MANAGEMENT AGREEMENT
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AGREEMENT made this 28th day of June, 2004, by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇,
Inc., a Delaware corporation ("CHI") and ATT Holding Co., a Delaware corporation
("ATT"), ▇▇▇▇ True Temper, Inc., a Delaware corporation ("▇▇▇▇") and ▇▇▇▇▇
Holdings Inc. ("Holdings" and, together with ATT and ▇▇▇▇, the "Companies" and
each, a "Company").
W I T N E S S E T H:
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WHEREAS, the Companies desire to retain CHI to provide business and
organizational strategy, financial and investment management, advisory and
merchant and investment banking services to the Companies and their direct and
indirect subsidiaries upon the terms and conditions hereinafter set forth, and
CHI is willing to undertake such obligations;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties agree as follows:
1. Appointment. The Companies hereby engage CHI, and CHI hereby agrees,
upon the terms and subject to the conditions set forth herein, to provide
certain services to the Companies and their direct and indirect subsidiaries as
described in Section 3 hereof.
2. Term. The term of this Agreement (the "Term") shall be for an initial
term expiring December 31, 2011. Such term shall be renewed automatically for
additional one-year terms thereafter unless CHI or the Companies shall give
notice in writing within 90 days before the expiration of the initial term or
any one-year renewal thereof of its desire to terminate this Agreement. The
provisions of Section 6 and otherwise as the context so requires shall survive
the termination of this Agreement.
3. Duties of CHI. CHI shall provide the Companies and their direct and
indirect subsidiaries with business and organizational strategy, financial and
investment management, advisory and merchant and investment banking services
(collectively, the "Services").
3.1. Exclusions from "Services". Notwithstanding anything in the foregoing
to the contrary, the following services are specifically excluded from the
definition of "Services":
(i) Independent Accounting Services. Accounting services rendered to the
Companies, their direct or indirect subsidiaries, or CHI, with prior notice and
consultation with the management of the Companies, by an independent accounting
firm or accountant (i.e., an accountant who is not an employee of CHI);
(ii) Legal Services. Legal services rendered to the Companies, their direct
or indirect subsidiaries, or CHI, with prior notice and consultation with the
management of the Companies, by an independent law firm or attorney (i.e., an
attorney who is not an employee of CHI);
(iii) Transaction Services. Services in connection with any transaction in
which the Companies or their direct or indirect subsidiaries may be, or may
consider becoming, involved, including acquisitions, divestitures or financings,
it being understood that CHI shall be first approached and shall have a thirty
day period concerning all opportunities during which it may decide to perform,
for an additional fee that is customary for the nature of such transaction as
determined and approved by the Board of Directors of CHATT Holdings Inc. (or its
direct parent, CHATT Holdings LLC) in its reasonable judgment, any of such
transaction related services; and
(iv) Independent Actuarial Services. Actuarial services rendered to the
Companies, their direct or indirect subsidiaries, or CHI with prior notice and
consultation with the management of the Companies, by an independent actuarial
firm or actuary (i.e., an actuary who is not an employee of CHI). ----
4. Powers of CHI. So that it may properly perform its duties hereunder, CHI
shall, subject to Section 8 hereof, have the authority to do all things
necessary and proper to carry out the duties set forth in Section 3.
5. Compensation and Reimbursement.
(a) Transaction Fee. As consideration payable to CHI with respect to the
services provided by CHI in connection with the acquisition of the capital stock
and warrants of ATT on the date hereof and the financing related thereto, the
Companies shall pay to CHI a transaction fee in an amount equal to 3% of the
aggregate equity contributions made by members of the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Group to any
of the Companies or their subsidiaries on or as of the date hereof, earned and
payable on the date hereof.
(b) Initial Annual Fee. As consideration payable to CHI or any of its
affiliates for providing the Services to the Companies and their direct and
indirect subsidiaries, the Companies shall pay to CHI an annual management fee
(the "Initial Annual Fee"), earned and payable as follows: (i) an amount equal
to 1 1/2% of the aggregate equity contributions made by members of the ▇▇▇▇▇▇
▇▇▇▇▇▇ Group to any of the Companies or their subsidiaries on or as of the date
hereof in respect of the first full year of this Agreement, payable in arrears
on the first anniversary of the date hereof, (ii) an amount equal to 1 1/2% of
the aggregate equity contributions made by members of the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Group to
any of the Companies or their subsidiaries on or as of the date hereof in
respect of the second full year of this Agreement, payable in advance not more
frequently than quarterly during the second full year of this Agreement, with
the first such quarterly payment due on the first anniversary of the date of
this Agreement and (c) in respect of full years from and after the second
anniversary of the date of this Agreement, an amount equal to 3% of the
aggregate equity contributions made by members of the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Group to any
of the Companies or their subsidiaries on or as of the date hereof in respect of
each year after the second full year of this Agreement, payable in advance not
more frequently than quarterly during such year, with the first such quarterly
payment due on the applicable anniversary of the date of this Agreement.
