Exhibit 10.2
CORPORATE SERVICES AGREEMENT
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THIS CORPORATE SERVICES AGREEMENT (this "Agreement") is entered into as of
________, 1997 by and between XXXXXX, INC., a Delaware corporation ("XxxXxx"),
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and AURA SYSTEMS, INC., a Delaware corporation ("Aura").
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RECITALS:
X. XxxXxx is currently a majority-owned subsidiary of Aura and obtains
certain administrative and other services from Aura.
X. XxxXxx is currently considering an initial public offering (the
"Offering") of its securities, including up to approximately 1,700,000 shares of
its common stock, $0.001 par value (the "Common Stock").
C. After such Offering, Aura will own approximately seventy seven percent
(77%) of the Common Stock of XxxXxx.
D. After the Offering, XxxXxx desires to continue to obtain certain
administrative and other services from Aura and Aura is willing to continue to
furnish or make such services available to XxxXxx in a manner generally
consistent with past practices.
E. By this Agreement, Aura and XxxXxx desire to set forth the basis for
Aura's providing services of the type referred to herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
1. Services. Beginning on the date of this Agreement, Aura will provide
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or otherwise make available to XxxXxx certain services, including, but not
limited to, the following:
1.1 Central Services. Aura shall provide to XxxXxx all services and
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functions set forth on Exhibit A attached hereto.
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1.2 Similar Routine Services. Aura shall also provide such other similar
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routine services in addition to those enumerated in Section 1.1 above as
reasonably requested by XxxXxx (such services collectively with the Central
Services, the "Services").
1.3 Additional Services. In addition to the Services, certain specific
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services may be made available to XxxXxx by Aura on an as-requested basis.
These services are services that are not included in the Central Services, and
are not, in Aura's good faith judgment, routine administrative services, or are
services that create unusual burdens or demands on Aura's resources (the
"Additional Services").
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1.4 Aura Obligations. By agreeing to provide the Services, Aura is making
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no representations or warranties as to the quality, suitability or adequacy of
the Services for any purpose or use. In providing the Services, Aura shall not
be obligated to (i) hire any additional employees; (ii) maintain the employment
of any specific current Aura employee; or (iii) purchase, lease or license any
additional equipment, software or facility.
2. Fees.
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2.1 Fixed Fee for Services. For performing the Services, Aura will charge
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XxxXxx a monthly fixed fee of $50,000 (the "Fixed Fee") (such amount to be
prorated on a daily basis for any partial month of Services), which Fixed Fee is
intended to compensate Aura for all of XxxXxx'x pro rata share of the aggregate
costs actually incurred by Aura in connection with the provision of such
Services to all recipients thereof. The Fixed Fee may be adjusted on an annual
basis by mutual agreement of Aura and XxxXxx.
2.2 Fees for Additional Services. Prior to performing Additional Services
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for XxxXxx, Xxxx shall notify XxxXxx of the cost of such Additional Services and
obtain XxxXxx'x consent prior to performing such Additional Services. Aura will
charge XxxXxx for the costs actually incurred (including overhead and general
administrative expenses) for such Additional Services that are requested by
XxxXxx and supplied by Aura.
2.3 Fixed Fee Payment Date. The Fixed Fee for Services pursuant to
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Section 2.1 will be paid by XxxXxx to Aura on the fifteenth (15th) calendar day
of the month after the month in which such Services were provided.
2.4 Charges for Additional Services. Charges for Additional Services
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provided pursuant to Section 2.2, if any, will be determined and payable at the
end of each Aura accounting period. The charges will be due when billed and
shall be paid no later than thirty (30) days from the date of billing.
2.5 Direct Payment. In connection with the provision of Additional
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Services by Aura, if Additional Services are provided directly by a third party
outside provider to XxxXxx, or if in connection with the provision of such
Additional Services out-of-pocket costs are incurred by Aura, the cost thereof
will be paid by XxxXxx. To the extent that XxxXxx is billed by such third party
outside provider directly, XxxXxx shall pay the xxxx directly. If Aura is
billed for such Additional Services, Aura may pay the xxxx and charge XxxXxx the
amount of the xxxx or forward the xxxx to XxxXxx for payment by XxxXxx.
3. XxxXxx'x Directors and Officers. Nothing contained herein shall be
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construed to relieve the directors or officers of XxxXxx from the performance of
their respective duties or to limit the exercise of their powers in accordance
with the Certificate of Incorporation or Bylaws of XxxXxx or in accordance with
any applicable statute or regulation.
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4. No Liability; No Third Party Beneficiaries. In furnishing XxxXxx with
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Services or Additional Services as herein provided, neither Aura nor any of its
officers, directors, employees or agents shall be liable to XxxXxx or its
employees, creditors or stockholders for errors of judgment or for anything
except willful malfeasance, bad faith, gross negligence or reckless disregard in
the performance of such duties under the terms of this Agreement. The
provisions of this Agreement are for the sole benefit of Aura and XxxXxx and
will not, except to the extent otherwise expressly stated herein, inure to the
benefit of any third party.
