Management Services Agreement

EXHIBIT 10.4


AMENDED AND RESTATED
MANAGEMENT SERVICES AGREEMENT


This Amended and Restated Management Services Agreement (the "Agreement") is made and entered into as of November 18, 1996, by and among Aftermarket Technology Corp., a Delaware corporation ("ATC"), ATC Components, Inc., a Delaware corporation ("ATC Components"), Aaron's Automotive Products, Inc., a Delaware corporation ("Aaron's"), CRS Holdings Corp., a Delaware corporation ("CRS Holdings"), Diverco Acquisition Corp., a Delaware corporation ("Diverco Acquisition"), H.T.P., Inc., a Delaware corporation ("HTP"), King-O-Matic Industries Limited, an Ontario corporation ("King-O-Matic"), Mamco Converters, Inc., a Delaware corporation ("Mamco"), Mascot Truck Parts, Inc., an Ontario corporation ("Mascot"), RPM Merit, Inc., a Delaware corporation ("RPM"), and Tranzparts Acquisition Corp., a Delaware corporation ("Tranzparts" and, collectively with ATC, ATC Components, Aaron's, CRS Holdings, Diverco Acquisition, HTP, King-O-Matic, Mamco, Mascot and RPM, the "ATC Companies"), and Aurora Capital Partners L.P., a Delaware limited partnership ("ACP").


WHEREAS, ATC and its subsidiaries as of July 19, 1994 entered into a Management Services Agreement with ACP dated as of the same date (the "Prior Agreement") to assure themselves of the services of ACP as a financial consultant upon the terms and conditions set forth in the Prior Agreement; and


WHEREAS, ACP and the ATC Companies wish to amend and restate the Prior Agreement upon the terms and conditions set forth in this Agreement.


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


1. SCOPE OF SERVICES. ACP, through its employees, affiliates and employees of affiliates, shall provide the ATC Companies with consultation and advice in such fields as financial services, accounting, general business management, acquisitions, banking and other matters (the "Services"). ACP shall, in its reasonable discretion, determine the amount of time to be expended by its affiliates and employees in performing such Services. ACP shall perform its duties hereunder at such times and places as are reasonable, in the reasonable discretion of ACP, in light of the tasks involved. ACP shall not be required to comply with any established work schedule and shall have no regularly scheduled duties assigned to it by the ATC Companies. The ATC Companies shall, in soliciting ACP's advice and requesting ACP's performance of its duties hereunder, give ACP reasonable advance notice of the same in consideration of ACP's other business obligations.


2. COMPENSATION.


(a) In consideration of the Services to be rendered hereunder, the ATC Companies hereby jointly and severally agree to pay ACP a base annual management fee (the "Base Compensation") initially equal to $ 528,975.00. Payments of the Base Compensation shall be made in monthly installments payable in advance on the first day of each calendar month. The first and last payments hereunder shall be appropriately pro rated for the shorter periods that may be reflected thereby. The Base Compensation shall be increased on July 19th of each year after the date of this Agreement by the percentage increase in the Consumer Price


MANAGEMENT SERVICES AGREEMENT


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Index as published by the Bureau of Labor Statistics. The Base Compensation also shall be subject to increase, at the discretion of a majority of the disinterested members of the Board of Directors of ATC, by up to an aggregate of $250,000 in the event that any of the ATC Companies or any of their respective affiliates in which any ATC Company has an ownership interest consummates a significant corporate transaction after the date hereof, such as the acquisition of another business.


(b) Notwithstanding Section 2(a), if at any time during the term of this Agreement Aurora Equity Partners L.P., a Delaware limited partnership, Aurora Overseas Equity Partners I, L.P., a Cayman Islands limited partnership, and their affiliates (collectively "Aurora") collectively beneficially own less than 50% of the outstanding common stock of ATC, then commencing on the first day of the next succeeding calendar month and continuing until the first day of the calendar month next succeeding the calendar month in which Aurora collectively beneficially owns 50% or more of the outstanding common stock of ATC, the amount of Base Compensation payable by the ATC Companies to ACP with respect to such month shall be reduced to the product of (i) the initial Base Compensation (as such initial Base Compensation may previously have been adjusted due to cost of living increases or discretionary increases by the Board of Directors as set forth in Section 2(a)) and (ii) the percentage (the "Percentage Factor") set forth in the following chart and based upon the following percentages of outstanding common stock of ATC collectively beneficially owned by Aurora on the first day of such month:


PERCENTAGE OF
OUTSTANDING COMMON STOCK
COLLECTIVELY BENEFICIALLY OWNED PERCENTAGE
BY AURORA FACTOR
------------------------------------ ------------


Less than 50% but 40% or more 80%
Less than 40% but 30% or more 60%
Less than 30% but 20% or more 40%
Less than 20% 0%


The shares of common stock of ATC outstanding and collectively beneficially owned by Aurora shall be determined in accordance with the provisions of Rules 13d-3 and 13d-5 promulgated under the Securities Exchange Act of 1934, as amended and in effect on the date of this Agreement, whether or not otherwise applicable to ATC.


(c) In addition to the Base Compensation payable to ACP under Section 2(a) above (as the same may be reduced pursuant to Section 2(b)), the ATC Companies shall (i) pay to ACP a transaction fee for merger and acquisition services rendered in connection with acquisitions made by the ATC Companies or any of their affiliates in which any ATC Company has an ownership interest, such fee to equal 2.0% of the first $75.0 million of the aggregate acquisition consideration (including debt assumed by the purchaser and current assets retained by the seller) and 1.0% of the aggregate acquisition consideration (including debt assumed by the purchaser and current assets retained by the seller) in excess of $75.0 million; (ii) reimburse ACP for all of its reasonable out-of-pocket costs and expenses incurred in connection with the performance of its obligations under this Agreement; and (iii) if ATC's EBITDA in any calendar year exceeds management's budgeted EBITDA for such calendar year by 15.0% or more, pay to ACP an additional management fee equal to one-half of its Base Compensation for such calendar year, such additional management fee to be paid not later than 90 days after the end of such calendar year.


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(d) Notwithstanding the foregoing provisions of this Section 2, no ATC Company shall make payment of any compensation payable to ACP pursuant to this Section 2 at any time that (i) an Event of Default shall have occurred and then be continuing under the terms of Section 9 (a) of that certain Revolving Credit Agreement among ACT, the several Lenders from time to time parties thereto and Chemical Bank, as agent, dated as of July 19, ...