Exhibit 10.8

 

MANAGEMENT SERVICES AGREEMENT

 

This MANAGEMENT SERVICES AGREEMENT (this “Agreement”) is entered into and
declared effective as of May 3, 2019 (the “Effective Date”) by and between C-PAK
Consumer Product Holdings LLC (the “Company”) and Capital Park Holdings Corp., a
Delaware corporation (the “Parent Company”).

 

WHEREAS, the Company together with certain of its Affiliates have acquired
substantially all of the assets associated with the Joy and Cream Suds Brands
from The Proctor and Gamble Company (the “Transaction”);

 

WHEREAS, in connection with the Transaction and related transactions, the Parent
Company (or its affiliates) provided advice and analysis including assistance
with due diligence and other investigatory matters related to the business of
the Company and the industries in which it operates, and advice with respect to
equity and debt facilities, arrangement and negotiation of senior executive
management employment agreements and related arrangements and other matters
(collectively, “Advisory Services”);

 

WHEREAS, the Parent Company has expertise and specifically skills in private
equity corporate finance, mergers and acquisitions, strategic corporate
planning, operating management and other management skills and advisory
services;

 

WHEREAS, the Company will require the Parent Company’s special skills and
management advisory services in connection with its business operations and
execution of its strategic plan; and

 

WHEREAS, the Parent Company is willing to provide such skills and services to
the Company on the terms set forth below.

 

NOW THEREFORE, in consideration of the mutual agreements set forth below, the
parties hereto agree as follows:

 

  1. Services. The Parent Company shall furnish the following management
services (the “Services”) to the Company:

 

  a. financial, managerial and operational advice in connection with the
Company’s day-to-day operations, including advice with respect to the
development and implementation of strategies for improving the operating,
marketing and financial performance of the Company;         b. advice in
connection with the Company’s negotiation and consummation of agreements,
contracts, documents and instruments necessary to provide the Company with
senior secured debt financing from banks or other financial institutions or
other entities on terms and conditions satisfactory to the Company;

 

   

 

 

  c. advice in connection with the financing, acquisition, disposition, merger,
combination and/or change of control transactions involving the Company (in
whatever manner any of the foregoing may be structured);         d. sourcing,
evaluating and monitoring of inorganic growth opportunities for the Company;    
    e. review of industry trends and major developments that have the potential
to impact the Company in a material way; and         f. any additional services
reasonably requested by the board of directors of the Company (the “Board”) that
are reasonably related to the Company’s business objectives.

 

The Parent Company shall assign dedicated personnel to be principally
responsible for providing the Services to the Company and such personnel, on
behalf of the Parent Company, shall devote such time and effort to the
performance of the Services as deemed reasonably necessary or appropriate;
provided, however, that no minimum number of hours shall be deemed to be
required to be devoted on a weekly, monthly, annual or other basis.

 

  2. Compensation Matters.

 

  a. Transaction Fee. In consideration for the Parent Company having provided
the Advisory Services in connection with the Transaction, the Company
acknowledges and agrees that the Parent Company is owed the Transaction Fee (as
defined below). For purposes of this Agreement, the Transaction Fee shall be
defined as an amount equal to the sum of the enterprise value of the Transaction
multiplied by 3%. As of the date of this Agreement, the Company shall accrue as
a liability 100% of the amount of the Transaction Fee (the “Transaction Fee
Accrued Liability”), which accrued liability shall sit on the Company’s balance
sheet and be reflected in the Company’s general accounts in a separately
designated account (the “Management Services Accrued Liability Account”).      
  b. Management Fees. Subject to the limitations set forth herein, the Parent
Company shall earn, on a quarterly basis in arrears commencing with the fiscal
quarter (the “Initial Fiscal Quarter”) following the closing date of the
Transaction, the Management Fee (as defined below) for rendering the Services.
The applicable Management Fee shall be deemed to be earned by the Parent Company
and shall, on the last day of each fiscal quarter, increase the account balance
of the Management Services Accrued Liability Account. The “Management Fee” shall
be an amount equal to four percent (4%) of the Company’s quarterly reported
EBITDA (as defined below) for the fiscal quarter immediately preceding the
fiscal quarter in which the Management Fee is to be deemed earned by the Parent
Company; provided that (a) the calculations of reported EBITDA and the
applicable Management Fee shall have been verified by the Company’s current
chief executive officer or other highest ranking officer (the “CEO”) and the
chief financial officer of the Company and (b) in connection with the booking
into the Management Services Accrued Liability Account of any Management Fee
deemed earned by the Parent Company for the Initial Fiscal Quarter shall include
the calculation of such Management Fee commencing as of the date immediately
following the closing date of the Transaction through the calculation date with
respect to the Initial Fiscal Quarter. Any payment due the Parent Company in
connection with the termination of this Agreement shall be prorated for the
period beginning on the applicable fiscal quarter and ending on the date of
termination of this Agreement.

