Executive Services Agreement
![](https://www.sec.gov/Archives/edgar/data/1332585/000114420407049273/tatumlogox1x1.jpg)
Executive
Services Agreement
September
7, 2007
Xx.
Xxx
Xxxxxx
Chairman
Argyle
Security, Inc.
000
Xxxxxxx Xxxxx
Xxxxx
000
Xxx
Xxxxxxx, XX 00000
Dear
Xx.
Xxxxxx:
Xxxxx,
LLC ("Xxxxx") understands that Argyle Security, Inc. ("the Company") desires
to
engage a partner of Xxxxx to serve as chief financial officer. This Executive
Services Agreement sets forth the conditions under which such services will
be
provided.
Services;
Fees
Xxxxx
will make available to the Company Xxx
Xxxxxxx (the "Xxxxx Partner"), who will serve as chief financial officer of
the
Company. The Xxxxx Partner will become an employee and, if applicable, a duly
elected or appointed officer of the Company and subject to the supervision
and
direction of the co-CEO’s of the Company, the board of directors of the Company,
or both. Xxxxx will have no control or supervision over the Xxxxx Partner.
The
Monthly Charge to the Company will be $30,000 subject to the adjustment
described below. The Company will pay the Xxxxx Partner directly a salary of
$24,000, representing 80% of the Monthly Charge ("Salary").
In addition, the Company will pay directly to Xxxxx a fee of $6,000,
representing 20% of the Monthly Charge ("Fees"),
as partial compensation for resources provided.
The
Company will have no obligation to provide the Xxxxx Partner any health or
major
medical benefits, stock, or bonus payments. The Xxxxx Partner will remain on
his
or her current medical plan.
Payments;
Deposit
Payments
to Xxxxx should be made by direct deposit through the Company's payroll, or
by
an automated clearing house ("ACH") payment at the same time as payments are
made to the Employee. If such payment method is not available and payments
are
made by check, Xxxxx will issue invoices to the Company, and the Company agrees
to pay such invoices no later than ten (10) days after receipt of invoices.
The
Company will reimburse the Xxxxx Partner directly for out-of-pocket expenses
incurred by the Xxxxx Partner in providing services hereunder to the same extent
that the Company is responsible for such expenses of senior managers of the
Company. The Company will also reimburse travel expenses, including mileage,
hotels and meals from Austin to the Company by providing a lump sum,
non-accountable monthly expense amount of $2,500.
The
Company agrees to pay Xxxxx and to maintain a security deposit of $10,000 for
the Company's future payment obligations to both Xxxxx and the Xxxxx Partner
under this agreement (the "Deposit"). If the Company breaches this agreement
and
fails to cure such breach as provided in this agreement, Xxxxx will be entitled
to apply the Deposit to its damages resulting from such breach. Upon termination
or expiration of this agreement, Xxxxx will return to the Company the balance
of
the Deposit remaining after application of any amounts to unfulfilled payment
obligations of the Company to Xxxxx or the Xxxxx Partner as provided for in
this
agreement.
Hiring
Xxxxx Partner Outside of Agreement
During
the twelve (12)-month period following termination or expiration of this
agreement, other than in connection with another Xxxxx agreement, the Company
will not employ the Xxxxx Partner, or engage the Xxxxx Partner as an independent
contractor, to render services of substantially the same nature as those to
be
performed by the Xxxxx Partner as contemplated by this agreement. The
parties recognize and agree that a breach by the Company of this provision
would
result in the loss to Xxxxx of the Xxxxx Partner's valuable expertise and
revenue potential and that such injury will be impossible or very difficult
to
ascertain. Therefore, in the event this provision is breached, Xxxxx will
be entitled to receive as liquidated damages an amount equal to forty-five
percent (45%) of the Xxxxx Partner's Annualized Compensation (as defined below),
which amount the parties agree is reasonably proportionate to the probable
loss
to Xxxxx and is not intended as a penalty. If, however, a court or
arbitrator, as applicable, determines that liquidated damages are not
appropriate for such breach, Xxxxx will have the right to seek actual damages.
