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Exhibit 10.1
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (the "Agreement") dated as of
September 30, 1998 is between True Temper Sports, Inc. (the "Company") and
Cornerstone Equity Investors, LLC ("Cornerstone").
WHEREAS, the Company desires to retain Cornerstone and Cornerstone
desires to perform for the Company certain services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. Term. This Agreement shall be in effect for an initial term of
seven (7) years commencing on the date hereof (the "Term"), and shall be
automatically extended thereafter on a year to year basis unless the Company or
Cornerstone gives written notice of its desire to terminate this Agreement to
the other party 90 days prior to the expiration of the Term or any extension
thereof.
2. Services. Cornerstone shall perform or cause to be performed such
services for the Company and its direct and indirect subsidiaries as directed by
the Company's board of directors and agreed to by Cornerstone, which may
include, without limitation, the following:
(a) general management services;
(b) identification, support, negotiation and analysis of acquisitions
and dispositions;
(c) support, negotiation and analysis of financing alternatives,
including, without limitation, in connection with acquisitions, capital
expenditures and refinancing of existing indebtedness;
(d) finance functions, including assistance in the preparation of
financial projections, and monitoring of compliance with financing agreements;
(e) strategic planning functions, including evaluating major
strategic alternatives; and
(f) other services for the Company and its subsidiaries upon which
the Company's board of directors and Cornerstone agree.
3. Advisory Fees and Transaction Fees.
(a) Payment to Cornerstone for services rendered in connection with
the performance of services pursuant to this Agreement shall be $500,000 per
year or such other amount as the parties hereto shall agree ("Advisory Fees")
plus reasonable out-of-pocket expenses of
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Cornerstone. The Advisory Fees shall be payable quarterly in advance by the
Company in immediately available funds, the first such payment to be made
promptly after the date hereof.
(b) During the term of this Agreement, Cornerstone shall be entitled
to receive from the Company a transaction fee in connection with the
consummation by the Company or any of its subsidiaries of (i) each material
acquisition of an additional business (ii) each material divestiture and (iii)
each material financing or refinancing, in each case, in an amount equal to 1%
of the aggregate value of such transaction (each such payment, a "Transaction
Fee").
(c) Upon the consummation of the recapitalization of the Company
contemplated by that certain Reorganization, Recapitalization and Stock Purchase
Agreement by and between The Black & ▇▇▇▇▇▇ Corporation, True Temper Sports,
Inc. and TTSI LLC, dated as of June 29, 1998, the Company shall pay to
Cornerstone a transaction fee of $3,000,000 (the "Closing Fee") in immediately
available funds, to an account designated by Cornerstone; it being understood
that the Closing Fee shall be in lieu of the Transaction Fee with respect to
such recapitalization.
(d) In the event that during the term of this Agreement the Company
and Cornerstone agree, in their respective sole discretion, that all or a
portion of the Advisory Fees to be paid by the Company to Cornerstone can be
advantageously applied directly by the Company for purposes that are beneficial
to the Company and to Cornerstone in connection with services provided by
Cornerstone hereunder or that may facilitate the provision of such services by
Cornerstone, then the Advisory Fees payable hereunder will be reduced and the
Company will apply such agreed amounts directly for such other purposes.
4. Subordination. Cornerstone covenants and agrees that the payment
to Cornerstone of any Advisory Fees and Transaction Fees as contemplated in this
Agreement shall be subordinate and junior in right to payment for any
indebtedness incurred by the Company related to or arising out of the issuance
by the Company of the Senior Subordinated Increasing Rate Notes (the "Notes")
pursuant to that certain Securities Purchase Agreement, dated as of September
30,1998, among the Company, the Guarantors thereto and the Purchaser Party
thereto (the "Bridge Agreement"). No payment shall be made by the Company
hereunder, whether with respect to any Advisory Fees or Transaction Fees, at any
time when there shall have occurred and be continuing (i) any default in the
payment of all or any part of the principal or premium, if any, on any of the
Notes as and when the same shall become due and payable either at maturity, upon
any redemption, by declaration or otherwise or (ii) any default in the payment
of any installment of interest upon any of the Notes or any fees payable under
the Bridge Agreement or any taxes payable thereunder as and when the same shall
become due and payable; provided, however, that following the earlier of (a) the
cure, waiver or other resolution of such default or (ii) the payment in full in
cash of all obligations under the Notes then outstanding, all amounts that have
not been paid to Cornerstone due to the application of the provisions of this
Section 4 shall be promptly paid to Cornerstone without requiring any demand,
notice to the Company or other action on the part of Cornerstone.
