Sample Business Contracts

Management Services Agreement - Burke Industries Inc. and J.F. Lehman & Co.

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                            MANAGEMENT SERVICES AGREEMENT

     This Management Services Agreement ("Agreement") is entered into as of 
June 18, 1998, between Burke Industries, Inc., a California corporation 
("Burke"), and J.F. Lehman & Company, a Delaware corporation ("JFL").  In 
consideration of the premises, it is agreed as follows:


          1.1  Burke is engaged in the business, INTER ALIA, of designing, 
manufacturing, and marketing numerous types of rubber related products for 
both commercial and military applications.  Burke conducts such business 
operations worldwide, but is focused primarily in the United States.

          1.2  Key personnel of JFL have substantial expertise that is useful 
to Burke.  Burke desires to obtain management services from JFL, and JFL 
desires to provide management services to Burke, all on the terms and 
conditions of this Agreement. 

provide to Burke and at Burke's request the management services ("Services") 
listed in Schedule "A" attached hereto and hereby made a part hereof.  JFL's 
key personnel will devote as much of their business time and effort to the 
provision of Services hereunder as is reasonably required for the prompt and 
efficient accomplishment of the Services to be provided, and will not, except 
with Burke's express consent, accept undertakings for other clients that are 
likely to interfere or conflict with their availability to perform Services 
when required hereunder.  JFL agrees further to comply with the reasonable 
directions of Burke and to use its best efforts to promote Burke's interests.

     3.   MANAGEMENT FEES.  In consideration for the advisory and consulting 
services to be rendered by JFL to Burke hereunder, including services in 
connection with strategic financial planning, investment management, 
management and administration and other matters relating to the business and 
operations of Burke, Burke shall pay to JFL a fee (the "Annual Fee") in the 
amount of $500,000 per annum for each year during the period commencing on 
October 1, 1998 and ending on the date of the termination this Agreement.  
The Annual Fee shall be payable in quarterly installments, payable in advance 
beginning on October 1, 1998 and on the same calendar day of every third 
month thereafter until the date of termination of this Agreement.

     4.   EXPENSES.  Burke shall reimburse JFL promptly upon request for 
travel and other out-of-pocket expenses reasonably incurred in connection 
with the performance of Services pursuant to this Agreement, subject to the 
provision by JFL of satisfactory documentation of such expenses.  Salaries of 
JFL employees and the ordinary expenses of maintaining JFL's offices are not 
reimbursable expenses pursuant to this Agreement.


     5.   STATUS.  It is the intention of the parties that JFL shall be an 
independent contractor pursuant to this Agreement, and that this Agreement 
shall not be construed to create or give rise to any partnership, agency or 
joint venture.

     6.   TERM AND TERMINATION.  This Agreement shall be effective as of 
August 20, 1997 and shall continue in effect until the earliest to occur of 
(i) the tenth anniversary of this Agreement and (ii) the closing of a sale to 
an entity which is not an "Affiliate" (as defined in Section 12b-2 of the 
Securities Exchange Act of 1934) of the Company or any of its existing 
shareholders on the date hereof of all or substantially all of the capital 
stock or assets of the Company.  The provisions of Section 4 and otherwise as 
the context so requires shall survive the termination of this Agreement.

     7.   REPRESENTATIONS AND WARRANTIES.  JFL represents and warrants that 
it is not a party to or bound by any agreement or contract or subject to any 
restrictions, particularly, but without limitation, in connection with any 
previous or other consulting relationship, which prevents JFL from entering 
into and performing its obligations under this Agreement.

     8.   MISCELLANEOUS.  

          8.1  This Agreement contains the entire understanding of the 
parties with respect to the subject matter contained herein and may be 
altered, amended or superseded only by an Agreement in writing, signed by the 
party against whom enforcement of any waiver, change, modification, extension 
or discharge is sought.  This Agreement may be assigned by either party only 
with the written consent of the other.

          8.2  If any provision of this Agreement shall be prohibited or 
invalid under applicable law, such provision shall be ineffective only to the 
extent of such prohibition or invalidity without invalidating the remainder 
of such provision or the remaining provisions of this Agreement.

          8.3  This Agreement shall be binding upon and shall inure to the 
benefit of the parties and their respective successors and permitted assigns.

