Exh. 10.6
OMEGA HOLDINGS, INC. MANAGEMENT AGREEMENT
--------------------------------------------------------------------------------
MANAGEMENT AGREEMENT
This Management Agreement (this "Agreement") is entered into as of the 13th
day of June, 1997 by and between Omega Holdings, Inc., a Delaware corporation,
Omega Cabinets, Ltd., a Delaware corporation and a wholly-owned subsidiary of
Omega Holdings, Inc. (Omega Holdings, Inc. and Omega Cabinets, Ltd. are
hereinafter referred to collectively as the "Company"), and BCC Industrial
Services, Inc., a Delaware corporation (the "Advisor").
Whereas, Omega Merger Corp., a Delaware corporation, has been formed
for the purpose of merging with and into Omega Holdings, Inc. (such
transaction being referred to herein as the "Merger"), all on the terms and
subject to the conditions of that certain Agreement and Plan of Merger
dated as of April 28, 1997 (the "Merger Agreement") by and among Omega
Holdings, Inc, the stockholders of Omega Holdings, Inc. (the
"Stockholders") and Omega Merger Corp.;
Whereas, subject to the terms and conditions of this Agreement, the
Company desires to retain the Advisor to provide certain management and
advisory services to the Company, and the Advisor desire to provide such
services.
Now, therefore, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Services. The Advisor hereby agrees that, during the term of this Agreement
(the "Term"), it will provide the Company with financial, managerial and
operational advice in connection with its day-to-day operations, including,
without limitation:
i. advice with respect to the investment of funds; and
ii. advice with respect to the development and implementation of
strategies for improving the operating, marketing and financial
performance of the Company.
2. Payment of Fees. The Company hereby agrees to pay to the Advisor (or such
affiliates of the Advisor as are designated by it) a management fee in an
amount equal to $325,000 per annum and warrants to purchase an aggregate of
2,391.40 shares of the common stock of Omega Holdings, Inc. in
substantially the form attached as
OMEGA HOLDINGS, INC. MANAGEMENT AGREEMENT
--------------------------------------------------------------------------------
Exhibit 2, in exchange for the services provided to the Company by the
Advisor, as more fully described in Section 1 of this Agreement. The fee
will be payable by the Company quarterly in advance, the first such
installment being payable by the Company on demand at or after the closing
of the Merger. Each payment made pursuant to this Section 2 shall be paid
by wire transfer of immediately available federal funds to the account for
the Advisor specified on Schedule 1 hereto, or to such other account as the
Advisor may specify to the Company in writing prior to such payment. The
warrants shall be exercisable in full as of the date of the issue at an
exercise price equal to $1,000 per share of such common stock.
3. Term.
a. Except as expressly set forth in this Section 3, this Agreement shall
continue in full force and effect, unless and until terminated by
mutual consent of the parties, for so long as the Advisor (or any
successor or permitted assign of the Advisor, as the case may be)
continues to carry on the business of providing services of the type
described in Section 1 above.
b. The Advisor shall cease to be a party to this Agreement and, except as
set forth in Section 3(d), shall be released of all of its rights and
obligations hereunder upon any of the following events:
i. the Advisor (or a successor or permitted assign of the Advisor,
as the case may be) ceases to carry on the business of providing
services of the type described in Section 1 above; or
ii. the Advisor materially breaches the terms of this Agreement and
fails to cure such breach within 30 days following written notice
thereof; or
iii upon election of the Advisor in the event that the Company
materially breaches the terms of this Agreement and fails to cure
such breach within 30 days following written notice thereof.
c. This Agreement shall terminate in the event that the Advisor ceases to
be a party to this Agreement.
d. Each of (a) the obligations of the Company under Section 4 below, (b)
any and all accrued and unpaid obligations of the Company owed under
Section 2 above, and (c) the provisions of Section 7 shall survive any
termination or expiration of this Agreement to the maximum extent
permitted under applicable law.