 

   

 

 

  c. Reductions in the Management Services Accrued Liability Account Balance.
The Parties hereto acknowledge and agree that any dividends or distributions
made by the Company to the Parent Company (other than dividends and
distributions paid in connection with the tax liability of Parent Company or any
of its direct or indirect equityholders) shall result in a reduction in the
balance of the Management Services Accrued Liability Account.           For
purposes of this Agreement, reported “EBITDA” shall be defined as with respect
to the Company for any calculation period related to this Agreement, net income
for such period, plus the sum of the following items for the same period, all
determined in accordance with GAAP: (i) interest expense, (ii) depreciation,
depletion, obsolescence and amortization of property, (iii) tax expense, and
(iv) non-cash stock option expense.

 

  3. Term. The initial term of this Agreement shall be ten (10) years from the
Effective Date (the “Term”) provided that this Agreement may be terminated by
the Company by an affirmative vote of a majority of the directors of the Board
upon ninety (90) days prior written notice to the Parent Company (the “Company
Termination Right”). In connection with the exercise of the Company Termination
Right, the Company shall be obligated to cause to be paid to the Parent Company,
in immediately available funds, a one-time payment (the “Termination Payment”)
equal to the product of: (a) the last installment of the Management Fee paid to
the Parent Company pursuant to this Agreement and (b) twenty-five (25). The
Parent Company shall have no right to terminate this Agreement without the
affirmative consent of a majority of the directors of the Board. Notwithstanding
the foregoing or anything contained herein to the contrary, the Parties
acknowledge and agree that (a) the Company shall have no obligation to make the
Termination Payment and (b) this Agreement shall automatically terminate upon
the effective date of a sale of substantially all or all of the assets or common
equity interests of the Company to a party not otherwise affiliated with the
Company.         4. Assignment. This Agreement and any rights and obligations
hereunder shall not be assignable or transferable by the Parent Company, other
than to an affiliate of the Parent Company, without the prior written consent of
the Company, or by the Company to any other person or entity at any time.

 

   

 

 

  5. Indemnification.

 

  a. The Company shall indemnify and hold harmless the Parent Company, its
affiliates, respective directors, officers, controlling persons (within the
meaning of Section 15 of the Securities Act of 1933 or Section 20(a) of the
Securities Exchange Act of 1934), if any, agents and employees (the Parent
Company, its affiliates, their agents, their employees and such other specified
persons being collectively referred to as the “Parent Company Indemnified
Persons” and individually as a “Parent Company Indemnified Person”) from and
against any and all claims, liabilities, losses, damages and expenses incurred
by any Parent Company Indemnified Person which are related to or arise out of
(i) actions taken or omitted to be taken (including any untrue statements made
or any statements omitted to be made) by the Company (and not at the direction
of any Parent Company Indemnified Person) or (ii) actions taken or omitted to be
taken by a Parent Company Indemnified Person with the Company’s consent or in
conformity with the Company’s instructions or the Company’s actions or omissions
(and not at the direction of any Parent Company Indemnified Person) (the
“Indemnification Obligations”), and will reimburse each Parent Company
Indemnified Person for all reasonable documented costs and expenses including
reasonable fees of any Parent Company Indemnified Person’s counsel, as they are
incurred, in connection with investigating, preparing for, defending, or
appealing any action, formal or informal claim, investigation, inquiry or other
proceeding, whether or not in connection with pending or threatened litigation,
whether or not any Parent Company Indemnified Person is named as a party thereto
and whether or not any liability results therefrom, in each case, so long as it
relates to the Indemnified Obligations. The Company, however, will not be
responsible for any claims, liabilities, losses, damages or expenses pursuant to
the proceeding sentence that have resulted principally from the bad faith,
negligence or willful misconduct of the Parent Company. The Company also agrees
that neither the Parent Company nor any other Parent Company Indemnified Person
shall have any liability to the Company for or in connection with the Parent
Company’s engagement hereunder, except for any such liability for claims,
liabilities, losses, damages or expenses incurred by the Company that have
resulted principally from the Parent Company’s own bad faith, negligence or
willful misconduct. The Company further agrees that they will not, without the
prior written consent of the Parent Company, which shall not be unreasonably
withheld, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any Parent Company
Indemnified Person is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of the Parent Company and each other Parent Company
Indemnified Person hereunder from all liability arising out of such claim,
action, suit or proceeding.

