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Exhibit 10.3
MANAGEMENT AGREEMENT
THIS AGREEMENT is entered into as of the 1st of April, 1997, by and among
NESCO, INC., a Delaware corporation, hereinafter referred to as "Nesco"; and
Continental Global Group, Inc., hereinafter referred to as the "Company", being
a Delaware corporation, in order to set forth the express terms of the
relationship:
WHEREAS, Nesco has provided general management oversight services to
the predecessor operations of the Company for the past ten years, and Nesco
Executives provide similar services to other wholly-owned companies of NES
Group, Inc. that are diversified in many businesses in the United States and
Europe,
WHEREAS, the Company is in need of such services as provided by Nesco
and can benefit therefrom, and
WHEREAS, in view of the fact that this Agreement will inure to the
benefit of the Company, due to the additional advisory services that can be
provided to the Company.
NOW, THEREFORE, be it hereby agreed by and among Nesco and the Company
that in exchange for the mutual promises herein recited and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Nesco, through its Executives will provide general management
oversight services on a regular basis with the Company in regards to business
activities involving financial results, legal issues and long-term planning
regarding current operations and acquisitions. Business development planning
will include Nesco assistance to identify and acquire acquisition candidates,
including preliminary negotiations and contractual preparations for such
activities. Nesco has and plans to assist the Company's efforts for banking
relationships of the Company for cash operation needs as well as acquisitions
and cash requirements, and will also monitor excess cash investments for the
Company through professional money management accounts.
2. In payment for these services, the Company will pay to Nesco a
management fee equal to 5% of the Company's EBITDA (as defined in the offering
memorandum for the Senior Note) on an annual basis. This fee shall be payable
monthly.
3. It is understood and agreed that the Company will directly
employ independent auditors, legal counsel and other consulting services, such
as advertising both in the United States and its foreign operations. Such
services will be paid directly by the Company.
4. This Agreement and the fees to be paid hereunder shall be
modified and limited to the extent necessary from time to time to maintain the
Company's compliance with any specific restriction imposed by a lending
institution or indentures relating to outstanding indebtedness to the Company,
including the indenture governing the Company's Senior Notes due 2007, entered
into on April 1, 1997. In such event the Company shall pay a managment fee to
Nesco in an amount which will not violate the specific lending restriction. Any
amount of management fee not timely paid due to the limitation stated herein
shall be accrued until such time as the restriction may be removed or subject
to further agreement between Nesco and the Company.
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5. This Agreement shall continue for an indefinite period, unless
one party notifies the other of its intent to terminate this Agreement upon not
less than 60 days written notice prior to the annual anniversary date of the
execution of this agreement.
6. This Agreement constitutes the entire agreement between the
parties hereto; all previous understandings and negotiations are merged into
this Agreement and there are not understandings or agreements between the
parties hereto other than those set forth in this Agreement. In the event the
parties hereafter reach mutual agreement as to additional terms, the
performance of the parties shall be evidence of the terms of such mutual
agreement, however, the parties will maintain a written record of the specific
terms constituting amendments hereto.
7. The Company does hereby to indemnify, defend and hold Nesco,
its directors and officers, harmless from any claim of liability asserted by it
or by any third party, arising from the services rendered by Nesco, except only
in the case of gross negligence or willful misconduct solely attributable to
Nesco. Nesco's liability for damage shall be limited to the total amount of
management fees paid to Nesco during the preceding 12 month period. In no
event shall Nesco be liable to the Company or any third party for incidental,
consequential, exemplary or special damages of any kind whatsoever. The
Company, at its expense, will maintain Directors and Officers Liability
insurance in substantially its current form, with Nesco named as an "additional
named insured", for all periods during which this agreement is in effect and
for 5 years after termination of this agreement.
8. This Agreement has been executed and shall be construed in
accordance with and governed by the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties hereunto have affixed or caused to be
affixed their respective signatures on the date aforesaid.
NESCO, INC. CONTINENTAL GLOBAL GROUP, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
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Its: VP Its: Vice President
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