Exhibit 10.1
MANAGEMENT SERVICES AGREEMENT
BY AND BETWEEN
COMPASS GROUP DIVERSIFIED HOLDINGS LLC,
AND
COMPASS GROUP MANAGEMENT LLC
Dated as of May 16, 2006
Amended as of November 8, 2006

 

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TABLE OF CONTENTS

         
 
  Page
ARTICLE I definitions
    1  
 
       
Section 1.1 Definitions
    1  
 
       
ARTICLE II APPOINTMENT OF THE MANAGER
    5  
 
       
Section 2.1 Appointment
    5  
Section 2.2 Term
    5  
 
       
ARTICLE III OBLIGATIONS OF THE PARTIES
    6  
 
       
Section 3.1 Obligations of the Manager
    6  
Section 3.2 Obligations of the Company
    7  
Section 3.3 Acquisition and Disposition Opportunities
    8  
Section 3.4 Offsetting Management Services
    9  
Section 3.5 Change of Services
    9  
Section 3.6 Transaction Services
    10  
Section 3.7 License
    10  
 
       
ARTICLE IV POWERS OF THE MANAGER
    11  
 
       
Section 4.1 Powers of the Manager
    11  
Section 4.2 Delegation
    11  
Section 4.3 Manager’s Obligations, Duties and Powers Exclusive
    12  
 
       
ARTICLE V INSPECTION OF RECORDS
    12    
Section 5.1 Books and Records of the Company
    12  
Section 5.2 Books and Records of the Manager
    12  
 
       
ARTICLE VI AUTHORITY OF THE COMPANY AND THE MANAGER
    13  
 
       
ARTICLE VII MANAGEMENT FEE; Expenses
    13  
 
       
Section 7.1 IPO Expenses
    13  
Section 7.2 Management Fee
    13  
Section 7.3 Reimbursement of Expenses
    15  
 
       
ARTICLE VIII SECONDMENT OF OFFICERS BY THE MANAGER
    16  
 
       
Section 8.1 Secondment of the Chief Executive Officer and Chief Financial
Officer
    16  
Section 8.2 Remuneration of the Chief Executive Officer and Chief Financial
Officer
    17  

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Section 8.3 Secondment of Additional Officers
    17  
Section 8.4 Removal of Seconded Officers
    17  
Section 8.5 Insurance
    18  
 
       
ARTICLE IX termination; RESIGNATION AND REMOVAL OF THE MANAGER
    18  
 
       
Section 9.1 Resignation by the Manager
    18  
Section 9.2 Removal of the Manager
    18  
Section 9.3 Termination
    19  
Section 9.4 Seconded Individuals
    19  
Section 9.5 Termination of License; Withdrawal of Branding
    19  
Section 9.6 Directions
    19  
Section 9.7 Payments Upon Termination
    20  
 
       
ARTICLE X INDEMNITY
    20  
 
       
Section 10.1 Indemnity
    20  
Section 10.2 Insurance
    21  
 
       
ARTICLE XI LIMITATION OF LIABILITY OF THE MANAGER
    21  
 
       
Section 11.1 Limitation of Liability
    21  
Section 11.2 Reliance of Manager
    21  
 
       
ARTICLE XII LEGAL ACTIONS
    22  
 
       
Section 12.1 Third Party Claims
    22  
 
       
ARTICLE XIII MISCELLANEOUS
    22  
 
       
Section 13.1 Obligation of Good Faith; No Fiduciary Duties
    22  
Section 13.2 Binding Effect
    22  
Section 13.3 Compliance
    22  
Section 13.4 Effect of Termination
    23  
Section 13.5 Notices
    23  
Section 13.6 Headings
    24  
Section 13.7 Applicable Law
    24  
Section 13.8 Submission to Jurisdiction; Waiver of Jury Trial
    24  
Section 13.9 Amendment; Waivers
    25  
Section 13.10 Remedies to Prevailing Party
    26  
Section 13.11 Severability
    26  
Section 13.12 Benefits Only to Parties
    26  
Section 13.13 Further Assurances
    26  

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Section 13.14 No Strict Construction
    26  
Section 13.15 Entire Agreement
    26  
Section 13.16 Assignment
    26  
Section 13.17 Confidentiality
    27  
Section 13.18 Counterparts
    28  

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     MANAGEMENT SERVICES AGREEMENT (as amended, revised, supplemented or
otherwise modified from time to time, this “Agreement”), dated as of May 16,
2006 and amended as of November 8, 2006, by and between Compass Group
Diversified Holdings LLC, a Delaware limited liability company (the “Company”),
and Compass Group Management LLC, a Delaware limited liability company (the
“Manager”). Each party hereto shall be referred to as, individually, a “Party”
and, collectively, the “Parties”.
     WHEREAS, the Company has determined that it would be in its best interests
to appoint a manager to perform the Services described herein and have agreed,
therefore, to appoint the Manager to perform such Services; and
     WHEREAS, the Manager has agreed to act as Manager and to perform the
Services described herein on the terms and subject to the conditions set forth
herein.
     NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
     Except as otherwise noted, for all purposes of this Agreement, the
following terms shall have the respective meanings set forth in this
Section 1.1, which meanings shall apply equally to the singular and plural forms
of the terms so defined and the words “herein,” “hereof” and “hereunder” and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision:
     “Adjusted Management Fee” has the meaning set forth in Section 7.2(c)
hereof.
     “Adjusted Net Assets’’ means, as of any Calculation Date, the sum of
(i) consolidated total assets (as determined in accordance with GAAP) of the
Company as of such Calculation Date, plus (ii) the absolute amount of
consolidated accumulated amortization of intangibles (as determined in
accordance with GAAP) of the Company as of such Calculation Date, minus
(iii) the absolute amount of Adjusted Total Liabilities of the Company as of
such Calculation Date, plus (iv) to the extent included in Adjusted Total
Liabilities of the Company as of such Calculation Date, the absolute amount of
the Company’s liabilities (as determined in accordance with GAAP) in respect of
its obligations under the Supplemental Put Agreement (as such term is defined in
the LLC Agreement).
     “Adjusted Total Liabilities’’ means, as of any Calculation Date, the
Company’s consolidated total liabilities (as determined in accordance with GAAP)
as of such Calculation Date, after excluding the effect of any outstanding Third
Party Indebtedness of the Company.
     “Adjustment Date” has the meaning set forth in Section 7.2(c) hereof.

 

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     “Affiliate” means, with respect to any Person, (i) any Person directly or
indirectly controlling, controlled by or under common control with such Person
or (ii) any officer, director, general member, member or trustee of such Person.
For purposes of this definition, the terms “controlling,” “controlled by” or
“under common control with” shall mean, with respect to any Persons, the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, or the power to elect at least 50% of the
directors, managers, general members, or Persons exercising similar authority
with respect to such Person.
     “Agreement” has the meaning set forth in the preamble of this Agreement.
     “Board of Directors” means, with respect to the Company or any Subsidiary
of the Company, as the case may be, the Board of Directors of the Company, such
Subsidiary of the Company, or, in each case, any committee thereof that has been
duly authorized by the Board of Directors to make a decision on the matter in
question or bind the Company or such Subsidiary of the Company, as the case may
be, as to the matter in question.
     “Business Day” means any day other than a Saturday, a Sunday or a day on
which banks in The City of New York are required, permitted or authorized, by
applicable law or executive order, to be closed for regular banking business.
     “Calculation Date” means, with respect to any Fiscal Quarter, the last day
of such Fiscal Quarter.
     “Chief Executive Officer” means the Chief Executive Officer of the Company,
including any interim Chief Executive Officer.
     “Chief Financial Officer” means the Chief Financial Officer of the Company,
including any interim Chief Financial Officer.
     “Commencement Date” means the date of the closing of the IPO by the Trust
and the Company.
     “Company” has the meaning set forth in the preamble of this Agreement.
     “Company Officers” means the Chief Executive Officer and the Chief
Financial Officer and any other officer of the Company hereinafter appointed by
the Board of Directors of the Company.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Federal Securities Laws” means, collectively, the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder.
     “Final Management Fee” has the meaning set forth in Section 7.2(b) hereof.
     “Fiscal Quarter” means the Company’s fiscal quarter for purposes of its
reporting obligations under the Exchange Act.

