Exhibit
10.16


 


MANAGEMENT SERVICES
AGREEMENT


 


This
Management Services Agreement (the “Agreement”) is made and entered into as of May 28,
2008 and among NuCO2 Parent Inc., a Delaware corporation (the “Company”),
NuCO2 Inc., a Florida corporation (“NuCO2”), and Aurora Management Partners LLC, a Delaware
limited liability company (“AMP”).


 


WHEREAS,
the Company and NuCO2 wish to assure themselves of the financial
consulting services of AMP upon the terms and conditions set forth in this
Agreement, and AMP is willing to accept such consultancy.


 


NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties agree as follows:


 


1.                                       Scope of Services. 
AMP, through its employees, Affiliates and employees of Affiliates,
shall provide the Company and NuCO2 with consultation and advice in such fields as
financial services, accounting, general business management, acquisitions,
dispositions, banking and other matters (the “Services”).  AMP shall, in its reasonable discretion,
determine the amount of time to be expended by its respective Affiliates and
employees in performing such Services. 
AMP shall perform its duties hereunder at such times and places as are
reasonable, in the reasonable discretion of AMP, in light of the tasks involved.  AMP shall not be required to comply with any
established work schedule and AMP shall not have regularly scheduled duties
assigned to it by the Company and/or NuCO2.  The Company and/or NuCO2 shall, in
soliciting AMP’s advice and requesting AMP’s performance of its duties
hereunder, give AMP reasonable advance notice of the same in consideration of
AMP’s other business obligations.


 


2.                                       Compensation.


 


(a)                                  As used herein, the following terms are
defined as follows:


 


(i)                                     “Affiliate” of a specified Person means a
Person that controls, is controlled by, or is under common control with, the
specified Person, and in this context, “control”, “controls” and “controlled”
mean the direct or indirect power to direct the management and policies or
affairs of a Person through the ownership of voting securities or by contract
or otherwise and, in the case of a limited partnership, shall include, but
shall not be limited to, all of the limited partnership’s general partners and
their respective Affiliates.


 


(ii)                                  “Person” means  a natural person, a company, a corporation, a joint venture,
a limited liability company, a partnership, a trust, an unincorporated
association or organization or other legal entity, or a government or an agency
or political subdivision thereof.


 


(iii)                               “Merger Agreement” means that certain Agreement and
Plan of Merger by and among the Company, NuCO2 Merger Co. and NuCO2,
dated as of January 29, 2008.


 

















 


(b)                                 In consideration of the Services to be
rendered hereunder, the Company and NuCO2,
jointly and severally, hereby agree to pay AMP an aggregate management fee of $1,000,000
per annum, to be paid quarterly in advance on March 31, June 30, September 30
and December 31 of each applicable year. 
Notwithstanding anything to the contrary set forth herein, the
management fee to be paid to AMP pursuant to this Section 2(b) shall
commence accruing as of the date hereof and the first quarterly payment shall
be made on May 28, 2008 (such first quarterly payment shall include the
management fee accrued from the date hereof through June 30, 2008).


 


(c)                                  In addition to the fees payable to AMP
under Section 2(b) above, the Company and NuCO2, jointly and severally, shall (i) pay to AMP a
fee for services rendered in connection with any acquisition, sale or disposition
of any division of the Company, NuCO2 or any of their respective Affiliates, any sale or disposition of the
Company or all or substantially all of the assets of the Company, NuCO2 or any of their
respective Affiliates or any other sale or disposition of any assets of the
Company, NuCO2 or
any of their respective Affiliates other than in the ordinary course of
business of such entities (including researching industry information,
performing financial analysis on prospective acquisition candidates, arranging
acquisition financing, and facilitating the close of the transaction), such fee
to equal 2.0% of the aggregate transaction consideration (including debt
assumed by the purchaser and current assets retained by the seller), after
giving consideration to the total cost of the transaction, including, without
limitation, any external investment banking fees incurred in connection with
such transaction; and (ii) reimburse AMP for all of its reasonable costs
and expenses incurred in connection with the performance of its obligations
under this Agreement, including any such costs and expenses incurred in
connection with any such acquisitions, sales or dispositions.


 


(d)                                 If the Closing (as defined in the Merger
Agreement) is consummated, the Company and NuCO2,
jointly and severally, shall pay to AMP on the date of such Closing (i) an
aggregate transaction fee of $9.68 million and (ii) all of the reasonable
costs and expenses incurred by AMP (or any of its Affiliates) in connection
with the transactions contemplated by the Merger Agreement and the related
transactions.