 

   

 

 

  b. The Parent Company shall indemnify and hold harmless the Company, its
affiliates, respective directors, officers, controlling persons (within the
meaning of Section 15 of the Securities Act of 1933 or Section 20(a) of the
Securities Exchange Act of 1934), if any, agents and employees (the Company, its
affiliates, agents, employees and such other specified persons being
collectively referred to as “Company Indemnified Persons” and individually as a
“Company Indemnified Person”) from and against any and all claims, liabilities,
losses, damages and expenses incurred by any Company Indemnified Person
(including fees and disbursements of the respective Company Indemnified Person’s
counsel) that have resulted principally from the bad faith, negligence or
willful misconduct of the Parent Company in providing the Services hereunder,
and will reimburse each Company Indemnified Person for all costs and expenses,
including fees of any Company Indemnified Person’s counsel, as they are
incurred, in connection with investigating, preparing for, defending or
appealing any action, formal or informal claim, investigation, inquiry or other
proceeding, whether or not in connection with pending or threatened litigation,
caused by or arising out of or that have resulted principally from the bad
faith, negligence or willful misconduct of the Parent Company in providing the
Services hereunder.         c. The foregoing right to indemnity shall be in
addition to any rights of the Parent Company, the Company, a Parent Company
Indemnified Person and/or any Company Indemnified Person may have at common law
or otherwise and shall remain in full force and effect following the completion
of any termination of this Agreement. Each party hereto consents to personal
jurisdiction and to service and venue in any court in which any claim is subject
to this Agreement is brought against another party.

 

  6. Governing Law. This Agreement shall be construed and administered, and the
validity hereof shall be determined in accordance with the laws of the State of
Texas, without regard to its conflicts of laws rules.         7. Arbitration.
All claims, demands, disputes, controversies, differences or misunderstandings
between the parties relating to this Agreement shall be settled by arbitration,
in accordance with the rules of the American Arbitration Association, and
judgment on the award rendered by the arbitrator or arbitrators may be entered
and enforced in any court having jurisdiction, and jurisdiction to be in no way
limited by the paragraph entitled “Governing Law” above.

 

   

 

 

  8. Subordination. Parent agrees that the payment, whether regularly scheduled
or otherwise, of the Transaction Fee Accrued Liability, the Management Fee, the
Termination Payment and all other obligations of the Company in respect of,
arising under or relating to this Agreement, including, without limitation, any
costs of collection (collectively, the “Subordinated Obligations”) is hereby
expressly subordinated to the prior indefeasible payment in full in cash of the
Senior Debt Obligations (as defined below), the Preferred Equity Obligations (as
defined below) and the Holding Company Put Obligations (as defined below)
pursuant to the terms of this Agreement and the termination of all commitments
under the Loan Documents (the earliest date on which the foregoing are
satisfied, the “Termination Date”). As used herein, “Senior Debt Obligations”
shall mean all of the Obligations under and as defined in that certain Loan
Agreement, dated as of May 3, 2019 (as amended, restated, amended and restated,
supplemented, or otherwise modified, replaced or refinanced from time to time,
the “Loan Agreement”), by and among the Company, C-PAK Consumer Product IP SPV
LLC, a Delaware limited liability company, C-Pak Consumer Product Holdings SPV I
LLC, a Delaware limited liability company (“Holdings”), the lenders from time to
time party thereto, as Lenders (as defined therein), and Piney Lake
Opportunities ECI Master Fund LP (“Piney Lake”), as administrative agent for the
Lenders and as collateral agent for the Secured Parties (as defined therein). As
used herein, “Preferred Equity Obligations” shall mean any obligation of C-Pak
PrefCo SVP I, Inc. (“PrefCo”) to redeem the Preferred Stock (as defined in that
certain Amended and Restated Certificate of Incorporation of PrefCo, dated as of
May 3, 2019, as may be amended, restated, amended and restated, supplemented, or
otherwise modified) and all accrued and unpaid dividends, liquidation
preference, any fees and expenses, and any other amounts arising thereunder or
in connection therewith, in each case, due and payable to Piney Lake or any of
its affiliates or permitted assignees as holders of Preferred Stock. As used
herein, “Holding Company Put Obligations” means any obligation of Holdings to
repurchase Common Units (as defined in that certain Amended and Restated Limited
Liability Company Agreement of Holdings, dated as of May 3, 2019 (as amended,
restated, amended and restated, supplemented, or otherwise modified from time to
time, the “Holdings LLCA”)) from Piney Lake or any of its permitted assignees or
transferees pursuant to the exercise of the put right by Piney Lake or any of
its permitted assignees or transferees pursuant to Section 15.2 of the Holdings
LLCA (the “Holdings Common Put”) and any obligations arising in connection
therewith or relating thereto. The Senior Debt Obligations, the Preferred Equity
Obligations and the Holding Company Put Obligations are collectively referred to
herein as the “Senior Obligations”.