5. Term of Agreement.
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5.1 Initial Term. The initial term of this Agreement shall begin on the
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date of this Agreement and continue for a term of six (6) months. This
Agreement shall automatically expire at the end of the initial term, unless
extended by mutual agreement of the parties.
5.2 Termination. This Agreement may be terminated at any time by either
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party upon sixty (60) days' prior written notice to the other party.
6. Independent Contractors. Aura and XxxXxx each hereby declares and
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represents that each is engaged in an independent business and will perform its
obligations under this Agreement as an independent contractor and not as the
agent or employee of the other, that each party shall and hereby retains the
right to exercise full control of and supervision over the performance of its
own obligations hereunder and shall retain full control over the employment,
direction, compensation, and discharge of all of its employees assisting in the
performance of such obligations, and that no act of commission or omission of
either party hereto shall be construed to make or render the other party, its
principal, agent, joint venturer or associate, except to the extent specified
herein.
7. Other Activities of Aura. XxxXxx recognizes that Aura now renders and
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may continue to render services to other companies that may conduct activities
similar to those of XxxXxx. Aura shall be free to render such services, and
XxxXxx hereby consents thereto; provided, however, that the provision of such
services does not conflict with the terms of the Noncompetition Agreement, dated
of even date herewith, between XxxXxx and Aura. Aura shall not be required to
devote full time and attention to the performance of its duties under this
Agreement, but shall devote only so much of its time and attention as it deems
reasonable or necessary to perform the services required hereunder.
8. Indemnification.
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8.1 Indemnification by XxxXxx. XxxXxx shall indemnify, defend and hold
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Aura and its directors, officers, and employees, harmless from and against all
damages, losses and out-of-pocket expenses (including fees) incurred by Aura in
the course of providing the Services, except for damages, losses and out-of
pocket expenses incurred as a result of any willful malfeasance, bad faith,
gross negligence or reckless disregard in the performance of duties by Aura or
any director, officer or employee of Aura.
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8.2 Indemnification by Aura. Aura shall indemnify, defend and hold XxxXxx
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and its directors, officers and employees harmless from and against all damages,
losses and out-of-pocket expenses (including fees) caused by or arising out of
any willful malfeasance, bad faith, gross negligence or reckless disregard in
the performance of duties by Aura or any director, officer or employee of Aura.
9. Confidentiality. Any and all information which is not generally known
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to the public which is exchanged between the parties in connection with this
Agreement, whether of a technical or business nature, shall be considered to be
confidential. The parties agree that confidential information shall not be
disclosed to any third party or parties without the written consent of the
nondisclosing party. Each party shall take reasonable measures to protect
against nondisclosure of confidential information by its directors, officers and
employees. Confidential information shall not include any information (i) which
is or becomes part of the public domain, (ii) which is obtained from third
parties who are not bound by confidentiality obligations or (iii) which is
required to be disclosed by law or the rules of any state or Federal regulatory
agency or the National Association of Securities Dealers, Inc. The provisions
of this section shall survive the termination of this Agreement.
10. Miscellaneous.
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10.1 Notices. All notices, xxxxxxxx, requests, demands, approvals,
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consents, and other communications which are required or may be given under this
Agreement shall be in writing and will be deemed to have been duly given if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid to the parties at their respective addresses set
forth below:
If to XxxXxx: If to Aura:
XxxXxx, Inc. Aura Systems, Inc.
31166 Via Colinas 0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx, XX 00000 Xx Xxxxxxx, XX 00000
Attn: Sultan X. Xxxx Attn: Xxxxxx X. Xxxxxxxx
10.2 No Assignment. This Agreement shall not be assignable by either party
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except with the prior written consent of the other party to this Agreement.
10.3 Applicable Law. This Agreement shall be governed in all respects by
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the laws of the State of California without regard to the conflicts of law
provisions thereof.
10.4 Headings. The section headings used in this Agreement are for
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convenience of reference only and will not be considered in the interpretation
or construction of any of the provisions thereof.
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10.5 Amendments and Waivers. No amendment, waiver of compliance with any
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provision or condition hereof, or consent pursuant to this Agreement, will be
effective unless evidenced by an instrument in writing signed by the party to be
charged.
10.6 Severability. If any terms or provisions hereof or the application
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thereof to any circumstances shall be found by any court having jurisdiction to
be invalid or unenforceable to any extent, such term or provision shall be
ineffective to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
10.7 Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the date first above written.
XXXXXX, INC.
By: _____________________________
Title: __________________________
AURA SYSTEMS, INC.
