NB SUPPLY MANAGEMENT
CORP.
as Manager,
and
GAC MANUFACTURING, LLC,
as Manufacturing
|
|
|
|
|
AMENDED AND
RESTATED
SUPPLY MANAGEMENT
AGREEMENT
|
|
Dated as of August 15,
2008
|
Page
|
ARTICLE I.
|
DEFINITIONS
|
1
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
ARTICLE
II.
|
DUTIES OF THE
MANAGER
|
2
|
|
|
|
|
|
|
Nature of
Management Services
|
2
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
Modifications,
Amendments and Consents With Respect to the Manufacturing
Assets
|
5
|
|
|
|
|
|
ARTICLE
III.
|
EFFECTIVE
DATE
|
5
|
|
|
|
|
|
ARTICLE
IV.
|
DEPOSIT OF
COLLECTIONS
|
6
|
|
|
|
|
|
ARTICLE
V.
|
REPRESENTATIONS
AND WARRANTIES OF THE MANAGER
|
6
|
|
|
|
|
|
|
Representations
and Warranties
|
6
|
|
|
|
|
|
ARTICLE
VI.
|
COVENANTS OF
THE MANAGER
|
9
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
ARTICLE
VII.
|
MANAGER
TERMINATION EVENT
|
13
|
|
|
|
|
|
|
Manager
Termination Event
|
13
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
ARTICLE
VIII.
|
MISCELLANEOUS
|
16
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
Severability of
Provisions
|
18
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
18
|
|
|
Limitation on
Liability; Indemnity
|
19
|
|
|
|
|
|
|
Errors and
Omissions Insurance
|
19
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
20
|
|
|
|
|
|
|
Separate
Identity Provisions
|
20
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
Effect on
Amended and Restated Supply Management Agreement;
Acknowledgement
|
21
|
Appendix A:
Standard Definitions
Exhibit B:
Power of Attorney
Exhibit C: Form
of Manager Report
AMENDED AND RESTATED SUPPLY
MANAGEMENT AGREEMENT
This AMENDED AND RESTATED SUPPLY MANAGEMENT
AGREEMENT is dated as of August 15, 2008 (this “ Supply
Management Agreement ”), and is by and between NB SUPPLY
MANAGEMENT CORP., a Delaware corporation (the “
Manager ”) and GAC MANUFACTURING, LLC, a Delaware
limited liability company (“ Manufacturing
”).
PRELIMINARY
STATEMENT
As of the date of this Supply Management
Agreement, Manufacturing owns the Real Property and certain other
Assets (the “ Manufacturing Assets ”) as set
forth in that certain Security Agreement Supplement, dated as of
the date hereof, by and among Manufacturing, NexCen Holding
Corporation, GAC Supply, LLC (“ Supply ”) and
BTMU Capital Corporation (the “ GAC Supply and
Manufacturing Security Agreement Supplement ”); and
Manufacturing and Supply have entered into that certain
Manufacturing Agreement, dated as of January 29, 2008 (the “
Manufacturing Agreement ”) pursuant to which
Manufacturing shall provide dough and other ancillary products, as
described in such agreement, to Supply.
This Supply Management Agreement hereby amends
and restated in its entirety that certain Supply Management
Agreement, dated as of August 15, 2008 (the “ Original
Management Agreement ”), by and between the parties
hereto. By executing this Supply Management Agreement, each of the
parties hereto consents to such Amendment.
Manufacturing has requested that the Manager
provide certain management services and assist and advise in the
management of the Manufacturing Assets and the performance of the
duties of Manufacturing under the Manufacturing Agreement and other
Transaction Documents to which Manufacturing is party.
NOW, THEREFORE, in consideration of the premises
and of the mutual covenants herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I.
DEFINITIONS
Section 1.1 Defined Terms .
(a) Except as otherwise expressly provided herein
or unless the context otherwise requires, the capitalized terms
used, but not defined, herein shall have the respective meanings
specified in the Standard Definitions attached to the Security
Agreement as Appendix A. The definitions of such terms are equally
applicable both to the singular and plural forms of such
terms.