 

  a. In the event of any distribution of the assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company (whether
or not in bankruptcy, insolvency or receivership proceedings and whether
voluntarily or involuntarily), or upon any assignment for the benefit of
creditors, or upon any other marshaling of the assets and liabilities of the
Company for the benefit of any creditor or creditors or otherwise (a
“Liquidation”):

 

  i. no payment or distribution of any character, whether in cash, securities or
other property, shall be made in respect of the Subordinated Obligations until
the Termination Date (whether or not all or any of the Senior Obligations shall
be been accelerated;         ii. any payment or distribution of any character,
whether in cash, securities or other property, which, except for the terms of
this Section 8(a), would be payable or deliverable in respect of the
Subordinated Obligations shall be paid or delivered directly to the holders of
Senior Obligations for application to the outstanding Senior Obligations, until
the same are paid in full; and

 

   

 

 

  iii. if, notwithstanding the foregoing terms of this Section 8(a), any payment
or distribution of any character, whether in cash, securities or other property,
shall be received in a Liquidation by the holders of the Subordinated
Obligations before the Termination Date as provided above, such payment or
distribution shall be held in trust for the benefit of, and shall be immediately
paid or delivered to (in the same form and with all applicable endorsements),
the holders of Senior Obligations for application (in the case of cash) to the
outstanding Senior Obligations, until the same are paid in full or to be held as
collateral for (in the case of non-cash property or securities) the payment or
prepayment in full of the Senior Obligations; provided, however, that such
amounts paid to the holders of Senior Obligations shall not be deemed to
discharge the Subordinated Obligations.

 

  b. The Company hereby agrees that it may not make, and the Parent Company
hereby agrees that it will not accept, any payment with respect to the
Subordinated Obligations or any dividend or distribution that reduces the
Subordinated Obligations until the Termination Date; provided that, the Company
may make payments with respect to the Subordinated Obligations and dividends and
distributions that reduce the Subordinated Obligations so long as (i) such
payments, dividends or distributions are permitted to be made under the Loan
Agreement, (ii) there are no outstanding and unpaid amounts with respect to the
PrefCo Obligations, and (iii) there are no outstanding and unpaid amounts with
respect to the Holdings Company Put Obligations. The Company shall not be
required to make any payment with respect to the Subordinated Obligations or
dividends or distributions to reduce the Subordinated Obligations at any time
when such payment or prepayment is prohibited from being made due to the
existence of any of the conditions in the immediately preceding sentence
(provided that any amounts that not paid may be accrued). Prior to the
indefeasible payment in full in cash of the Senior Obligations and the
termination of all commitments under the Senior Obligation Documents, the Parent
Company and any other holders of Subordinated Obligations shall not, in their
capacities as creditors of the Company, (a) take any action to accept, ask for,
sue for or demand any payment (including participating with, or supporting, any
other person in taking such action), to (A) enforce or collect (including by
set-off) the whole or any part of the Subordinated Obligations or (B) commence
(or join with any other creditor to commence) judicial enforcement of any of the
rights and remedies under this Agreement or applicable law (including any
Liquidation proceeding) with respect to the Subordinated Obligations or any of
Company’s property or assets, (b) take any action to exercise any rights or
remedies (including taking any security or collateral) with respect to the
Subordinated Obligations that may be available to the holders of Subordinated
Obligations, either at law or at equity, by judicial proceeding or otherwise,
(c) institute or participate in any proceedings or take any other action
challenging the enforceability, validity, security, perfection or priority of
any liens or security interests securing the Senior Obligations.         c. The
Subordinated Obligations are unsecured obligations of the Company and no
collateral secures the obligations of the Company under this Agreement. As long
as any Senior Obligations are outstanding, any liens and security interests
securing or purporting to secure all or any Subordinated Obligations in
contravention of the foregoing sentence shall be and hereby are subordinated for
all purposes and in all respects to the liens and security interests of the
holders of the Senior Debt Obligations, regardless of the date, time, manner or
order of grant, attachment or perfection of any such liens and/or security
interests and notwithstanding the provisions of the Uniform Commercial Code or
any other applicable law or decision.