(b) Subsequent Annual Fee. As further consideration payable to CHI or any
of its affiliates for providing the Services to the Companies and their direct
and indirect subsidiaries, in the event at any time or from time to time after
the date hereof any member of
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the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Group makes equity contributions to any of the Companies
and/or their subsidiaries after the date hereof, the Companies shall pay to CHI
an annual management fee in an amount equal to 3% of the aggregate equity
contributions made by any member of the ▇▇▇▇▇▇ ▇▇▇▇▇▇ Group to any of the
Companies or their subsidiaries after the date hereof (each, a "Subsequent
Annual Fee"), earned and payable in advance not more than frequently than
quarterly from the date of such additional equity contribution, with the first
quarterly payment of each Subsequent Annual Fee being due and payable on the
date such additional equity contribution is made.
(c) Accrual of Fees. The payment of the Initial Annual Fee and the
Subsequent Annual Fees shall be subject to the limitations set forth in the (i)
credit agreement, dated as of the date of this Agreement, by and among Ames,
Bank of America, N.A., as Administrative Agent, and the other lenders named
therein and (ii) the indenture, dated as of the date of this Agreement, among
Ames, ATT and The Bank of New York, each as in effect on the date hereof. All
payments of the Initial Annual Fee and the Subsequent Annual Fees that are not
paid shall accrue to the extent not paid and shall be paid as soon as any
limitations under the foregoing agreement and indenture are not in effect.
(d) Out-of-Pocket Expenses. In addition to the Initial Annual Fee and any
Subsequent Annual Fee, the Companies shall, at the direction of CHI, pay
directly or reimburse CHI for its Out-of-Pocket Expenses (as hereinafter
defined) incurred in connection with the Services provided for in Section 3
hereof. For purposes of this Agreement, the term "Out-of-Pocket Expenses" shall
mean the reasonable amounts paid by CHI in connection with the Services provided
for in Section 3, including (i) fees and disbursements of any independent
professionals and organizations, including independent auditors and outside
legal counsel, investment bankers or other financial advisors or consultants,
(ii) costs of any outside services of independent contractors such as financial
printers, couriers, business publications or similar services and (iii)
transportation, per diem, telephone calls, entertainment and all other
reasonable expenses actually incurred by CHI in rendering the Services provided
for herein. All reimbursements for Out-of-Pocket Expenses shall be made promptly
upon or as soon as practicable after presentation by CHI to the Companies of the
statement in connection therewith.
(e) Definition of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Group. For purposes of this Agreement,
"▇▇▇▇▇▇ ▇▇▇▇▇▇ Group" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners IV, L.P., CHI and any
other accounts or funds managed by CHI (including limited partners of ▇▇▇▇▇▇
▇▇▇▇▇▇ Partners IV, L.P. and its affiliated funds) or Affiliates of CHI, and
"Affiliate" shall mean, with respect to any specified individual, corporation,
limited liability company, partnership, association, trust or other entity or
organization (each, a "Person"), a Person that directly, or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with, such specified Person (it being understood that a Person shall be
deemed to "control" another Person, for purposes of this definition, if such
Person directly or indirectly has the power to direct or cause the direction of
the management and policies of such other Person, whether through holding
beneficial ownership interests in such other Person, through contracts or
otherwise).
6. Indemnification. The Companies will, jointly and severally, indemnify
and hold harmless CHI and its officers, directors, employees, agents,
representatives and affiliates (each being an "Indemnified Party") from and
against any and all losses, claims,
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damages and liabilities, joint or several, to which such Indemnified Party may
become subject under any applicable federal or state law, any claim made by any
third party or otherwise, relating to or arising out of the advisory and
consulting Services contemplated by this Agreement or the engagement of CHI
pursuant to, and the performance by CHI or such Indemnified Party of the
Services, and the Companies will reimburse any Indemnified Party for all costs
and expenses (including reasonable attorneys' fees and expenses) as they are
incurred in connection with the investigation of, preparation for or defense of
any pending or threatening claim, or any action or proceeding arising therefrom,
whether or not such Indemnified Party is a party thereto. The Companies will not
be liable under the foregoing indemnification provision to the extent that any
loss, claim, damage, liability, cost or expense is determined by a court, in a
final judgment from which no further appeal may be taken, to have resulted
solely from the gross negligence or willful misconduct of CHI. The reimbursement
and indemnity obligations of the Companies under this paragraph shall be in
addition to any liability which the Companies may otherwise have, shall extend
upon the same terms and conditions to any affiliate of CHI and the stockholders,
officers, directors, employees, agents, representatives, affiliates and
controlling persons (if any), as the case may be, of CHI and any such affiliate
and shall be binding upon and inure to the benefit of any successors, assigns,
heirs and personal representatives of the Companies, CHI, any such affiliate and
any such person. The foregoing provisions shall survive the termination of this
Agreement.
