Contract
Exhibit
10.3
THIS
MANAGEMENT AGREEMENT, (the “Agreement”) dated as
of October 1, 2009 (the “Effective Date”), is
hereby executed by Cyalume Technologies Holdings, Inc., a Delaware corporation
having its principal place of business at 00 Xxxxxxx Xxxxxx, Xxxx Xxxxxxxxxxx,
XX 00000 (the “Company”) and Selway
Capital, LLC, a Delaware limited liability corporation having its principal
place of business at 00 Xxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxxxx, XX 00000 (the “Manager”).
W I T N E
S S E T H:
WHEREAS,
the Company desires that the Manager provide certain services as described
herein in order for the Company to conduct its business, as more fully described
in the Company’s filings made with the United States Securities and Exchange
Commission (the “Business”);
and
WHEREAS,
the Manager desires to provide certain other services as described herein to the
Company, subject to the terms and conditions of this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants herein, the Company and the
Manager agree as follows:
Section
1. Administrative
Services. In consideration for value received, receipt of
which is hereby acknowledged by the Manager, the Manager hereby agrees to
provide services to the Company including but not limited to those listed below.
It is understood that Xxxxx Xxxxx shall be personally available to perform such
services to the Company. Also, other staff of Selway Management shall
also be available at Xx. Xxxxx’x request to assist him in performing these
tasks.
1.
Strategic development and implementation as well as consultation to the chief
executive officer of the Company on a regular basis as per his reasonable
requests;
2.
Identifying strategic partners with companies with which the Manager has
relationships and access. In this connection, the Manager will focus on building
partnerships with companies in Israel, Singapore, India and throughout Europe.
The focus will be on the rapid expansion of the Company’s munitions
business;
3. Advise
and support the Company with respect to its investor relations
strategy;
4. Advise
and support the Company on future fund raising, including identifying sources of
capital in the United States; and
5.
Support the Company mergers and acquisitions strategy and play an active role in
due diligence and analysis.
Section
2. Term. The
term of this Agreement shall commence on the Effective Date and terminate on the
third (3rd) anniversary of the Effective Date. Either party may
terminate this Agreement at any time upon written notice to the other party
received thirty (30) days prior to the effective time of such termination. This
agreement is terminable for Cyalume’s default in payment or for Selway’s failure
to perform services, each after written notice and a reasonable time to
cure.
Section
3. Manager’s
Compensation and Expenses.
(a) As
compensation for its services in acting as Manager hereunder, the Company shall
pay to the Manager a management fee in the amount of $41,666.67 (the “Management Fee”),
payable monthly in arrears the 15th day of
each month. If the Company is not able to pay the Management Fee for
a month or months, the Manager may elect to not terminate the agreement and to
continue providing the services as long as the Company accrues the unpaid
Management Fee as a liability to the Manager. Notwithstanding the
foregoing, (i) the Company shall only pay $11,000 per month between August 1,
2009 and January 31, 2010, with the balance of $31,666.67, accruing as an unpaid
Management Fee to the Manager; (ii) Company shall not pay unpaid Management Fee
until TD Bank provides consent to execute payment.
(b) The
Company’s Board of Directors, at a meeting held after December 31, 2009, will
consider awarding the Manager a bonus of up to $210,000 for services performed
by the Manager in 2009, to be paid in either cash or stock at the discretion of
the Board of Directors.
(c) The
Manager shall bear the following ordinary day-to-day expenses incidental to the
services provided by it hereunder as follows: (i) all costs and expenses of its
office space, facilities, utility service and necessary administrative and
clerical functions connected with the Manager’s operations; and (ii)
compensation of all its employees (collectively, “Manager Expenses”);
provided, however, that any
costs and expenses incurred specifically on behalf of the Company and no other
clients or other business of the Manager shall be paid for by the Company or its
subsidiary. These expenses, except as defined in Section 3(d) below,
shall be approved in advance by the Company in writing.
(d) Company
Expenses. Except as provided in Section 3(c) above, the
Company, or its subsidiary, shall bear and be charged with all other reasonable
costs and expenses of the Manager whether incurred before or after the date
hereof, in connection with the services rendered by the Manager to or on behalf
of the Company, or any subsidiary, including, without limitation, any travel,
legal and accounting expenses and other professional fees to third parties and
out of pocket costs related thereto.
Section
4. The Manager’s
Liability. The Manager and its affiliated persons who provide
services to the Company assume under this Agreement no liability for anything
other than to render or stand ready to render the services specifically called
for herein and neither the Manager nor any of its directors, managers, officers,
employees, subsidiaries or affiliates shall by reason of this Agreement be
responsible for any action of the Company under this Agreement.
