exv10w17



 




Exhibit
10.17



EXECUTION COPY




MANAGEMENT SERVICES AGREEMENT




     THIS MANAGEMENT SERVICES AGREEMENT (this “Agreement”) is made as of this 10th day of February,
2004 by and between Crosman Corporation, a Delaware corporation with offices at Routes 5 & 20, East
Bloomfield, NY 14443 (the “Company”) and Kilgore Consulting III LLC, a Connecticut limited
liability company with offices at 61 Wilton Road, Westport, Connecticut 06880 (“Kilgore”).



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I T N E S S E
T H




     WHEREAS, the Company is engaged in the business of designing, manufacturing and
selling sporting goods equipment (the “Business”); and



     WHEREAS, the Company desires to retain Kilgore to provide executive, financial, and
managerial oversight services to it relating to the Business on the terms herein set forth, and
Kilgore has capability enabling it to provide such services and is agreeable to providing the same
on such, terms:



     NOW, THEREFORE, in consideration of the mutual covenants herein contained, it is hereby agreed
as follows:




	1.	 	TERM AND DUTIES





     For the one (1) year period commencing on the date hereof unless sooner terminated pursuant to
the provisions of paragraph 7 hereof (the “Term”), Kilgore shall provide executive, financial, and
managerial oversight services to the Company and the Company’s subsidiaries from time to time. The
nature of such services shall be to analyze the performance of the Company’s executive personnel
and to assist them in developing and planning the implementation of financing, internal growth and
acquisition strategies; however, Kilgore will not become involved in day to day operations. In
general, such services shall be provided by reviewing internal reports and financial statements and
analyses prepared by the executive



 









 




officers of the Company and advising them as to matters covered by such reports as well
assisting them to formulate financial and corporate growth strategies. If so requested,
appropriate personnel of Kilgore will attend all meetings of the Board of Directors. It is
understood that persons who will provide services to the Company may be employees of Kilgore and
will also have such duties with Kilgore, and that, therefore, none of said persons will devote
full business time to the business of the Company, but that they will devote thereto only such
time as may be necessary from time to time properly to perform their duties. At the expiration of
the term, this Agreement shall automatically renew for an additional one (1) year term unless
either party shall have notified the other of its intention not to renew this Agreement at least
sixty (60) days prior to the expiration of the Term. Any such notice shall be given in accordance
with section 10(c) hereof.





	2.	 	DEGREE OF CARE





     Kilgore shall use its best efforts to perform its services, and to cause its personnel
to perform their services hereunder in a professional manner and with due care, but shall have no
liability to the Company or for any act or omission except for
willful default or gross negligence.




	3.	 	FEES





     In full consideration and compensation for the services to be furnished by Kilgore to the
Company and its subsidiaries during the Term, the Company will pay to Kilgore and Kilgore will
accept (i) an up front fee, payable upon execution and delivery of this Agreement, equal to Five
Hundred Eighty Thousand Dollars ($580,000), and (ii) an annual fee equal to Five Hundred Eighty
Thousand Dollars ($580,000) beginning upon the date of execution of this Agreement and payable in
quarterly installments, in advance, thereafter. Kilgore may elect to defer a portion or all of its
fee for any such installment due by written notice to the Company.



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	4.	 	EXPENSES





     (a) During the Term, the personnel of Kilgore assigned to perform duties hereunder
will engage in such travel as may be reasonably required in connection with the performance of
those duties. The company will pay (or reimburse) all such reasonable expenses upon
submission of proper documentation.



     (b) The Company will pay for, or reimburse Kilgore for, all equipment and supplies
bought by Kilgore and specifically dedicated to the purposes of this Agreement (e.g. computer
supplies). Kilgore shall not be entitled to reimbursement of incidental expenses (e.g. use
of Kilgore’s offices) for purposes hereof.



     (c) Kilgore will pay all salaries, wages, bonuses, health and other insurance expenses,
pension fund payments, payroll taxes and withholding and the like applicable to its employees
furnishing services hereunder, without the right to reimbursement from the Company.



     (d) The
Company will indemnify, to the full extent permitted by law, Kilgore and the personnel of Kilgore who perform services hereunder against any claims which may be made
against them by reason thereof.




	5.	 	CONFIDENTIALITY





     The Company acknowledges that Kilgore is engaged in various other businesses some of
which may be competitive with the business and that all persons who perform services for the
Company pursuant to this Agreement will be full time employees of
Kilgore and that their primary
loyalty is to Kilgore. The mere existence of Kilgore’s business activities as described
above and the use of such employees to perform services for Kilgore shall in no way give rise to
any liability of Kilgore or such employees under this Agreement.



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	6.	 	RELATIONSHIP BETWEEN PARTIES





     Kilgore and the Company are not partners or joint venturers, and neither shall have any power
or right to incur any liability on behalf of the other party; provided, however, that any of the
personnel of Kilgore elected as an officer of the Company shall have the power to obligate the
Company in such capacity as an officer, but only to the extent appropriate for such office. Each
party shall discharge its own debts and obligations without recourse against the other.




	7.	 	DEFAULTS





     The following shall constitute events of default (“Events of Default”) hereunder:



     (a) The failure of the Company to pay Kilgore any sums due Kilgore hereunder
within ten (10) days of written demand therefor by Kilgore.



     (b) The failure of either party to perform, keep or fulfill in any material respect any of
the other covenants, undertakings, obligations or conditions set forth in this Agreement or
the failure of Kilgore to perform the services required under this Agreement with the degree of care
set forth in Paragraph 2 hereof, and the continuance of such default for a period of thirty (30)
days after notice of said default.