-2-
OMEGA HOLDINGS, INC. MANAGEMENT AGREEMENT
--------------------------------------------------------------------------------
4. Expenses; Indemnification.
a. Expenses. The Company agrees to pay on demand all expenses incurred
by the Advisor or its affiliates (collectively, the "Advisor
Entities") in connection with the Merger or otherwise incurred in
connection with the Company, including but not limited to (i) the
fees and disbursements of: (A) Ropes & Xxxx, and (B) any accountants
or other consultants or advisors retained by the Advisor Entities
arising in connection therewith (including but not limited to the
preparation, negotiation and execution of this Agreement and any other
agreement executed in connection with the Merger (and any and all
amendments, modifications, restructurings and waivers, and exercises
and preservations of rights and remedies hereunder or thereunder) and
the operations of the Company and any of its subsidiaries), and (ii)
any out-of-pocket expenses incurred by the Advisor in connection with
the provision of services hereunder or the attendance at any meeting
of the board of directors (or any committee thereof) of the Company or
any of its affiliates.
b. Indemnity and Liability. In consideration of the execution and
delivery of this Agreement by the Advisor, the Company hereby agrees
to indemnify, exonerate and hold each of the Advisor Entities, and
each of their respective partners, shareholders, directors, officers,
fiduciaries, employees, other affiliates and agents and each of the
partners, shareholders, directors, officers, fiduciaries, employees,
other affiliates and agents of each of the foregoing (collectively,
the "Indemnitees") free and harmless from and against any and all
actions, causes of action, suits, losses, liabilities and damages, and
expenses in connection therewith, including without limitation
attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnitees or any of them as a result
of, or arising out of, or relating to the Merger or any agreement
executed in connection with the Merger, except for any such
Indemnified Liabilities arising on account of such Indemnitee's
willful misconduct, and if and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby
agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. None of the Indemnitees shall be
liable to the Company or any of its affiliates for any act or omission
suffered or taken by such Indemnitee that does not constitute willful
misconduct.
5. Assignment, etc. Except as provided below, none of the parties shall have
the right to assign this Agreement. Notwithstanding the foregoing, (a) the
Advisor may assign all or part of its rights and obligations hereunder to
any affiliate of such Advisor which
-3-
Omega Holdings, Inc. Management Agreement
--------------------------------------------------------------------------------
provides services similar to those called for by this Agreement, in which
event the Advisor shall be released of all of its rights and obligations
hereunder, and (b) the provisions hereof for the benefit of the Advisor
Entities shall inure to the benefit of their successors and assigns.
6. Amendments and Waivers. No amendment or waiver of any term, provision or
condition of this Agreement shall be effective, unless in writing and
executed by each of the Advisors and the Company. No waiver on any one
occasion shall extend to or effect or be construed as a waiver of any right
or remedy on any future occasion. No course of dealing of any person nor
any delay or omission in exercising any right or remedy shall constitute an
amendment of this Agreement or a waiver of any right or remedy of any party
hereto.
7. Miscellaneous.
a. Choice of Law. This Agreement shall be governed by and construed in
accordance with the domestic substantive laws of the State of Delaware
without giving effect to any choice or conflict of law provision or
rule that would cause the application of the domestic substantive laws
of any other jurisdiction.
b. Consent to Jurisdiction. Each of the parties agrees that all actions,
suits or proceedings arising out of or based upon this Agreement or
the subject matter hereof shall be brought and maintained exclusively
in the federal and state courts of the State of Delaware, provided
that the Advisor may bring any such action, suit or proceeding against
the Company in any jurisdiction in which the Company is subject to
personal jurisdiction. Each of the parties hereto by execution hereof
(i) hereby irrevocably submits to the jurisdiction of the federal and
state courts in the State of Delaware for the purpose of any action,
suit or proceeding arising out of or based upon this Agreement or the
subject matter hereof, and (ii) hereby waives to the extent not
prohibited by applicable law, and agrees not to assert by way of
motion, as a defense or otherwise, in any such action, suit or
proceeding, any claim that it is not subject personally to the
jurisdiction of the above-named courts, that it is immune from
extraterritorial injunctive relief or other injunctive relief, that
its property is exempt or immune from attachment or execution, that
any such action, suit or proceeding may not be brought or maintained
in one of the above-named courts, that any such action, suit or
proceeding brought or maintained in one of the above-named courts
should be dismissed on grounds of forum non conveniens, should be
----- --- ----------
transferred to any court other than one of the above-named courts,
should be stayed by virtue of the pendency of any other action, suit
or proceeding in any court other than one of the above-named courts,
or that this Agreement or the
-4-
Omega Holdings, Inc. Management Agreement
--------------------------------------------------------------------------------
subject matter hereof may not be enforced in or by any of the above-
named courts. Each of the parties hereto hereby consents to service of
process in any such suit, action or proceeding in any manner permitted
by the laws of the State of Delaware, agrees that service of process
by registered or certified mail, return receipt requested, at the
address specified in or pursuant to Section 9 is reasonably calculated
to give actual notice and waives and agrees not to assert by way of
motion, as a defense or otherwise, in any such action, suit or
proceeding, any claim that service of process made in accordance with
Section 9 does not constitute good and sufficient service of process.