 

   

 

 

  d. For the purposes of this Section 8, the Termination Date shall not have
occurred, unless and until the holders of Senior Obligations shall have received
cash or, if so approved by holders of the Senior Obligations sufficient to bind
all holders of Senior Obligations, securities, or both, equal to the full amount
of such Senior Obligations at the time outstanding and, with respect to the
Senior Debt Obligations, all commitments to extend further credit to the Company
have terminated.         e. The Parent Company agrees that no payment or
distribution to any holder of Senior Obligations pursuant to this Agreement
shall entitle Parent Company to exercise any rights of subrogation in respect
thereof until the Termination Date; provided, however, that such rights and
remedies shall remain waived and released at any time any Secured Parties (as
defined in the Loan Agreement) (with or through their designees) or any other
holder of Senior Obligations (or all of them) have acquired all or any portion
of the Collateral (as defined in the Loan Agreement) by credit bid, strict
foreclosure or through any other exercise of remedies available thereto.        
f. If any payment on account of the Subordinated Obligations not permitted by
the terms of this Agreement is received by the holder thereof prior to the
Termination Date, such payment shall be held in trust by such holder of the
Subordinated Obligations for the benefit of the holders of the Senior
Obligations, and shall immediately be paid over to the holders of the Senior
Obligations, or their authorized representative, for application to the payment
of the Senior Obligations until paid in full.         g. The holders of the
Senior Obligations may, at any time and from time to time with or without
notice, without impairing or releasing the subordination provisions of this
Section 8, do any one or more of the following: (a) change the manner, place,
terms (including any amount required to be paid or any maturity date) or amount
of, and/or change or extend the time of payment of or renew or alter, all or any
of the Senior Obligations, or amend, restate, amend and restate, modify,
supplement or terminate in any manner any instrument, document or agreement
relating to the Senior Obligations; (b) release any person or entity liable in
any manner for the payment or collection of the Senior Obligations; (c) exercise
or refrain from exercising any rights in respect of the Senior Obligations
against the Company or any other person or entity; (d) apply any monies or other
property paid by any person or entity or otherwise realized in any manner to the
Senior Obligations; or (e) accept or release any security for the Senior Debt
Obligations.         h. No modification or waiver of the terms of this Agreement
shall be effective without the prior written consent of the holders of the
Senior Obligations necessary to bind all of the holders of Senior Obligations.
Prior to the Termination Date, no holders of Subordinated Obligations shall,
without the prior written consent of such holders of the Senior Obligations
necessary to bind all of the holders of Senior Obligations, agree to any
amendment, modification or supplement to this Agreement which would be adverse
to the interests of the Company or the interests of the holders of the Senior
Obligations in their capacity as such or assign all or any part of the
Subordinated Obligations.

 

   

 

 

  i. To the fullest extent permitted by applicable law, the holders of
Subordinated Obligations hereby waive: (a) notice of acceptance of this
Agreement by any (and all) holders of the Senior Obligations; (b) notice of the
existence, or creation or non-payment, of all or any of the Senior Obligations;
and (c) all diligence in collection or protection of, or realization upon, the
Senior Obligations or any portion thereof or security therefor.         j. The
holders of Senior Obligations are intended third party beneficiaries of the
provisions of Section 8 of this Agreement and, as such, shall be permitted to
enforce such provisions.

 

   

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

  C-PAK CONSUMER PRODUCT HOLDINGS LLC, a Delaware limited liability company    
    By: /s/ Lloyd Ward‎   Name: Lloyd Ward   Title: Chief Executive Officer

 

   

 

 

  CAPITAL PARK HOLDINGS CORP., a Delaware corporation         By: /s/ Eric Blue‎
  Name: Eric Blue   Title: CEO and Chief Investment Officer