MANAGEMENT ADVISORY AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement"), dated as of
April 21, 1998, is entered into by and between DIAMOND BRANDS
INCORPORATED, a Minnesota corporation ("DBI"), and XXXXXX XXXX &
COMPANY, LLC ("SKC").
In consideration of the mutual covenants and agreement set
forth below, the parties hereto agree as follows:
1. SKC Management Duties. SKC shall provide general
management services to DBI, as reasonably requested by DBI, which
shall include, without limitation, the following services (the
"SKC Services"):
(a) Assist with the development and implementation of
a long-term strategic business plan for the
expansion and maintenance of DBI's business and
operations (the "Business");
(b) Assist with the development of short-term and
long-term financial and operational budgets for
the Business;
(c) Assist with the coordination of DBI's credit
arrangements; and
(d) Assist with the identification of operational
opportunities.
2. Performance of Services. SKC shall exercise due diligence
and due care in the performance of the services hereunder.
3. Compensation for Services.
(a) For so long as this Agreement shall remain in
effect, SKC shall receive from DBI (unless waived
in writing by SKC) a management fee, which, on an
annual basis shall be equal to the greater of (i)
0.05% of the budgeted consolidated net sales of
DBI, as reflected in DBI's budget approved by its
Board of Directors and (ii) $200,000. Such fee
will be paid in advance within the first ten days
of each calendar month in an amount to the greater
of (x) the amount described in (i) above for such
month or (y) $16,660:
(b) In addition to the foregoing, DBI shall reimburse
SKC for all out-of-pocket expenses (including
travel and lodging expenses) SKC may reasonably
incur in connection with the performance of the
SKC Services.
4. Independent Contractors. Employees and principals of SKC
shall not be deemed to be at any time during the term of this
Agreement employees of DBI. The status and relationship with DBI
of SKC shall be that of an independent contractor, and
accordingly SKC shall not state
or imply, directly or indirectly, that it is empowered or
authorized to commit or bind DBI or to incur any expenses on
behalf of DBI or to enter into any oral of written agreement in
the name of or on behalf of DBI (provided, however, that the
foregoing shall in no way restrict the ability of any employee or
officer of DBI to take any action in such capacity on behalf of
DBI, nor shall it restrict the ability of any representative to
take any action on behalf of DBI that may be authorized by DBI).
Nothing herein shall create, expressly or by implication, a
partnership, joint venture or other association between the
parties.
5. Term of Agreement. This Agreement shall remain in effect
until the tenth anniversary of the date of this Agreement;
provided, however, that SKC may elect to terminate this Agreement
at any time hereafter and for any reason upon 30 days' written
notice to DBI.
6. Indemnification. DBI shall indemnify SKC and its
respective partners, principals, members, employees, directors,
officers, representatives and consultants (collectively,
"Agents") against, and shall defend against, save and hold each
of them harmless from, all claims, actions, proceedings, demands,
liabilities, damages, judgments, assessments, losses and costs,
including fees and expenses (including all legal costs and
expenses relating thereto) arising out of or in connection with
this Agreement or any act performed or omitted to be performed by
SKC or any Agent under or pursuant to this Agreement. When acting
within the scope of this Agreement, SKC and each Agent shall be
deemed an agent of DBI solely for purposes of indemnification
under the Certificate of Incorporation and Bylaws of Cascade.
7. Assignment. No party may assign its rights or obligations
under this Agreement without the prior written consent of the
other.
8. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California
without giving effect to the principles of conflicts of laws
thereunder.
9. Amendment. This Agreement can be modified or amended only
by a writing signed by the parties hereto.
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IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed as of the date first above written.
DIAMOND BRANDS INCORPORATED
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXX XXXX & COMPANY, LLC
By: /s/ Xxxxxxx X. Xxxx
--------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Member
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