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     “GAAP” means generally accepted accounting principles in effect in the
United States, consistently applied.
     “Incur” means, with respect to any Indebtedness or other obligation of a
Person, to create, issue, acquire (by conversion, exchange or otherwise),
assume, suffer, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation.
     “Indebtedness” means, with respect to any Person, (i) any liability for
borrowed money, or under any reimbursement obligation relating to a letter of
credit, (ii) all indebtedness (including bond, note, debenture, purchase money
obligation or similar instrument) for the acquisition of any businesses,
properties or assets of any kind (other than property, including inventory, and
services purchased, trade payables, other expenses accruals and deferred
compensation items arising in the Ordinary Course of Business), (iii) all
obligations under leases that have been or should be, in accordance with GAAP,
recorded as capital leases, (iv) any liabilities of others described in the
preceding clauses (i) to (iii) (inclusive) that such Person has guaranteed or
that is otherwise its legal liability, and (v) (without duplication) any
amendment, supplement, modification, deferral, renewal, extension or refunding
of any liability of the types referred to in clauses (i) through (iv) above.
     “Indemnified Parties” has the meaning set forth in Article X hereof.
     “Independent Director” means a director who (i)(a) is not an officer or
employee of the Company, or an officer, director or employee of any of the
Subsidiaries of the Company or their Subsidiaries, (b) was not appointed as a
director pursuant to the terms of this Agreement and (c) is not affiliated with
the Manager or any of its Affiliates, and (ii) satisfies the independence
requirements under the Exchange Act and the rules and regulations of the Nasdaq
National Market.
     “Investment Advisers Act” means the Investment Advisers Act of 1940, as
amended.
     “Investment Company Act” means the Investment Company Act of 1940, as
amended.
     “IPO ” means the initial public offering of Trust Shares by the Trust,
closing on the date hereof.
     “LLC Agreement” means the Amended and Restated Operating Agreement of
Compass Group Diversified Holdings LLC, dated as of the date hereof, including
all exhibits and schedules attached thereto, as may be amended, revised,
supplemented or otherwise modified from time to time.
     “Losses” has the meaning set forth in Article X hereof.
     “Management Fee” has the meaning set forth in Section 7.2(a) hereof.
     “Management Fee Payment Date” means, with respect to any Calculation Date,
the date that is ten (10) Business Days following the receipt by the Company of
the calculation of the Management Fee from the MSA Administrator with respect to
such Calculation Date.

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     “Manager” has the meaning set forth in the preamble of this Agreement.
     “Manager Marks” has the meaning set forth in Section 3.7 hereof.
     “MSA Administrator” means, as of any Calculation Date, (i) for so long as
this Agreement remains in full force and effect as of such Calculation Date, the
Manager, and (ii) thereafter, the Chief Financial Officer.
     “Nasdaq National Market” means the Nasdaq National Market (or any successor
thereto).
     “Offsetting Management Fees” has the meaning specified in Section 3.4
hereof.
     “Offsetting Management Services” has the meaning specified in Section 3.4
hereof.
     “Offsetting Management Services Agreement” has the meaning specified in
Section 3.4 hereof.
     “Ordinary Course of Business” means, with respect to any Person, an action
taken by such Person if such action is (i) consistent with the past practices of
such Person and is taken in the normal day-to-day business or operations of such
Person and (ii) which is not required to be specifically authorized or approved
by the board of directors of such Person.
     “Over-Paid Management Fees” means, as of any Calculation Date, the amount
by which (i) Adjusted Management Fees that were actually paid on all Management
Fee Payment Dates preceding such Calculation Date, exceeded (ii) Adjusted
Management Fees that were actually due and payable by the Company on all such
Management Fee Payment Dates, as determined by the MSA Administrator upon
availability of the Company’s final consolidated financial statements in
accordance with Section 7.2(e); provided, that such amount shall not be less
than zero.
     “Party” and “Parties” have the meaning set forth in the preamble of this
Agreement.
     “Person” means any individual, company (whether general or limited),
limited liability company, corporation, trust, estate, association, nominee or
other entity.
     “Securities Act” means the Securities Act of 1933, as amended.
     “Services” has the meaning set forth in Section 3.1(b) hereof.
     “Subsidiary” means, with respect to any Person, any corporation, company,
joint venture, limited liability company, association or other Person in which
such Person owns, directly or indirectly, more than 50% of the outstanding
voting equity securities or interests, the holders of which are generally
entitled to vote for the election of the Board of Directors or other governing
body of such Person.
     “Termination Fee” means, as of any Termination Fee Date, the amount equal
to the product of (i) two (2) multiplied by (ii) the sum of the four Management
Fees calculated with respect to the four Fiscal Quarters immediately preceding
such Termination Fee Date.

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     “Termination Fee Date” means the date upon which this Agreement is
terminated pursuant to an event described in Section 9.2(a) hereof.
     “Third Party Indebtedness” means, with respect to any Person, Indebtedness
of such Person owed to any lenders or other creditors that are not Affiliated
with such Person.
     “Transaction Fee” has the meaning set forth in Section 3.6 hereof.
     “Transaction Services” has the meaning set forth in Section 3.6 hereof.
     “Transaction Services Agreements” has the meaning set forth in Section 3.6
hereof.
     “Trust” means Compass Diversified Trust, which holds one hundred percent
(100%) of the Trust Interest in the Company.
     “Trust Certificate” means the certificates representing Trust Shares.
     “Trust Interest” means the trust interests of the Company as provided for
and described in the LLC Agreement.
     “Trust Shares” means the shares of beneficial interest of the Trust where
each such share represents an undivided beneficial interest in one Trust
Interest; provided, that in the event that all outstanding shares of beneficial
interest of the Trust are exchanged for Trust Interests in accordance with the
terms of the LLC Agreement, all references herein to “Trust Shares” shall
automatically be deemed to refer to Trust Interests upon such exchange.
     “Under-Paid Management Fees” means, as of any Calculation Date, the amount
by which (i) Adjusted Management Fees that were actually due and payable by the
Company on all Management Fee Payment Dates preceding such Calculation Date, as
determined by the MSA Administrator upon availability of the Company’s final
consolidated financial statements in accordance with in Section 7.2(e) exceeded
(ii) Adjusted Management Fees that were actually paid on all such Management Fee
Payment Dates; provided, that such amount shall not be less than zero.
ARTICLE II
APPOINTMENT OF THE MANAGER
Section 2.1 Appointment
     The Company hereby agrees to, and hereby do, appoint the Manager to perform
the Services as set forth in Section 3.1 herein and in accordance with the terms
of this Agreement.
Section 2.2 Term
     The Manager shall provide Services to the Company from the Commencement
Date until the termination of this Agreement in accordance with Article IX
hereof.

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ARTICLE III
OBLIGATIONS OF THE PARTIES
Section 3.1 Obligations of the Manager
     (a) Subject always to the oversight and supervision of the Board of
Directors of the Company and the terms and conditions of this Agreement, the
Manager shall during the term of this Agreement (i) perform the Services as set
forth in Section 3.1(b) below and (ii) comply with the provisions of the LLC
Agreement, as amended from time to time, and the operational objectives and
business plans of the Company in existence from time to time. The Company shall
promptly provide the Manager with all amendments to the LLC Agreement and all
stated operational objectives and business plans of the Company approved by the
Board of Directors of the Company and any other available information reasonably
requested by the Manager.
     (b) Subject to Sections 3.4 and 3.6 hereof and Article VII, the Manager
agrees and covenants that it shall perform the following services (as may be
modified from time to time pursuant to Section 3.5 hereof, the “Services”):
     (i) manage the Company’s day-to-day business and operations, including
managing its liquidity and capital resources and causing the Company to comply
with applicable law;
     (ii) identify, evaluate, manage, perform due diligence on, negotiate and
oversee the acquisitions of target businesses by the Company and any other
investments of the Company;
     (iii) evaluate, manage, negotiate and oversee the disposition of all or any
part of the property, assets or investments of the Company, including
dispositions of all or any part of the Company’s Subsidiaries;
     (iv) evaluate and oversee the financial and operational performance of any
of the Company’s Subsidiaries, including monitoring the business and operations
thereof, and the financial performance of any of the Company’s other
investments;
     (v) provide, on the Company’s behalf, managerial assistance to its
Subsidiaries;
     (vi) provide or second, as determined necessary by the Manager and in
accordance with the terms and conditions of this Agreement and the LLC
Agreement, employees of the Manager to serve as executive officers or other
employees of the Company or as members of the Company’s Board of Directors; and
     (vii) perform any other services for and on behalf of the Company to the
extent that such services are consistent with those that are customarily
performed by the executive officers and employees of a publicly listed or quoted
Person.