The amount will be due and payable to Xxxxx upon written demand to the
Company. For this purpose, ''Annualized Compensation'' will mean monthly
Salary equivalent to what the Xxxxx Partner would receive on a full-time basis
multiplied by twelve (12), plus the maximum amount of any bonus for which
the Xxxxx Partner was eligible with respect to the then current bonus
year.
Term
& Termination
Effective
upon fifteen (15) days' advance written notice, either party may terminate
this
agreement, such termination to be effective on the date specified in the notice,
provided that such date is no earlier than fifteen (15) days after the date
of
delivery of the notice. Xxxxx will continue to render services and will be
paid
during such notice period.
Xxxxx
retains the right to terminate this agreement immediately if (1) the Company
is
engaged in or asks the Xxxxx Partner to engage in or to ignore any illegal
or
unethical activity, (2) the Xxxxx Partner dies or becomes disabled, (3) the
Xxxxx Partner ceases to be a partner of Xxxxx for any other reason, or (4)
upon
written notice by Xxxxx of non-payment by the Company of amounts due under
this
agreement. For purposes of this agreement, disability will be as defined by
the
applicable policy of disability insurance or, in the absence of such insurance,
by Xxxxx'x management acting in good faith.
In
the
event that either party commits a breach of this agreement, other than for
reasons described in the above paragraph, and fails to cure the same within
seven (7) days following delivery by the non-breaching party of written notice
specifying the nature of the breach, the non-breaching party will have the
right
to terminate this agreement immediately effective upon written notice of such
termination.
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Insurance
To
the
extent the Company has directors' and officers' liability insurance in effect,
the Company will provide such insurance coverage for the Xxxxx Partner, along
with written evidence to Xxxxx or the Xxxxx Partner that the Xxxxx Partner
is
covered by such insurance.
Furthermore,
the Company will maintain such insurance coverage with respect to occurrences
arising during the term of this agreement for at least three years following
the
termination or expiration of this agreement or will purchase a directors' and
officers' extended reporting period, or "tail," policy to cover the Xxxxx
Partner.
Disclaimers,
Limitations of Liability & Indemnity
Xxxxx
assumes no responsibility or liability under this agreement other than to render
the services called for hereunder and will not be responsible for any action
taken by the Company in following or declining to follow any of Xxxxx'x advice
or recommendations. Xxxxx represents to the Company that Xxxxx has conducted
its
standard screening and investigation procedures with respect to the Xxxxx
Partner becoming a partner in Xxxxx, and the results of the same were
satisfactory to Xxxxx. Xxxxx disclaims all other warranties, either express
or
implied. Without limiting the foregoing, Xxxxx makes no representation or
warranty as to the accuracy or reliability of reports, projections, forecasts,
or any other information derived from use of Xxxxx'x resources, and Xxxxx will
not be liable for any claims of reliance on such reports, projections,
forecasts, or information. Xxxxx will not be liable for any non-compliance
of
reports, projections, forecasts, or information or services with federal, state,
or local laws or regulations.
Such
reports, projections, forecasts, or information or services are for the sole
benefit of the Company and not any unnamed third parties.
In
the
event that any partner of Xxxxx (including without limitation the Xxxxx Partner
to the extent not otherwise entitled in his or her capacity as an officer of
the
Company) is subpoenaed or otherwise required to appear as a witness or Xxxxx
or
such partner is required to provide evidence, in either case in connection
with
any action, suit, or other proceeding initiated by a third party or by the
Company against a third party, then the Company shall reimburse Xxxxx for the
costs and expenses (including reasonable attorneys' fees) actually incurred
by
Xxxxx or such partner and provide Xxxxx with compensation at Xxxxx'x customary
rate for the time incurred.
The
Company agrees that, with respect to any claims the Company may assert against
Xxxxx in connection with this agreement or the relationship arising hereunder,
Xxxxx'x total liability will not exceed two (2) months of Fees.
As
a
condition for recovery of any liability, the Company must assert any claim
against Xxxxx within three (3) months after discovery or sixty (60) days after
the termination or expiration of this agreement, whichever is earlier.
Xxxxx
will not be liable in any event for incidental, consequential, punitive, or
special damages, including without limitation, any interruption of business
or
loss of business, profit, or goodwill.
