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EXHIBIT 10.13
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (this "Agreement") is dated as of
December 11, 1997 between Stanadyne Automotive Corp., a Delaware corporation
(the "Company") and American Industrial Partners, a Delaware general
partnership ("AIP").
Background
Subject to the terms and conditions of this Agreement, the Company desires
to retain AIP to provide certain management services to the Company and its
subsidiaries.
Terms and Conditions
In consideration of the mutual covenants contained herein and intending to
be legally bound hereby, the parties agree as follows:
1. Management Services. AIP shall provide general management, financial
and other corporate advisory services to the Company and its subsidiaries.
These management services shall be performed by the officers, employees or
agents of AIP as it may determine in its discretion from time to time.
2. Fees and Expenses.
(a) Subject to the provisions of that certain Subordination Agreement
dated as of December 11, 1997 by the Company and AIP in favor of DLJ Capital
Funding, Inc., The First National Bank of Chicago, a national banking
association, as agents for the lenders and the United States Trust Company of
New York as trustee for the senior subordinated notes, the Company shall pay to
AIP an annual management fee (the "Management Fee") of One Million One Hundred
Thousand Dollars ($1,100,000). The Management Fee shall be payable
quarter-annually in advance on each January 1, April 1, July 1 and October 1
occurring during the term of this Agreement, beginning January 1, 1998. The
Company shall pay to AIP on the Closing Date, as defined in that certain Stock
Purchase Agreement dated as of November 7, 1997 by and among SAC, Inc.,
Stanadyne Automotive Holding Corp. and Metromedia Company, its pro rata
Management Fee for the period beginning on the Closing Date and ending on
December 31, 1997.
(b) The Company shall promptly, when requested, reimburse AIP for all
reasonable out-of-pocket expenses incurred in the ordinary course by AIP in
connection with AIP's obligations hereunder.
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(c) Notwithstanding anything to the contrary contained herein, the
Company shall accrue but not pay the Management Fee if (i) any such payment
would violate, breach or otherwise constitute a default (or any event which
might with the lapse of time or the giving of notice or both, constitute a
default) under any of the Company's financing agreements, or (ii) AIP instructs
the Company not to pay all or any portion of the Management Fee during any
fiscal year.
3. Indemnification. To the extent permitted by law, the Company shall
protect, hold harmless and indemnify AIP from and against any and all
liability, obligations, losses, claims and damages whatsoever and expenses in
connection therewith including, without limitation, reasonable counsel fees and
expenses, penalties and interest arising out of or as the result of the
entering into of this Agreement except to the extent, and only to the extent,
that such liability or claim is the result of the willful misconduct or gross
negligence of AIP.
4. Independent Contractor; No Joint Venture. AIP is performing services
hereunder as an independent contractor (and not as an agent, representative or
employee of the Company) and AIP is not and shall not be deemed to be a
co-venturer with, or partner of, the Company in any respect.
5. Entire Agreement; Amendment. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the subject
matter hereof. This Agreement may be amended or modified, or any provision
hereof may be waived, provided that such amendment or waiver is set forth in a
writing executed by the parties. No courses of dealing between or among any
persons having any interest in this Agreement will be deemed effective to
modify, amend or discharge any part of this Agreement or any rights or
obligations of any person under or by reason of this Agreement.
6. No Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto
without the prior written consent of the other parties hereto; provided
that AIP may assign all of its rights and obligations hereunder to any
Affiliate of AIP without the consent of the Company; and provided further that
AIP may assign any or all of its rights hereunder, without the consent of the
Company (i) to any lender providing financing to AIP or its Affiliates and (ii)
in connection with any sale of all or substantially all of the assets, capital
stock or business of AIP or the Company (whether effected by sale, exchange,
merger, consolidation or other transaction).
7. Binding Effect. In the event of assignment of this Agreement
pursuant to Section 6 hereunder, this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their successors and permitted
assigns.
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8. Term. This Agreement shall terminate on the fifteenth anniversary of
the date hereof. Notwithstanding the foregoing, this Agreement shall always
remain in effect to the extent that any money is owed under sections 2 or 3 of
this Agreement.
9. Governing Law. The validity, performance, construction and effect of
this Agreement shall be governed by and construed in accordance with the
internal law of the State of [CALIFORNIA].
10. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given by personal
delivery, by reputable overnight courier or by mail (registered or certified
mail, postage prepaid, return receipt requested) to the respective parties as
follows:
If to AIP:
American Industrial Partners
One Maritime Plaza, Suite 2525
San Francisco, CA 94111
Telecopy: 415-788-5302
Telephone: 415-788-7354
Attention: Kenneth J. Diekroeger
with a copy to:
Kirkland & Ellis
655 Fifteenth Street, N.W.
Suite 1200
Washington, D.C. 20005
Telecopy: (202) 879-5200
Telephone: (202) 879-5040
Attention: Jack M. Feder, Esq.
If to the Company:
Stanadyne Automotive Corp.
92 Deerfield Road
Windsor, CT 06095
Telecopy: 860-683-4500
Telephone: 860-525-0821
Attention: Mike Boyer, Chief Financial Officer
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or to such other address as any party hereto may, from time to time, designate
in a written notice given in like manner. Notices will be deemed to have been
given hereunder when delivered personally, five days after deposit in the U.S.
mail and one business day after deposit with a reputable overnight courier
service.
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IN WITNESS WHEREOF, each of the parties hereto has caused this writing to
be executed as of the day and year first above written.
STANADYNE AUTOMOTIVE CORP.
/s/ Michael Boyer
By: Michael H. Boyer
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Its: Vice President and CFO
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AMERICAN INDUSTRIAL PARTNERS
/s/ Kenneth Diekroeger
By: Kenneth Diekroeger
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Its: Principal
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