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The foregoing Services shall include, but are not limited to, the following:
(1) establishing and maintaining books and records of the company in accordance
with customary practice and GAAP; (2) recommend to the Company’s Board of
Directors (x) capital raising activities, including the issuance of debt or
equity securities of the Company, the entry into credit facilities or other
credit arrangements, structured financings or other capital market transactions,
(y) changes or other modifications in the capital structure of the Company,
including repurchases; (3) recommend to the Company’s Board of Directors the
engagement of or, if approval is not otherwise required hereunder, engage
agents, consultants or other third party service providers to the Company,
including accountants, lawyers or experts, in each case, as may be necessary by
the Company from time to time; (4) maintain the Company’s property and assets in
the Ordinary Course of Business; (5) make recommendations to the Company’s Board
of Directors with respect to the exercise of voting rights to which the Company
is entitled to vote in respect of its investments; (6) manage or oversee
litigation, administrative or regulatory proceedings, investigations or any
other reviews of the Company’s business or operations that may arise in the
Ordinary Course of Business or otherwise, subject to the approval of the
Company’s Board of Directors to the extent necessary in connection with the
settlement, compromise, consent to the entry of an order or judgment or other
agreement resolving any of the foregoing; (7) establish and maintain appropriate
insurance policies with respect to the Company’s business and operations;
(8) recommend to the Company’s Board of Directors the payment of dividends or
other distributions on the equity interests of the Company; and (9) attend to
the timely calculation and payment of taxes payable, and the filing of all taxes
return due, by the Company.
     (c) In connection with the performance of its obligations under this
Agreement, the Manager shall be required to obtain authorization and approval of
the Company’s Board of Directors in accordance with the Company’s internal
policy regarding action requiring Board of Directors approval, as otherwise
required by any such Board of Directors (or any applicable committee thereof) or
the Company’s officers or as otherwise required by applicable law.
     (d) In connection with the performance of the Services under this
Agreement, the Manager shall have all necessary power and authority to perform,
or cause to be performed, such Services on behalf of the Company.
     (e) In connection with the performance of its obligations under this
Agreement, the Manager is not permitted to engage in any activities that would
cause it to become an “investment adviser” as defined in Section 202(a)(11) of
the Investment Advisers Act, or any successor provision thereto.
     (f) While the Manager is providing the Services under this Agreement, the
Manager shall also be permitted to provide services, including services similar
to the Services covered hereby, to other Persons, including Affiliates of the
Manager. This Agreement and the Manager’s obligation to provide the Services
under this Agreement shall not create an exclusive relationship between the
Manager and its Affiliates, on the one hand, and the Company and its
Subsidiaries, on the other.

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Section 3.2 Obligations of the Company
     (a) The Company shall, and the Company shall cause its Subsidiaries to, do
all things reasonably necessary on their part as requested by the Manager
consistent with the terms of this Agreement to enable the Company to fulfill its
obligations under this Agreement.
     (b) The Company shall, and the Company shall cause its Subsidiaries to,
take reasonable steps to ensure that:
     (i) their officers and employees, and the officers and employees of their
Subsidiaries, act in accordance with the terms of this Agreement and the
reasonable directions of the Manager in fulfilling the Manager’s obligations
hereunder and allowing the Manager to exercise its powers and rights hereunder;
and
     (ii) the Company and its Subsidiaries provide to the Manager all reports
(including monthly management reports and all other relevant reports), which the
Manager may reasonably require and on such dates as the Manager may reasonably
require.
     (c) Without the prior written consent of the Manager, the Company shall not
amend any provision of the LLC Agreement that adversely affects, either directly
or indirectly, the rights of the Manager hereunder.
     (d) The Company agrees that, in connection with the performance by the
Manager of its obligations hereunder, the Manager may recommend to the Company,
and on behalf of the Company may engage in, transactions with any of the
Manager’s Affiliates; provided, that any such transactions shall be subject to
the authorization and approval of the Company’s nominating and corporate
governance committee.
     (e) The Company shall maintain a Board of Directors consisting of a
majority of Independent Directors.
     (f) The Company shall take any and all actions necessary to ensure that it
does not become an “investment company” as defined in Section 3(a)(1) of the
Investment Company Act, or any successor provision thereto.
Section 3.3 Acquisition and Disposition Opportunities
     (a) The Company agrees that the Manager shall have, and do hereby grant to
the Manager, exclusive responsibility for reviewing and making recommendations
to the Company’s Board of Directors with respect to acquisition and disposition
opportunities. In the event that any such opportunity is not originated by the
Manager, the Company’s Board of Directors shall seek a recommendation from the
Manager prior to making any decision concerning such opportunity.
     (b) In the case of any acquisition or disposition opportunity that involves
an Affiliate of the Manager or the Company, the Company’s nominating and
corporate governance committee shall be required to authorize and approve such
transaction.
     (c) The Manager shall review each acquisition or disposition opportunity
presented to the Manager to determine, in its sole discretion, if such
acquisition or disposition opportunity satisfies the Company’s acquisition
criteria, as established by the Company’s Board of Directors from time to time.
If the Manager determines, in its sole discretion, if such an opportunity
satisfies such criteria, the Manager shall refer such opportunity to the
Company’s Board of Directors for its authorization and approval prior to any
consummation thereof.

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     (d) In the event that an acquisition opportunity is referred to the
Company’s Board of Directors by the Manager and the Company’s Board of Directors
determines not to promptly pursue such opportunity in whole or in part, any part
of such opportunity that the Company does not promptly pursue may be pursued by
the Manager or may be referred by the Manager to any Person, including
Affiliates of the Manager, in the sole discretion of the Manager.
Section 3.4 Offsetting Management Services
     Notwithstanding anything else to the contrary herein, the Company agrees
that the Manager may, at any time, enter into management services agreements
with any one or more of the Subsidiaries of the Company (“Offsetting Management
Services Agreement”), including by assignment thereof, relating to the
performance by the Manager of management services for such Subsidiaries of the
Company that may or may not be similar to Services to be provided hereunder
(“Offsetting Management Services”); provided, that such Offsetting Management
Services Agreement shall be designated as such therein; provided, further, that
any Offsetting Management Services provided to a Subsidiary of the Company
pursuant to an Offsetting Management Services Agreement shall not be deemed to
be Services provided hereunder. Any fee to be paid pursuant to such an
Offsetting Management Services Agreement (“Offsetting Management Fee”) shall be
paid directly by the relevant Subsidiary of the Company to the Manager and shall
not be deemed an obligation of the Company. Notwithstanding anything else to the
contrary in any Offsetting Management Services Agreement, the Parties hereto
agree (i) to use commercially reasonable efforts so that Offsetting Management
Fees to be paid with respect to any Fiscal Quarter shall be paid at a time so as
to permit such Offsetting Management Fees to be utilized for adjustment in
accordance Section 7.2(c) hereof with respect to such Fiscal Quarter and
(ii) that the aggregate amount of all Offsetting Management Fees to be paid by
all of the Subsidiaries of the Company with respect to any Fiscal Quarter shall
not exceed the aggregate amount of the Management Fee calculated with respect to
such Fiscal Quarter; provided, that if the aggregate amount of all Offsetting
Management Fees to be paid by all of the Subsidiaries of the Company with
respect to any Fiscal Quarter exceed the aggregate amount of Management Fee
calculated with respect to such Fiscal Quarter, then the Manager agrees that it
shall reduce, on a pro rata basis, the Offsetting Management Fees to be paid by
each of the Subsidiaries of the Company under each of the Offsetting Management
Agreements, determined by reference to the Adjusted Net Assets of each of the
Subsidiaries of the Company, until the aggregate amount of all Offsetting
Management Fees to be paid by all of the Subsidiaries of the Company with
respect to any Fiscal Quarter does not exceed the aggregate amount of Management
Fee calculated with respect to such Fiscal Quarter. Each such Offsetting
Management Services Agreement shall be terminable, without penalty (including a
termination fee), by the relevant Subsidiary of the Company upon 30 days prior
written notice. Entry into an Offsetting Management Services Agreement by any
Subsidiary of the Company shall not be subject to authorization and approval of
the Company’s nominating and corporate governance committee.
Section 3.5 Change of Services

