Exhibit 10.2
Conformed Copy
MANAGEMENT ADVISORY AGREEMENT
THIS MANAGEMENT ADVISORY AGREEMENT (the "Agreement")
is made and entered into effective as of April 18, 1997, between
Del Monte Corporation, a New York corporation (the "Company") and
TPG Partners, L.P., a Delaware limited partnership (together with
its successors, "TPG").
1. Retention. The Company hereby acknowledges that it
has retained TPG, and TPG acknowledges that, subject to
reasonable advance notice in order to accommodate scheduling, TPG
will provide management advisory services to the Company as
requested by the Board of Directors of the Company during the
term of this Agreement.
2. Term. The term of this Agreement shall continue
until the earlier to occur of (i) the tenth anniversary of the
date hereof, or (ii) the date on which TPG and its affiliates
cease to own beneficially, directly or indirectly, at least
twenty-five percent of the voting power of the securities of Del
Monte Foods Company, a Maryland corporation, or its successors.
3. Compensation.
(a) As compensation for TPG's services under this
Agreement, the Company shall be obligated to pay to TPG an annual
fee (the "Management Advisory Fee") of $500,000 (the "Base Fee"),
subject to adjustment pursuant to paragraphs (b) and (c) below
and prorated on a daily basis for any partial calendar year
during the term of this Agreement. The Management Advisory Fee
shall be payable in equal quarterly installments on each January
1, April 1, July 1, and October 1 during the term of this
Agreement (each a "Payment Date"), beginning with the first
Payment Date following the date hereof. All payments shall be
made by wire transfer of immediately available funds to such
account as TPG may designate from time to time in writing.
(b) On the first day of each fiscal year of the
Company during the term of this Agreement, the Management
Advisory Fee applicable to such fiscal year shall be adjusted to
an annual amount equal to (i) the budgeted consolidated annual
net sales of the Company and its subsidiaries for such fiscal
year, multiplied by (ii) 0.05% (the "Percentage"); provided,
however, that in no event shall the annual Management Advisory
Fee be less than the Base Fee.
(c) On each occasion that the Company or any of
its subsidiaries shall acquire another entity or business during
the term of this Agreement, the annual Management Advisory Fee
for the calendar year in which such acquisition occurs shall be
adjusted prospectively (i.e., for periods subsequent to such
acquisition until the next adjustment pursuant to clause (b)
above), as of the closing of such acquisition, to an annual
amount equal to the product of (i) the pro forma combined
budgeted consolidated annual net sales of the Company and its
subsidiaries for the entire then-current fiscal year of the
Company (including the sales of
the acquired entity or business for such entire fiscal year, on a
pro forma basis) and (ii) the Percentage; provided, however, that
in no event shall the annual Management Advisory Fee be less than
the Base Fee.
(d) All past due payments in respect of the
Management Advisory Fee shall bear interest at the lesser of the
highest rate of interest which may be charged under applicable
law or the prime commercial lending rate per annum of Bank of
America N.T. and S.A. or its successors (which rate is a
reference rate and is not necessarily its lowest or best rate of
interest actually charged to any customer) (the "Prime Rate") as
in effect from time to time, plus two percent (2%), from the due
date of such payment to and including the date on which payment
is made to TPG in full, including such interest accrued thereon.
(e) Any or all of the fees provided for in this
Section 3 may be waived in full or in part by TPG in its sole and
absolute discretion.
4. Reimbursement of Expenses. In addition to the
compensation to be paid pursuant to Section 3 hereof, the Company
agrees to pay or reimburse TPG for all "Reimbursable Expenses",
which shall consist of all reasonable disbursement and
out-of-pocket expenses (including without limitation, costs of
travel, postage, deliveries, communications, etc. and fees and
expenses of counsel and accountants) incurred by TPG or its
affiliates for the account of the Company or in connection with
the performance by TPG of the services contemplated by Section 1
hereof. Promptly (but not more than 10 days) after request by or
notice from TPG, the Company shall pay TPG, by wire transfer of
immediately available funds to an account designated by TPG, the
Reimbursable Expenses for which TPG has provided the Company
invoices or reasonably detailed descriptions. All past due
payments in respect of the Reimbursable Expenses shall bear
interest at the lesser of the highest rate of interest which may
be charged under applicable law or the Prime Rate plus 2% from
the Payment Date to and including the date on which such
Reimbursable Expenses plus accrued interest thereon, are fully
paid to TPG.
