EXHIBIT 10.17
MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT (the "Agreement"), dated as of July 23,
2001, is entered into by and between Catalina Lighting, Inc., a Florida
corporation with offices at 18191 NW 68th Avenue, Miami, Florida 33015 (the
"Company") and Sun Capital Partners Management, LLC, a Delaware limited
liability company with offices at 5355 Town Center Road, Suite 802, Boca Raton,
Florida 33486 (the "Manager").
WHEREAS, the Company desires to have the Manager render, and the Manager
desires to render, certain services from time to time on the terms herein
provided;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, the parties hereto agree as follows:
1. Agreement; Term.
(a) The Company hereby retains the Manager to perform, and the
Manager agrees to render to the Company, on the terms herein set forth,
management and consulting services regarding the business of the Company and
such other services relating to the Company as may from time to time be
reasonably requested by the Board of Directors or executive officers of the
Company. Without limiting the generality of the foregoing, the parties currently
contemplate that these services shall include advice regarding improvements to
the Company's financial reporting, accounting and management information systems
and staffing.
(b) It is expressly understood and agreed that the Manager shall
devote only so much time, and shall consult with and advise the officers and
managers of the Company only to such extent and at such times and places as may
be mutually convenient to the Company and the Manager. The Manager shall be free
to provide similar services to such other business enterprises or activities as
the Manager may deem fit without any limitation or restriction whatsoever.
(c) The term of this Agreement shall commence as of the date hereof
and shall terminate on July 23, 2011.
2. Compensation and Expenses.
(a) For the services to be rendered by the Manager hereunder, the
Manager shall receive an annual fee (the "Management Fee") equal to $500,000.
The Company shall pay the Management Fee in quarterly installments in advance of
$125,000. Each quarterly installment of the Management Fee shall be paid on the
last business day of the quarter preceding the quarter for which the installment
is due. On the date hereof, the Company shall pay the Manager $98,118.28,
representing the pro rata portion of the Management Fee for the quarter ending
September 30, 2001.
(b) The Company shall reimburse the Manager for the cost of all
reasonable out-of-pocket fees and expenses incurred by the Manager and its
Affiliates in the performance of the services hereunder and all matters related
thereto.
(c) The Manager shall also be entitled to additional customary and
reasonable fees for investment banking services provided the Company at the
Company's request, including, without limitation, refinancings, restructurings,
equity offerings, mergers, acquisitions and divestitures. In the event of an
acquisition, merger, consolidation, business combination, or sale of all or
substantially all of the Company's assets or the outstanding shares of the
Company's capital stock, the Company shall pay the Manager a fee in cash equal
to 1% of the aggregate consideration (including assumed debt and long-term
liabilities) paid to the Company or its shareholders in connection with such
transaction.
3. Relationship of the Parties. The Manager is providing services
hereunder as an independent contractor. Nothing in this Agreement shall be
deemed to constitute the parties hereto joint venturers, partners or
participants in an unincorporated business or other separate entity, nor in any
manner create any employer-employee relationship between the Company on the one
hand, and the Manager or any of the Manager's employees on the other hand.
4. Board of Directors and Officers. Nothing in this Agreement shall be
construed to relieve the directors or officers of Company from the performance
of their respective duties or limit the exercise of their powers in accordance
with the Company's Articles of Incorporation or Bylaws, any applicable
provisions of the applicable corporate law, or otherwise. The activities of
Company shall at all times be subject to the control and direction of its Board
of Directors and officers. The Company reserves the right to make all decisions
with regard to any matter upon which the Manager has rendered its advice and
consultation.
5. Limitation of Liability. In no event will the Manager be liable to the
Company for special, indirect, punitive or consequential damages, including,
without limitation, loss of profits or lost business, even if the Company has
been advised of the possibility of such damages. Under no circumstances will the
Manager's liability exceed, in the aggregate, the fees actually paid to the
Manager hereunder.
6. Indemnification. The Company shall reimburse, defend, indemnify and
hold the Manager, and its employees, officers, agents, members and managers,
harmless from and against any damage, loss, liability, deficiency, diminution in
value, action, suit, claim, proceeding, investigation, audit, demand,
assessment, fine, judgment, cost and other expense (including, without
limitation, reasonable legal fees and expenses) arising out of, related to or in
connection with (a) any act or omission of the Company or the Manager, except to
the extent involving the willful misconduct, bad faith or gross negligence of
the Manager, or (b) any act or omission made at the direction of the Company.
7. Notices. Any notice, request, demand or other communication permitted
or required to be given hereunder shall be in writing, shall be sent by one of
the following means to the addressee at the address et forth in the preamble to
this Agreement (or at such other address
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as shall be designated hereunder by notice to the other party hereto, effective
upon actual receipt) and shall be deemed conclusively to have been given: (a) on
the first business day following the day timely deposited with a nationally
recognized overnight delivery service, with the cost of delivery prepaid for the
account of the sender; (b) on the fifth business day following the day duly sent
be certified or registered United States mail, postage prepaid and return
receipt requested; or (c) if delivered by other means, when actually received by
the addressee on a business day (or on the next business day if received after
the close of normal business hours or on any non-business day).
8. Assignment; Successors and Assigns. This Agreement and the rights,
duties and obligations of the Company hereunder may not be assigned or delegated
by the Company without the prior written consent of the Manager. This Agreement
and the rights, duties and obligations of the Manager hereunder may not be
assigned or delegated by the Manager, other than to an affiliate of the Manager,
without the prior written consent of the Company. All covenants, promises and
agreements by or on behalf of the parties contained in this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns.
9. Amendments. No amendment, supplement or waiver of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
the Manager and the Company (in the case of an amendment or supplement) or by
the waiving party (in the case of a waiver).
10. Applicable Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Florida, without giving
effect to principles of conflicts of law or choice of law that would compel the
application of the substantive laws of any other jurisdiction.
11. Section Headings. The headings of each section are contained herein
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
12. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto with regard to the subject matter hereof and supersedes and
replaces all prior agreements, understandings and representations, oral or
written, with regard to such matters.
13. Severability. If any provision of this Agreement or application
thereof under any circumstances is adjudicated to be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect any other
provision or application of this Agreement which can be given effect without the
invalid or unenforceable provision or application and shall not invalidate or
render unenforceable such provision or application in any other jurisdiction. If
any provision is held void, invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.
14. Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original, and both of which together shall constitute one and
the same document.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SUN CAPITAL PARTNERS MANAGEMENT, LLC
by: /s/ Michael Kalb
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Name: Michael Kalb
Title: Vice President
CATALINA LIGHTING, INC.
by: /s/ Robert Hersh
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Name: Robert Hersh
Title: President and Chief Executive Officer
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