not prohibited by applicable law, and agrees not to assert, by
way of motion, as a defense or otherwise, in any such action, suit or
proceeding, any claim that it is not subject personally to the
jurisdiction of the above-named courts, that it is immune from
extraterritorial injunctive relief or other injunctive relief, that
its property is exempt or immune from attachment or execution, that
any such action, suit or proceeding may not be brought or maintained
in one of the above-named courts, that any such action, suit or
proceeding brought or maintained in one of the above-named courts
should be dismissed on grounds of forum non conveniens, should be
----- --- ----------
transferred to any court other than one of the above-named courts,
should be stayed by virtue of the pendency of any other action, suit
or proceeding in any court other than one of the above-named courts,
or that this Agreement or the subject matter hereof may not be
enforced in or by any of the above-named courts. Each of the parties
hereto hereby consents to service of process in any such suit, action
or proceeding in any manner permitted by the laws of The Commonwealth
of Massachusetts, agrees that service of process by registered or
certified mail, return receipt requested, at the address specified in
or pursuant to Section 9 is reasonably calculated to give actual
notice and waives and agrees not to assert by way of motion, as a
defense or otherwise, in any such action, suit or proceeding any claim
that service of process made in accordance with Section 9 does not
constitute good and sufficient service of process. The provisions of
this Section 7(b) shall not restrict the ability of any party to
enforce in any court any judgment obtained in a federal or state court
of The Commonwealth of Massachusetts.
e. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY 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 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 7(c) constitute a material inducement upon
which such party is relying and will rely in entering into this
Agreement and the transactions contemplated hereby. Any 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.
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8. Merger/Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes any
prior communication or agreement with respect thereto.
9. Notice. All notices, demands, and communications of any kind which any
party may require or desire to serve upon any other party under this
Agreement shall be in writing and shall be served upon such other party and
such other party's copied persons as specified below by personal delivery
to the address set forth for it below or to such other address as such
party shall have specified by notice to each other party or by mailing a
copy thereof by certified or registered mail, or by Federal Express or any
other reputable overnight courier service, postage prepaid, with return
receipt requested, addressed to such party and copied persons at such
addresses. In the case of service by personal delivery, it shall be deemed
complete on the first business day after the date of actual delivery to
such address. In case of service by mail or by overnight courier, it shall
be deemed complete, whether or not received, on the third day after the
date of mailing as shown by the registered or certified mail receipt or
courier service receipt. Notwithstanding the foregoing, notice to any
party or copied person of change of address shall be deemed complete only
upon actual receipt by an officer or agent of such party or copied person.
If to the Company, to it at:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
With a copy to:
▇▇▇▇ Capital, Inc.
Two ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
If to Bain, to it at:
Two ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
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With a copy to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
10. Severability. If in any judicial or arbitral proceedings a court or
arbitrator shall refuse to enforce any provision of this Agreement, then
such unenforceable provision shall be deemed eliminated from this Agreement
for the purpose of such proceedings to the extent necessary to permit the
remaining provisions to be enforced. To the full extent, however, that the
provisions of any applicable law may be waived, they are hereby waived to
the end that this Agreement be deemed to be valid and binding agreement
enforceable in accordance with its terms, and in the event that any
provision hereof shall be found to be invalid or unenforceable, such
provision shall be construed by limiting it so as to be valid and
enforceable to the maximum extent consistent with and possible under
applicable law.
11. Disclaimer, Limitation of Liability and Freedom to Pursue Opportunities.
a. Disclaimer. Bain makes no representations or warranties, express or
implied, in respect of the services to be provided by it hereunder.
b. Standard of Care. In no event shall Bain be liable to the Company or
any of its affiliates for any act, alleged act, omission or alleged
omission on the part of Bain that does not constitute gross negligence
or willful misconduct.
