MANAGEMENT AGREEMENT
AGREEMENT, dated as of December 1, 1996, between Casull Arms Corporation, a
Delaware corporation with offices at Casull Arms Corporation, c/o Xx. Xxxxx X.
Xxxxxxx, Chairman of the Board, 0000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx
00000 (the "Company"), and FH Capital Advisors, Inc., a New York corporation
with offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Advisor").
1. (a) Advisor agrees that throughout the term of this Agreement as
specified in Section 7 (the "Term") it shall provide to the Company such
reasonable advice, service, consultation, and assistance as the Company shall
seek from Advisor with respect to the Company's business affairs and shall
perform such other services related to the business affairs of the Company as
the Board of Directors of the Company shall reasonably request. Such advice,
service, consultation, and assistance may be, with limitation, in the areas
listed under the heading "Areas(s)" on Schedule A hereto.
(b) The parties hereto agree that services to be provided by Advisor
for the Company hereunder are to be performed by the person listed on Schedule A
hereto or such other or additional persons as shall be designated by Advisor
from time to time and approved by the Board of Directors of the Company (all of
such persons are hereinafter collectively referred to as the "Principals").
Each Principal may, without limitation, provide services in the area(s) listed
on Schedule A hereto. The
Principals shall be required by Advisor to devote to the providing of services
to the Company hereunder that amount of time which is reasonably necessary in
order for Advisor to meet its obligations hereunder. In the case of those
Principals who are also members of the Board of Directors of the Company or any
committee of the Board of Directors of the Company, such time shall be in
addition to time spent at meetings of these entities.
2. Advisor agrees that the service which it is to provide to the Company
hereunder shall be performed at the reasonable direction of the Board of
Directors of the Company as implemented by the Company's senior management
consistent with the other applicable provisions of this Agreement. Advisor
agrees that it shall function in an advisory and consultative capacity and that
the Board of Directors of the Company and the duly appointed officers of the
Company shall be responsible for the management of the Company and the
implementation of any advice or other services rendered by Advisor hereunder.
Advisor assumes no responsibility under this Agreement other than to render the
services called for hereunder in good faith, and shall not be responsible for
any action of the Board of Directors of the Company or any of the duly appointed
officers of the Company in following or declining to follow any advice or
recommendations of Advisor. Neither Advisor nor any of the Principals shall be
liable to the Company except by reason of acts constituting bad faith, willful
misconduct or gross negligence of their duties.
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3. (a) During the Term, the Company agrees to pay to Advisor a
management fee (the "Fee") for the services to be performed by Advisor, as
provided herein, compensation at the rate of $5,000 per month. Any portion of
the Fee which is not paid on a current basis shall accrue and become payable at
such time as the Company has sufficient funds to do so.
(b) Advisor shall bear the expense for rent, telephone, utilities,
office furniture, equipment and machinery and other office expenses of Advisor
relating to the performance by Advisor of its duties hereunder. The Company
shall be responsible for all other expenses arising out of the Advisor's
performance of its duties hereunder.
4. Subject to Section 3(b) and the first sentence of Section 5, the
company agrees to indemnify and hold harmless Advisor and the Principals from
and against any and all losses, claim, damages, liabilities and expenses, joint
and several (which shall include, but not be limited to, counsel fees and any
and all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever and any
and all amounts paid in settlement of any claim or litigation), as and when
incurred, to which any of them may become subject under any statute, under
common law, or otherwise, relating to, based upon or arising out of Advisor's or
any Principal's activities under this Agreement or any act or omission by
Advisor or any Principal in connection with their respective obligations under
this Agreement, provided, however, that the Company shall not be liable in
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any such case to the extent that any such loss, claim, damage, liability or
expense is found in a final judgment by a court of competent jurisdiction, not
subject to further appeal, to have resulted from the bad faith, willful
misconduct or gross negligence of Advisor or one or more of the Principals.
5. (a) Advisor shall bear all of the costs and expenses of the personal
compensation and employment benefits, if any,of the Principals. The Principals
shall not be entitled to any compensation or benefit from the Company for
services performed for the Company in any capacity, except (i) for fees for
serving on the Board of Directors of the Company or any committee of the Board
of Directors of the Company, (ii) as approved by the Board of Directors, or
(iii) as otherwise expressly provided herein.
(b) It is expressly understood between the parties hereto that
Advisor shall be an independent contractor. It is also expressly agreed that
Advisor shall be solely responsible for the withholding and payment of any and
all taxes and other sums required to be withheld or paid with respect the
compensation of the Principals, if any, pursuant to any and all state, federal
or other laws in connection with the rendering of services by Advisor hereunder.
6. Advisor agrees, on behalf of itself and its employees and
representatives, including without limitation the Principals, that all
memoranda, notes, records or other documents relating to the Company made or
compiled by Advisor or its employees or representatives in the fulfillment of
Advisor's obligations under this Agreement or
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otherwise shall be the Company's property and shall be delivered to the Company
upon request. Advisor shall not knowingly use, for itself or others, or divulge
to others, other than in the ordinary course of the Company's business, any
secret or confidential information, knowledge or data of the Company obtained by
it as a result of its performance of this Agreement, unless authorized by the
Company.
7. (a) The Term shall commence upon the closing of the initial public
offering of the Company and shall expire 30 days after such date as either party
gives written notice of termination to the other.
(b) Upon termination of this agreement, the Company agrees that it
shall make payment to Advisor of the pro rata portion of the Fee attributable to
the period through the date on which this Agreement terminates.
8. This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof, supersedes any existing agreements between
them concerning such subject matter, and may be modified only by a written
instrument duly executed by each party.
9. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or delivered against receipt to the party to whom it is to be
given at the address of such party set forth in the preamble to this Agreement
(or to such other address as the party shall have furnished in writing in
accordance with the provisions of
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this Section 9). Any notice or other communication given by certified mail
shall be deemed given at the time of certification thereof, except for a notice
changing a party's address, which shall be deemed given at the time of the
receipt thereof.
10. Any waiver by either party of a breach of any provisions of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provisions or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term
of this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of that right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
11. The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties thereto and their respective successors and assigns.
12. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to conflict of laws.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CASULL ARMS CORP.
BY: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Chairman of the Board
FH CAPITAL ADVISORS, INC.
BY: /s/ Xxxxxxxx Kiev
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Xxxxxxxx Kiev
Managing Director
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SCHEDULE A
AREAS
1. Executive Management
2. Financial Analysis
3. Facilities Management
4. Management Information Systems
PERSONS
1. Xxxxxx Xxxxxxx
2. Xxxxxxxx Kiev