 


3.                                       Term.  Unless
earlier terminated as provided in Section 4 below, the term of this
Agreement shall commence on the date hereof and shall terminate automatically
on the earlier to occur of (i) the sale of all of the outstanding capital
stock of the Company, (ii) the sale of all or substantially all of the
assets of the Company, (iii) the merger of the Company or sale in one or a
series of related transactions of the outstanding capital stock of the Company
after which the holders of a majority of the voting power of the Company
immediately prior to such merger or stock sale do not, immediately after such
merger or stock sale, hold a majority of the voting power of the surviving
corporation or the Company, as the case may be, or (iv) the tenth
anniversary of the date first set forth above. 
The expiration of the term of this Agreement shall not adversely affect
AMP’s right to receive any compensation accrued prior to the date of such
termination or any rights to receive reimbursement of any costs and expenses
incurred by AMP prior to the date of such termination.  The provisions of Sections 5, 6, 7, 8,
9, 10, 11 and 12 shall survive the expiration of the term of this Agreement or
any termination of this Agreement.


 


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4.                                       Termination for Cause. 
The Company, by written notice to AMP authorized by a majority of the
directors (other than those affiliated with AMP), may terminate this Agreement
for justifiable cause, which shall mean any of the following events:  (a) misappropriation by AMP of funds or
property of the Company, NuCO2 and/or any of its subsidiaries; (b) gross
neglect or willful misconduct by AMP in the fulfillment of its obligations
hereunder; or (c) the conviction of AMP or any person who is then a member
of AMP of a felony involving moral turpitude that has become final and not
subject to further appeal.


 


5.                                       Confidential Information. 
During the term of this Agreement, AMP will have access to and become
acquainted with confidential information of the Company, NuCO2 and/or any of
its subsidiaries, including among other things customer relationships,
processes, and compilations of information, records and specifications, which
are owned by the Company, NuCO2 and/or any of its subsidiaries.  AMP shall not use or disclose any of the
Company’s, NuCO2’s and/or any of its subsidiaries
confidential information in any way that is detrimental to the interests of the
Company, NuCO2 and/or
any of its subsidiaries, directly or indirectly, either during or within two (2) years
after the term of this Agreement, except as required in the course of this
Agreement.  AMP shall be responsible for
any breaches of this Section 5 by AMP’s officers, directors, employees and
advisors.


 


6.                                       Notices.  All notices,
demands and requests required under this Agreement shall be in writing and
shall be deemed to have been given if served personally or sent by registered
or certified mail, postage prepaid, or by telegraph or telex addressed to the
addressee set forth or such other addresses as either party may designate by
notice to the other:


 


	
  If
  to the Company:

  	
   

  	
  NuCO2 Parent Inc. 

  c/o
  Aurora Capital Group

  10877
  Wilshire Boulevard

  Suite 2100

  Los
  Angeles, CA 90024

  Telecopier
  No: (310) 227-5591

  Attn:
  Timothy J. Hart

  
	
   

  	
   

  	
   

  
	
  If
  to NuCO2:

  	
   

  	
  NuCO2 Inc.

  2800
  SE Market Place

  Stuart,
  FL 34997

  Attention:
  Eric M. Wechsler

  Telecopier
  No: (772) 221-1690

  
	
   

  	
   

  	
   

  
	
  If
  to AMP:

  	
   

  	
  Aurora
  Management Partners LLC

  10877
  Wilshire Boulevard

  Suite 2100

  Los
  Angeles, CA 90024

  Telecopier
  No: (310) 227-5591

  Attn:
  Timothy J. Hart

  



 


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Notices delivered in person shall be effective when so
delivered.  Notices delivered by courier
shall be effective three (3) business days after delivery by the sender to
an air courier of national reputation who guarantees delivery within such three
(3) business day period.  Telecopied
notices shall be effective when receipt is acknowledged telephonically by the
addressee or its agent or employee. 
Notices sent by mail shall be effective five (5) business days
after the sender’s deposit of such notice in the United States mails, first
class postage prepaid.


 


7.                                       Assigns and Successors. 
The rights and obligations of the Company and NuCO2 under this
Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company and NuCO2,
respectively.  The rights and obligations
of AMP under this Agreement may be assigned by AMP in its sole discretion to an
Affiliate of AMP.


 


8.                                       Attorneys’ Fees. 
If any legal proceeding is necessary to enforce or interpret the terms
of this Agreement, or to recover damages for breach thereof, the prevailing
party shall be entitled to reasonable attorneys’ fees, as well as costs and
disbursements, in addition to any other relief to which he or she is entitled.


