EXHIBIT 10.53
AMENDED AND RESTATED
MANAGEMENT SERVICES AGREEMENT
This AMENDED AND RESTATED MANAGEMENT SERVICES AGREEMENT (this
"AGREEMENT") is dated as of July 29, 2002, and entered into between Roller
Bearing Company of America, Inc., a Delaware corporation (the "COMPANY"), and
Whitney & Co., a Delaware corporation ("WHITNEY") and an affiliate of Whitney V,
L.P., a Delaware limited partnership ("PURCHASER").
WHEREAS, on December 18, 2000 and January 5, 2001, Whitney
Acquisition II, Corp., a Delaware corporation and affiliate of Whitney, acquired
shares of Class A Common Stock ("CLASS A COMMON STOCK"), par value $.01 per
share, of Roller Bearing Holding Company, Inc., a Delaware corporation and the
sole stockholder of the Company ("HOLDINGS" and such transactions, the "PRIOR
ACQUISITIONS"), and in connection with the Prior Acquisitions, the Company and
Whitney entered into a Management Services Agreement dated as of December 18,
2000 (the "ORIGINAL AGREEMENT"), pursuant to which the Company retained Whitney
to provide certain financial consulting and management advisory services to the
Company;
WHEREAS, on the date hereof, Purchaser has acquired 230,000 shares
(the "CLASS B PREFERRED SHARES") of the Class B Exchangeable Convertible
Participating Preferred Stock, par value $.01 per share, of Holdings (the
"CURRENT ACQUISITION") pursuant to a Preferred Stock Purchase Agreement dated as
of the date hereof by and among Holdings, the Company, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and Purchaser (the "PURCHASE AGREEMENT");
WHEREAS, Purchaser together with its affiliates and certain of their
limited partners intend on holding the shares of capital stock of Holdings
acquired in the Prior Acquisitions and the Current Acquisition (the "WHITNEY
SHARES") as a long-term investment and, in connection therewith, wish to assist
the Company in executing its business plan and achieving its long-term strategic
objectives; and
WHEREAS, in furtherance of the matters set forth in the preceding
paragraph, the Company desires to amend and restate the Original Agreement as
set forth herein.
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
ending on July 31, 2007 (the "TERM"), and shall be automatically extended
thereafter on a year to year basis unless the Company or Whitney 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. Notwithstanding
the foregoing, this Agreement shall terminate automatically upon the earlier to
occur of (i) an Initial Public Offering (as defined below) and (ii) such time
that the Minimum Whitney Ownership (as defined in that certain Amended and
Restated Stockholders' Agreement (the "STOCKHOLDERS' AGREEMENT") dated on
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even date herewith among Holdings, the Company, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ Family Investment, L.P., Whitney RBHC Investor, LLC and the Purchaser)
is less than 20%. For purposes of this Agreement, the term "INITIAL PUBLIC
OFFERING" means the underwritten public offering by either the Company or any of
its subsidiaries of its common stock pursuant to a registration statement (other
than a registration statement on Form S-8 or S-4 or any successor form thereto)
that has been filed under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and declared effective by the Securities and Exchange
Commission or any similar agency then having jurisdiction to enforce the
Securities Act; PROVIDED, HOWEVER, that for this purpose any offering under Rule
144A under the Securities Act or any similar rule or regulation promulgated
under the Securities Act shall not be deemed to be an Initial Public Offering.
2. SERVICES. Whitney 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 Whitney, which may include,
without limitation, the following:
(a) general management consulting services;
(b) identification, support, negotiation and/or analysis of
acquisitions and dispositions;
(c) support, negotiation and/or analysis of financing
alternatives, including, without limitation, in connection with acquisitions,
capital expenditures and refinancing of existing indebtedness;
(d) finance functions, including assisting 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 Whitney agree.