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     (a) The Company and the Manager shall have the right at any time during the
term of this Agreement to change the Services provided by the Manager and such
changes shall in no way otherwise affect the rights or obligations of any Party
hereunder.
     (b) Any change in the Services shall be authorized in writing and evidenced
by an amendment to this Agreement, as provided in Section 13.9 hereof. Unless
otherwise agreed in writing, the provisions of this Agreement shall apply to all
changes in the Services.
Section 3.6 Transaction Services
     Notwithstanding anything else to the contrary herein, the Company agrees
that the Manager may, at any time, enter into transaction services agreements
with one or more of its Subsidiaries (“Transaction Services Agreements”)
relating to the performance by the Manager of certain transaction-related
services that are customarily performed by a third-party investment banking firm
or similar financial advisor, which may or may not be similar to Services to be
provided hereunder, in connection with the acquisition of target businesses by
the Company or the Company’s Subsidiaries or dispositions of Subsidiaries of the
Company or any property or assets of the Company or its Subsidiaries
(“Transaction Services”); provided, that such Transaction Services Agreement
shall be designated as such therein; provided, further, that any Transaction
Services provided to the Company’s Subsidiaries pursuant to Transaction Services
Agreements shall not be deemed to be Services provided hereunder. The Manager
shall contract for the performance of such Transaction Services on market terms
and conditions. Entry into a Transaction Services Agreement shall be subject to
the authorization and approval of the Company’s nominating and corporate
governance committee, and the Company’s nominating and corporate governance
committee shall have the right to take whatever measures they deem prudent to
confirm the market terms of any Transaction Services Agreement. Any fee to be
paid pursuant to a Transaction Services Agreement (the “Transaction Fee”) shall
be paid by the relevant Subsidiary of the Company that is a party to the
corresponding Transaction Services Agreement directly to the Manager.
Transaction Fees are not Offsetting Management Fees and shall not have the
effect of Offsetting Management Fees as provided herein. Any Transaction
Services Agreement may also provide for the reimbursement of costs and expenses
of the Manager in the performance of any Transaction Services, including costs
and expenses referenced in Section 7.3(b)(iii) hereof.
Section 3.7 License
     (a) The Manager hereby grants the Company, subject to the terms and
conditions of this Agreement, a non-exclusive, royalty-free right to use the
following trademarked names (“Manager Marks”) in connection with its business
and operations or as may be required to comply with applicable law:

  (i)   Compass Diversified Trust     (ii)   Compass Group Diversified Holdings
    (iii)   www.compassdiversifiedtrust.com     (iv)   www.compasstrust.com

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Notwithstanding the foregoing, the Company shall be permitted to (i) sublicense
the use, on any terms and conditions consistent and coextensive with this
Section 3.7, of any of the Manager Marks to the Trust to use in connection with
its business and operations or as may be required to comply with applicable law
and (ii) sublicense the use, on any terms and conditions consistent and
co-extensive with this Section 3.7, of any of the Manager Marks to any of the
Company’s Subsidiaries to use in connection with its business and operations or
as may be required to comply with applicable law.
     (b) The Company agrees to notify the Manager promptly upon notice of
(a) any conflicting uses of, or any applications of or registrations for, a
trademark, service mark or logo that may conflict with the Manager Marks,
(b) any acts of infringement or unfair competition involving the Manager Marks
or (c) any allegations that the use of the Manager Marks by the Company or any
of its Affiliates infringe upon the trademark or service mark or other rights,
including without limitation, rights relating to unfair competition of any other
Person.
     (c) The Manager shall have the sole right to initiate any opposition,
cancellation or infringement proceedings necessary to enforce the Manager Marks.
The Manager shall have the right to include the Company or its Affiliates as a
party in any such enforcement proceedings where necessary, and the Company
agrees to join in such proceedings, at the Manager’s sole cost and expense as a
voluntary plaintiff or claimant upon request of the Manager, and the Company
shall cooperate with the Manager in such proceedings, at the Manager’s sole cost
and expense. The Manager shall have the sole right to control and settle any
such proceedings.
ARTICLE IV
POWERS OF THE MANAGER
Section 4.1 Powers of the Manager
     (a) The Manager shall have no power to enter into any contract for or on
behalf of the Company or otherwise subject it to any obligation, such power to
be the sole right and obligation of the Company, acting through its Board of
Directors and/or the Company Officers.
     (b) Subject to Section 4.2 and for purposes other than to delegate its
duties and powers to perform the Services hereunder, the Manager shall have the
power to engage any agents (including real estate agents and managing agents),
valuers, contractors and advisors (including accounting, financial, tax and
legal advisors) that it deems necessary or desirable in connection with the
performance of its obligations hereunder, which costs therefor shall be subject
to reimbursement in accordance with Section 7.3 hereto.
Section 4.2 Delegation
     The Manager may delegate or appoint:
     (a) Any of its Affiliates as its agent, at its own cost and expense, to
perform any or all of the Services hereunder; or

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     (b) Any other Person, whether or not an Affiliate of the Manager, as its
agent, at its own cost and expense, to perform those Services hereunder which,
in the sole discretion of the Manager, are not critical to the ability of the
Manager to satisfy its obligations hereunder;
provided, however, that, in each case, the Manager shall not be relieved of any
of its obligations or duties owed to the Company hereunder as a result of such
delegation. The Manager shall be permitted to share Company information with its
appointed agents subject to appropriate and reasonable confidentiality
arrangements. For the avoidance of doubt, any reference to Manager herein shall
include its delegates or appointees pursuant to this Section 4.2.
Section 4.3 Manager’s Obligations, Duties and Powers Exclusive
     The Company agrees that during the term of this Agreement, the obligations,
duties and powers imposed on and granted to the Manager under Article III and
this Article IV are to be performed or held exclusively by the Manager or its
delegates and the Company shall not, through the exercise of the powers of their
employees, Boards of Directors or their shareholders or members, as the case may
be, perform any of the Services except in circumstances where it is necessary to
do so to comply with applicable law or as otherwise agreed to or delegated, in
accordance with Section 4.2 hereof, by the Manager in writing.
ARTICLE V
INSPECTION OF RECORDS
Section 5.1 Books and Records of the Company
     At all reasonable times and on reasonable notice, the Manager and any
Person authorized by the Manager shall have access to, and the right to inspect,
for any reasonable purpose, during the term of this Agreement and for a period
of five (5) years after termination hereof, the books, records and data stored
in computers and all documentation of the Company pertaining to all Services
performed by the Manager or the Management Fee to be paid by the Company to the
Manager, in each case, hereunder. There shall be no cost or expense charged by
any Party to another Party pursuant to the exercise of rights under this
Section 5.1.
Section 5.2 Books and Records of the Manager
     At all reasonable times and on reasonable notice, any Person authorized by
the Company shall have access to, and the right to inspect the books, records
and data stored in computers and all documentation of the Manager pertaining to
all Services performed by the Manager or the Management Fee to be paid by the
Company to the Manager, in each case, hereunder. There shall be no cost or
expense charged by any Party to another Party pursuant to the exercise of rights
under this Section 5.2.

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ARTICLE VI
AUTHORITY OF THE COMPANY
AND THE MANAGER
     Each Party represents to the others that it is duly authorized with full
power and authority to execute, deliver and perform its obligations and duties
under this Agreement. The Company represents that the engagement of the Manager
has been duly authorized by the Board of Directors of the Company and is in
accordance with all governing documents of the Company.
ARTICLE VII
MANAGEMENT FEE; EXPENSES
Section 7.1 IPO Expenses
     The Company agrees to reimburse the Manager and its Affiliates, within five
(5) Business Days after the Commencement Date, for certain costs and expenses
Incurred or to be Incurred prior to and in connection with the IPO upon the
provision of reasonably sufficient support for such reimbursement. Any such
reimbursement shall be made in U.S. dollars by wire transfer in immediately
available funds to an account or accounts designated by the Manager from time to
time.
Section 7.2 Management Fee
     (a) Obligation. Subject to the terms and conditions set forth in this
Section 7.2, for the term of this Agreement, (i) the MSA Administrator shall
calculate the fee payable to the Manager in accordance with this Section 7.2
(the “Management Fee”), and the components thereof, in accordance with
Section 7.2(b) hereof and (ii) the Company shall pay the Management Fee to the
Manager in accordance with Section 7.2(d) hereof.
     (b) Calculation of Management Fee. Subject to Section 7.2(e) hereof, as
payment to the Manager for performing Services hereunder during any Fiscal
Quarter or any part thereof, the MSA Administrator, as of any Calculation Date
with respect to such Fiscal Quarter, shall calculate, on or promptly following
such Calculation Date, the Management Fee with respect to such Fiscal Quarter,
which shall be equal to, as of such Calculation Date, the product of (i) 0.5%,
multiplied by (ii) Adjusted Net Assets as of such Calculation Date; provided,
however, that, with respect to the Fiscal Quarter in which the Commencement Date
occurs, the Management Fee shall be equal to the product of (i)(x) 0.5%,
multiplied by (y) the Adjusted Net Assets as of such Calculation Date,
multiplied by (ii) a fraction, the numerator of which is the number of days from
and including the Commencement Date to and including the last day of such Fiscal
Quarter and the denominator of which is the number of days in such Fiscal
Quarter; provided, further, however, that, with respect to the Fiscal Quarter in
which this Agreement is terminated, the Management Fee shall be equal to the
product of (i)(x) 0.5%, multiplied by (y) the Adjusted Net Assets as of such
Calculation Date, multiplied by (ii) a fraction, the numerator of which is the
number of days from and including the first day of such Fiscal Quarter to but
excluding the date upon which this Agreement is terminated and the denominator
of which is the number of days in such Fiscal Quarter (such amount so calculated
in accordance with this proviso, the “Final Management Fee”).