7. Distributions. The Companies shall cause their subsidiaries to
distribute funds to the Companies to the extent necessary and not prohibited by
applicable law for the Companies to satisfy their obligations under this
Agreement.
8. Independent Contractors. Nothing herein shall be construed to create a
joint venture or partnership between CHI, on the one hand, and the Companies, on
the other hand, or an employee/employer relationship. CHI shall be an
independent contractor pursuant to this Agreement. Neither CHI nor the Companies
shall have any express or implied right or authority to assume or create any
obligations on behalf of or in the name of the other or to bind the other to any
contract, agreement or undertaking with any third party.
9. Notices. Any notice or other communications required or permitted to be
given hereunder shall be in writing and delivered by hand or mailed by
registered or certified mail, return receipt requested, or by telecopier to the
party to whom it is to be given at its address set forth herein, or to such
other address as the party shall have specified by notice similarly given and
the mailing date shall be deemed the date from which all time periods pertaining
to a date of notice shall run.
(i) If to ATT or Ames, to it at:
▇▇▇▇ True Temper, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇]
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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(ii) If to Holdings, to it at:
CHATT HOLDINGS LLC
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
(iii) if to CHI, to it at:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
10. Assignment. This Agreement shall inure to the benefit of and be binding
upon the parties and their successors and assigns. However, neither this
Agreement nor any of the rights of the parties hereunder may be transferred or
assigned by either party hereto, except that (i) if either Company shall merge
or consolidate with or into, or sell or otherwise transfer substantially all its
assets to, another corporation which assumes the obligations of such Company
under this Agreement, such Company may assign its rights hereunder to that
corporation and (ii) CHI may assign its rights and obligations hereunder to any
other person or entity controlled, directly or indirectly, by ▇▇▇▇ ▇. ▇▇▇▇▇▇
and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. Any attempted transfer or assignment in violation of
this Section 10 shall be void.
11. Permissible Activities. Nothing herein shall in any way preclude CHI or
its affiliates or its respective officers, directors and partners from engaging
in any business activities or from performing services for its or their own
account or for the account of others,
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including companies which may be in competition with the business conducted by
the Companies or their direct or indirect subsidiaries.
12. General. No amendment or waiver of any provision of this Agreement, or
consent to any departure by either party from any such provision, shall in any
event be effective unless the same shall be in writing and signed by the parties
to this Agreement. The waiver of any party of any breach of this Agreement shall
not operate or be construed to be a waiver of any subsequent breach.
13. Entire Agreement. This Agreement contains the entire agreement between
the parties hereto and supersedes all prior agreements and understandings, oral
and written, among the parties hereto with respect to the subject matter hereof.
14. Section Headings. The section headings contained herein are included
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
15. Applicable Law. This agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York. Each of the parties
hereto hereby irrevocably submits to the exclusive jurisdiction of any Federal
court sitting in the Southern District of New York over any suit, action or
proceeding arising out of or relating to this agreement. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted or not
prohibited by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. Each of the parties hereto
hereby irrevocably consents to the service of process in any suit, action or
proceeding by sending the same by certified mail, return receipt requested or by
overnight courier service, to the address of such party set forth in Section 9
or in the records of the Companies. EACH PARTY HERETO WAIVES ANY RIGHT IT MAY
HAVE TO TRIAL BY JURY IN ANY ACTION BROUGHT HEREUNDER OR ARISING OUT OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
16. Severability. Any section, clause, sentence, provision, subparagraph or
paragraph of this Agreement held by a court of competent jurisdiction to be
invalid, illegal or ineffective shall not impair, invalidate or nullify the
remainder of this Agreement, but the effect thereof shall be such section,
clause, sentence, provision, subparagraph or paragraph so held to be invalid,
illegal or ineffective.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Senior Vice President and Chief Financial Officer
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CHATT HOLDINGS INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Title: Secretary and Treasurer
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ATT HOLDING CO.
By: /s/ ▇▇▇▇▇▇▇ ▇. Dell
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Name: ▇▇▇▇▇▇▇ ▇. Dell
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Title: President and Chief Executive Officer
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▇▇▇▇ TRUE TEMPER, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. Dell
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Name: ▇▇▇▇▇▇▇ ▇. Dell
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Title: President and Chief Executive Officer
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