5. Personnel. Cornerstone shall provide and devote to the performance
of this Agreement such employees, affiliates and agents of Cornerstone as
Cornerstone shall deem appropriate to the furnishing of the services required.
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6. Liability. Neither Cornerstone nor any of its affiliates, members,
partners, employees or agents shall be liable to the Company or any of its
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, unless such loss, liability, damage or expense shall be proven to
result directly from gross negligence, willful misconduct or bad faith on the
part of Cornerstone, its affiliates, members, partners, employees or agents
acting within the scope of their employment or authority.
7. Indemnity. The Company and its subsidiaries shall defend,
indemnify and hold harmless Cornerstone, its affiliates, members, partners,
employees and agents from and against any and all loss, liability, damage, or
expenses arising from any claim (a "Claim") by any person with respect to, or in
any way related to, the performance of services contemplated by this Agreement
(including attorneys' fees) (collectively, "Claims") resulting from any act or
omission of Cornerstone, its affiliates, members, partners, employees or agents,
other than for Claims which shall be proven to be the direct result of gross
negligence, bad faith or willful misconduct by Cornerstone, its affiliates,
members, partners, employees or agents. The Company and its subsidiaries shall
defend at its own cost and expense any and all suits or actions (just or unjust)
which may be brought against the Company, and/or any of its subsidiaries and any
of Cornerstone, its officers, directors, affiliates, members, partners,
employees or agents or in which any of Cornerstone, its affiliates, members,
partners, employees or agents may be impleaded with others upon any Claim or
Claims, or upon any matter, directly or indirectly, related to or arising out of
this Agreement or the performance hereof by Cornerstone, its affiliates,
members, partners, employees or agents, except that if such damage shall be
proven to be the direct result of gross negligence, bad faith or willful
misconduct by Cornerstone, its affiliates, members, partners, employees or
agents, then Cornerstone shall reimburse the Company for the costs of defense
and other costs incurred by the Company.
8. Notices. All notices or other communications required or permitted
by this Agreement shall be effective upon receipt and shall be in writing and
delivered personally or by overnight courier, or sent by facsimile, as follows:
To the Company:
True Temper Sports, Inc.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
To Cornerstone:
Cornerstone Equity Investors, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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9. Assignment. No party hereto may assign any obligations hereunder
to any other party without the prior written consent of the other party hereto,
which consent shall not be unreasonably withheld; provided, however, that,
notwithstanding the foregoing, Cornerstone may assign its rights and obligations
under this Agreement to any of its affiliates without the consent of the
Company.
10. Successors. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and assigns of the parties hereto.
11. Counterparts. This Agreement may be executed and delivered by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original and both of which taken together shall
constitute but one and the same agreement.
12. Entire Agreement; Modification; Governing Law. The terms and
conditions hereof constitute the entire agreement between the parties hereto
with respect to the subject matter of this Agreement and supersede all previous
communications, either oral or written, representations or warranties of any
kind whatsoever, except as expressly set forth herein. No modifications of this
Agreement nor waiver of the terms or conditions hereof shall be binding upon any
party hereto unless approved in writing by an authorized representative of such
party. All issues concerning this Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than the State of New York.
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IN WITNESS WHEREOF, the parties have executed this Management
Services Agreement as of the date first written above.
TRUE TEMPER SPORTS, INC.