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     (c) Adjustment of Management Fee. The amount of any Management Fee
calculated in accordance with Section 7.2(b) hereof as of any Calculation Date
shall be adjusted, on a dollar-for-dollar basis (such Management Fee, as
adjusted, the “Adjusted Management Fee”), by the MSA Administrator immediately
prior to the Management Fee Payment Date with respect to such Calculation Date
(such date of adjustment, the “Adjustment Date”) as follows:
     (i) reduced, on a dollar-for-dollar basis, by the aggregate amount of all
Offsetting Management Fees, if any, received by the Manager from any of the
Subsidiaries of the Company with respect to such Fiscal Quarter as of the date
of such adjustment;
     (ii) reduced, on a dollar-for-dollar basis, by the aggregate amount of all
Over-Paid Management Fees, if any, existing as of such Calculation Date;
     (iii) increased, on a dollar-for-dollar basis, by the aggregate amount of
all Under-Paid Management Fees, if any, existing as of such Calculation Date;
and
     (iv) increased, on a dollar-for-dollar basis, by the aggregate amount of
all accrued and unpaid Management Fees, if any, as of such Calculation Date,
without duplication of any of the foregoing.
     (d) Payment of Adjusted Management Fee. Subject to Section 7.2(f) hereof,
the Company shall pay to the Manager, on the Management Fee Payment Date with
respect to any Calculation Date, the Adjusted Management Fee as of such
Calculation Date. Any such payment shall be made in U.S. dollars by wire
transfer in immediately available funds to an account or accounts designated by
the Manager from time to time.
     (e) Basis for Calculation of Management Fee and Adjusted Management Fee.
The calculation of Management Fee, including the components thereof, with
respect to any Fiscal Quarter on any Calculation Date shall be based on (i) the
Company’s audited consolidated financial statements to the extent available,
(ii) if audited consolidated financial statements are not available, then the
Company’s unaudited consolidated financial statements to the extent available,
and (iii) if neither audited nor unaudited consolidated financial statements are
available, then the Company’s books and records then available; provided, that,
with respect to any calculation of the Management Fee based on the Company’s
books and records, upon availability of the earlier of (x) the Company’s audited
consolidated financial statements and (y) the Company’s unaudited consolidated
financial statements, in each case, relating to amounts previously calculated on
such Calculation Date by reference to the Company’s books and records, the MSA
Administrator shall recalculate (A) any Management Fees, and any components
thereof, that were previously calculated based on such books and records and
(B) any Adjusted Management Fees that were calculated based on such Management
Fees, in each case, to determine if any Over-Paid Management Fee or Under-Paid
Management Fee were outstanding as of such Calculation Date; provided, further,
that the amount so recalculated shall be conclusive and binding on the Parties
hereto and no further recalculations shall be required or

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permitted except that a further recalculation shall be required and performed
(A) upon a demonstration of clear error with respect to any prior calculation or
recalculation or (B) upon the restatement of the consolidated financial
statements of the Company, or any amounts therein, underlying any prior
calculation or recalculation, in each case, at any time. The calculation of
Adjusted Management Fees, including the components thereof, as of any Adjustment
Date shall be made based on information that is available as of such Adjustment
Date; provided, that if any events, including the payment of Offsetting
Management Fees, occur after such Adjustment Date that would affect the amount
of Adjusted Management Fees calculated as of such Adjustment Date, then the MSA
Administrator shall recalculate Adjusted Management Fees as of such Adjustment
Date to determine if any Over-Paid Management Fee or Under-Paid Management Fee
were created as of the Calculation Date immediately succeeding such Adjustment
Date. Notwithstanding the foregoing, the calculation of the Final Management
Fee, including the components thereof, shall be made and based on the Company’s
unaudited consolidated financial statements for the applicable Fiscal Quarter
when such unaudited consolidated financial statements are available; provided,
that, once calculated, no further recalculation of Final Management Fee shall be
required or permitted.
     (f) Sufficient Liquidity. If the Company does not have sufficient liquid
assets to timely pay the entire amount of the Management Fee due on any
Management Fee Payment Date, the Company shall liquidate assets or Incur
Indebtedness in order to pay such Management Fee in full on such Management Fee
Payment Date; provided, that the Manager may elect, in its sole discretion by
delivery of written notice to the Company prior to such Management Fee Payment
Date, to allow the Company to defer the payment of all or any portion of the
Management Fee otherwise due and payable on such Management Fee Payment Date
until the next succeeding Management Fee Payment Date and, thereby, enable the
Company to avoid such liquidation or Incurrence. For the avoidance of doubt, the
Manager may make such election to allow the Company to defer the payment of
Management Fees more than once.
     (g) Books and Records. The MSA Administrator shall maintain cumulative
books and records with respect to the details of any calculations made pursuant
to this Section 7.2, which records shall be available for inspection and
reproduction at any time upon request by the Board of Directors of the Company
and, if the Manager is not the MSA Administrator, the Manager.
Section 7.3 Reimbursement of Expenses
     (a) Subject to Sections 7.1 and 8.2 hereof, the Company shall reimburse the
Manager for the following amounts that are actually Incurred by the Manager
during the term of this Agreement:
          (i) all costs and expenses of the Company that are Incurred by the
Manager or its Affiliates on behalf of the Company, including all out-of-pocket
costs and expenses Incurred in connection with performing Services hereunder,
and all costs and expenses the reimbursement of which is specifically approved
by the Board of Directors of the Company; and

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          (ii) the compensation and other costs and expenses of the Chief
Financial Officer and his or her staff, as approved by the Company’s
compensation committee.
     (b) Notwithstanding the foregoing or anything else to the contrary herein,
none of the Company, any Subsidiary of the Company or their Subsidiaries shall
be obligated or responsible for reimbursing or otherwise paying for any costs or
expenses relating to (i) the Manager’s overhead or any other costs and expenses
relating to the Manager’s conduct or maintenance of its business and operations
as a provider of services, (ii) costs and expenses Incurred by the Manager in
connection with the identification, evaluation, management, performance of due
diligence on, negotiating and oversight of potential acquisitions by the Company
where the Company (or the Manager on behalf of the Company) does not submit an
indication of interest or letter of intent to pursue such potential acquisition,
including costs and expenses relating to travel, marketing and attendance at
industry events and retention of outside service providers relating thereto and
(iii) costs and expenses Incurred by the Manager in connection with the
identification, evaluation, management, performance of due diligence on,
negotiating and oversight of an acquisition by the Company if both (x) such
acquisition is actually closed by the Company and (y) the Subsidiary so
acquired, by any manner whatsoever, in connection with such acquisition has
entered into a Transaction Services Agreement with the Manager under which such
costs and expenses are being reimbursed.
     (c) Any such reimbursement shall be made upon demand by the Manager in U.S.
dollars by wire transfer in immediately available funds to an account or
accounts designated by the Manager from time to time.
     (d) Except as otherwise provided for in this Section 7.3, all
reimbursements made pursuant to this Section 7.3 shall be reviewed by the
Company’s compensation committee on an annual basis in connection with the
preparation of the Company’s year-end audited consolidated financial statements.
If the Company’s compensation committee identifies any discrepancy in such
reimbursements, then the Company’s compensation committee, on behalf of the
Company, and the Manager shall mutually resolve such discrepancy.
ARTICLE VIII
SECONDMENT OF OFFICERS BY THE MANAGER
Section 8.1 Secondment of the Chief Executive Officer and Chief Financial
Officer
     The Manager shall second to the Company individuals to serve as the
Company’s Chief Executive Officer and Chief Financial Officer. The Company’s
Board of Directors shall elect the seconded Chief Executive Officer and Chief
Financial Officer as officers of the Company in accordance with the terms of the
LLC Agreement and the operational objectives and business plans of the Company
in existence from time to time. The seconded Chief Executive Officer and Chief
Financial Officer shall report directly, and be subject, to the Company’s Board
of Directors.