(b) All references in this instrument to designated
“Articles,” “Sections,”
“Subsections” and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions
of this instrument as originally executed or if amended or
supplemented, as so amended and supplemented. The words
“herein,” “hereof,” “hereunder”
and other words of similar import refer to this Supply Management
Agreement as a whole and not to any particular Article, Section,
Subsection or other subdivision. The words “including”
and “include” shall be deemed to be followed by the
words “without limitation”. References to Persons
herein shall be deemed to include their permitted successors and
assigns. Additionally, and for the avoidance of doubt, all
references to “NexCen Brands” shall be deemed to refer
to any entity, including any other Affiliate thereof, into which
NexCen Brands shall merge, or consolidate, or to which NexCen
Brands shall contribute, sell, or otherwise transfer any material
portion of its assets or liabilities.
ARTICLE
II.
DUTIES OF THE
MANAGER
Section 2.1 Nature of Management Services
.
(a) Management Services . Manufacturing hereby appoints the Manager, as
manager, to provide the Management Services. The Manager hereby
agrees to such appointment. The Manager hereby agrees to perform
all of the following services (the “ Management
Services ”) at its sole cost and expense, except as may
otherwise be provided herein, and in accordance with the standards
set forth in Section 2.1(b) hereof, for the benefit of
Manufacturing including:
|
|
|
to manage the
Manufacturing Assets, and to take any and all actions on behalf of
Manufacturing which may be necessary, required, convenient or
incidental to cause the business to be conducted, including without
limitation, compliance with the Security Deed, the Transaction
Documents and all laws and ordinances applicable to the Real
Property and the operation of Manufacturing’s
business;
|
|
|
|
to pay all
Manager Costs as and when due;
|
|
|
|
to record
ownership changes, and other conveyances, in connection with the
Manufacturing Assets;
|
|
|
|
to pursue the
business strategy chosen by Manufacturing to maximize the value of
and the income derived from the Manufacturing Assets and the
ability to manufacture the product to be delivered to Supply under
the Manufacturing Agreement and on the Franchisees of GAC
Franchising, LLC;
|
|
|
|
to cause
Manufacturing to enter into, enforce its rights under and comply
with the provisions of the Manufacturing Agreement (including,
without limitation, causing Manufacturing to purchase raw
materials, providing employees necessary to facilitate production
of product and otherwise manage the production of the product) and
from time to time, to take reasonable steps to negotiate, amend
and/or renew the terms of the Manufacturing Agreement consistent
with the exercise of sound business judgment and the other
provisions hereof and the other Transaction Documents;
|
|
|
|
to coordinate
distribution of product to Supply pursuant to the Manufacturing
Agreement, and to bill and collect accounts receivable from Supply
in connection with the same
|
|
|
|
to keep the
Manufacturing Assets and Real Property in good working order and
useable condition as necessary to comply with the Transaction
Documents, including with respect to taking all reasonable steps
for their physical repair and maintenance;
|
|
|
|
to manage the
affairs and take all such action as may be necessary to cause
Manufacturing to be in compliance with, and enforce its rights
under, its obligations under the Transaction Documents, including,
without limitation, with respect to the deposit of all Collections
into the appropriate accounts as required by the provisions of the
Security Agreement and the disbursement of monies as set forth in
Sections 6.6 and 14.1 of the Security Agreement and with respect to
the Security Deed;
|
|
|
|
to enforce and
collect payment of the amount owing on each Manufacturing
Asset;
|
|
|
|
to respond, on
behalf of Manufacturing, to inquiries with respect to the
Manufacturing Agreement and any supply agreements;
|
|
|
|
to enforce and
maintain, on behalf of Manufacturing, the terms of all Contracts
(including all vendor contracts, leases of assets, supply contracts
and other agreements in connection with the operation of the
Manufacturing business and compliance with the Transaction
Document) related to the Real Property and Manufacturing Assets,
the manufacturing and distribution of the product in accordance
with the terms of such Contracts and the Transaction
Documents;
|
|
|
|
to maintain
separate, complete and accurate books and records with respect to
all transactions contemplated hereunder in connection with the Real
Property and Manufacturing Assets;
|
|
|
|
to deliver
electronically or otherwise to Manufacturing on a calendar
quarterly basis an informational listing of any additions,
subtractions or changes to the Manufacturing Assets or the Real
Property, the date of any new Contract and a summary of its key
terms and, also, hard copies of all documents evidencing new
Manufacturing Assets or Real Property;
|
|
|
|
to cause
Manufacturing to pay all Taxes when due; and
|
|
|
|
to procure and
maintain all necessary or prudent licenses, permits, approvals or
consents with respect to the Real Property, the Manufacturing
business and the product.
|
The list of Management Services may be amended
from time to time by mutual agreement of the Manager and
Manufacturing, but subject to the prior written consent of the
Agent.
