1
EXHIBIT 10.19
MANAGEMENT AGREEMENT
WITH
BERKSHIRE PARTNERS LLC
AGREEMENT entered into as of the 26th day of November, 1997, between
Berkshire Partners LLC, a Massachusetts limited liability company (the
"Consultant"), and Holmes Products Corp., a Massachusetts corporation (the
"Company").
WHEREAS, the Consultant has staff specially skilled in corporate
finance, strategic corporate planning, and other management skills and services;
WHEREAS, as of the date hereof, an affiliate of the Consultant, has
purchased shares of the Company's common stock;
WHEREAS, the Company will require the Consultant's special skills and
management advise on services in connection with the general business
operations of the Company; and
WHEREAS, the Consultant is willing to provide such skills and services
to the Company.
NOW THEREFORE, in consideration of the rights and obligations set
forth herein, the parties agree as follows:
1. ENGAGEMENT. The Company hereby engages the Consultant for the Term
(as hereinafter defined) and upon the terms and conditions herein set forth to
provide consulting and management advisory services to the Company. These
services will be in the areas of financial and strategic corporate planning and
finance and in such other management areas as the Consultant and the Company
shall mutually agree. In consideration of the compensation herein specified, the
Consultant accepts such engagement and agrees to perform the services specified
herein.
2. TERM. The engagement hereunder shall be for a term commencing on
the date hereof and expiring on the fifth (5th) anniversary hereof (the "Term").
Upon expiration of the Term, this Agreement shall automatically extend for
successive periods of one (1) year, unless the Consultant or the Company shall
give notice to the other at least ninety (90) days prior to the end of the Term
(or any annual extension thereof) indicating that it does not intend to further
extend this Agreement. Notwithstanding the foregoing, this Agreement will
automatically expire upon the later of (i) such time as Consultant and its
affiliated and related entities and funds own less than forty percent (40%) of
the Company's Common Stock Equivalents (as such term is defined in the Company's
Stockholders' Agreement) or (ii) such time as Consultant and its affiliated
and related entities and funds, taken as a single group, own fewer Common Stock
Equivalents than the Management Stockholders (as such term is defined in the
Company's Stockholders' Agreement), taken as a single group.
2
3. SERVICES TO BE PERFORMED. The Consultant shall devote substantial
time and efforts to the performance of the consulting and management advisory
services contemplated by this Agreement. However, no precise number of hours is
to be devoted by the Consultant on a weekly or monthly basis. The Consultant
shall perform services under this Agreement directly through its employees or
agents. The Company acknowledges that the Consultant's services to it are not
exclusive and that the Consultant will render similar services to other persons.
4. CONFIDENTIALITY. The Consultant shall maintain the confidentiality
of all non-public information of the Company which may come into its possession
as a result of the performance of services under this Agreement, and shall use
its best efforts to ensure that its employees, agents and outside consultants
also maintain the confidentiality of such information.
5. COMPENSATION: EXPENSE REIMBURSEMENT.
5.1 The Company shall pay to the Consultant, on the date
hereof, a structuring fee in the amount of $1,500,000 for
arranging financing, consulting with management of the
Company and certain other transactions on behalf of the
Company.
5.2 In consideration of the Consultant's provision of
management, advisory, and consultant services to the
Company hereunder.. the Company shall pay the Consultant an
annual fee of Four Hundred Thousand Dollars ($400,000),
which shall be paid in equal monthly installments on the
first day of each month commencing with the first day of
the month immediately following the date hereof.
5.3 The Consultant shall be reimbursed for expenses reasonably
incurred in connection with the services provided
hereunder, such as travel, lodging and similar
out-of-pocket costs reasonably incurred by the Consultant
in connection with the performance of such services
hereunder. Reimbursement shall be made only upon
presentation to the Company by the Consultant of reasonably
itemized documentation.
6. INDEMNIFICATION. In addition to their agreements and obligations
under this Agreement and any other agreement in effect from time to time, the
Company agrees to indemnify and hold harmless the Consultant and its affiliates
(including its officers, directors, partners, employees and agents) from and
against any and all claims, liabilities, expenses, costs, losses and damages (or
actions in respect thereto in any way related to or arising out of the
performance by the Consultant of services under this Agreement and to reimburse
the Consultant and any other such indemnified person for an), legal and other
expenses incurred by it in connection with or relating to investigating,
preparing to defend, or defending any actions, claims or other proceedings
(including any investigation or inquiry) arising in any manner out of or in
connection with the Consultant's performance under this Agreement (whether or
not such indemnified person is a named party in such proceeding); provided,
however, that the Company shall not be responsible under this Section 6 for any
claims, liabilities, losses, damages or expenses to the extent that it is
finally judicially determined that the), result from actions taken
2
3
or omitted to be taken by the Consultant (or such other indemnified person) due
to the Consultant's (or such other indemnified person's) gross negligence or
willful misconduct.
7. NOTICE. All notices hereunder, to be effective, shall be in
writing and shall be band delivered or mailed by certified mail, postage prepaid
as follows:
(i) If to Consultant:
Berkshire Partners LLC
One Boston Place, Suite 3300
Boston, MA 02108
Facsimile: (617) 227-6105
Attention: Richard K. Lubin
With a copy to:
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, MA 02110
Facsimile: (617) 951-1295
Attention: James Westra, Esq.
(ii) If to the Company:
Holmes Products Corp.
233 Fortune Boulevard
Milford, MA 01757
Facsimile No: (508)634-1211
Attention: President
8. MODIFICATIONS. This Agreement constitutes the entire agreement
between the parties hereto with regard to the subject matter hereof, superseding
all prior understandings and agreements whether written or oral. This Agreement
may not be amended or revised except by a writing, signed by the parties.
9. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
but may not be assigned by either part), without the prior written consent of
the other.
10. CAPTIONS. Captions have been inserted solely for convenience of
reference and in no way define, limit or describe the scope or substance of any
provisions of this Agreement.
11. SEVERABILITY. The provisions of this Agreement are severable, and
the invalidity of any provision shall not affect the validity of an), other
provision.
3
4
12. GOVERNING LAW. This Agreement shall be construed under and
governed by the laws of The Commonwealth of Massachusetts (regardless of the
laws that might otherwise govern under applicable Commonwealth of Massachusetts
principles of conflicts of laws).
13. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, box all of which
together will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have duly executed this agreement as a
scaled instrument as of the date first above written.
BERKSHIRE PARTNERS LLC HOLMES PRODUCTS CORP.
By: /s/ Richard K. Lubin By: /s/ Jordan A. Kahn
---------------------------------- --------------------------------
4