3. FEES.
(a) ADVISORY FEES. As consideration for services rendered
hereunder, the Company shall pay to Whitney the following fees and expenses: (i)
for each year of the Term (including any extension period), an annual advisory
fee of $450,000 (the "ADVISORY FEES"), and (ii) for each year of the Term
(including any extension period), all reasonable out-of-pocket fees and expenses
incurred by Whitney or any of its affiliates in connection with the provision of
services hereunder; PROVIDED, that at such time, if any, that the Whitney
Parties (as defined in the Stockholders' Agreement) cease to own any shares of
Preferred Stock (as defined in the Purchase Agreement), then the annual Advisory
Fees due hereunder from and after such time shall be reduced to $150,000 per
year. The annual Advisory Fees shall be payable quarterly in arrears on each
March
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31, June 30, September 30 and December 31, or if any such date shall not be a
business day, on the next succeeding business day to occur after such date,
beginning on September 30, 2002, and ending upon the termination of this
Agreement; PROVIDED that in recognition of the fact that the Company has already
paid $37,500 in Advisory Fees in respect of the period ending on September 30,
2002, the payment otherwise due on September 30, 2002 shall be reduced by
$37,500. All fees and expenses payable under clause (ii) above shall be paid
from to time to time upon the request of Whitney (subject to any reasonable
documentary requirements of the Company). Upon the termination of this
Agreement, the Company shall promptly pay to Whitney any unpaid portion of the
annual Advisory Fees to the extent such payment was due and payable prior to
such date. Notwithstanding the foregoing, the Company shall not be obligated to
pay any portion of the Advisory Fees during the continuation of a "default" or
an "event of default" as defined in the Credit Agreement, as defined in the
Purchase Agreement.
(b) OTHER FEES. As further consideration for Whitney agreeing
to perform services hereunder, on the date hereof, the Company shall (i) pay to
Whitney a fee of $750,000 (the "CLOSING FEE"), and (ii) reimburse all of
Purchaser and Whitney's reasonable out-of-pocket expenses (including, but
without limitation, fees, charges and disbursements of counsel and consultants)
incurred in connection with (A) the preparation, negotiation, execution,
delivery and performance of the Purchase Agreement and any other documents
relating to the transactions contemplated thereby (including, without
limitation, this Agreement) and (B) Whitney's due diligence investigation, which
payments shall be made by wire transfer of immediately available funds to an
account or accounts designated by Whitney.
(c) FEES PAID UNDER ORIGINAL AGREEMENT. The Company acknowledges
and agrees that all fees paid to Whitney in accordance with the Original
Agreement prior to the date hereof (including, without limitation, all closing
fees and all prepaid annual advisory fees) were earned by Whitney upon receipt
thereof, and such fees shall not be effected in any way by operation of this
Agreement or otherwise. Whitney acknowledges that as of the date hereof, there
are no fees or expenses due under the Original Agreement and unpaid by the
Company to Whitney.
4. PERSONNEL. Whitney shall provide and devote to the performance
of this Agreement such employees, affiliates and agents of Whitney as Whitney
shall deem appropriate to the furnishing of the services required. The parties
acknowledge and agree that this Agreement shall not create an agency
relationship between the Company and Whitney and neither party shall have the
authority to bind the other.
5. LIABILITY. Neither Whitney 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 Whitney, its affiliates, members, partners, employees or agents acting
within the scope of their employment or authority.
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6. INDEMNITY. The Company and its subsidiaries shall defend,
indemnify and hold harmless Whitney, 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 Whitney, 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 Whitney, 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
Whitney, its officers, directors, affiliates, members, partners, employees or
agents or in which any of Whitney, 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 Whitney, 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 Whitney, its affiliates,
members, partners, employees or agents acting within the scope of their
employment or authority, then Whitney shall reimburse the Company for the costs
of defense and other costs incurred by the Company.
7. 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, TO:
Roller Bearing Holding Company, Inc.
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, C.E.O.
Telecopy No.:(▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE TO THE COMPANY), TO:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: C. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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TO WHITNEY, TO:
Whitney & Co.
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No.:(▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE TO WHITNEY), TO:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy No.:(▇▇▇) ▇▇▇-▇▇▇▇
8. 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, Whitney may assign its rights and
obligations under this Agreement to any of its affiliates without the consent of
the Company.
9. SUCCESSORS. This Agreement and all the obligations and
benefits hereunder shall inure to the successors and assigns of the parties
hereto.
10. 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.
11. 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 Amended and
Restated Management Services Agreement as of the date first written above.
ROLLER BEARING COMPANY OF AMERICA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
WHITNEY & CO.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: