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EXHIBIT 10.3
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (this "Agreement") is made this 1st day of
June 2000, by and between Techolym, L.P., a Texas limited partnership
("Techolym"), and Newmark Homes Corp. (the "Company"), a Nevada corporation.
RECITALS
WHEREAS, Techolym is a wholly owned subsidiary of Technical Olympic USA, Inc.
("Technical Olympic"), a Delaware corporation; and
WHEREAS, Technical Olympic purchased eighty percent (80%) of the issued and
outstanding common stock of the Company on December 15, 1999; and
WHEREAS, Technical Olympic has been providing corporate and staff support and
management services to the Company since December 15, 1999; and
WHEREAS, the Company desires to provide for the continuation of such corporate
and staff support and management services to the Company in connection with the
business and policies of the Company, such services to be provided by Techolym;
and
WHEREAS, the providing of such services to the Company is in the best interest
of the Company:
NOW, THEREFORE, in consideration of the mutual covenants and other good and
valuable consideration contained herein, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Engagement
The Company hereby engages Techolym and Techolym hereby accepts such engagement
and agrees to perform the corporate and staff support and management services
described in Paragraphs 3, 4 and 5 (together, the "Services") on behalf of and
for the account of the Company in accordance with the terms and conditions of
this Agreement; provided, however, that Services expressly excludes any such
services which Techolym would not be legally permitted to provide to a third
party. Techolym shall hire such professionals as may be necessary to perform
certain Services and shall monitor or supervise the performance of such
Services by such third party providers.
2. General Standards
Techolym will provide and/or will cause the Services to be provided hereunder
with reasonable diligence.
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3. General Advisory Services
Techolym agrees that the Services will include consultation with and assistance
to the Board of Directors and management of the Company in connection with
issues involving any and all matters of the business or affairs of the Company
including, but not limited to, strategic analysis, planning and management,
corporate governance and reporting, financial analysis, monitoring and
reporting, business development and consultation, insurance, litigation,
personnel and all other matters involving or affecting the business or affairs
of the Company or any of its subsidiaries. Techolym and the Company acknowledge
and agree that Techolym is not an agent of the Company, that Techolym is not
and will not be responsible for any management decisions on behalf of the
Company and that it may not commit the Company to any action. In performing
Services, Techolym will act under the direction of the Board of Directors of
the Company and will consult regularly with the Board of Directors (or a
designee thereof). Techolym will assist the management of the Company with the
implementation of all resolutions relating to the Services adopted by the
Company's Board of Directors (or an executive committee thereof).
4. Administrative Support Services
(a) Techolym shall provide support services to the Company, in
the areas of financial planning, budgeting and analysis; the
monitoring of the performance of the Company (excluding the
day-to-day operations of the Company) and preparing reports
for the Board of Directors regarding such performance;
evaluating and advising the Company regarding business
opportunities, whenever requested by management; and
attending to the administrative duties of business of the
Company (excluding the day-to-day operations of the Company).
(b) Techolym shall provide such support services to the Company
as requested by management to assist it in the monitoring of
outside counsels, litigation matters, and other legal matters
affecting the Company.
(c) Techolym shall provide the services necessary to provide
assistance in connection with the Company's obligation to
prepare any and all filings required to be made with the
Securities and Exchange Commission pursuant to the Securities
Act of 1933 or the Securities Exchange Act of 1934 or the
National Association of Securities Dealers for listing on the
NASDAQ National Market or other applicable securities
exchange pursuant to the laws, rules and regulations
governing the same, and in the preparation and distribution
of all materials required to be delivered to the holders of
the Common Stock of the Company pursuant to such laws, rules
and regulations.
(d) Techolym shall maintain the corporate records of the Company
and its subsidiaries and shall provide the services necessary
to provide assistance in
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connection with the meetings, actions, and corporate
governance of the boards of directors, committees and
shareholders of the Company and its subsidiaries.
(e) At Techolym's election, it may cause one or more of its
affiliates or third party contractors to provide certain of
the Services called for by this Agreement; provided, however,
that Techolym shall remain responsible for the provision of
the Services in accordance with this Agreement.
5. Incidental Services
Techolym shall perform such incidental services to the ones listed in
Paragraphs 3 and 4 as reasonably requested from time to time by the Board of
Directors or management of the Company, but only to the extent that Techolym
consents to perform such incidental services.
6. Reimbursement and Compensation
(a) The Company, in consideration for the performance of the
Services provided to the Company by or on behalf of Techolym
for fiscal 2000, agrees to reimburse Techolym $1,500,000,
said amount being the budgeted operating cost of Techolym (or
Technical Olympic prior to the date of this Agreement)
necessary to perform the Services subsequent to January 1,
2000. The amount of $750,000 of the consideration shall be
paid to Techolym by June 10, 2000, and $125,000 shall be paid
to Techolym by the tenth (10th) day of each subsequent month
through and including December 10, 2000.
(b) For subsequent years beginning in 2001, the consideration to
be paid to Techolym shall be variable and shall be the
greater of either:
(1) 107.5% of the actual consideration paid to Techolym
for the Services provided in the prior year; or
(2) The amount, to a maximum of 125% of the actual
consideration paid to Techolym for the Services
provided in the prior year, of the budgeted
operating cost of Techolym necessary to provide the
Services to the Company, said budget being prepared
in December of the prior year. The amount of
consideration to be paid in these subsequent years
under this Section 6(b)(2) shall be communicated to
the Company prior to December 10 of the prior year.
In the event that the budgeted operating cost of
Techolym necessary to provide the Services to the
Company exceeds 125% of the actual consideration
paid to Techolym for the Services provided in the
prior year, Techolym shall submit such budget to the
Company for approval prior to such amount in excess
of 125% being in effect.
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Payment by the Company to Techolym for the subsequent years shall be on a
monthly basis beginning January 10 of such year and shall be equal to
one-twelfth of the greater of the amount calculated pursuant to Paragraph
6(b)(1) or 6(b)(2) above.
(c) The reimbursement and compensation described in this Paragraph 6
shall constitute Techolym's full and complete consideration for the
performance of the Services.
7. Access
Subject to the confidentiality provisions of Paragraph 15, the Company agrees
to provide Techolym such access to its records, personnel and locations as is
necessary for the fulfillment of Techolym's duties hereunder. The Company
agrees to make appropriate personnel available to act promptly upon
recommendations made by Techolym hereunder and approved by the Company and to
facilitate the performance of Techolym's duties pursuant to this Agreement. The
Company shall provide Techolym, promptly following the request therefore, all
appropriate information and direction as shall be necessary and useful to
Techolym in timely and competently performing the Services hereunder.
8. Designees
Each of Techolym and the Company hereby designate the persons listed below as
the primary contacts for the purposes of the administration of this Agreement,
including the delivery and receipt of all invoices for expense reimbursement as
provided in Paragraph 6 hereof, and the delivery of any other notices or
communications provided for herein, or otherwise given.
For Techolym: Technical Olympic USA, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxxx
For the Company: Newmark Homes Corp.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxx
9. Nature of Services
Techolym and the Company agree that all Services performed hereunder shall be
in Techolym's capacity as an independent contractor, and it is not the purpose
or intent of this Agreement to create any franchise, joint venture, trust,
partnership, or
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employer/employee relationship for any purpose whatsoever. Nothing in this
Agreement shall be construed to make either party hereto an agent, joint
venturer, partner, legal representative, employee or policy-making participant
of the other, and neither party shall have the right to obligate or bind the
other party in any manner whatsoever. The performance by Techolym of its duties
under this Agreement shall not relieve the Company of any legal or contractual
duty whatsoever, including duties to comply with applicable laws, rules,
regulations, orders, policies, procedures and financial and accounting
reporting obligations. Techolym shall have no authority under this Agreement to
supervise employees or other agents of the Company, to implement policies or
modify procedures or business plans or to mandate any course of action in
connection with the operations of the Company.
10. Indemnification
The Company hereby agrees to indemnify Techolym for any losses, costs, expenses
(including reasonable attorneys' fees), fees and judgments relating to claims
asserted against Techolym by any third party as a result of, or relating to,
the performance by Techolym of its duties pursuant to this Agreement, other
than losses, costs, expenses, fees and judgments resulting from Techolym's
gross negligence or willful misconduct.
Techolym hereby agrees to indemnify the Company for any losses, costs, expenses
(including reasonable attorneys' fees), fees and judgments relating to claims
asserted against the Company by any third party as a result of, or relating to,
the gross negligence or willful misconduct of Techolym in the performance by
Techolym of its duties pursuant to this Agreement.
The provisions contained in this Paragraph 10 shall survive the termination or
expiration of this Agreement.
11. Term
The term of this Agreement shall commence on June 1, 2000 and shall remain in
effect from year to year thereafter unless terminated by one of the parties in
accordance with the terms of this Agreement.
12. Termination by Techolym
This Agreement may be terminated by Techolym at any time upon (a) the mutual
agreement of the parties; or (b) the failure of the Company to pay to Techolym
the reimbursements or compensation provided hereunder or to perform any of its
other agreements contained herein (the "Company Breach") with such Company
Breach continuing uncured for thirty (30) days after written notice to the
Company from Techolym stating the Company Breach.