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Section 8.2 Remuneration of the Chief Executive Officer and Chief Financial
Officer

     (a) The Chief Executive Officer and Chief Financial Officer seconded to the
Company pursuant to this Article VIII shall, at all times, remain employees of,
and be remunerated by, the Manager or an Affiliate of the Manager.
     (b) Except as set forth in Section 8.2(c) hereof, the Services performed
for the Company by the Chief Executive Officer and all other personnel, if any,
of the Manager or its Affiliates shall be provided at the cost of the Manager or
an Affiliate of the Manager. For the avoidance of doubt, except as set forth in
Section 8.2(c) hereof, the Company shall have no obligation to reimburse the
Manager for the compensation and other expenses of any employees,
representatives, delegates and seconded officers of the Manager and its
Affiliates.
     (c) The Services performed by the Chief Financial Officer and his or her
staff shall be provided at the cost of the Manager or an Affiliate of the
Manager and reimbursed by the Company pursuant to Section 7.3 of this Agreement.
     (d) The remuneration of the Chief Financial Officer and any member of his
or her staff that serves as an executive officer of the Company, shall be
determined and approved by the Company’s compensation committee upon such
Person’s engagement and on an annual basis thereafter, with each annual
determination and approval occurring in the year prior to the year to which such
remuneration relates by reference to the following:
     (i) The standard remuneration guidelines as adopted by the Company or the
Manager from time to time;
     (ii) The respective individual’s performance, the Manager’s performance and
the performance, financial or otherwise, of the Company and its Subsidiaries;
and
     (iii) The assessment by the Board of Directors of the Company of the
respective individual’s performance and the performance of the Manager.
     (e) The Manager shall disclose the amount of remuneration of the Chief
Financial Officer and any other officer or employee seconded to the Company,
including the Chief Executive Officer, to the Board of Directors of the Company
to the extent required for the Company to comply with the requirements of
applicable law, including the Federal Securities Laws.
Section 8.3 Secondment of Additional Officers
     The Manager and the Company’s Board of Directors may agree from time to
time that the Manager shall second to the Company one or more additional
individuals to serve as officers or otherwise of the Company, upon such terms as
the Manager and the Company’s Board of Directors may mutually agree. Any such
individuals shall have such titles and fulfill such functions as the Manager and
the Company may mutually agree.
Section 8.4 Removal of Seconded Officers
     The Company’s Board of Directors, after due consultation with the Manager,
may at any time request that the Manager replace any individual seconded to the
Company as provided in this Article VIII and the Manager shall, as promptly as
practicable, replace any individual with respect to whom the Board of Directors
shall have made its request, subject to the requirements for the election of
officers under the LLC Agreement.

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Section 8.5 Insurance
     The Company agrees it shall maintain adequate directors and officers
insurance for any individuals seconded to the Company, with liability coverage
of no less than $15 million.
ARTICLE IX
TERMINATION; RESIGNATION AND REMOVAL OF THE MANAGER
Section 9.1 Resignation by the Manager
     The Manager may resign and terminate this Agreement at any time with
90 days’ prior written notice to the Company, which right shall not be
contingent upon the finding of a replacement manager. However, if the Manager
resigns, until the date on which the resignation becomes effective, the Manager
shall, upon request of the Company’s Board of Directors, use reasonable efforts
to assist the Company’s Board of Directors to find a replacement manager at no
cost and expense to the Company.
Section 9.2 Removal of the Manager
     The Company’s Board of Directors may terminate this Agreement and the
Manager’s appointment if, at any time:
     (a) (i) a majority of the Company’s Board of Directors vote to terminate
this Agreement and (ii) the holders of at least a majority of the then
outstanding Trust Shares (other than Trust Shares beneficially owned by the
Manager) vote to terminate this Agreement.
     (b) neither I. Joseph Massoud nor his designated successor is the managing
member of the Manager, and such change occurred without the prior written
consent of the Company’s Board of Directors;
     (c) there is a finding by a court of competent jurisdiction in a final,
non-appealable order that (i) the Manager materially breached the terms of this
Agreement and such breach continued unremedied for sixty (60) days after the
Manager received written notice from the Company setting forth the terms of such
breach, or (ii) the Manager (x) acted with gross negligence, willful misconduct,
bad faith or reckless disregard in performing its duties and obligations under
this Agreement or (y) engaged in fraudulent or dishonest acts in connection with
the business and operations of the Company;
     (d) (i) the Manager has been convicted of a felony under Federal or State
law, (ii) the Company’s Board of Directors finds that the Manager is
demonstrably and materially incapable of performing its duties and obligations
under this Agreement, and (iii) the holders of at least sixty-six and two-thirds
percentage (66 2/3%) of then outstanding Trust Shares (other than Trust Shares
beneficially owned by the Manager) vote to terminate this Agreement; or

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     (e) (i) there is a finding by a court of competent jurisdiction that the
Manager has (x) engaged in fraudulent or dishonest acts in connection with the
business or operations of the Company or (y) gross negligence, willful
misconduct, bad faith or reckless disregard in performing its duties and
obligations under this Agreement, and (ii) the holders of at least sixty-six and
two-thirds percentage (66 2/3%) of the then outstanding Trust Shares (other than
Trust Shares beneficially owned by the Manager) vote to terminate this
Agreement.
Section 9.3 Termination
     Subject to Section 13.4, this Agreement shall terminate upon the
resignation or removal of the Manager in accordance with Sections 9.1 or 9.2
hereof.
Section 9.4 Seconded Individuals
     Upon the termination of this Agreement, all seconded officers, including
the Chief Executive Officer and Chief Financial Officer, employees,
representatives and delegates of the Manager and its Affiliates who perform
Services hereunder, shall resign their respective positions with the Company and
cease working on behalf of the Company as of the date of such termination or at
such other time as determined by the Manager. Any Manager appointed director may
continue to serve on the Company’s Board of Directors subject to the terms of
the LLC Agreement.
Section 9.5 Termination of License; Withdrawal of Branding
     If this Agreement is terminated pursuant to Section 9.2 of this Agreement,
the right granted pursuant to Section 3.7 hereof shall terminate within 180 days
of such termination and the Company agrees, and the Company agrees to cause the
Trust and its Subsidiaries, to cease using the term “Compass” or any of the
Manager Marks entirely in its or their business or operations, as the case may
be, within 180 days of such termination, including by changing its name to
remove any reference to the term “Compass” or the Manager Marks; provided, that,
to the extent the Board of Directors of the Company deems it necessary or
advisable, the Manager agrees that the Trust, the Company and the Subsidiaries
of the Company may use the term “Compass” or any of the Manager Marks in
referencing their previous names.
Section 9.6 Directions
     After a written notice of termination has been given under this Article IX,
the Company may direct the Manager to undertake any actions necessary to
transfer any aspect of the ownership or control of the assets of the Company to
the Company or to any nominee of the Company and to do all other things
necessary to bring the appointment of the Manager to an end, and the Manager
shall comply with all such reasonable directions. In addition, the Manager
shall, at the Company’s expense, deliver to any new manager or the Company any
books or records held by the Manager under this Agreement and shall execute and
deliver such instruments and do such things as may reasonably be required to
permit new management of the Company to effectively assume its responsibilities.