Section
5. Indemnity. (a)
The Company shall indemnify the Manager and its managers, directors, officers,
employees and agents (each such person, an “Indemnified Party”)
against all losses, claims, actions, suits, damages, penalties, judgments,
liabilities and expenses (including, without limitation, reasonable attorneys’
fees but excluding lost profits, consequential damages and other indirect or
special damages and any costs and expenses attributable solely to administrative
overheads) (collectively, “Losses”) which any of
them may pay or incur arising out of or relating this Agreement or the services
called for herein; provided, however, that such
indemnity shall not apply to any such loss, claim, damage, penalty, judgment,
liability or expense attributable to the Manager or any other Indemnified Party
as a result of the Indemnified Party’s gross negligence, willful misconduct or
material breach of its obligations under this Agreement. If any
action, suit or proceeding arising from any of the foregoing is brought against
any Indemnified Party, the Company will resist and defend such action, suit or
proceeding or cause the same to be resisted and defended by its counsel (which
counsel shall be reasonably satisfactory to the affected Indemnified Party) and
shall pay all costs of defense as incurred; provided, however, that if it
is finally determined by a court of competent jurisdiction that such Indemnified
Party is not entitled to indemnification hereunder, the Indemnified Party shall
immediately reimburse the Company all amounts spent by the Company in defense of
such Indemnified Party. Each Indemnified Party shall immediately
notify the Company of any damage, loss, liability, cost or expense which the
Indemnified Party has determined has given or would give rise to a right of
indemnification under this Agreement and the Company shall have the exclusive
right to compromise or defend any such liability or claim at its own expense,
which decision shall be binding and conclusive upon the Indemnified
Party. Failure to give such notice shall not relieve the Company of
its indemnity under this Agreement; provided, that the
Company shall not be held responsible for any damage, loss, liability, cost or
expense resulting from the failure to give such notice or if such failure
results in the forfeiture of substantive rights. The Company’s
obligations under this Section 5(a) shall survive any termination of this
Agreement.
(b) The
Manager shall indemnify the Company and its directors, officers, employees and
agents (each such person, a “Company Indemnified
Party”) against all Losses which any of them may pay or incur arising out
of or relating to or as a result of the Manager’s gross negligence, willful
misconduct or material breach of its obligations under this Agreement; provided, however, that such
indemnity shall not apply to any such loss, claim, damage, penalty, judgment,
liability or expense attributable to the Company or any other Company
Indemnified Party as a result of the
Company’s gross negligence, willful misconduct or material breach of its
obligations under this Agreement. If any action, suit or proceeding
arising from any of the foregoing is brought against any Company Indemnified
Party, the Manager will resist and defend such action, suit or proceeding or
cause the same to be resisted and defended by its counsel (which counsel shall
be reasonably satisfactory to the affected Company Indemnified Party) and shall
pay all costs of defense as incurred; provided, however, that if it
is finally determined by a court of competent jurisdiction that such Company
Indemnified Party is not entitled to indemnification hereunder, the Company
Indemnified Party shall immediately reimburse the Manager all amounts spent by
the Manager in defense of such Company Indemnified Party. Each
Company Indemnified Party shall immediately notify the Manager of any damage,
loss, liability, cost or expense which the Company Indemnified Party has
determined has given or would give rise to a right of indemnification under this
Agreement and the Manager shall have the exclusive right to compromise or defend
any such liability or claim at its own expense, which decision shall be binding
and conclusive upon the Company Indemnified Party. Failure to give
such notice shall not relieve the Manager of its indemnity under this Agreement;
provided, that
the Manager shall not be held responsible for any damage, loss, liability, cost
or expense resulting from the failure to give such notice or if such failure
results in the forfeiture of substantive rights. The Manager’s
obligations under this Section 5(b) shall survive any termination of this
Agreement.
Section
6. Notices. Any
notice or other communication (collectively, “Notice”) to be given
to the Company or the Manager in connection with this Agreement shall be in
writing and will be deemed to have been given and received (a) on the date
delivered if by courier or other means of personal delivery, (b) on the date
sent by telecopy with automatic confirmation by the transmitting machine showing
the proper number of pages were transmitted without error, (c) on the next
business day after being sent by a nationally recognized overnight mail service
in time for and specifying next day or next business day delivery, or (d) on the
fifth (5th) day
after mailing by U.S. Postal Service certified or registered mail, in each case
postage prepaid and with any other costs necessary for delivery paid by the
sender. Any party may by notice pursuant to this Section 6 designate
another address as the new address to which notice must be given.
Section
7. No
Restrictions. Nothing in this Agreement shall limit or
restrict the right of any director, officer or employee of the Manager or any
director, officer, employee, member or partner of any of its subsidiaries or its
Affiliates to engage in any other business or to devote his time and attention
to the management or other aspects of any other business, whether of a similar
or dissimilar nature, or limit or restrict the right of the Manager or of any of
its Affiliates to engage in any other business or to render services of any kind
to any other corporation, firm, individual or association.