     (d) Upon the occurrence of any Event of Default, the non-defaulting party may give to the
defaulting party notice of the non-defaulting party’s intention to terminate this Agreement
specifying the cause therefor (‘Termination Notice”). If the defaulting party shall fail to cure
the Event of Default before the expiration of a period of sixty (60) days from the date of such
Termination Notice, this Agreement shall terminate. In the case of an Event of Default by the
Company, the parties acknowledge that the damages of Kilgore would be substantial, but difficult to
compute with accuracy; accordingly, Kilgore shall be entitled to receive in cash as an agreed upon
amount of liquidated damages an amount equal to Seventy-Five Percent (75%) of



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all
amounts payable under this Agreement from the date of the Event of Default to the end of
the Term, discounted to present value using a seven percent (7%) interest rate.




     The rights granted hereunder shall not be in substitution for, but shall be in addition to,
any rights and remedies available to the non-defaulting party hereunder by reason of applicable
provisions of law.




	8.	 	WAIVER.





     The failure of either party to insist upon a strict performance of any of the terms or
provisions of this Agreement or to exercise any option, right or remedy herein contained, shall not
be construed as a waiver or as a relinquishment for the future of such term, provision, option,
right or remedy, but the same shall continue and remain in full force and effect. No waiver by
either party of any term or provision hereof shall be deemed to have been made unless expressed in
writing and signed by such party. In the event of consent by either party to an assignment of this
Agreement, no further assignment shall be made without the express consent in writing of such
party, unless such assignment may otherwise be made without such consent pursuant to the terms of
this Agreement. In the event that any portion of this Agreement shall be declared invalid by order,
decree or judgment of a court of competent jurisdiction, this Agreement shall be construed as if
such portion had not been inserted herein except when such
construction would operate as an undue
hardship to Kilgore or the Company or constitute a substantial deviation from the general intent
and purpose of said parties as reflected in this Agreement.




	9.	 	ASSIGNMENT.





     Neither party shall assign or transfer or permit the assignment or transfer of this
Agreement, or it rights or obligations hereunder without the prior
written consent of the other; provided, however, that the sale of substantially all the assets of Kilgore to, or the merger of



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Kilgore
into a single entity or a group of entities under common control, shall not
constitute an assignment or transfer for purposes of this Section 9.





	10.	 	MISCELLANEOUS





     (a) Right
to Make Agreement. The Company and Kilgore each warrant that neither
the execution of this Agreement nor the consummation of the transactions contemplated hereby
shall violate any provision of law or judgment, writ, injunction, order or decree of any court
or governmental authority having jurisdiction over the Company or Kilgore; result in or
constitute a breach under any indenture, contract, other commitment or restriction to which either is a
party or by which either is bound; or require any consent, vote or approval which has not been
taken, or at the time of the transaction involved shall not have been given or taken. Each party
covenants that it has and will continue to have throughout the term of this Agreement and any
extensions thereof, the full right to enter into this Agreement and perform its obligations
hereunder.



     (b) Applicable
Law; Jurisdiction. This Agreement shall be construed under and shall
be governed by the laws of the State of Connecticut. Each party unconditionally submits itself
to the exclusive jurisdiction of any Connecticut State Court or Federal Court of the United
States of America sitting in Connecticut. Each party unconditionally waives any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding in any such
court and waives the defense of an inconvenient forum to the maintenance of such action or

proceeding in any such court. The parties hereby irrevocably waive trial by jury.



     (c) Notices. Notices, statements and other communications to be given under the
terms of this Agreement shall be in writing and delivered by hand against receipt or sent by
certified or registered mail, return receipt requested:



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	 	To the Company:
	 	Crosman Acquisition Corporation
	 

	 	 	 	c/o The Compass Group International LLC
	 

	 	 	 	61 Wilton Road, 2nd Floor
	 

	 	 	 	Westport, CT 06880
	 

	 	 	 	Attn: Alan B. Offenberg
	 
	 	 	 	 
	 

	 	To Kilgore:
	 	Kilgore Consulting III, LLC
	 

	 	 	 	61 Wilton Road, 2nd Floor 
	 

	 	 	 	Westport, CT 06880
	 

	 	 	 	Attn: I. Joseph Massoud
	 
	 	 	 	 
	 

	 	With a Copy to:
	 	Squire Sanders & Dempsey,
L.L.P.
	 

	 	 	 	312 Walnut Street, Suite 3500 
	 

	 	 	 	Cincinnati, OH 45202 
	 

	 	 	 	Attn: Stephen C. Mahon





A party may change its address for receiving notices, statement and other communications by
notice hereunder.




     (d) Entire
Agreement. This Agreement, together with other writings signed by the
parties expressly stated to be supplementing hereto and together with any instruments to be
executed and delivered pursuant to this Agreement, constitutes the entire agreement between the
parties and supersedes all prior understandings and writings.



(Signature Pages Follow)




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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
duly authorized officers on the year and day first above written.



	 	 	 	 	 	 	 
	 	 	Crosman Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	/s/ I. Joseph Massoud	 	 
	 

	 	 	 

	 	 
	 

	 	 	Name: I. Joseph Massoud	 	 
	 

	 	 	Title: Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	KILGORE CONSULTING III LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	/s/ I. Joseph Massoud	 	 
	 

	 	 	 

	 	 
	 

	 	 	Name: I. Joseph Massoud	 	 
	 
	 	 	 	 	 	 
	 

	 	 	Title: President of The Compass Group	 	 
	 

	 	 	International LLC, Managing Member	 	 







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