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Section 9.7 Payments Upon Termination
(a) Notwithstanding anything in this Agreement to the contrary, the fees, costs
and expenses payable to the Manager pursuant to Article VII hereof shall be
payable to the Manager upon, and with respect to, the termination of this
Agreement pursuant to this Article IX. All payments made pursuant to this
Section 9.7(a) shall be made in accordance with Article VII hereof.
     (b) Upon termination of this Agreement pursuant to the event set forth in
Section 9.2(a) hereof, the Company shall pay the Termination Fee to the Manager.
The Termination Fee shall be payable in eight (8) equal quarterly installments,
with the first such installment being paid on or within five (5) Business Days
of the last day of the Fiscal Quarter in which the Termination Fee Date occurs
and each subsequent installment being paid on or within five (5) Business Days
of the last day of each subsequent Fiscal Quarter, until such time as the
Termination Fee is paid in full to the Manager. Any payments made pursuant to
this Section 9.7(b) shall be made in U.S. dollars by wire transfer in
immediately available funds to an account or accounts designated by the Manager
from time to time.
     (c) Subject to Section 9.7(a) hereof, no termination fee shall be due or
payable by the Company to the Manager upon termination of this Agreement
pursuant to any of the events set forth in Section 9.2(b) to Section 9.2(e)
hereof, inclusive.
ARTICLE X
INDEMNITY
Section 10.1 Indemnity
     The Company shall indemnify, reimburse, defend and hold harmless the
Manager and its successors and permitted assigns, together with their respective
employees, officers, members, managers, directors, agents and representatives
(collectively the “Indemnified Parties”), from and against all losses (including
lost profits), costs, damages, injuries, taxes, penalties, interests, expenses,
obligations, claims and liabilities (joint or severable) of any kind or nature
whatsoever (collectively “Losses”) that are Incurred by such Indemnified Parties
in connection with, relating to or arising out of (i) the breach of any term or
condition of this Agreement, or (ii) the performance of any Services hereunder;
provided, however, that the Company shall not be obligated to indemnify,
reimburse, defend or hold harmless any Indemnified Party for any Losses
Incurred, by such Indemnified Party in connection with, relating to or arising
out of:
     (a) a breach by such Indemnified Party of this Agreement;
     (b) the gross negligence, willful misconduct, bad faith or reckless
disregard of such Indemnified Party in the performance of any Services
hereunder; or
     (c) fraudulent or dishonest acts of such Indemnified Party with respect to
the Company or any of its Subsidiaries.

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     The rights of any Indemnified Party referred to above shall be in addition
to any rights that such Indemnified Party shall otherwise have at law or in
equity.
     Without the prior written consent of the Company, no Indemnified Party
shall settle, compromise or consent to the entry of any judgment in, or
otherwise seek to terminate any, claim, action, proceeding or investigation in
respect of which indemnification could be sought hereunder unless (a) such
Indemnified Party indemnifies the Company from any liabilities arising out of
such claim, action, proceeding or investigation, (b) such settlement, compromise
or consent includes an unconditional release of the Company and Indemnified
Party from all liability arising out of such claim, action, proceeding or
investigation and (c) the parties involved agree that the terms of such
settlement, compromise or consent shall remain confidential.
Section 10.2 Insurance
     The Company agrees it shall maintain adequate insurance in support of the
indemnity obligation set forth in this Article X.
ARTICLE XI
LIMITATION OF LIABILITY OF THE MANAGER
Section 11.1 Limitation of Liability
     The Manager shall not be liable for, and the Company shall not take, or
permit to be taken, any action against the Manager to hold the Manager liable
for, any error of judgment or mistake of law or for any loss suffered by the
Company or its Subsidiaries (including, without limitation, by reason of the
purchase, sale or retention of any security) in connection with the performance
of the Manager’s duties under this Agreement, except for a loss resulting from
gross negligence, willful misconduct, bad faith or reckless disregard on the
part of the Manager in the performance of its duties and obligations under this
Agreement, or its fraudulent or dishonest acts with respect to the Company or
any of its Subsidiaries.
Section 11.2 Reliance of Manager
     The Manager may take and may act and rely upon:
     (a) the opinion or advice of legal counsel, which may be in-house counsel
to the Company or the Manager, any U.S.-based law firm, or other legal counsel
reasonably acceptable to the Board of Directors of the Company, in relation to
the interpretation of this Agreement or any other document (whether statutory or
otherwise) or generally in connection with the Company;
     (b) advice, opinions, statements or information from bankers, accountants,
auditors, valuation consultants and other Persons consulted by the Manager who
are in each case believed by the Manager in good faith to be expert in relation
to the matters upon which they are consulted;
     (c) a document which the Manager believes in good faith to be the original
or a copy of an appointment by the Trust in respect of any Trust Interest or
holder of a Trust Certificate in respect of a share of Trust Shares of a Person
to act as such Person’s agent for any purpose connected with the Company; and

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     (d) any other document provided to the Manager in connection with the
Company upon which it is reasonable for the Manager to rely.
The Manager shall not be liable for anything done, suffered or omitted by it in
good faith in reliance upon such opinion, advice, statement, information or
document.
ARTICLE XII
LEGAL ACTIONS
Section 12.1 Third Party Claims
     (a) The Manager shall notify the Company promptly of any claim made by any
third party in relation to the assets of the Company and shall send to the
Company any notice, claim, summons or writ served on the Manager concerning the
Company.
     (b) The Manager shall not, without the prior written consent of the Board
of Directors of the Company, purport to accept or admit any claims or
liabilities of which it receives notification pursuant to Section 12.1(a) above
on behalf of the Company or make any settlement or compromise with any third
party in respect of the Company.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Obligation of Good Faith; No Fiduciary Duties
     The Manager shall perform its duties under this Agreement in good faith and
for the benefit of the Company. The relationship of the Manager to the Company
is as an independent contractor and nothing in this Agreement shall be construed
to impose on the Manager an express or implied fiduciary duty.
Section 13.2 Binding Effect
     This Agreement shall be binding upon, shall inure to the benefit of and be
enforceable by the Parties hereto and their respective successors and permitted
assigns.
Section 13.3 Compliance
     (a) The Manager shall (and must ensure that each of its officers, agents
and employees) comply with any law, including the Federal Securities Laws and
the securities laws of any applicable jurisdiction and the Nasdaq National
Market (or any successor thereto) rules and regulations, in each case, as in
effect from time to time, to the extent that it concerns the functions of the
Manager under this Agreement.

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     (b) The Manager shall maintain management systems, policies and internal
controls and procedures that reasonably ensure that the Manager and its
employees comply with the terms and conditions of this Agreement, as well as
comply with the internal policies, controls and procedures established by the
Company from time to time, including, without limitation, those relating to
trading policies, conflicts of interest and similar corporate governance
measures.
Section 13.4 Effect of Termination
     This Agreement shall be effective as of the date first above written and
shall continue in full force and effect thereafter until termination hereof in
accordance with Article IX. The obligations of the Company set forth in Articles
VII, IX and X and Sections 8.2(c), 11.1, 13.5, 13.9 and 13.17 hereof shall
survive such termination of this Agreement, subject to applicable law.
Section 13.5 Notices
     Any notice or other communication required or permitted under this
Agreement shall be deemed to have been duly given (i) five (5) Business Days
following deposit in the mails if sent by registered or certified mail, postage
prepaid, (ii) when sent, if sent by facsimile transmission, if receipt thereof
is confirmed by telephone, (iii) when delivered, if delivered personally to the
intended recipient and (iv) two (2) Business Days following deposit with a
nationally recognized overnight courier service, in each case addressed as
follows:
If to the Company, to:
Attention: Chief Executive Officer
Compass Group Diversified Holdings LLC
Sixty One Wilton Road, Second Floor
Westport, CT 06880
Fax: 203-221-8253
with a copy (which shall not constitute notice) to its counsel:
Attention: Cynthia M. Krus
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
Fax: 202-637-3593
If to the Manager, to:
Attention: I. Joseph Massoud
Compass Group Management LLC
Sixty One Wilton Road, Second Floor
Westport, CT 06880
Fax: 203-221-8253
with a copy (which shall not constitute notice) to its counsel:

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Attention: Stephen C. Mahon
Squire Sanders & Dempsey LLP
312 Walnut Street, Suite 3500
Cincinnati, OH 45202
Fax: 513-361-1201
and
Attention: Brian B. Snarr
Morrison Cohen, LLP
909 Third Avenue
New York, NY 10022
Fax: 212-735-8708
or to such other address or facsimile number as any such Party may, from time to
time, designate in writing to all other Parties hereto, and any such
communication shall be deemed to be given, made or served as of the date so
delivered or, in the case of any communication delivered by mail, as of the date
so received.
Section 13.6 Headings
     The headings in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect.
Section 13.7 Applicable Law
     This Agreement, the legal relations between and among the Parties and the
adjudication and the enforcement thereof shall be governed by and interpreted
and construed in accordance with the laws of the State of New York, without
regard to the conflicts of law provisions thereof to the extent such principles
or rules would require or permit the application of the laws of another
jurisdiction.
Section 13.8 Submission to Jurisdiction; Waiver of Jury Trial
     Each of the Parties hereby irrevocably acknowledges and consents that any
legal action or proceeding brought with respect to any of the obligations
arising under or relating to this Agreement may be brought in the courts of the
State of New York, County of New York or in the United Stales District Court for
the Southern District of New York and each of the Parties hereby irrevocably
submits to and accepts with regard to any such action or proceeding, for itself
and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts. Each Party hereby further irrevocably
waives any claim that any such courts lack jurisdiction over such Party, and
agrees not to plead or claim, in any legal action or proceeding with respect to
this Agreement or the transactions contemplated hereby brought in any of the
aforesaid courts, that any such court lacks jurisdiction over such Party. Each
Party irrevocably consents to the service of process in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such party, at its address for notices set forth in
Section 13.5 hereof, such service to become effective ten (10) days after such
mailing.