Section
8. Status of Manager
as Independent Contractor. The Manager shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Company from time to time, have
no authority to act for or represent the Company in any way or otherwise be
deemed an agent of the Company.
Section
9. Arbitration.
(a) General. Except
as otherwise expressly provided herein, in the event of any dispute, claim or
controversy (collectively “dispute”) among the
parties arising out of or relating to this Agreement, whether in contract, tort,
equity or otherwise, and whether relating to the meaning, interpretation,
effect, validity, performance or enforcement of this Agreement that cannot be
resolved by the parties, such dispute shall be resolved by and through an
arbitration proceeding conducted under the auspices of the commercial
arbitration rules of the American Arbitration Association (or any like
organization successor thereto) in New York, New York. The
arbitrability of a dispute shall likewise be determined by
arbitration.
(b) Procedure. The
arbitration proceeding shall be conducted in as expedited a manner as is then
permitted by the commercial arbitration rules (formal or informal) of the
American Arbitration Association. Both the foregoing agreement of the
parties to arbitrate any and all such disputes, and the results, determinations,
findings, judgments and/or awards rendered through any such arbitration shall be
final and binding on the parties and may be specifically enforced by legal
proceedings in any court of competent jurisdiction.
(c) Costs of
Arbitration. The cost of the arbitration proceeding and any
proceeding in court to confirm or to vacate any arbitration award, as applicable
(including each party’s attorneys’ fees and costs), shall be borne by the
unsuccessful party or, at the discretion of the arbitrator(s), may be prorated
between the parties in such proportion as the arbitrator(s) determine(s) to be
equitable and shall be awarded as part of the arbitrators’ award.
Section
10. GOVERNING
LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO CHOICE OF LAW PRINCIPLES).
Section
11. Submission to
Jurisdiction. With respect to any claim or action arising
hereunder, the parties (a) irrevocably submit to the nonexclusive jurisdiction
of the courts of the State of New York and the United States District Court
located in the State of New York and appellate courts from any thereof, and (b)
irrevocably waive any objection which such party may have at any time to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement brought in any such court, and irrevocably waive any claim that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum. The terms of this Section 11 shall survive
any termination of this Agreement.
Section
12. Waiver of Jury
Trial. THE PARTIES TO THIS AGREEMENT KNOWINGLY, VOLUNTARILY
AND EXPRESSLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ENFORCING OR DEFENDING ANY RIGHTS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE PARTIES
THERETO ACKNOWLEDGE THAT THE PROVISIONS OF THIS SECTION 12 HAVE BEEN
BARGAINED FOR AND THAT EACH SUCH PARTY HAS BEEN REPRESENTED BY COUNSEL IN
CONNECTION HEREWITH. THE TERMS OF THIS SECTION 12 SHALL SURVIVE
ANY TERMINATION OF THIS AGREEMENT.
Section
13. Entire
Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the matters covered hereby and
supersedes all prior agreements and understandings among the
parties.
Section
14. Counterparts. This
Agreement may be executed by the parties hereto in separate counterparts, each
of which counterparts, when executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one and
the same agreement.
Section
15. Amendments. This
Agreement may be supplemented, modified or amended by written instrument signed
on behalf of each party hereto.
Section
16. Severability of
Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability, without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section
17. Successors,
Assignment. This Agreement (a) shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns, and (b) may not be assigned by any party hereto without the
prior written consent of the other parties hereto.
Section
18. Headings. The
headings contained in this Agreement are for convenience of reference only and
shall not affect the construction or interpretation of any provision of this
Agreement.
Section
19. Scope of
Performance. In acting with respect to this Agreement, the
Manager shall be required to perform only such duties as are specifically set
forth in (a) this Agreement and (b) applicable law as in effect from time to
time. The Manager undertakes to perform only such duties as are
specifically set forth in this Agreement.
Section
20. Additional
Parties. Schedule A shall be
updated from time to time, as mutually agreed by the parties hereto to add an
additional Company in connection with the Business. Each such party
added to Schedule A
shall be bound by the terms and conditions hereof and shall execute a
Joinder Agreement in the form reasonably satisfactory to the Manager and the
Company.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the day and year first above written.
| CYALUME TECHNOLOGIES HOLDINGS, INC. | |
|
By:
|
/s/
Xxxxx Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
Title:
|
Chief
Executive Officer
|
| SELWAY CAPITAL, LLC | |
|
By:
|
/s/
Xxxxx Xxxxx
|
|
Name:
|
Xxxxx
Xxxxx
|