By:_______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice-President
CORNERSTONE EQUITY INVESTORS, LLC
By:_______________________________
Name:
Title:
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AMENDMENT TO MANAGEMENT SERVICES AGREEMENT
THIS AMENDMENT (this "Amendment") to the Management Services
Agreement (the "Agreement") is made as of the 23rd day of November, 1998, by and
among True Temper Sports, Inc. (the "Company") and Cornerstone Equity Investors,
LLC ("Cornerstone").
WHEREAS, the Company and Cornerstone entered into the
Agreement as of September 30, 1998; and
WHEREAS, the Company and Cornerstone desire to amend Section 4
of the Agreement as more fully set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties contained herein, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used in but not defined in
this Amendment shall have the meanings specified in the Agreement.
Section 2. Amendment to Section 4. Section 4 of the Agreement is hereby
amended by deleting Section 4 thereof in its entirety and replacing it with the
following:
"4. Subordination. Cornerstone covenants and agrees that the
payment to Cornerstone of any Advisory Fees and Transaction Fees as contemplated
in this Agreement shall be subordinate and junior in right to payment for any
indebtedness incurred by the Company related to or arising out of the issuance
by the Company of the 10"% Senior Subordinated Notes due 2008 (the "Notes")
pursuant to that certain indenture between the Company and United States Trust
Company of new York, as trustee, dated November 23, 1998 (the "Indenture"). No
payment shall be made by the Company hereunder, whether with respect to any
Advisory Fees or Transaction Fees, at any time when there shall have occurred
and be continuing (i) any default in the payment of all or any part of the
principal or premium, if any, on any of the Notes as and when the same shall
become due and payable either at maturity, upon any redemption, by declaration
or otherwise or (ii) any default in the payment of any installment of interest
upon any of the Notes or any fees payable under the Indenture or any taxes
payable thereunder as and when the same shall become due and payable; provided,
however, that following the earlier of (a) the cure, waiver or other resolution
of such default or (ii) the payment in full in cash of all obligations under the
Notes then outstanding, all amounts that have not been paid to Cornerstone due
to the application of the provisions of this Section 4 shall be promptly paid to
Cornerstone without requiring any demand, notice to the Company or other action
on the part of Cornerstone."
Section 3. Limited Amendment. Except as amended by this Amendment and
as the context may otherwise require to give effect to the intent and purposes
of this Amendment, the Agreement shall remain in full force and effect without
any other amendments or modifications.
Section 4. Notices. All notices, requests and other communications to
any party hereunder shall be in writing and shall be given,
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if to the Company:
True Temper Sports, Inc.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to Cornerstone:
Cornerstone Equity Investors, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 5. Assignment. No party hereto may assign any
obligations hereunder to any other party without the prior written consent of
the other party hereto, which consent shall not be unreasonably withheld;
provided, however, that, notwithstanding the foregoing, Cornerstone may assign
its rights and obligations under this Agreement to any of its affiliates without
the consent of the Company.
Section 6. Successors. This Amendment and all the obligations
and benefits hereunder shall inure to the successors and assigns of the parties
hereto.
Section 7. Counterparts. This Amendment may be executed and
delivered by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original and both of which taken
together shall constitute but one and the same agreement.
Section 8. Entire Agreement; Modification; Governing Law. The
terms and conditions of the Agreement as amended by this Amendment constitute
the entire agreement among the parties with respect to the subject matter of the
Agreement and supersede all prior agreements, understandings and negotiations,
both written and oral, between the parties with respect to the subject matter
thereof.
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IN WITNESS WHEREOF, the parties have executed this Management
Services Agreement as of the date first written above.
TRUE TEMPER SPORTS, INC.
By: ________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
CORNERSTONE EQUITY INVESTORS, LLC
By:_________________________________
Name:
Title:
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MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (the "Agreement") dated as of
September 30, 1998 is between True Temper Sports, Inc. (the "Company") and
Cornerstone Equity Investors, LLC ("Cornerstone").