Arbitration
If
the
parties are unable to resolve any dispute arising out of or in connection with
this agreement, either party may refer the dispute to arbitration by a single
arbitrator selected by the parties according to the rules of the American
Arbitration Association ("AAA"), and the decision of the arbitrator will be
final and binding on both parties. Such arbitration will be conducted by the
Houston, Texas, office of the AAA. In the event that the parties fail to agree
on the selection of the arbitrator within thirty (30) days after either party's
request for arbitration under this paragraph, the arbitrator will be chosen
by
AAA. The arbitrator may in his discretion order documentary discovery but shall
not allow depositions without a showing of compelling need. The arbitrator
will
render his decision within ninety (90) days after the call for arbitration.
The
arbitrator will have no authority to award punitive damages. Judgment on the
award of the arbitrator may be entered in and enforced by any court of competent
jurisdiction. The arbitrator will have no authority to award damages in excess
or in contravention of this agreement and may not amend or disregard any
provision of this agreement, including this paragraph. Notwithstanding the
foregoing, either party may seek appropriate injunctive relief from a court
of
competent jurisdiction, and either party may seek injunctive relief in any
court
of competent jurisdiction.
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Miscellaneous
Xxxxx
will be entitled to receive all reasonable costs and expenses incidental to
the
collection of overdue amounts under this agreement, including but not limited
to
attorneys' fees actually incurred.
The
Company agrees to allow Xxxxx to use the Company’s logo and name on Xxxxx’x
website and other marketing materials for the sole purpose of identifying the
Company as a client of Xxxxx. Xxxxx will not use the Company’s logo or name in
any press release or general circulation advertisement without the Company’s
prior written consent.
Neither
the Company nor Xxxxx will be deemed to have waived any rights or remedies
accruing under this agreement unless such waiver is in writing and signed by
the
party electing to waive the right or remedy. This agreement binds and benefits
the respective successors of Xxxxx and the Company.
Neither
party will be liable for any delay or failure to perform under this agreement
(other than with respect to payment obligations) to the extent such delay or
failure is a result of an act of God, war, earthquake, civil disobedience,
court
order, labor dispute, or other cause beyond such party's reasonable
control.
The
provisions concerning payment of compensation and reimbursement of costs and
expenses, limitation of liability, directors' and officers' insurance, and
arbitration will survive the expiration or any termination of this
agreement.
This
agreement will be governed by and construed in all respects in accordance with
the laws of the State of Texas, without giving effect to conflicts-of-laws
principles.
The
terms
of this agreement are severable and may not be amended except in writing signed
by the party to be bound. If any portion of this agreement is found to be
unenforceable, the rest of the agreement will be enforceable except to the
extent that the severed provision deprives either party of a substantial benefit
of its bargain.
Nothing
in this agreement shall confer any rights upon any person or entity other than
the parties hereto and their respective successors and permitted assigns and
the
Xxxxx Partner.
Each
person signing below is authorized to sign on behalf of the party indicated,
and
in each case such signature is the only one necessary.
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Bank
Lockbox Mailing Address for Deposit and Fees:
Xxxxx,
LLC
X.X.
Xxx 000000
Xxxxxxx,
XX 00000-0000
|
Electronic
Payment Instructions for Deposit and Fees:
Bank
Name: Bank of America
|
|
Branch:
Atlanta
|
|
Routing
Number:
|
For
ACH Payments: 061 000 052
|
For
Wires: 026 009 593
|
|
Account
Name: Xxxxx, LLC
|
|
Account
Number: 003 279 247 763
|
|
Please
reference Argyle
Security Acquisition Corporation in
the body of the wire.
|
Please
sign below and return a signed copy of this letter to indicate the Company's
agreement with its terms and conditions.
We
look
forward to serving you.
Sincerely
yours,
XXXXX, LLC | Acknowledged and agreed by: | ||
/s/ Xxx Xxxxxxx | ARGYLE SECURITY, INC. | ||
Signature |
|||
Xxx
Xxxxxxx
Area Managing Partner for Xxxxx, LLC |
/s/ Xxx
Xxxxxx
Signature |
||
Xxx Xxxxxx, Chairman
|
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9/7/07
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