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Each Party hereby irrevocably waives any objection to such service of process
and further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced hereunder or under any other documents contemplated hereby
that service of process was in any way invalid or ineffective. The foregoing
shall not limit the rights of any Party to serve process in any other manner
permitted by applicable law. The foregoing consents to jurisdiction shall not
constitute general consents to service of process in the State of New York for
any purpose except as provided above and shall not be deemed to confer rights on
any Person other than the respective Parties.
     Each of the Parties hereby waives any right it may have under the laws of
any jurisdiction to commence by publication any legal action or proceeding with
respect this Agreement. To the fullest extent permitted by applicable law, each
of the Parties hereby irrevocably waives the objection which it may now or
hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement in any of the courts referred to in
this Section 13.8 and hereby further irrevocably waives and agrees not to plead
or claim that any such court is not a convenient forum for any such suit, action
or proceeding.
     The Parties agree that any judgment obtained by any Party or its successors
or assigns in any action, suit or proceeding referred to above may, in the
discretion of such Party (or its successors or assigns), be enforced in any
jurisdiction, to the extent permitted by applicable law.
     The Parties agree that the remedy at law for any breach of this Agreement
may be inadequate and that should any dispute arise concerning any matter
hereunder, this Agreement shall be enforceable in a court of equity by an
injunction or a decree of specific performance. Such remedies shall, however, be
cumulative and nonexclusive, and shall be in addition to any other remedies
which the Parties may have.
     Each Party hereby waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of any litigation as
between the Parties directly or indirectly arising out of, under or in
connection with this Agreement or the transactions contemplated hereby or
disputes relating hereto. Each Party (i) certifies that no representative, agent
or attorney of any other Party has represented, expressly or otherwise, that
such other Party would not, in the event of litigation, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other Parties have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 13.8.
Section 13.9 Amendment; Waivers
     No term or condition of this Agreement may be amended, modified or waived
without the prior written consent of the Party against whom such amendment,
modification or waiver will be enforced; provided, that any amendment of
Article VII or section 8.2 hereof shall not be effective as to any Party hereto
unless such amendment was authorized and approved by the Company’s compensation
committee. Any waiver granted hereunder shall be deemed a specific waiver
relating only to the specific event giving rise to such waiver and not as a
general waiver of any term or condition hereof.

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Section 13.10 Remedies to Prevailing Party
     If any action at law or equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys’ fees, costs, and necessary disbursements in addition to any other
relief to which such party may be entitled.
Section 13.11 Severability
     Each provision of this Agreement is intended to be severable from the
others so that if, any provision or term hereof is illegal, invalid or
unenforceable for any reason whatsoever, such illegality, invalidity or
unenforceability shall not affect or impair the validity of the remaining
provisions and terms hereof; provided, however, that the provisions governing
payment of the Management Fee described in Article VII hereof are not severable.
Section 13.12 Benefits Only to Parties
     Nothing expressed by or mentioned in this Agreement is intended or shall be
construed to give any Person other than the Parties and their respective
successors or permitted assigns, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained, this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the Parties and their respective
successors and permitted assigns, and for the benefit of no other Person.
Section 13.13 Further Assurances
     Each Party hereto shall take any and all such actions, and execute and
deliver such further agreements, consents, instruments and any other documents
as may be necessary from time to time to give effect to the provisions and
purposes of this Agreement.
Section 13.14 No Strict Construction
     The Parties have participated jointly in the negotiation and drafting of
this Agreement. In the event any ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by all Parties, and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any provision of this
Agreement.
Section 13.15 Entire Agreement
     This Agreement constitutes the sole and entire agreement of the Parties
with regards to the subject matter of this Agreement. Any written or oral
agreements, statements, promises, negotiations or representations not expressly
set forth in this Agreement are of no force and effect.
Section 13.16 Assignment
     This Agreement shall not be assignable by either party except by the
Manager to any Person with which the Manager may merge or consolidate or to
which the Manager transfers substantially all of its assets, and then only in
the event that such assignee assumes all of the obligations to the Company and
the Subsidiaries of the Company hereunder.

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Section 13.17 Confidentiality
     (a) The Manager shall not, and the Manager shall cause its Affiliates and
their respective agents and representatives not to, at any time from and after
the date of this Agreement, directly or indirectly, disclose or use any
confidential or proprietary information involving or relating to (x) the
Company, including any information contained in the books and records of the
Company and (y) the Company’s Subsidiaries, including any information contained
in the books and records of any such Subsidiaries; provided, however, that
disclosure and use of any information shall be permitted (i) with the prior
written consent of the Company, (ii) as, and to the extent, expressly permitted
by this Agreement, any Offsetting Management Services Agreement, any Transaction
Services Agreement or any other agreement between the Manager and the Company or
any of the Company’s Subsidiaries (but only to the extent that such information
relates to such Subsidiaries), (iii) as, and solely to the extent, necessary or
required for the performance by the Manager, any of its Affiliates or its
delegates of any of their respective obligations under this Agreement, (iv) as,
and to the extent, necessary or required in the operation of the Company’s
business or operations in the Ordinary Course of Business, (v) to the extent
such information is generally available to, or known by, the public or otherwise
has entered the public domain (other than as a result of disclosure in violation
of this Section 13.17 by the Manager or any of its Affiliates), (vi) as, and to
the extent, necessary or required by any governmental order, applicable law or
any governmental authority, subject to Section 13.17(d), and (vii) as, and to
the extent, necessary or required or reasonably appropriate in connection with
the enforcement of any right or remedy relating to this Agreement, any
Offsetting Management Services Agreement, any Transaction Services Agreement or
any other agreement between the Manager and the Company or any of the Company’s
Subsidiaries.
     (b) The Manager shall produce and implement policies and procedures that
are reasonably designed to ensure compliance by the Manager’s directors,
officers, employees, agents and representatives with the requirements of this
Section 13.17.
     (c) For the avoidance of doubt, confidential information includes business
plans, financial information, operational information, strategic information,
legal strategies or legal analysis, formulas, production processes, lists,
names, research, marketing, sales information and any other information similar
to any of the foregoing or serving a purpose similar to any of the foregoing
with respect to the business or operations of the Company or any of its
Subsidiaries. However, the Parties are not required to mark or otherwise
designate information as “confidential or proprietary information,”
“confidential” or “proprietary” in order to receive the benefits of this Section
13.17.
     (d) In the event that the Manager is required by governmental order,
applicable law or any governmental authority to disclose any confidential
information of the Company or any of its Subsidiaries that is subject to the
restrictions of this Section 13.17, the Manager shall (i) notify the Company or
any of its Subsidiaries in writing as soon as possible, unless it is otherwise
affirmatively prohibited by such governmental order, applicable law or such
governmental authority from notifying the Company or any such Subsidiaries, as
the case may be, (ii) cooperate with the Company or any such Subsidiaries to
preserve the confidentiality of such confidential information consistent with
the requirements of such governmental order, applicable law or such governmental
authority and (iii) use its reasonable best efforts to limit any such disclosure
to the minimum disclosure necessary or required to comply with such governmental
order, applicable law or such governmental authority, in each case, at the cost
and expense of the Company.

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     (e) Nothing in this Section 13.17 shall prohibit the Manager from keeping
or maintaining any copies of any records, documents or other information that
may contain information that is otherwise subject to the requirements of this
Section 13.17, subject to its compliance with this Section 13.17.
     (f) The Manager shall be responsible for any breach or violation of the
requirements of this Section 13.17 by any of its agents or representatives.
Section 13.18 Counterparts
     This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
but one and the same instrument.

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IN WITNESS WHEREOF, the Parties have executed this amended Agreement as of
November 8, 2006,

                  COMPASS GROUP MANAGEMENT LLC    
 
           
 
  By: :
Name:   /s/ I. Joseph Massoud
 
I. Joseph Massoud    
 
  Title:   Managing Member    
 
                COMPASS GROUP DIVERSIFIED HOLDINGS LLC    
 
           
 
  By:
Name:   /s/ James J. Bottiglieri
 
James J. Bottiglieri    
 
  Title:   Chief Financial Officer    

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