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13. Termination by the Company
This Agreement may be terminated by the Company at any time upon (a) the mutual
agreement of the parties, (b) upon sixty (60) days prior written notice to
Techolym, or (c) upon a material breach of this Agreement by Techolym (the
"Techolym Breach") with such Techolym Breach continuing uncured for thirty (30)
days after written notice to Techolym from the Company stating the Techolym
Breach; provided, however, that if the Techolym Breach is not capable of cure
within said thirty (30) day period, then Techolym shall have such time as is
necessary, other than with respect to the provision of Services, to cure such
Techolym Breach provided that Techolym commences action to cure the Techolym
Breach within the thirty (30) day notice period and continues diligently to
cure the Techolym Breach and, provided further, that such Techolym Breach shall
be cured within 90 days of written notice.
14. Duties Upon Termination or Expiration
Upon termination or expiration of this Agreement, Techolym shall, within thirty
(30) business days thereafter, deliver to the Company complete copies of all
records or reports, if any, maintained by Techolym in connection with the
provision of the Services. Techolym shall also be available for a period not
more than sixty (60) days following termination for reasonable consultations
with the Company concerning the Services provided; provided, however, the
Company shall reimburse Techolym for any reasonable and documented direct and
out-of-pocket expenses incurred in connection with such consultations.
Upon termination or expiration of this Agreement, the Company shall compensate
Techolym for all compensation accrued and unpaid as of the date of termination.
Such payment shall be within three (3) business days of the delivery by
Techolym of the information called for above.
Upon termination of this Agreement, Techolym agrees to comply with the
confidentiality obligations set forth in Paragraph 15 below.
15. Confidentiality
Techolym acknowledges that it will have access to confidential information
regarding the Company, its subsidiaries and its businesses. Techolym agrees
that it and its subsidiaries, affiliates, employees, officers, directors,
agents or other representatives will not, during or subsequent to the term of
this Agreement, divulge, furnish or make accessible to any person (other than
as required to render the Services, by law or with the written permission of
the Company) any such confidential information. Confidential information does
not include any information that has publicly become available prior to
Techolym's receipt of such information or thereafter became publicly available
(other than as a result of disclosure by Techolym).
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16. Modification
This Agreement may not be orally changed or modified. All changes or
modifications to this Agreement shall be in writing signed by the party against
whom enforcement of any change or modification is sought.
17. Waiver
No delay or failure to exercise any remedy or right occurring upon any breach
or default shall be construed as a waiver of such remedy or right, nor shall it
affect any subsequent default of a same or different nature.
18. Effect of Invalidity
Should any part of this Agreement, for any reason, be declared invalid, such
decision shall not affect the validity of any remaining portion, which
remaining portion shall remain in force and effect.
19. Successors and Assigns
Neither the Company nor Techolym may assign its rights nor claims, transfer or
subcontract its obligations or delegate its duties hereunder, except as
provided in Paragraph 1 or 4(e), without the prior written consent of the other
party hereto.
20. No Third Party Beneficiary
The provisions of this Agreement are enforceable solely by the parties to this
Agreement, and no other person shall have the right, separate and apart from
the General Partner of Techolym, to enforce any provision of this Agreement or
to compel any party to this Agreement to comply with the terms of this
Agreement.
21. Notices
All notices, requests, clause, demands and other communications hereunder shall
be in writing and in English and shall be deemed to have been duly given when
delivered in person, by overnight courier or telecopy to the respective parties
as follows:
If to the Company: Newmark Homes Corp.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxx
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If to Techolym: Technical Olympic USA, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxxx
Or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above;
provided, however, that notice of any change of address shall be effective only
upon receipt thereof.
22. Further Actions
At any time and from time to time, each party agrees, without further
consideration, to take such actions and to execute and deliver such documents
as may be necessary to effectuate the purposes of this Agreement.
23. Captions
The paragraph captions contained in this Agreement are inserted only as a
matter of convenience and reference, and in no way define, limit or describe
the scope of this Agreement, nor the intent of any provision thereof.
24. Counterparts
This Agreement may be executed in one or more counterparts, by facsimile or
original signatures, each of which shall be deemed an original, but which,
taken together, shall constitute one Agreement.
25. Governing Law
This Agreement, and the application or interpretation thereof, shall be
governed by the laws of the State of Texas.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
TECHOLYM, L.P., a Texas limited partnership
BY: TECHNICAL OLYMPIC USA, INC., its sole
General Partner
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
NEWMARK HOMES CORP.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President