WHEREAS, the Company desires to retain Cornerstone and Cornerstone desires
to perform for the Company certain services;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:
1. Term. This Agreement shall be in effect for an initial term of seven
(7) years commencing on the date hereof (the "Term"), and shall be automatically
extended thereafter on a year to year basis unless the Company or Cornerstone
gives written notice of its desire to terminate this Agreement to the other
party 90 days prior to the expiration of the Term or any extension thereof.
2. Services. Cornerstone shall perform or cause to be performed such
services for the Company and its direct and indirect subsidiaries as directed
by the Company's board of directors and agreed to by Cornerstone, which may
include, without limitation, the following:
(a) general management services;
(b) identification, support, negotiation and analysis of acquisitions and
dispositions;
(c) support, negotiation and analysis of financing alternatives, including,
without limitation, in connection with acquisitions, capital expenditures and
refinancing of existing indebtedness;
(d) finance functions, including assistance in the preparation of
financial projections, and monitoring of compliance with financing agreements;
(e) strategic planning functions, including evaluating major strategic
alternatives; and
(f) other services for the Company and its subsidiaries upon which the
Company's board of directors and Cornerstone agree.
3. Advisory Fees and Transaction Fees.
(a) Payment to Cornerstone for services rendered in connection with the
performance of services pursuant to this Agreement shall be $500,000 per year
or such other amount as the parties hereto shall agree ("Advisory Fees") plus
reasonable out-of-pocket expenses of
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Cornerstone. The Advisory Fees shall be payable quarterly in advance by the
Company in immediately available funds, the first such payment to be made
promptly after the date hereof.
(b) During the term of this Agreement, Cornerstone shall be entitled to
receive from the Company a transaction fee in connection with the consummation
by the Company or any of its subsidiaries of (i) each material acquisition of an
additional business (ii) each material divestiture and (iii) each material
financing or refinancing, in each case, in an amount equal to 1% of the
aggregate value of such transaction (each such payment, a "Transaction Fee").
(c) Upon the consummation of the recapitalization of the Company
contemplated by that certain Reorganization, Recapitalization and Stock Purchase
Agreement by and between The Black & ▇▇▇▇▇▇ Corporation, True Temper Sports,
Inc. and TTSI LLC, dated as of June 29, 1998, the Company shall pay to
Cornerstone a transaction fee of $3,000,000 (the "Closing Fee") in immediately
available funds, to an account designated by Cornerstone; it being understood
that the Closing Fee shall be in lieu of the Transaction Fee with respect to
such recapitalization.
(d) In the event that during the term of this Agreement the Company and
Cornerstone agree, in their respective sole discretion, that all or a portion of
the Advisory Fees to be paid by the Company to Cornerstone can be advantageously
applied directly by the Company for purposes that are beneficial to the Company
and to Cornerstone in connection with services provided by Cornerstone hereunder
or that may facilitate the provision of such services by Cornerstone, then the
Advisory Fees payable hereunder will be reduced and the Company will apply such
agreed amounts directly for such other purposes.
4. Subordination. Cornerstone covenants and agrees that the payment to
Cornerstone of any Advisory Fees and Transaction Fees as contemplated in this
Agreement shall be subordinate and junior in right to payment for any
indebtedness incurred by the Company related to or arising out of the issuance
by the Company of the Senior Subordinated Increasing Rate Notes (the "Notes")
pursuant to that certain Securities Purchase Agreement, dated as of September
30, 1998, among the Company, the Guarantors thereto and the Purchaser Party
thereto (the "Bridge Agreement"). No payment shall be made by the Company
hereunder, whether with respect to any Advisory Fees or Transaction Fees, at any
time when there shall have occurred and be continuing (i) any default in the
payment of all or any part of the principal or premium, if any, on any of the
Notes as and when the same shall become due and payable either at maturity, upon
any redemption, by declaration or otherwise or (ii) any default in the payment
of any installment of interest upon any of the Notes or any fees payable under
the Bridge Agreement or any taxes payable thereunder as and when the same shall
become due and payable; provided, however, that following the earlier of (a) the
cure, waiver or other resolution of such default or (ii) the payment in full in
cash of all obligations under the Notes then outstanding, all amounts that have
not been paid to Cornerstone due to the application of the provisions of this
Section 4 shall be promptly paid to Cornerstone without requiring any demand,
notice to the Company or other action on the part of Cornerstone.
