Exhibit 10.5
MANAGEMENT SERVICES AGREEMENT
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This Agreement is made as of November 17, 1995, by and between Cambridge
Industries, Inc., a Delaware corporation (the "Company"), and Xxxx Capital,
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Inc., a Delaware corporation ("Bain").
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WHEREAS, the Company desires to retain Bain and Bain desires to perform
for the Company and its subsidiaries certain services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
1. Term. This Agreement shall be in effect for an initial term of 5
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years commencing on the date hereof (the "Term"), and shall be automatically
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extended thereafter on a year to year basis unless the Company or Bain provides
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. Bain shall perform or cause to be performed such
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services for the Company and its subsidiaries as directed by the Company's board
of directors (the "Board"), which may include, without limitation, the
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following:
(a) general executive and management services;
(b) identification, support, negotiation and analysis of acquisitions
and dispositions by the Company or its subsidiaries;
(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) marketing functions, including monitoring of marketing plans and
strategies;
(f) human resource functions, including searching and hiring of
executives; and
(g) other services for the Company and its subsidiaries upon which the
Board and Bain agree.
3. Advisory Fees and Transaction Fees. Payment to Bain for services
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rendered in connection with the performance of services pursuant to this
Agreement shall be $875,000 per year ("Advisory Fees") plus reasonable
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out-of-pocket expenses of Bain, payable by the Company on a quarterly basis in
arrears commencing December 31, 1995; provided that, the amount payable to Bain
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respect of Advisory Fees for any given quarter will be reduced by the amount of
Transaction Fees (as defined below), if any, received by Bain during such
quarter, and, to the extent Transaction Fees received by Bain exceed Advisory
Fees payable by the Company for such quarter, such excess will be carried
forward and will reduce future Advisory Fees payable during the next three
consecutive fiscal quarters (but will not be carried forward to offset Advisory
Fees beyond the third consecutive fiscal quarter after the fiscal quarter in
which the Transaction Fees were received).
(b) During the term of this Agreement, Bain shall be entitled to
receive from the Company a transaction fee in connection with the consummation
of each acquisition by the Company of an additional business in an amount equal
to 1% of the aggregate transaction value of such acquisition (each such payment,
a "Transaction Fee"); provided that, Bain may waive the payment of a Transaction
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Fee in connection with any acquisition as to which Bain and the Board mutually
agree that a Transaction Fee is not appropriate. In addition, upon the
consummation of the transactions contemplated by the Refinancing Agreement dated
as of the date hereof by and among the Company and the Company's equityholders,
the Company shall pay to Bain a transaction fee of $2,250,000 in immediately
available funds, to an account designated by Bain.
4. Personnel. Bain shall provide and devote to the performance of
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this Agreement such partners, employees and agents of Bain as Bain shall xxxx
appropriate to the furnishing of the services required.
5. Liability. Neither Bain nor any of its affiliates, partners,
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employees or agents shall be liable to the Company or 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
Bain, its affiliates, 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
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and hold harmless Bain, its affiliates, 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
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performance of services contemplated by this Agreement (included attorneys'
fees) (collectively, "Claims") resulting from any act or omission of Bain, its
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affiliates, 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 Bain, its affiliates, 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, its
subsidiaries and Bain, its officers, directors, affiliates, partners, employees
or agents or in which Bain, its affiliates, 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 Bain, its affiliates, 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 Bain, its affiliates, partners, employees or
agents, then Bain shall reimburse the Company and its subsidiaries for the costs
of defense and other costs incurred by the Company and its subsidiaries.
7. Notices. All notices hereunder shall be in writing and shall be
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delivered personally or mailed by United States mail, postage prepaid, addressed
to the parties as follows:
To the Company:
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Cambridge Industries, Inc.
000 Xxxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Board of Directors
To Bain:
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Xxxx Capital, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxx
Xxxxxx Xxxxxx
Xxxxxx X. Xxxx
8. Assignment. Neither party may assign any obligations hereunder to any
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other party without the prior written consent of the other party; such consent
shall not be unreasonably
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withheld; provided, however, that Bain may assign its rights and obligations
under this Agreement to any of its affiliates without the consent of the
Company. The assignor shall remain liable for the performance of any assignee.
9. Successors. This Agreement and all the obligations and benefits
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hereunder shall inure to the successors and assigns of the parties.
10. Counterparts. This Agreement may be executed and delivered by each
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party 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
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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 thereof shall be binding upon
either party 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 Michigan, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
Michigan or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than the State of Michigan.
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IN WITNESS WHEREOF, the parties have executed this Management Services
Agreement as of the date first written above.
CAMBRIDGE INDUSTRIES, INC.
By: [SIGNATURE APPEARS HERE]
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Its: Pres.
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XXXX CAPITAL, INC.
By: [SIGNATURE APPEARS HERE]
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Its:
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AMENDMENT TO MANAGEMENT SERVICES AGREEMENT
This AMENDMENT TO MANAGEMENT SERVICES AGREEMENT (this "Amendment"), dated
March 1, 1996, is by and between Cambridge Industries, Inc. (the "Company") and
Xxxx Capital, Inc. ("Bain").
WHEREAS, Bain is acting as an advisor to the Company pursuant to the terms
of that certain Management Services Agreement (the "Agreement") dated as of
November 17, 1995 between the Company and Bain.
WHEREAS, the Company and Bain wish to amend the Agreement.
NOW THEREFORE, in consideration of the agreements herein contained, the
parties hereto agree as follows:
1. Paragraph 3 of the Agreement is hereby amended by replacing
subparagraph 3(a) with the following:
"3. Advisory Fees and Transaction Fees. (a) Payment to Bain
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for services rendered in connection with the performance of services
pursuant to this Agreement shall be $950,000 per year ("Advisory Fees")
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plus reasonable out-of-pocket expenses of Bain, payable by the Company
on a quarterly basis in arrears commencing March 31, 1996; provided
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that, the amount payable to Bain in respect of Advisory Fees for any
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given quarter will be reduced by the amount of Transaction Fees (as
defined below)(other than the $412,500 Transaction Fee payable to Bain
in connection with the acquisition of the Reinforced Plastic Division
of GenCorp, Inc.), if any, received by Bain during such quarter, and,
to the extent such Transaction Fees received by Bain exceed Advisory
Fees payable by the Company for such quarter, such excess will be
carried forward and will reduce future Advisory Fees payable during the
next three consecutive fiscal quarters (but will not be carried forward
to offset Advisory Fees beyond the third consecutive fiscal quarter
after the fiscal quarter in which the Transaction Fees were received)."
2. Applicable Law. All issues and questions concerning the
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construction, validity, interpretation and enforceability of this Amendment
shall be governed by, and construed in accordance with, the laws of the State of
Michigan, without giving effect to any choice of law or conflict of law
provisions (whether of the State of Michigan or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Michigan.
3. Counterparts; Effectiveness. This Amendment may be executed in any
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number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument.
This Amendment shall become effective upon the execution of a counterpart hereof
by each of the parties hereto, and written or telephonic notification of such
execution and authorization of delivery thereof has been received by each party
hereto.
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IN WITNESS WHEREOF, the parties hereto have cause this Amendment to be
excuted by their respective officers hereunto duly authorized as of the day and
year first written above.
CAMBRIDGE INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Vice President
XXXX CAPITAL, INC.
By: /s/ Xxxxxx Xxxxx
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Its:
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