          8.4  Notices delivered pursuant to this Agreement shall be in 
writing, and shall be deemed to have been duly given when (a) delivered by 
hand; (b) sent by facsimile (with receipt confirmed), provided that a copy is 
promptly thereafter mailed by first-class prepaid certified mail, return 
receipt requested; (c) received by the addressee, if sent with delivery 
receipt requested by Express Mail, Federal Express, other express delivery 
service or first-class prepaid certified mail, in each case to the 
appropriate addresses and facsimile numbers set forth below, or to such other 
address(es) or facsimile number(s) as a party may designate as to itself by 
notice to the other party.

               8.4.1          If to Burke:

                              Burke Industries, Inc.
                              2250 South Tenth St.


                              San Jose, California  95112
                              Attention:  Mr. Rocco C. Genovese
                              Facsimile:  (408) 995-5163

                              with a copy sent by any of the foregoing methods
                              simultaneously to:
                              Kenneth M. Doran, Esq.
                              Gibson, Dunn & Crutcher LLP
                              333 South Grand Avenue
                              Los Angeles, CA  90071-3197
                              Facsimile:  (213) 229-7520

               8.4.2          If to JFL:
                              450 Park Avenue, 6th Floor
                              New York, New York  10022
                              Attention:  Donald Glickman
                              Facsimile:  (212) 634-1160

          8.5  This Agreement shall be governed by, and interpreted in 
accordance with, the laws of the State of New York applicable to contracts 
made and to be performed in that State.


     IN WITNESS WHEREOF, this Agreement has been executed all as of the date 
first above written.

                              BURKE INDUSTRIES, INC.

                              By: /s/ Rocco C. Genovese    
                              Name:  Rocco C. Genovese
                              Title:  President and Chief Executive Officer

                              J.F. LEHMAN & COMPANY

                              By: /s/ Donald Glickman 
                              Name: Donald Glickman
                              Title  Managing Principal


                                     SCHEDULE A              
                          TO MANAGEMENT SERVICES AGREEMENT
                            DATED AS OF AUGUST 20, 1997


        -       Development of new products for U.S. Navy and other Military

        -       Development of new commercial products

        -       Marketing

        -       Other Opportunities


        -       Contracting and contract compliance

        -       Supervise investor relations

        -       Security compliance

        -       Advice on engineering issues

        -       Application of existing commercial products to military

        -       Arrangement/management of domestic bank facilities

        -       Assistance in identifying/retaining key personnel and other
                service providers

        -       Advice on cash flow management

        -       Advice on potential acquisitions
TOTAL QUARTERLY MANAGEMENT FEES                                  $125,000.00

AMENDMENT NO. 1 TO MANAGEMENT AGREEMENT This Amendment No. 1 to the Management Agreement (this "Amendment") is made and entered into as of June __, 1998 by and among Burke Industries, Inc. (the "Company") and J.F. Lehman & Company, Inc. (the "Advisor"). Except as otherwise provided herein, capitalized terms used herein will have the meanings ascribed to them in the Management Agreement (as defined below). W I T N E S S E T H WHEREAS, the Company and the Advisor entered into that certain Management Agreement dated as of August 20, 1997 (the "Agreement"), pursuant to which the parties agreed, among other things, that the Advisor shall be entitled to receive an Annual Fee for certain management services rendered by the Advisor to the Company in accordance with the terms of Section 1(b) of the Agreement; WHEREAS, the Company and the Advisor also entered into that certain Management Services Agreement dated as of June 18, 1998 (the "Management Services Agreement"), effective as of August 20, 1997, which sets forth in greater detail the management services to be provided by the Advisor to the Company and the fees to be paid to the Advisor in connection with the provision of those services; and WHEREAS, the Company and the Advisor now desire to amend the Agreement to delete Section 1(b) from the Agreement, effective as of August 20, 1997, and to replace the matters discussed therein with the Management Services Agreement. NOW, THEREFORE, BE IT RESOLVED, that in consideration of the premises herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: AGREEMENT 1. Section 1(b) of the Agreement is hereby amended in its entirety to read: "(b) Intentionally left blank." 2. This Amendment may be executed in one or more counterparts, all of which will constitute one and the same instrument. 3. Except as amended hereby, the Agreement shall continue in full force and effect. <PAGE> IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment as of the date first above written. BURKE INDUSTRIES, INC. By: /s/ Rocco C. Genovese --------------------------------- Name: Rocco C. Genovese Title: President and Chief Executive Officer J.F. LEHMAN & COMPANY, INC. By: /s/ Donald Glickman --------------------------------- Name: Donald Glickman Title: Managing Principal