5. Indemnification. The Company shall indemnify and
hold harmless each of TPG, its affiliates and shareholders, and
the respective directors, officers, controlling persons (within
the meaning of Section 15 of the Securities Act of 1933 or
Section 20(a) of the Securities Exchange Act of 1934), if any,
agents and employees of TPG and/or any of its affiliates and
shareholders (TPG, its affiliates and shareholders, and such
other specified persons being collectively referred to as
"Indemnified Persons", and individually as an "Indemnified
Person") from and against any and all claims, liabilities,
losses, damages and expenses incurred by any Indemnified Person
(including those arising out of an Indemnified Person's
negligence and fees and disbursements of the respective
Indemnified Person's counsel) which (A) are related to or arise
out of (i) actions taken or omitted to be taken (including any
untrue statements made or any statements omitted to be made) by
the Company or (ii) actions taken or omitted to be taken by an
Indemnified Person with the Company's consent or in conformity
with the Company's instructions or the Company's actions or
omissions or (B) are otherwise related to or arise out of TPG's
engagement, and will reimburse each Indemnified Person for all
costs and expenses, including fees and disbursements of any
Indemnified Person's counsel, as they are incurred, in
2
connection with investigating, preparing for, defending, or
appealing any action, formal or informal claim, investigation,
inquiry, or other proceeding, whether or not in connection with
pending or threatened litigation, caused by or arising out of or
in connection with TPG's acting pursuant to the engagement,
whether or not any Indemnified Person is named as a party thereto
and whether or not any liability results therefrom. The Company
will not, however, be responsible for any claims, liabilities,
losses, damages, or expenses pursuant to clause (B) of the
preceding sentence that have resulted primarily from TPG's gross
negligence or willful misconduct. The Company also agrees that
neither TPG nor any other Indemnified Person shall have any
liability to the Company for or in connection with such
engagement except for any such liability for claims, liabilities,
losses, damages, or expenses incurred by the Company that have
resulted primarily from TPG's gross negligence or willful
misconduct. The Company further agrees that it will not, without
the prior written consent of TPG, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim,
action, suit, or proceeding in respect of which indemnifications
may be sought hereunder (whether or not any Indemnified Person is
an actual or potential party to such claim, action, suit, or
proceeding) unless such settlement, compromise or consent
includes an unconditional release of TPG and each other
Indemnified Person hereunder from all liability arising out of
such claim, action, suit or proceeding. THE COMPANY HEREBY
ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO
ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES, OR EXPENSES THAT HAVE
RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR
PASSIVE OR THE SOLE, JOINT, OR CONCURRENT ORDINARY NEGLIGENCE OF
TPG OR ANY OTHER INDEMNIFIED PERSON.
The foregoing right to indemnity shall be in addition
to any rights that TPG and/or any other Indemnified Person may
have at common law or otherwise and shall remain in full force
and effect following the completion or any termination of the
engagement. The Company hereby consents to personal jurisdiction
and to service and venue in any court in which any claim, which
is subject to this agreement, is brought against TPG or any other
Indemnified Person.
It is understood that, in connection with TPG's
engagement, TPG may also be engaged to act for the Company in one
or more additional capacities, and that the terms of this
engagement or any such additional engagement(s) may be embodied
in one or more separate written agreements. This indemnification
shall apply to the engagement specified in the first paragraph
hereof as well as to any such additional engagement(s) (whether
written or oral) and any modification of said engagement or such
additional engagement(s) and shall remain in full force and
effect following the completion or termination of said engagement
or such additional engagements.
6. Confidential Information. In connection with the
performance of the services hereunder, TPG agrees not to divulge
any confidential information, secret processes, or trade secrets
disclosed by the Company to it solely in its capacity as a
financial advisor, unless the Company consents to the divulging
thereof or such information, secret processes, or trade secrets
are publicly available or otherwise available to TPG without
restriction or breach of any
3
confidentiality agreement or unless required by any governmental
authority or in response to any valid legal process.
7. Governing Law. This Agreement shall be construed,
interpreted, and enforced in accordance with the laws of the
State of New York, excluding any choice-of-law provisions
thereof.
8. Assignment. This Agreement and all provisions
contained herein shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and
assigns; provided, however, neither this Agreement nor any of the
rights, interests, or obligations hereunder shall be assigned
(other than with respect to the rights and obligations of TPG,
which may be assigned to any one or more of its principals or
affiliates) by any of the parties without the prior written
consent of the other parties.
9. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument, and the signature of any party to any counterpart
shall be deemed a signature to, and may be appended to, any other
counterpart.
10. Other Understandings. All discussions,
understandings, and agreements theretofore made between any of
the parties hereto with respect to the subject matter hereof are
merged in this Agreement, which alone fully and completely
expresses the Agreement of the parties hereto. All calculations
of the Management Advisory Fee and Reimbursable Expenses shall be
made by TPG and, in the absence of manifest error, shall be final
and conclusive. The Company expressly acknowledges that TPG has
been retained solely as an advisor to the Company, and not as an
advisor to or agent of any other person, and that the Company's
engagement of TPG is not intended to confer any rights upon any
person not a party hereto, including shareholders, employees or
creditors of the Company, as against TPG, TPG's affiliates or
their respective directors, officers, agents and employees.
4
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date and year first above
written.
TPG PARTNERS, L.P.
By: TPG Genpar, L.P.
its General Partner
By: TPG Advisors, Inc.,
its General Partner
By: /s/ Xxxxxx Xxxxxxx
Name:
Title:
DEL MONTE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
Name:
Title:
5