(b) Manager’s Standard of
Performance . The Manager
shall exercise commercially reasonable efforts in performing the
Management Services and shall perform the Management Services in
accordance with industry practice, the express terms of this Supply
Management Agreement and Applicable Law and with at least the same
care, prudence, skill and diligence as the Manager would employ in
the management of its own assets or any other assets that it
manages.
(c) Discretionary Powers . The Manager shall exercise all discretionary
powers involved in connection with the Management Services subject
to the terms hereof, and shall pay all costs and expenses incurred
in connection therewith that may be necessary or advisable for the
carrying out of the transactions contemplated by this Supply
Management Agreement. The Manager may, for its own account, seek
the assistance of other parties in carrying out its duties
hereunder.
(d) Approvals . The Manager shall consult with and obtain
written approval from Manufacturing for any action in connection
with the Manufacturing Assets that is not in the ordinary course of
the Management Services. The Manager shall not take any action
pursuant to this Supply Management Agreement on behalf of
Manufacturing which is inconsistent with, or would cause
Manufacturing, the Issuer, NexCen Brands or any of their Affiliates
to violate, the Transaction Documents.
(e) Legal Proceedings . The Manager is hereby authorized, empowered,
and agrees, in accordance with Section 2.1(b) and consistent
with past practice and clause (b) above to
commence, at Manufacturing’s sole cost and expense in its own
name or in the name of Manufacturing, and to pursue legal
proceedings relating to any aspect of the Manufacturing Assets. The
Manager is hereby further authorized and empowered to determine
whether and where to bring litigation, to retain counsel on a
contingency fee or other basis to enforce Manufacturing’s
rights in the Manufacturing Assets and to protect the value of the
Manufacturing Assets and to obtain judgments with respect thereto.
Manufacturing shall take any and all such actions that the Manager
may deem necessary or appropriate to enable the Manager to carry
out its duties under this Supply Management Agreement. If, in any
legal proceeding, it shall be determined that the Manager may not
enforce Manufacturing’s rights in the Manufacturing Assets
and to protect the value of the Manufacturing Assets on the ground
that is not a real party in interest or a holder entitled to
enforce Manufacturing’s rights in the Manufacturing Assets
and to protect the value of the Manufacturing Assets,
Manufacturing, shall, at its expense, take such steps as the
Manager deems reasonably necessary to enforce Manufacturing’s
rights in the Manufacturing Assets and/or to protect the value of
the Manufacturing Assets, including bringing suit in its own name
or joining the action as a party.
(f) Principal Place of Business
. All activities hereunder by the
Manager and its employees shall be conducted from the
Manager’s principal place of business identified in
Section 8.1 hereof, or at such other location as to which
Manufacturing and the Agent are provided thirty (30) days’
prior written notice.
Section 2.2 Manager Fee . As compensation for the performance of the
Management Services, the Manager shall be entitled to the
applicable Manager Fee, as provided in the Security Agreement. The
Manager represents that the Manager Fee is not more or less than
the fee that is customarily paid in arm’s length transactions
for similar services. The Manager shall not be entitled to any
other amounts for its services hereunder other than the Manager
Fee. The Manager shall have the right, but
not the obligation, to advance all Operating Expenses, provided,
however, that the Manager shall not make any such advance if the
Manager reasonably determines that such advance would not be
ultimately recoverable from the Collections. On any Payment Date on
which there is insufficient Distributable Cash in accordance with
Section 14.1(a) of the Security Agreement to pay the Subordinate
Manager Fee, in whole or in part, on such Payment Date, the Manager
shall have the right to receive funds from the Held Collections
Account to pay such shortfall in the Subordinate Manager Fee for
the related Collection Period in accordance with, and to the extent
amounts are available for such purpose under Section 14.1(b)(i) of
the Security Agreement.
Section 2.3 Modifications, Amendments and Consents With
Respect to the Manufacturing Assets . Except as provided in Section 2.1(d) ,
the Manager shall not agree to any modification, waiver or
amendment of any term of any material element of any agreements
with respect to the Manufacturing Assets or to any extension of a
Contract, if such modification, waiver or amendment, individually
or together with all modifications, waivers or amendments
previously made, shall reasonably be expected to result in a
Material Adverse Change without the prior written consent of
Franchising or Brands, as applicable, and the Agent;
provided , however , that the Manager shall not make
any modification, waiver or amendment to any Covered Material
Contract in any material respect that is adverse or could
reasonably be expected to be adverse to Franchise or Brands without
the prior written consent of Franchising or Brands, as applicable
and the Agent.