By: _____________________________
Title: __________________________
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EXHIBIT A
CENTRAL SERVICES
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(a) Records Retention. Aura shall provide assistance in the storage and
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retrieval, both electronic and physical, of business and transaction
documentation and information.
(b) Financial Accounting. Aura shall provide assistance with internal and
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external financial reporting, management of general ledger functions and fixed
asset and real property accounting.
(c) Corporate Project Control. Aura shall provide assistance, training and
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coordination of corporate project control activities.
(d) Cost Accounting. Aura shall provide assistance in assigning project
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account and contract numbers, maintaining organization tables and group
receivable analysis.
(e) Corporate Development. Aura shall provide assistance with corporate
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planning, government relations and corporate quality assurance.
(f) Corporate Information Services. Aura shall be responsible for
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developing application software for XxxXxx'x Management Information System
(MIS), writing program codes and distributing MIS reports.
(g) Tax. Aura shall be responsible for the preparation and filing of
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Federal, state and local tax returns pursuant to and in accordance with the
terms of the Tax Sharing Agreement of even date herewith between Aura and
XxxXxx. In addition, Aura shall provide tax research and planning and
assistance on tax audits (Federal, state and local). XxxXxx shall be
responsible for the preparation and filing of property, sales and use tax
returns.
(h) Corporate Contracts. Aura shall provide assistance on general
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contracting issues and internal administration procedures and conflicts of
interest.
(i) Risk Management and Insurance. Aura shall include XxxXxx and its
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property and employees, where applicable, within insurance coverage obtained by
Aura ("Aura Insurance"), except for Directors and Officers Liability Insurance,
which shall be procured by XxxXxx with the assistance of Aura Risk Management at
the sole cost of XxxXxx. XxxXxx shall be responsible for coordinating with Aura
Risk Management any other insurance policy or coverage XxxXxx desires and shall
be solely responsible for any expense or settlement which is (i) not within the
scope of the Aura Insurance or (ii) a policy exclusion or limitation under the
Aura Insurance. Any claim expense or settlement amounts that are within any
deductible or self-insured retention applicable to any policy shall be included
in the monthly Fixed Fee (as defined in Section 2.1). XxxXxx shall not take any
action which shall cause a default or limit Aura's ability to make any claim
under the Aura
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Insurance and XxxXxx agrees to indemnify and hold harmless Aura for any expenses
that are the result of XxxXxx'x breach of policy provisions which results in
denial of coverage to Aura. With respect to any claim made under the Aura
Insurance which is applicable to or desired by XxxXxx, XxxXxx shall notify Aura
of such claim, cooperate with Aura in the presentation and prosecution of such
claim, and consult with Aura on any dispute regarding such claim; provided,
however, that as between Aura and XxxXxx, Xxxx shall have final decision-making
authority over such claim.
(j) Legal. Aura shall provide, when requested, general legal advice,
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review and guidance in the areas of contracts, intellectual property, labor and
corporate matters. Aura shall provide assistance for SEC compliance,
acquisitions and strategic arrangements and will maintain XxxXxx'x corporate
records, including minutes of meetings of the Boards of Directors and
Stockholders. Legal services provided by lawyers other than Aura's in-house
counsel shall be coordinated with and approved by NewCom prior to obtaining such
services and the cost of such services shall be invoiced to and paid by XxxXxx
in accordance with the provisions of Sections 2.2 and 2.5 of this Agreement.
(k) Human Resources/Payroll. Aura shall administer, oversee and maintain
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Aura programs and benefits in which XxxXxx employees participate, provide
support and assistance in employee relation matters, interface with governmental
agencies including the EEOC and maintain and update employee policies and
procedures. Aura shall also provide payroll and related services for XxxXxx'x
employees. XxxXxx shall provide to Aura all necessary information required for
participation in such plans by employees and for payroll and other related
services.
(l) Stock Programs. Aura shall administer the participation of XxxXxx'x
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employees in certain stock benefit programs and plans maintained by Aura such as
stock option plans, bonus plans and stock purchase plans.
(m) Retirement Programs. Aura shall administer the participation of
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XxxXxx'x employees in the employee benefit plans sponsored by Aura such as the
following: [EMPLOYEE STOCK OWNERSHIP PLAN, PROFIT SHARING PLAN, CASH OR DEFERRED
ARRANGEMENT AND CERTAIN BONUS AND DEFERRAL PLANS.] XxxXxx shall provide to Aura
all necessary information required for participation in such plans by its
employees. Aura shall be responsible for filing all required reports under
ERISA for employee benefit plans sponsored by Aura in which NewCom employees
participate.
(n) Real Estate/Facilities. To the extent that XxxXxx requires new or
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additional facilities, Aura shall assist XxxXxx in locating such facilities and
will provide assistance in the negotiation and documentation of leases.
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