 


9.                                       Indemnity.  To the same
extent as the Company or NuCO2 provides indemnification (whether through
contract or the Company’s or NuCO2’s
respective Certificate of Incorporation, Articles of Incorporation or Bylaws)
to its directors and officers, the Company and NuCO2,
jointly and severally, shall indemnify and hold each of AMP and their
respective partners, members, officers, employees, agents and Affiliates and
the stockholders, partners, members, Affiliates, directors, officers and
employees of any of the foregoing (and representatives and agents of any of the
foregoing designated by AMP from time to time whether before or after the
occurrence of the event giving rise to the claim for indemnity) (each such
person entitled to indemnity hereunder being referred to as an “Indemnitee”)
harmless from any and all losses, costs, liabilities and damages (including
reasonable attorneys’ fees) arising out of or connected with, or claimed to arise
out of or to be connected with, any act performed or omitted to be performed
under this Agreement or otherwise relating to the business or affairs of the
Company, NuCO2 or
their respective Affiliates, provided such act or omission was taken in good
faith by such Indemnitee and did not constitute gross negligence or willful
misconduct on the part of the relevant Indemnitee, and provided further only in
the event of criminal proceedings, that the Indemnitee had no reasonable cause
to believe the conduct of the Indemnitee was unlawful.  An adverse judgment or plea of nolo contendere shall not, of itself, create a presumption
that the Indemnitee did not act in good faith or that the Indemnitee had
reasonable cause to believe the conduct of the Indemnitee was unlawful.  Expenses incurred in defending any civil or
criminal action arising out of or relating to any event or circumstance to
which this indemnity shall apply shall be paid by the Company and/or NuCO2, as the case may be, upon receipt of an undertaking
by or on behalf of the Indemnitee to repay such amount if it be later shown
that such Indemnitee was not entitled to indemnification.  No Indemnitee shall be liable to the Company,
NuCO2 or
any of their respective partners, members, Affiliates, stockholders, directors,
officers or employees or any Affiliates, stockholders, partners, members,
directors, officers, employees, representatives or agents of any of the
foregoing or any other person claiming through any of the foregoing for any act
or omission by AMP in 


 


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the performance of its duties hereunder or otherwise
in relation hereto which was taken or omitted to be taken in good faith by such
Indemnitee and which did not constitute gross negligence or willful misconduct
on the part of such Indemnitee.


 


10.                                 Outside Activities of AMP. 
AMP shall be entitled to and may have business interests and engage in
business activities in addition to the activities contemplated by this
Agreement.  Neither AMP, any partner,
member, officer, employee or Affiliate of AMP nor any stockholder, partner,
member, director, officer or employee of any of the foregoing shall have any
obligation or duty to offer any investment or business opportunity (other than
an opportunity directly involving the provision of bulk carbon dioxide systems
and distribution of beverage-grade bulk carbon dioxide) of any kind to the
Company and/or NuCO2 or
any of their respective stockholders, directors, officers or employees (under
any doctrine of “corporate opportunity” or otherwise), it being expressly
understood that AMP and their respective partners, members, officers, employees
and Affiliates and the stockholders, partners, members, directors, officers and
employees of any of the foregoing may make investments in, acquire, or provide
management, advisory or consulting services to, entities engaged in businesses
similar to the business of the Company and/or NuCO2 without any duty, obligation or liability to
the Company and/or NuCO2 or
their respective stockholders, partners, members, directors, officers or
employees.


 


11.                                 Amendment; Waiver. 
This Agreement may be amended, and any right or claim hereunder waived,
only by a written instrument signed by AMP, the Company and NuCO2.  Except as
provided in Sections 9 and 10 hereof, nothing in this Agreement, express
or implied, is intended to confer upon any third person any rights or remedies
under or by reason of this Agreement.  No
amendment or waiver of this Agreement requires the consent of any individual,
partnership, corporation or other entity not a party to this Agreement, except
that any amendment of Section 9 shall only operate prospectively as to any
Indemnitee provided therein unless such Indemnitee shall have agreed in writing
to such amendment.


 


12.                                 Construction, Etc. 
This Agreement shall be construed under and governed by the internal
laws of the State of Delaware.  Section headings
are for convenience only and shall not be considered a part of the terms and
provisions of this Agreement.  This
Agreement may be executed in any number of counterparts, each of which when
executed and delivered shall be deemed an original and all of which when taken
together shall constitute one and the same instrument.


 


[SIGNATURE PAGE FOLLOWS]


 


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


 


 


	
   

  	
  NuCO2 PARENT INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Timothy J. Hart

  
	
   

  	
  Name:

  	
  Timothy
  J. Hart

  
	
   

  	
  Title:

  	
  Vice
  President, Secretary and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NuCO2 INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Eric M. Wechsler

  
	
   

  	
  Name:

  	
  Eric
  M. Wechsler

  
	
   

  	
  Title:

  	
  General
  Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AURORA
  MANAGEMENT PARTNERS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Timothy J. Hart

  
	
   

  	
  Name:

  	
  Timothy
  J. Hart

  
	
   

  	
  Title:

  	
  Vice
  President and Secretary