(a) Power of Attorney . So long as this Supply Management Agreement
is in effect, Manufacturing hereby irrevocably constitutes and
appoints the Manager and any officer thereof with full power of
substitution, as its true and lawful attorney-in-fact with full
power and authority to act in the place and stead of Manufacturing,
and in the name of Manufacturing, or in its own name, from time to
time in the Manager’s discretion, for the purpose of Managing
the Manufacturing Assets, the business in which the Manufacturing
Assets are employed and providing the Management Services in
accordance with the terms of this Supply Management Agreement, and
will execute the power of attorney in the form attached hereto as
Exhibit B .
ARTICLE
III.
EFFECTIVE
DATE
This Supply Management Agreement shall become
effective as of the date hereof and, except as provided in
Article VII , shall continue in force on a calendar year to
calendar year basis unless terminated in writing by either party on
or before December 1 of any calendar year, but not earlier than the
date after the date on which all Secured Obligations are
indefeasibly paid in full in cash (other than with respect to any
indemnity obligations or obligations under any Transaction Document
that by their terms survive the termination thereof).
ARTICLE
IV.
DEPOSIT OF
COLLECTIONS
All Collections is the property of
Manufacturing. All Collections received by the Manager shall be
deposited into Manufacturing’s Co-Issuer Collection Account
or as otherwise directed in writing by Manufacturing (acting the
consent of the Agent), and the Manager shall direct that any
Collections be paid to Manufacturing’s Co-Issuer Collection
Account; provided , however , if, notwithstanding
such direction, any proceeds of the Manufacturing Assets shall come
into the possession or control of the Manager or its agents, the
Manager shall hold such proceeds, or cause the same to be held, in
the form received, in trust for Manufacturing and shall within one
(1) Business Day after receipt thereof, cause the same to be
deposited into Manufacturing’s Co-Issuer Collection
Account.
ARTICLE
V.
REPRESENTATIONS AND
WARRANTIES OF THE MANAGER
Section 5.1 Representations and Warranties
. The Manager as of the Restatement
Date and each Payment Date represents and warrants to, and in favor
of, Manufacturing and the Agent that:
(a) Organization, Power, Qualification
. The Manager (i) is a Delaware
corporation, duly organized, validly existing and in good standing,
(ii) has the corporate power, legal right and authority to own its
properties and to carry on its business as now being and hereafter
proposed to be conducted and (iii) is, and always has been, duly
qualified and is in good standing and authorized to do business in
each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization
and the failure to be so qualified could, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Change.
(b) Authorization, Enforceability
. The Manager (i) has the corporate
power, and (ii) has taken all necessary action to authorize it to
execute, deliver and perform this Supply Management Agreement in
accordance with its terms and to consummate the transactions
contemplated hereby. This Supply Management Agreement has been duly
executed and delivered by the Manager and is a legal, valid and
binding obligation of the Manager, enforceable in accordance with
its terms, subject, as to enforcement of remedies, to any
applicable bankruptcy, insolvency or other similar law affecting
the enforcement of creditors’ rights and secured parties
generally, and subject to the limitation that the availability of
the remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding therefor
may be brought.
(c) Non-Contravention . The execution, delivery and performance of
this Supply Management Agreement in accordance with its terms and
the consummation of the transactions contemplated hereby by the
Manager do not and will not (i) require any consent or approval or
authorization of, or giving notice to, any Person, except for
consents and approvals that have already been obtained or notices
that have been duly given, (ii) violate any Applicable Law, (iii)
conflict with, result in a breach of, or constitute a default under
its Organizational Documents, or conflict with, result in a breach
of a material provision under (with or without notice or lapse of
time or both) any agreement or other instrument, to which the
Manager is a party or by which it or any of its properties or
assets may be bound, which conflict, breach or default would have a
material adverse effect on the business, assets, liabilities,
condition (financial or otherwise), results of operations or
prospects of the Manager or on the ability of the Manager to
perform any of its obligations under this Supply Management
Agreement, or (iv) result in or require the creation or imposition
of any Liens upon or with respect to any property now owned or
hereafter acquired by the Manager.