c. Freedom to Pursue Opportunities, Etc. In anticipation that the
Company and Bain (or one or more affiliates, associated investment
funds or portfolio companies, or clients of Bain) may engage in the
same or similar activities or lines of business and have an interest
in the same areas of corporate opportunities, and in recognition of
the benefits to be derived by the Company from the services to be
provided under this Agreement and in recognition of the difficulties
which may confront any advisor who desires and endeavors fully to
satisfy such advisor's duties in determining the full scope of such
duties in any particular situation, the provisions of this clause (c)
are set forth to regulate, define and guide the conduct of certain
affairs of the Company as they may involve Bain (or one or more
affiliates, associated investment funds or portfolio companies, or
clients of Bain). Except as Bain may otherwise agree in writing after
the date hereof:
▇. ▇▇▇▇ (and its affiliates, associated investment funds, portfolio
companies and clients) shall have the right to, and shall have no
duty (contractual or
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otherwise) not to, directly or indirectly: (A) engage in the same
or similar business activities or lines of business as the
Company, including those competing with the Company, and (B) do
business with any client or customer of the Company;
ii. Neither Bain nor any officer, director, employee, partner,
affiliate or associated investment fund, portfolio company or
client thereof shall be liable to the Company or its affiliates
for breach of any duty (contractual or otherwise) by reason of
any such activities of or of such person's participation therein;
and
iii. In the event that Bain acquires knowledge of a potential
transaction or matter that may be a corporate opportunity for
both the Company and Bain or any other person, neither Bain nor
any officer, director, employee, partner, affiliate or associated
investment fund, portfolio company or client thereof shall have
any duty (contractual or otherwise) to communicate or present
such corporate opportunity to the Company and, notwithstanding
any provision of this Agreement to the contrary, no such person
or entity shall be liable to the Company or its affiliates for
breach of any duty (contractual or otherwise) by reason of the
fact that Bain (or one or more affiliates, associated investment
funds or portfolio companies, or clients of Bain) directly or
indirectly pursues or acquires such opportunity for itself,
directs such opportunity to another person, or does not present
such opportunity to the Company.
d. Limitation of Liability. In no event will either party hereto be
liable to the other for any indirect, special, incidental or
consequential damages, including lost profits or savings, whether or
not such damages are foreseeable, or for any third party claims
(whether based in contract, tort or otherwise), relating to the
services to be provided by Bain hereunder.
12. Counterparts. This Agreement may be executed in any number of counterparts
and by each of the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as an instrument under seal as of the date first above
written by its officer or representative thereunto duly authorized.
THE COMPANY: DETAILS, INC.
By /s/ ▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Title:
BAIN: ▇▇▇▇ CAPITAL PARTNERS V, L.P.
By ▇▇▇▇ Capital Investors V, Inc.,
its general partner
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title:
Schedule 1 to
Management Agreement
--------------------
Wire Transfer Instructions for
▇▇▇▇ Capital Partners V, L.P.
Citibank N.A.
ABA # 021 000 089
For ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇
Account # ▇▇▇▇▇▇▇▇
To Further Credit:
▇▇▇▇ Capital Partners V, L.P.
Acct. #810512-4
Management Agreement
October 28, 1997
In accordance with Section 7(b) of the Management Agreement, dated as of
October 28, 1997, between Details Holdings Corp. (f/k/a Details, Inc.) and ▇▇▇▇
Capital Partners V, L.P. (as the same has been, and may be, amended, restated,
supplemented or otherwise modified from time to time, the "Management
Agreement"), the undersigned hereby agrees that as of the date set forth below,
it is a party to the Management Agreement and is bound by the terms and
provisions thereof as if it were an original party thereto.
DETAILS, INC.
By
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Title:
Dated as of November 3, 1997
Management Agreement
October 28, 1997
In accordance with Section 7(b) of the Management Agreement, dated as of
October 28, 1997, between Details Holdings Corp. (f/k/a Details, Inc.) and ▇▇▇▇
Capital Partners V, L.P. (as the same has been, and may be, amended, restated,
supplemented or otherwise modified from time to time, the "Management
Agreement"), the undersigned hereby agrees that as of the date set forth below,
it is a party to the Management Agreement and is bound by the terms and
provisions thereof as if it were an original party thereto.
DETAILS CAPITAL CORP.
By
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Title:
Dated as of November __, 1997