The provisions of this Section 7(b) shall not restrict the ability of
any party to enforce in any court any judgment obtained in a federal
or state court of the State of Delaware.
c. Waiver of Jury Trial. To the extent not prohibited by applicable law
which cannot be waived, each of the parties hereto hereby waives, and
covenants that it will not assert (whether as plaintiff, defendant, or
otherwise), any right to trial by jury in any forum in respect of any
issue, claim, demand, cause of action, action, suit or proceeding
arising out of or based upon this Agreement or the subject matter
hereof, in each case whether now existing or hereafter arising and
whether in contract or tort or otherwise. Any of the parties hereto
may file an original counterpart or a copy of this Agreement with any
court as written evidence of the consent of each of the parties hereto
to the waiver of its right to trial by jury.
d. Reliance. Each of the parties hereto acknowledges that it has been
informed by each other party that the provisions of this Section 7
constitute a material inducement upon which such party is relying and
will rely in entering into this Agreement and the transactions
contemplated hereby.
8. Merger/Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes any
prior communication or agreement with respect thereto.
9. Notice. Any notices and other communications required or permitted in this
Agreement shall be effective if in writing and delivered personally or sent
(i) by Federal Express, DHL or UPS, (ii) by telecopier or (iii) by
registered or certified mail, postage prepaid, in each case, addressed as
follows:
If to the Company:
Omega Holdings, Inc.
Omega Cabinets, Ltd.
-5-
Omega Holdings, Inc. Management Agreement
--------------------------------------------------------------------------------
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attention: Chief Executive Officer
Telephone: 000-000-0000
Telecopier: 000-000-0000
If to the Advisor:
BCC Industrial Services, Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
Copy to:
-------
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: X. Xxxxxxx Xxxxxxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000
Unless otherwise specified herein, such notices or other communications shall be
deemed effective (a) on the date received, if personally delivered, (b) the next
business day after being sent by Federal Express, DHL or UPS to an address for
which next day service is available, (c) the third business day after being sent
by Federal Express, DHL or UPS other than to an address for which next day
service is available, (c) the same business day, if sent by telecopier and (iv)
the third business day after being sent by registered or certified mail. Each
of the parties hereto shall be entitled to specify a different address or
telecopier number by giving notice as aforesaid to each of the other parties
hereto.
10. Severability. If in any judicial or arbitral proceedings a court or
arbitrator shall refuse to enforce any provision of this Agreement, then
such unenforceable provision shall be deemed eliminated from this Agreement
for the purpose of such proceedings to the extent necessary to permit the
remaining provisions to be enforced. To the full extent, however, that the
provisions of any applicable law may be waived, they are hereby waived to
the end that this Agreement be deemed to be valid and binding agreement
enforceable in accordance with its terms, and in the event that any
provision hereof shall be found to be invalid or unenforceable, such
provision shall be construed by
-6-
Omega Holdings, Inc. Management Agreement
--------------------------------------------------------------------------------
limiting it so as to be valid and enforceable to the maximum extent
consistent with and possible under applicable law.
11. Counterparts. This Agreement may be executed in any number of counterparts
and by each of the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
-7-
Omega Holdings, Inc. Management Agreement
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as an instrument under seal as of the date first above
written by its officer or representative thereunto duly authorized.
The Company: Omega Holdings, Inc.
By
-------------------------------
Title:
Omega Cabinets, Ltd.
By
-------------------------------
Title:
Omega Holdings, Inc. Management Agreement
--------------------------------------------------------------------------------
the Advisor: BCC Industrial Services, Inc.
By
-------------------------------
Name:
Title:
Omega Holdings, Inc. Management Agreement
--------------------------------------------------------------------------------
Schedule 1 to
Management Agreement
--------------------
Wire Transfer Instructions for
BCC Industrial Services, Inc.
CHASE MANHATTAN BANK, N.A.
ABA # 000000000
For: the account of United States Trust Co. of New York
Account # 000-0-000000
To Further Credit: BCC Industrial Services, Inc.
Attention: Xxx Xxxxxxxx
Telephone Advice: 000-000-0000
Account # 479-16300