(d) Compliance with Law .
|
|
|
The Manager is,
and always has been, in compliance with all Applicable Laws,
including without limitation those relating to ERISA and Taxes,
except where non-compliance, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse
Change.
|
|
|
|
Except as
previously set forth on Schedule VIII to the Security Agreement,
the Manager, to the Manager’s knowledge, is not, and never
has been, under investigation with respect to any violation of any
Applicable Law, regulation, order or requirement relating to any of
the foregoing in connection with its respective
business.
|
|
|
|
There does not
currently exist, nor has there existed at any time since its
formation, any threatened or actual dispute between the Manager and
any of its outside accountants, auditors or other financial
advisors.
|
|
|
|
Neither the
Manager nor any of its officers or agents, nor any Person acting on
behalf of any of them, have made any illegal or improper payment
to, or provided any illegal or improper benefit or inducement for,
any governmental official, union official, supplier, customer,
union or other Person, in an attempt to influence any such Person
to take or to refrain from taking any action relating to the
Manager, Manufacturing or the business of the Manager,
Manufacturing, or to engage in any action by or on behalf of any of
them in any way, or paid any bribe, payoff, influence payment,
kickback or other unlawful payment. Neither the Manager nor any of
the officers or agents of the Manager or any Person acting on
behalf of any of them, have taken any action that violates the
Foreign Corrupt Practices Act. The Manager has at all times been in
compliance with all Applicable Laws relating to export control and
trade embargoes. To the Manager’s knowledge, no product sold
or service provided by the Manager or Manufacturing during the last
five years has been, directly or indirectly, sold to or performed
on behalf of any country where such sale of products or provision
of services is prohibited by OFAC, the Department of Treasury or
other U.S. governmental authority.
|
(e) Litigation . There is no, and never has been, action, suit
or proceeding pending or, to the knowledge of the Manager,
threatened against the Manager or any of its properties or assets
in any court or before any arbitrator of any kind or before or by
any Governmental Authority which, if decided adversely to the
Manager, would reasonably be expected to result in a Material
Adverse Change.
(f) Governmental Regulation . The Manager is not required to obtain any
consent, approval, authorization, permit or license from, or effect
any filing or registration with, any Governmental Authority in
connection with the execution, delivery and performance, in
accordance with its respective terms, of this Supply Management
Agreement.
(g) Investment Company . The Manager is not, and has never been, an
“investment company” within the meaning of the
Investment Company Act.
(h) Bankruptcy . The Manager is not, and has never been, a
debtor in a bankruptcy case.
(i) Absence of Default . The Manager is, and has always been, in
compliance with all of the provisions of its Organizational
Documents, as the same may have been amended or restated (or
comparable constitutive documents) and no event has occurred, or
failed to occur, which has not been remedied or waived, the
occurrence or nonoccurrence of which constitutes, or which with the
passage of time or giving of notice or both would constitute, (i) a
Manager Termination Event or (ii) a default by the Manager under
any agreement or other instrument, or any judgment, decree or order
to which the Manager is a party or by which the Manager or any of
its properties or assets may be bound, which default could,
individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change.
(j) Disclosure . The Manager has not failed to disclose any
fact, circumstance or other information which could, either alone
or in conjunction with all other such facts, circumstances and
information, reasonably be expected to result in a Material Adverse
Change; and to the Manager’s knowledge, there is no fact that
has specific application to any of the Manager, Manufacturing,
NexCen Brands or any of their Affiliates (other than general
economic or industry conditions) and that could, individually or in
the aggregate, reasonably be expected to result in a Material
Adverse Change. This representation shall not be affected by any
investigation made by or on behalf of the Agent.
(k) Information . All written information, reports and other
papers and data furnished to the Agent, with respect to the
Manager, shall be, at the time the same is so furnished, complete,
true and correct in all material respects as and when
made.
(l) Taxes . The Manager has timely filed all tax returns
(federal, state and local) which are required to be filed and has
paid all taxes related thereto. There has been no waiver of any
statutes of limitation in respect of taxes or agreement to any
extension of time with respect to a tax assessment or deficiency of
the Manager; there is no material claim, audit, action, suit or
proceeding against or with respect to the Manager in any tax; the
Manager has not received from any taxing authority any formal or
informal (x) notice indicating an intent to open an audit or other
review, (y) request for information related to tax matters or (z)
notice of deficiency or proposed adjustment for any amount of tax
proposed, asserted, or assessed by any taxing authority against the
Manager.
(m) Subsidiaries . As of the date hereof, there are no
corporations, partnerships, limited liability companies, joint
ventures or other business entities in which the Manager owns, of
record or beneficially, a direct or indirect
|