5. Personnel. Cornerstone shall provide and devote to the performance of
this Agreement such employees, affiliates and agents of Cornerstone as
Cornerstone shall deem appropriate to the furnishing of the services required.
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6. Liability. Neither Cornerstone nor any of its affiliates, members,
partners, employees or agents shall be liable to the Company or any of its
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, unless such loss, liability, damage or expense shall be proven to
result directly from gross negligence, willful misconduct or bad faith on the
part of Cornerstone, its affiliates, members, partners, employees or agents
acting within the scope of their employment or authority.
7. Indemnity. The Company and its subsidiaries shall defend, indemnify
and hold harmless Cornerstone, its affiliates, members, partners, employees and
agents from and against any and all loss, liability, damage, or expenses
arising from any claim (a "Claim") by any person with respect to, or in any way
related to, the performance of services contemplated by this Agreement (includ-
ing attorneys' fees) (collectively, "Claims") resulting from any act or omission
of Cornerstone, its affiliates, members, partners, employees or agents, other
than for Claims which shall be proven to be the direct result of gross
negligence, bad faith or willful misconduct by Cornerstone, its affiliates,
members, partners, employees or agents. The Company and its subsidiaries shall
defend at its own cost and expense any and all suits or actions (just or unjust)
which may be brought against the Company, and/or any of its subsidiaries and any
of Cornerstone, its officers, directors, affiliates, members, partners,
employees or agents or in which any of Cornerstone, its affiliates, members,
partners, employees or agents may be impleaded with others upon any Claim or
Claims, or upon any matter, directly or indirectly, related to or arising out
of this Agreement or the performance hereof by Cornerstone, its affiliates,
members, partners, employees or agents, except that if such damage shall be
proven to be the direct result of gross negligence, bad faith or willful
misconduct by Cornerstone, its affiliates, members, partners, employees or
agents, then Cornerstone shall reimburse the Company for the costs of defense
and other costs incurred by the Company.
8. Notices. All notices or other communications required or permitted by
this Agreement shall be effective upon receipt and shall be in writing and
delivered personally or by overnight courier, or sent by facsimile, as follows:
To the Company:
True Temper Sports, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
To Cornerstone:
Cornerstone Equity Investors, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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9. Assignment. No party hereto may assign any obligations hereunder to any
other party without the prior written consent of the other party hereto, which
consent shall not be unreasonably withheld; provided, however, that,
notwithstanding the foregoing, Cornerstone may assign its rights and
obligations under this Agreement to any of its affiliates without the consent
of the Company.
10. Successors. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and assigns of the parties hereto.
11. Counterparts. This Agreement may be executed and delivered by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original and both of which taken together shall
constitute but one and the same agreement.
12. Entire Agreement; Modification; Governing Law. The terms and
conditions hereof constitute the entire agreement between the parties hereto
with respect to the subject matter of this Agreement and supersede all previous
communications, either oral or written, representations or warranties of any
kind whatsoever, except as expressly set forth herein. No modification of this
Agreement nor waiver of the terms or conditions hereof shall be binding upon
any party hereto unless approved in writing by an authorized representative of
such party. All issues concerning this Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of
the State of New York or any other jurisdiction) that would cause the
application of the law of any jurisdiction other than the State of New York.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Management
Services Agreement as of the date first written above.
TRUE TEMPER SPORTS, INC.
By: ________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice-President
CORNERSTONE EQUITY INVESTORS, LLC
By:_________________________________
Name:
Title:
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